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Case Laws
Showing 281 to 300 of 2016 Records
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2018 (12) TMI 1738
Levy of IGST on imported goods - Import under Advance authorization scheme - the bill of entry was not being assessed either on self assessment, provisional assessment or reassessment - it was held that the respondent extended benefit of exemption notification which had hitherto prevailed to levies under the Integrated Goods and Service Tax (IGST). That levy did not exist at the time the amended customs notifications were issued i.e. 29.06.2017.
HELD THAT:- The Special Leave Petition is dismissed.
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2018 (12) TMI 1737
Filing of Form GST TRAN-1 - transitional credit - transition to GST regime - HELD THAT:- The respondents are directed to provisionally entertain the GST TRAN-1 and other returns of the petitioner either by way of opening the portal or manually.
List this matter on 05.12.2018
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2018 (12) TMI 1736
Tax collected but not deposited in the government exchequer - recovery alongwith interest and penalty - HELD THAT:- It is seen from the records that the office of the appellant has admitted that service tax had been collected along with inspection fees as agreed upon in the tender documents. It is, therefore, a clear case of non-deposit of service tax component collected in the various invoices. The tender process makes it clear that the payment of inspection fees also must comply with the provisions of Finance Act, 1994 and, thereby, includes the service tax component.
Implicitly, service tax component had been collected and this must be deposited. It is the responsibility of every provider of service to deposit the amounts collected as service tax, irrespective of whether the service provided is taxable or not, with the exchequer. Failure to do so must result in recovery of that amount.
It is seen that the appellant is a department of the government of Maharashtra concerned with the erection and maintenance of dams. Owing to the lack of understanding and absence of motive, imposition of penalty under section 78 of Finance Act, 1994 will not sustain - penalty set aside - appeal allowed in part.
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2018 (12) TMI 1735
Taxability - services rendered by the appellant in respect of construction of residential units - period October 2007 to February 2008 - HELD THAT:- The appellants are builders of residential complexes and entered into/sale deeds/agreements for construction with the buyers - the demand in the case in hand is prior to 01.07.2010 and the services provided were for construction of residential complexes by the builder.
The decision in the case of Kolla Developers & Builders of this Bench [2018 (11) TMI 164 - CESTAT HYDERABAD] is directly on the same issue where it was held that legal position is settled and the appellant was not required to pay service tax on the services allegedly rendered by them during the relevant period.
Appeal allowed - decided in favor of appellant.
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2018 (12) TMI 1734
Long term capital loss - Genuineness - sale of listed shares to a group company at a price less than the market price. - off market transactions - Revenue submitted that, had the assessee sold these shares through the stock exchange then the impugned loss could have been avoided. Accordingly, the learned DR contended that the loss claimed by the assessee is nothing but generated through the use of a colorable device.
Held that:- if the assessee would have sold these shares through the network of the stock exchange, the possibility of the reduction in the value of shares in the market would not have been avoided. It is because at that relevant time the daily average number of shares traded in the stock exchange namely BSE & NSE were 4,87,085 and 9,56,701 respectively. The relevant details showing the average number of shares traded in the stock exchange is placed on pages 54 to 55 of the paper book. Thus the sudden supply of 30 lacks shares, that too by the promoter of the assessee company in the stock exchange would have adversely affected the price of the shares of Arvind Ltd.
There is no provision under the Act prescribing the guidelines for pricing of the shares unlike the provisions contained under section 50C of the Act concerning immovable properties under the head capital gain. - As per the provisions of section 50CA of the Act, the sale price of shares other than quoted shares shall be the fair market rate which shall be determined as prescribed under the rule 11UAA of the Income Tax Rule. - the lawmakers have not brought any mechanism to determine the sale price of quoted shares if sold off-market. Thus it is transpired that the sale price of the quoted shares shall be the price as agreed between two parties if it is sold off-market.
