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Case Laws
Showing 241 to 260 of 1831 Records
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2017 (5) TMI 1597
Addition on account of inventories written off - neither any details were furnished by the company and nor there was any supporting evidence to justify and establish that the inventories were actually destroyed - addition made on account of travelling and conveyance expenses nor any supporting evidence was filed to justify the claim - Held that:- The issues are answered in favour of the assessee and against the department as relying on PRINCIPAL COMMISSIONER OF INCOME TAX, ALWAR. VERSUS M/S GILLETTE INDIA LTD. [2017 (5) TMI 1592 - RAJASTHAN HIGH COURT]
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2017 (5) TMI 1596
Provisional release of goods - mis-declaration of imported goods - The petitioner's apprehension is that even the final adjudication would take time and in view of certain grievances expressed by him in respect of the Officers they would be biased against him - Held that:- With a view to leaving no scope for grievance, we would direct the Commissioner Customs to pass the final order of adjudication. Mr. Goyal states that a show cause notice will be issued latest by 30.05.2017 - petition disposed off.
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2017 (5) TMI 1595
Items of income not to be included whilst computing the profits derived from the business of the Gadepan I unit and were not eligible for a deduction under section 80IA - Held that:- Taking into consideration the decision of the Supreme Court in ACG Associated Capsules Pvt. Ltd. (2012 (2) TMI 101 - SUPREME COURT OF INDIA), issue No.1 is answered in favour of assessee inasmuch as deposit which he has clubbed was statutory mandatory requirements against the Fixed Deposit receipt. In that view of the matter, if there is a breach of condition of 10% will invite action. In that view of the matter, it was mandatory requirement under the Act
Compensation received on the machinery break down in view of decision in CIT vs. Metalman Auto (P.) Ltd. (2011 (2) TMI 330 - PUNJAB AND HARYANA HIGH COURT) it is squarely covered and issue is decided in favour of assessee against the department.
Expenses should be written back 37,40,951/-, in our considered opinion, the issue is required to be answered in favour of Department and against the assessee in view of the fact that this will not form a part of income since it was written off deposit which was kept in separate account. This is not an income derived. The issue is decided in favour of Department and against the assessee.
For issue on recovery of rent as relied upon decisions reported in Commissioner of Income Tax vs. Indo Swiss Jewels Ltd. and Anr. (2005 (9) TMI 47 - BOMBAY HIGH COURT) as held it is clear that the inter-corporate deposits were made by the assessee from the surplus funds that were set apart for the payment of imported machinery. That the said deposits were withdrawn and payment was made towards import of the machinery is also not questioned by the Revenue. The interest earned on the short-term deposits of the money kept apart for the purpose of business has to be treated as income earned on business and cannot be treated as income from other sources.
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2017 (5) TMI 1594
Unexplained share application money under Section 68 - Held that:- The issue is squarely covered by the decision of this Court in Commissioner of Income Tax, Jaipur-II, Jaipur vs. M/s Hotel Gaudavan Pvt. Ltd. [2017 (4) TMI 1328 - RAJASTHAN HIGH COURT] which is covered by the decision of the Supreme Court in the case of Commissioner of Income Tax vs. Lovely Exports (P) Ltd., (2008 (1) TMI 575 - SUPREME COURT OF INDIA), and the decision of this Court in the case of Commissioner of Income Tax vs. M/s VTC Leasing & Finance Ltd.[2017 (1) TMI 1567 - RAJASTHAN HIGH COURT]. - Decided in favour of assessee
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2017 (5) TMI 1593
TPA - Adjustment made in the Arms Length Price of international transaction by taking into account TNMM at entity level - Held that:- Considering the fact that the TPO himself has admitted that assessee is a market leader and it will be extremely difficult to identify the comparables and the fact that neither in earlier years nor in subsequent years any adjustment has been made by comparing the results at entity level, we hold that the international transaction entered by the assessee with the AE even at entity level is at arm’s length and therefore the adjustment made by the AO is not justified. See CIT ALWAR VERSUS M/S SAKATA INX (INDIA) LTD [2017 (5) TMI 1586 - RAJASTHAN HIGH COURT]
Addition on account of inventories written off - Held that:- The disallowance confirmed by the ld. CIT(A) only for the reason that these items are not actually destroyed and is only a provision can’t be upheld for the reason that item wise details of the same is filed, these are the identified items and have been subsequently destroyed as per the regular procedure followed. The write off for obsolesce of such identified items is allow able deduction as per the case laws relied by the Ld. AR. In fact no provision is created in books of accounts but only the nomenclature of provision for obsolesce is used. In the balance sheet also no such provision is appearing either in the liabilities side or as reduction from asset side not the Ld. D/R could point out any such provision in the balance sheet. Therefore the disallowance confirmed by the Ld. CIT(A) is deleted.
