|
Advanced Search Options
Case Laws
Showing 301 to 320 of 1739 Records
-
2017 (8) TMI 1442
Issues Involved:
1. Justification of deleting the addition made by AO by way of disallowance of depreciation claimed on hotel building.
2. Justification of deleting the addition made by the AO on account of cessation of liability under Section 41(1) of the I.T. Act.
3. Justification of deleting the additions made under Section 68 of the Act of unexplained cash credits.
Issue-wise Detailed Analysis:
1. Disallowance of Depreciation Claimed on Hotel Building:
The department challenged the Tribunal's decision to delete the addition of Rs. 43,05,806/- and Rs. 1,07,64,515/- made by the Assessing Officer (AO) by way of disallowance of depreciation claimed on the hotel building. The AO contended that the related investment in the building was not explained and only bogus bills were arranged for construction expenses. The Tribunal, however, dismissed this addition, leading to the department's appeal.
The High Court referenced the Supreme Court's decision in K.M. Sugar Mills Ltd. vs. CIT, which emphasized that once the income from leasing assets is treated as business income, depreciation on those assets should not be disallowed. The court also cited CIT vs. Kesaria Tea Co. Ltd., where it was held that unilateral actions by the assessee, such as writing off liabilities, do not necessarily mean that the liability ceased in the eye of law. Thus, the High Court found no substantial question of law in the department's appeal and dismissed it.
2. Cessation of Liability under Section 41(1) of the I.T. Act:
The department also contested the deletion of Rs. 1,45,45,000/- made by the AO on account of cessation of liability under Section 41(1) of the I.T. Act. The Tribunal had ruled in favor of the assessee, leading to the department's appeal.
The High Court referred to the decision in CIT vs. Lovely Exports (P) Ltd., which stated that if share application money is received by the assessee-company from alleged bogus shareholders, the department is free to re-open their individual assessments. The court also cited the case of CIT vs. T.V. Sundaram Iyengar and Sons Ltd., which held that if an amount is received in the course of a trading transaction and becomes the assessee's own money, it should be treated as income. The High Court found that the loan taken was always treated as a capital liability and if wiped out, it should naturally go as wiping out the capital liability. Consequently, the High Court upheld the Tribunal's decision and dismissed the appeal.
3. Unexplained Cash Credits under Section 68:
The department challenged the Tribunal's decision to delete the additions made under Section 68 of the Act for unexplained cash credits, where the assessee could not discharge the burden of proving the creditworthiness of creditors and genuineness of transactions.
The High Court referred to the case of Commissioner of Income Tax vs. M/s VTC Leasing & Finance Ltd., where it was held that if the share application money is received from alleged bogus shareholders, the department can re-open their individual assessments. The court found no infirmity with the Tribunal's judgment, stating that the issue was squarely covered by previous decisions and upheld the Tribunal's decision, dismissing the department's appeal.
Conclusion:
The High Court dismissed the department's appeals on all issues, upholding the Tribunal's decisions. The court found no substantial question of law in the department's contentions and relied on precedents that supported the Tribunal's rulings. The judgments emphasized the principles of proving the genuineness of transactions, the treatment of liabilities, and the conditions under which depreciation and cessation of liabilities are to be assessed.
-
2017 (8) TMI 1441
Time Limitation - Classification of Services - CESTAT expressed opinion that the Assessing Authority could have demanded service tax from the respondent only for the period of one year immediately preceding the show cause notice and the demand for the rest of the earlier periods is barred by limitation - Whether the Tribunal is justified in holding that the demand was time barred despite the fact that there was suppression of fact and extended period of limitation was correctly invoked by Adjudicating Authority?
Held that:- Section 73 of FA, states that the period of limitation for issuing notice to show cause why service tax should be not paid or realised is dependant upon the omission or failure on the part of the assessee in filing the return u/s 70 of the Act is five years from the relevant date.
