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Showing 261 to 280 of 1887 Records
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2017 (12) TMI 1631
Interest income received on FDRs - whether fixed deposits as purchased on account of business exigencies, therefore the same may be treated as business income? - Held that:- Wherever the FDRs are purchased on account of business exigencies, the interest generated thereon would be business income and not income from other sources. But in the instant case, it is not borne out from the orders of lower authorities whether all FDRs are purchased for business exigencies or not. Therefore, we restore the matter to the file of the AO to examine the nature of FDRs and its purpose and to give a specific finding whether the FDRs were purchased for business purposes or not. If it is purchased for business purposes, the interest income earned thereon shall be treated as business income and not income from other sources in the light of aforesaid judgments of jurisdictional High Court.
MAT applicability - applicability of provisions of section 115JB to the assessee as engaged in the business of generation of power - Held that:- Since it has been repeatedly held by the different Benches of the Tribunal and Hon’ble High Court of Kerala that where the assessee is governed by different Acts and Rules, and is not required to prepare its profit & loss account and balance sheet as per Part II & III of Schedule VI to the Companies Act, the provisions of section 115JB cannot be invoked against him. In the light of this legal position, we are of the view that the revenue authorities wrongly invoked the provisions of section 115JB of the Act, therefore the order of the CIT(Appeals) is not sustainable in the eyes of law. Accordingly, we set aside the order of CIT(Appeals) in this regard.
Appeal of the assessee is partly allowed for statistical purposes.
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2017 (12) TMI 1630
Recall of order - appeal was decided ex parte, without proper notice of hearing to the respondent - principles of natural justice - Held that:- On perusal of the case records, we do not find any notice has been communicated to the respondent, fixing the date of hearing on 22-11-2016. Thus, we are of the view that Final Order dated 22-11-2016 passed by this Tribunal ex parte can be recalled in the interest of justice - Decided in favor of Revenue.
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2017 (12) TMI 1629
Valuation - inclusion of value of of chassis in the assessable value of goods cleared by SML - Rule 10A of the Central Excise Valuation Rules - Held that:- Identical issue decided in appellant own case SITA SINGH & SONS (P) LTD. VERSUS CCE, DELHI-IV [2017 (10) TMI 1298 - CESTAT CHANDIGARH], where it was held that the assessee is liable to pay duty in terms of Rule 10A of the Rules i.e. on the value at which the principal manufacturer cleared the goods on payment of duty, therefore, the differential duty is confirmed along with interest.
Demand of duty along with interest is confirmed - penalty set aside - appeal allowed in part.
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2017 (12) TMI 1628
Corporate insolvency procedure - seeking extension of time for completion of the resolution process - Held that:- This resolution has been passed by 99.67% of the voting share of Committee of Creditors and later on two more creditors exercised voting rights by e-voting which ultimately resulted the resolution being passed with 100% voting in favour of the resolution for seeking extension. Having heard the learned counsel for the applicant and the reasons explained in the resolution itself which have been highlighted in the instant application, the application deserves to be accepted. Accordingly, the period of 180 days which is stated to be expiring on 07.01.2018 is extended for 90 days in terms of Section 12 (3) of the I & B Code, 2016 for completion of the resolution process.
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2017 (12) TMI 1627
Transfer pricing adjustment - MAM selection - assessee has entered into Advance Pricing Agreement (APA) with CBDT - application of internal CUP as well as computation of ALP under internal Cost Plus Method - Held that:- In the light of fact that assessee has entered into APA, the Coordinate Bench of the Tribunal in the assessment year 2009-10 has directed Assessing Officer to decide the issue in accordance with the terms and conditions of APA as nature of transactions are similar.
We are of considered opinion that it would be just and proper to restore these issues to the file of Assessing Officer with similar directions as above by the Tribunal in asssessee’s appeal for assessment year 2009-10. We further find forces in the submission of ld. DR that before deciding the issues raised in appeals under consideration, it would be relevant to ascertain the nature of international transactions that have been carried out during assessment years 2005-06 to 2007-08. If they are of similar nature, the same can be decided afresh in line with the terms and conditions of APA.
