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Showing 281 to 300 of 2006 Records
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2018 (4) TMI 1729
Stay of demand - HELD THAT:- Earlier stay against the outstanding demand was granted, subject to certain terms, which, according to the Learned Counsel for the Assessee have already been complied with. Lastly, the stay against the outstanding demand was granted vide order dated 09th October, 2017. There is no delay on the part of the assessee for disposal of the appeal.
The demand is further stayed for a period of six months or disposal of the appeal whichever expires earlier, subject to the same terms.
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2018 (4) TMI 1728
Deduction u/s 54F - assessee owned more than one residential house other than the new asset on the date of transfer of the original asset - whether the assessee was having more than one residential house other than new asset on the date of the original transfer of asset? - HELD THAT:- As per the assessee in the present case, this property is being used for storing construction material. About this claim of the assessee that this property is being used for the purpose of storing construction material, the AO has stated the assessment order as reproduced above that the assessee has not produced any evidence to prove this claim. AO has also noted that this property is demolished by the assessee and a multi storied complex is coming up on the land of this property and hence, it is not possible to verify the use of this property at the relevant point of time. We feel it proper to restore this aspect of the matter also to CIT (A) for fresh decision with the direction that the assessee should produce evidence in support of this claim that this property is being used for storing construction material during relevant period and if the assessee is able to do so than this property should not be considered as a residential house property owned by the assessee on the relevant date for deciding the eligibility of the assessee for deduction u/s 54F.
Claim of the assessee about Apartment at Bangalore as per the AO, actual user is not relevant and we have held in Para 10 above that a house property can be considered as a residential house property only if it is being used for residential purpose by the assessee or the tenant and this decision of us is supported by the tribunal order rendered in the case of Sanjeev Puri vs. DCIT [2016 (8) TMI 907 - ITAT DELHI].
CIT (A) has noted the claim of the assessee that this property is being used as assessee's office at Bangalore and learned DR of the revenue could not bring any material before us to even create some doubt about this claim of the assessee that this property is used as office and is disclosed in balance sheet as stock in trade. Hence we hold that this property cannot be considered as a residential house property owned by the assessee on the relevant date.
Regarding the Property at Katipalla village out of remaining two properties as find that about this Property, the AO says of the assessment order that this property has 10.2 acres of land with building with a number and he has noted the explanation of the assessee that this is an agricultural property but the AO concluded that since the agricultural land has a building inside and this building is fit to be used for residential purposes, it is a residential house but there is no finding of the AO that it is actually used for residential purposes. In the absence of this finding of the AO that this property was actually used for residential purposes and the failure of the learned DR of the revenue to bring any evidence before us in this regard to dislodge the claim of the assessee and finding of CIT (A) that this property is not a residential property, we hold that this property also cannot be considered as a residential house property owned by the assessee on the relevant date.
Remaining property i.e. Flat at Ashoka Majestic there is no finding of the AO that this was actually used as a residential house and in spite of this finding of CIT (A) that this property is not used for residential purposes, DR of the revenue did not bring any evidence before us in this regard to dislodge the claim of the assessee and finding of CIT (A) that this property is not a residential property and it is a business asset shown in the balance sheet as stock in trade. Hence, we hold that this property also cannot be considered as a residential house property owned by the assessee on the relevant date.
Five properties in dispute, except for first and third properties, we have held that none of these three properties can be considered as a residential house property owned by the assessee on the relevant date. But for two properties i.e. first and third properties, we have restored the matter back to CIT (A) for fresh decision. Hence, this issue is partly decided in favour of the revenue for statistical purposes.
Properties are residential house properties while deciding the issue about allowability of the assessee's claim for deduction u/s 54F - CIT (A) heId that since it is held by him that none of these five properties is a residential house property owned by the assessee in the relevant year, this addition is deleted. We also find that the assessment order, the AO has noted the contentions of the assessee that these five properties are used for business purposes and therefore, no addition u/s 22/23 is called for.
