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Showing 281 to 300 of 1288 Records
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2014 (9) TMI 1013
Computation of deduction u/s.10A - per diem (amount paid to employees in foreign exchange) expenditure incurred in foreign currency - whether to be deducted from the export turnover for the purpose of computing deduction u/s.10A of the Act? - Whether the Tribunal was correct in taking into consideration Explanation 2 (iv) of Section 10A of the Act which clearly contemplated that such expenditure was liable to be deducted from the export turnover for the purpose of computing deduction U/s.10A of the Act? - Held that:- This Court had an occasion to consider the said questions of law in the case of Commissioner of Income Tax And Another Vs. MICO [2015 (7) TMI 876 - KARNATAKA HIGH COURT] wherein the said substantial questions of law was answered in favour of the assessee and against the revenue.
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2014 (9) TMI 1012
Deduction claimed by the assessee u/s 80IB(10) denied - Held that:- This is settled position of law that the Law existing at the particular point of time will be applicable unless and until it is specifically made retrospective by the legislator. In our opinion, the assessee is expected to complete the project as per the approved plan at a particular point of time and the assessee is not expected to do or fulfill the conditions which are not in existence at the relevant point of time or made compulsory after making such amendment in the Act from the future date. When the project approved, the competent authority has given specified date that project should have completed by that date. The Section 80IB(10), which was in existence there nowhere required the assessee to complete the project within a particular period. Therefore, in our view, the restriction, which has been imposed subsequently by amending the provisions of the law will not apply to the assessee that the project should have been completed within four years from the end of the financial year in which housing is approved by the local authorities. We, therefore, set-aside the order of the CIT(A) on this issue and allow the ground taken by the assessee in both the assessment years. - Decided in favour of assessee.
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2014 (9) TMI 1011
MAT computation - CIT(A) deleting the disallowance made by the Assessing Officer in computing the book profit u/s 115JB in respect of provisions made for Gratuity, Leave Encashment and Post- Retirement Medical Benefits - Held that:- This issue is covered in favour of the assessee company by the order of the ITAT in assessee’s own case in assessment year 2002-03 [2010 (10) TMI 1022 - ITAT DELHI ] wherein held once the assessee is maintaining his accounts on mercantile system, a liability accrued though to be discharged at a future date would be a proper deduction while working out the profits and gains of business, regard being had to be accepted principles of commercial practice and accountancy. If the facts of the case are viewed in the light of the decisions referred to above, we find that the provision made by the assessee in respect of gratuity, leave encashment and post retirement medical benefit on actuarial basis cannot be said provisions for unascertained liability so as to fall in clause (c) of the Explanation to section 115-JB (2) of the Act. Accordingly the ld. CIT (Appeals) and the assessing officer erred in holding the provisions made by the assessee were on account of un-ascertained liability to be added back under clause (c) of the Explanation to section 115- JB (2) of the Act. Accordingly, we set aside the order of the authorities below and direct the assessing officer to allow the claim of the assessee - Decided in favour of assessee
Disallowance of provisions made for the bad and doubtful debts - Held that:- The Ld. AR fairly conceded that in view of the retrospective amendment made by the Finance (No.2) Act, 2009 this issue is covered against the assessee. This ground of the revenue’s appeal for making addition on account of the provisions for bad and doubtful debts is allowed. - Decided in favour of revenue
Addition in computing the book profit in respect of the expenditure on account of the amortization of the land on the reasoning that no depreciation is allowable on land under the Companies Act as no rate of depreciation is provided in Schedule XIV of Companies Act - CIT(A) deleted the addition - Held that:- It is not the case of the Revenue here that the adjustment made by the AO is under Explanation to section 115J. The contention of the Revenue here is that land is not a depreciable asset and depreciation charged in the profit and loss account which is not in accordance with the provisions of the Companies Act read with Accounting Standard 6. As stated hereinabove, the contention of the Revenue that the land in question of the assessee company is not a depreciable asset is factually incorrect and further as held by the Supreme Court no adjustment can be made to net profit as certified by the statutory auditors.Accordingly we uphold the order of CIT(A) deleting this addition - Decided in favour of assessee
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2014 (9) TMI 1010
Transfer pricing adjustment - Held that:- Informed Technologies India Ltd. is required to be excluded from the final set of comparables because the said concern is abnormal profit making company.