Whether this transaction is a colorable device to reduce its future tax liability - Held that:- whenever assessee has two options, any layman will always go for one which reduces its tax liability but to hold that the transaction as a colorable device Revenue needs to see it in entirety, as held by the Hon’ble Gujarat high court [1995 (12) TMI 12 - GUJARAT HIGH COURT]
We are not inclined to uphold the finding of authorities below. Accordingly, we set aside the order of learned CIT(A) and direct the AO to delete the addition made by him. Hence the ground of appeal of the assessee is allowed. - Decided in favor of assessee.
Short-term capital loss - sales of shares and forfeiture of share warrants were carried out among the related parties and belonging to the same group - AO was of the view that the loss claimed by the assessee is a colorable device - Held that:- section 50CA is applicable w.e.f. 01st April 2018, therefore, for the assessment year under consideration there was no mechanism under the law to determine the sale price of unquoted shares.
Additions u/s 56(2)(x) r.w.s 68 - Held that:- the person being the recipient is subject to tax if it acquires anything at a value lesser than the fair market price. These provisions have been brought under the statute with effect from 01.04.2017. We also note that the same provision was also there in the old provision under clause (vii) to section 56(2) of the Act. However, on reading the same, we note that the tax liability, if any arises will be applicable in the hands of the recipient and no liability, can be imposed on the transferor. Therefore, we are of the view that the assessee being the transferor of shares cannot be subject to tax in the instant case. - the investment made by the assessee at such a high premium and subsequent sale at a loss cannot be the basis holding that such loss is bogus in the given facts & circumstances.
Colorable device to claim short term loss - Held that:- had there been any malafide intention of the assessee then it could have booked such loss in the more planned manner so that there should not have been any doubt. We are forming our view on the basis that the assessee did not set off such loss till the date of passing the order by the learned CIT-A. Had there been any malafide intention of the assessee, then it could have claimed the set off of such loss in the same financial year or the subsequent financial year.
Similarly, we also note that the future income under the head capital gain cannot be predicted for claiming the set off of such loss. Moreover, there was no allegation of the Revenue that such loss was created to claim the set off of the future income. The future income is unseen and unpredictable and it was not possible to design the same in the relevant year. Therefore, we are of the view that such loss cannot be disallowed keeping in mind the future income of the assessee.
The above the loss of ₹ 3,50 crores cannot be treated as generated through the use of colrable decvice. - Decided in favor of assessee.
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2018 (12) TMI 1733
Scope of Advance Ruling application - levy of GST - rate of GST - Extraction of timber / bamboo from Natural Forest - Transportation of Timber / bamboo from Natural Forest to the Government depots - Maintenance of Government depots like classification / grading of timber & bamboo and wages to mastris for supervision - HELD THAT:- An applicant can seek an advance ruling in relation to supply of goods or services or both undertaken or proposed to be undertaken by the applicant - Further, as per Section 103 (1) of the APGST Act such an Advance Ruling is binding only on the applicant and on the Officer Concerned or the jurisdictional Officer in respect of the applicant.
In the present case the applicant is recipient of the services and not supplier of such services - the application is not liable for admission and therefore rejected without going in to the merits of the case.
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2018 (12) TMI 1732
Government entity or not - Rate of GST - Electrification work for procurement of plant, design, supply, install and commission certain facilities viz Providing Underground cable works in Visakhapatnam city, package -1 and Package - 3 - whether tax rate of 12% [CGST-6% + SGST- 6%] is applicable? - N/N. 20/2017-Central Tax (Rate) Dated.22-08-2017 and N/N. 24/2017-Central Tax (Rate) dated 21.09.2017? - works contract services provided to Eastern Power Distribution Company of Andhra Pradesh Limited - HELD THAT:- The Government of India, vide notification No. 11/2017-Central Tax (Rate), dated - 28th June 2017 notified the rate of GST applicable on supply of services. Under this notification for heading 9954 the applicable rate of GST is 9%.
