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Showing 241 to 260 of 1677 Records
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2016 (9) TMI 1443
Penalty u/s 271AAA - During search operations at the residential premises, cash and jewellery were found and seized - Held that:- The assessee derived only income from salary and has admitted undisclosed income without specifying the manner in which the said income has been derived and has also not substantiated the manner. Hence the assessee clearly falls under the ambit of aforesaid provision of the Act. Section 273B does not include section 271AAA from cases where the penalty can be waived on attribution of reasonable cause. No infirmity in the orders of the authorities below and confirm the levy of penalty. - Decided against assessee.
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2016 (9) TMI 1442
Processing fee charged u/s 234E while processing the statement furnished by the assessee u/s 200A - Held that:- Appeal is covered in favour of the assessee by the decision of ITAT Amritsar Bench in the case of Sibia Healthcare Private Limited vs. DCIT [2015 (6) TMI 437 - ITAT AMRITSAR] wherein it has been held that prior to 01.06.2015, there was no enabling provision u/s 200A of the Act for raising a demand in respect of levy of fee u/s 234E - Decided in favor of assessee.
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2016 (9) TMI 1441
Validity of reopening of assessment - period of limitation - assessee was searched u/s 132 whereas the assessment after search proceedings was framed u/s 143(3) read with section 148 instead of 143(3) read with 153A - Held that:- The issue of assessment being barred by limitation has been decided by the decision of co-ordinate bench of this Tribunal in assessee’s own case in assessment year 2004-05 in the same search proceedings wherein it has been held that assessment as framed by the AO was invalid and barred by limitation.
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2016 (9) TMI 1440
TPA - corporate guarantee commission - international transaction in terms with section 92B - Held that:- There is service rendered to A.E. by providing guarantees and therefore, invoking provisions of T.P. does arise on the facts of the case. Since the DRP has also followed its earlier order for the A.Y. 2009-2010, we uphold the finding of the DRP that the corporate guarantee is an international transaction. Thereafter, we also direct the Assessing Officer to adopt rate as 0.53% as corporate guarantee commission as done in the earlier assessment year. Thus, Ground of appeal No.4 is rejected and ground of appeal No.5 is treated as allowed for statistical purposes.
Interest on Loans & Advances given by the Appellant to AE - rate of interest - Held that:- We direct the Assessing Officer to re-workout the interest on the loan brought by the assessee to it’s a.E. at LIBOR+ 2.75% as against LIBOR+ 4.75% charged by the Assessing Officer/TPO.
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2016 (9) TMI 1439
Disallowance U/s.40A(2) - payments of commission - payment as excessive and unreasonable having regard to the market value of the goods/services - Held that:- It is not correct for the Assessing Officer to begin a fresh litigation in the absence of any new material or change in the circumstances on the premise that there are new views, closer and more intelligent analysis. Assessing Officer had not doubted the genuineness of the payment and Shri E.K. Parthasarathy, Managing Director has admitted the receipt as his income in his return of income and paid the relevant taxes. Therefore, we do not find any infirmity in the order of Ld.CIT(A) and the order of Ld.CIT(A) is upheld and the ground raised by the revenue on the addition of profit commission to Mr. E.K. Parthasarathy stands dismissed.
Payment of commission to guarantors - allowable busniss expenditure - Held that:- The company has chosen to make the payment of guarantee commission as a source of income to the directors and the facts of the Hon’ble Karnataka High court in the case of United Breweries [2011 (10) TMI 443 - KARNATAKA HIGH COURT ] are clearly applicable in the assessee’s case. Accordingly, we hold that the payment of commission to guarantors is not wholly and exclusively incurred for the purpose of business and is not allowable deduction u/s. 37(1) of income tax act. Accordingly, the addition made by the AO is confirmed - decided against assessee.
Addition u/s 40A(2)(a) - commission paid to John Bruce (UK) LTD. - the expenditure was not incurred wholly and exclusively for the purpose of business - Held that:- The paper book submitted by the AR is not certified by either assessee or the AR. Therefore, we are of the opinion that the material placed before the Bench is not made available to the AO. The assessee had submitted the details of commission paid, and the invoice amounts, but not placed the copies of invoices to verify whether the sales were made through the JBUK or not? CIT(A) examined the agreements and came to conclusion that the expenditure was incurred for the purpose of business but he has not given any opportunity to the AO. This issue requires further verification to examine the genuiness of expenditure.
