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Showing 301 to 320 of 1585 Records
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2015 (8) TMI 1293
Foreign exchange loss / gain treated as operating in nature - Calculation of operating margin - Held that:- We observe that it has not been disputed that the foreign exchange gain/loss has arisen as a consequence of the realization of the consideration for rendering software development services and therefore there is no reason for its exclusion from the operating revenues for the purpose of calculating the operating margin of the assessee. Thus we hold that operating revenue should be computed by including the foreign exchange gain/loss. See SAP LABS India (P.) Ltd. Versus Assistant Commissioner of Income-tax, Circle-12 (3), Bangalore [2010 (8) TMI 676 - ITAT, BANGALORE ]
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2015 (8) TMI 1292
Input tax credit - MP VAT - Maintainability of writ petition - Input purchased from a registered dealer used by the assessee in manufacturing of bodies of motor vehicle - Infact, the components purchased was used for fabricating plant and machinery which is then used for manufacturing of the final manufacturing product i.e. the motor vehicle body. - Held that:- Leaving it to the revenue to decide such a question may not be proper. Instead, it would be more appropriate if we deal with such questions and decide it in this petition under Article 226 of the Constitution as it is a question with regard to interpretation of statutory provision and no disputed question of fact as canvassed by Shri Samdarshi Tiwari are available. - writ petition is maintainable.
If inputs or goods purchased are used in relation to manufacture of final product and even if its use may be as a plant or machinery or equipments or part thereof, in respect of the goods, specified as the final product, the benefit of MODVAT, CENVAT or “input tax rebate” can be claimed. Meaning thereby, it is not necessary that the goods purchased from the registered dealer which is known as “input” should be used directly for manufacture of the final product. It is sufficient if the input is used in respect of or in relation to a plant or machinery or a equipment which is ultimately used for manufacturing the final product. That in fact, should be the interpretation of the provisions of the Section.
From the order of the assessment it is seen that the Assessing Authority holds that if the components produced after manufacturing and processing of the material purchased from M/s Vijay Steels, is sold by the petitioner, they are entitled to rebate on input tax under Section 14 but because they have consumed it for use as a plant and machinery, they are not entitled to this benefit. This according to us cannot be the correct interpretation of Section 14(1)(a) sub rule (2) and (4).
If that be the intention of the legislature in giving input rebate to a dealer then it would be beyond the legislative purpose if the intention of the legislature is interpreted as done by the department by holding that the material used or consumed should be sold and should not be further used in respect of anything for the making of a final product which is ultimately sold. This could never be the intention of the legislature. - Benefit of input tax credit allowed - Decided in favor of assessee / petitioners.
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2015 (8) TMI 1291
Reference of constituting a five Member Bench - Valuation - deduction of cash discount - Held that:- Considering the submissions of both the sides and particularly that there is no need to refer the matter to five Member Bench in view of the Hon’ble Supreme Court decision in the case of CCE, Pune v. SKF India Ltd. (2009 (7) TMI 6 - SUPREME COURT ), we decline to answer reference as to whether, it is necessary to refer the matter to five Member Bench or otherwise. The appellant is at liberty to pursue the appeal before the learned Division Bench on merit and other issues, to canvass all points on the basis of binding decisions. Registry is directed to place the matter before regular Bench for appropriate order.
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2015 (8) TMI 1290
Addition on account of interest free advance given to sister concern - Held that:- It is evident that in assessment year 2006-07, the issue of disallowance of interest u/s 36(i)(iii) of the Act, on interest free advances made to sister concerns was examined by the Assessing Officer and it was held by the Assessing Officer that the interest free advances were made out of interest free funds to the extent available. It was only the excess advances, which were held to be made out of interest bearing funds and the provisions of section 36(i)(iii) of the Act were applied thereon. In the impugned assessment year, on the very same advances, the Revenue seems to be taking a different view, by holding that the entire interest free advances are out of interest bearing funds. There has to be consistency and definiteness in the approach of the Revenue in recognizing the nature of an account so that the basis of a concluded assessment would not be ignored. Having held the interest free advances to be out of interest free funds in assessment year 2006-07, the Revenue cannot now take a totally different view and hold the same advances to be out of interest bearing funds in the impugned year.