Traveling expenses disallowance - Held that:- Assessee has produced entire module, bill and vouchers of expenses for verification as desired. However, in making disallowance out of the above expenses after submission of month wise details of the expenses by the assessee,AO has not required assessee to furnish the details of any specific expenses. We also note that on these expenses, FBT is paid and that such adhoc disallowance is not made in the past and in A.Y. 07-08, the DRP has directed the AO not to make such adhoc disallowance. In these facts and circumstances, we direct the AO to delete the disallowance
TDS u/s 194H - TDS liability on gifts and trade incentives - Held that:- The observation of AO that services has been received by the assessee against these payment and therefore he should have deducted tax at source on the value of the gift is ill founded in as much as the payment is not against the services but against the sale of goods to the distributors and therefore TDS provisions are not applicable.
Adhoc miscellaneous expenses disallowance not permissible - bills and vouchers of expenses as desired were produced for verification and examined on test check basis. - Assessee appeal allowed.
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2017 (5) TMI 1592
Provision for diminution in value of stock - Held that:– In any case since stock are valued at cost or market price whichever is lower and these inventory has no value, the same is to be allowed to the assessee in view of the accounting principles and the ratio laid down in CIT Vs. Hotline Teletube and Components Ltd. [2008 (8) TMI 6 - HIGH COURT DELHI] Provision for diminution in value of stock is allowable as business loss.
TDS u/s 195 OR 194C - existence of TDS liability - Held that:- This company is incorporated on 29.11.2001 having registered office at Mumbai. Therefore, it is an Indian Co. as defined u/s 2(26) and is a company resident in India u/s 6(3). All payment made to this company towards advertisement charges is in Indian currency. Tax is deducted at source on such payment u/s 194C. Sec. 195 is applicable when payment is made to a non resident.
Admittedly, payment to Group M Media India Pvt. Ltd. is a payment to resident and not a non resident. Therefore, section 195 is not attracted. The AO has not disputed the genuineness of the payment and therefore only because there is no agreement for the advertisement work with this company cannot be viewed adversely. Thus disallowance made by the AO is incorrect, against law and the same is deleted.
The order has admitted that bills and vouchers of expenses, as desired, were produced for verification which was test checked. The observation of AO that services has been received by the assessee against these payment and therefore he should have deducted tax at source on the value of the gift is ill founded in as much as the payment is not against the services but against the sale of goods to the distributors and therefore TDS provisions are not applicable. - Decided in favour of the assessee and against the department
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2017 (5) TMI 1591
Subsidy received - capital receipt OR revenue receipt - Held that:- In the case of DCIT vs Teesta Agro Industries Ltd. [2011 (1) TMI 1501 - ITAT KOLKATA] has observed that the subsidy given in the form of the remission of sales-tax under the West Bengal State Incentive Scheme 1999 is in the nature of capital receipt and therefore not assessable to income tax. In view of above, we are of the opinion that the impugned subsidy is capital in nature and therefore not liable to tax. Simply the assessee has inadvertently offered the same to tax does not mean the capital receipt has become taxable.