Taxability u/s 22/23 - AO concluded that since these properties are not let out, addition of notional rent of these properties is to be made but he has not given any finding about the claim of the assessee that these properties are used for business purposes. As per section 22 of I. T. Act, for any property occupied by the assessee for the purpose of any business carried on by him, Annual value is not to be computed for taxing under the head Income from house Property. Since, we have upheld the order of CIT (A) on this aspect in respect of three properties out of five properties, we uphold the order of CIT (A) on this issue also in respect of those three properties but for remaining two properties, we have restored the matter back to CIT (A) for a fresh decision in respect of allowability of assessee's claim under section 54F. Hence on this aspect i.e. taxability u/s 22/23 also, in relation to these two properties, the matter is restored to CIT (A) for fresh decision with the direction that if it is found that these two properties are actually used for business or agricultural purposes than no addition can be made u/s 22/23. Ground No. 14 & 15 are partly allowed for statistical purposes.
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2018 (4) TMI 1727
Penalty u/s. 271(1)(c) - AO brought to tax income to tax as income under the head “income from other sources" as against income declared by the assessee as income under the head “income from house property" - no benefit of expenses were allowed which was claimed to be incurred in relation to the earning of said income as the assessee could not show that these expenses were incurred in connection with the services for which service charges were received - HELD THAT:- It is the claim of the assessee that the expenses were incurred exclusively for earning the said income and if the opportunity is provided , the assessee will be able prove its case that these expenses were genuinely , bonafdily, exclusively and wholly incurred for providing services to Tata Teleservices Maharashtra Limited .
The matter need to be restored back to the file of the AO for fresh adjudication on merits in accordance with law . Needless to say that the AO shall provide proper and adequate opportunity of being heard to the assessee in accordance with the principal of natural justice. The onus is on assessee to prove that these expenses which were debited to Income and Expenditure Account against service charges received from Tata Teleservices Maharashtra Limited credited to Income and Expenditure Account , were genuinely, wholly, exclsuively and bonafidely incurred in relation to services rendered as per contract to Tata Teleservices Maharashtra Limited. The AO shall allow assessee to file necessary evidences / explanation in support of its contentions. - Appeal of the assessee is allowed for statistical purposes
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2018 (4) TMI 1726
ADD - initiation of Sunset Review - continuation of existing Anti-Dumping Duty so as to continue protection available to domestic industry against the alleged dumping of products – Soda-Ash, from Turkey and Russia - section 9(A) of Customs Tariff Act, 1975 - HELD THAT:- We have no doubt in our mind qua availability of judicial review of such a decision and hence when judicial review is warranted, it is also required to be seen to it that the same exercise may not result into empty formality or futility and create an irretrievable situation. The Court is also mindful of the fact that court by granting relief would be directing the authorities to continue Anti-Dumping Duty and to initiate Sunset Review proceeding without there being any opportunity of being heard to the otherside, but at the sametime, looking to the dearth of time and when the petitioners cannot be held to be in any way contributory in passage of time, as they have approached the Court within time, it becomes Court’s duty to see to it that balance of convenience is struck so as to avert any irreparable injury to eitherside.
For safeguarding the interest of those who are likely tobe affected by this order, we direct the concerned respondents to make it explicitly clear to all the concerned that, the Notification/s that may be issued pursuant to our this order would be subject to result of these petitions and will entail the refund of duty that may be levied in case of failure of the petitioners in these petitions.
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2018 (4) TMI 1725
Assessment u/s 153C - search and seizure operation under section 132 - disallowance of payments made to Sino Credits Leasing Ltd. (SCLL) - statement of Shri S.K Gupta, Director SCLL recorded in which Shri Gupta and reportedly stated that SCLL was involved in giving bogus entries - HELD THAT:- Departmental appeal in the instant appeal are similar as have been considered in the case of M/s. Puri Constructions Ltd., [2017 (12) TMI 1708 - ITAT DELHI] wherein held the addition so made solely on the basis of statement of Sh. S.K. Gupta’s statement and without rebutting the documentary evidences so relied on by the assessee company is hereby deleted
The findings of the CIT(A) are similarly worded. It is agreed position that facts are identical in the case of Assessee as well as M/s. Puri Constructions Ltd., (supra). Therefore, all the issues are covered in favour of the assessee. It may also be noted here that search was conducted in the case of M/s. Taneja-Puri Group of cases in which some alleged documents pertaining to assessee were found. On that basis, proceedings were initiated under section 153C against the assessee. Further, in the case of M/s. Puri Constructions Ltd., (supra), the entire additions have been deleted by the Tribunal and no evidence was found admissible against the assessee. Therefore, nothing survive against the assessee so as to proceed under section 153C - no admissible evidence have been brought on record against the assessee so as to make any addition.
