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Showing 241 to 260 of 2015 Records
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2018 (12) TMI 1777
100% EOU - Classification of services - Health Club and Fitness Centre services or not - business of development of software as a 100% EOU operating under the STPI scheme - HELD THAT:- The Trust has been constituted for the welfare of the employees in 1994 much before the period of dispute impugned herein. Both Trust and the appellant company cannot be said to be one and the same entity, inasmuch as both are separately assessed to Income Tax and both have been granted separate service tax registrations which is a fact on record. Both the authorities below have taken note of the fact that subject service (for gym, health centre, etc) has actually been rendered by the Trust and it is only the premises where gym is located, belongs to the company, which should not be the mere criterion for ascertaining the service provider - In fact, the entire contribution made by the members, on which the instant demand has been raised, has been received by the Trust and not the Company.
As per Section 65(7) of the Finance Act, 1994, the term ‘assessee’ has been defined to mean the person liable to service tax and includes its agent. As per the Rules, the person liable to pay service tax is the person who has provided the taxable services, i.e. the service provider. It is not disputed that the service has actually been provided by the Trust, who subsequently got registered with the department and started discharging service tax liability which fact has been noted by the Ld. Asst Commissioner in his order dated 28.11.2008, based on which the demand on appellant company has been dropped.
The demand of service tax, interest and penalty by allowing the instant appeal with consequential relief - appeal allowed - decided in favor of appellant.
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2018 (12) TMI 1776
Valuation - inclusion of reimbursed subsidy amount admissible under the Scheme towards the payment VAT on future sale, in assessable value - HELD THAT:- The same issue has been decided by this Hon’ble Tribunal in case of SHREE CEMENT LTD. SHREE JAIPUR CEMENT LTD. VERSUS CCE, ALWAR [2018 (1) TMI 915 - CESTAT NEW DELHI] where it was held that There is no justification for inclusion in the assessable value, the VAT amounts paid by the assessee using VAT 37B Challans.
Appeal dismissed - decided against Revenue.
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2018 (12) TMI 1775
Reopening of assessment u/s 147 - case reopened on the basis of facts disclosed by the petitioner in wealth tax return - HELD THAT:- As pointed out that the petitioner has drawn the attention of the Assessing Officer to all these facts in the objections raised against the reopening to the effect that the property being stock-in-trade is reflected in the books of accounts of the petitioner's proprietary concern “C.R. Patil Sankul” in respect of which the petitioner is maintaining separate books of accounts. As pointed out that in this case the impugned notice is issued on 31.3.2018; vide letter dated 9.4.2018 the petitioner had called upon the respondent Assessing Officer to furnish a copy of the reasons recorded for reopening the assessment, however, such reasons came to be furnished only on 14.9.2018, and hence, there was some delay in raising the objections. Assessing Officer is, therefore, not disposing of the objections on the ground of delay and is proceeding further with the assessment.
Having regard to the submissions advanced by the learned advocate for the petitioner, Issue Notice returnable on 11th February, 2019. By way of ad-interim relief, the respondent is permitted to proceed further pursuant to the impugned notice; he, however, shall not pass the final order without the permission of this court. Direct service is permitted.
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2018 (12) TMI 1774
Penalty u/s 271D - failure to comply with Section 269SS - reasonable cause u/s 273B for entering into such transactions through journal entries - Tribunal holds that the failure to comply with Section 269SS was on account of reasonable cause on the part of the respondents - HELD THAT:- No ground to entertain this petition. The Special Leave Petition is dismissed. Pending application(s), if any, stand disposed of.
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2018 (12) TMI 1773
Implementation of Ethanol Blended Petrol (EBP) on mandatory basis - Chemical industry has been suffering from a long time from shortage of ethanol - basic objective of Ethanol has not been achieved due to shortfall in supply by the ethanol suppliers - HELD THAT:- It is apparent from inception, the EBP factored in purchase of ethanol by OMCs, which are public sector units, at prices to be decided by the Central Government. This was part of its overall strategy of not only ensuring cleaner fuel, and lowering emission, but increasing eventually bio fuel component to 10%. The material on record shows that from an initial low of about 1.75% in 2009, the EBP achieved upto 3.5% of bio-fuel element in the petroleum sold. The various cabinet notes and decisions also indicate that a key component in EBP and its envisioned success was on the basis of sustained supply of ethanol at prices determined by the Central Government. This, it was felt, would act as incentive to those supply ethanol, for the EBP. The February 2010 minutes suggests that the Saumitra Chowdhury Committee was set up at the behest of the Central Government.