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2017 (12) TMI 1626
Assessment u/s 153C - calculation of LTCG - adoption of sale consideration - proof of agreement of sale as seized in search - Held that:- Assessing Officer had framed the assessment mainly stating that the agreement for sale was seized and also placing reliance on the statement recorded u/s 132(4) from Shri Babu John.
As mentioned earlier, there is no agreement of sale that was sized nor was the statement of Shri Babu John indicating that the assessee was paid more than the declared value in sale deed. Therefore, we have to conclude the adoption of sale consideration at ₹ 99.90 lakh is not supported by any corroborative evidences / materials. Hence, we direct the Assessing Officer to adopt the sale consideration as disclosed in document No.3424/07 dated 24.04.2008 viz., ₹ 18.30 lakh instead of ₹ 99.90 lakh for the purpose of calculating long term capital gains. It is ordered accordingly.
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2017 (12) TMI 1625
Reopening of assessment - addition u/s 68 - Held that:- On examination of certain information received from the Directorate of Investigation, Kolkata which had carried the investigation in the case of the 9 entities, details whereof has been set out in the reasons recorded, it was ascertained that those 9 entities are the companies with no real business and are only engaged in business of providing accommodation entries of bogus nature to beneficiary concerns which was further confirmed by the directors/dummy directors/key persons of the said entities in their respective statements. Thus, on the basis of the material on record, AO opined that the appellant company has received and utilised the share application money received from bogus sources lacking genuineness, creditworthiness, genuine identity, which fall within the purview of Section 68 of the Act.
In the instant case where the return filed by the assessee was not subjected to scrutiny assessment, the belief formed by the AO after due examination of the material on record that the income of the assessee chargeable to tax during the relevant assessment year has escaped assessment cannot be said to be arbitrary or irrational or there exists no rational and intelligible nexus between the reasons and the belief.
It is true that the reasons recorded or the material available on record must have nexus to the subjective opinion formed by the AO regarding the escapement of the income but then, while recording the reasons for belief formed, the AO is not required to finally ascertain the factum of escapement of the tax and it is sufficient that the AO had cause or justification to know or suppose that income had escaped assessment [vide Rajesh Jhaveri Stock Brockers (P.) Ltd.'s case (2007 (5) TMI 197 - SUPREME COURT)]. It is also well settled the sufficiency and adequacy of the reasons which have led to formation of a belief by the AO that the income has escaped the assessment cannot be examined by the court.
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2017 (12) TMI 1624
Disallowance of Business Promotion Expenses - allowable busniss expenditure u/s 37 - non rejection of books of accounts - Held that:- It is an undisputed fact that neither the Ld. AO not the Ld CIT(A) pointed out any discrepancy relating to the “Business Promotion Expenses” with reference to the books of accounts of the assessee. Books of accounts of the assessee are not rejected.
Though, the Ld. AO and for that matter Ld. CIT(A) made the ad hoc disallowance, there does not appear to be any basis for the same. It is not in dispute that vide letter dated 26/09/2014 the assessee has always been maintaining that expenses are purely and comprehensively further business purpose. There is no dispute that any of these expenses are not for business purpose. It is not the case of the Revenue that any of these expenses is towards personal expense of any person relating to the assessee. Thus it is difficult to sustain the ad-hoc disallowance, in the absence of authorities pointing out any discrepancy in respect of these expenses - decided in favour of assessee.
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2017 (12) TMI 1623
Rectification of mistake u/s 154 - demand u/s 234E while issuing intimation under section 200A - scope of amendment of sec 200A - Held that:- The issue arising in the present appeals is identical to the issue before the Tribunal in bunch of appeals and where the amendment to section 200A(1) is procedural in nature, then the Assessing Officer while processing the TDS statements / returns in the present set of appeals for the period prior to 01.06.2015, was not empowered to charge fees under section 234E. Accordingly, intimation issued by the AO u/s 200A in all the appeals does not stand and the demand raised by charging the fees under section 234E of the Act is not valid and the same is deleted. The grounds of appeal raised by the assessee are thus, allowed.
