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Showing 301 to 320 of 1287 Records
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2014 (11) TMI 989
Penalty u/s 76, 77 & 78 - held that:- While considering the scope and ambit of Sections 76, 77, 78 of the Act, this Court has held in [2011 (1) TMI 52 - High Court of Punjab and Haryana] - Commissioner of Central Excise Commissionerate v. M/s First Flight Courier Limited; [2011 (2) TMI 80 - HIGH COURT OF PUNJAB AND HARYANA] - Commissioner of Central Excise, Commissionerate, Ludhiana v. M/s Akash Cable, [2010 (7) TMI 255 - PUNJAB AND HARYANA HIGH COURT] - Commissioner of Central Excise v. M/s Pannu Property Dealers, Ludhaina that Sections 76, 77 and 78 of the Act, do not envisage imposition of simultaneous penalties. This apart, there appears to be error in the order passed by the Tribunal holding that the appellant did not deposit 25% of penalty within one month of its impositions. The Tribunal lost sight of the fact that adjudicating authority did not impose penalty and therefore, the assessee did not get an opportunity to deposit 25% of the penalty, within one month. - Consequently, but without expressing any opinion on the merits of the appeal and as to the rights of parties, the appeal is allowed, order dated 4-7-2013 [2013 (7) TMI 508 - CESTAT NEW DELHI], is set aside and the matter is restored to the CESTAT - Decided in favour of assessee.
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2014 (11) TMI 988
Contravention of Rule 46A(3) of the IT Rules - adoption of a different rate of OP/TC of two companies - Held that:- Assessee, vide its letter dated 13.10.2008 addressed to the TPO, a copy of which is placed on pages 233 onwards of the paper book, calculated unadjusted OP/TC of this company at 16.15%. The detailed calculation is given along with this letter. Without adversely commenting on such calculation, the TPO proceeded to include a different percentage while calculating the arithmetic mean of OP/TC of the comparable companies. The ld. CIT(A) substituted the correct OP/TC as was given to the TPO. In our considered opinion, there is no admission of any additional evidence at the ld. CIT(A)’s end. He has simply taken the figure from the letter given by the assessee to the TPO accompanied by the detailed calculation, which was not controverted by the TPO. - no infirmity can be traced in the order of the ld. CIT(A) in correcting the OP/TC margin of this company, which is without the assistance of any additional evidence filed before the ld. CIT(A) in contravention of Rule 46A(3) - Decided against Revenue.
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2014 (11) TMI 987
Failure to obtain permission before incurring expenditure u/s 34(2AB) and 35(2AB) - Held that:- If the section 35(2AB)(1) is analyzed then the deduction shall be allowed of a sum equal to two times of the expenditure so incurred and the prescribed authority is to submit its report of such approval/facility to the Director General on a prescribed form within specified time, meaning thereby, the authority concerned has to submit the report to the Director General. However, if the totality of facts are analyzed, as mentioned earlier, the assessee made application for such approval on 11/12/2007 with the prescribed authority and such approval was granted on 04/03/2009, therefore, the assessee cannot be denied the claimed deduction u/s 35(2AB) of the Act merely on the ground that the prescribed authority did not submit form no. 3CL in time to the Income-tax Department. The assessee cannot be penalized for the fault, if any, of the Department.
The Assessing Officer cannot be expected to be too technical rather is to take practical approach under the facts narrated hereinabove, because, it was beyond the control of the assessee to direct the authority to submit the prescribed form on Form no.3CL to the Department. Section 35(2AB) of the Act, nowhere suggest that the date of approval of research and development facility will be cut off date for eligibility of weighted deduction under this section on expenses incurred from that date onwards; Once facility is approved, entire expenditure so incurred on development of research and development facility has to be allowed for such weighted deduction u/s 35(2AB) of the Act and thus it would be sufficient to hold that assessee has fulfilled the conditions as laid down in the section. - Decided against Revenue.