The additions were made merely on presumptions without bringing any concrete material against the assessee on record. All the evidences found during the course of search and found in post-search enquiry have been considered in the case of M/s. Puri Constructions Ltd., (supra) and entire additions have been deleted by the Tribunal. Therefore, on the basis of the same evidence and material, no additions could be made against the assessee. the Ld. CIT(A) on proper appreciation of evidence and material record, correctly deleted the additions. - Decided in favour of assessee.
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2018 (4) TMI 1724
Addition being provision of inventory written off - CIT(A) held that the assessee duly followed AS-2 on valuation inventory and valued the stores on the basis of cost or net realisable value, whichever is lower - HELD THAT:- It is found that the assessee had taken three ATP Air Crafts in FY 2005-06 and it grounded the Air Craft Operation in the FY 2007-08. However, some spares remained unused and kept in the stock. The opening value of the stock as on 01.04.2010 was ₹ 1,13,33,793/- and during the year the assessee had made efforts to dispose off the stocks and in response received quotation from third party of USD 100,000 (₹ 49,50,000/-). Based on AS-2, the assessee has valued the stores on the basis of cost or net realisable value, whichever is lower. Therefore, the assessee has written down the value of stocks to ₹ 49,50,000/-. We find that the assessee has to value inventory as per AS-2 and on that basis it has valued the cost of spare parts which has become obsolete and non-moving.
Addition as employee’s contribution to PF and ESIC - amount as paid after due date of payment and was not allowable as per section 36(1)(va) r.w.s. 2 (24)(x) - HELD THAT:- CIT(A) in assessee’s own case for AY 2010-11 had allowed the deduction of delay in payment of Employees’ contribution to ESIC and PF. The Revenue filed appeal before the ITAT against the said order of the Ld. CIT(A). The Tribunal upheld the order of the Ld. CIT(A), following the decision in CIT v. M/s Alom Etrusions Ltd. [2009 (11) TMI 27 - SUPREME COURT] and CIT v. M/s Hindustan Organics Chemicals Ltd [2014 (7) TMI 477 - BOMBAY HIGH COURT] - Facts being identical, we follow the said order of the Co-ordinate Bench in assessee’s own case for the AY 2011-12 and uphold the order of the Ld. CIT(A).
Unrealized foreign exchange loss disallowed being loss due to foreign exchange fluctuation - Treating provision for earlier termination of lease in the same ground along the line of unrealized Foreign Loss - HELD THAT:- As decided in own case [2016 (8) TMI 1443 - ITAT MUMBAI] entire amount has already been paid by the assessee to the Lessor and in this respect a compromise was entered into between the parties before the Indian Court and the entire decree passed by the UK Court was satisfied. It is important to mention here that it was the decree of the Queen’s Bench Division of the High Court of Justice, UK which was fully satisfied from which it can be gathered that the liability of the assessee was crystallized in view of the order dated 14-05-2010 of the High Court of Justice, UK which was ultimately satisfied by the assessee by making payment to the lessor. Therefore, once the liability for making payment was crystallized by the High Court Order, then question of contingent liability does not arise. Therefore, both the AO and the learned CIT (A) was wrong in treating the liability as contingent liability of the assessee
MAT Computation - adjustment made u/s 115JB - HELD THAT:- Adjustments were made by the AO without any discussion in the assessment order. In Apollo Tyres Ltd. [2002 (5) TMI 5 - SUPREME COURT] it has been held that where the profit and loss account has been prepared in accordance with Part II and III of Schedule VI to the Companies Act and which has been scrutinized and certified by the statutory auditor and relevant authorities, the Assessing Officer has no power to scrutinize net profit in profit and loss account except to the extent provided in Explanation to 115J. Revenue appeal dismissed.
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2018 (4) TMI 1723
Income accrued in India - Taxability in India - Exclusion of income of Foreign branches - AO while relying upon the Notification No. S 2123(e) dated 28.08.2008 treated the income of foreign branches as taxable in India. - assessee submits that the assessee excluded the income from foreign branches on the basis of Double Taxation Avoidance Agreement (DTAA) with respective countries and the income arising from those branches situated in contracting state cannot be taxed in India - HELD THAT:- As decided in own case [2017 (2) TMI 1422 - ITAT MUMBAI] income of the foreign branches of the assessee shall also be taxable in India, that is, it would be included in the return income filed by the assessee in India and whatever taxes have been paid by the branches in the other countries credit of such taxes shall be given.
