|
Advanced Search Options
Case Laws
Showing 301 to 320 of 1396 Records
-
2021 (4) TMI 1096
Levy of service tax - reimbursement of the damage of the municipal roads due to such work - section 174 (2)(e) of the CGST Act - HELD THAT:- There is no scope for passing any interim order, as prayed for, in the writ petition as the same will amount to passing of final order in the writ petition. An issue, however, remains to be adjudicated as to whether the petitioner is liable to pay service tax in view of the notification and the fate of ₹ 18,90,432/- paid by the petitioner as GST.
Let this matter appear under the heading “Hearing” on 25th February, 2021.
-
2021 (4) TMI 1095
Opening of portal for filing of form GST TRAN-I electronically or to accept the same manually - migration to GST regime - Kerela VAT Act - HELD THAT:- When the first respondent had all valid reasons to assume that the facilities to upload the necessary form was available till 30.12.2017, it is not available in the eye of law for the respondents to loathe the action of the first respondent in attempting to upload on 29.12.2017 - It is an undisputed fact that the assessees as well as the department have faced several difficulties, especially during the transitional stage of the new tax regime and even a Grievance Redressal Committee had also been formed for redressing the grievance of the dealers.
The learned Single Judge was perfectly justified in issuing the judgment impugned - Appeal dismissed.
-
2021 (4) TMI 1094
Confiscation of goods - jewellery items - evasion of GST or not - HELD THAT:- Perusal of section 129 of the GST Act, 2017 makes it clear that the authorities under the Act are vested with powers to detain or seize and after detention or seizure to proceed further in the matter for assessing the tax and penalty, in case if it is found that the person transporting the goods or storing the goods while they are in transit indulge in contravention of the provisions of the GST Act or the Rules made thereunder. However, Section 130 of the GST Act deals with mens rea of a person who intends to avoid payment of taxes. If any person supplies or misuses any goods in contravention of the provisions of the GST Act or Rules with intend to evade payment of taxes or fails to account for any goods, on which he is liable to pay tax, the provisions of Section 130 of the GST Act applies.
Notice issued under section 130 of the GST Act (Ext.P2) makes it clear that, officers of the respondent department during shadow operation noticed two persons entering and coming out of the jewellery shop. The bags held by them were checked and those were found to be containing gold ornaments weighing 2270.13 grams including stone weight. Ext.P2 notice makes it clear that goods were not accompanied by any documents showing or reflecting payment of tax on them as per the provisions of the GST Act, 2017 - petition dismissed.
-
2021 (4) TMI 1093
Refund of unutilized input tax credit - Validity of the attachment of the bank account of the petitioner - HELD THAT:- Without expressing any opinion on the stand taken by the respondents at this stage, we are of the view that petitioner may file rejoinder affidavit to the stand taken by the respondents so that the case can be decided one way or the other.
Let the rejoinder affidavit be filed within two weeks.
-
2021 (4) TMI 1092
Revenue neutrality - issue is revenue neutral without involving of any out flow of net tax to the Government - suppression with intent to evade tax or not - extended period of limitation - reimbursement of actual expenses paid to another service provider - service also ought to have been provided by the appellant - pure agent services - omission to mention certain details in the periodical returns to be filed with the authorities - constitutes evidence of suppression of facts with a deliberate and wilful intention to evade tax or not.
When actual expenses paid to another service provider are reimbursed by the service receiver, can still the authorities hold that that service also ought to have been provided by the appellant and therefore, the charges in this regard cannot be excluded as charges paid in the capacity as a 'Pure Agent'? - HELD THAT:- The issue was held in favour of the assessee in a decision of the Hon'ble Supreme Court in UNION OF INDIA AND ANR. VERSUS M/S. INTERCONTINENTAL CONSULTANTS AND TECHNOCRATS PVT. LTD. [2018 (3) TMI 357 - SUPREME COURT] where it was held that Realising that Section 67, dealing with valuation of taxable services, does not include reimbursable expenses for providing such service, the Legislature amended by Finance Act, 2015 with effect from May 14, 2015, whereby Clause (a) which deals with ‘consideration’ is suitably amended to include reimbursable expenditure or cost incurred by the service provider and charged, in the course of providing or agreeing to provide a taxable service. Thus, only with effect from May 14, 2015, by virtue of provisions of Section 67 itself, such reimbursable expenditure or cost would also form part of valuation of taxable services for charging service tax.