Even on merits it is clear from the facts stated above, that the assessee had enough interest free funds to advance interest free sums to its sister concern. - Decided against revenue
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2015 (8) TMI 1289
Levy of VAT or service tax - activity is in nature of sale or service - activity of providing passive infrastructure and related operations and maintenance services to various telecommunication operators in India - Held that:- When the petitioner has not transferred the possession of the passive infrastructure to the sharing telecom operators in the manner understood in law, the limited access provided to them can only be regarded as a permissive use or a limited licence to use the same. The possession of the passive infrastructure always remained with the petitioner. The sharing telecom operators did not therefore, have any right to use the passive infrastructure.
There is no intention on the part of the Indus to transfer the right to use; it is only a licence or an authority granted to telecom operator as defined in Section 52 of the Easements Act, 1952. A licence cannot in law confer any right; it can only prevent an act from being unlawful which, but for the licence, would be unlawful. A licence can never convey by itself any interest in the property - The entire MSA has to be read as a whole without laying any undue emphasis upon a particular word or clause therein. What is permitted under the MSA is a licence to the telecom operators to have access to passive infrastructure and a permission to keep equipments of the sharing telecom operator in a prefabricated shelter with provision to have ingress and aggress only to the authorized representatives of the mobile operator. - Decision in the case of INDUS TOWERS LTD. [2013 (6) TMI 81 - KARNATAKA HIGH COURT] followed.
The order of demand on the basis that the petitioner transferred the right to use passive infrastructure to the sharing telecom operators is quashed. - Decided in favor of assessee.
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2015 (8) TMI 1288
Grant of exemption from Entertainment Tax for Tamil movie - Held that:- any applicant, who is eligible to apply for grant of exemption from payment of entertainment tax, shall be called for screening of the film by the Committee within two weeks from the date of submission of the application. Such an intimation by the Committee shall be sent to the producer of the film within three days from the date of submission of the application. The producer shall make arrangements for screening of the film within a week from the date of submission of the application. The Committee shall send its recommendation to the State Government within a period of one week and the State Government shall take an appropriate decision within two weeks therefrom. The film shall be considered in accordance with date of application. To clarify, the chronology of the receipt of application shall be given the priority. - Appeals disposed of
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2015 (8) TMI 1287
Disallowance u/s 14A - Held that:- The issue of calculation of disallowance u/s 14A is restored to the file of the AO to re-compute the disallowance u/s 14A by taking into consideration the principles laid down by the co-ordinate bench of this Tribunal in the case of REI Agro Ltd. [2013 (9) TMI 156 - ITAT KOLKATA] wherein held that if there is any interest expenditure, which is directly relatable to any particular income or receipt, such interest expenditure is not to be considered under rule 8D(2)(ii). Also for bringing any interest expenditure, claimed by the assessee, under the ambit of rule 8D(2)(ii) it will have to be shown by the AO that the said interest is not directly attributable to any particular income or receipt - Decided in favour of assessee for statistical purposes.
Disallowance of the expenditure towards renewal of a mining lease/afforestation charges - revenue v/s capital expenditure - Held that:- In view of the decision of the Hon'ble Supreme Court in the case of Madras Industrial Investment Corporation Ltd. [1997 (4) TMI 5 - SUPREME Court] the allowance of this expenditure is to be staggered proportionately over the period of the lease and in proportion to the quantity of ore extracted from the said mine. In these circumstances, this issue is restored to the file of the AO for computation of the allowance of the afforestation charges as revenue expenditure in proportion to the quantum of iron ore extracted over the period of the lease.