Maple e-Solutions Ltd the difference in functions sought to be canvassed by the assessee is emerging from record. Merely because the two kind of activities are referred to as ITES in a Notification by the CBDT does not imply that the same have to be understood as functionally identical/similar. Infact, the dissimilarity in the functions performed by assessee and Maple eSolutions Ltd. is quite evident and the same has also not been disputed by the lower authorities. On this aspect, we are of the opinion that the said concern is liable to be excluded from the list of comparables.
Disallowance of fee paid to ROC, Pune - CIT(A) disallowed the said expenditure on the ground that the payment was in the nature of penalty and thus the same was not an allowable expenditure in terms of the Explanation below section 37(1) - Held that:- he additional fee/cost to regularize the default in compliance with the filing requirements are specified by the Department of Company Affairs, Government of India and it does not envisage that the payments are penal in nature. In our considered opinion, whether or not a particular payment is in nature of penalty is required to be examined having regard to the particular statutory scheme in terms of which it has been incurred. In the present case, apart from making a bald assertion the income-tax authorities have not established as to how the impugned payment is in the shape of penalty or an amount akin to penalty for any breach or infraction of law or any public policy. In the absence of such a finding based on relevant material we are unable to accept the stand of the Revenue that Explanation to section 37(1) of the Act is attracted qua the impugned payment. Therefore, we set-aside the order of the CIT(A) and direct the Assessing Officer to delete the impugned addition. - Decided in favour of assessee
Addition to the stated value of international transaction of IT enabled services rendered by the assessee to its associated enterprise in order to determine its arm's length price - selection of comparables - Held that:- We are inclined to uphold assessee’s plea of excluding Coral Hubs Ltd. from the final set of comparables on account of the distinction in the business model.
Genesys International Corporation Ltd. be excluded from the final set of comparables on the ground that for the financial year ended 31.03.2008 corresponding to the year under consideration before us, the said concern has made abnormally high profit of 46.82% for the purposes of determination of arm's length price of international transaction of Provision of IT enabled services to the associated enterprises.
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2014 (9) TMI 1009
Eligibility to deduction u/s.80-IB(10) - allowance on proportionate basis - Held that:- The provision being an incentive provision, toward promoting the growth of affordable housing in the country, the construction enables the same, while at the same time operating to exclude the extension of the incentive to housing that is not covered or targeted by the provision, as sought to be included by the ld. AR. Again, it is trite law that the benefit of any ambiguity, if any, in the language of the provision, so that two reasonable views are permissible, is to go to the tax payer. We may clarify that our decision, even as sought to be emphasized earlier, despite approving the proportionate deduction, i.e., w.r.t. section 80-IB(10)(c), is, for the reasons afore-stated, thus not in conflict with the decision by the hon’ble jurisdictional high court in Brahma Associates (2011 (2) TMI 373 - BOMBAY HIGH COURT ). The deduction toward the residential units satisfying the condition of s. 80-IB(10)(c), arrived at on a proportionate basis, is therefore upheld. - Decided against revenue
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2014 (9) TMI 1008
Non-issuance of notice under section 143(2) - Reopening of assessment - Held that:- In the case of Hotel Blue Moon (2010 (2) TMI 1 - SUPREME COURT OF INDIA ) the Hon'ble Supreme Court observed, vis-a-vis the block assessment, that non-issuance of notice under section 143(2) cannot be considered as procedural irregularity and the same is not curable; requirement of notice under section 143(2) cannot be dispensed with and failure to issue notice would result in holding the assessment as null and void. Similar view was taken by the Hon'ble Gujarat High Court in the case of Pratapbhai K. Soni (2014 (3) TMI 806 - GUJARAT HIGH COURT ). In particular, the Hon'ble Bombay High Court, in the case of CIT vs. Geno Pharmaceuticals Ltd. [2013 (10) TMI 218 - BOMBAY HIGH COURT] observed that notice under section 143(2) of the Act is mandatory and omission to issue a notice is vital to assessment proceedings under section 143(3) r.w.s. 147 of the Act. Consistent with the view taken in the aforementioned case it is of the view that the assessment made in the instant case is null and void. - Decided in favour of assessee
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2014 (9) TMI 1007
Nature and manner of admission of electronic records - proof by evidence - relevancy and admissibility - Allegations of corrupt practices under Section 123(4) of The Representation of the People Act, 1951 - Genuineness, veracity or reliability of the evidence - Publication and distribution of defamatory leaflets - Word ‘Connivance’ - HELD THAT:- Proof of electronic record is a special provision introduced by the IT Act amending various provisions under the Evidence Act. The very caption of Section 65A of the Evidence Act, read with Sections 59 and 65B is sufficient to hold that the special provisions on evidence relating to electronic record shall be governed by the procedure prescribed under Section 65B of the Evidence Act. That is a complete code in itself. Being a special law, the general law under Sections 63 and 65 has to yield.
