Restoration of appeal - case of Revenue is that the applicant has voluntarily withdrawn the appeal and once he has withdrawn the appeal, the said appeal cannot be restored - HELD THAT:- The applicant has voluntarily withdrawn the appeal filed by him before this Tribunal which was allowed by the Tribunal vide its order dated 20.12.2016, the appeal cannot be restored on the ground that the Revenue’s appeal before the Commissioner (Appeals) has been allowed subsequently. Moreover, the Commissioner has only remanded the matter to the original authority and the applicant is at liberty to defend the case before the adjudicating authority.
There is no reason to restore the appeal - application dismissed.
Principles of Natural Justice - prohibiting Custom Broker from operating in the port - applicant submits that in gross-violation of principles of natural justice, without affording an opportunity of hearing to the appellant, the prohibition order has been passed - HELD THAT:- Even though the prohibition order was passed on 08.11.2017, from the record we do not find that an opportunity of hearing was extended to the appellant to explain their position before such order was passed. Needless to mention, this is gross violation of principles of natural justice and touches the very root of the matter.
The matter is remanded to the adjudicating authority to follow the principles of natural justice and pass a fresh order accordingly.
The appeal is admitted on the substantial question of law - Whether the ld. CESTAT was right in law in holding that the Cenvat Credit of Goods Transport Agency services for outward transportation of goods beyond the place of removal is eligible within the meaning of ‘input service’ as defined under Cenvat Credit Rules, 2004?
Issue notice to the respondent - The matter is fixed for final hearing on 14th March, 2018.
Grant of approval u/s 80-G by tribunal - as per revenue Registration u/s 12-A was denied by the CIT and the same is a precondition for grant of approval u/s 80-G of the act besides the conditions laid down in Clause (a) of the proviso to Section 80-G (5) were not fulfilled - HELD THAT:- As of today the assessee stands registered as a charitable institution under Section 12-A of the Act. The natural corollary is that this application under Section 80G(5) of the Act also becomes liable to be allowed.
TP Adjustment - selection of comparable - as per CIT-A 0% RPT filter should be applied - HELD THAT:- We find from the order of TPO that application of RPT of more than 25% was applied by TPO as well as the assessee-company. Therefore, the ld.CIT(A) was not justified in excluding the above companies by applying 0% of RPT filter. Accordingly, this ground of appeal filed by the revenue is allowed.
Companies having abnormal profits - Companies making super profits or losses cannot by ipse facto reason to exclude the companies from the list of comparables. See QUARK SYSTEMS PVT. LTD. [2009 (10) TMI 591 - ITAT, CHANDIGARH]
M/s.Infosys Technologies cannot be considered as a comparable on the ground of brand value. Accordingly, we uphold the finding of the ld.CIT(A) to exclude this company from the list of comparables.
Foreign exchange gain arising out of sale proceeds received from AE constitutes part of operating income - we remand this issue to the file of the AO/TPO to re-compute the margin of the assessee by treating foreign exchange gain as part of operating income and also compute profit margins of the comparable entities by treating foreign exchange gain as operating income. This ground of appeal filed by the revenues is partly allowed for statistical purposes.
Deduction of 5% from arms length as standard deduction - HELD THAT:- This issue is covered by the decision of the co-ordinate bench of Tribunal in the case of addition of the code adventure of the table in the case of Tatra Vectra Motors Ltd. vs. Dy.CIT [2012 (4) TMI 359 - ITAT BANGALORE] in favour of the assessee-company as find no justification in the action of the lower authorities in disentitling the assessee from its claim for the benefit of +/5% to compute ALP in terms of the erstwhile proviso to section 92C(2)
Exclusion of companies on functional dissimilarities - Additional grounds of cross objections - HELD THAT:- We find that there is no finding either by the ld.CIT or by the TPO on functional differences vis-à-vis tested party. Since the relevant information is not on record we deem it fit to admit the additional ground of appeal and set aside the issue to the file of the TPO to decide the issue of comparability on functional differences
Construction of Complex Services - Separate consideration for land - Department was of the view that the amount recovered as land value should also form part of the total consideration received for payment of service tax - HELD THAT:- The agreements entered into by the appellant with the buyer clearly indicate that the consideration recovered is partly for the sale of undivided rights of the land on which the complex has been constructed and rest is for the construction charges. The two amounts are indicated separately in the agreements entered into with the buyers as well as recorded separately in the Books of Accounts of the appellant.