The Applicant Contractee i.e. APEPDCL is a Government Company i.e. wholly owned by the Government of Andhra Pradesh. The applicant had submitted the copy of Audited Annual Accounts of M/s APEPDCL for the FY 2016-17. It is evident from the schedule of Equity Share Capital of the Annual Statement that 100% share capital is held by the Government of Andhra Pradesh in the name of Honourable Governor of Andhra Pradesh. Thus, based on the above facts, it is concluded that the Government of Andhra Pradesh is having full control over the APEPDCL and covered under the definition of Government Entity.
Nature of work undertaken by the applicant - execution of works awarded by M/s Eastern Power Distribution Company of Andhra Pradesh Limited for Procurement of plant, design, supply, install and commission certain facilities - HELD THAT:- The works under discussion have been undertaken to execute/Implement various schemes for constructing sub stations, erection of distribution transformers, implementation of World Bank Projects etc.. Moreover, the above works undertaken by APEPDCL are for business purpose and the benefit of Concessional Rate of 12% (6% under Central tax and 6% State tax) as per notification is not available to the applicant - As per Section 2 of CGST Act, 2017 and APGST Act, 2017 defines “works contract” as a contract for building, construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of any immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract.
In the instant case, the contract entered by the applicant squarely falls under the works contract and falls under entry no. (ii) of S.No.3 of the table of notification no. 11/2017 - Central Tax (Rate), Dated - 28th June 2017 as amended from time to time and corresponding notifications under APGST Act, 2017, and the applicable rate of tax is 18% (9% under Central tax and 9% State tax).
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2018 (12) TMI 1731
Handing over of subject premises (public premises) by the petitioner - Lease agreement - Proceedings for eviction of petitioner from the subject premises - the jurisdiction of this Court is sought to be invoked by petitioners by alleging mala fide.
HELD THAT:- A Constitution Bench of Supreme Court in ASHOKA MARKETING LTD. VERSUS PUNJAB NATIONAL BANK PNB [1990 (8) TMI 393 - SUPREME COURT] has clearly reiterated that "Public Premises" under the PP Act means any premises belonging to, or taken on lease or requisitioned by, or on behalf of, the Central Government, and includes any such premises which have been placed by that government, whether before or after the commencement of the Public Premises (Eviction of Unauthorized Occupants) Amendment Act, 1980 - A Division Bench of this Court and other several Single Bench decisions of this Court, has ruled that correctness or otherwise of the allegations regarding determination of a Lease has to be decided by the concerned authority under the PP Act.
Malafide intent - HELD THAT:- It has not been shown as to how the impugned order is vitiated by mala fide or what is the bias. It is not spelt out as to what is the oblique motive in passing of the impugned order - the allegations of mala fide are preposterous and no note of these allegations is required to be taken. In the instant case, the allegations of mala fide levelled by petitioners are bald and unspecific and so, no notice of these allegations is taken.
The 'subject premises' was leased out to legendary AJL for its publication, but the dominant purpose is now practically lost. This Court is constrained to observe that major portion of the 'subject premises' has been rented out and petitioners' newspaper, which was to be housed originally in the basement and ground floor, has now been shifted on the top floor with hardly any 'press activity' - Though in the instant case, beneficial interest of petitioner-AJL is not technically transferred by way of sale/mortgage/gift, but it falls under the last category of 'or otherwise', as by the afore-noted novel modus operandi, AJL has been taken over by Young Indian Company for all practical purposes. This Court is conscious of the fact that Young Indian Company is a charitable company, but modus operandi to acquire 99% of AJL's shares speaks volumes. The manner in which it has been done is also questionable.
This Court is of the considered view that by no process of reasoning, can it be said that the 'subject premises' is not liable to be proceeded against under the PP Act. In the opinion of this Court, impugned order is well reasoned and it amply justifies the re-entry of respondent in the 'subject premises'. There is no impediment in the way of respondent to invoke the provisions of the PP Act to seek eviction of petitioners, in case petitioners do not voluntarily vacate the 'subject premises' and hand over its vacant possession to respondent-Land and Development Officer, within a period of two weeks from today.