The petitioner’s challenge to the EBP is two-fold : a constitutional challenge on the basis that the policy is an unsustainable restriction, as it is not founded even on a statute; and two that its continued existence is arbitrary, since it has the effect of driving up the price of ethanol, which has applications other than for biofuel purposes, especially in the chemical industry.
So far as the first issue is concerned, It is therefore, evident that not all activities of the State, carried out through its executive powers, need to be based on legislation. The State can do the robes of a trader, and enter into commercial relationships; it can procure goods, set price limits for procurements of article by its officers and agencies and in the course of commerce or other multifarious activities it engages in, fashion guidelines including pricing parameters, ceiling limit in respect of nature of articles, or the spelling out the kind of services it wishes to procure, or set out the standard terms of contract. This freedom to contract is fettered only to the extent that it should be aimed at securing public interest and inuring to the larger public good.
As to the second argument that the decision to continue with the EBP is unfair, as it results in artificial and tends to drive up prices of ethanol and that without such intervention, whereby the oil manufacturing companies are directed to procure the product at specified prices, the Court recollects that in the exercise of policy framing and implementation, the State has flexibility in its approach.
It is thus, apparent that the Court’s jurisdiction is limited to examine the validity or legal efficacy of a policy and ensuring that it does not violate any statutory canon or is not the outcome of an irregular or unfair procedure; nor tainted by mala fides. In the facts of the present case, what the petitioner frontally challenges is not just the legality of the EBP but its efficacy as well, contending that it has not yielded the benefits envisioned on the one hand, and on the other, is wreaking havoc on its business - it is unfeasible for this Court to venture into the area of a merits review of that policy, purely because the procurement price fixed, tends to drive up prices of ethanol for use by industrial consumers, like the petitioner.
Petition dismissed.
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2018 (12) TMI 1772
Rectification of mistake u/s 254 - denial of claim of deduction u/s.10(2A) - ITAT set aside the order of the ld. CIT(A) which held that the receipt should be treated as capital receipt - ITAT has also set aside the order of the ld. CIT(A) regarding the adjustment of the said amount from computation of book profit u/s. 115JB - HELD THAT:- Assessee is pointing out the various submissions and the paper book submitted and wants a reconsideration of the issues decided by the ITAT. We find that section 254(2) of the Act mandates rectification of the mistake apparent from the record. The request of reconsideration as made by the ld. Counsel of the assessee throughout his submissions does not come under the purview of rectification of mistake apparent from the record. What the ld. Counsel of the assessee is seeking is the review of the order of the Tribunal which is not permissible under the Act.
We place reliance upon the decision of Hon'ble jurisdictional High Court in the case of CIT vs. Ramesh Electric and Trading Co. [1992 (11) TMI 32 - BOMBAY HIGH COURT] as referred to and drawn strength from the case of T.S. Balaram, ITO v. Volkart Bros. [1971 (8) TMI 3 - SUPREME COURT] wherein held mistake apparent on the record must be an obvious and patent mistake and not something which can be established by a long drawn process of reasoning on points on which there may be conceivably two opinions. A decision on a debatable point of law is not a mistake apparent from the record
From the above it is clear that wrong appreciation of facts or wrong appreciation of case laws may be an error in judgement but they do not constitute mistake apparent from record.
Issue pointed out by the ld. Counsel of the assessee do not fall under the realm of mistake apparent from the record liable to be rectified u/s. 254(2) of the Act. It is settled law that reappreciation/ re-adjudication is not permissible in the garb of the rectification of mistake in the order of the Tribunal. Miscellaneous applications by the assessee are dismissed.