The bonafides of the assessee or any confusion or difference in opinion as to the categorisation of the service are not at all relevant factors for the purposes of issuing notice under the aforesaid provision. The only thing that is relevant is omission to file return - In the case at hand, it is admitted on record that the respondent had not got itself registered and had failed to file return within the prescribed period of time. Thus, the period for issuing notice u/s 70 of the Act is five years on account of non-filing of the return.
Te show cause notice dated 31.01.2003 issued by the Assesssing Authority for the period 01.01.2000 to 30.09.2002 was in no way barred by limitation - appeal allowed - decided in favor of Revenue.
-
2017 (8) TMI 1440
Disallowance of interest being the interest referable to interest free loans and advances given to subsidiary companies - Tribunal held that the interest free fund available to the assessee is sufficient to meet its investment - Held that:- We do not see how when the Assessing Officer's views are that in cases of the interest free loans and interest given by the assessee to its subsidiary companies are in the above sums, still, the principle laid down by this Court that if there are funds available to them interest free and overdraft or loans taken, would not apply. This view of the Assessing Officer is ex facie contrary to the settled principle that a presumption would arise that the investment would be out of the interest free funds generated or available with the company. Then, the borrowed capital in hand in that case and interest expenditure was deductible under Section 36(1)(iii) - The Tribunal held that the interest free fund available to the assessee is sufficient to meet its investment. It can be presumed that investments were made from interest free funds available with the assessee. This position clearly emerges from the record and for the current assessment year as well. We do not see how a different view in the facts and circumstances can be taken. If the Tribunal had followed the earlier view and on facts, then, there is no perversity when nothing contrary to the factual material was brought on record by the Revenue. In such circumstances, the concurrent view on disallowance of interest was reversed and the appeal of the assessee to that extent was partly allowed. We do not see any substantial question of law arising from such a view of the Tribunal.
Claim of depreciation - whether Hon'ble Tribunal was right in holding that prior to insertion of Explanation-5 to section 32 the claim of depreciation was optional and could not be thrust on the assessee, if it had not claimed it? - Held that:- The Tribunal found that going by the wording of the ground and which is identical to question No.6.6, reproduced above, it is not permissible to apply the Explanation and, therefore, the claim of depreciation which was optional could not be thrust on the assessee for the prior period. This is an attempt made by the Revenue even in the assessment year under consideration and in an oblique or indirect manner. It is that finding of fact which has been rendered against the Revenue. No substantial question of law emerging from such an approach of the Tribunal
Pre-operative expenses incurred in connection with creation of plant and machinery in units which have not commenced production - Held that:- Tribunal held that it has considered identical issue on facts in the prior assessment year 2002-03 and its order dated 28-5-2012 in the appeal pertaining to that assessment year, it had turned down the Revenue's request and answered the issue in favour of the assessee. Therefore, when identical issue arose and on similar facts for the assessment year under consideration, it is on facts that the earlier view was followed. Once the earlier view was followed on facts and the same not being disputed, then, the settled principle would apply in that the Revenue is bound by the view taken by the Tribunal for the prior assessment years on facts and that applies with full force. More so, when it is allowed to gain finality.
Disallowance u/s 80M - assessee claimed deduction under Section 80M in respect of the entire dividend income without apportioning any expenditure against the said income - Held that:- Hon'ble Supreme Court in the case of Distributors (Baroda) (P.) Ltd. v. Union of India [1985 (7) TMI 1 - SUPREME COURT] it is only the actual expenses incurred for earning the dividend income which ought to be taken into consideration and there is no question of making an estimation or assumption. The above issue was also considered by the Tribunal in the assessee's own case and for the Assessment Year 2001-02
Correct rate of guarantee commission - Held that:- The charging of guarantee commission depends upon transaction to transaction and mutual understanding between the parties. A rate of 2.5% for guarantee commission therefore cannot be applied in the absence of relevant and cogent material. The Tribunal, therefore, came to the conclusion that this exercise of the First Appellate Authority has been carried out to its satisfaction. The assessee itself paid the guarantee commission at the rate varying from 0.25% to 0.6% per annum to third party and when it has not incurred any cost for providing guarantee to the Bank for the loan given to its subsidiary, applying the rate of 2.5% by the Transfer Pricing Officer based on external comparables was not justified.
