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Showing 241 to 260 of 1903 Records
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2015 (12) TMI 1669
Works contract - composite turnkey contract - work executed by the appellant in favour of DMRC amounts to a composite indivisible works contract but was erroneously classified by Revenue as ECIS during the period upto 01.06.2007 - Held that: - the preambular portion of the definition of works contracts excludes works contract provided in respect of railways from the scope of definition of the taxable service, during relevant period - appeal allowed - decided in favor of appellant.
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2015 (12) TMI 1668
Imposition of penalties - CENVAT credit availed on the basis of forged invoices - whether, penalty can be imposed on the appellants in the terms of Rule 15(1) and 15(2) ibid? - Held that: - the conditions of Rule 3 ibid has not been violated in this case. The documents available in the case file show that the appellant was not aware of the fact regarding non-payment of Central Excise duty by the supplier of raw Bidis into the Central Government account - filing of FIR and lodgment of the criminal case by the appellant prove the fact that appellant was not aware of non-payment/deposit of the duty by the suppliers of goods and that based on the invoice / TR-6 Challan the cenvat credit was taken by it on receipt of the raw Bidis into the factory. Thus, malafides cannot be attributed to the appellants, justifying imposition of penalties - penalties set aside - the matter is remanded to the original authority for necessary verification of the actual cenvat credit involved in the case, which can be reversed by the appellant - appeal allowed by way of remand.
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2015 (12) TMI 1667
Disallowance of carry forward of the expenditure to be set off against the future income of the assessee trust - Held that:- The income of charitable trusts is required to be computed on commercial principles. The concept of application of the income for the year in which the income has arisen is not found in Section 11(1)(a) of the Act. No limitation to the above effect is found in the language of the section. It merely requires application of the income that has arisen from the property held under trust. In this view of the matter, the principles relating to set off of losses, etc. is not of any relevance and therefore any excess application of income during the year can be regarded as application of the income of future years and can be adjusted. Therefore, in our view, the claim of the assessee for carry forward of excess application is in accordance with the judicial precedents on the issue and the same is allowable. See Commissioner of Income-Tax Versus Institute Of Banking Personnel Selection [2003 (7) TMI 52 - BOMBAY High Court ] - Decided in favour of assessee
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2015 (12) TMI 1666
Deferred compensation expenses on account of ESOP - allowable business expenses - Held that:- The deductibility of expenses on account of ESOP being discount under the ESOP has been decided in Biocon Limited v. DCIT [ 2014 (12) TMI 838 - ITAT BANGALORE] held that discount under ESOP is in the nature of employees cost and is hence deductible during the vesting period w.r.t. the market price of share at the time of grant of options to the employees. The Hon’ble Special Bench has held that the amount of discount claimed as deduction during the vesting period is required to be reversed in relation to the un-vesting/lapsing options at the appropriate time, however, an adjustment to the income is called for at the time of exercise of option by the amount of difference in the amount of discount calculated with reference to the market price at the time of grant of option and the market price at the time of exercise of option. No contrary decision is brought to our notice by the Revenue to controvert the decision of the Special Bench of Bangalore ITAT with respect to this issue.
Thus deduction being deferred employee compensation expense (ESOP) debited under the head employee cost as an allowable business expenditure under the head ‘profit and gains of business or profession’ incurred wholly and exclusively for the purposes of business of the assessee company. We further hold that the amount of discount claimed as deduction during the vesting period is required to be reversed in relation to the un-vesting/lapsing of options at the appropriate time. However, an adjustment to the income is called for at the time of exercise of option by the amount of difference in the amount of discount calculated with reference the market price at the time of grant of option and the market price at the time of exercise of option - Decided in favour of assessee
Disallowance u/s 14A read with Rule 8D - Held that:- Since the relevant A.Y. is 2008-09, the Hon’ble Bombay High Court in Godrej & Boyce Mfg. Co. Ltd. (2010 (8) TMI 77 - BOMBAY HIGH COURT) has already held that the Rule 8D is applicable for A.Y. 2008-09 and hence in our considered view, the investment of ₹ 4,61,37,00,000/- made by the assessee company in its subsidiary namely M/s India Infoline Investment Services Ltd. of ₹ 4,61,37,00,000/- will be included in the average investment for the purpose of computation of disallowance u/s 14A r.w.r 8D(2)(iii) of the Income Tax Rules, 1962 and hence to that extent, the contention of the Revenue is accepted while the assessee company has demonstrated that the investments in the share capital of India Infoline Investment Services Limited on 4th February 2008 has been made out of proceeds of fresh issue of shares of the assessee company in January 2008, thus no disallowance under Rule 8D(2)(ii) of Income Tax Rules, 1962 read with Section 14A of the Act is justified.