TDS u/s 195 - non deduction of tds on commission to the foreign agents outside India by applying the provisions - disallowance u/s 40(a)(ia) - Held that:- Expenditure has been incurred by the Assessee for the purpose of the business of the Assessee itself. However, in respect of the issue as to whether the Assessee was liable to deduct TDS u/s 195 and whether the disallowance was liable to be made u/s 40(a)(ia) of the Act for non-deduction of the TDS u/s 195(1) of the Act, it is noticed that the provisions of Sec. 195 has been amended by the introduction of Explanation-II to the said section by the Finance Act, 2012 with retrospective effect from 1.4.1962 whereby it is clarified that “the obligation to comply with sub-section (1) and to make deduction thereunder applies and shall be deemed to have always applied and extends and shall be deemed to have always extended to all persons, resident or non-resident, whether or not the non-resident person has (i) a residence or place of business or business connection in India; or (ii) any other presence in any manner whatsoever in India.” In view of the introduction of Explanation - II to Sec. 195 of the Act, as the Assessee has not deducted TDS u/s 195, the disallowance made by the AO by invoking the provisions of Sec. 40(a)(ia) of the Act would have to be restored and we do so. - Decided in favour of revenue
Claim of depreciation @ 60% allowed on the UPS at par with the depreciation rate on computers. See assessee'swn case [2013 (4) TMI 814 - ITAT PANAJI]
Disallowance of expenditure of interest paid on loans taken at interest and advanced to the sister concerns without charging any interest - Held that:- As it is noticed that the Assessee has sufficient non-interest bearing funds available with it, the disallowance as made by the AO, and as deleted by the ld. CIT(A) stands confirmed.
Addition on account of notional loss on exchange variation - Held that:- This issue is restored to the file of the AO for re-adjudication in line with the decision of the co-ordinate bench of this Tribunal in the case of M/s. Majestic Exports [2015 (7) TMI 936 - ITAT CHENNAI ] wherein held held that Loss suffered on account of forex derivative contracts (Exotic Cross Currency Option Contracts) cannot be treated as speculative loss to the extent that the derivative transactions are not more than the total export turnover of the assessee. If the derivative transaction is in excess of export turnover, the loss in respect of that portion of excess transactions has to be considered as speculative loss because the excess derivative transaction has no proximity with export turnover.
Addition on account of repairs and maintenance of old vessels which were in the nature of current repairs - CIT(A) deleted the addition - Held that:- Nature of the expenditure is only for the purpose of maintaining the vessels sea-worthy and in accordance with the requirements of the Maritime Regulatory Authority and there is no increase in the capacity . Additions correctly delted
Disallowance of additional depreciation deleted
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2015 (8) TMI 1286
Assessment u/s 153C - Whether the hard disc found in the premises of the searched entity i.e. GLOBAL HERITAGE VENTURE PVT. LTD belonged to the Assessee for the purposes of Section 153 C of the Act as it stood prior to its amendment with effect from 1st June 2015? - Held that:- Assessing Officer failed to record his satisfaction in that regard in terms of the law as explained by the Court in Pepsico India Holdings (P) Ltd. v. ACIT [2014 (8) TMI 898 - DELHI HIGH COURT]
The finding of photocopies in the possession of a searched person does not necessarily mean and imply that they “belong” to the person who holds the originals - Possession of documents and possession of photocopies of documents are two separate things. The AO should not confuse the expression “belongs to” with the expressions “relates to” or “refers to” - Decided in favour of assessee.
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2015 (8) TMI 1285
Estimating the profit at 8% of the sale consideration - Appellate Authorities directing the Assessing Officer to allow the expenditure incurred towards 8 acres for development, when the Assessing Officer has taken into consideration the land developed in respect of 6 acres - Held that:- The Assessing Officer having accepted the fact that the agreement entered with S.N.Krishnaiah Setty is only in respect of 6 acres of land, while assessing the undisclosed income, had taken into consideration the entire 8 acres of land , which is contrary to law. In the real estate business the department had accepted the net profit of 8% on the turnover for the last so many years in respect of the M/s.Skytop Builders Pvt.Ltd. The same benefit was extended in case of assessee also. Section 44-AD of the Act contemplates that in the case of an eligible assessee engaged in an eligible business, a sum equal to 8% of the total turnover or gross receipt of the assessee in the previous year on account of such business or, as the case may be. In the instant case, admittedly, the assessee had not maintained books of accounts.