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2014 (11) TMI 986
Deletion of the addition on account of the arm’s length price - held that:- ALP adjustments can only be made in respect of international transactions with the AEs and cannot extend to the transactions with non AEs. - There are large number decisions of the coordinate benches, including in the case of Alstom Projects India Ltd Vs ACIT [2013 (8) TMI 442 - ITAT MUMBAI], holding so. In the case of CIT Vs Stratex Networks India Pvt Ltd (2013 (5) TMI 277 - DELHI HIGH COURT), Hon’ble jurisdictional High Court has also accepted this position. Learned Departmental Representative, even as vehemently relying upon the stand of the TPO, does not dispute this legal position but he contends that the factual elements embedded in this contention, at least on computation aspect, need to be verified by the TPO - it fit and proper to uphold the stand of the CIT(A) in principle but remit the matter for the limited purposes of verifying the computation of excluding transactions with non- AEs in calculating the ALP required to be made under the TNMM method. To this extent, the matter is restored to the file of the TPO. - Decided in favour of Revenue.
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2014 (11) TMI 985
Disallowance of interest expenditure - Held that:- The assessee is able to show, with reference to its accounts, of the borrowed capital having financed a particular asset (or asset class), the interest cost relatable thereto would necessarily have to be consider as expended toward the same. Upon this being conveyed by the Bench during hearing, the ld. Authorized Representative (AR), the assessee's counsel, would submit that the borrowed capital in the instant case is in fact wholly for business purposes, being toward the assessee's hotel project at Kodaikanal and the real estate business at Mumbai. We observe no findings in the matter on record. So, however, if, as claimed, the borrowed capital is in the form of dedicated funds, i.e., specified activities and/or assets, so that the same stands utilized for the same purpose/s, and which would be where the terms and conditions of the borrowing have been met, there could be no presumption with regard to the borrowed funds having been used for any purpose other than the same and, accordingly, no part of the interest could be considered as having not been utilized for business purposes and, hence, toward financing the investment/s. Thus e matter is restored back to the file of the A.O. to allow the assessee an opportunity to present and exhibit its case as stated hereinabove, the onus for which would only be on it. - Decided in favour of assessee for statistical purposes.
Disallowance u/s. 14A is in respect of indirect administrative expenditure, covered under Rule 8D(2)(iii) - Held that:- The same stands made applying the said rule. While the A.O. effected the disallowance invoking the said rule, mandatory for the current year, the ld. CIT(A), in appeal, rejected the assessee's contention of the rule being arbitrary. Further, the A.O. having rendered his satisfaction with reference to the facts of the case, rule 8D stood triggered and, accordingly, the disallowance was to be, in his view, confirmed. No specific contention in this regard stood made before us. The assessee failing to substantiate its claim of having not incurred any expenditure in relation to income not forming part of the total income, we find no infirmity in the orders of the authorities below and, accordingly, confirm the disallowance of the indirect administrative expenditure, which is the subject matter of disallowance under r.8D(2)(iii), i.e., in principle. - Decided against assessee.
Adjustment to the book profit qua the disallowance effected u/s. 14A - Held that:- Both the income and expenditure, determining the net profit, which forms the basis for computing income under the Act, are only as per the books of account. The provision of section 14A only codifies the law, which is otherwise inherent in tax jurisprudence, that only the net income (i.e., net of the expenditure), from whatever source, is to be brought to tax and, consequently, only the net income, where tax-exempt, is to be so. Further, rule 8D prescribes a method/s toward determining the said income, i.e., on net basis, providing a uniform basis for ascertaining the amount of expenditure liable to be excluded in computing the income chargeable to tax. The legal basis for the relevant adjustment, i.e., qua the expenditure relatable to the exempt income, in determining the book profit, which is an alternate method of taxation, i.e., where the income computed under the regular provisions of the Act falls below the prescribed percentage of book profit, is per clause (f) of Explanation 1 below sub-section (2) of section 115JB. Thus no basis for not confirming the adjustment of the expenditure, as finally sustained for disallowance u/s. 14A(1), in computing the book profit u/s.115JB. - Decided against assessee.