The speeches, songs and announcements were recorded using other instruments and by feeding them into a computer, CDs were made therefrom which were produced in court, without due certification. Those CDs cannot be admitted in evidence since the mandatory requirements of Section 65B of the Evidence Act are not satisfied. It is clarified that notwithstanding what we have stated herein in the preceding paragraphs on the secondary evidence on electronic record with reference to Section 59, 65A and 65B of the Evidence Act, if an electronic record as such is used as primary evidence under Section 62 of the Evidence Act, the same is admissible in evidence, without compliance of the conditions in Section 65B of the Evidence Act.
It is also relevant to note that in Annexure-P3-complaint filed by the chief electoral agent of the appellant on 13.04.2011, there is no reference to the number of copies of Exhibit-P1-leaflet, days when the same were distributed and the people who distributed the same, etc., and most importantly, there is no allegation at all in Annexure-P3 that the said leaflet was printed by the first respondent or with his consent. The only allegation is on knowledge and connivance on the part of the first respondent. We have already held that knowledge and connivance is different from consent. Consent is the requirement for constituting corrupt practice under Section 123(4) of the RP Act. In such circumstances, it cannot be said that there is a complete chain of circumstances which would lead to a reasonable inference on consent by the first respondent with regard to printing of Exhibit-P1-leaflet. Not only that there are missing links, the evidence available is also not cogent and credible on the consent aspect of first respondent.
The allegation is on distribution of Exhibit-P1 at about 08.00 p.m. on 12.04.2011. But the evidence is on distribution of Exhibit-P1 at various places at 08.00 a.m., 02.00 p.m., 05.00 p.m., 06.30 p.m., etc. by the UDF workers. No doubt, the details on distribution are given at Paragraph-5 (extracted above) of the election petition at different places, at various timings. The appellant as PW-1 stated that copies of Exhibit-P1 were distributed until 08.00 p.m. Though the evidence is on printing of 1,000 copies of Exhibit-P1, the evidence on distribution is of many thousands. In one panchayat itself, according to PW-22- KV Muhammed around 5,000 copies were distributed near Areakode bus stand. Another allegation is that two bundles were entrusted with one Sarafulla at Areakode but he is not examined. All this would show that there is no consistent case with regard to the distribution of Exhibit-P1 making it difficult for the Court to hold that there is credible evidence in that regard.
From the record, it is not possible to infer consent on the part of the first respondent in the matter of printing and publication of Exhibit-P1-leaflet. There is also no evidence that the distribution of Exhibit-P1 was with the consent of first respondent. The allegation in the election petition that bundles of Exhibit-P1 were kept in the house of the first respondent is not even attempted to be proved. The only connecting link is of the two jeeps which were used by the UDF workers and not exclusively by the first respondent. It is significant to note that there is no case for the appellant that any corrupt practice has been committed in the interest of the returned candidate by an agent other than his election agent, as per the ground under Section 100(1)(d)(ii) of the RP Act. The definite case is only of Section 100(1)(b) of the RP Act.
Having regard to the admissible evidence available on record, though for different reasons, we find it extremely difficult to hold that the appellant has founded and proved corrupt practice under Section 100(1)(b) read with Section 123(4) of the RP Act against the first respondent.
Appeal dismissed.
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2014 (9) TMI 1006
Disallowance of expenditure on entertainment related to employees participating in the extension of hospitality Held that:- CIT (Appeals) did not erred in not accepting the contention of the appellant that at least 60% of the total expenditure on entertainment related to employees participating in the extension of hospitality and instead confirming exclusion of only 15% thereof while computing disallowance u/s 37(2).
Claim for deduction of proportionate premium on leasehold land amortised disallowed - Held that:- CIT(A) was justified in confirming rejection of assessee’s claim for deduction of proportionate on leasehold land amortized and charged to Profit & Loss Account of the year in question.