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2015 (12) TMI 1665
Entitlement for deduction u/s. 54 in respect of one house only - Capital gains exemption in case of investment in a residential house property - Held that:- The comprehensive reading of circular 1 of 2015 made it clear that the exemption of LTCG is also available if investment made in more than 1 residential house.
In view of the judgment in CIT vs. Chand M. Makhija [2013 (12) TMI 1525 - KARNATAKA HIGH COURT] and circular 1 of 2015 of CBDT, the assessee was not liable for LTCG against flat no.101 and the addition made by the AO which was sustained by the CIT(A) is deleted.
Since ground no.1 of appeal has been allowed by us and holding of 2 flat are not to be treated as separate investment for allowing deduction u/s 54 of the Act, hence, ground no.2 has become infructuous.
Addition of amount received on account of alternate accommodation - Held that:- CIT(A) while dealing with this addition has held that the assessee has not been able to prove any nexus between the rent received of ₹ 15,50,000/- and expenses claimed of ₹ 6,36,280/- and further held that in absence of such nexus, the expenses so claimed cannot be allowed, however, the same was sustained to the extent of ₹ 6,36,280/-. Assessee drawn our attention to page 11 of the development agreement wherein it has been clearly mentioned that the assessee is entitled to ₹ 15,50,000/- in temporary alternative accommodation to be acquired by the owners through their own efforts and their own choice.
Since this compensation of ₹ 15,50,000/- has been shown as income under the head “Income from other Sources”, therefore, the assessee is entitled for deduction of expenses incurred for earning this income.We accordingly, direct the AO to allow the deduction of expenses claimed, on account of (i) rent paid ₹ 5,94,000/- (ii) Brokerage ₹ 27,280/- and (iii) Rent paid brokerage ₹ 15,000/-
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2015 (12) TMI 1664
TPA - selection of comparable - Held that:- Motilal Oswal Investment Advisors Pvt Ltd is held as a “merchant banker and investment banker”, which is functionally not similar to that of function of non-binding advisory services. Therefore, after hearing both the parties in this regard, we are of the opinion that Motilal Oswal Investment Advisors Pvt Ltd is not a good comparable in this case. Accordingly, AO is directed to exclude the same from the comparables.
IDFC company is engaged in rendering of services as Portfolio Manager, whose functions are intimately different from that of the functions of non-binding advisory services rendered by the assessee to its AEs.
The services rendered by the ICRA are more akin to ITeS activities and not the non-binding advisory services. We find merit in the argument of the Ld Counsel for the assessee. Further, Ld Counsel also brought our attention to the fact that the TPO / AO collected some information u/s 133(6) of the Act and made use of the same at the back of the assessee without supplying copies to the assessee. We find merit in the arguments of the Ld Counsel for the assessee that the said information shares with the assessee before they are made use by the TPO / AO. For this limited purpose, we remand this issue to the file of the AO / TPO to re-examine the functions of the said company in depth after supplying the information so collected by them u/s 133(6) of the Act.