Petition disposed off.
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2018 (12) TMI 1730
Approval of the ‘Resolution Plan’ - Insolvency and bankruptcy - Appellants submitted that the payment terms provided in the ‘Resolution Plan’ is in contravention to the applicable provisions of law. The 3rd Respondent- ‘Successful Resolution Applicant’ has arbitrarily reduced or written off substantial liabilities of the promoters/ shareholders without any legal basis - HELD THAT:- The object of the ‘I&B Code’ is, inter alia, maximization of the value of the assets of the ‘Corporate Debtor’, then to balance all the creditors and make availability of credit and for promotion of entrepreneurship of the ‘Corporate Debtor’. While considering the ‘Resolution Plan’, the creditors focus on resolution of the borrower ‘Corporate Debtor’, in line with the spirit of the ‘I&B Code’.
The present appeal has been preferred by the promoters, who are responsible for having contributed to the insolvency of the ‘Corporate Debtor’. The ‘I&B Code’ prohibits the promoters from gaining, directly or indirectly, control of the ‘Corporate Debtor’, or benefiting from the ‘Corporate Insolvency Resolution Process’ or its outcome. The ‘I&B Code’ seeks to protect creditors of the ‘Corporate Debtor’ by preventing promoters from rewarding themselves at the expense of creditors and undermining the insolvency processes.
For the aforesaid reasons, it will be evident from the ‘I&B Code’ that the powers of the promoters as the members of the Board of Directors of the ‘Corporate Debtor’ are suspended. The voting right of the shareholders, including promoter shareholders, are suspended and shareholders’ approval is deemed to have been granted for implementation of the ‘Resolution Plan’ as apparent from explanation to Section 30(2)(f) of the ‘I&B Code’. The promoters, being ‘related parties’ of the ‘Corporate Debtor’, have no right of representation, participation or voting in a meeting of the ‘Committee of Creditors’.
Admittedly, the shareholders and promoters are not the creditors and thereby the ‘Resolution Plan’ cannot balance the maximization of the value of the assets of the ‘Corporate Debtor’ at par with the ‘Financial Creditors’ or ‘Operational Creditors’ or ‘Secured Creditors’ or ‘Unsecured Creditors’. They are also ineligible to submit the ‘Resolution Plan’ to again control or takeover the management of the ‘Corporate Debtor’.
If no amount is given to the promoters/ shareholders and the other equity shareholders who are not the promoters have been separately treated by providing certain amount in their favour, the Appellant cannot claim to have been discriminated.
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2018 (12) TMI 1729
Waiver of pre-deposit - Vires of Section 35F of The Central Excise Act, 1944 - requirement of pre-deposit for entertaining appeal - inherent power of Tribunal to waive off pre-deposit in exceptional cases - it was held in the case that There would be no escape from pre-deposit as the Tribunal lacks the power to entertain the appeal without it - HELD THAT:- The impugned order is upheld.
SLP dismissed.
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2018 (12) TMI 1728
Clandestine removal - unaccounted production - Imposition of penalty - non-granting of cum-duty excise benefit to the petitioner - application to Settlement Commission - Section 32F of the Central Excise Act 1944 - HELD THAT:- The petitioner has accepted and voluntarily made the payment towards pass liability to conduct of suppression of production, escaping central excise duty and un accounted raw materials which has also been clandestinely removed to various byers which had escaped the excise duty. The petitioner cannot expect to grant the cum duty benefit while calculating the duty payable by him - Actually, no duty has been included while the petitioner was removing the MS Billets to various customers who purchase from him. In such cases, there cannot be any question of detection of duty where no duty has been actually included in the wholesale price, the Settlement Commission has ordered for rejection for grant of cum duty benefit cannot be interfered with.