Disallowance u/s 35AB - Held that:- In so far as the fees paid under the process know-how agreements entered during the year under consideration is concerned, in order to test the efficacy of section 35AB on such claim, it would be imperative to examine as to whether the expenditure is revenue or capital in nature and depending on that answer, the Assessing Officer shall decide the applicability of section 35AB of the Act. On this limited aspect, we deem it fit and proper to restore the matter back to the file of the Assessing Officer to be adjudicated afresh, of-course after allowing assessee reasonable opportunity of being heard. In this manner, on this Ground assessee partly succeeds
Disallowance under Rule 6B of the I.T. Rules, 1962 - Held that:- This expenditure can only be allowed u/s.37(1) provided it is established that expenses have been incurred for the purpose of business. As name of persons to whom these gifts have been given were not available with the assessee, it was difficult to hold that such persons were business associates or having business dealings with the assessee’s company. Under these circumstances, authorities below were justified to hold that such expenditure incurred could not be treated for business purpose.
Disallowance made by the appellant in respect of warranty obligations - Held that:- The precedent in the assessee’s own case fully covers the controversy and accordingly the Assessing Officer is directed to give effect to the above precedent as per directions given in assessment years 1994-95 and 1995-96. Accordingly, the assessee succeeds on this Ground as above.
Disallowance of provision for leave encashment - Held that:- We decide this issue against the assessee for the detailed reasons given in the aforesaid order of the Tribunal for the assessment year 1995-96. Accordingly, this ground of appeal of the assessee is dismissed.
Provision for profit equalization to recognize proportionate revenue on percentage completion basis - Held that:- A similar issue came before coordinate Bench in the case of Thermax Babcock & Wilcox Ltd. Vs. DCIT [2001 (5) TMI 173 - ITAT PUNE] for A.Ys. 1990- 91 and 1991-92, wherein the Tribunal has held that the provision for profit equalization to recognize proportionate revenue on percentage completion basis in case of long term contracts in accordance with the well recognized method of accounting recommended in Accounting Standard 7 issued by the Institute of Chartered Accountants of India is fully deductible. Nothing contrary has been brought to our knowledge on behalf of the Revenue. Following the same reasoning, we decide the issue in favour of the assessee
Fluctuation in rate of exchange - Held that:- It was a common point between the parties that the issue relating to fluctuation in exchange rate had been subjectmatter of consideration by the Tribunal in assessment year 1995- 96 and the Tribunal has restored the matters to the file of the Assessing Officer to follow the directions given therein. Following the same, we hold so and restore the issues to the file of the Assessing Officer to adjudicate the issues afresh in the light of precedent referred to above.
Deduction under sec.80-HHC - reduction from profits derived from export of manufactured goods the loss suffered from export of trading goods - Held that:- the issue is liable to be decided against the assessee in view of decision of the Hon’ble Supreme Court in the case of IPCA Laboratories Ltd. (2004 (3) TMI 9 - SUPREME Court ).
Excise Duty and Sales tax collected from total turnover are decided in favour of the assessee in view of the decision of the Hon’ble Supreme Court in the case of Lakshmi Machine Works (2007 (4) TMI 202 - SUPREME Court ).
Insurance claim, Bad debts recovered, Amount written back, Custom duty refund, Credit balance appropriated , Sale of scrap items of the income should be excluded from the turnover for the purpose of computing deduction u/s.80HHC
Fluctuation in rate of exchange - Held that:- As only component of fluctuation which is on sales is liable to be included in total turnover and not the balance, if any. The Assessing Officer is directed to re-compute the deduction under section 80HHC of the Act accordingly.
Exclusions from the “profits of the business” as per Explanation (baa) for the purposes of section 80HHC - Held that:- We deem it fit and proper to set aside the issue to the file of the Assessing Officer to be adjudicated in the light of the judgment of the Hon’ble Bombay High Court in the case of Pfizer Ltd., (2010 (6) TMI 433 - Bombay High Court) except to the extent of lease rental, which is liable to be excluded in terms of Explanation (baa) to section 80HHC of the Act. The Assessing Officer shall re-adjudicate the controversy after allowing the assessee an opportunity of being heard in the matter.
Subjecting the items of income / receipts to 90% reduction on net income basis by invoking Explanation (baa) to Section 80 HHC of the Act and not on gross receipts basis - Held that:- Hon’ble Supreme Court in the case of ACG Associated Capsules P. Ltd. (2012 (2) TMI 101 - SUPREME COURT OF INDIA ), wherein, the Hon’ble Supreme Court has upheld the contention that such receipts should be considered on net income basis and not on gross receipts basis for the purpose of invoking Explanation (baa) to Section 80 HHC of the Act. We direct the Assessing Officer to decide the issue in the light of the same.