Receipt of subsidy will not be taxable being capital in nature under the provisions of MAT - Held that:- Hon’ble Supreme Court in the case of Padmaraje R Kadambande Vs CIT [1992 (4) TMI 215 - SUPREME COURT has held that capital receipts are not income within the meaning of section 2(24) of the Act and hence not chargeable to tax. When a receipt cannot be brought to tax under the computation of income under the normal provisions as well as under the deeming provisions of the Act, then such receipt is out of the purview of the provisions of section 115JB. We find the decisions in support of this proposition that a capital receipt which is not chargeable to tax under any provisions of the Act would not be liable for book profits tax u/s 115JB
Addition on account of unexpired foreign currency forward contract on Marked to Market (MTM for short) basis - Held that:- Instructions issued by the CBDT are not binding on the Courts. So there is no value in the argument of the DR. However, we disagree with the view of the AO on the ground that the adjustment was made by the assessee in terms of AS 11 issued by ICAI and in pursuance of mercantile system of accounting as notified u/s 145 of the Act. We reject the submission of the Appellant in these appeals that the increase in liability on account of the fluctuation in the rate of foreign exchange remaining on the last day of the financial year is notional or contingent and, therefore, cannot be allowed as a deduction - Decided against revenue
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2017 (5) TMI 1590
Addition of Long Term Capital Gain - Assessing Officer applying the market value on the basis of the rate communicated by Ghazibad Development Authority of ₹ 5,700/- per sq. mtr as against the rate of ₹ 4,200/- sq. mtr. applied by the assessee? - Held that:- The issue agitated before tribunal as regard to previous year, the issues as discussed which we have decided today but there is no reference of price in the same. In our view in CIT(A) and the tribunal have committed an error in not referring to the price in the previous year.
Therefore, the matter is required to be remitted back to the tribunal only on this issue. The matter is remitted back to tribunal to decide, the same keeping in view the statutory provision. We make it clear that we have not expressed any opinion of merits.
Deduction u/s 80IB (10) - whether project which is cleared as "residential plus commercial" project cannot be treated as housing project ? - Held that:- The second issue is covered by the decision of this court in Commissioner of Income Tax Vs. Veena Developers [2015 (5) TMI 193 - SUPREME COURT] as held where the commercial user permitted by the local authority is within the limits prescribed under the DC Rules/Regulation, the deduction under Section 80IB(10) upto 31.3.2005 would be allowable irrespective of the fact that the project is approved as ‘housing project’ or ‘residential plus commercial. - Decided in favour of assessee
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2017 (5) TMI 1589
Penalty u/s 271(1)(c) - depreciation claim on expenditure in respect of mining right - Held that:- The satisfaction for initiation of penalty is coupled with the findings of the assessment order would show that satisfaction existed in the course of assessment itself and deemed to constitute satisfaction. The Hon’ble Supreme Court in the case of Union of India vs. Dharmendra Testile Processors [2008 (9) TMI 52 - SUPREME COURT] has held that willful concealment is not an essential ingredient for attracting civil liability. The assessee intentionally claimed the capital expenditure as revenue expenditure on new project (i.e. cement), which was separate activity of the assessee company from the existing business i.e. production of fertilizers.”
In our considered opinion, in view of the decision of the Supreme Court where it has been held that wrong claim of depreciation will not invite penalty. - Decided in favour of assessee.
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2017 (5) TMI 1588
TPA - comparables selection - Margins earned by the government companies as held to be reliable for computation of the Arm”s Length Price - excluding Apitco Limited as a comparable - Held that:- In the present case the Assessee itself picked up two of the 100% government owned companies namely ECIL and ITDCL as its comparables but that was not accepted by the TPO or the DRP. The reason for the ITAT excluding Apitco as a comparable is also for the same reason that it was a 100% government owned company.
The Court finds that the view taken by the ITAT in the present case, which is consistent with the view expressed by the Mumbai Bench of the ITAT and which has been affirmed by the Bombay High Court in CIT v. ThyssenKrupp Industries India Pvt. Ltd [2016 (4) TMI 88 - BOMBAY HIGH COURT], is indeed a plausible one to take.
Whether taking up a 100% government owned company as a comparable would be justified or not would depend on the facts and circumstances of the case. The basic rule as contained in Rule 10B of the Income Tax Rules would apply. In the facts of the present case, however, the Court finds that the view taken by the ITAT does not give rise to any substantial question of law. Appeal is dismissed.