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2015 (12) TMI 1663
Unexplained jewelry - excess jewellery found in a search - explanation offered by the assessee that if the credit is given for 500 grams for each family members in terms of instruction no.1916 dated 11-05-1994 which governs the seizure, during the course of search and seizure operations source for 1300 grams can be treated as explained - Held that:- Now we deal with the applicability of CBDT instruction in terms of which credit of 1300 grams of jewellery was claimed by the assessee. It is the duty of the assessee to bring on record the family members with supporting evidence and also prove that other family members i.e. father of assessee had not claimed the same relief. We find from material on record that it is father of the assessee, who offered the explanation in support of source of jewellery found. We also find that father of the assessee and assessee are residing jointly. Mere reliance on the case laws does not come to the rescue of the assessee without bringing any supporting material on record in support of legal proposition. Therefore, in absence of any material on record, we are not able to grant any relief on this ground.
Regarding the ancestral jewellery of 500 grams the assessee had not produced any evidence proving the existence of ancestral jewellery of 500 grams therefore, it cannot be treated as explained. Regarding the balance jewellery of 400 grams in the hands of the assessee’s wife Smt.Saritha Bai, the order of learned CIT(A) is well reasoned since the wealth tax return of the assessee’s wife was filed after conclusion of search & seizure operation, it cannot be treated as explained. - Decided against assessee
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2015 (12) TMI 1662
Issues Involved:
1. Inclusion of R-Systems International Ltd. as a comparable.
2. Inclusion of Eclerx Services Limited as a comparable.
3. Inclusion of Infosys BPO Limited as a comparable.
4. Inclusion of TCS e-serve International Limited as a comparable.
Issue-wise Detailed Analysis:
1. Inclusion of R-Systems International Ltd. as a Comparable:
During the course of hearing, the assessee argued for including R-Systems International Ltd. as a comparable. The TPO rejected this company on the ground that it was engaged in software development, while the DRP rejected it due to its different financial year. The assessee submitted the margins for the period April 2009 to March 2010, based on calendar year data available in the public domain, which were not considered by the lower authorities. The Tribunal referenced the Delhi Bench decision in MERCER CONSULTING (INDIA) PVT. LTD. and the Mumbai Bench decision in AEGIS LTD., which allowed the inclusion of such data. The Tribunal remitted the issue to the TPO/AO to include R-Systems International Ltd. in the list of comparables after re-computing the margins for the financial year under consideration based on the audited accounts, taking segmental data of the BPO segment into consideration. This ground was allowed for statistical purposes.
2. Inclusion of Eclerx Services Limited as a Comparable:
The assessee contended that Eclerx Services Limited was functionally different, providing high-end KPO services, while the assessee was engaged in routine BPO services. The Tribunal noted that the Delhi High Court in Rampgreen Solutions Pvt. Ltd. and the Tribunal in the assessee's own case for A.Y. 2009-10 had held that KPO service providers are not comparable to BPO service providers. The Tribunal directed the exclusion of Eclerx Services Limited from the list of comparables, following the precedent set by the Delhi High Court and the Tribunal's earlier decisions.
3. Inclusion of Infosys BPO Limited as a Comparable:
The assessee argued that Infosys BPO Limited was functionally different and had a significantly higher turnover, driven by its brand value and entrepreneurial nature. The Tribunal referenced multiple judgments, including the Delhi High Court decision in Agnity India Technologies Pvt Ltd., which upheld the exclusion of Infosys BPO due to functional differences and its large turnover. The Tribunal agreed with the assessee's arguments and directed the exclusion of Infosys BPO Limited from the list of comparables.
4. Inclusion of TCS e-serve International Limited as a Comparable:
The assessee argued that TCS e-serve International Limited was not comparable due to its transactions with Citigroup entities, functional differences, and an exceptional year of operations. The Tribunal noted that TCS e-serve was part of a large group and provided various technical services, making it functionally distinct from the assessee's BPO services. The Tribunal referenced the decision in Techbooks International Pvt. Ltd., which excluded TCS e-serve due to the absence of segmental data for its software development services. The Tribunal directed the AO to exclude TCS e-serve International Limited from the list of comparables.
