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Case Laws
Showing 241 to 260 of 2006 Records
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2018 (4) TMI 1770
Disallowance u/s.14A r.w. Rule 8D(2) - If the disallowance made by the AO u/s.14A r.w. Rule 8D(2) of the I.T. Rules, 1962 is sustainable when there is no satisfaction invoking the provisions of the Act/Rules ? HELD THAT:- As decided in the assessee’s own case for A.Y₹ 2006-07 & 2011-12
[2018 (3) TMI 425 - ITAT PUNE] satisfaction recorded by the AO in Para No.5.1 is extremely based on the suspicion and surmises. The satisfaction arrived at by the AO with reference to the entries in the books of account of the assessee and also having regard to the correctness of the claim of the assessee. In that sense of the matter, the satisfaction recorded by the AO is extremely generic and which falls short of the legal requirement for assuming jurisdiction u/s.14A of the Act.
Buffer disclosure - Undisclosed income - absence of any clear omissions or commissions or discrepancies made out by the AO for taxing the said sum - HELD THAT:- As decided in Serum Institute of India Ltd. Vs. DCIT [ 2018 (3) TMI 391 - ITAT PUNE ] onus is on the AO to establish the omissions and commissions before the AO proceeded to tax the said buffer disclosure of ₹ 60 lakhs. As such, AO did not examine this aspect of the issue. CIT(A)/A) are of the opinion that the assessed income may not be less than the returned income. Therefore, with similar directions to the AO, we remand the issue to the file of AO. Accordingly, this issue is adjudicated pro tanto.
Allowability of the claim relating to the Group Gratuity Scheme - HELD THAT:- The issue stands covered against the assessee by the order of Tribunal in its own case for the A.Y₹ 2006-07 to 2011-12 [2018 (3) TMI 425 - ITAT PUNE] held that the order of CIT(A) on this issue is fair and reasonable as the scheme has not been approved till date, as admitted by the Ld. AR for the assessee. Hence, it does not call for any interference on this issue. - Decided against assessee.
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2018 (4) TMI 1769
Disallowance made u/s 14A holding that assessee did not earn any exempt income - HELD THAT:- It is not in dispute that the assessee has not earned any dividend income in the year under consideration. In the light of the consistent view taken by the ITAT Hyderabad Bench (in the assessee’s own case for the A.Y. 2009-10) we are of the opinion that the view taken by the Ld. CIT(A) does not call for any interference.
It may be noted that the Assessee requested for time which was not granted; In fact he has not even filed his power of attorney. Considering the fact that there is no need for appearance of the assessee in the instant case, we reject the request for adjournment and proceed to dispose of the appeal. In view of the circumstances stated hereinabove, we are of the view that the order passed by the Ld. CIT(A) deserves to be upheld. As pronounced in the open court, the appeal filed by the Revenue is dismissed.
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2018 (4) TMI 1768
Disallowance of interest expenditure u/s 57(iii) - whether the interest expenditure incurred by the assessee on the borrowed fund is an allowable expenditure under section 57(iii)? - HELD THAT:- There is no denial that the money borrowed by the assessee was given to the sister concerns on which the assessee has earned the interest though the said interest was less than the expenditure incurred by the assessee.
In the case in hand the facts and purpose of taking loans and giving to the sister concerns is not in dispute and, therefore, merely because the assessee has earned less interest and paid more interest cannot be a reason for disallowing the claim of the assessee.
What is required for allowing the expenditure under section 57(iii) of the Act is the expenditure must be laid out or expended wholly and exclusively for the purpose of making or earning income. In the case in hand there is a direct connection and nexus between the expenditure incurred on account of interest paid and the interest income earned by the assessee on the loans and advances given to the sister concerns.
AO in the scrutiny assessment passed under section 143(3) for the assessment year 2013-14 vide order dated 30th March, 2016 has allowed the claim of the assessee though it was restricted to the income under the head Other sources. Therefore, the AO for the assessment year 2013-14 has accepted the expenditure on account of interest incurred for earning the interest income and accordingly allowed the claim of the assessee to the extent of interest income. In view of the above facts and circumstances of the case as well as the decisions as cited supra, we find that the disallowance made by the AO is not justifiable. Accordingly the same is deleted. - Decided in favour of assessee.