Disallowance u/s 40A(2)(a) - payment of profit commission to Ms.Priya Sriram, D/o. Mr.Parthasarathy - Held that:- As evident from the above trading results that there were no additional efforts or services rendered by Mrs.Priya Sriram to make the payment of profit commission over and above the fixed salary. Since the fixed was already increased from ₹ 35.50 lacs in 2010-11 to ₹ 60.01 lacs there was no reason for payment of commission on overall profit of the company without incremental benefit.
Though there are three whole time Directors and senior officers working in the company only Mrs. Priya Sriram was paid profit commission on the total profit without considering and evaluating the incremental benefit derived by the company. The A.R has not substantiated the additional responsibilities or services given to her and discharged by her with the terms and conditions of employment. Therefore we are in agreement with the AO that no additional services were rendered by Mrs. Priya Sriram for payment of profit commission and the payment was not in the business interest. Accordingly we set aside the order of CIT(A) and restore the order of the AO. - Decided in favour of revenue
Disallowance U/s.40A(2)(a) - payments of rent in respect of accommodation leased from Mr.Sriram Sivaram son in Law of Mr.E.K.Parthasarathy CMD of the company - Held that:- Mr.Sriram Sivaram is a whole time director and there are other directors but no such facility was extended to any of the other directors. The leased accommodation is a taxable perquisite in the hands of Mr.Sriram Sivaram, which is much lower in rate. Mr.Sriram Sivaram is a Director of the company and drawing salary. Section 40A(2) was brought into Act to curb the incidence of tax evasion, curbing such practice of distributing profits without making the payment of legitimate tax. Therefore, we agree with the CIT(A)’s order and the entire transaction is nothing but an arrangement wherein benefit is bestowed upon individual of the family rather than the company deriving any benefit. Therefore, AO has rightly disallowed the expenditure as unreasonable - Decided in favour of revenue
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2016 (9) TMI 1438
Dismissal of Revenue’s appeal by Tribunal on the ground that the Revenue had not come in appeal for the Assessment Years 2005-06 & 2007-08 - Held that:- The Revenue has not been able to point out any specific error which is apparent from the record in respect of order of the Tribunal. In fact, the Revenue in MA has admitted that it has not been filed any appeal for the Assessment Years 2005-06 & 2007-08. Once, the closing balance for the Assessment Years 2005-06 & 2007-08 are accepted, then obviously the opening balance for the immediately succeeding Assessment Years cannot be tinkered with. In these circumstances, as no error has been pointed out in the order of the Tribunal, the MA filed by the Revenue stands dismissed.
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2016 (9) TMI 1437
Addition u/s. 40A(3) and 40A(3A) - cash payment exceeding the prescribed limit - assessee has made payments exceeding ₹ 20,000/- in a single day through bearer cheques to suppliers of raw hide - Held that:- the consequence, which were to be fallen on account of non-observation of Section 40A(3) of the Act must have nexus to the failure of such object. Therefore, the genuineness of the transactions being free from vice of any device of evasion of tax is relevant consideration.
With regard to the purpose of bringing the provisions of section there is no doubt about the identity of the party. AR has produced the sales bills along with the transport details and road permit issued by the Government to the company. So in the instant case, there is no evasion of tax by claiming the bogus expenditure in cash. We also find that the assessment was framed under section 143(3) of the Act for the assessments years 2012-13 and 2013-14 without making any disallowance under section 40A(3) of the Act. From this fact we find that the parties from whom the raw hide and skin purchased were accepted as producers. No such issue was raised by the AO in the assessment. - Decided against revenue
Bogus sundry creditors - purchases of goods from these parties have been accepted to be genuine - Held that:- revenue had failed to prove that the amounts were credited to the books of account of the assessee in the year under consideration. These amounts were brought forward from earlier years and it is settled law that the addition under section 68 could be made only if the amount was credited in the accounts of the assessee in the relevant financial year. In Shri Vardhman Overseas Ltd. v. Asstt. CIT (2008 (7) TMI 617 - ITAT DELHI) it was held that no new amount had been credited by assessee in its account during the year under consideration. Therefore, applicability of section 68 of the Act is also ruled out and addition could not be made under section 68 of the Act - Decided against revenue
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2016 (9) TMI 1436
Loss in open market trading - speculative transaction - loss set off against the other income of the assessee - Held that:- In this case, the assessee is trading in derivatives in the Multi Commodity Stock Exchange, which was recognized. Therefore, the same cannot be treated as speculative transaction within the meaning of Section 43(5) of the Act. The transaction made in derivatives through Multi Commodities Stock Exchange was exempted under proviso (d) to Section 43(5) of the Act. Therefore, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed. - Decided in favour of assessee.