Section 32K empowers the Settlement Commission to grant immunity from prosecution and imposed penalty on the assessee who make application under Section 32E before the Settlement Commission for adjudication of the escape excise duty or evasion of excise duty - In the present case, the petitioner who are the manufacturers of MS Billets suppressed 680.987 Mts Billets found un accounted and in excess of the production records shall be lapped with penalty - The petitioner has clandestinely removed the Billets to various of his buyers thereby escaping from the excise duty.
The Settlement Commission exercising its powers under Section 32K of Central Excise Act 1944, imposed the penalty of ₹ 14,00,000 as penalty while granting immunity over the said penalty amount to the petitioner to the gravity offense committed by the petitioner’s company suppressing 680.987 Millets procurement of raw materials and removing the same to various buyers thereby escaping from the duty payable by the petitioner is a very serious offense and the Settlement Commission has imposed 10% of the settled duty as penalty against the petitioner.
This Court do not find any infirmity in such levy of the penalty as against the petitioner and the petitioner cannot claim exemption from the penalty and the Settlement Commission has imposed penalty only after perusing the documents that were seized during the search operation conducted at the petitioner premises factory and sufficient materials and proof were established by the department before the Settlement Commission.
Petition dismissed.
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2018 (12) TMI 1727
Condonation of delay in filing appeal - though the show cause notice is issued in the year 2004 and the response/reply to the same was filed by the petitioners in the year 2005, it has not been adjudicated upon for pretty long 13 years - Short payment of Central Excise Duty - DTA clearances of waste and rejects of fabrics - demand of short paid duty with interest and penalty - HELD THAT:- Since inordinate delay in adjudication proceedings pursuant to the show cause notice for nearly about 14 years is unreasonable, without any explanation, without there being any fault on the part of the petitioners.
Petition allowed.
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2018 (12) TMI 1726
Grant of anticipatory bail - fake sale/purchase to the tune of crores of rupees by getting registration number under the G.S.T. Act, 2017 on the basis of wrong/fake documents - petitioner submitted that the main offence is under the G.S.T. Act and the FIR cannot be registered under Sections 420 and 120B of IPC - HELD THAT:- Without discussing the facts of the case in minute details and without expressing any opinion on the merits of the case, It is found that there are serious allegations levelled against the present petitioner and the petitioner is required for custodial interrogation.
Petition dismissed.
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2018 (12) TMI 1725
ALP adjustment - international transactions of sale of polyester film products by the appellant to its associated enterprises ('AEs') applying Transactional Net Margin Method ("TNMM") - HELD THAT:- As carefully gone through the orders of the Tribunal, for the A.Y 2006-07 and 2007-08 in Assessee's own case and found that exactly similar additions so made by the TPO has been deleted by the Tribunal. The facts and circumstances during both the assessment yea₹ 2010-11 and 2011-12 under consideration are same, we therefore respectfully follow the same and do not find any reason to interfere with the order of the CIT(A) for deleting the addition made on account of transfer pricing adjustment.
Disallowance made u/s 43B in respect of payment of interest by issue of equity shares - HELD THAT:- Respectfully following the order of the Tribunal in the case of sister concern as well as RATHI GRAPHICS TECHNOLOGIES LTD. [2015 (8) TMI 376 - DELHI HIGH COURT] we do not find merit for the disallowance of interest u/s 43B, which was paid by issue of equity shares. As per our considered view the conversion of interest liability into share capital would lead to extinguishment of the liability whereas its conversion into borrowings or loans would simply lead to change in the nature of the liability. Thus, Courts have conceded with the appellant‟s view that conversion of interest liability into share capital would indeed be treated as “actual payment‟ of interest for the purposes of Sec. 43B.
Disallowance made u/s 14A while computing book profit u/s 115JB - HELD THAT:- The issue is covered in favour of the assessee by the order of Special Bench, ITAT Delhi in the case of Vireet Investment [2017 (6) TMI 1124 - ITAT DELHI] . Respectfully following the proposition laid down in the case of above said case, we do not find any merit for the addition of disallowance made u/s 14A of the Act, while computing book profit u/s 115JB of the Act.