We find that the Tribunal as above has not held that it is only that income of the foreign branches which was taxed in that foreign country which is to be included in the return of income filed by the assessee. Hence, we are in agreement with the revenue plea that Ld. CIT-A has not properly followed the Tribunal decision as referred by him . A reading of the notification canvassed by the assessee also does not help the case of assessee. The notification also does not support the direction of CIT-A. The doctrine of stare decisis mandates that we follow the coordinate bench decision as above and hold that the income of the branches of assessee situated abroad shall also be taxable in India and whatever tax have been paid by the branches in the foreign country, credit of such taxed shall be given. Accordingly, we allow the ground raised by the revenue.
Disallowance of broken period interest expenses - HELD THAT:- As decided in own case [2018 (3) TMI 1777 - ITAT MUMBAI] Hon’ble Bombay High Court in CIT Vs. HDFC Bank Ltd [2014 (8) TMI 119 - BOMBAY HIGH COURT] while relying on the ratio laid down in its earlier decision in American Express International Banking Corporation Vs. CIT [2002 (9) TMI 96 - BOMBAY HIGH COURT] which in turn, had distinguished the ratio laid down by the Hon’ble Supreme Court in Vijaya Bank Vs. CIT [1990 (9) TMI 5 - SUPREME COURT] and CIT Vs. Bank of Rajasthan Ltd [2008 (3) TMI 325 - RAJASTHAN HIGH COURT] and had held that broken period interest is allowable as deduction. Following the same parity of reasoning, we hold that the assessee is entitled to the claim of broken period interest.
Disallowance u/s 14A computed as per rule 8D - HELD THAT:- As decided in own case [2017 (2) TMI 1422 - ITAT MUMBAI] assessee has submitted that several more decisions have come which have upheld the view that disallowance under section 14A is not required when the investment is held as stock in trade. In our considered opinion we should follow the doctrine of stare decisis. Accordingly following the same directions as above we remit this issue to the file of the assessing officer.
Recently in Maxopp Investment Ltd. Vs Commissioner of Income-tax [2018 (3) TMI 805 - SUPREME COURT] has held that in cases, where shares are held as stock-in-trade, main purpose is to trade in those shares and earn profits therefrom, in the process, certain dividend is also earned, though incidentally, which is also an income. This triggers applicability of section 14A which is based on theory of apportionment of expenditure between taxable and non-taxable income. Therefore, to that extent, expenditure incurred in acquiring those shares will have to be apportioned - this ground of appeal is restored to the file of Assessing Officer for deciding the issue afresh
Methods of accounting for Provision for bad and doubtful debts - Provision for bad and doubtful debts u/s 36(1) (viia) to the extent of provision made in books during the previous year instead of the eligible amount as per the said section - Assessee relied upon the decision of Prathma Bank [2017 (9) TMI 106 - ITAT DELHI] and submitted that the Provision for bad and doubtful held by the assessee as at the year end should be considered for allowing deduction u/s36(1)(viia) - HELD THAT:- There are two methods of accounting for Provision for bad and doubtful debts. The first method is to reverse the Opening balance standing under the head “Provision for bad and doubtful debts” by crediting to the Profit and Loss account and then create fresh “Provision for Bad and Doubtful debts” by debiting the Profit and loss account. If this method had been followed, then the revenue might not have objected to allow the amount debited to Profit and loss account u/s 36(1)(viia) of the Act. The second method is to retain the Opening balance of “Provision for bad and doubtful debts” in the Balance sheet and create provision for incremental amount alone by debiting Profit and Loss account. The incremental amount is added to the opening balance of “Provision for bad and doubtful debts”. If second method is followed, then the closing balance of “Provision for bad and doubtful debts” has to be considered for the purposes of sec. 36(1)(viia) of the Act. Hence, if the assessee has followed the second method, then there is merit in the claim of the assessee. Accordingly we set aside the order passed by Ld CIT(A) on this issue and restore the same to the file of the AO with the direction to examine the method followed by the assessee
MAT applicability of section 115JB - HELD THAT:- AO applied the provision of section 115JB on his observation that every assessee which is company, has to prepare its account as per part II and III of schedule VI of Companies Act. However, the ld CIT(A) allowed the relief to the assessee on the basis of decision of Mumbai Tribunal in case of Bank of India Vs ACIT [2014 (5) TMI 929 - ITAT MUMBAI] and in case of Union Bank of India Vs ACIT [2013 (1) TMI 785 - ITAT MUMBAI] wherein the Tribunal held that provisions of section 115JB are not applicable in case of assessee bank. No contrary decision is brought to our notice. Thus, we do not find any reason to interfere to the finding of the ld. CIT (A).