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2018 (4) TMI 1767
Levy of service tax - Outdoor Catering services - imposition of penalty as well - HELD THAT:- The learned Tribunal has not committed any legal error in passing the impugned order - The view of the learned Tribunal has been affirmed by the Allahabad High Court in the case of M/S. INDIAN COFFEE WORKERS' CO-OPERATIVE SOCIETY LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX, ALLAHABAD [2014 (4) TMI 407 - ALLAHABAD HIGH COURT], therefore, in view of the fact that the issue involved in the matter on levy of service tax has been settled by the Allahabad High Court, thus, no substantial question of law is arising in this appeal.
Appeal dismissed.
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2018 (4) TMI 1766
Disallowance u/s 14A r.w. Rule 8D - AO non arriving at a satisfaction as regards the correctness of the claim of the assessee, on the basis of its accounts - HELD THAT:- The very process of determination of the amount of expenditure incurred in relation to exempt income would be triggered only if the A.O. returns a finding that he is not satisfied with the correctness of the claim of the assessee in respect of such expenditure.
A.O before discarding the claim of the assessee as regards the amount of expenditure incurred in relation to the exempt income, as per the mandate of law, remains under a statutory obligation to record cogent reasons as regards his dissatisfaction in respect of such claim of the assessee, before determining the amount of disallowance in accordance with the method prescribed in Section 14A r.w. Rule 8D. We find that our aforesaid view stands fortified by case of Godrej & Boyce Manufacturing Company Limited [2017 (5) TMI 403 - SUPREME COURT]
A.O had failed to satisfy the statutory requirement of arriving at a satisfaction, that having regard to the accounts of the assessee, as placed before him, it was not possible for him generate the requisite satisfaction with regard to the correctness of the claim of disallowance made by the assessee under Sec. 14A - A.O had failed to record the requisite satisfaction, therefore, the very assumption of jurisdiction by him for dislodging the claim of disallowance made by the assessee and substituting the same by the amount worked out as per Sec. 14A r.w Rule 8D cannot be sustained - Decided in favour of assessee.
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2018 (4) TMI 1765
Addition u/s 80IB [10] - would an assessee be correct in contending that in many of the units in the housing project, the constructed area may exceed 1500 sq.ft., disallowance or deduction should relate to such unit and the remaining which fulfilled the necessary condition; including the limit of the constructed area, must be granted the benefit? - HELD THAT:- In the present case, however, we are not inclined to entertain Revenue’s Tax Appeal simply because out of several units included in the housing project [the number being 65, as we are informed] only in one of them, the constructed area exceeds the upper limit; that too, by a small margin. In the facts of the present case, therefore, we reserve our comments on the said question of law arising in a better case. To make it absolutely clear, not entertaining this Tax Appeal would not in any manner amount to our approving the ultimate conclusion of law reached at by the Tribunal on this issue.
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2018 (4) TMI 1764
Conversion of shipping bill - request for conversion of fresh shipping bill to advance licence shipping bills - request for conversion rejected on the basis of time limit, as prescribed by Circular No.36/2010-Cus dated 23.09.2010 - Adjudicating Authority has rejected such request of the assessee on the ground that the request has been made after the period of 3 months.
HELD THAT:- Tribunal in the case of M/S DIAMOND ENGINEERING (CHENNAI) PVT LTD. VERSUS COMMISSIONER OF CUSTOMS (SEAPORT), CHENNAI [2013 (3) TMI 46 - CESTAT CHENNAI] has dealt with an identical issue and has observed that inasmuch as Section 149 of the Customs Act, 1962, which governs the said issue, does not prescribe any time limit, the said Circular No.36/2010-Cus dated 23.09.2010 cannot be adopted for rejecting the request on the basis of time limit.
Matter remanded to the Original Adjudicating Authority for examining the appellant’s request for conversion, without raising the objection of time limit - appeal allowed by way of remand.
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2018 (4) TMI 1763
Interrogation/investigation against petitioner - Co-operation in the investigation - protective order of the nature - HELD THAT:- The Petitioner shall not be arrested in connection the investigations under DRI without following the procedure prescribed under the Criminal Procedure Code.