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2016 (9) TMI 1435
Foreign exchange gain - gains made on account of restatement of foreign exchange loan - revenue or capital gain - Held that:- Adjustment on account of foreign exchange rate fluctuation is required to be made to actual cost as at the end of every year prior to amendment of provisions of section 43A i.e. before 1/4/2003. In the present case, the assessment year involved is 2010-11. Therefore, amended provisions of section 43A are applicable. As per the amended provisions of section 43A, adjustment is required to be made in actual cost of the asset for the purpose of allowing depreciation only at the time of actual payment of such ECB borrowings. Therefore, we are of the considered opinion that the CIT(A) was right in holding that gains arising on account of exchange fluctuation are not liable to tax as it is on capital account and is required to be adjusted in the year of actual repayment of loan from the actual cost of asset. To this extent, the direction of the CIT(A) is modified and the grounds of appeal are partly allowed.
Addition under repairs and maintenance - Held that:- CIT(A) had merely allowed repairs and maintenance towards machinery and other expenditure of ₹ 17,16,77,432/- based on account-wise details filed before him without examining in detail true nature of expenditure incurred with reference to invoices, bills etc. In our considered opinion, the CIT(A) not to have allowed the same without examining true nature of expenditure with reference to external evidence - to meet ends of justice, we remit this ground to the file of the AO for fresh adjudication after affording due opportunity to the assessee.
MAT - reduce a sum being lower of brought forward loss or depreciation from book profit under section 115JB - Held that:- The lower of depreciation loss or business loss is required to be set off against book profit determined. In the present case, the amount of unabsorbed depreciation, loss is to be set off against book profit is required determined. In this case, there is unabsorbed depreciation loss of ₹ 113,14,04,000/- and business loss of Rs. ₹ 37,17,10,000/-, depreciation loss of ₹ 37,17,10,000/- lower of the two is required to be set off against book profits. However, the CIT(A), though accepted in principle, contention of the assessee-company that lower of unabsorbed depreciation or business loss calculated on cumulative basis as shown in the immediately preceding financial year can be set off against book profits - Since the figures adopted by the CIT(A) are not borne out of record, we remit the issue back to the file of the AO to adopt the correct figure following the principle that unabsorbed depreciation or business loss should be calculated on cumulative basis.
Depreciation on the intangible assets - Held that:- CIT(A) erred in facts and law in confirming the disallowance of depreciation on the intangible assets having upheld the Appellant's claim of acquiring business and commercial right.
Repairs & maintenance expenses for building and machinery - Held that:- CIT(A) erred in facts and in law in confirming the disallowance of repairs and maintenance expenses for building and machinery on the grounds that details/invoices/bills/vouchers were not furnished, without taking cognizance of the invoices and the submissions made by the Appellant. Without prejudice to the above, the learned CIT(A) erred in law in not granting depreciation on the aforesaid expenses held to be capital in nature.
Set off of brought forward business loss in the computation of income under section 115JB - Held that:- On the facts and in the circumstances of the case, the learned CIT(A) inadvertently erred in facts in granting set-off of lower of brought forward business loss or unabsorbed depreciation of ₹ 193,159,000 only, as against ₹ 363,340,000 claimed by the Appellant in the return of income.
Disallowance of depreciation on intangible assets - Held that:- The expenditure was incurred wholly in connection with entering into various agreements. Most of the expenditure was towards availing of professional and legal services during pre-operative period i.e. before commencement of the commercial operation. This expenditure is revenue in nature incurred during pre-operative period which qualifies for capitalization among various fixed assets. As a result of this expenditure, it cannot be said that the assessee had acquired any commercial rights. Furthermore, some of the expenditure also related to leasehold rights in land which par takes character of the land which does not qualify for depreciation. We uphold the order of the CIT(A) and dismiss the ground of appeal filed by the assessee-company.