Period of limitation - delay in filing appeal - Held that:- CIT(A) had taken the date of intimation under section 200A(3) dated 07-08-2014 and computed the delay in filing the appeal late before him. The assessee had filed the appeal before the CIT(A) against the order passed under section 154. The said application for rectification under section 154 was filed on 08-06-2017/09- 03-2017 in the respective years. The said application was decided by the AO on 09-06-2017. The assessee filed an appeal against the dismissal of the rectification application filed under section 154. The said fact is clear from the perusal of Form No.35 with special reference to Column 2(a) and 2(b). No merit in the order of CIT(A) in the case of Medical Superintendent Rural Hospital, Surgana in dismissing the appeal in-limine being filed beyond the period of limitation. We have already decided the issue on merits in favour of assessee.
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2017 (12) TMI 1622
TPA - wrong selection of MAM - Assessee had adopted an overall entity based Transactional Net Margin Method (TNMM) to determine ALP of its international transactions - TPO adopted a transaction-by-transaction approach considering segmental profitability as per AS 17 - According to assessee, it has appointed the new law firm who after analysis of the original T. P study has advised the assessee to adopt transaction by transaction method, in place of entity level bench marking approach and e, it should not be penalized for the error/mistake which occurred in the first place, because of wrong legal advice of erstwhile attorneys
Held that:- We note that the Hon’ble Supreme Court in N. Balakrishnan Vs. M. Krishnamurthy (1998 (9) TMI 602 - SUPREME COURT OF INDIA) wherein a similar case where there was a delay of 883 days because of the mis-handling the case by the Advocate of the petitioner, the Hon’ble Supreme Court condoned the delay taking note that the petitioner cannot be faulted due to the latches of the lawyer.
Similarly, for substantial justice, the assessee should not suffer because of earlier legal advice which the assessee realizes to be wrong and ready to correct. Therefore, in the interest of justice and fair play, the transfer pricing adjustment ordered by the TPO is set aside with a direction to re-adjudicate only on the issue on which the TPO has found the assessee’s transaction not at arms’ length, which is to be done afresh after taking into consideration, the aforesaid documents filed before us for A.Y 2011-12 and DRP for AY 2012-13 and after hearing the assessee.
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2017 (12) TMI 1621
Accrual of income - whether duty drawn back accrues to the assessee only on passing of the order by appropriate authority and not in the year of export? - Held that:- Question 1 is answered in the negative, i.e. in favour of the Assessee and against the Revenue.
Unutilized MODVAT credit for earlier years adjusted in assessment years - whether should be treated as actual payment of the excise duty under Section 43B - Held that:- Question 2 is answered in the negative, i.e. in favour of the Revenue and against the Assessee.
Excess consumption of raw materials and components shown by the Assessee - Held that:- Question 3 is answered in the negative, i.e. in favour of the Assessee and against the Revenue.
Not to reduce the amount of deduction allowable under Section 80-IB from the profits of business for the purpose of computing deduction under Section 80HHC? - Held that:- In view of the decisions in Great Eastern Exports v. CIT [2010 (11) TMI 91 - DELHI HIGH COURT] and Associated Capsules (P.) Ltd. v. DCIT [2011 (1) TMI 787 - BOMBAY HIGH COURT] in favor of the Assessee.
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2017 (12) TMI 1620
Principles of natural justice - no opportunity given to petitioner to establish his case - Whether in the facts of this case the finding of the Tribunal was perverse in not accepting the affidavit evidence of the constituted attorney of the assessee in which the reason for delay was sought to be explained without giving further opportunity to the assessee to explain delay through the persons to whom the cause of such delay directly attributed?