Disallowance u/s 14A r.w.r. 8D - assessee has argued for exclusion the investments made in the group concerns while computing the disallowance u/s 14A - HELD THAT:- We do not find any merit in this contention of the Ld. AR in so far as Hon‟ble Supreme Court recent decision in the case of Maxoup Investment [2018 (3) TMI 805 - SUPREME COURT] have held that even investments made in group concern as strategical investment is also liable for disallowance u/s 14A of the Act. We confirmed the action of the A.O with regard to inclusion of strategical investment / investment made in group concerns while working out average investment on which disallowance u/s 14A r.w.r. 8D of the IT Rules is warranted.
We direct the A.O to restrict the disallowance u/s 14A in all the years to the amount of exempt income earned by the appellant during the year under consideration. We also find support for this contention in case of Daga Global Chemicals Vs. ACIT [2015 (1) TMI 1204 - ITAT MUMBAI] wherein he assessee had appealed against the excessive disallowance made u/s 14A - ITAT subsequently held that even if disallowance u/s 14A of the Act is made, the same shall not exceed the amount of exempt income earned.
Depreciation on revalued assets in computing the book profit u/s 115JB - HELD THAT:- This plea was taken by the assessee first time before the A.O during the course of assessment without filing revised return, accordingly A.O declined same by following the decision of Hon‟ble Supreme Court in the case of Goetz (India) Pvt Ltd. [2006 (3) TMI 75 - SUPREME COURT] . Following the reasons given herein above with respect to disallowance on depreciation on revalued assets while computing book profit u/s 115JB of the Act which was also filed before the A.O during the course of assessment proceedings. We restore the matter back to the file of the A.O for deciding as per law we direct accordingly.
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2018 (12) TMI 1724
Addition u/s 14A read with Rule 8D in the computation of book profits u/s 115JB - HELD THAT:- We note that the Special Bench of ITAT Delhi Bench in ACIT vs Vireet Investment (P) Ltd [2017 (6) TMI 1124 - ITAT DELHI] answer the question referred to us in favour of assessee by holding that the computation under clause (f) Explanation 1 to section 115JB(2) is to be made without resorting to the computation as contemplated u/s 14A read with Rule 8D
We restore the matter to ld AO to calculate the book profit u/s 115JB of the Act after working out the disallowance, if any, in terms of clause (f) to Explanation 1 of Section 115JB of the Act independently after considering the expenses debited in the profit and loss account as mandated under the provisions of law. We would like to state that the disallowances made under the provisions of Sec. 14A r.w.s 8D of the IT Rules, cannot be applied to the provisions of Sec. 115JB. Accordingly, Ground No. 1 of revenue’s appeal is allowed for statistical purposes.
Allowing the ESOP expenses - HELD THAT:- Special Bench decision of Bangalore Tribunal in the case of Biocon Ltd vs DCIT [2013 (8) TMI 629 - ITAT BANGALORE] wherein it had considered the allowability of ESOP expenses in detail and had held the discount on ESOP as a part of employee’s cost and hence allowable in the hands of the employer. Accordingly, the ld CIT-A correctly deleted the disallowance
Addition towards exchange loss - HELD THAT:- Reason given for disallowance was that in absence of details for transactions, it could not be denied that the transactions were related to the business of the assessee. However the appellant has explained that the amount reduced this year was actually related to the reversal of entry in the previous year.
During the year ended on 3l.03.2012 the assessee had a MTM loss on reinstatement of hedging transactions of ₹ 522.68 lacs which had been claimed in the books of accounts. At the time of filing of return for A.Y 2012-13 the said amount was added back while computing returned income. As on 0l.04.2012 in the books the said loss of ₹ 522.68 lacs had been reversed and therefore appeared an income side. Also as on 3l.03.2013 there was MTM loss of ₹ 239.38 which appeared as expenditure in the books. While filing of return for the year, the appellant reversed both the entries resulting in net reduction of ₹ 283.30 lacs. The appellant has produced copy of computation of income for both the years to support its contention. Thus it can be seen that the deduction is on 'account of reversal of entry which had been considered as part of income in A.Y 2012-13. There is no justification in adding back the amount of ₹ 283.30 lacs. The addition of ₹ 283.30 lacs is accordingly deleted - Decided against revenue.