Taxability of notional credit on account of unrecorded entries in NOSTRO account - assessee submits that NOSTRO account represents dealings with foreign banks. The long pending unreconciled entries (about more than 10 years) were advised to be closed by RBI by transferring the credit entries to Profit and Loss account - as submitted that those credits were not claimed as expenditure in the earlier years and hence the provisions of sec. 41(1) shall not apply and the impugned amount is not taxable - HELD THAT:- CIT(A) concluded that such credit balance is not a capital receipt. He further held that the assessee being a financial institution, the transactions relating to money/instruments and unreconciled credit balances is having element of profit and hence the same is taxable in the hands of the assessee. Accordingly he confirmed the action of Assessing Officer. Before us, the ld. AR of the assessee reiterated the contentions raised before the tax authorities. He has not shown any favourable law or decision of Court about non-taxability of unreconciled credit entries lying in Nostro account. On the contrary, we find merits in the view expressed by Ld CIT(A). We also notice that the unreconciled credit entries in NOSTRO account has arisen during the course of carrying on of the business of banking and hence the same has to be construed as profit from banking business only. Thus, we do not find any reason to interfere with the finding of ld. CIT(A). - Decided against assessee.
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2018 (4) TMI 1722
Deduction u/s. 10A - adjustment of amount on account of Transfer Pricing - HELD THAT:- Assessee has clarified that (i) it does not have any business other than the unit which is eligible for exemption u/s. 10A, (ii) the voluntary TP adjustment has been made in respect of international transaction involving export of engineering design services and (iii) the voluntary TP adjustment has been made through a disclosure in Form 3CEB and is not an ad-hoc addition in the income tax return.
The assessee has excluded voluntary TP adjustment from 'export turnover' in line with the computation mechanism prescribed in section 10A. The TPO has not made any adjustment in his order dated 10/09/20012 passed u/s. 92CA(3). The assessee has explained that the proviso to section 92C(4) is not applicable in its case as the assessee has on its own determined its total income in the return of income having regard to the arm's length price.
In the instant case, the assessee himself has computed the arm's length prices and has disclosed the income on the basis of arm's length prices. It is not a case, where there is an enhancement of income due to determination of arm's length price. Hence, it was rightly held that assessee was entitled to deduction under section 10A in respect of income declared in the return of income on the basis of computation of arm's length price. We are of the considered view that the facts in the present case are exactly similar to the facts as in the case of iGate Global Solutions Ltd [2007 (11) TMI 444 - ITAT BANGALORE]. Therefore, the Ld. CIT (A) held that the assessee is eligible for deduction u/s. 10A in respect of income declared in the return of income on the basis of computation of arm's length price. Accordingly, he directed the A.O. to allow the claim for deduction u/s. 10A in the instant case, which does not need any interference on our part, hence, we uphold the action of the Ld. CIT (A) and reject the grounds raised by the Revenue.
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2018 (4) TMI 1721
Revision u/s 263 - AO had failed to carry out proper inquiries with respect to assessee’s on-money receipts - Tribunal, by the impugned judgment, reversed the order of Commissioner - HELD THAT:- In such judgment, the Tribunal observed that in the order of assessment, the Assessing Officer had raised multiple queries calling upon the assessee’s response. The Tribunal was of the opinion that the Assessing Officer had carried out detailed inquiries. The Commissioner was incorrect in holding that no inquiries were carried out. The revisional powers, therefore, could not have been exercised.
Tribunal has in the impugned judgment referred to the detailed correspondence between Assessing Officer and the assessee during the course of assessment proceedings to come to a conclusion that the Assessing Officer had carried out detailed inquiries which includes assessee’s on-money transactions. It was on account of these findings that the Tribunal was prompted to reverse the order of revision. Appeal dismissed.