The assessee is a doctor by profession, his father and brother are involved in the real estate business. For the last so many years, the Department has accepted the net profit at 8% on the total turnover of the company M/s. Skytop Builders Pvt. Ltd. Accordingly, the Appellate Authority as well as the Tribunal accepted the contention of the assessee and taken 8% of the total turnover as the income. The Assessing Authority during the course of assessment proceedings admitted the f act that the assessee has entered into an agreement and issued power of attorney to Sri.S.N.Krishnaiah Setty for marketing the sites formed in 6 acres of land. In respect of remaining 2 acres of land, the dispute is pending before the Arbitrator. Such being the case, the Assessing Authority ought to have taken the income from 6 acres of land. We find no infirmity or irregularity in the finding arrived at by the First Appellate Authority as well as the Tribunal. The appellants have not made out a case to interfere with the order passed by the Tribunal. - Decided in favour of assessee.
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2015 (8) TMI 1284
Power and authority of advisories issued by food authority - High Court held that the impugned Advisory viz. Product Approval Advisory issued by Respondent No.2 does not have force of law and is not within the ambit and scope of the power conferred on the Food Authority under the FSS Act and the Rules and Regulations framed thereunder. Also the Food Authority did not have power and authority to issue these Advisories under sections 16(1) read with section 16(5) read with sections 18 and 22 of the said Act without following the procedure laid down under Sections 92 and 93 of the Act of placing the Advisories/Regulations before both the Houses of Parliament - Apex court found no ground of interference in the impugned order, therefore dismissed the special leave petitions
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2015 (8) TMI 1283
Demand of Service tax along with interest and penalties - Cargo Handling Service - Packing cement into bags and loading of the packed bags into wagons and trucks as well as stacking of packed bags on platform/godown whenever required and other miscellaneous works at packing plant area - Appellant contended that it only provided manpower to do certain assigned works and so fell under “Manpower Recruitment or Supply Service” and not under “Cargo Handling Service”.
Held that:- the service rendered is categorically covered under the scope of ‘Cargo Handling Service’. As the appellant made a reference to Board Circular No. FB/11/1/2012-TRU, dated 1-8-2002 to defend the proposition that the activity of loading and unloading by individuals with the help of hired labourers would not come under the purview “Cargo Handling Service”, the Board circulars do not have any binding effect on CESTAT. In the present case, the service was not rendered by an individual but by a proprietary concern and it has been held in the case of J.K. Transport v. CCE, Raipur-II [2006 (1) TMI 3 - CESTAT - New Delhi] that a proprietary firm rendering service does not tantamount to rendition of service by an individual. - Decided against the appellant
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2015 (8) TMI 1282
Maintainability - Whether there is a mistake on the face of records - Appellant contended that Tribunal failed to consider the vital fact and also the decision relied by the appellant, which amounts to an error apparent on the face of records - Held that:- the disciplinary proceedings initiated against the appellant on the charge of abetting smuggling activities culminated in dropping the charges and exonerating the appellant. This fact is seen to have been brought to the notice of the Tribunal by filing a Misc. application and also furnishing copy of the order. But the Tribunal while passing the impugned Final Order has failed to consider the same. So also the decision relied by the appellant was also not taken note of. The Tribunal being the ultimate fact finding forum, the non-consideration of such vital fact, the omission of which has bearing upon the decision arrived, in our view, is an error apparent on the face of records. Therefore, we hold that there is an error which calls for exercise of jurisdiction of the Tribunal under Section 35C(2) for rectification.
Imposition of penalty - Section 112 of the Customs Act, 1962 - Appellant submitted that on similar facts this Tribunal in Commissioner of Customs, Amritsar v. Parminder Jit Singh [2013 (7) TMI 377 - CESTAT NEW DELHI] has held that when disciplinary proceedings under CCS (CCA) Rules, 1995 are dropped, the imposition of penalty under Section 112 on same charge and same evidence cannot survive - Held that:- the impugned order to extent of imposing penalty of ₹ 1,00,000/- upon the appellant under Section 112. Therefore, the Final Order as to the extent of imposing penalty upon the appellant is recalled and set aside. - Decided in favour of appellant
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2015 (8) TMI 1281
Rejection of books of accounts - profit rate estimation of 1.5% - Held that:- No opening stock inventory and closing stock inventory in quantity as well as in value was furnished. The assessee did not produce any stock register. The Assessing Officer considered that even if rebate and discount is reduced, then GP would work out to 0.29%.