Taxability of lump sum payment made gratuitously to the widow Mrs. Arnawaz Aga - Held that:- . The lump sum gratuitous payment is a testimonial of the nature of a gift and not remuneration to the employee for his services. The purpose for which the amount was paid was to express gratitude for what he had done and in appreciation of his personal qualities. Obviously the terms of the employment of the deceased director Mr. Aga did not entitle him to such a benefit. The lump sum gratuitous payment made after death to the widow therefore cannot be said to be wholly and exclusively incurred by the assessee for the purpose of its business. It is pertinent to mention that in the light of the clarification given by the CBDT in Circular No.573 the testimonial in the nature of gratuitous lump sum payment is not taxable under the Act in the hands of the widow Mrs. Aga. One and the same outgoing would not be eligible for tax relief twice in such circumstances. Accordingly, ground raised by the assessee in this regard is dismissed.
Non-compete covenant - assessable as income of the appellant - CIT(A) confirmed the order of the AO that the said sums were taxable either as business income or as short term capital gains u/s 50 of the Act - Held that:- case the assessee has transferred on a going concern basis for a lump sum price its Water treatment Product business undertaking consisting of all tangible and information intangible assets, products, goodwill, manpower, proprietary information, trademark, licences, know how, customer orders and all other information/material relevant for the conduct of business. For that purpose the assessee has entered into Business Transfer Agreement and Non Competition Agreement under a negative covenant for 25 years. The business undertaking has been transferred by the assessee on a going concern basis for a lump sum price without values assigned to the individual assets in the previous year relevant to the A.Y. 1997-98. In the light of the attendant facts and circumstances the transfer of the business undertaking does not involve itemised sale of assets and provisions of Section 50 are therefore not attracted. The said transfer of business undertaking is for a lump sum price involving monetary consideration and therefore provisions of Section 28 (iv) are also not applicable in such a case. We draw support in this regard from the decision of Hon’ble Bombay High Court in the case of Mahindra & Mahindra Limited (2003 (1) TMI 71 - BOMBAY High Court ). We find that the provisions of Section 50 B and 28 (va) being prospective in nature as held by the Hon’ble Apex Court Guffic Chem P. Ltd. reported in [2011 (3) TMI 6 - Supreme Court] are not applicable to the impugned capital receipts on transfer of business undertaking by the assessee in the previous year relevant to the A.Y. 1997-98. In the light of the attendant facts and circumstances of the case and respectfully following the decisions of the Hon’ble Apex Court and jurisdictional Bombay High Court cited above the grounds raised by the assessee are allowed.
Attributable to dividend income while computing deduction u/s 80M - Held that:- Hon’ble Supreme Court in the case of Distributors (Baroda) P. Ltd. (1985 (7) TMI 1 - SUPREME Court ) has held that it is only net dividend which is to be considered for the purpose of deduction under Section 80 M in the light of the provisions of Section 80 AA of the Income Tax Act. The learned CIT Appeals has attributed expenses for earning the dividend income at 2.5% instead of 5% of gross dividend amount considered by the Assessing Officer as against the assessee's plea that no expenditure can be considered to be attributable for earning the dividend income. In the light of the facts and circumstances of the case we do not find it necessary to interfere with the finding of CIT Appeals in this regard. The amount of expenditure at 2.5% of the gross dividend income can be considered attributable to earning the dividend income to meet the ends of justice
Manner of computing indirect costs of trading goods for the purposes of section 80HHC - Held that:- We direct the Assessing Officer to follow the directions as given for assessment year 1995-96 as while giving effect to the direction of the Commissioner of Income-tax (Appeals) for the year under consideration, the Assessing Officer had accepted the computation of indirect costs attributable to trading exports excluding costs that had no nexus with such trading exports. In our view, it would be in the fitness of things that the Assessing Officer reviews the working already accepted by him so as to be in conformity with the aforesaid decisions and also directions of the Tribunal contained in its order for the assessment year 1994-95 (supra). As a result thereof, on this Ground, the Revenue succeeds for statistical purposes only
Capital receipt not chargeable to tax - Held that:- he learned counsel for the assessee has submitted that Central Board of Direct Taxes has issued Circular no. 573 dated 21.8.1990 clarifying that any such gratuitous lump sum payment will not be taxable as income in the hands of the recipient widow under the Income Tax Act. Learned CIT Appeals has given the finding accordingly upholding the claim that such a receipt is not taxable in the hands of Mrs. Aga. We find that the lump sum gratuitous payment is a testimonial of the nature of a gift and not remuneration to the employee for his services. The purpose for which the amount was paid was to express gratitude for what he had done and in appreciation of his personal qualities. The amount paid by Thermax Ltd. has been held by us to be not deductible in its hands for the impugned A.Y. 1997-98 in appeal of Thermax Ltd. (ref. 970/PN/01). In the light of the facts and circumstances of the case we do not find it necessary to interfere with the finding of the CIT(A) that the said receipt is therefore not taxable in the hands of Mrs. Aga. We order accordingly.