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2017 (5) TMI 1587
Interest receipt not constitute “business income” for the purpose of computation of exemption u/s 10B - 90% exclusion of net interest/rent or gross interest/rent – Held that:- In view of the decision of Supreme Court in case of ACG Associated Capsules (P) Ltd. vs. Commissioner of Income Tax, Central-IV, Mumbai [2012 (2) TMI 101 - SUPREME COURT OF INDIA] Ninety per cent of not the gross interest/rent but only the net interest/rent, which has been included in the profits of the business of the assessee as computed under the heads ‘PGBP’ is to be deducted under clause (1) of Explanation (baa) to Section 80HHC for determining the profits of the business. Matter remanded back to A.O. to work out the deductions – Decided in favor of assessee
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2017 (5) TMI 1586
TPA - comparable selection - Held that:- Finding of the comparable to be adopted to determine the ALP as the basis of the activity conducted by the respondent-assessee is essentially a finding of fact. The view taken by the Tribunal is a reasonable and possible view. Moreover it has not been shown us to be in any manner perverse. Thus the question as raised does not give rise to any substantial questions of law
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2017 (5) TMI 1585
Addition on account of sundry creditors - CIT-A deleted aforesaid addition, which has been reversed by Tribunal restoring order of Assessing Authority - Held that:- Findings of facts have been recorded by Tribunal. Once huge amount of ₹ 277.01 lacs and odd shown towards sundry creditors could not be verified by Assessee by producing relevant documents, Tribunal has rightly allowed addition thereof and its finding of fact which is not shown to be perverse or contrary to record, in our view, would not give rise to any substantial question of law.
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2017 (5) TMI 1584
Addition u/s 68 - notices never came to be issued to 11 creditors - Held that:- Out of 64 creditors, notices never came to be issued to 11 creditors. Quite apparently, learned Tribunal without discussing the evidence, if any, placed on record by the assessee with regard to the creditworthiness and genuineness of the transactions, proceeded to hold that no addition on account of unexplained credit could be made against the assessee, since the assessee was in the process of installing the plant and had not commenced any business activities.
As emerges from the impugned order that assessee vide letter dated 24.11.2008 had requested the Assessing Officer to issue summons against the aforesaid 11 creditors to ensure their attendance for their examination on oath under Section 131 of the Income Tax Act, but Assessing Officer instead of issuing notices under Section 131 of the Act proceeded to decide the case on the basis of material on record - remand back the matter to the Assessing Officer, ITA Baddi to examine and decide the matter afresh on the basis of material adduced on record by the respective parties
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2017 (5) TMI 1583
Treatment of interest on Non Performing Assets (NPAs) - Revenue contends that given the obligation of the assessee to maintain books in accordance with Section 209 of the Companies Act, 1956 on accrual basis, it had to reflect the interest accrued upon unpaid loans (NPAs) - Held that:- Interest on sticky loans and advances could not be charged to tax - The issue stands covered in favour of the Assessee and against the Revenue. SEE GE MONEY FINANCIAL SERVICES PVT. LTD., VERSUS DCIT, CIRCLE-12 (1) , NEW DELHI. [2016 (7) TMI 1396 - DELHI HIGH COURT] and PR. COMMISSIONER OF INCOME TAX-4 VERSUS GE MONEY FINANCIAL SERVICES PVT. LTD. [2017 (2) TMI 1361 - DELHI HIGH COURT]
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2017 (5) TMI 1582
Refund of SAD - N/N. 102/2007-Cus., dated 14-9-2007 - time limitation - Board’s Circular No. 6/2008-Cus., dated 28-4-2008 clarifying that single claim against a particular Bill of Entry to be filed within the maximum time period of one year - Held that:- there are no friction between the Board’s circular and the statutory provisions of filing of the refund claim within one year.
The claim of refund of the Special Additional Duty paid on import of goods should be filed before the expiry of one year from the date of payment of duty, conceived from the aforesaid angle, even if the appellant was required to file a consolidated in a single refund claim with the Customs authorities on a monthly basis, it should have been filed before the expiry of one year from the date of payment of duty against each of the bill of entry.