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2018 (4) TMI 1720
Stay petition - direction to pay 10% of the demand - contention of the petitioner is that the returns filed by them have been taken for scrutiny maliciously with a view to fasten liability on them for having lodged a complaint against an officer of the department - HELD THAT:- It is brought to the notice of this Court in several cases that the files are selected for scrutiny with the aid of computers. Further, in terms of the impugned order, the petitioner is asked to pay a meagre portion of the demand. In the circumstances, no justification to entertain the writ petition challenging Ext.P11 order, in exercise of my discretionary jurisdiction under Article 226 of the Constitution of India.
As Senior Counsel prayed for indulgence of this Court to extend the time prescribed for payment of 10% of the demand made in terms of Ext.P11 order. In so far as the petitioner challenged Ext.P11 order in the writ petition and since the writ petition is not being entertained, we deem it appropriate to extend the time granted to the petitioner for payment of 10% of the demand in terms of the impugned order till 12.4.2018. Ordered accordingly.
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2018 (4) TMI 1719
Exemption u/s 10(23C)(vi) - rejection of exemption on the ground that one of the objects of the assessee “to provide facilities for indoor and outdoor games for the recreation of members” is not an educational object - HELD THAT:- CCIT can grant the approval only in the case where assessee existed solely for educational purposes. In the present case, the assessee is also providing facilities for indoor and outdoor games for recreation of members, is not covered under the purview of section 10(23C(vi). Therefore, ld. CCIT has rightly rejected to grant approval to the assessee society under section 10(23C(vi) of the Act. We find no infirmity in the order passed by the ld.CCIT. Thus, this appeal filed by the assessee is dismissed.
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2018 (4) TMI 1718
Rectification of an order - Modifications seeked - TDS u/s 194C or 194J - HELD THAT:- Called for 'Speaking to the Minutes' of the order dated 26.3.2018 [2018 (3) TMI 1771 - BOMBAY HIGH COURT]
On Page 2 in the second line of Paragraph 4(b) of the said order, words “10th and 11th October, 2015” be replaced with “10th and 11th October, 2017”
Office to carry out aforesaid modifications.
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2018 (4) TMI 1717
Mode of making payment of service tax - case of the department is that the Postal department made the payment by making entry in their books of accounts and not made the payment electronically - HELD THAT:- The Postal Department has made a debit entry in their books of accounts towards payment of service tax. As regard rule 6(2) of Service Tax Rules, 1994 it is only a procedure. If by any other means payment is made merely because it is not made electronically it cannot be said that the payment was not made.
Therefore, even if the payment is made by making debit entry it should be accepted as payment of service tax. Except the debit entry no other confirmatory evidence was shown by Postal department.It is only a debit entry appearing in the books of accounts of Postal department there should be a confirmation that the amount which was debited has been credited to the Ministry of Finance. Therefore, the matter needs to be reconsidered on this point only.
Appeal allowed by way of remand.
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2018 (4) TMI 1716
Interest payable u/s 234B - Collection of interest for non-deposit of advance tax in respect of the consideration received by the non-resident assessee - PE in India - DTAA - HELD THAT:- The Tribunal (Income Tax Appellate Tribunal) had followed the decisions of this Court in the cases of ‘Director of Income Tax vs. Jacabs Civil Incorporated’ [2010 (8) TMI 37 - DELHI HIGH COURT] , ‘Director of Income Tax, International Taxation vs. GE Packaged Power Inc. and ors.’ [2015 (1) TMI 1168 - DELHI HIGH COURT] and ‘Commissioner of Income Tax, International Taxation-2 vs. ZTE Corporation’ 2017 (1) TMI 1338 - DELHI HIGH COURT]
Since the Tribunal followed the rulings of this Court no question of law arises. These appeals are dismissed as untenable along with pending applications.
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2018 (4) TMI 1715
Fraudulent scheme of trading in the scrip of M/s. S. J. Corporation Ltd. (‘SJC’) - violation of SEBI Act and PFUTP Regulations - Market manipulation where the scheme employed by the appellants involved hiking the price of the shares in which the promoters had to make open offer - defunct company is taken over - increase the price of the scrip which they have to buy in an open offer at a higher price - HELD THAT:- There is no ambiguity in our mind that a scheme of fraud has been conceived and implemented by the appellants herein, except appellant no. 5.
We also hold that this is a unique case of manipulation. A defunct company is taken over by a few parties; peculiar interest is shown by a few others in buying the shares of that company placing orders mostly at 5% above the LTP thereby gradually raising its price to abnormal levels and creating artificial liquidity in the scrip and thereafter most of the parties trying to off-load their holdings at a substantially inflated price. If individual case is seen independently there is nothing abnormal about it but when the picture is looked at in totality what is unfolding is a fraud perpetuated on the market / investors.