-
2017 (8) TMI 1439
Condonation of delay of 247 days in filing the petition - exclusion of time taken in refiling the petition - Section 34 of the Arbitration and Conciliation Act, 1996 - Held that:- Re-filing the application/petition without accompanying the application for condonation of delay, as provided in H.P. High Court Rules, for taking the time, to remove the objections, beyond 20 days is not fatal for the applicant/petitioner as the Registry has never objected re-filing of the petition beyond 20 days after removing the objections and for this reason it cannot be said that application/petition is not properly instituted for want of condonation of delay in re-filing the petition after removing objections as it was entertained by the Registry and listed in the Court without any such objection and therefore, there was no occasion for the applicant/petitioner to invoke Rule 7 of Chapter 6 C of Part 1 of H.P. High Court Rules. In fact the delay in re-filing deserves to be considered as deemed to have been condoned.
The exclusion of time as provided under Section 14 of the Limitation Act is not available only for defect of jurisdiction, but also 'other cause of like nature' and interpretation of 'other cause of like nature' as only defect of jurisdiction, would be against the intention of legislation as in that eventuality there was no need to incorporate the word 'or other cause of like nature.' - Section 34(5) of the Act 1996 provides that an application under Section 34 'shall' be filed by a party 'only after' issuing a prior notice to the other party and such application 'shall' be accompanied by an affidavit by the applicant endorsing compliance of the said requirement. The language of sub Section indicates that compliance thereof is mandatory in nature and definitely without such compliance and affidavit related thereto, the Court was unable to entertain it.
After permitting exclusion of time from 26.2.2015 to 25.10.2015 taken in pursing the first application/petition filed without compliance of provisions of Section 34(5) of the Act, 1996 and re-filing the present application/petition after compliance thereof, the delay of 6 days in filing the application/petition is condoned - application allowed.
-
2017 (8) TMI 1438
The Supreme Court of India condoned delay and granted leave in the case. The citation is 2017 (8) TMI 1438 - SC. Justices J. Chelameswar and S. Abdul Nazeer were presiding. Counsel for the petitioner(s) included Mr. Ranjit Kumar, Mr. Tara Chandra Sharma, Mr. Debashish Bharukha, and Mr. B. Krishna Prasad.
-
2017 (8) TMI 1437
Addition on account of unverifiable purchases - rejection of books of accounts u/s 145(3) - Held that:- mere speculation cannot be a ground for addition of income. There must be a some material substance either in the form of documents or the like to arrive at a ground for addition of income. See Chetnaben Shah Legal Heir of Jagdishchandra K.Shah Vs. The Income Tax Officer, War 10(3) [2016 (7) TMI 973 - GUJARAT HIGH COURT]
The authority will accept the law but the transaction whether it is genuine or not will be verified by the Assessing Officer - COMMISSIONER OF INCOME TAX, JAIPUR-I, JAIPUR (RAJ.) VERSUS GEMS PARADISE [2016 (11) TMI 1400 - RAJASTHAN HIGH COURT]
-
2017 (8) TMI 1436
TDS u/s 194C - difference between the amounts shown by the assessee and the IRCTC in their books of accounts - Held that:- In plain terms, section 194C does not cover the present situation where the assessee was making payment of licence fee to the IRCTC for catering service. In that view of the matter, we see no reason to interfere. However, this may not be seen as our confirmation of the Tribunal’s view that IRCTC was a government body and therefore also requirement of deducting tax at source did not arise or that proviso to sub-section (1) of Section 201 may have retrospective effect. See PR. COMMISSIONER OF INCOME TAX-6 VERSUS HAKMICHAND D AND SONS [2017 (10) TMI 484 - GUJARAT HIGH COURT]
-
2017 (8) TMI 1435
Reopening of assessment - disallowance u/s 40(a)(ia) - Held that:- We do not see any failure on the part of the assessee to disclose truly and fully all material facts. The payments were part of the return filed by the assessee. If the Assessing Officer desired to disallow any part of such payments on the ground that the deduction of tax at source was not carried out, it was open for him to do so after hearing the assessee.