Other Grounds:
Ground Nos. 1 to 6, 9, 12, 16, 17, 18 & 19, and 20 & 21 were dismissed as no specific arguments were made by the Ld. Counsel or were deemed consequential.
Conclusion:
The appeal of the assessee was partly allowed, with specific directions to exclude certain companies from the list of comparables and to reconsider the inclusion of R-Systems International Ltd. based on re-computed margins. The order was pronounced in the open court on 9th December 2015.
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2015 (12) TMI 1661
Bail application - Prevention of Money Laundering - Held that:- The burden of proof as referred to herein above relates to proceeds of crime. As stated herein above, since the applicant is not facing any charge for any offence under Part A of Schedule, Section 45 (1) of the PMLA would not be prima facie applicable and, therefore, it is not required that the applicant is to be declared as not guilty of such offence at the time of dealing with an application for bail.
Under Section 45 (2) of PMLA, the other provisions of the Code would be applicable and, therefore, the case is to be dealt with accordingly. Therefore, I am dealing with the same. As far as the allegations levelled against the present applicant are concerned, I have gone through the statement of the applicant himself. It appears that applicant is one of the partners of “SAM DELHI” along with another accused of the Original Complaint No.8 of 2015 who were operating their own book in Delhi making and receiving bets on different matches. The investigation is almost over and on completion of investigation, the present complaint has been filed by the authority. I have also considered the fact that the maximum punishment is of 7 years and, therefore, the case of the applicant can be considered by imposing certain conditions. In my view, the judgments relied upon by Ms. Patel would not be applicable to the facts of the present case.
Hence, the application is allowed and the applicant is ordered to be released on bail registered at the instance of the respondent No.2, on executing a bond of ₹ 1,00,000/- (Rupees One Lac only) with two local sureties of ₹ 50,000/- each to the satisfaction of the trial Court and subject to the certain conditions .
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2015 (12) TMI 1660
TPA - selection of comparable - Held that:- As gone through the Master Services Agreement between the assessee and its AE, namely, Tech Enterprises Inc., a Fairfax based incorporation having its registered office at Fairfax, Virginia, USA. This Agreement is valid for the year under consideration as well, whose copy is available at page 263 onwards of the paper book. As per this Agreement, the assessee specializes in provision of technical services, such as, data conversion, web-page construction, data entry/key boarding and software development. The assessee under this Agreement has undertaken to render ‘Included services’ which have been described in Exhibit-A. The services so availed by the assessee’s AE are ultimately given to end-customers. Thus companies dissimilar with that of assessee need to be excluded from final list of comparability.
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2015 (12) TMI 1659
Interest on time deposits paid to members under Section 194A - assessee is a Co-operative bank - Held that:- The Ministry of Finance, Government of India vide Circular No.19/2015 in F.No.142/14/2015- TPL, has clarified that the Co-operative Banks need not deduct tax at source under Section 194A of the Act. - Decided in favour of assessee.
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2015 (12) TMI 1658
Recovery of arrear sales tax - petitioner was asked to pay the arrears of tax on property of seller, from whom the property was purchased by the petitioner - the petitioner has approached this Court stating that he is a bona fide purchaser for value without notice of the charge over the property and hence, his interest should be protected - Held that: - it is, no doubt, clear that the petitioner had purchased the property in question without notice of the charge over the same from his vendor and the same has also not been reflected in the Encumbrance Certificate issued by the Registration Department. In such circumstances, this Court is of the view that the impugned order passed by the respondent is vitiated in law - the petitioner, being a bona fide purchaser for consideration without notice of the charge over of the property, cannot be proceeded against insofar as the arrears of sales tax of his vendor - petition allowed - decided in favor of petitioner.
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2015 (12) TMI 1657
Addition u/s 68 - reopening of assessment - Held that:- Nowhere in the assessment order the ld. Assessing Officer has brought into existence any material to show that the company Victory Software P. Ltd. is a non-existing and a fictitious entity. It is, therefore, incorrect to arrive at a conclusion that the money received by the assessee by way of share application from Victory Software is bogus.