As this issue is decided in favor of assessee, other issues becomes irrelevant to be considered - appeal allowed - decided in favor of assessee.
-
2021 (4) TMI 1091
Input tax credit - seeking rectification of the GSTR-1 Form for the period of January 2018 to March 2018 - application was rejected on the ground that the period for making such an application expired at the end of September 2018 as per Section 37 of the West Bengal Goods and Services Tax Act, 2017 - period of January 2018 to March 2018 - HELD THAT:- As per Section 37(3) of the West Bengal Goods and Services Tax Act, 2017, It is to be noted that the Act does not provide any provision for appeal. Furthermore, there is no provision for condoning of such a delay.
There are no reason to interfere as the statute has provided a period of limitation for seeking rectification. The writ court cannot, by itself, condone such a limitation period. Condoning such delay would make the provision otiose and open the floodgates for similar cases - application dismissed.
-
2021 (4) TMI 1090
Penalty u/s 271(1)(c) - non-disclosure of income in the return - AO observed that the assessee earned remuneration from a firm which was credited to the capital but not offered for taxation - HELD THAT:- A copy of the notice issued u/s 274 of the Act has been placed in the appeal folder, from which it is discernible that the AO did not strike off either of the two limbs viz., concealment of the particulars of income; and furnishing of inaccurate particulars.The penalty order came to be passed by holding that the assessee concealed his income.
Recently, a full Bench of Hon‟ble Bombay High Court in Mohd. Farhan A. Shaikh [2021 (3) TMI 608 - BOMBAY HIGH COURT] considered this very issue. Answering the question in affirmative, the Full Bench held that a defect in notice of not striking the relevant words vitiates the penalty even though the AO had properly recorded the satisfaction for imposition of penalty in the order u/s 143(3) of the Act.
Hon‟ble Bombay High Court in Pr.CIT Vs. Golden Peace Hotels and Resorts (P.) Ltd. [2021 (3) TMI 195 - SC ORDER] also took similar view that where inapplicable portions were not struck off in the penalty notice, the penalty was vitiated. SLP of the Department against this judgment has been recently dismissed in Pr.CIT Vs. Golden Peace Hotels and Resorts (P.) Ltd. [2020 (2) TMI 333 - BOMBAY HIGH COURT]. It is clear that where the charge is not properly set out in the notice u/s 274 viz., both the limbs stand therein without striking off of the inapplicable limb, but the penalty has been, in fact, levied for one of the two, such a penalty order gets vitiated.
We find from the notice u/s 274 that the AO did not strike out one of the two limbs though the penalty was imposed with reference to the first one only, namely, concealment of particulars of income.
-
2021 (4) TMI 1089
Confiscation - redemption fine - penalty - import of seafood for the purpose of export and trade - Frozen Pangasius Fillet Untrimmed 100% Non IQF - quality requirements of FSSAI and the FSS Act complied or not - HELD THAT:- The appellant while placing purchase order clarified to the vendor that the goods in question should be in compliance with the Indian Standards – Food safety Standards (Contaminants, Toxins and Residues) Regulation, 2011 and Indian Food Safety and Standards Authority of India Regulation for microbiological requirements for fish and fishery products and also to meet other safety standards. In order to meet these standards, the vendor supplied the test certificate issued by the Ministry of Agriculture and Rural Development, Social Republic of Vietnam which certified that the goods imported was in compliance with FSSAI.
Further, on subsequent laboratory analysis, the said product failed in two out of eighteen quality and safety parameters and as a result of which NOC was not issued by the Food and Safety Standard Authority - findings of both the authorities that the goods are liable for confiscation under Section 111(d) of the Act is not legally justified.
The appellant had no intention to violate FSSAI and FSS Act and had no intention to import goods contrary to the prohibition stipulated in the Act or any other law for the time being in force. Hence, the imposition of redemption fine and penalty is not sustainable in law - Appeal allowed - decided in favor of appellant.