It is not that the trade logs are disputed or the financial transactions are in dispute. What is disputed is only the motive behind such trade and the financial transactions. Even the argument of the promoters of SJC that they did not trade is only legally correct since another companyw herein they were promoters at the relevant time placed a buy order on 28.01.2009 (in Phase-II) for 100 shares at price 5% above the LTP, though only 10 shares got delivered.
Similarly, appellant placed one buy order for just 5 shares at the rate of ₹ 1185/- per share on 26.09.2009. This was the highest reported price ever and it is equivalent to a pre-split price of ₹ 11850/-. Since the counter party did not meet the obligation the difference was credited to the appellant’s account. This appellant was already holding 400 shares of SJC (pre-split) and her husband (appellant in appeal no. 536 of 2015) had offloaded part of his holdings in Phase-III. Therefore, each small buy or small role played by each appellant needs to be juxtaposed with the motive of the appellant. Further, residing in a location or telephone calls between people also in itself do not make one party to a fraudulent scheme; but all associated factors together do make them parties. Therefore, given the factual matrix perused by us we find no merit in the submissions of the appellants.
We find no fault in imposing such a joint and several penalty as it is now abundantly clear that the appellants were acting together and together they inflated the notional value of their shares to more than ₹ 132 crore. If they could be party to such a fraudulent scheme whether they are a homogeneous group or otherwise they should find a way to fulfill the consequences / obligation of paying the penalty jointly and severally imposed upon them.
In view of the above reasons we find no merit in the appeals except that of Ms. Reshma Patel, Appellant No. 5 as she succeeds in her appeal. Since in the impugned order penalty of ₹ 2.5 crore has been imposed under Section 15HA of SEBI Act on 19 appellants jointly and severally and one of them succeeds in the appeal the penalty amount also needs to be reduced. Accordingly, we reduce the joint and several penalty from ₹ 2.5 crore to ₹ 2.3 crore to be paid by 18 of the appellants.
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2018 (4) TMI 1714
Addition u/s 68 - Addition as identity of the applicants remained unverified and the assessee could not give reply in this regard - Amount received towards the share applications was by way of cheque - HELD THAT:- All the details regarding applicants were furnished by the assessee and Department could have issued notices to such applicants. Hence, there was no need for the Assessing Officer to make addition.
It appears that before the CIT (Appeals) also such prayer could have been made by the Department for issuance of Notices upon share applicants. No such application was preferred before C.I.T. (Appeals) by this appellant. Hence, we see no reason at this stage to remand the matter to the Assessing Officer for further verification of share applications.
Similar type of cases are coming to this court often and most of the time sametype of error is committed by the Assessing Officers, either deliberately or due to “induced ignorance”. This is not the first time such type of matter has been taken up by this Court
Commissioner, Income Tax to have orientation courses or induction courses conducted for the Assessing Officers to make them understand that whenever assessee receives any amount by cheque, there is a need for the Assessing Officer to give notice to the drawers of those cheques.
There is no substance in this Tax Appeal as no error has been committed by the Income Tax Appellate Tribunal and the Commissioner of Income Tax - No substantial question of law involved in this Tax Appeal, this Tax Appeal is, hereby, dismissed.
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2018 (4) TMI 1713
Stay of demand - Seeing extension of the stay already granted - delay in disposal of the appeal - HELD THAT:- Stay against the outstanding demand was granted subject to certain conditions, which, according to the Learned Counsel for the Assessee, have already been complied with.
The delay in disposal of the appeal is not attributable to the assessee. In this view of the matter, the stay already granted against the outstanding demand is further extended for a period of six months or disposal of the appeal whichever expires earlier. Copy of the order be given to both the parties. Stay application of the assessee is allowed.
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2018 (4) TMI 1712
Registration u/s 12AA denied - charitable activity or not?- denial of registration as neither the objects have been pursued nor the activities of the trust get corroborated - HELD THAT:- In the instant case, the objects of the trust are not in controversy which is first consideration for grant of registration u/s 12AA of the Act. Secondly, the trust is at nascent stage and during the Financial Year 2015-16 having received donation to the extent of ₹ 1,12,000/- only and maximum of (₹ 1,03,250/-), which has already been utilized for the charitable purposes as it reflects from the visiting fees paid to the various doctors for giving free consultations/treatments, which even otherwise not refuted by the Revenue Department and aforesaid facts favours the pursuing of objects .