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2014 (9) TMI 1005
Disallowance made under section 14A by applying Rule 8D - computing the book profits u/s 115JB - Held that:- Identical to the issue before the Tribunal in the case of sister concern and following the same parity of reasoning we direct the Assessing Officer to exclude the disallowance made under section 14A of the Act, while computing the book profits u/s 115JB of the Act. We direct the Assessing Officer to recompute the book profits under section 115JB of the Act - Decided in favour of assessee in part.
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2014 (9) TMI 1004
Penalty u/s. 271(1)(c) - exemption u/s. 10B reduced by AO - CIT(A) deleted the penalty - Held that:- The claim of exemption u/s. 10B of the Act by the assessee was reduced by the Assessing Officer. So, it cannot be said that the assessee concealed the income or furnished the inaccurate particulars of its income. Therefore, keeping in view the ratio laid down by the Hon'ble Supreme Court in the aforesaid case of CIT Vs. Reliance Petro Product (P) Ltd [2010 (3) TMI 80 - SUPREME COURT ], we do not see any infirmity in the order of the Ld. CIT(A). Accordingly do not see any merit in this appeal of the department. - Decided in favour of assessee.
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2014 (9) TMI 1003
Eligibility of deduction under sections 80I and 80HH - contention of the assessee is that during the period AYs 1988-89 to 1990-91 the machineries were put to use and no “commercial production” was made except the ‘trial run” - Held that:- The onus was on the assessee to demonstrate the quantum of input used in all three years when the depreciation is claimed and also the quantity of production produced in the “trial run”. Since the “trial run” has been made in all the three years, it was incumbent upon the assessee to explain that how many days “trial run” was carried out and how much electricity was consumed, whether raw-material was used or not, whether any finished products were produced and what was the accounting treatment of these goods, etc. and nothing has been placed on record by the assessee. The Revenue has demonstrated that there is substantial increase in the production turnover of the old Unit and as per the Revenue, such increase in the production was not possible when the production made in the new Unit is utilized by the old Unit. It is not disputed that the machinery used by the two Units are different, but the product remained same except the length of the product. It is not coming out from the record that what was the nature of the product sold by the assessee during AYs 1988-89 to 1990-91. In the absence of such details and also coupled with the facts that the assessee has not explained under what circumstances “trial run” was necessary for all the three years.
Therefore, we are of the considered view that the issue to be restored to the file of AO for verification, whether there was only “trial run” of the machinery as claimed by the assessee or the assessee carried out any “commercial production” from New Unit during AYs 1988-89 to 1990- 91. In case, the assessee is able to prove its claim of “trial run” in that event the AO would allow the claim of deduction as made by the assessee. - Decided in favour of statistical purposes.
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2014 (9) TMI 1002
TDS u/s 194A - “interest on deposit and loans - Disallowance u/s 40(a)(ia) - Held that:- Assessing Officer was of the opinion that as per sub clause (i) of section 194A(3), only payer a cooperative society has been provided. The nature of payee is expressly not defined in the said clause that means any payment of interest to member or non member or to cooperative society including cooperative bank etc., are all covered by the ambit of clause (i). But the Tribunal has held that if interest is being paid to Members, then TDS would not be deducted. It was not demonstrated before us that payment made by the assessee including payment to non member. Respectfully following the decision of The Bagalkot District Central Coop. Bank, Bagalkot Vs. JCIT. [2015 (1) TMI 1005 - ITAT BANGALORE] we delete the disallowance made by the Assessing Officer. - Decided in favour of assessee
Addition on the premise that on NPA account the assessee ought to have recognized the interest income - Held that:- The alleged interest income on NPA account is not to be credited to the P&L a/c . The addition made by the Assessing Officer is deleted. See ITO vs. M/s.Shiva Sahakari Bank Niyamitha [2012 (12) TMI 1021 - ITAT BANGALORE] - Decided in favour of assessee
Disallowance of provision for bad and doubtful debt u/s 36(viia) - Held that:- In the present case, the assessee contended that the claim was made in the return, but provision was not made in the books. We directed the learned Counsel to show us the statement of income. He placed on record the claim which read as under:
Less: Deductible expenditure and income to be excluded NPA provision u/s 36(1)(ix) = ₹ 6,78,133
Sub clause (ix) of section 36(1) deals with any expenditure bonafidely incurred by a company for the purpose of promoting family planning amongst its employees. It does not talk about any provision for bad and doubtful debts. Thus neither specifically disclosed in the return of income, nor had a provision made in the audited accounts. We do not find any basis for the assessee to make a claim at this stage. Therefore, there is no error in the order of the CIT (A) on this ground, this ground of appeal is rejected. Other grounds are general in nature or supporting arguments qua these three issues. - Decided against assessee.