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2014 (11) TMI 984
Disallowance of interest - Whether CIT(A) is correct in holding that Article under which interest u/s. 244A of I.T. Act, 1961 is taxable cannot be decided in proceedings u/s 154 without appreciating the fact that interest issued u/s. 244A being apparently not in the nature of interest on debt is clearly taxable under Article 23 of the India-USA DTAA - Held that:- Following decision of Asstt. CIT Versus Clough Engineering Ltd. [2011 (5) TMI 562 - ITAT, DELHI] - issue is at least a debatable one and hence beyond the pale of section 154 of the Act. We therefore do not find any reason to interfere with the order passed by CIT(A). - Decided against Revenue.
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2014 (11) TMI 983
CENVAT Credit - Violation of Rule 3(5) of the Cenvat Credit Rules, 2004 - Held that:- On a perusal of the show cause notice it is seen that there is no clear finding, but the authority would state that it appears that the petitioner availed the credit on the basis of ineligible documents. The explanation of the petitioner was that subsequently the Bills of Entries were lost and therefore they lodged Police complaint and thereafter the copies were re-done, as the duly certified by the authorities have not been traceable. This explanation said to have been given by the petitioner appears to have not been considered by the respondent and issued the present show cause notice. - after the case has already been settled by the Settlement Commission, the question of re-opening the same does not arise, unless and until it is established that fraud has been committed. It is not the case of the respondent Department that fraud has been committed nor the Department approached the Settlement Commission in this regard - Decided in favour of assessee.
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2014 (11) TMI 982
Disallowance under section 14A - whether CIT(A) has failed to appreciate that investments in subsidiaries are out of commercial expediency and hence should not be considered for disallowance under section 14A - Held that:- Respectfully following the said decision of Asst. CIT v. Oriental Structural Engineers P. Ltd. [2011 (12) TMI 6 - ITAT DELHI] wherein held that no expenses and interest attributable to the investments made by the assessee in SPVs can be disallowed under section 14A read with rule 8D because it cannot be termed as expense/interest incurred for earning exempt income, we direct the Assessing Officer to recompute the disallowance under section 14A by excluding the investments made in special purpose vehicles and consider only the balance investments for the purpose of disallowance under section 14A of the Act.
The Assessing Officer shall calculate disallowance under section 14A the interest expenses directly incurred for earning exempt income on the investments other than the investments made in special purpose vehicles plus 2 per cent. of the dividend income earned on the investments other than investments made in special purpose vehicles after verifying the total investments made by the assessee and after providing adequate opportunity of being heard to the assessee. - Decided in favour of assessee for statistical purposes.
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2014 (11) TMI 981
Penalty under section 271(1)(c) - claim of deduction under section 80-IB disallowed - CIT(A) deleted penalty levy - Held that:- The assessee while making claim of deduction under section 80-IB in computation of income disclosed complete facts and claimed to have permanent registration as small scale unit issued by the District Industries Centre, Patiala. The claim of the assessee was qualified by the auditor as well. The assessee referred to various notifications issued by the concerned Department through which time to time, the monetary limits were varying and ultimately the last notification was also favourable to the assessee.
In the case of the assessee, the value of exclusive plant and machinery as on April 1, 2004 was ₹ 2.93 crores and because of the addition made in the assessment year under appeal of ₹ 58.33 lakhs, the total investment comes to ₹ 3.51 crores.
It is, therefore, clear that the assessee was small scale industrial unit and was entitled for deduction under section 80-IB earlier and it is only because of some additions made in year under consideration, the assessee would not have qualified for deduction under section 80-IB of the Act. The assessee, therefore, made a bona fide claim to deduction under section 80-IB as per the notification issued lastly which covered such unit upto ₹ 5 crores though there may be some restriction thereon. It is, therefore, not a case of filing of inaccurate particulars of income or concealing the particulars of income for imposition of penalty under section 271(1)(c) - Decided in favour of assessee.