It is however made clear that the Petitioner shall cooperate with the investigation. The Petitioner shall respond to the notices/summons issued by the Respondent – Authority.
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2018 (4) TMI 1762
Specific requirement of registration under section 12A - Eligibility to grant of registration u/s 12A - denial of exemption of corpus receipts under section 11(1)(d) of the Act and the denial of exemption as regards voluntary contributions on the ground that the assessee was not registered under section 12A of the Act as it held that there was no such requirement for grant of registration - HELD THAT:- Application filed by the assessee in the present case was on December 31, 1993 which was before the introduction of section 12AA which came into effect only from April 1, 1997. As per the substantive law applicable to the present case in force at the relevant point of time, the only condition mandated under section 12A to claim benefit of exemption under section 11 would be to have filed the application for registration of the trust in the prescribed manner before July 1, 1973 or before the expiry of a period of one year from the date of creation of the trust or the establishment of the institution whichever was later.
There is no mandate in the law as it then stood to have applied and obtained registration to claim exemption. Mere filing of an application in terms of section 12A was sufficient to claim the benefit of exemption. The Central Board of Direct Taxes Circular No. 762 dated February 18, 1998 ([1998] 230 ITR (St.) 12 ) which provides for an explanatory note relating to the amendment stipulates that the amendment relating to exemption from income- tax in respect of income from a charitable or religious Trust or institution would take effect from April 1, 1997 which seeks to re-emphasize that the provisions of section 12AA which provides that registration is mandatory to claim exemption would come into force with prospective effect.
As regards the finding of the Tribunal that the omission of the word "Prathisthana" in the name of the assessee-trust was the fault of the Department and not of the assessee for which the assessee cannot be penalised, the same being a finding of fact and not requiring any interference, no ground is made to entertain the appeals on the said finding. Tribunal was correct in holding that the assessee is entitled for section 12A registration by holding that there was no requirement for granting section 12A registration by the Commissioner of Income-tax for the period under consideration
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2018 (4) TMI 1761
Taxability - Commercial Training & Coaching service - Business Auxiliary Service - input tax credit - HELD THAT:- The appellant have imparted Computer training under FULL Accreditation granted by DOEACC Society (a body under the Department of Electronics and Information Technology Ministry of Communications and Information Technology, Government of India), vide certificate dated 18th Day of March, 1989 granted for five years to conduct DOEACC "O" Level Computer Course under the head of Commercial Training & Coaching - The approved Courses and/or Degrees or Diplomas granted under various Government approved Institutes or Universities, courses are exempted from the levy of service tax where the institutes have granted degree or diploma recognized by law - demand under the head of Commercial Training & Coaching under Section 65(27) read with Section 65(105)(zzc) of the Finance Act is set aside.
Business auxiliary service - HELD THAT:- The appellant have provided service to the educational Institutes/Universities which is not a commercial activity - no service tax is payable under the category of BAS as the service tax is dutiable on the person who provides such services to promote/support the business of another.
Input tax credit - Duty paying documents - Rule 9 of Cenvat Credit Rules, 2004 - failure to prove that credit can be correctly taken and utilized on the basis of invoice issued by provider of input service - HELD THAT:- The Learned Counsel for the appellant have demonstrated sample(s) copies of such invoices during the course of hearing. All the required information being - name, address, registration number, etc., type of the service tax is payable thereon, etc., are given - Credit is allowed.
Appeal allowed - decided in favor of appellant.
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2018 (4) TMI 1760
CENVAT Credit - credit availed within six months from the date of issue of invoice - spare parts of capital goods in the year in which the goods had been received - N/N. 21/2014-CE(NT) dated 11th July 2014 and subsequent N/N. 6/2005-CE(NT) dated 1st March 2015 - HELD THAT:- It is seen from the records that there is no evidence of suppression or mis-representation on the part of the appellant and that a major portion of the demand had already been set aside on the finding that availment was covered by the eligible notification and, therefore, the portion that was confirmed could not have said to have arisen on account of suppression or mis-representation.
Appeal allowed - decided in favor of appellant.
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2018 (4) TMI 1759
TP Adjustment - comparable selection - HELD THAT:- As Company’s software development service revenue for FY 2010-11 was less than 75% of its total operating revenue for that year. Thus, above action of the DRP in rejecting the company is correct.