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2018 (12) TMI 1771
Manufacturer of goods - manufacture and supply of Railway Wagon and Bogie components falling under Chapter 72, 73 and 86 of the Central Excise, Tariff Act, 1985 - whether the assessee is to be considered as the manufacturer of the goods supplied by them to Electricity Boards/Railway Wagon manufacturers?
HELD THAT:- Admittedly, goods have been got manufactured by various job workers by payment of job charges and supply of raw materials. After receipt of goods from the job workers, the mandatory inspection by third party Agency has been carried out at the assessee’s premises before supply of the goods to the customers. Further the assesses have represented themselves as manufacturer of the goods before their customers. In these circumstances, the question for decision is whether the assessees are liable to be considered as manufacturer and liable to payment of Excise Duty - Revenue has justified the view that the assessee is the manufacturer with the argument that inspection is an important process without completion of which, the goods do not become marketable, since they cannot be supplied to the customers. The definition of the term “Manufacture” in section 2 (f) includes any process which is ancillary or incidental to the completion of the manufactured product.
Revenue has sought to sustain the view that the assessee is the manufacturer with the submission that they have engaged the job workers, supplied the raw material and supervised the activities there and hence, are to be considered as the manufacturer. Even though, the idea is attractive, it does not merit acceptance. The transformation of the raw material into the final product has been done by the job worker at his premises and hence, the job worker alone is to be considered as the manufacturer and the liability to payment of Excise Duty would be upon him.
The assessees cannot be considered as manufacturers of the goods supplied to Railway Wagon manufacturers as well as Electricity Boards. The respective job workers who have manufactured the goods will be liable to payment of Excise Duty. In this view, there are no infirmity in the order passed by the Commissioner dated 30/11/2012 and hence, it is sustained and all the revenue appeals are rejected.
Appeal allowed - decided in favor of appellant.
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2018 (12) TMI 1770
Chargeability of interest u/s 234B in the case of non-resident - HELD THAT:- Issue covered against the revenue by the decision of this court in Director of Income - Tax v. Jacabs Civil Incorporated [ 2010 (8) TMI 37 - DELHI HIGH COURT] and Director of Income - Tax (International Taxation) v. GE Packaged Power Inc. [2015 (1) TMI 1168 - DELHI HIGH COURT]
No substantial question of law arises for consideration in this appeal. Accordingly, the appeal is dismissed without any order as to costs.
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2018 (12) TMI 1769
Book profits computation u/s 115JA - inclusion of loss of assets which had not been actually written off - HELD THAT:- In the subsequent judgment of this Court in the case of COMMISSIONER OF INCOME TAX, MANGALURU Vs. SYNDICATE BANK SYNDICATE HOUSE [2014 (10) TMI 857 - KARNATAKA HIGH COURT] while following the earlier order in the assessee’s own case, the matter was remanded to the First Appellate Authority, with a direction to the authority to look into the records and to record a finding as to whether the bad and doubtful debts are reduced from the loans and advances of the debtors from the assets side of the balance sheet.
In view of the fact that the said issue has to be ascertained by the authority, we do not find it necessary that the said substantial question of law raised requires to be answered. Therefore, the matter stands remitted to the Commissioner of Income Tax (Appeals), with a direction to look into the records and to record a finding as to whether the bad and doubtful debts are reduced from the loan and advances of the debtors from the assets side of the balance sheet and thereafter, to re-compute the income under Section 115JA of the Act. The contention of the assessee if raised withregard to the applicability of Section 115JA of the Act, is kept open for adjudication before the Commissioner of Income Tax (Appeals).
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2018 (12) TMI 1768
Stay on appeal - inter-state purchase of goods - mistake in C-form - amount reflected in wrong column - correction of the mistake - HELD THAT:- The present writ petition is disposed off directing that the petitioner would be issued segregated and separate C-forms in terms of the prayer Clause-A to the writ petition (subject to verification of entitlement or merits and not on the ground of limitation).
However, this direction would remain suspended till Civil Appeals pending in the Supreme Court against the decision in the case of the petitioner are decided.
Petition disposed off.