Premium paid on govt. securities amortized over a period of time holding of these securities and claimed proportionately - Held that:- From perusal of the order of the Assessing Officer, paragraph 8 to 8.5, nowhere, any reason is discernible as to how these trading stock could be considered as investment. The only reason assigned by him is the period of retaining these securities. This sole circumstance is not sufficient to treat the trading stock as investment. With regard to amortization of premium is concerned, the CIT (A) has based her order on the circular issued by the Board. The investment in Govt. security if made on premium, then premium has to be amortized over the period of time. The assessee has followed this step and claimed deduction of ₹ 1,86,000/-.Assessing Officer has erred in disallowing this claim. Considering the well reasoned order of the CIT (A), we do not find any reason to interfere in it. Accordingly appeal of the Revenue is devoid of any merit.
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2014 (9) TMI 1001
Transfer pricing adjustment - selection of comparables - Held that:- RPT filter should be considered at 15% of the total revenue and companies having RPT in excess of 15% of total revenues are to be excluded from the list of comparables. In this view of the matter, the order of the learned CIT (Appeals) holding that companies are not to be considered as comparables even if they have a single RPT i.e. ;that the RPT is in excess of 0%, is reversed.
Entitlement to standard deduction of 5% from the ALP under the proviso to section 92C(2) - Held that:- In view of the amendment brought about by the Finance Act, 2012 by introduction of the clarificatory amendment of section 92CA(2) of the Act w.r.e.f. 1.4.2002, the issue has been settled and therefore the assessee is not entitled to the benefit of 5% standard deduction from the ALP of international transactions.
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2014 (9) TMI 1000
Disallowance u/s.40(a(ia) - CIT(A) deleted the addition as relying on Merilyn Shipping & Transports [2012 (4) TMI 290 - ITAT VISAKHAPATNAM]- Held that:- We find that expenses related to professional fees, advertisement and management were debited in P&L Account, that same were paid. Therefore, in our view, no disallowance u/s 40(a)(ia) of the Act should be made.
We further find that while deciding the appeal in the case of Janapriya Engineers Syndicate (2015 (5) TMI 309 - ANDHRA PRADESH HIGH COURT ) the Hon'ble Andhra Pradesh High Court has clarified the issue of interim stay granted by it in the case of Merilyn Shipping & Transports [2012 (4) TMI 290 - ITAT VISAKHAPATNAM]. From the clarification issued by the Hon'ble High Court, it is clear that until and unless the decision of Marilyn Shipping & Transport(supra)is reversed by the Court,it is binding on all the benches of the Tribunal. We find that Hon'ble Court has held that judicial discipline mandates that the decision of the special bench has to be followed by other benches. As on today,the stay order granted by the Hon’ble Court has been vacated and the order of the special bench is binding on other benches of the Tribunal.Therefore, respectfully following the same,we hold that the FAA was justified in following the order of Marilyn Shipping & Transport (supra). - Decided in favour of assessee
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2014 (9) TMI 999
Disallowance u/s. 14A - Whether ITAT erred in law in holding that for computing disallowance u/s. 14A read with Rule 8D effective from the Assessment Year 2008- 2009? - Held that:- Let requisite number of informal paper books containing all relevant papers used before the authority below be filed within eight weeks from date. Let copies of the Paper Books be served along with the notice of appeal on the respondent within a fortnight from the date of preparation of the Paper Book. In default, the appeal will stand dismissed. Let the matter appear as “For Hearing” in the Monthly Combined.