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2014 (11) TMI 980
Deduction under section 10A - whether to be allowed prior to setting off of unabsorbed losses and unabsorbed depreciation or not? - Held that:- In terms of the decision of the hon'ble Supreme Court in Himatsingka Seide Ltd. v. CIT [2013 (10) TMI 823 - SUPREME COURT] we hold that the unabsorbed depreciation shall form part of the current year's depreciation and the same is required to be deducted before allowing deduction under section 10A of the Act. However, the unabsorbed business loss has to be deducted only from the profit available after allowing deduction under section 10A of the Act. Accordingly, we modify the order of the learned Commissioner of Income-tax (Appeals) and direct the Assessing Officer to compute the total income in terms of the abovesaid discussion.
Applicability of provisions of section 115JB to the unit located at special economic zone? - Held that:- The profits of the special economic zone unit are not required to be included in computing the book profit under section 115JB of the Act. See Genesys International Corpn. Ltd. Versus Assistant Commissioner of Income-tax, Circle 8(1) [2012 (12) TMI 491 - ITAT MUMBAI ] - Decided in favour of assessee.
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2014 (11) TMI 979
Commission of offence under Section 9 - Validity of Order passed by the Magistrate - Held that:- Petitioner filed a written submission in support of his earlier discharge application u/s 245(2) Cr.P.C. It further appears that the learned Magistrate has not decided the said application of the petitioner claiming discharge, rather he fixed the next date for remaining evidence u/s 244 Cr.P.C., whereas this Court vide order dated 6-12-2013 has directed to decide the said discharge application on merit in accordance with law within a period which shall not exceed a period of three months. This court has also observed that if the concerned court after hearing the counsel for the accused persuaded to have the view that the accused ought not to have been summoned and the charge is groundless, it shall not abstain from discharging the accused only on the ground that the material available at the time of summoning was the same, which is available on record at the time of hearing the discharge application u/s 245(2) Cr.P.C. and on the other hand if the lower court even after hearing the counsel for the accused holds the view that the accused has been rightly summoned and the material produced by the complainant does not indicate the charges to be groundless it shall make an order to that effect and proceed further in the matter in accordance with law and shall also be free to adopt such measures to procure the attendance of the accused as the law permits. - order dated 26-7-2014 passed by the Magistrate concerned does not appear to be proper and accordingly the learned Magistrate is directed to decide the application for discharge moved on behalf of the petitioner u/s 245(2) Cr.P.C. within a period of three months
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2014 (11) TMI 978
Maintainability of appeal - Section 35G - Held that:- Under Section 35G of the Act, appeal before the High Court is maintainable against the order passed by the Customs, Excise and Service Tax Appellate Tribunal, only when it does not relate to determination of any question having a relation to the rate of duty of Excise or to the value of goods for the purpose of assessment. Appeals on the said two issues are maintainable before the Supreme Court under Section 35L of the Act. - present appeals are not maintainable before the High Court and are accordingly directed to be returned - Decided against Revenue.
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2014 (11) TMI 977
Levy of interest under section 234B - Provisions of section 132B of the Income-tax Act seized cash - Held that:- Any infirmity in the order of the learned Commissioner of Income-tax (Appeals) in directing the Assessing Officer to reduce the interest under section 234B of the Income-tax Act. It is not in dispute that the assessee made a request for adjustment of cash so seized towards advance tax instalments. The issue is now settled by the hon'ble Punjab and Haryana High Court in favour of the assessee in the case of Arun Kapoor (2010 (7) TMI 610 - Punjab and Haryana High Court). Merely because the special leave petition of the Department is pending before the hon'ble Supreme Court, is no ground to show disregard to the judgment of the hon'ble High Court. The authorities below are bound to follow the decision of the hon'ble High Court. Accordingly, there is no infirmity in the order of the learned Commissioner of Income-tax (Appeals) in deciding the issue in favour of the assessee by following the judgment of the hon'ble jurisdictional High Court - Decided against Revenue.