Company comparable with the ITES company as that of assessee need to be selected for final list.
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2018 (4) TMI 1758
The National Company Law Tribunal, Mumbai allowed MA 199/2018, MA 223/2018, and IA 05/2018 in CP (1B)-1139 (MB)/2017. Stay order on holding COC meeting is vacated. IA 05/2018 withdrawal memo is dismissed as withdrawn. Reasons for the order will be given later.
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2018 (4) TMI 1757
Disallowance on account of provision for leave encashment - HELD THAT:- Both parties inform us during the course of hearing that hon'ble jurisdictional high court’s decision in Exide Industries Ltd. vs. Union of India [2007 (6) TMI 175 - CALCUTTA HIGH COURT] quashing the statutory provision itself to be ultra vires. Hon'ble apex court [2009 (5) TMI 894 - SC ORDER] has stayed operation thereof vide order dated 08.05.2009. The assessee’s instant former substantive ground is restored back to the Assessing Officer to be decided afresh after the final outcome in Revenue’s appeal in Exide Industries Ltd.
Disallowance of sales tax incentive and state capital investment subsidy respectively while computing the book profit u/s 115JB - HELD THAT:- From the foregoing discussion, we note that subsidy was given by the Govt. of West Bengal for the purpose of enabling the entrepreneurs to establish new industry and also expand the existing industries. Under normal computation of income the subsidy given to promote the industries are not subject to tax, therefore, an item which is not taxable cannot be brought to tax under the provision of MAT. In holding so, we rely on the order of this co-ordinate Bench of this Tribunal in the case of Sicpa India (P) Ltd. [2017 (3) TMI 1383 - ITAT KOLKATA]
The undisputed fact is that the incentive received by assessee is not in the nature of income earned during the course of business. Therefore, in our considered view, same cannot be regarded as “income” for the purpose of MAT u/s 115JB of the Act. Thus, the amount of incentive received by assessee should be excluded from the determination of book profit under the provision of Section 115JB - we reverse the order of Ld. CIT(A). and direct the AO to delete the same
Disallowing the credit for tax paid by assessee by way of adjustment of refund for AY 2011-12 - HELD THAT:- We direct AO to allow the credit of refund pertaining to AY 2011-12 adjusted against the demand for the year under consideration as per the provision of law. In terms of above direction, this ground of assessee is allowed for statistical purpose.
Charging interest u/s. 234C on the assessed income rather than on returned income - AR before us brought to our notice that AO has charged interest u/s 234C of the Act on assessed income whereas the provision of section 234C of the Act require to charge the interest on the income declared by assessee in its returned income - HELD THAT:- We set aside the order of Ld. CIT(A) and remit the issue back to the file of AO to pass speaking order after providing reasonable opportunity of being heard to assessee and charge the interest under section 234C of the Act as per the provisions of law. This ground of assessee is allowed for statistical purpose.
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2018 (4) TMI 1756
Penalty u/s 271(1)(c) - HELD THAT:- As we have observed in Meherjee Cassinath Holdings Pvt. Ltd. [2017 (5) TMI 904 - ITAT MUMBAI] while relying on the judgment of Hon'ble Supreme Court not only in the case of Dilip N. Shroff [2007 (5) TMI 198 - SUPREME COURT] but also in the case of T. Ashok Pai, [2007 (5) TMI 199 - SUPREME COURT] wherein it was held the two expressions, namely 'concealment of the particulars of income' and 'furnishing of inaccurate particulars of income' have different connotations, it is imperative for the assessee to be made aware as to which of the two is being put against him for the purpose of levy of penalty u/s 271(1)(c) of the Act.
With utmost regards to the decision of coordinate bench, we noted that the decisions of Hon’ble Apex Court were not brought to the notice of coordinate benches. With this observation, we accepted the legal submissions of the ld. AR for the assessee and allow the grounds of appeal raised by the assessee. Appeal filed by assessee is allowed.