We do not see any reason to interfere in the Tribunal’s order declaring the process of reopening of assessment as illegal. In that view of the matter, we have not examined the correctness of the discussion of the Tribunal in the impugned order pertaining to the validity of the additions made by the Assessing Officer under Section 40(a)(ia) of the Act. We may examine the same in appropriate proceedings if the situation so arises. Appeal dismissed.
-
2017 (8) TMI 1434
Unexplained deposits - deposits made in the bank account in Union Bank of India, Cotton Green Branch, Mumbai, when the same was not disclosed by the assessee in its books of accounts - Held that:- This matter should further have been seen and considered in the context of probabilities and possibilities of having earned any income by the assessee company from these transactions, being based at Jaipur and carrying out such transactions in Bombay wherein no such blank authorities given to Mr. Mayur M. Thakkar was required in case he could have been carrying out these transactions regularly in Bombay. Thus the assessing authority has wrongly assessed and ld. CIT(A) has wrongly upheld the deposits as additions being unexplained income in the hands of the assessee.
Also alternatively the counsel for the assessee submitted that if any income is found assessable, it should only be a commission earned from such transactions by the assessee company. Also the alternative arguments made by the ld. Counsel for the assessee is that in case it is considered that all these transactions have been carried out by the assessee company and deposits and making out of drafts and carrying out all these business is a part of the work carried out by the assessee company and these deposits are considered as cash deposits in the bank account then there cannot be any assessment more than the amount of peak credit for both the years being a block period which does not exceed more than 10 lakhs. In no case there can be 100% assessment on the total deposits as an income and cannot be considered as undisclosed income of the block period - decided in favour of assessee
-
2017 (8) TMI 1433
Accrued income shown as unmatured advances in the Balance Sheet - Held that:- As decided in assessee’s own case [2017 (4) TMI 358 - ITAT HYDERABAD] what is to be seen is whether the assessee has followed a recognized method of accounting or not. If method followed by the assessee is such whereby correct income cannot be deduced, then only the assessing officer has the authority to adopt a reasonable basis to determine the total income. In the instant case it cannot be disputed that the assessee has followed a recognized method of accounting and hence, there is no question of adding any further amount to the total income. - Decided in favour of assessee
Arm’s length Price adjustment u/s 92CA - comparable selection - Held that:- Assessee company entered into certain International Transactions pertaining to BPO services by way of Tele-calling services and sales Agency Services in respect of data bank belonging to the Associated Enterprises. The assessee company has been adopting cost plus 15% mark up for invoicing these Associated Enterprises in respect of Tele-calling Services. The assessee company in respect of sales agency, has been charging and paying sales commission of 10%. For purpose of complying with Transfer Pricing Regulations, the assessee company adopted cost plus 15% mark up as Arms Length Price in respect of Tele-calling and Comparative Uncontrolled, thus companies functionally dissimilar with that of assess need to be deselected from final list.
Disallowance of expenditure included in employees cost - Held that:- We are of the opinion that this issue required to be examined by the Assessing Officer/TPO in detail whether the said amount claimed to have received by the assessee as reimbursement expenses are indeed reimbursement or not. In case of reimbursement at cost of the expenditure incurred on behalf of the AEs and has not formed part of the expenditure claimed as operating cost of the assessee then, the reimbursement should not be considered as part of assessee's sales. The amounts should be excluded in computing the operating profits. Since the Assessing Officer has not examined and it is also not on record whether the said expenditure was not part of claim under section 37(1) in the regular computation or not, in the interest of justice, we remit the matter back to the file of the TPO to examine the facts and to exclude only in the case the said amount is reimbursement of expenditure and there was no claim by the assessee in its computation of income
-
2017 (8) TMI 1432
Revision u/s 263 - Held that:- Taking support of Section 263 (1)(b), the concept of record is the record which was available with the A.O. at the time of assessment. If the contention which has been raised by Mr. Jain is taken into consideration, no assessee will be assessee. If the subsequent events to the assessment order is taken into consideration then the scope of Section 263 will be enlarged. The record which was available with the A.O. is required to be taken into consideration and the tribunal while considering the matter has taken into consideration the seven documents, more particularly D.L.C. Certificate which could be procured easily and the other documents like export licence which has been granted w.e.f. 02.09.2002 and registration certificate granted by C.T.O. w.e.f. 26.08.2002. He has also produced the muster roll register.