Further, the last questionnaire issued by the Assessing Officer was not responded to by the assessee, therefore, it is clear from the findings of the authorities below that assessee did not cooperate in finalization of the assessment and no complete details were furnished.Therefore, Assessing Officer was justified in rejecting the book results. Since complete details have not been furnished even before us, therefore, history of the assessee could not be considered favourably because for the year under assessment as well as for earlier years, no details have been produced before us in support of the claim made by the assessee. Considering the conduct of the assessee, in not filing complete details, we do not find any justification to interfere with the orders of authorities below - Decided against assessee
Disallowance of expenses and under section 40A(3) - Held that:- Once GP rate is applied, no further disallowance could be made out of various expenses as well as under section 40A(3) of the Income Tax Act. We, accordingly, following the decision in the case of Banwari Lal Banshidhar (1997 (5) TMI 37 - ALLAHABAD High Court ) set aside the orders of authorities below and delete the addition - Decided in favour of assessee
Addition on account of cash credit under section 68 - Held that:- Since the assessee has failed to furnish any evidence on source of the deposit and credit worthiness of the creditor, therefore, assessee has failed to prove the credit worthiness of the creditor and genuineness of the transaction in the matter. No submissions were made before ld. CIT(Appeals) and even no evidence have been produced before us to explain the above issue, therefore, we do not find any error in the orders of the authorities below in making and confirming the addition. - Decided against assessee
Addition of deduction claimed under section 80C being the amount of tuition fees paid by the assessee for school going children - Held that:- The assessee did not furnish any evidence regarding payment of the tuition fee therefore, addition was made. No evidence was furnished before ld. CIT(Appeals). Therefore, addition was confirmed. Even before us, no evidence of payment of tuition fees has been filed. The ld. counsel for the assessee has shown inability to produce any evidence in this regard. - Decided against assessee
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2015 (8) TMI 1280
Confiscation of goods and imposition of interest and penalty - Import of Polyester Knitted Fabric without payment of duty under two Advance Licences - Availed exemption in terms of Customs Notification No. 96/2009, dated 11-9-2009 - Duty free goods had been diverted to the domestic market though in both the licences it is specified that materials imported shall not be transferred even after the fulfilment of the stipulated export obligation and the same shall be utilized only for further export production.
Held that:- it is apparent that subsequent to the decision of the Special Bench of the Settlement Commission in the case of Idris Y. Porbunderwala [2005 (6) TMI 302 - SETTLEMENT COMMISSION, CUSTOMS AND CENTRAL EXCISE], various High Courts have unambiguously held that the goods to which Section 123 applies do not fall in the jurisdiction of Settlement Commission and also that the proper and complete compliance of the conditions laid down in the statute cannot be compromised or condoned in any manner. Therefore, the Bench holds that the cases relating to goods which are specified/notified under sub-section (2) of Section 123 of the Customs Act, 1962 are outside the purview of Settlement Commission. Accordingly, as the goods to which the instant case relates are notified under sub-section (2) of Section 123 of the Customs Act, 1962 and also so admitted by the applicants during the hearing on 24-7-2015, the Bench rejects the application for settlement filed by the appellant. - Settlement application rejected as non-jurisdictional
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2015 (8) TMI 1279
Grant of stay of collection of demanded tax - Held that:- Considering all these aspects and in the interest of justice, we are of the opinion that the 1st respondent- Deputy Commissioner ought to have exercised discretion as enjoined on him under Section 220(6) of the Act and granted stay. Inasmuch as the matter is ripe for hearing before the Supreme Court on 10.09.2015, this Court, instead of setting aside the impugned order and remanding the matter back for fresh consideration, deems it appropriate to dispose of the writ petitions with the following direction:
“The 1st respondent – Deputy Commissioner of Income-tax, TDS Circle, is directed not to take any coercive steps for recovery of the total disputed tax demand of ₹ 17,42,97,709/- for the assessment years from 2010-2011 to 2014-2015 subject to the condition that the petitioner deposits 40% of the demanded amount. Out of 40%, the petitioner shall pay 20% within a period of two weeks from the date of receipt of a copy of this order and remaining 20% shall be paid within a period of four weeks thereafter.”