Held that:- In the instant case, the assessee had taken the point before the Tribunal through an affidavit of its constituted attorney. But no affidavit by the person concerned, who had retired was filed. It is apparent from the order of the Tribunal that no further opportunity was given to the assessee to establish its contention by filing affidavit of the concerned person. In the supplementary affidavit filed before us, the affidavit has been annexed - in the given circumstances of the case, at least a further opportunity should have been given to the assessee to explain the reason for delay. We, therefore, answer the question, on which we have admitted the appeal, in the affirmative and in favour of the assessee.
The order of the Tribunal is set aside and the matter is remanded to the Tribunal for a decision afresh.
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2017 (12) TMI 1619
Revocation of Suspension order - Reversion of petitioner from the post of Deputy Commercial Tax Officer to the post of Assistant - case of Revenue is that the allegations against the writ petitioner, are serious and therefore, they cannot revoke the order of suspension - Held that:- It is mandatory that whenever disciplinary proceedings are initiated against a Government employee, the same should be completed within a reasonable period of time, unless there is an acceptable impediment. Under normal circumstances, the disciplinary proceedings initiated ought to have been completed, without any further delay. The long delay in concluding the disciplinary proceedings will certainly cause prejudice to the employees, in respect of their promotions, retiral benefits etc. Thus, the Competent Authorities have to see that the disciplinary proceedings initiated against the writ petitioner is concluded, within a reasonable period of time.
It is brought to the notice of this Court that the writ petitioner was also reverted to the post of Assistant from the post of Deputy Commercial Tax Officer in proceedings dated 18.12.2014 - this Court is of the firm opinion that there is no bar for the respondent to continue the disciplinary proceedings. However, now more than four years have lapsed and there is no reason to continue the order of suspension against the writ petitioner. The writ petitioner may be reinstated and he may be posted in any one of the non-sensitive post till the final disposal of the disciplinary proceedings pending against the writ petitioner - This Court is of further opinion that placing an employee under suspension for an unspecified period will cause monetary loss to the State Exchequer.
In the case on hand, the writ petitioner is under continuous suspension for more than four years and therefore, this Court is of the opinion that the suspension deserves to be set aside - the order of suspension issued by the respondent in Memo No.EE2/21208/2013 dated 31.3.2016 is quashed and the writ petitioner may be posted in the post of Assistant in any one of the non-sensitive post till the completion of the disciplinary proceedings.
Petition allowed - decided in favor of petitioner.
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2017 (12) TMI 1618
Recovery of loan - sale of mortgaged property - The petitioner will deposit a sum of ₹ 2.50 lacs with the Bank within three days. Further ₹ 7.50 lacs will be deposited on or before the next date of hearing.
The petitioner will pay his half share of the loan amount and other half share may be recovered by selling the property of the other partner.
Adjourned to 16.1.2018.
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2017 (12) TMI 1617
Revision u/s 263 - disallow the claim of exemption u/s 54EC and 54F - order erroneous and prejudicial to the interest of the revenue - Held that:- While exercising the powers under Section 263, the Commissioner must not sit as an appellate authority and that where two views are possible and if the AO has taken one plausible view, the Commissioner cannot interfere with such view, merely because he has taken a different view.
In the light of Section 2(47), it cannot be said that the view taken by the AO, was not a plausible one. In the absence of any specific provision which determines the actual date of transfer, the view taken by the AO that the date on which form No.7B was signed by both parties and presented to the purchaser company, is the date of effective transfer, can be a plausible view. On these facts of the case, the Commissioner ought not to have exercised his revisional jurisdiction under Section 263 of the Act. - Decided in favour of assessee.
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2017 (12) TMI 1616
Modified Assured Career Progression (MACP) - whether the benefit of MACP is applicable from 01.01.2006 or from 01.09.2008?
Held that:- A bare perusal of Clause(i) of the Resolution clearly indicates that the Central Government decided to implement the revised pay structure of pay bands and grade pay, as well as pension with effect from 01.01.2006. The second part of the Clause lays down that all allowances except the Dearness Allowance/relief will be effective from 01.09.2008. The AFT held, and in our opinion rightly so, that the benefit of MACP is part of the pay structure and will affect the grade pay of the employees and, therefore, it cannot be said that it is a part of allowances. The benefit of MACP if given to the respondents would affect their pension also.