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2018 (4) TMI 1755
TP Adjustment - determination of Arm's Length Price in respect of international transaction of rendering of Software Development Services and Information Technology Enabled Services by the Assessee to its holding company - Comparable selection - HELD THAT:- Assessee is a company engaged in the business of providing contract Software Development Services (SWD Services) and providing Information Technology Enabled Services (ITES) to its holding company in Netherlands BV as a captive service provider. The transaction of rendering software development services and ITES to holding company was a transaction with an Associated Enterprise (AE) and was therefore an international transaction thus companies functionally dissimilar with that of assessee need to be deselected from final list.
Comparability of ITES segment - companies functionally dissimilar with that of assessee need to be deselected from final list.
Grant the entire FTC (Foreign Tax Credit) (i.e., credit for tax paid outside India on income which is also included in die total income in me return of income filed in India) - HELD THAT:- The facts in this regard are that in its return of income filed under the Act for the AY 2012-13, the Assessee for the instant assessment year, Assessee has claimed FTC of ₹ 13,94,950/- (relevant details at pages 867 and 894 of the paperbook). However, in the draft assessment order passed by the AO, he allowed FTC only to the extent of ₹ 9,83,255/- without giving any explanation for the short-grant of FTC. Although the Assessee objected to the same before the DRP, it refused to interfere with this issue on the premise that doing so would be beyond the scope of its powers. Consequently, in the impugned final assessment order, FTC was only allowed to the extent of ₹ 9,83,255/- as against the sum of ₹ 13,94,950/- that was claimed by the. Assessee in its return of income. We are of the view that it would meet the ends of justice if a direction is given to the AO to verify the claim of the Assessee and allow tax credit in accordance with law.
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2018 (4) TMI 1754
Disallowance of peripheral expenditure - Allowable revenue expenditure - HELD THAT:- AR referred to the nature of the expenditure incurred through the corporate office at Bhubaneswar and further substantiated that the assessee has evidence to prove the claim. Therefore, we, considering the apparent facts and material on record, are of the opinion that the claim of the assessee in respect of incurring of expenditure at peripheral areas as per the order of the Govt. is not disputed and the reasons recorded by the lower authorities in respect of sustenance of the addition to the extent of ₹ 56,27,609/- cannot be overlooked. Accordingly, in the interest of justice, we remit this issue to the file of AO to verify the nature of expenditure incurred on the peripheral areas and decide the same on merits. This ground of appeal is allowed for statistical purposes
TDS u/s 194C - disallowance of wheeling charges for non-deduction of TDS under section 40(a)(ia) - scope of second proviso to Section 40 Sub-clause (ia) of clause (a), which was inserted by the Finance Act, 2012 with effect from 1st April, 2013 - HELD THAT:- Hon’ble Delhi High Court in the case of CIT Vs. Ansal Land Mark Township (P) Ltd. [2015 (9) TMI 79 - DELHI HIGH COURT] held that the proviso added u/s.40(a)(ia) of the Income Tax Act,1961 was retrospective in operation and the assessee is entitled to the benefit of the same. Accordingly, if the assessee substantiates with evidence that GRIDCO has offered the income in their income tax assessment, the assessee cannot be treated as “assessee in default”. Accordingly, we are of the opinion that the matter needs to be examined and we remit this disputed income to the file of the AO and the assessee shall cooperate and submit the income tax particulars in the assessment proceedings for early disposal of the case and this ground of appeal of the assessee is allowed for statistical purposes.
Disallowance of additional depreciation u/s.32(1)(iia) - HELD THAT:- We restore this matter to the file of the AO for fresh adjudication in respect of the claim of additional depreciation u/s.32(1)(iia) of the Act and this ground of appeal of the assessee is allowed for statistical purposes.
Disallowance of provision for leave encashment u/s.43B(f) - HELD THAT:- The assessee has made the provision for leave encashment and the provision was not added back in the computation of income. As the ld. AR submitted that the above issue is covered by the order of the coordinate bench of the Tribunal in the case of Baitarani Gramya Bank [1762067] remit this issue to the file of the AO to examine and allow the claim and this ground of appeal is allowed for statistical purposes.