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2014 (11) TMI 976
Nature of income - interest on deposit, interest on staff loan, interest on Government Securities, service charges for handling UNDP programme, miscellaneous income, profit on sale of fixed assets, difference in exchange, commitment fee, application fee, MNES service charges - business income OR Income from other sources - Held that:- The correct nature of the above items of income, as to whether falling under the head "Income from other sources" or "Profit and gains of business or profession", cannot be determined at our end in the light of the non-speaking order passed by the authorities below on the exact nature of such income. The Tribunal can adjudicate when some finding is returned, either way, by the authorities below in respect of such items of income. In the absence of any such finding, we are handicapped to adjudicate their nature. In our considered opinion, the ends of justice would meet adequately if the matter is sent back to the Assessing Officer for elaborating, considering and then deciding the true nature of income of the above discussed items in the light of the judgment of the hon'ble jurisdictional High Court by means of a speaking order. - Decided in favour of assesse for statistical purposes.
Non-granting of exemption under section 10(23G) of the Act in respect of the abovereferred items of income - Held that:- Only when the correct nature of income is determined as to whether it is "income from other sources" or "business income", that the position regarding the allowability or otherwise of exemption under section 10(23G) can be ascertained. We, therefore, direct the Assessing Officer to decide the question of exemption under section 10(23G) in respect of the above items of income, after first ascertaining the correct nature of income as discussed above.
Disallowance of depreciation - CIT(A) allowed the claim - Held that:- It has not been denied by the Assessing Officer that the assessee exercised dominion over such property having right to occupy and use the same. In such circumstances, the assessee shall be treated as the owner of such properties entitled to claim of depreciation. In so far as the second objection of the Assessing Officer about the claiming of depreciation on the cost of land is concerned, we agree in principle that there can be no question of allowing depreciation on the cost of land. The learned authorised representative contended that the value of the asset under this block does not include the cost of land. In our considered opinion, it would be in the fitness of things, if the impugned order on this issue is set aside and the matter is sent back to the Assessing Officer for identifying the cost of land, if any, included in the amount on which depreciation has been claimed. We order accordingly and direct the Assessing Officer to refuse depreciation on the cost of land, if any, included in such gross value on which depreciation was claimed by the assesse - Decided partly in favour of revenue.
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2014 (11) TMI 975
Exemption under section 10B denied - Held that:- Transfer of right to use the software in media form, i.e., in the form of compact disc etc., was held to be sale of goods. The hon'ble Supreme Court in the case of CIT v. B. Suresh [2009 (3) TMI 4 - SUPREME COURT] where the issue arose whether exploitation of a film right which were transferred by the assessee in India to abroad would constitute export for the purposes of deduction under section 80HHC of the Act, it was observed that the telecast ing rights fell in the category of articles of trade and commerce and hence within the category of "merchandise" and the transfer of the said rights by way of lease fell within the meaning "sale" and would attract section 80HHC.Therefore the issue of exemption under section 10B is squarely covered in favour of the assessee by the above decision.
disallowances of expenses - Held that:- Whatever disallowances are made, such income in turn becomes eligible for exemption under section 10B of Income-tax Act. Therefore we agree with the findings of the learned Commissioner of Income-tax (Appeals) that there was no purpose of making such additions and in our opinion, such additions have been rightly deleted - Decided against revenue.
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2014 (11) TMI 974
Penalty u/s 271AAA - Held that:- As relying on case of CIT v. Mahendra C. Shah [2008 (2) TMI 32 - GUJARAT HIGH COURT] it becomes clear that if no question is asked during the statement recorded under section 132(4) the assessee cannot be expected to further substantiate the manner of earning of income. Since taxes have already been paid, therefore in our opinion, penalty could not have been levied. Accordingly we set aside the order of the learned Commissioner of Income-tax (Appeals) and delete the penalty. - Decided in favour of assesse.
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2014 (11) TMI 973
Validity of tribunal's order - Decision given on the basis of precedent decision - Port services - Classification of service - Held that:- Tribunal has committed no error. Firstly the decision of Ramdev Food Products Pvt. Ltd. (2010 (6) TMI 178 - CESTAT, AHMEDABAD) on which Tribunal has placed reliance has been upheld by this Court vide decision dated 6-12-2012. Secondly as finding of fact Commissioner has held that services were provided by port itself. That being the position and in view of the fact that Tribunal had upheld this finding, entire controversy is substantially narrowed down. Further we notice that definition of taxable service contained in Section 65(105)(zn) came to be amended with effect from 1-7-2010 - in the clarification issued by the Board in its circular dated 12-3-2009 to a query “the services provider providing services to the exporter provides various services. But he has registration of only one service. The refund is being denied on the grounds that the taxable services that are not covered under the registration are not eligible for such refunds.” - No question of law arises - Decided against Revenue.