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2016 (9) TMI 1434
Deduction u/s. 10A - exclude telecommunication charges and travel expenses incurred in foreign currency from the total turnover - Held that:- Hon'ble jurisdictional High Court in the case of CIT v. Tata Elxsi Ltd.(2011 (8) TMI 782 - KARNATAKA HIGH COURT) wherein it was held that whatever is excluded from the export turnover, has also to be excluded from the total turnover. Grievance of the Revenue that the decision of HC has not been accepted by the revenue and an appeal by the revenue has been filed before the Hon'ble Supreme Court is of no relevance as law declared by the Hon'ble High Court of Karnataka which is the jurisdictional High Court is binding on us.
Transfer pricing addition - comparable selection criteria - functional similarity - Held that:- The assessee company is engaged in the business of development of software and provides sales & marketing support thus companies functionally dissimilar with that of assessee need to be deselected from final list.
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2016 (9) TMI 1433
Addition being the deemed rental income from income from House Property - Held that:- We direct the Assessing Officer to pass consequential order in line with the decision of the Co-ordinate Bench for the Assessment Years 2003-04 to 2006-07 [2015 (3) TMI 1307 - ITAT MUMBAI] and recompute the rental income for the Assessment Years under appeal accordingly
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2016 (9) TMI 1432
Validity of assessment order - penalty - Held that: - The penalty proceedings is an absolute of the assessment proceedings - If one were to decide assessment proceedings and penalty proceedings jointly, clear divergence among the materials and adjudicating process has to be reflected so that the order has to reflect the independent consideration of the assessment proceedings, as also, the question as to whether there should be a penalty order.
The matters are remitted to the assessing authority to consider the assessment proceedings and penalty proceedings de novo after affording sufficient opportunity to the assessee - petition allowed by way of remand.
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2016 (9) TMI 1431
Input tax credit - validity of SCN - Held that: - the SCN issued by the assessing officer proposing to reverse the I. T. C. availed of by the respondent/writ petitioner/dealer is lacking any valid or sustainable basis. If the sales effected to the writ petitioner/dealer are not disclosed by such a seller either in the form of return filed monthly or the tax collected from the writ petitioner/ dealer is not made over to the Department by such seller, the action lies against such a defaulting seller but not against the purchaser - appeal dismissed - decided against appellant-Revenue.
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2016 (9) TMI 1430
Refund claim - export of services - N/N. 41/2007 dated 6.10.2007 - denial on the ground that the same are not covered by the port services, which are only specified services in terms of notification in question - Held that: - As regards the verification of documents, the same can only be done at the level of original adjudicating authority. As such, it is deemed appropriate to set aside all the impugned orders and remand the matters to the Commissioner for fresh consideration of the appellants’ refund claim in the light of declaration of law by the Tribunal - appeal allowed by way of remand.
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2016 (9) TMI 1429
Rejecting the books of accounts - CIT-A confirming the net profit rate of 15% against the declared rate of 10.12% and net profit rate 29.52% estimated the ld. A.O. - Held that:- In the year 2005- 06, the turnover of gross contract receipts was ₹ 12102939/- and whereas gross receipts in the year was ₹ 34012026/-. Whereas the gross receipt in the A.Y. 2006-07 was ₹ 46441234/- . ₹ 46114965 is the gross contract receipts for the year 2004-05 and 2005-06, in our view, in fact the gross receipt of 2006-07 was ₹ 46441234/-. Thus, the gross receipts of 2006-07 is matching the gross receipts for the earlier two years. Therefore, to apply the NP rate for the year 2005-06 @ 29.52%, in our view, was not correct and therefore, a rational view is required to be taken estimating the profit of the assessee. The ends of justice would be served if the estimate of profit of the assessee is estimated at 17% subject to depreciation, interest and remuneration to the partners. Thus, the appeal of the assessee is dismissed and appeal of the revenue is partly allowed on this ground.
Disallowing on account of depreciation - use of machinery in the assessment year under consideration - Held that:- AR has failed to point out the bill showing that it was purchased prior to 30/03/2006 and was put to use by the assessee in the year under consideration. Since the assessee has failed to produce any document showing the uses of machine in the assessment year under consideration, therefore, depreciation on the machine is disallowed. Accordingly, this ground of assessee appeal is dismissed.
Addition of outstanding liabilities - Held that:- AO was not required to travel and examine the outstanding liabilities of wages which was specifically disallowed by the Assessing Officer in the earlier years and the order of the Assessing Officer was set aside after upholding the rejection of books and specific directions were issued to estimate the profit on the basis of the past history. Since the profit of the assessee has been estimated @ 17% of the turnover by the Tribunal hereinabove, that will take care of all the disallowances earlier made by the Assessing Officer in its assessment year and therefore, no specific addition should have been made by the Assessing Officer under the outstanding liability (wages payable), as the said adjudication by the Assessing Officer is beyond the scope of the remand proceedings - no hesitation to delete the addition made towards unexplained liability shown in the balance sheet.