We also hold that the assessee has discharged its burden u/s 68 as it had filed the enormous details in respect of M/s Victory Software P. Ltd. before the ld. Assessing Officer for him to investigate upon in detail. The ld. Assessing Officer has failed to establish that the details filed by the assessee are wrong. He has also failed to produce sufficient material on record to prove that the receipt of money by the assessee from M/s Victory Software P. Ltd. is accommodation entries from the entry operator S.K. Jain Group. In the above circumstances, we allow grounds filed by the assessee and held that reopening by the ld. Assessing Officer was met valid. - Decided in favour of assessee.
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2015 (12) TMI 1656
Imposition of penalty u/s 112(a)(i) read with Section 114 AA of the CA, 1962 - import of restricted item - fire crackers were found concealed along with the declared goods - confiscation - penalty - Held that: - the appellant introduced the middle man with the CHA and is no way connected to the importer of the goods and also was not aware about the goods contained in the container. Thus, the person who has not dealt with the clearance of goods and also not connived with CHA or importer in clearance of prohibited goods, penalty cannot be imposed on such person as a mediator/ facilitator - penalty set aside - appeal allowed - decided in favor of appellant.
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2015 (12) TMI 1655
CENVAT credit - denial on the ground that the disputed goods are not confirming to either inputs or capital goods for the purpose of taking cenvat credit - Held that: - impugned order has been passed based on documents submitted by the respondent. Since, upon analysis of the factual aspect, the learned Commissioner (Appeals) has held that cenvat credit is available on the disputed goods, I do not find any reason to deny the cenvat credit on the ground that the same have not been used in or in relation to the manufacture of final product by the respondent - credit allowed - appeal dismissed - decided against Revenue.
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2015 (12) TMI 1654
Interest for delayed sanction of refund - Section 11BB of the CEA, 1944 - relevant date for calculation of interest - Held that: - the liability of the Revenue to pay interest under Section 11BB ibid commences from the date of expiry of three months from the date of receipt of application of refund under sub-section (1) of Section 11B ibid. Time taken for verification of documents, issuance of show cause notice and adjudication of the dispute by Revenue should be excluded for the purpose of computation of the period for sanctioning the refund - In this case, since the assessee had submitted all the desired documents on 22.11.2004, such date should be considered as the relevant date for filing the refund application. Since the refund amount was not paid within three months from the date of its filing, the assessee is entitled for interest from the date of expiry of three months from filing the refund application i.e. 21.02.2005, till the date of actual payment of the refund amount i.e. 03.01.2006 - appeal dismissed - decided against Revenue.
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2015 (12) TMI 1653
Assessment u/s 153C - Held that:- No hesitation in holding that the A.O. of the person searched has not recorded any satisfaction that the income relatable to the seized material belongs to the assessees herein. Therefore, the assessments are quashed.
Rectification of mistake - Held that:- Since the very basis i.e., the assessments under section 143(3) read with section 153C of the I.T. Act have been quashed, the order passed by the A.O. u/s. 154 has no legs to stand. Therefore, the appeals against the order of the CIT(A) confirming the order of the A.O. under section 154 are also quashed as having no basis.
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2015 (12) TMI 1652
Natural justice - the mandate of law u/r 10(11) of the TNVAT Rules, 2007, for calling for the records for a detailed scrutiny, was not followed - alternative remedy of appeal - Held that: - the grievance of the appellant as against the Assessing Officer is not something that still entitles the appellant to bye- pass the alternative remedy of appeal. Therefore despite the fact that we are unable to approve the manner in which the Assessing Officer dealt with the objections, we do not wish to entertain the writ appeals - appeal dismissed - decided against appellant.