Refund claim - principles of unjust enrichment - service tax paid on transportation of goods to the premises of M/s. Ispat Industries Ltd. - HELD THAT:- In this case, there is no scope of taking any cenvat credit on the basis of challan of the appellant inasmuch as, in the challan, the name of the recipient M/s. Ispat Industries has not been mentioned. Since the name of the consignee i.e. Ispat Industries is not finding place in the challan of the appellant, it can be construed that such recipient of service has not availed any cenvat benefit in respect of the service tax paid by the appellant.
There is no question of passing of any service tax incidence to the service receiver and accordingly, the doctrine of unjust enrichment will have no application in this case, for denial of the refund benefit.
There are no merits in the impugned order, in dismissing the appeal of the appellant on the ground of unjust enrichment - appeal allowed - decided in favor of appellant.
Liability of service tax - Consulting Engineering Service - part service provided outside India - HELD THAT:- Major part of the service was provided outside India and since there is no provision for making proportionate recovery on the basis of number of days in India. So, no Service Tax is liable to be paid.
The Gujarat High Court admitted a tax appeal to consider the question of whether the CESTAT was correct in ordering the release of seized gold upon payment of a redemption fine of Rs. 40 lakhs.
Addition on account of bonus paid to one of its Director - addition u/s 36(1 )(ii) - AO noted that no dividend was distributed among the shareholders, which included directors of the company - HELD THAT:- We note that in assessment year 2007-08, no evidences were filed by the assessee in respect of the services rendered by the directors. In the year under consideration also no such evidences have been filed before the lower authorities or before us. Thus, respectfully following the finding of the Tribunal (supra) we restore this issue to the file of the Assessing Officer for deciding afresh with the directions identical to what has been given by the Tribunal(supra). Accordingly, the Ground No. 1 of the appeal is allowed for statistical purposes.
Addition on account of out of pocket expenses incurred by the assessee - HELD THAT:- AO has made the disallowance mainly on the issue that the assessee failed to discharge its onus that expenses were incurred wholly and exclusively for the purpose of business. Since, the assessee has not furnished any evidence to support the claim that expenses were incurred wholly and exclusively for the purpose of business, we feel it appropriate to restore the issue to the file of the AO for deciding afresh after providing adequate opportunity of being heard to the assessee. The assessee may produce all the documents to substantiate its claims to satisfy the conditions under section 37. Accordingly, the ground of the appeal of the Revenue is allowed for statistical purposes.
Rectification in Register of the Members of the Rl Company in respect of Allotment of Shares that took place on 19.06.1996 i.e. after a period of 21 years - HELD THAT:- It is a known fact that during 1996, the basis of allotment was made in consultation with Representative of Stock Exchange, Public Representative of SEBI, Representative of Lead Manager and RTI therefore, questioning the allotment took place in 1996 after 21 years by the petitioner company as illegal, malafide etc., is not tenable, not supported by any facts/documents.
The Bench is inclined to accept the submissions of the Respondents that the instant petition is time barred as per Limitation Act 1963 and is not eligible to file the instant petition however, instead of dismissing the matter on this ground alone, the Bench felt to consider other major allegation of the petitioner. The respondents have also correctly pointed out that the petitioner claims to be a Power of Attorney Holder of all his 146 applicants, has failed to submit even a single duly signed POA given by any of the applicants. Therefore, the petitioner is not entitled to file this instant petition.
Though the petitioner sought to invoke Section 59 of the Companies Act 2013, the alleged fraud, fake, falsification of the Register of Members according to the petitioner was in the year 1996 therefore, Section 111 of Companies Act 2013 is applicable.