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2014 (9) TMI 998
Royalty payments - revenue or capital expenditure - entitlement for additional depreciation - Held that:- ITAT in the assessee’s own case in A.Ys. 1999-2000,2003-04, 2004-05 and 2005-06 has held that 75% of the royalty payment is revenue expenditure and balance 25% was held to be capital expenditure and entitled for depreciation. Since the facts are exactly the same (continuation from the earlier years), the decision of the ITAT is equally applicable for the current A.Y. 2008-09 under consideration. Therefore, the Assessing Officer is directed to treat 3/4th as revenue expenditure and the balance of 1/4th of payments as capital expenditure, in accordance with the directions of the ITAT in the earlier years.
Additional depreciation claim - when the assessee has used plant and machinery less than 180 days whether it will be eligible to carry forward the remaining balance of additional depreciation to next year or not - Held that:- In the present case the assessee used new plant and machinery below 180 days and therefore, additional depreciation shall be allowed only 50%. See M.M. Forgings Ltd. v. Addl. CIT [2011 (1) TMI 203 - MADRAS HIGH COURT ] - Decided partly in favour of assessee
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2014 (9) TMI 997
Waiver of pre deposit - Mama's Best India Chocolate - classification under CTH 19019090 or under CTH 21069099 - products consists of skim milk powder (64.7%), Lactose (15.2%), Sucrose (12%), Coco powder (2.5%), oligofructose (FOS) (2.2%), minerals and vitamins. - Held that:- As per the constitution of the impugned goods, 2/3rd of the product consists skim milk powder. Therefore, prima facie, there is merit in the contention of the appellant that it is a food preparation based on the headings of 0401 to 0404 the cocoa contents being less than 5% by weight. Thus, it appears that CTH 1901 is more specific to the goods under importation compared to CTH 2106 which is a residuary entry for food preparations not elsewhere specified or included. We further notice even if the product is held to be falling under CTH 2106, the appellant would be eligible for the benefit of Notification No.75/2005-Cus and 2/2011-CE, since the product is of Singapore origin and is a food mix. Therefore, the benefit of these notifications would be available. If the benefit is extended, then it can be seen that the appellants have discharged excess duty liability than what is due. In these circumstances, the appellant has made out a strong case for waiver of pre-deposit. - Stay granted.
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2014 (9) TMI 996
Disallowance u/s 14A - CIT(A) deleted the addition - Held that:- Exempt income of assessee comprised of interest on tax paid, relief bonds accrued and PPF interest for which journal entries were passed at the end of the year and dividend income was credited in the bank through ECS, hence, no expenditure incurred were referable and relatable to the exempt income. The ld. CIT(A) further observed that the A.O. has also not given any finding as to whether the assessee has made a claim of expenditure in relation to exempt income and the claim is not correct. The categorical finding has been recorded by the ld. CIT(A) to the effect that the assessee has earned dividend income of ₹ 10,245/- which has been directly credited to the bank through ECS. The interest of ₹ 69,901/- received on PPF, for which a journal entry was passed on 31-3-09 and similarly interest of ₹ 66,02,652/- on tax free bonds is credited by journal entries passed on 31-3-09. Thus, no expenditure has been incurred for earning exempt income.
From the records, we also find that the expenditure mentioned by the A.O. was in relation to the professional income earned by the assessee which is taxable under the Income Tax Act, there is no reason to disallow the expenses incurred for earning the taxable income. The findings so recorded by the ld. CIT(A)has not been controverted by the Department by bringing any positive material on record. Accordingly, we do not find any reason or infirmity with the order of the ld. CIT(A) in deleting the disallowance made by the A.O. u/s 14-A of the Act - Decided in favour of assessee
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2014 (9) TMI 995
Evasion of custom duty - illegally import by mis-declaring the model code - Demand of differential duty - Held that:- Appellant acted as a broker in import of the car. On the facts of the case no complicity has been established on the broker, hence on the assumption and presumption appellant cannot be declared as a party to the alleged mis-declaration, as there is no evidence on records to show that there was any declaration of model code at the time of import. The appellant cannot be implicated in the matter only for the reason that he assisted the importer to import the car. Hence, I allow the appeal and set aside the penalty imposed on appellant - Decided in favour of assessee.
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2014 (9) TMI 994
Restoration of appeal - Held that:- appellant has filed a restoration application now, which was received by the Registry on 30-7-2014, on the ground that they have now complied with the directions of pre-deposit and, therefore, the appeal be restored. Even though the statute does not lay down any time-limit for restoration of appeal, the consistent stand taken by this Tribunal, affirmed by the Hon’ble Bombay High Court is that the restoration application has to be filed within three months from the date of dismissal of the appeal. - Restoration denied.
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