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2018 (12) TMI 1767
Allotment and transfer of share - It is stated that the petitioner had already submitted the transfer instrument duly executed by the petitioner as directed by the respondent No.1 company but the respondent No.1 company first denied the transfer on the ground of non-inheritance of the said right and later on, on the ground that the relevant documents were not provided before 26.09.2007 - condonation of delay in filing appeal - HELD THAT:- The instant prayer made under Section 58 of the Companies Act, 2013 is in the nature of Appeal as contemplated in sub-section (4) of Section 58 and the application for condonation of delay is maintainable in the Appeal.
The petitioner had been pursuing the genuine cause of seeking the letter of Administration before the District Judge in the application filed in the year 2007 which was decided after a period of 5 years, in the year 2012. The delay thus cannot be said to be malicious or contumacious but rather bonafide. The application for condonation of delay is thus allowed.
The arrangement as well as the later correspondence of respondent No. 1 company clearly brings out that transfer of share is involved and thereby Section 58(4) of the Act would become applicable. In view of this position, the applicability of Section 59 of the Act is not being examined.
The respondent No.1 company without sufficient cause refused to register the transfer of shares consequent to the arrangement between the respondent no.1 company and the erstwhile respondent No.2 company whereby the father of the petitioner/his legal heirs were entitled to receive equivalent shares of respondent company No.1 from respondent company No.2 - the petition is maintainable in law and the contentions raised by the respondent No.1 and 2 companies in respect of the maintainability of the petition cannot be accepted.
Under the provisions of Section 58 (5) of the Act, we direct that the transfer shall be registered by the respondent No. 1 company and the respondent No.1 company shall comply with such order within a period of ten days on receipt of the order - Application disposed off.
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2018 (12) TMI 1766
Condonation of delay - delay of 1631 days - sufficient cause of delay - HELD THAT:- As gone through the affidavit filed by the Managing Director of the assessee-company and also the medical certificates. As find that there is no proximity between the period of delay and the medical certificates filed by the assessee. also find that the assessee has not explained the extraordinary delay of 1631 days by explaining the reasons. Find that the assessee failed to show a sufficient cause to condone the delay in the filing the appeal. Therefore, the petition filed by the assessee for condonation of delay is deserves to be dismissed. Accordingly, dismiss the appeal in limini.
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2018 (12) TMI 1765
Violation of FEMA - Appellant Company has failed to submit (Bill of entry) documentary evidence for import of goods in respect of the advance remittance through HSBC Bank - penalty imposed on managing director - HELD THAT:- It is admitted by the respondent that the Company has used the foreign exchange for the declared purpose in terms of section 10 (5) by assuming that non-receipt of the goods would mean use of foreign exchange for a wrong purpose. Once the foreign exchange has been used by the Appellant Company for the declared purpose and if said purpose is not achieved it would not lead to the inference of not using the foreign exchange for the purpose for which it was acquired.
Invoking of Regulation 6 of the Foreign Exchange Management (Realisation, Repatriation and Surrender of Foreign Exchange) Regulations, 2000 is without any substance as the same applies to Resident Person, who has acquired or purchased foreign exchange for any purpose mentioned in the declaration to the Authorised Dealer in terms of Section 10 (5) of the Act and does not use it for the said purpose and is enjoined to surrender such foreign exchange or unused portion thereof back to the Authorised Dealer within 60 days. In the Show Cause Notice, the provisions of the law have also been engrafted .
The Counsel for the respondent has referred Section 11 of FEMA contending that the exemption granted by RBI is basically seeking compliance are not otherwise which has no substance as for alleged compliance of filing of Bill of Entry, RBI had granted exemption, hence there was no scope of compliance. Even more, reading of Section 11 FERA, 1999 in the manner is correct. In fact, it is an enabling section empowering RBI to issue directions to the Bankers/Authorised Persons for the purpose of securing compliance of the provisions of FEMA. The said section goes in consonance with the judgment of the Hon‟ble Supreme Court in the case of LIC versus Escorts, [1985 (12) TMI 289 - SUPREME COURT] wherein held that Reserve Bank of India is the Custodian General of the foreign exchange of the country and what is permitted/exempted by RBI cannot be questioned, by any person and directions are given by RBI in terms of section 11 of FEMA in consonance with the said law laid down by Hon‟ble Supreme Court.