-
2021 (4) TMI 1088
Oppression and mismanagement - Siphoning of funds - diversion of funds - investigation of the Respondent No. 1 Company's affairs by Registrar of Companies - HELD THAT:- It is clear that the NCLT may direct the Central Government to investigate under Section 210 (2) of the Companies Act 2013. After a reference from the NCLT, the Central Government has to mandatorily appoint an Inspector under Section 210 (2) of the Act. Therefore, before the Learned NCLT passes such an order, it will follow as a natural corollary that the Learned NCLT, at least form prime facie opinion, based on the records available and the submissions made, that such an investigation into the affairs of the Company was necessary, and such direction, in any event, ought to be issued to the Central Government and not to the Registrar - the direction issued by the Learned NCLT appointing the Registrar of Companies to investigate into the affairs of Respondent No. 1 Company violates the provisions of the statute, in as much as in terms of Section 210 (2) of the Companies Act 2013, such a direction can be given only to the Central Government and not to the Registrar. In terms of Section 213 of the Companies Act 2013, such a direction can be given, once again, only to the Central Government and not to the Registrar, and only upon the satisfaction of the conditions precedent specified therein.
The Learned NCLT erred in directing the Registrar of Companies to investigate into affairs of Respondent No. 1 Company, as the said Directions violate the statutory provision of Section 210 (2) and Section 213 of the Companies Act 2013 - Appeal allowed in part.
-
2021 (4) TMI 1087
Rectification of mistake - Tribunal in not discussing and in not adjudicating on the objection of the assessee with regard to the comparability of the MPS Ltd to the assessee company - HELD THAT:- We find that there is an inadvertent mistake in the order of the Tribunal in not discussing and in not adjudicating on the objection of the assessee with regard to the comparability of the MPS Ltd to the assessee company and therefore, there is a mistake apparent from the record which needs rectification.
Further, we also find that the assessee has filed additional evidence with regard to the comparability of MPS Ltd to the assessee company and therefore, it requires admission and remand of the issue to the file of the Assessing Officer/TPO for verification and re-consideration.
-
2021 (4) TMI 1086
Refund of Customs Duty - duty paid under protest - claim rejected on the ground that appellant has not challenged the assessment of Bill of Entry not got it reassessed before or after out of charge of goods - HELD THAT:- Though the refund has been rejected by the original authority but the original authority has observed that the importer had an option to file an application for amendment of the Bill of Entry under Section 149 of the Customs Act, 1962 to rectify any mistake in the Bill of Entry based on the documents available at the time of importation but the learned Commissioner while passing the impugned order in para 12 denied the right of the appellant to seek amendment of Bill of Entry as permissible under Section 149 of the Customs Act, 1962. Further, it is found that the Revenue has not challenged the show-cause notice as well as the Order-in-Original allowing the option to the appellant to seek an amendment in the Bill of Entry as permissible under Section 149 of the Customs Act, 1962 but the same was suo moto set aside by the learned Commissioner which is against law as held in various decisions relied upon by the appellant.
An identical issue has been considered by two Division Benches of this Tribunal in the case of M/S. CALISON FIBRES PVT LTD. VERSUS COMMISSIONER OF CUSTOMS (IMPORT) , NHAVA SHEVA [2019 (7) TMI 1060 - CESTAT MUMBAI]. In para 5 in the case of Calisons Fibres Pvt. Ltd., the Division Bench directed that the request for reassessment be treated as application under Section 149 of Customs Act, 1962 for amendment of Bill of Entry and accordingly, directed the proper officer to consider the said application and pass appropriate order in accordance with law after granting opportunity of hearing to the appellant.
Appeal disposed off.
-
2021 (4) TMI 1085
TP Adjustment - comparable selection - exclusion of Microgenetics Systems Ltd. by the TPO was done after applying the turnover-filter of ₹ 5 crores - HELD THAT:- As AR’s submissions that there is no linkage between the turnover and profit margins though are not valid, but the TPO has also not given any concrete findings as to why this particular comparable was earlier selected and was only excluded following the turnover filter of ₹ 5 crores. This filter whether strictly followed by the TPO or not in other comparables is also not emerging from the order of the TPO. Thus, it will be appropriate to direct the TPO/AO for taking cognizance of this comparable after applying all the filters as well as the functional profile of the comparable into account and thereafter if all the parameters are proper, then select this comparable. Thus, Ground No. 2 of the assessee’s appeal is partly allowed for statistical purpose.