Benefit of N/N. 33/99-CE dated 8.07.1999 - Refund of excise duty - time limitation - Section 11 B of the Central Excise Act, 1944 - HELD THAT:- The appellant having been once found to be eligible for exemptions and refund of duty paid, denial of benefit of exemptions and refund on the ground of delay, in our considered opinion, will cause grave injustice which cannot be permitted. Even otherwise, it is well settled law that non-following of procedural requirement cannot deny the substantive benefit, otherwise available to the assessee. Also exemptions made with a beneficient object like growth of Industry in a Region have to be liberally construed and a narrow construction of the Notification which defeats the object cannot be accepted.
The impugned order of the Tribunal is not based on correct appreciation of the provisions of Notification and denial of refund (of duty paid) to the appellant on the ground of delay is wholly unjustified. We also hold that statements of duty paid submitted in RT-12 returns by the appellant was substantial compliance of Clause 2(a) of the Notification and there was no need for it to submit a separate statement of the duty paid and claim refund.
Addition u/s. 69A - difference in TDS as per Form No.26AS with the income admitted in the profit and loss account - addition by estimating the income at 3.5% of the purchase turnover - assessee claimed refund being tax collected at source on old gold purchased through jewellery auction - as per the assessee, Section 69A could not have been used for fixing a higher income when estimated rate of return was adopted - argument of the assessee was that he had participated in the auctions and had bidded for various parties like gold commission agents, goldsmiths, traders etc.and was only an agent participating in the auction - HELD THAT:- Though the assessee states that he was participating in old gold auction done by M/s. Manappuram Finance Ltd, on behalf of various parties, he could not produce any confirmation from any such parties. Form No.26AS was in the name of the assessee and this admittedly reflected purchases of gold worth @23,32,17,428/-. Assessee had also claimed refund for the tax of @17,45,898/- collected at source. Assessee having failed to produce any evidence in support of its contention that he was acting on behalf of others, when participating in the bid, the only reasonable presumption that can be drawn is that assessee himself was doing business. In such a situation, assessee having failed to produce any books of accounts, in our opinion,AO was left with no choice but to make an estimate of income, based on value of purchases made by the assessee.
Estimation of 3.5% was in our opinion reasonable. No doubt Assessing Officer has cited Section 69A of the Act while making the addition. However this by itself does not make the addition by estimating the income at 3.5% of the purchase turnover bad in law. Even dehorse the said Section, the addition was very much fair and in accordance with law. We do not find any reason to interfere with the order of the ld. Commissioner of Income Tax (Appeals). - Decided against assessee.
Levy of penalty u/s. 271(1)(c) - as alleged assessee has included certain income in the return filed pursuance to the notice u/s. 148 - HELD THAT:- In its return of income filed on 22.09.2011, the assessee has included the disclosure made by Shri Pranshankar Sompura in his statement recorded u/s. 133A on 21.04.2010. The returned income was accepted as such after making a minor addition on account of low G.P. rate. Notice u/s. 148 is dated 01.03.2013. Therefore, it cannot be said that the assessee has included certain income in the return filed pursuance to the notice u/s. 148 of the Act. Moreover, the assessee did not file any fresh return but instead stated that the return already filed should be treated as filed in pursuance to the notice u/s. 148 of the Act.
We do not find this to be a fit case for the levy of penalty u/s. 271(1)(c) of the Act. We accordingly direct the A.O. to delete the penalty so levied - Decided in favour of assessee.
Reopening of assessment - addition in the present proceedings were addressed on behalf of the Central Excise Authority before CESTAT - HELD THAT:- In the facts of the present case admittedly no effort was made by the assessing officer to call for any record from the Central excise authority or look into any material before the formation of his belief . It is seen that infact whether anything was done for the formation of his belief itself is not evident. It is seen that from the date of receipt of the information up to the date of issuance of notice more than sufficient time was available to the assessing officer . In the facts for 2006-07 Assessment year as has been argued on behalf the assessee and we have noticed that this fact is not disputed by the Ld. Sr. DR that the information was already available to the assessing officer before the passing of the original order under section 143 (3). We note that on account of this fact the said action has possibly not been defended as vehemently by the Revenue also.