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2018 (12) TMI 1723
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:- SLP dismissed.
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2018 (12) TMI 1722
Directions against the Respondent to return the physical possession of the ‘B’ Wing premises of Lakshmi Towers to the applicant and restrain the Respondent from taking any action in relation to the ‘A’ Wing premises - Section 13(4) of the SARFAESI Act - HELD THAT:- The Respondent, who is also the Financial Creditor of the Corporate Debtor, was fully aware of the moratorium order but violated that and taken the possession of the alleged premises/property without due process of law - the respondent are directed to immediately return the physical possession of the B Wing premises to the applicant and we further restrain the Respondent from taking any further action in relation to A Wing premises pursuant to the notices issued by the Respondent under Section 13 (4) of the SARFAESI Act.
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2018 (12) TMI 1721
Interrogation by the officers of DRI - HELD THAT:- The matter is still pending before the Apex Court.
Till next date, no coercive action shall be taken against the petitioner in respect of the File - the advocate of the petitioner are directed to accompany the petitioner at visible but not audible distance during their interrogation by the officers of DRI in accordance with the general direction.
Writ Petition is adjourned to 10th January, 2019.
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2018 (12) TMI 1720
Disallowance on account of depreciation on Computer Software by treating the same as 'intangible assets' - HELD THAT:- It is noticed that as per rule 5 of income tax rules 1962 depreciation allowance u/s. 32 of the income tax act shall be calculated at the percentage specified in the second column of the table in Appendix 1 effective from assessment year 2006- 07 on wards depreciation is to be calculated @ prescribed in new appendix-1 entry at serial no. 5 of part-III (which deals with rate depreciation on machinery and plant) of the said table referred to computer, including computer software and the rate of depreciation prescribed in the said table against this entry is 60% . As per note 7 below the said table “ computer software” means any computer program recorded in any disc, tape, perforated media other information storage device. In the light of the above provision of income tax, we observed that income tax act does not make any difference between the system software and application software, therefore, we justify the decision of ld. CIT(A) in allowing the claim of the assessee of depreciation @ 60% on the computer software. Accordingly this ground of revenue is dismissed.
Addition u/s. 145A - AO noticed that assessee has shown amount receivable on account of un-utilized/closing balance on account of MODVAT/CENVAT credit under loan and advances and the same was not included in the value of closing stock - HELD THAT:- Assessee was following similar method in the preceding years and there were notes in the audit report that if the adjustment on account of section 145A was made, there would be no effect on the income. It is noticed that the assessee is following exclusive method of accounting for last many years and all purchases and sales of goods are accounted net of MODVAT including inventory i.e. opening stock and closing stock. On this issue the Hon'ble ITAT Bench of Ahmedabad in the case of Alpanil Industries V. ACIT [2009 (9) TMI 1008 - ITAT AHMEDABAD] for A.Y. 1999-2000 & 2000-2001 has discussed the principle related to valuation of closing stock u/s 145A - As perused the material on record carefully. After considering the finding of the ld. CIT(A) along with judicial finding, we consider that there will be no effect in the taxable profit of the assessee by including the amount of excise duty paid on purchase in the valuation of closing stock of raw material since the assessee was following excusive method of accounting as elaborated in the findings of the Ld.CIT(A), therefore, we do not find any reason to interfere in the decision of ld. CIT(A). Accordingly the appeal of the revenue is dismissed.
Addition on account of under valuation of stock - HELD THAT:- Assessee has filed stock statement to the bank reflecting the position of closing stock as on 24th March, 2009. However, in the balance sheet of the assessee, the position of stock was shown as on 31st March, 2009. The assessing officer has not disproved these material facts that the difference in the valuation of closing stock was arisen because of difference in the dates as per which closing stock was reflected in the bank statement and in the books of account of the assessee.