Considering the applicant trust has been formed only first day of April, 2015 which certainly at the nascent stage and application for registration u/s 12AA was filed on 26.09.2016 and the assessee trust do not have much fund at the initial stage to pursue its objections, however, from the records available in file, we do not have any hesitation to say that the some of the stated object vis-a-vis treatment for poor and weaker sections of the society, irrespective of their caste or creed and religion, have already been persuaded by the applicant trust, therefore, the main reason for rejection of the registration as given by the CIT(E) that neither the objects are seems to have been persuaded nor the activities of the trust got corroborated, having no substance and can not be considered as logical reasoning and hence the order impugned herein is perverse, improper and illogical and liable to be set aside.
We set the order passed by the CIT(A) and direct the CIT(E) to grant registration u/s 12AA of the Act to the appellant society, henceforth, however, the grant of registration can be subjected to condition, if any, which the Ld. CIT(E) deems fit and proper under the law. - Decided in favour of assessee.
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2018 (4) TMI 1711
Notice, returnable on 18.7.2018. Mr. Satish Aggarwala, Advocate accepts notice on behalf of respondent No.1. Counter-affidavit will be filed within four weeks. Rejoinder, if any, may be filed within four weeks, after counter-affidavit is served.
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2018 (4) TMI 1710
Genuineness of expenditure - Disallowance of employees expenses and other expenses on account of alleged unverifiability - not filing the proper vouchers in support of the claim - HELD THAT:- AO issued show cause notice to the assessee to produce the books of accounts along with vouchers for verification of genuineness of the expenditure claimed. The assessee failed to produce the requisite supporting evidence. Even before the ld. CIT (A), the assessee did not produce the vouchers in support of the claim of expenditure.
It is not the case of the AO that the expenditure is excessive. Keeping in view the nature of business activity of the assessee and further the nature of expenditure as claimed by the assessee is also not disputed to be incurred wholly and exclusively for the purpose of business of the assessee, therefore, in the facts and circumstances of the case, we are of the considered view that the disallowance on account of not filing the proper vouchers in support of the claim shall be restricted to 10% instead of 20%. We direct the AO accordingly to restrict the disallowance to 10% of the expenditure. - Decided partly in favour of assessee.
Taxability of notional rental income in respect of unsold space held as stock-in-trade -Notional income assessed by the AO u/s 23(1)(a) in respect of unsold stock-in-trade - AO proposed to determine the ALV of the unsold space which is not let out by taking into consideration the rent in respect of the portion let out at ground floor of the complex - HELD THAT:- It is mandate that the AO has to determine the annual letting value by considering the reasonable rent expected to be fetched by the property on the basis of the method provided for fixation of standard rent or computation of rateable value.
Since in the case in hand the 4th floor of the property is not eligible for fixation of standard rent being unauthorized construction and subjected to demolition action of the Municipal authorities, therefore, in the normal circumstances the reasonable rent expected to be fetched by such property would be nil.
Since the property in question is newly constructed and held as stock-in-trade, therefore the vacancy of the property being not let out is not intentional or deliberate act on the part of the assessee but it is beyond the control of the assessee to find a tenant for such unauthorized construction. Once the non-letting of the property is not due to the reason of intentionally keeping vacant by the assessee but it is because of the fact and circumstances that the said space could not be let out despite the best efforts of the assessee, the benefit of vacancy under section 23(1)(c) would be available to the assessee.
As per the provisions of section 23(1)(c) the property can be vacant during the whole of relevant previous year and, therefore, both situation cannot co-exist that the property is actually let out and also the same is vacant during the whole year. Accordingly, in the facts and circumstances of the case when it was not possible for the assessee to let out the property, then the benefit of section 23(1)(c) would be available to the assessee. Hence the initial delay in letting out the property first time cannot be considered as deemed let out as per the provisions of section 23 of the Act.
Accordingly we are of the considered view that the ALV of the property in question would be Nil as it was not possible to let out the property during the year under consideration and further the unauthorized construction of the property is otherwise not eligible for determination of standard rent or rateable value and consequently there is no basis for determination of ALV of the property under section 23(1)(a) of the Act. Hence we delete the addition made by the AO. - Decided in favour of the assessee
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