As gone before the Settlement Commission in the preceding assessment year and subsequent years cannot be the basis for a decision in the years under challenge. The said fact at best can be a reason for arousing suspicion that all may not be correct in the facts of a particular assessee however the presumption that necessarily it must be a case where reopening can be said to be justified would require drawing of presumptions conjectures and surmises .
In the facts of the present case admittedly no effort was made by the assessing officer to call for any record from the Central excise authority or look into any material before the formation of his belief . It is seen that infact whether anything was done for the formation of his belief itself is not evident. It is seen that from the date of receipt of the information up to the date of issuance of notice more than sufficient time was available to the assessing officer.
In the facts for 2006-07 Assessment year as has been argued on behalf the assessee and we have noticed that this fact is not disputed by the Sr. DR that the information was already available to the assessing officer before the passing of the original order under section 143 (3). We note that on account of this fact the said action has possibly not been defended as vehemently by the Revenue also. In these peculiar facts and circumstances of the case we find that the appeal of the assessee both on the assumption of jurisdiction as well as on merits has to be allowed.
Instead of having reason to believe it was only one conclusion after another which position of fact is borne out from the record in the facts of the present case also. Accordingly we hold that the appeals of the assessee on both counts for the detailed reasons given hereinabove have to be allowed. - Decided in favour of assessee.
Disallowance of Additional Depreciation u/s 32(1)(iia) - use less than 180 days - entitled for balance 50% of additional depreciation in the subsequent assessment year - new machinery and plant which has been acquired and installed in the first year of installation - AO disallowed 50% of additional depreciation as claimed by the assessee during the current assessment year on the plant and machinery which was installed in the preceding assessment year and was put to use after 30th September whereby it has been used for less than 180 days - CIT-A held that the assessee is entitled for 50% additional depreciation in the subsequent assessment year which was not allowed in the preceding assessment year due to the assessee company used the assets for less than 180 days -
HELD THAT:- Referring to cases of SHRI T.P. TEXTILES PRIVATE LIMITED [2017 (3) TMI 739 - MADRAS HIGH COURT] AND M/S RITTAL INDIA PVT. LTD. (NO. 1) [2016 (1) TMI 81 - KARNATAKA HIGH COURT] and also considering the amendment brought in by way of proviso to section 32(1) wherein it has been specifically stated that 50% of additional depreciation which was not allowed in the preceding assessment year shall be allowed in the subsequent assessment year, concluded that the assessee is entitled for additional 50% depreciation in the assessment year which follows the assessment year in which the machinery had been bought and put to use for less than 180 days.
We also found that the Coordinate Bench in the case of Rashtriya Chemicals and Fertilizers Ltd. [2016 (8) TMI 366 - ITAT MUMBAI] has taken similar view following the decision of the the Hon'ble Karnataka High Court in the case of CIT vs. Rittal India (P) Ltd. (supra). Respectfully following the said decisions we uphold the order of the learned CIT(A) and reject the grounds raised by the Revenue.
Urban land chargeable to wealth tax - Impugned lands are agricultural lands - whether assessee’s case squarely falls within the definition of agricultural land? - whether lands in question are exempted for wealth tax u/s 2(ea)? - HELD THAT:- In this case, neither the Tahsildar nor the AO himself has inspected the land. The land records clearly show that as per the Government records, the lands are agricultural lands. The sale deeds also substantiate that the lands in question were agricultural lands. There is no other evidence brought on record to controvert that the impugned lands were not agricultural lands.
Therefore, unable to uphold the contention of the lower authorities that the lands are non agricultural lands and accordingly hold that the lands are agricultural lands and entitled for exemption u/s 2(ea) of WT Act. Section 2(ea)(b) was amended retrospectively w.e.f. 01.04.1993 as per Finance Act, 2013 as per which the lands on which construction of building is not permissible are excluded from the definition of urban land.