Addition on account of foreign travelling expenses - HELD THAT:- As observed that complete details of employees who traveled abroad, countries visited, nature and amount of expenses and purpose of travel but provided to the assessing officer therefore the assessing officer was not justified in disallowing the expenses merely on the suspicion without considering the evidences placed on record and without disproving the details and evidences submitted by the assessee. In the light of the above facts and circumstances, we are inclined with the finding of learned CIT appeal. therefore, we do not find any merit in the appeal of the revenue and the same is dismissed.
Addition on account of commission expenses - HELD THAT:- It is noticed that assessee has submitted details of commission paid to various dealers as overriding commission in accordance with the sales promotion. It is also noticed that assessee has paid commission to various dealers for extra efforts in procuring orders from customers after verification and approved by the Marketing Manager of the assessee company. It is noticed the assessing officer has not made any inquiries u/s 133(6)/ 131 of the act to disprove the genuineness of the expenditure claimed by the assessee in the form of overriding commission paid to the various dealers for the extra efforts made in procuring the orders from the customers. Therefore we don't find error in the decision of learned CIT(A), therefore the ground of appeal of the revenue is dismissed
Addition on account of expenditure on purchase of computer software - allowable revenue expenses - HELD THAT:- We have noticed that depreciation on the computer software is allowable @ 60% as adjudicated supra in this order, therefore, we are inclined with the ld. CIT(A) for allowing the depreciation @ 60%. Therefore, appeal of the revenue is dismissed on this issue.
Addition on account of foreign exchange fluctuation - HELD THAT:- Assessee has submitted the corresponding detail demonstrating that the amount computed by way of difference between rate at which the contract was entered into and the rate on the last day of the previous year has been debited in respect of forward contract entered into by the assessee for underlying export transaction which was outstanding as on 31st March, 2009. Similarly, the amount in respect of reinstatement of export receivable and creditors for import as on 31st March, 2009 were reinstated at the foreign exchange rate prevailing on 31st March, 2009. It is also noticed that the foreign exchange rate differences had been incurred in the ordinary course of business in accordance with the consistent accounting policy followed by the company which was in compliance to the accounting standard 11 issued by the ICAI. It is also noticed rule 115 of the income tax rule provides that all the assessee should convert their foreign exchange assets into Indian rupees on the last day of previous year
TDS u/s 195 - Disallowance u/s. 40(a)(ia) - payments were made for repairing charges/scraping of goods which was sold to the said non-residents - HELD THAT:- The assessee has made payment to non-resident for two purposes towards charges for repairs carried out by such companies outside India and towards claim for goods rejected and scrapped by such companies due to inferior quality/manufacturing defects. It is observed that assessee has actually exported goods but there were certain manufacturing defect in such goods , therefore, these goods were required to be repaired in some cases and in some cases the same were to be scrapped. In the light of the above facts and circumstances it clearly demonstrated that the assessee has made payment as reimbursement to its concerned customer, therefore, we consider that no part of amount paid to such parties was chargeable to tax in India in their hand, therefore, we are inclined with the findings of ld. CIT(A) of deleting the impugned additions. Accordingly, the appeal of the revenue is dismissed.
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2018 (12) TMI 1719
Deduction u/s 80IB(10) - assessee has not completed the project due to failure attributable to assessee itself within stipulated time prescribed u/S. 80IB(10) - AO denied the benefit on the premise that the housing project was not completed within the time permitted - HELD THAT:- Assessee had established on record that the buildings referred to as Complex A1 and A2 were part of separate project for which a separate approval was granted by the Municipal Corporation. Likewise, with respect to buildings Complex A3 to A8, building permission was granted by the Municipal Corporation separately. It was, in this background, that the CIT(A) and the Tribunal accepted two different dates of completion taking into account the respective dates of approval of the housing project. The entire issue is one of the facts. No question of law arises. The Income Tax Appeal is dismissed.
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