The tribunal has considered the complete facts in detail. It will not be appropriate to re-appreciate the facts, more particularly when the tribunal has observed that the discussion which has been done by the A.O. have not been specifically rebutted by the Department. - Decided in favour of assessee
-
2017 (8) TMI 1431
Additional depreciation of 20% on plant and machinery used for production of ready mix concrete - assessee was manufacturing ready mix concrete for the purpose of sale apart from use in construction of buildings and was being levied Central Excise duty on such manufacture - Held that:- There can be no doubt that preparation of ready mix concrete results in transformation of stone chips, sand, cement, flyash and other articles into a new and distinct object having a different name, character and use. Once the ready mix concrete is prepared, the ingredients used lose their original character and can never be restored to their original character. It is not in dispute that the appellant-assessee is registered under the Central Excise Act and has been paying inter alia excise duty for manufacture of concrete ready mix, which is sold by the appellant-assessee to other civil contractors.
The judgment and order of the learned Tribunal cannot be sustained to the extent that the additional depreciation claimed by the appellant-assessee on the machinery used for manufacture of ready mix concrete has been disallowed, and the same is set aside. We restore the order of the Commissioner of Income Tax (Appeals) - 1 in this regard. - Decided in favour of assessee.
-
2017 (8) TMI 1430
Income derived from the sale of shares - “business income” OR “short terms capital gain” - Held that:- It has been observed by the Commissioner that only 10 scripts are traded. It was not a case of the repeated sale of the same script. It was not a case of frequent buying and selling to make quick money. The intention can be proved by the conduct of the assessee after the purchase. The CIT(A) has given the details of the 10 scripts out of which short term capital gain was claimed. Upon appreciation of the evidence plausible conclusion has been arrived at by the CIT(A) and the Tribunal, more over for past three assessment years also the income of the assessee through sale of shares is held to be short term and long term capital gain. The said order is accepted by the Revenue. No substantial question of law arises. The Appeal is dismissed.
-
2017 (8) TMI 1429
TDS u/s 195 - holding that the payments of transponder fees by the Appellant to Intelsat Corporation, USA, ('Intelsat') as taxable as 'royalty' - India-USA Tax Treaty - Held that:- As decided in assessee's own case [2014 (4) TMI 737 - ITAT MUMBAI] the payments were made to the Intelsat is for user of transponder capacity by the assessee for telecasting/broadcasting of its various programmes on television channels including marketing and advertising airtime etc.
The application of the term 'royalty' to the transaction on the premise of territorial jurisdiction in-as-much as the said 'process' was not being used in India - Without doubt, the rights in or for the use of the process vesting in the assessee are located in India, where at the signals are downlinked as also uplinked from – it has to be read in conjunction with Explanation below section 9(2), inserted on the statute by Finance Act, 2007 w.r.e.f 01.06.1976
The use of transponder by the assessee for telecasting/broadcasting the programme involves the transmission by the satellite including uplinking, amplification, conversion for downlinking of signals which falls in the expression "Process" as per Explanation 6 of section 9(1)(vi) - the payments made for use/ right to use of process falls in the ambit of expression "royalty" as per DTAA as well as provisions of Income Tax Act – there was no reason to interfere in the decision of CIT(A) – Decided against Assessee.
-
2017 (8) TMI 1428
Valuation of differential duty - quantification of differential duty based on comparable value of similar products manufactured and cleared by others - Held that:- There is no cogent reason to entertain the appeal. The judgment impugned does not warrant any interference - appeal is dismissed.