In the instant case, the AO has not brought on record any evidence to show that the lands are converted. Once the lands are not converted as non agricultural lands, construction of building is not permissible. In the case of Commissioner of Wealth Tax Vs. D.C.M.Ltd. [2005 (2) TMI 97 - DELHI HIGH COURT] held that the urban land on which construction of building is not permissible and no permission till date had been granted by the appropriate authority, the lands are excluded from the definition of urban land chargeable to wealth tax.
Commissioner of Wealth Tax Vs.E.Udayakumar [2005 (10) TMI 64 - MADRAS HIGH COURT] held that agricultural lands situated within the limits of city corporation on which no construction is put up is not chargeable to wealth tax. The assessee’s case squarely falls within the definition of agricultural land as well as the amended provisions of Wealth Tax Act, where construction is not permissible. Accordingly we hold that the lands in question are exempted for wealth tax u/s 2(ea), hence not chargeable to wealth tax. We are unable to sustain the orders of the lower authorities and allow the appeal of the assessee.
Addition u/s 68 - bogus Income from share transactions - HELD THAT:- CIT (Appeals) has given a finding that dealing in shares by the assessee in the above script has to be taken as dealing in penny stock which was in the form of accommodation entries and hence the entire sale consideration of this scrip has to be treated as unexplained cash credit within the meaning of section 68.
The facts of the case indicate that the assessee has claimed to have purchased share from Cable Corporation of India Ltd. through Mahasagar Securities Pvt. Ltd. and Alliance Intermediateries & Network Pvt. Ltd. These intermediateries are companies operated by Shri Mukesh Choksi and are involved in providing bogus entries.
On enquiry, the AO has found that for the said company Cable Corporation of India Ltd., Link Intime India Pvt. Ltd. is the registered authority. The Assessing Officer asked for information u/s. 133(6) of the Act vide letter dated 25.2.2015 from Link Intime India Pvt. Ltd. regarding the genuineness of the transaction. The said Link Intime India Pvt. Ltd. vide letter dated 27.2.2015 stated that the assessee (shareholder) is not holding any shares in DEMAT account in the above mentioned company. In these factual backgrounds, the above transaction of the assessee has been held to be bogus accommodation transaction. The above factual scenario clearly indicates that the assessee has indulged in bogus transaction to show his undisclosed income in the garb of long term capital gain.
The shares of unknown company in an off market deal has jumped manifold without any apparent reason. There is no economic and financial basis for the astronomical appreciation involved in the short span of time. See SANJAY BIMALCHAND JAIN L/H SHANTIDEVI BIMALCHAND JAIN VERSUS THE PR. COMMISSIONER OF INCOME TAX-I, NAGPUR & ANOTHER [2017 (5) TMI 983 - BOMBAY HIGH COURT] - Decided against assessee.
Disallowances of 25% of total unverifiable sundry Creditors - bogus creditors - HELD THAT:- This is a case where the Commissioner of Income Tax (Appeals) and the Tribunal correctly limited the additions to 25% following the judgment of this Court in case of Vijay Proteins Ltd vs Commissioner Of Income Tax reported in [2015 (1) TMI 828 - GUJARAT HIGH COURT]
Counsel for the Revenue however submitted that in case of N.K. Industries Ltd. v. Dy. C.I.T. [2016 (6) TMI 1139 - GUJARAT HIGH COURT], this Court had confirmed the addition of the entire amount. This was however a case where the entire purchases were found to be bogus which would have the effect of increasing the profit of the assessee by corresponding figure - Tax Appeal is dismissed.
Exemption u/s 11 & 12 - Corpus Contribution from Government of India and SIDBI not offered for tax - applicability of the proviso to section 2(15) - HELD THAT:- As decided in assessee's own case [2017 (1) TMI 1145 - ITAT MUMBAI] it is not possible to infer that assessee Trust is carrying on any regular ‘trade, commerce or business’ and on the contrary it is an entity which is essentially existing for charitable purposes but conducting some activities for consideration or fee. In this background, the proviso to section 2(15) of the Act cannot be invoked to exclude assessee Trust from the purview of section 2(15) of the Act since the said proviso only seeks to exclude institutions which are carrying on regular business - Decided in favour of assessee.
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