Moreover, the Assessing Officer has made the disallowances U/s 68 of the Act, in view of the judgment of the Hon’ble Jurisdictional High court in the case of CIT Vs. G.K. Contractor [
2009 (1) TMI 840 - RAJASTHAN HIGH COURT], once the books are rejected and the income of the assessee is estimated, no separate addition can be made U/s 68 of the Act. - Decided in favour of assessee.
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2016 (9) TMI 1428
Winding up petition - Held that:- In terms of Section 434(1) of the Companies Act, 1956 since the respondent has neglected to pay the said amount, therefore, it is deemed to be ‘unable to pay the debt’. The statutory notice under Section 434 of the Act sent by the petitioner was refused by the respondent, therefore, it would be deemed to be served.
Hence, a case is made out for admitting the present winding up petition. Hence the company petition is admitted.
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2016 (9) TMI 1427
Addition on account of suppressed service charges - undisclosed receipts - undisclosed contract receipts - Held that:- The assessee derives income from executing the contract job work and in doing so is bound to incur expenses. It is not the case of the revenue that all expenses including the expenses relatable to the undisclosed receipts from execution of contract job work has already been taken into consideration while arriving at the total income of the assessee declared in the return of income by the assessee. Thus the belief of taxing 31.75% which is the disclosed gross profit of the assessee on the undisclosed contract receipts is just and fair and the plea of the Assessee in this regard is directed to be accepted.
TDS u/s 194C - Addition u/s 40 (a)(ia) - amounts to different parties for supply of technical works and labourer on a regular basis for conducting AMC job-work - Held that:- As decided in case of M/s. Abhoy Charan Bakshi [2016 (5) TMI 755 - ITAT KOLKATA] the Assessee has furnished all the details of assessment particulars of the recipients of payment from the Assessee. The AO therefore should not have any difficulty in making the required verification. We therefore set aside the order of the CIT(A) to the extent to which he had sustained the order of the AO on the disallowance u/s.40(a)(ia) and remand the issue to the AO to verify whether the recipients have included the receipts paid by the assessee in their respective returns of income and also paid taxes on the same. Similar directions as were made above should be given in the present case also.
Addition on account of education expenses for the employee of the assessee - Held that:- It would be just and proper to set aside the order of CIT(A) on this issue and remand to the AO for fresh consideration of the issue with the liberty to the assessee to establish that the expenses in question were in fact incurred for the education of the children of the employees. If it is so established then the deduction claimed should be allowed.
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2016 (9) TMI 1426
CENVAT credit - duty paid on inputs which were used for clearing both exempted as well as duty paid goods - non-maintenance of separate records - Held that: - identical issue decided in the case of CCE & ST, Hyderabad-III Vs M/s Kishore Sons Surfactants vide Final Order No.A-30006/2015 has decided the issue in favor of the assessee - appeal allowed - decided in favor of appellant.
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2016 (9) TMI 1425
Transfer Pricing adjustment in respect of provision of Information Technology Enabled Services (ITES) - comparable selection - Held that:- The assessee, i.e., Capita India Private Limited is part of Capita Group Plc which is a United Kingdom based company mainly into BPO and professional services. In India, the assessee is engaged in providing full spectrum of Information Technology Enabled Services (ITES) to Capita Group covering both voiced and non-voiced based segment, thus companies functionally dissimilar with that of assessee need to be deselected from final list.
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2016 (9) TMI 1424
Validity of assessment order - reversal of ITC - TNVAT Act - Held that: - The petitioner, on receipt of the notice, produced C Forms and the respondent while considering the explanation offered by the petitioner and the C Forms, verified the same and found it to be correct and allowed concessional rate of tax. However, sought to reverse the Input Tax Credit [ITC] u/s 19[2][v] and 19[5][a] of the TNVAT Act, 2006 - In the absence of any proposal in the show cause notice, this could not have been done by the respondent, even assuming that he has some material to do so.
On technical ground, the impugned orders insofar as directing reversal of ITC u/s.19[2][v] and 19[5][a] of the Act, are quashed and in other aspects, the orders of assessment, being in favor of the dealer/petitioner herein, is confirmed.
Petition allowed in part.
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