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2015 (8) TMI 1278
Order heard and passed by different Commissioners - Violation of principles of natural justice - Incumbent officer without hearing the petitioner passed the clarification order - Held that:- this petition deserves to be allowed in part. The clarification order, is set aside and proceeding remitted for consideration afresh, after extending reasonable opportunity of hearing to the petitioner and to pass orders in accordance with law. - Decided partly in favour of petitioner by way of remand
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2015 (8) TMI 1277
Disallowance of proportionate interest under section 36(i)(iii) - existence of commercial expediency - ITAT deleted the disallowance - Held that:- The Commissioner of Income-tax (Appeals) and the Tribunal found as a matter of fact that the company had interest-free advances from its directors/shareholders and the members of their families amounting to ₹ 315.11 lakhs as against the interest-free advances made by the company aggregating to ₹ 219.72 lakhs as on March 31, 2008, In view thereof, it was rightly inferred that the respondent/assessee had enough interest- free funds which would cover the advances also made interest-free. - Decided in favour of assessee.
Disallowance on account of investments in shops and pent-houses - assessee could not give any proof that such immovable assets would be used for business purpose - ITAT deleted the disallowance - Held that:- The respondent-assessee is in the business inter alia of making investments in shares and property. We are entirely in agreement that merely because the assessee has given out some of its properties on rent, it does not lead to the inference that investments in other properties are not for business purposes. We are unable to see why such a view has been taken. The assessee can always give out its properties on rent and acquire further properties towards investment.- Decided in favour of assessee.
Disallowance u/s 14A - ITAT deleted the disallowance - Held that:- Assessing Officer had not recorded any reasons in the assessment order to hold that any expenditure had been incurred on earning the exempt income and that the Assessing Officer had rejected the claim of the appellant without giving any reasons for the same. Section 14A requires the Assessing Officer to record satisfaction that the interest bearing funds have been used to earn tax-free income and that the satisfaction must be based upon credible and relevant evidence. It was further held that the onus to prove that interest bearing funds were used lies squarely on the Revenue. The issue, therefore, in this regard was based only on the facts. The least that must be said in favour of the respondents is that the findings of fact recorded by the Commissioner of Income-tax (Appeals) and by the Tribunal are not perverse and that the view taken by them is certainly a possible view.- Decided in favour of assessee.
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2015 (8) TMI 1276
Entitlement for refund - Export of services - Cenvat credit in respect of unutilised input credit was accumulated in the record of the assessee - Held that:- there is no dispute that export of good and services are not dutiable. Therefore, according to Rule 5 of the Cenvat Credit Rules, 2004, when duty or tax paid on input or input service accumulates and such duty or tax so accumulated is eligible to be allowed as Cenvat credit but not utilised by the exporter, he is entitled to refund thereof. Also the registration is not the criteria to allow refund when the very output or output service is not at all liable to duty/tax, followed by the decision of the Hon’ble High Court of Karnataka in the case of mPortal India Wireless Solutions P. Ltd. Vs Commissioner of Service Tax, Bangalore [2011 (9) TMI 450 - KARNATAKA HIGH COURT]. - Decided against the revenue
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2015 (8) TMI 1275
Why the matter be not remanded to the Tribunal for having passed a non-speaking order hindering judicial review - payment of service tax on reverse charge basis through Cenvat Credit - Held that:- any order amenable to challenge and/or consideration before a superior Forum has to be reasoned containing brief narration of essential facts, contentions of the parties and then the conclusion to facilitate judicial review for the manner in which the authority concerned may have applied its mind. Even if an appellate order of affirmance or relying on any other similar orders may not be as elaborate as an original order, but nonetheless it must contain a brief discussion to facilitate the superior Court or Forum to understand and appreciate the manner in which there has been application of mind. Therefore, the order dated 17.10.2014 is set aside and the matter is remanded to the Tribunal to hear the parties afresh and pass a reasoned and speaking order. - Decided in favour of appellant
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2015 (8) TMI 1274
Writ petition - Petitioner submitted that nothing survives in the writ petition and hence it has become infructuous - Held that:- this Court dismisses the writ petition as having become infructuous. - Decided in favour of petitioner
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