Rejection of R-Systems International Ltd. - As from the perusal of the annual reports, it can be seen that audited financial data for the relevant previous year (April, 2009 to March, 2010) is available in the public domain relating to four quarters. Merely having different financial year cannot discard this comparable from the list of comparables. Thus, we direct the TPO/AO to consider this comparable after applying all the filters as well as the functional profile of the comparable into account and thereafter if all the para-meters are proper, then select this comparable. Thus, Ground No. 3 of the assessee’s appeal is partly allowed for statistical purpose.
TCS Eserve International and TCS E-Serve Limited - It can be seen that the functional profile of these comparables are different from that of the assessee company. Both these entities are involved in software testing, verification and validation of software which falls in the domain of “software development” services. Besides this separate segmental details pertaining to ITeS/BPO activities are also not available in their financial statements.Therefore, we direct the TPO/AO to exclude both these comparables i.e. TCS Eserve International and TCS E-Serve Limited from the final list of comparables.
Third party cost recoveries from AE for the purpose of applying the mark-up - HELD THAT:- As per the terms of the service agreement with the overseas AE, such expenses are recovered by the assessee on a costto- cost basis, without charging any mark-up. The CIT(A) has rightly held that the assessee should have marked up these expenses by a profit-margin before making the recoveries as the said expenses are part and parcel of the business of the assessee and forms part of the total cost based. Besides this the decisions of Cheil Communication India Pvt. Ltd. [2010 (11) TMI 630 - ITAT DELHI] is altogether on a different footing and the factual aspects are totally different from that of the assessee’s case herein. In Cheil Communications, the issue was that of remunerated by its associated enterprises on the basis of a fixed commission/charges based on expenses or cost incurred by the assessee for release of a particular advertisement as well as on advisory services. Thus, Ground No. 7 of the assessee’s appeal is dismissed
Working capital adjustments on account of outstanding receivables - HELD THAT:- As submission of the Ld. AR was that the assessee could not recover two invoices dated 31.03.2009 and 30.10.2009 within the stipulated credit period of 30 days and there was delay of 11 and 6 days respectively in collecting these invoices on an isolated basis. But the Ld. AR claims that the weighted average period of realization with respect to all invoices during the relevant year put together was only 20.52 days. This issue needs to be verified properly by the TPO/AO, therefore, we are remanding back this issue to the file of the TPO/AO for proper adjudication after taking cognizance of the actual delay in collection of invoices. Needless to say, the assessee be given proper hearing after following principles of natural justice.Ground No. 8 of the assessee’s appeal is partly allowed for statistical purpose.
Exclusion of four comparables Accentia Technology Pvt. Ltd., Eclerx Services Ltd., I Gate Global Services and Infosys BPO Ltd. - HELD THAT:- From the perusal of these companies profiles and the findings given by the CIT(A) is apt. As in case of Accentia Technology Pvt. Ltd. there was extraordinary event that of merger took place during the year. In case of Eclerx Services Ltd., the functional profile is altogether different than the assessee company. In case of I Gate Global Services separate segmental data relating to IT enabled Services and IT Services were not available. In case of Infosys BPO Ltd., it is a giant in the area of the software development, besides this it assumes all risk leading to higher profits as well as there was an extra ordinary economic event during the year as it acquired membership interest in Machenic Systems LLC. Thus, all these comparables were rightly excluded by the CIT(A). Hence, all four grounds of Revenue’s appeal are dismissed.