The respondent admittedly not denied the fact that the vendor was declared bankrupt who has also not issued the 60 days notice to the appellant about it, otherwise the appellant would have approached to recover the amount as of law. Even if the contention of the respondent is accepted, the respondent ED is not able to get any additional/independent evidence against the appellant apart which was already available with RBI.
As asserted by the respondent that inquiries were made with the Company to find out the person incharge and responsible during the relevant period and the Company vide communication dated 14/10/2014 informed that Mr. S. Jain (Head of Finance) was the person incharge during the impugned period, who had already left the Company. The said Mr. S. Jain has not been arraigned in the show cause noticee and instead the Managing Director, who is appointed on 27/08/2015 as Managing Director of the Company, a citizen of South Korea was arraigned in vicarious liability in terms of Section 42 of FEMA. The Form DIRE-12 for appointment of the Appellant No. 2 as Managing Director. The present Managing Director became Managing Director on 27/08/2015 and was not the person in-charge of and responsible to for the conduct of the business of the Company, which was duly informed to the Respondents during the course of investigation but the Respondent chosen to arraign the new Managing Director with vicarious liability. Therefore, the notice and the penalty imposed on the Managing Director is without any valid reason.
Allegations against the Company and the order passed against the Company is liable to be set aside. Once Company is not liable, as aforesaid, there is no scope of imposition of penalty on the Managing Director as the precondition for imposition of penalty in vicarious liability is, if the company is found guilty.
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2018 (12) TMI 1764
TP Adjustment - comparable selection - exclusion on account of RPT filter - HELD THAT:- Companies with RPT in excess of 15% need to be excluded from final list.
Working capital adjustment - In the present case lower authority had worked out working capital adjustment on hypothetical figure of 1.63% instead of on actual basis. Hence we direct the TPO to grant working capital adjustment on actual basis, subject to availability of the workings made available by the assessee to TPO in earlier round of litigation. Accordingly we direct the AO / TPO to give the working capital adjustment on actual basis if the assessee has given the detailed working to the lower authorities. However, if no such working has been given by the assessee to the lower authorities then in our view the assessee will not be entitled to any such claim. This ground is allowed for statistical purpose.
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2018 (12) TMI 1763
Revision u/s 263 - AO has not examined the taxability of unsold flat under the head "Income from House Property" and disallowance as per the provisions of section 36(1)(iii) - HELD THAT:- Keeping in view the contrary decision of non-jurisdictional High Court, we are of the view that issue is debatable and two views are possible. The Hon'ble Supreme Court in Max India Ltd.'s case [2007 (11) TMI 12 - SUPREME COURT] held that when two views are inherently possible, the provision of section 263 would not attract. We may refer here that the unsold flat was treated by assessee as stock-in-trade in its books of account. The flats sold by the assessee were assessed under the head "Income from Business". Therefore, in our considered view that the order for not bringing the unsold flats to tax at notional letting value under the head "Income from Other Sources" is not erroneous. The assessing officer has taken one of the possible views. Even otherwise, sub-section (5) in section 23 was inserted by Finance Act, 2017 and is applicable only from 01.04.2018 and not for the Assessment Year under consideration. Therefore, the twin condition as prescribed under section 263 are not fulfilled in respect of first issue i.e. taxability of unsold flats under the head "Income from House Property".
Disallowance of interest u/s 36(1)(iii) in respect of payment made to PRS Developers - AO has taken starting figure of ₹ 739.66 Crore and reduced interest disallowance of ₹ 27.66 Crore, however, in the notice; the opening figure is taken as per assessment order. As per the working of notice the opening CWIP on 01.04.2012 should be ₹ 720.24 Crore, whereas the opening CWIP determined by Assessing Officer is ₹ 711.90 Crore. The Assessing Officer has correctly worked out opening CWIP at ₹ 711.9 Crore and has reduced ₹ 14.27 Crore interest attributable for Assessment Year 2013-14. In our view The Assessing Officer has correctly worked out the CWIP as on 01.04.2012 at ₹ 711.90 Crore (₹ 739.56 Crore - ₹ 27.66 Crore) and has reduced ₹ 14.27 Crore interest attributable for A.Y. 2013-14. Therefore, the order is not erroneous and passed after due verification of fact. Hence, the revision order is passed by ld. PCIT on second issue is also failed. - Decided in favour of assessee.