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2014 (11) TMI 972
Waiver of pre-deposit of service tax - Discrepancies in the ST-3 returns and the balance sheet submitted by the petitioner - Security agency and manpower supply services - Held that:- Adjudicating authority contemplates that service tax under the services of Security Agency and Manpower Supply Services have not been paid as shown in the balance sheet which attracts violation of the provisions of Sections 67, 68, 69 and 73 of the Finance Act, 1994. The adjudicating authority cannot travel beyond the show cause notice and should have confined its consideration within the compass thereof. The Tribunal ought to have taken into account the above aspect and should not have shirked its responsibility by mere saying that the aforesaid services were culled out from the balance sheets submitted by the petitioner before the adjudicating authority. - Tribunal ought to have given a total waiver of pre-deposit of the service tax relating to the Cleaning Services, Supply of Tangible Goods Services, Business Auxiliary Services and Consulting Engineers Services amounting to ₹ 29.44 lakhs. The adjudicating authority has given the dictionary meaning of the word ‘Watch and Ward’; and the meaning attribute to the security services and has held that those cannot stand on a separate pedestal. The finding does not appear, prima facie, to be perverse and without any basis.
Once the Tribunal found that the petitioner should be directed to deposit 25% of the service tax, the petitioner shall deposit the same on the Security Service component, excluding the said sum of ₹ 29.44 lakhs. - stay order modified.
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2014 (11) TMI 971
Service Tax Voluntary Compliance Encouragement Scheme, 2013 - Declaration of tax - Held that:- The scheme makes no difference between tax dues which are short-paid due to bona fide error and one which flows from deliberate inaction. There is no power for waiving or relaxing the condition of depositing 50% tax dues flowing from Section 107. It would not be possible for this Court to exercise writ jurisdiction to direct the authority, in plain terms, which the statutory provision does not permit.
Only after the taxes are fully deposited stage-wise that the declaration under Section 107 would be accepted. Section 110 only pertains to recovery of the taxes declared, but not paid. This provision has no bearing on the invalidity of declaration when the declarant fails to deposit the taxes as provided in sub-sections (3) and (4) of Section 107. If we interpret Section 110, as urged by the learned counsel for the petitioner, that it encompasses both the cases of delay in depositing the taxes at the first stage of sub-section (3) of Section 107 and second stage of sub-section (4) of section 107, the proviso to sub-section (4) would be rendered wholly redundant. If as suggested, shortfall in the taxes could be accepted after charging interest under Section 110, there was no need to make special proviso for extending time for depositing the remaining of the taxes under sub-section (4) of Section 107. Further, Section 110 pertains to compulsory recovery of taxes with interest. Sub-sections (3) and (4) of Section 107 refer to voluntary tax deposit by a declarant in terms of the scheme. Both these operate in separate fields. - Decided against assessee.
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2014 (11) TMI 970
Maintainability of appeal - refund claim or levy of service tax - Export of services - marketing of foreign Principal’s products in India - Rule 3(1)(iii) of the Export of Service Rules, 2005 - Held that:- The precise issue, which had arisen was whether the assessee was engaged in export of services and, therefore, whether service tax was payable. Reliance was placed by the respondent-assessee on the Rules to make the claim for refund. Prayer for consequential refund could only be granted in case the service rendered was an “export” and, therefore, no service tax was payable and leviable on the said service in terms of the Rules and the circulars/notifications. In these circumstances, we do not think that the appeal is maintainable before the High Court and the same is accordingly directed to be returned. The appellant, if aggrieved and wants, can take appropriate steps as per law. - Decided against Revenue.
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