-
2021 (4) TMI 1084
Revision u/s 263 by CIT - claim of assessee in respect of LTCG wherein no enquiry on the part of AO conducted - original assessment has scrutinised the assessment for AY 2014-15 since it was selected by the CASS especially for “Suspicious Long Term Capital Gain on Shares (inputs from the Investigation Wing)” - HELD THAT:- We note that pursuant to CASS, the AO had taken note of this issue i.e. Suspicious Long Term Capital Gain on Shares (inputs from the Investigation Wing) [ LTCG] and has called for the documents from the assessee to substantiate the genuineness of the transaction and pursuant to which the assessee had filed the documents which the AO in his assessment order has acknowledged to have verified from the share trader, which facts are evident from the perusal of the original scrutiny assessment order - So, the AO’s action on the issue of accepting the claim of assessee in respect of LTCG which the Ld Pr CIT would like to rake up by passing the impugned order has already undergone enquiry by the AO; meaning the AO’s action in the first round cannot be termed as a case of “no enquiry” on the issue of LTCG. Resultantly, the Ld. Pr. CIT cannot brand the action of AO to accept the claim of assessee in respect of LTCG as a case of no enquiry on the part of AO to term it as an erroneous order; and which finding could have facilitated him to usurp/interfere by exercising his revisional jurisdiction u/s. 263.
We should bear in mind that in case if he wanted to interfere in the present case (since AO had enquired) then he (Ld. Pr. CIT) himself ought to have conducted enquiry to bring out the fallacy as to show how the enquiry conducted by the AO was erroneous. And for that the Ld. Pr. CIT while conducting enquiry is supposed to confront the assessee during the revisional proceedings with the materials which he is going to use against it and after eliciting the reply of the assessee then only could have passed the impugned order directing the AO to make the addition on LTCG. Failure to do so vitiates the impugned order directing addition of LTCG
As revenue could not point out any difference in the law and facts in respect of the facts of this present case in hand as well as in the case of Ritin Lakhmani & Ors [2020 (11) TMI 768 - ITAT KOLKATA] then, we are bound by the judicial discipline to follow the decision of the coordinate bench of this Tribunal in the case of Ritin (supra) wherein hold that the order passed u/s 263 of the Act is bad in law.
Decided in favour of assessee.
-
2021 (4) TMI 1083
Computation of capital gains under section 50 - no depreciation had been claimed or allowed in respect of the asset - Whether on Sale of any asset falling in the block of assets, the same has to be reduced for the WDV of the said block of Asset any not from the individual asset as done by Assessing Officer? - as per assessee no deprecation was claimed on these 17 units since Financial Year 2011-12 but the Assessing Officer treated the gain on sale of these units as short term capital gain under section 50C of the Act and computed the capital gain - HELD THAT:- We noted that the assessee has claimed depreciation on the property sold as Lunkard Sky Max of 17 units in AYs 2010-11 and 2011-12. But from AY 2012-13 i.e. Financial Year 2011-12 out of 17 units 7 units were given on rent and accordingly rental income was shown as income from house property and no depreciation was claimed on this property.
We noted that this issue has been decided by Co-ordinate Bench of Mumbai in the case of M/s Prabodh Investment & Trading Company Pvt. Ltd [2011 (2) TMI 1433 - ITAT MUMBAI] as held if no depreciation had been claimed or allowed in respect of the asset, even though for an earlier period depreciation was claimed and allowed, from the year in which the depreciation claimed was discontinued, the asset would cease to be a business or depreciable asset and if the asset had been acquired beyond the period of thirty six months from the date of sale, it would be a case of long term capital gains. In our humble understanding, the ratio of the order appears to be that the asset had ceased to be a business asset and had become an investment
Once, this is a fact that the moment assessee stopped claiming depreciation in respect of property and let out the same for rent, it ceases to be a business asset and thus, the profit or gain arising out of sale of property is to be considered as long term capital gain after indexation. - Decided in favour of assessee.
-
2021 (4) TMI 1082
Addition u/s 68 - Unexplained loans - CIT(A) held that mere establishing of the identities of the lenders of loan together with the fact that the transactions were made through cheques could be itself establish the genuineness of the transactions - HELD THAT:- The assessee has complied with the basic conditions of the provision of 68 by submitting the confirmations of loan, copies of the Bank Statements and Copies of Income Tax Return of these four loan creditors. We noted from the assessment order that although the Assessing Officer has written a very elaborate order but he has missed the basic three ingredients of the provision of section 68 of the Act. Hence, not carried any enquiry qua these three conditions rather he mainly relied on the search conducted in the case of Bhawarlal Jain Group of cases. It is also not clear from the assessment order whether these loan parties are genuine or non-genuine and the amount received are unexplained but how. It is a fact that the assessee has discharged its primary onus by filing all these documents which the Assessing Officer should have verified and examined these parties.