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2018 (12) TMI 1762
Penalty u/s 271AAAB - undisclosed income - income surrendered at the time of search - HELD THAT:- In this case there was an existing tax liability on the assessee to pay the taxes and, therefore, the AO should have adjusted the tax from the seized assets, hence, it cannot be said that the assessee has not complied the aforesaid requirement of provisions of section 271AAAB.
Even otherwise, the assessee has also explained that it was not possessed of sufficient funds and the moment it got possessed of funds, it filed the revised return on 12.2.2014 and paid due taxes.
So far as the contention of the assessee that the aforesaid surrender can not / does not fall within the definition of the undisclosed income, as defined under the provisions of section 271AAB is concerned, we do not agree with the above submissions. The assessee has duly made a statement that the aforesaid disclosure was on account of unrecorded transactions / discrepancies in the accounts and on account of certain loose papers found during the search action.
Disclosure, in our view, falls within the scope of undisclosed income as provided under Explanation (C) to section 271AAB. We hold that the case of the assessee does not fall under the provisions of section 271AAB(3) but under the provisions of section 271AAB(1) and minimum penalty@ 10% of the undisclosed income is leviable - Appeal of the assessee is treated as partly allowed.
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2018 (12) TMI 1761
Addition u/s 68 - Bogus LTCG - HELD THAT:- Assessee specifically requested for cross-examination of the deponents whose statements were the basis of addition by the AO and also the report of the Investigation Directorate, Kolkata for rebuttal; from the judicial decisions cited, we find that the issue for consideration is squarely covered by the orders of the Bengaluru ITAT in the cases of Arvind Kumar Moolchand [2017 (5) TMI 1643 - ITAT BANGALORE] and Pukhraj Hasmukhlal [2018 (1) TMI 1406 - ITAT BANGALORE] .
Following the aforesaid orders (supra), we set aside the orders of the AO and restore the matter of treatment of profit declared on sale of shares, claimed as exempt u/s 10(38) to the file of the AO to re-adjudicate the issue afresh; after making available to the assessee for rebuttal all documents; including Statements, Investigation Reports, etc., relied upon by Revenue for making the additions/disallowances and providing adequate opportunity to the assessee for cross-examination of persons whose statements are being relied upon - Assessee’s appeal allowed for statistical purposes.
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2018 (12) TMI 1760
The High Court of Uttarakhand dismissed the appeal as withdrawn, as the appellant sought permission to withdraw the appeal in order to pursue a rectification application. The judges presiding over the case were Hon'ble Ramesh Ranganathan, C.J. and Hon'ble R. C. Khulbe, J. The legal representatives were Mr. Pulak Raj Mullick for the Appellant and Mr. Shobhit Saharia for the Respondent.