Disallowance of expenditure on departmental meetings, official lunch and dinner and company guests - expenditure on ceremonial expenses, other staff welfare expenses and cultural activities and also disallowance under other miscellaneous expenses - HELD THAT:- Tribunal in assessee’s own case and restrict the disallowance to ₹ 10,00,000/- under other miscellaneous expenses as against ₹ 34,85,383/- disallowed by the AO and in respect of estimation of expenses, departmental meeting, official lunch and dinner and company guests, ceremonial expenses, other staff welfare expenses and expenses on social & cultural activities, we rely on the Tribunal decision and are of the opinion that the expenses were incurred wholly and exclusively for the business and allowable u/s.37(1) of the Act and accordingly direct the AO to delete the addition and allow this ground of appeal of the assessee.
Disallowance under prior period adjustments - HELD THAT:- We considering the material aspects and the concept of income and expenditure remit this disputed issue to the file of AO to verify the claims and grant the set off of prior period income against the prior period expenses and passed the order on merits and the assessee shall cooperate in submitting the information and this ground of appeal of the assessee is allowed for statistical purposes.
Disallowance of amounts written off in respect of claims/receivables - AO has disallowed the claim of receivables as the assessee has not furnished any explanations with regard to the allowability - HELD THAT:- We found that the assessee has claimed ₹ 1,86,07,855/- on account of write off scraps and the same was considered by the CIT(A) and granted partial relief. This issue of claim of receivables of the company pertains to earlier years but the AO has not brought on record these facts that the assessee has not disclosed. Whereas ld. AR before us prayed that the assessee is eligible to write off the claim as they are pertaining to earlier years and prayed for an opportunity before the AO. We find strength in the submissions of the ld AR. Accordingly, we remit this issue to the file of AO and this ground of appeal of the assessee is allowed for statistical purposes.
Disallowance of Electricity Duty u/s.43B - HELD THAT:- Claim allowed as relying on assessee own case
Claim on account of diminution in the value of non-moving stores & spares allowed
Addition u/s 40A - payment to benevolent scheme - HELD THAT:- We find in the instant case that the CIT(A) is justified in allowing the deduction towards the claim of payment under benevolent scheme. Accordingly, we dismiss this ground of Revenue.
Addition on account of pot-reling expenses - HELD THAT:- Assessing Officer white making the addition has not made a case that by relining the pots and the assessee has virtually obtained an asset which could have been resulted into enduring benefit for the assessee to treat such expenditure as capital in nature. Apart from above facts, we have also considered the fact that the claim of the assessee was accepted by the Ld. CIT in succeeding year and the Department is not in appeal against the order of the Ld. CIT before this Tribunal.
Allowability of peripheral development expenses - HELD THAT:- We find that the CIT(A) while considering this issue has dealt on the submissions of the assessee and findings of the AO and decided the disputed issue based on the order of the Government of Orissa and treated the entire expenditure on development of the two districts viz.: Angul and Koraput as peripheral development expenditure incurred wholly and exclusively for the purpose of business and restricted the disallowance to ₹ 56,27,609/- and granted relief to the assessee for ₹ 7,62,83,499/-. Hence, we are not inclined to interfere with the order of CIT(A) on this ground
Gift coupons to the employees - HELD THAT:- AO disallowed the claim of the assessee because the payments made by the assessee were in the nature of ex-gratia payments. The CIT(A) held that the expenditure is clearly incurred wholly and exclusively for the purpose of business and has to be allowed as a deduction u/s.37(1) of the Act. We find that the similar expenditures were claimed in the earlier years and the Revenue has accepted the same. In our considered view the CIT(A) has rightly deleted the disallowance made by the AO on account of gift coupons to the employees. Accordingly, we upheld the action of the CIT(A) and dismiss the ground of appeal of Revenue.
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2018 (4) TMI 1753
TP Adjustment - Tribunal considering TNMM as MAM - HELD THAT:- In the absence of the any distinguishing features being shown the in the subject Assessment Year to that existing in Assessment Years2006-07,2007-08and 2008-09,the same must apply in the subject Assessment Year. The reasons indicated in our order in respect of the Appeal [2018 (3) TMI 536 - BOMBAY HIGH COURT] in respect of the same respondent assessee for the earlier assessment years, would equally apply to the facts of the present appeal. No substantial question of law.