The assessee has complied with the basic conditions of the provision of 68 by submitting the confirmations of loan, copies of the Bank Statements and Copies of Income Tax Return of these four loan creditors. We noted from the assessment order that although the Assessing Officer has written a very elaborate order but he has missed the basic three ingredients of the provision of section 68 of the Act. Hence, not carried any enquiry qua these three conditions rather he mainly relied on the search conducted in the case of Bhawarlal Jain Group of cases. It is also not clear from the assessment order whether these loan parties are genuine or non-genuine and the amount received are unexplained but how. It is a fact that the assessee has discharged its primary onus by filing all these documents which the Assessing Officer should have verified and examined these parties.
DR could not controvert the basic facts of the case except relying on the case law of Pawankumer M Sanghvi [2017 (5) TMI 1159 - ITAT AHMEDABAD] and Pr. CIT vs. NRA Iron & Steel (P) Ltd. [2019 (10) TMI 1178 - SUPREME COURT]. Without pointing out the factual aspect of this case, we cannot take it as legal proposition laid down in the given facts.
Hence, we are of the view that there is no infirmity in the order of the CIT(A) and hence, we confirm the same. The appeal of Revenue on this issue is dismissed.
Addition of commission paid at the rate of 3% on the above loans and addition of interest on the above loan transactions - HELD THAT:- Since, the CIT(A) has already held this loan as genuine and we confirmed the order of CIT(A), these grounds are consequential and hence, dismissed.
-
2021 (4) TMI 1081
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - lease deed - financial lease as per the terms laid down under the guidelines of “Indian Accounting Standards” or not - HELD THAT:- Reliance placed in the case of ASEA BROWN BOVERI LTD. VERSUS INDUSTRIAL FINANCE CORPN. OF INDIA [2004 (10) TMI 325 - SUPREME COURT]. This matter of “Asea Brown” related to lease finance agreement dated 4th December, 1990 with Respondent No.3 of that matter, pursuant to which the Appellant took 56 cars under the lease finance from Respondent No.3 in that matter. Subsequently, Respondent No.3 became notified party under Section 3(2) of the Special Courts (Trial of Offences Relating to Transactions in Securities) Act, 1992 due to certain illegal transactions covering period between 1.4.1991 and 6.6.1992. The transaction dated 4th December, 1990 was not referable to the concerned period. The Central Government appointed Respondent No.1 of that matter under Section 3(1) of 1992 Act over properties belonging to Respondent No.3.
Under Section 5(8)(d), we are concerned with Indian Accounting Standards. With this in view, if para – 63 of the Indian Accounting Standards (referred supra) is perused, the present lease deed does not have any Clause of transfer of ownership of the underlying asset (which is land) (and not flats harped on by Appellant) to the lessee or flat buyers who would be sub-lessees at the end of the lease term - Material is Para – 62 of Accounting Standards (referred supra) which states that a lease is classified as a finance lease “if it transfers substantially all the risks and rewards incidental to ownership of an underlying asset.” Paragraphs – 63 and 64 records the factors or indicators which individually or in combination are required to be seen if it is a financial lease. The Respondent has in comparative chart filed, referred to various clauses to forcefully put on record that the present lease deed is not a finance lease. Even without referring to them when we keep in view the guiding factor if the lease transfers “substantially all the risks and rewards incidental to ownership”, we find that the present lease deed hopelessly fails in this regard.
The Appellant, even after creating the lease kept with itself all the rights to control and monitor the project which was to come up. The Appellant of course now has tried to say in the Appeal that it was “only exercising minor supervision over the land use” (see 9.12 of the Appeal), which we do not agree to. What we can see from the Lease Deed which we have just referred in brief, is that the acts which could be performed by the lessee, were fully controlled by the Appellant. The lessee, of course, had the liberty to construct and transfer the flats by way of sublease. The above discussion shows that while risks and liabilities were transferred to the lessee, the rewards incidental to ownership were not transferred. There is no Clause of transfer of ownership at the end of lease term - when we have gone through the Lease Deed keeping the classification of leases and the indicators mentioned above, we do not find that the lease deed in question can be said to be a finance lease.