We are only concerned with the interpretation of the Resolution of the Government which clearly states that the recommendations of 6th CPC as modified and accepted by the Central Government in so far as they relate to pay structure, pay scales, grade pay etc. will apply from 01.01.2006. There may be some gainers and some losers but the intention of the Government was clear that this Scheme which is part of the pay structure would apply from 01.01.2006.
There are no merits in the appeal - appeal dismissed.
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2017 (12) TMI 1615
Maintenance and Repair Services or not? - reconditioning of old and worn out Sugar Mill Rollers - Held that:- An indentical issue was the subject matter of the said decision of the Tribunal in the case of Jagat Machinery Pvt. Ltd. vs. Commissioner [2012 (12) TMI 478 - CESTAT NEW DELHI], wherein it stands held that the activity of re-conditioning of old and worn out shells of Sugar Mills Rollers, shall be liable to service tax only with effect from 16.06.2005.
Time Limitation - Held that:- The entire facts were being placed by the appellant before their Jurisdictional Central Excise Authorities, in which case no malafide can be attributed to them so as to invoke the longer period of limitation.
Appeal allowed - decided in favor of appellant.
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2017 (12) TMI 1614
Disallowance expenses claimed towards the bricks, machinery repair, cartage etc. and labour expenses - Held that:- Expenses for bricks, machinery repair, cartage etc., the A.O. concluded that insufficient evidence was adduced. He, therefore, disallowed 10% of the claim. This was reduced by half by the C.I.T.(Appeals). ITAT gave two reasons to set aside the findings of the A.O. – C.I.T.(Appeals). Firstly, that the books of account were not rejected and secondly, that in the past, consistently such expenses were allowed in scrutiny assessments.
In the case of labour cases too, identical reasons were adduced by the A.O. to bring to tax a sum of ₹ 2.2 crores. The same were set aside ultimately by the ITAT.
This Court is of the opinion that the principal reasoning of the ITAT, i.e. omission to reject the books of account, in which event the adhoc disallowance could have been adjusted and also the historical treatment of such expenses, cannot be termed as unreasonable; in support of its ultimate conclusion. No substantial question of law arises.
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2017 (12) TMI 1613
Addition u/s 41(1) on account of bogus liability and liability cease to exist - Held that:- The liabilities which are bogus would not be within the purview of section 41(1) of the Act; however, the trading liabilities which ceased to exist would fall within the purview of section 41(1). Therefore, both liabilities which are bogus cannot be treated as liability which ceased to exist in fact cessation of liability would be where if trading liability was existed. In the case of bogus liability, which was not in existence from the time of inception, cannot be treated to be ceased to exist. Hence, the authorities below have failed to appreciate this aspect of the matter. Admittedly, the Ld. CIT(A) has not accepted the explanation that such liability was discharged in subsequent years by making payment through banking channels.
We are unable to sustain this finding of the Ld. CIT(A) for the simple reasons that the banking accounts cannot be opened in vacuum. We therefore, direct the AO to delete this disallowance. Thus, this ground of the assessee's appeal is allowed.
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2017 (12) TMI 1612
Validity of re-assessment proceedings - unexplained deposits in bank - no addition on account of which the assessment was reopened - Held that:- A perusal of the reasons recorded by the AO as reproduced by him in the assessment order shows that the reopening was made on account of cash deposit of ₹ 19 lakh in the bank account of the assessee. However, the AO in the assessment order has made addition of ₹ 36,26,500/- on account of capital gain and interest income. Thus, there is no addition on account of which the assessment was reopened by issue of notice u/s 148 of the I.T. Act.
There was no addition made in the assessment order on account of which the assessment was reopened but some other additions have been made by the AO, therefore, the AO does not have jurisdiction to make such other additions in absence of any addition made for which the assessment was re-opened in the light of the decision of Hon’ble Delhi High Court in the case of Ranbaxy Laboratory Ltd. [2013 (1) TMI 679 - DELHI HIGH COURT] - Decided in favour of assessee
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