-
2017 (8) TMI 1427
Disallowance u/s. 36(1)(va) qua the employee’s contribution to the employee welfare funds, being the provident fund and state insurance funds - Held that:- Each of the contributions constituting the impugned sum in the present case is deposited beyond the due date defined in Explanation below s. 36(1)(va) and, thus, not deductible there-under. On the contrary, s. 36(1)(va) also providing the condition of payment, and one which is more stringent than that by s. 43B, a fact of which the Legislature could not but be aware of, is one more reason for regarding the employee’s contribution as separate and distinct from the employee’s contribution and, accordingly, not covered by s. 43B. We have already shown a difference in the nature of the two sums as well as the clear manner of the different descriptions adopted by law to identify them. There is no mandate in law for disregarding the same; rather, stands explained per different decisions, several of which stand cited supra. We decide accordingly.
Disallowance u/s. 14A - Held that:- The assessee having earned tax exempt dividend income at . 54,501/-. The AO observed an average investment of ₹ 32.27 lacs in shares and units, besides inflow and outflow of funds, so that expenditure on its management would have been incurred, i.e., besides a proportionate interest expenditure, incurred at a total ₹ 1.72 lacs. As no explanation for not effecting any suo motu disallowance u/s. 14A was forthcoming from the assessee, he, applying r. 8D, disallowed ₹ 26,112/-, including ₹ 9,976/- u/r. 8D(2)(ii) qua indirect interest expenditure, and the balance qua indirect, administrative expenditure. The same stands confirmed in first appeal on the same basis. No improvement in its case having been made before us, we confirm the same. We decide accordingly.
-
2017 (8) TMI 1426
Purchases of rice bran as bogus - Held that:- CIT (Appeals) on the basis of the material placed before him and on the basis of the statements of two persons namely- Vinay Singh and Rajesh Kumar Ramuka held that the rice bran was supplied by the aforesaid two persons in the name of their firms M/s. Om Sai Enterprises, M/s. Om Shiv Enterprises, M/s. Mahadev Enterprises and M/s. Nisha Enterprises and that the payments were received by them in the individual capacity as the bank accounts were in their names and in the name of one of the firm M/s. Nisha Enterprises.The Assessing Officer is not correct in holding that the aforesaid purchases were bogus inasmuch as the supplies were made by Party (A) and payments were made to Party (B). In fact the supply and payment were made to the same parties but with different names.
The findings of CIT (A) have been accepted by the tribunal and it has been held that the purchases are not bogus at all.
The question whether in the facts and circumstances of the case, the ITAT was justified in accepting the purchases to be genuine and not bogus is a matter of fact only. No question of law in this regard arises in this appeal.
-
2017 (8) TMI 1425
CENVAT Credit - Rent-a-cab operator service - Held that:- This issue came to be decided by the Court against the department in judgement in case of Principal Commissioner vs. Essar Oil Ltd. [2015 (12) TMI 1062 - GUJARAT HIGH COURT], where it was held that service in question was 'input service' and the service tax paid thereon would be available to the assessee by way of CENVAT Credit - credit allowed - appeal dismissed - decided against Revenue.
-
2017 (8) TMI 1424
Interpretation of Total Turnover & Export Turnover under 10A - Held that:- Learned counsel for the appellants fairly submits that the question raised in this appeal is answered against the appellants by this Court in CIT v. Tata Elxsi Ltd.[2011 (8) TMI 782 - KARNATAKA HIGH COURT].
-
2017 (8) TMI 1423
Disallowance of expenditure u/s. 40(a)(ia) - due date for payment into the account of Central Government - Held that:- The Tribunal by the impugned judgment held that tax deducted at source was deposited, however same was belated. The Tribunal also held that the explanation to section 40(a)(ia) added on 1.4.2005 as held by this Court in case of CIT v. Omprakash R. Chaudhary reported in (2015 (2) TMI 150 - GUJARAT HIGH COURT) is to be applied retrospectively.
............
|
9911796707