In the present matter, there is no sale of land. It is lease, for premium /rent with almost all rights controlled by the Lessor. We have gone through the provisions of Section 5(8)(f) and also when we keep the above observations of the Hon’ble Supreme Court of India, we are unable to persuade ourselves to accept the submission that when land is leased out, if premium is fixed and instalments are given, it should be treated as a financial lease. There are no substance in this arguement.
Appeal dismissed.
-
2021 (4) TMI 1080
Computing deduction u/s 10A - not considering the plea of the assessee that communication expenses should not be excluded from the export turnover for the purpose of computing deduction - HELD THAT:- we are of the opinion that this issue came up for consideration before the Hon’ble Karnataka High Court in the case of CIT v. Tata Elxsi Limited [2011 (8) TMI 782 - KARNATAKA HIGH COURT] wherein held that for the purpose of computing exemption u/s 10A of the Act, when export turnover in the numerator is to be arrived after excluding telecommunication expenses, the same should also be excluded in computing the export turnover as a component of total turnover in the denominator.
Methodology adopted by the assessee in allocating the common / indirect costs among its various segments - apportionment adopted by Cisco India a reasonable basis of allocation of common expenses incurred - HELD THAT: - This method of apportionment has also been consistently adopted by Cisco India on a year on year basis. It was further submitted that the Bangalore Bench of the Tribunal in assessee’s own case for A.Y. 2008-09 following the decision of the Hon’ble Delhi High Court in the case of CIT v. EHPT India (P) Ltd. [2011 (12) TMI 49 - DELHI HIGH COURT] and for A.Y. 2009-2010 [2014 (11) TMI 849 - ITAT BANGALORE] has upheld the method of allocation of the common expenses adopted by the assessee and held that where two basis of apportionment of common costs are available, any one of the basis should be consistently followed. Thus, since Cisco India has been following headcount basis for allocation from past 8 years the same basis should be followed for A.Y. 2008-2009 as well.
Further, the headcount basis of allocation of common expenses should be followed for A.Y. 2010-2011 as well.
Disallowance of deduction claimed in respect of forex fluctuation which is capital in nature - assessee failed to furnish the details with regard to the foreign exchange gain / or loss along with evidences to support the same - HELD THAT:- As decided in own case [2014 (11) TMI 849 - ITAT BANGALORE] the foreign exchange gain from software development services has to be considered as part of the income from software development services while computing the margin of the assessee and accordingly the margin of 12.67% computed by the assessee is directed to be adopted - Being so, we remit the issue to the files of the AO /TPO with a direction to the assessee to furnish the details of foreign exchange gain or loss. We also direct the A.O. to decide the issue in the light of the above order of the Tribunal in assessee’s own case above.
TP Adjustment - comparable selection - HELD THAT:- Companies functionally dissimilar with that of assessee need to be deselected from final list.
Not making suitable adjustments to account for differences in the risk profile of the assessee visà- vis the comparables - Taking the consistent view, we direct the AO/TPO to give proper risk adjustment as discussed in own case [2014 (11) TMI 849 - ITAT BANGALORE]
Computing the operating margin of Cyber Media Research Limited at 19.52% as against 12.88% computed by the assessee - HELD THAT:- This issue is remitted to the AO/TPO to re-compute the correct margin of operating margin of Cyber Media Research Limited, in accordance with law. Accordingly, this ground of the assessee is partly allowed for statistical purposes.
-
2021 (4) TMI 1079
Claim of exemption u/s 54 denied - investment of the sale consideration in the new residential house was made in the name of the mother of the assessee - HELD THAT:- On perusal of the appellate order, we find that the ld. CIT(A) has not disputed the eligibility of exemption under section 54 of the Act, but, to allow the benefit to the assessee, the assessee was required to furnish the proof that the capital asset acquired was assessed in the hands of the assessee as per the decision relied on by the assessee. As prayed by the ld. Counsel for the assessee, we direct the ld. CIT(A) to give one more opportunity to the assessee to furnish the proof that the capital asset acquired was assessed in the hands of the assessee and in case the assessee fails to furnish the evidence, the appellate order already passed by the ld. CIT(A) stands sustained. Appeal filed by the assessee is allowed for statistical purposes.