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2015 (12) TMI 1651
Addition u/s. 14A read with Rule 8D(2)(ii)- Held that:- As the assessee-company has suo moto worked out the interest disallowance of borrowing which were subject matter of investment in shares which were generating exempt income and hence the working given by the assessee is done on the basis of Auditor’s report of statutory auditor who carried out the work of audit. No qualifying has been made by the auditor while submitting Form 3CD report u/s. 44AB of the Act. Also as the assessee-company’s own capital is much more than the investment made by the assessee-company in the shares/mutual funds which were generating exempt income and therefore disallowance was not correct considering the jurisdictional High Court decisions in the case of Reliance Utilities and Power Ltd. (2009 (1) TMI 4 - BOMBAY HIGH COURT) and also taking note of the facts available on record and also taking note of his predecessor CIT(A)’s orders which have been referred by the assessee-company - Decided in favour of assessee
Allowance of foreign travelling expenses of wife of Chairman of the assessee-company - Held that:- CIT(A) after considering the submissions of the assessee that Mrs. Patsy P. Mistry was a Director of the assessee-company and wife of the Chairman of the Company Mr. Pallonji S. Mistry travelled abroad. Mr. pallonji s. Mistry is 80 years as on 31.3.2008 when Mrs. Patsy P. Mistry, Director of the accompanied him and considering the age of the Chairman of the assessee-company and also his medical necessity of health, his wife accompanied him during his tour abroad. Learned CIT(A) was of correct view that same was completely justified and warranted to accompany the Chairman hence the journey undertaken by Mr. Patsy Mistry cannot be said to be unjustified and not for business purposes when the chairman of the company was so warranted for the assessee’s business and operations. Learned CIT(A) disagreed with the Assessing Officer’s finding and deleted the addition made by Assessing Officer. - Decided in favour of assessee
Disallowance of Employees’ Contribution to Provident Fund/ESIC - payments made after the due dates - Held that:- The assessee-company has paid the contribution to PF and ESIC after the due date but within the grace period. Learned CIT(A) was rightly held that the payment made within the grace period by following the Judgement of Hon'ble Supreme Court in the case of CIT Vs. Alom Extrusions Ltd. (2009 (11) TMI 27 - SUPREME COURT ). Therefore, we are of the considered view that the findings of learned CIT(A) on this issue do not require any infirmity - Decided in favour of assessee
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2015 (12) TMI 1650
Undisclosed investment addition u/s 69 - Held that:- We have noticed that the basis for making the impugned addition is the loose sheet found during the course of search conducted in the Bharat Shah Group. A very important point is that the said loose paper does not contain the name of the assessee, it was an undated document and does not bear signature of anyone. Another important point is that both the purchaser as well as seller has denied the contents of the said document.
AO has tried to decipher the information found in the said document by interpreting that “Sh” represents Cash payment and “Q” represents cheque payment. We notice that the assessing officer has not brought any material on record to corroborate his interpretation. A perusal of the document would show that the letter written after 45 looks like “C” and hence it is capable to different interpretation also as against the interpretation given by the AO as “Lakhs”. The assessing officer has only tried to corroborate his interpretation by comparing the aggregate amount noted in the loose sheet with the stamp duty valuation. However, as pointed out by the assessee, the alleged cash payment together with the purchase value declared by the assessee far exceeds the stamp duty valuation and hence such kind of corroboration is not acceptable.
Even otherwise, the stamp duty valuation stated to be adopted by sec 50C is only a legal fiction applicable to a seller of property and it does not automatically support the conclusion that the difference between the stamp duty valuation and the actual sale consideration as passed hands. Though the AO has interpreted that the cheque payment made by the assessee was ₹ 2.85 crores, the said interpretation has been proved to be wrong by the co-owners, since they have actually paid a sum of ₹ 3.85 crores by way of cheque. Further, the assessee has stated that the payments have been made in 2004, 2010 and 2011, which fact also does not support the interpretation given by the assessing officer. Under these set of facts, we are of the view that the Ld CIT(A) was justified in observing that the assessing officer has made the impugned addition on surmises and conjectures. The decision rendered by Hon’ble jurisdictional High Court in the case of Lata Mangeshkar (1973 (6) TMI 13 - BOMBAY High Court ) supports the case of the assessee. - Decided in favour of assessee
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