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2018 (4) TMI 1752
Addition in respect of ‘Advertisement expenses’ - HELD THAT:- AO did not conduct any further inquiry. He simply proceeded to make the addition without ascertaining the genuineness or otherwise of these transactions. His inference of non-genuineness of the transactions was based simply on non-compliance by these two parties, whose complete particulars were with him. In case of non-compliance, the AO ought to have deputed Inspector or got the enquiry conducted by any other means before jumping to the conclusion of the non-genuineness of the transactions.
It is further pertinent to note that additions were made in similar way in other years of the assessee company. Such an issue came up for consideration before the Tribunal in assessee’s own case for the assessment years 2009-10 and 2011-12 has upheld the deletion of similar additions made in respect of `Advertisement expenses’ incurred by the assessee for which notices were issued u/s 133(6) of the Act but no compliance was made. Since the facts and circumstances of the instant ground are mutatis mutandis similar, respectfully following the precedent, we uphold the impugned order in deleting this addition.
Assessment u/s 153A - Addition u/s 14A - HELD THAT:- On a pertinent query, the ld. AR could not produce a copy of the computation of income or its original assessment order, which was stated to have been passed u/s 143(3) of the Act on 30.12.2009 to demonstrate that no such disallowance was offered by the assessee and further that a return was actually filed u/s 139 for the year under consideration. Under these circumstances, we set aside the impugned order and remit the matter to the file of Assessing Officer for examining, firstly, if the assessee filed its return u/s 139 of the Act or offered disallowance of ₹ 13.89 lac in the original return or any such addition was made. If it is found that no return was filed or the disallowance was so offered or an addition made in the order u/s 143(3) of the Act that, then, such a disallowance has to be repeated in the assessment made u/s 153A read with section 143(3) - The ground raised by the Revenue is, therefore, dismissed and that taken by the assessee is allowed for statistical purposes.
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2018 (4) TMI 1751
Assessment u/s 153A - disallowance made u/s 14A - HELD THAT:- We find that there is no mention of any incriminating material found during the course of search with respect to the unexplained advertisement expenses. Further with respect to the disallowance made u/s 14A of the income tax act there is no reference of any incriminating material found during the course of search. In view of this it is apparent that both the disallowance u/s 14A as well as the disallowance on account of unexplained expenditure on advertisement expenses were made without there being any incriminating material found during the course of search.
Hence, respectfully following the decision of CIT versus Kabul Chawla [2015 (9) TMI 80 - DELHI HIGH COURT] wherein it has been held that completed assessments can be interfered with by the assessing officer while making assessments u/s 153A only on the basis of some incriminating material unearthed during the course of search which was not produced or not disclosed or made known in course of original assessment. Therefore, in the present case the impugned assessment year 2009 – 10, which is a concluded assessment, cannot be disturbed without any incriminating material. For both the above additions the AO as well as the Ld. CIT (A) and the Ld. DR could not show us any incriminating material. In view of this we without going into the merit of the disallowances, direct the Ld. assessing officer to delete as they are not based on any incriminating material found during the course of the search.
Addition u/s 14A - HELD THAT:- In the instant case the assessee has made an investment in the shares of foreign companies, income from which cannot be exempt as per the provisions of the Income Tax Act. Even otherwise the assessee on its own has disallowed a sum of ₹ 5767092/- only on the assumption that the provisions of section 14A read with Rule 8D is automatic and mandatory. Even otherwise the Ld. assessing officer has not recorded any satisfaction with regard to the disallowance offered by the assessee on its own.
Without recording such satisfaction the AO proceeds to make any disallowance invoking rule 8D of the income tax rules is bad in law. In view of above facts we dismiss ground No. 2 of the appeal of the revenue and also dispose the cross objection filed by the assessee involving the grounds relating to disallowance under section 14A
Unexplained advertisement expenses - HELD THAT:- In the present case the assessee has produced the complete details of the expenditure incurred by it in assessment and sales promotion expenditure. No fault can be found with the assessee if the parties do not respond to the notice under section 133 (6) of the income tax act. More so in the identical situation in case of assessee for years including assessment year 2010-11 the CIT (A) has deleted the disallowance after considering the overall facts and circumstances of the case. The revenue has accepted that order and therefore there is no reason to challenge the same on identical issue before the coordinate bench in absence of any change in the facts and circumstances of the case. No such change in the facts and circumstances of the case was brought on record before us
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9911796707