-
2021 (4) TMI 1078
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - time limitation - HELD THAT:- The instant petition is filed by the Applicant is well within limitation. That apart, the Application is also complete in all respect.
The documents so produce by the Financial Creditor clearly establish the 'debt and there is default on the part of the Corporate Debtor in payment of financial debt. Thus, under the facts and circumstances, the Applicant fulfils the requirement of the IB Code and the Applicant is a Financial Creditor within the meaning of Section 5 (7) & 5(8)(C) of the IB Code - it is evident that Respondent has committed a default in payment of financial debt and therefore, it is a fit case to initiate Corporate Insolvency Resolution Process by admitted the instant application.
Application admitted - moratorium declared.
-
2021 (4) TMI 1077
Concept of mutuality - Payment of interest / compensation to the members - members unanimously opined that they need to be compensated on account of delay in implementation of project failing which they may be forced to withdraw from the project and demand refund of advance paid to the assessee-society - Whether the assessee can be thrust upon the status of a mutual society? - HELD THAT:- In the instant case, the members even after obtaining site / plot from assessee-society once, is entitled to continue to retain his membership. Therefore, there is no contribution from his side though he is entitled to participate in the profits earned by the assessee-society, which can be distributed in the form of dividend. The very fact that bylaws of the assessee-society contained the provisions that payment of dividend to its members goes to show that it is not a mutual society and commerciality is very much inherent in the activities of the assessee-society. In this regard, clause 75(6) of the Byelaws of the assessee-society is relevant. Therefore, the action of the Assessing Officer in thrusting the concept of mutuality even when the assessee-society never claimed the concept of mutuality, is bad in law and is hereby set aside.
Whether the interest expenditure can be allowed as a deduction u/s 37 or u/s 36(1)(iii) of the I.T.Act? - Income Tax Authorities failed to appreciate that the money contributed by the members was invested in FD’s and the portion of the interest earned thereon was credited to the account of the members way of compensation for delay in allotment of sites to the members. Therefore, the interest paid on advances from members is chargeable on interest income earned from depositing the same with the bank by the assessee. In other words, there is a direct nexus between the contribution by the members, which was utilized for making fixed deposit to earn interest income and payment of portion of such interest income earned as compensation to members for delayed allotment of sites. Therefore, the interest credited to the members is wholly and exclusively for the purpose of business and entitled to deduction u/s 37(1) of the I.T.Act. For claiming expenditure u/s 37(1) of the I.T.Act, there was no need for a cause and effect relationship between an item of income and expenditure as claimed by the A.O. All that would be necessary is only that it is for the “purpose of business” and not necessary for earning of the income. In this context, reliance is placed on the judgment of the Hon’ble Apex Court in the case of Sassoon J David & Co. Pvt. Ltd. v. CIT [1979 (5) TMI 3 - SUPREME COURT]
Even assuming that interest income is assessed as income from other sources, whether the interest expenditure ought to be allowed as a deduction u/s 57(iii) of the I.T.Act.?- AO has taken a view that there is no obligation on the assessee-society to pay interest to its members when advance was received. Therefore, the A.O. concluded that there is no contractual obligation to pay interest. On the other hand, we are of the view that it is not the requirement under Contract Law that all terms of the contract be agreed upon upfront and there is no scope for alteration thereafter. In the instant case, the delay in procuring the land and formation of site was unforeseen at the initial stage when advances were collected by the assessee-society. Having parted with money and also with site allotment being delayed, the expectation of the members to be compensated by way of interest on their advances is only legitimate. In view of the foregoing reasoning, we are of the view that even assuming that interest income is to be taxed under the head “income from other sources”, the interest expenditure that is paid to the members of the assessee-society is to be allowed u/s 57(iii) of the I.T.Act. It is ordered accordingly.
............
|
9911796707