Appeal dismissed - decided against appellant.
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2017 (5) TMI 1581
Additions u/s 69 - initial burden to explain the nature and source of the investment in land not recorded in the books of assessee - Held that:- On factual matrix, the tribunal has decided that burden is not shifted from assessee to department and though finding on third issue, no perversity is found, we find no ground to interfere.The amounts were received from bulk purchasers before the amount was paid as per agreement.
A sum of ₹ 21,000/- was paid on 9.2.2003 and ₹ 5,00,000/- was paid on 4.3.2003 and a sum of ₹ 5,11,000/- was mentioned in the agreement. In the case of ‘Govind Vatika Project’, a sum of ₹ 21,000/- was paid before the date of agreement and a sum of ₹ 10,00,000/- was paid on 15.10.2004. The assessee has also filed the cash flow statement also. Looking to the modus operandi of the business which is verifiable from the execution of the project of ‘Govind Vatika Project’, we hold that the investment for purchasing the land is out of the founds received from bulk and retail purchasers and hence no addition is required to be made on this account. - Decided in favour of the assessee and against the department.
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2017 (5) TMI 1580
Disallowance of depreciation on Morrison rope dyeing machine - boiler as a part of dyeing machine - whether machine installed by the appellant company is not an energy saving device? - Held that:- Before proceeding with the matter it will be out of place to mention that the boiler is the main part of the dying machine to increase the efficiency and the energy level and boiler being a part of effective machinery which converts water into steam at a lower efficiency of the energy
In view of the judgment in the case of Dy. Commissioner of Income Tax, Special Range-2 vs. Vippy Solvex Products Ltd. (2007 (3) TMI 746 - MADHYA PRADESH HIGH COURT) the view taken by the Tribunal is required to be accepted modified that the boiler is a part of dyeing machine and any part which is required in dying process is required to be granted 100% depreciation - All the authorities have seriously committed the error. - Decided in favour of assessee.
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2017 (5) TMI 1579
Deduction under section 80IC - 100% claimed by the appellant in the sixth year of operation of new industrial undertaking - Held that:- The issue addressed in the present appeal is identical to what has been decided in the case of Hycron Electronics Vs ITO. [2015 (6) TMI 725 - ITAT CHANDIGARH]
The assessee is a firm engaged in manufacturing of Mono and Master Cartons. The assessee has already claimed deduction under section 80IC of the Act to the extent of 100% eligible profit for five years’ period from assessment year 2007-08 to 2011-12. The assessee had again claimed 100% deduction against eligible profits in the relevant assessment year 2012-13, which was 6th year of production by claiming substantial expansion of the unit in assessment year 2010-11. Relying upon the aforesaid decision of the ITAT in the case of Hycron Electronics (supra), the claim was rejected by the lower authorities - accordingly, respectfully following the precedent, the appeal of the assessee is rejected.
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2017 (5) TMI 1578
LTCG on sale of shares - genuineness of the share transactions - addition on statement of the third party, viz. Sh. Mukesh Choksi - Held that:- The lower authorities which have hushed through the facts to arrive at a conclusion on the basis of principle of preponderance of human probability, had however absolutely failed to appreciate that the said principle could have been validly applied only on the basis of a considerate view as regards the facts of the case in totality, and not merely on the basis of the stand alone statement of the aforesaid third party, viz. Sh. Mukesh Choksi.
We are neither able to persuade ourselves to subscribe to the adverse inferences drawn by the lower authorities in respect of the share transactions of the assessee by referring to the stand alone statement of Sh. Mukesh Choksi, as the same as observed by us hereinabove, suffer from serious infirmities, and as such cannot be summarily accepted, nor are able to dislodge the genuineness of the purchase and sale of shares of the aforesaid 10,200 shares of M/s Talent Infoways Ltd., which we find had been duly substantiated by the assessee on the basis of material made available on record, which we find had not been dislodged by the lower authorities - Decided in favour of assessee
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