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2018 (12) TMI 1759
Disallowance of expenditure relatable to the earning of tax exempt dividend income under the provisions of section 14A - HELD THAT:- In the case of ‘Godrej & Boyce Manufacturing Co. Ltd. [2010 (8) TMI 77 - BOMBAY HIGH COURT] has held that Rule 8D of the I.T. Rules r.w.s. 14A(2) of the I.T. Act is not arbitrary or unreasonable but can be applied only if the assessee's method is not satisfactory. It has been further held that Rule 8D is not retrospective and applies from A.Y. 2008-09. For the years for which Rule 8D is not applicable and in the event of that the AO is not satisfied with the explanation/working given by the assessee, disallowance under section 14A has to be made on a reasonable basis. Almost similar view has been expressed by Hon'ble Delhi High Court in the case of 'Maxopp Investment Ltd, & Others' vs. CIT [2011 (11) TMI 267 - DELHI HIGH COURT]
Coordinate Mumbai Bench of the Tribunal in the case of ‘M/s ‘CIBA India Ltd Vs. DCIT’ [2015 (6) TMI 412 - ITAT MUMBAI] while relying upon the decision of the Hon'ble Bombay High Court in the case of ‘CIT Vs. Godrej Agrovet Ltd.,’ [2014 (8) TMI 457 - BOMBAY HIGH COURT] taking into account the consideration of facts and circumstances of that case has held that the expenditure equal to 4% of the exempt income earned by the assessee would constitute reasonable disallowance u/s 14A - in our view the interest of justice will be met if the disallowance made u/s 14A of the Act is restricted to 5% of the total tax exempt earned income
Deduction u/s 80IC - non-inclusion of the receipts, on account of interest received from customers on account of delayed payments, the provision of written back and sundry balances written back - HELD THAT:- The income for the times as discussed above is eligible to be considered and included in the income the assessee for the purpose of deduction u/s 80IC of the Act. However , the claim of duty draw back amounting to ₹ 427/- and Misc. receipts of ₹ 1201/- is not found tenable and the said receipts are to be excluded for the purpose of computing deduct ion u/s 80IC of the Act
Addition on account of shortage of furnished goods - HELD THAT:- As decided in own case [2013 (12) TMI 1697 - ITAT CHANDIGARH] the Tribunal after discussing the facts of the case has observed that the shortage in the finished goods being very small and is normally due to wastage etc. and also considering the plea of the assessee that it is customary that some of the samples may be distributed for promotion of the products, had deleted the addition.
Depreciation @ 60% on computer software asset - HELD THAT:- The assessment year involved is assessment year 2006-07. Even if the depreciation is allowed at a higher or normal rate of the depreciation rate, the entire of the depreciation will be get absorbed / stands al lowed by now i.e. i.e. in the assessment year 2019-2020. We do not see any merit at this stage to interfere as it will not serve any purpose as the same will ultimately have ‘nil’ tax effect. Hence, without deliberating upon the merits of the issue, we think that at this stage, the findings of the CIT(A) needs not to be disturbed. This ground of the Revenue’s appeal is therefore, stands dismissed.
Eligible profits u/s 80IC - CIT(A) in directing the Assessing officer to work out the profit on the sale of raw material and thereafter disallow the same for the eligible profits u/s 80IC - HELD THAT:- What is to be disallowed is the prof it on the sale of the raw material. We do not find any infirmity in the order of the CIT(A) on this issue and the same is upheld.
Deduction u/s 80IC on the income from waste and scrap sale - HELD THAT:- The plea of the assessee is that the waste and scrap is generated out of the manufacturing activity of the assessee. The Ld. CIT(A) considering the facts and circumstances of the case has also held so. In view of this, we do not find any infirmity in the order of the CIT(A) on this issue. This ground of the Revenue is therefore, dismissed.
Deduction u/s 80IC on the processing charges received by the assessee - HELD THAT:- CIT(A) after considering the submissions of both the parties and also examining the facts of the case held that the same to be an activity carried out by the assessee for third par ty and has directed the Assessing officer to allow deduction u/s 80IC of the Act on the profits earned from the processing activity of the assessee.
Addition on account of purchase of steam on arm length pricing from the sister concern - HELD THAT:- CIT(A) after considering the submissions of the assessee and also considering the fact that only a reasonable profit @ 7.37& has been paid to the sister concern, deleted the disallowance of the expenditure. We have considered the rival submissions and also have gone through the order of the CIT(A) and we do not find any infirmity in the same. In view of this, there is no merit in the ground raised by the Revenue
Only the profit element in the sale / purchase of raw material is to be excluded for deduct ion u/s 80IC
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2018 (12) TMI 1758
Scrutiny assessment - claim of waiver of principal component of deposit and debentures - taxable revenue receipt as against the assessee's claim of principal part of deposit and debentures as capital receipt - HELD THAT:- Income Tax Appeal in M/S. MANIPAL SOWSHAGYA NIDHI LIMITED VERSUS THE ASSISTANT COMMISSION OF INCOME-TAX, CIRCLE -1, UDUPI [2018 (12) TMI 1757 - KARNATAKA HIGH COURT] was disposed off by the order of even date on the same ground.
Hence, following the judgment above, the substantial question of law is answered in favour of the assessee and against the Revenue.
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9911796707
