Review petition – stay application - Held that:- Identical issue decided in the case of COMMISSIONER OF CUSTOMS (PORT) , KOLKATA VERSUS M/S. ENTERPRISE INTERNATIONAL LTD., M/S. AAHANA COMMERCE PVT. LTD., M/S. CHEMSILK COMMERCE PVT. LTD. [2016 (9) TMI 74 - CESTAT KOLKATA], where it was held that In view of dismissal of the review petition of the department by Apex Court by order dated 15.07.2016, appeals filed by the department are not sustainable - appeal dismissed - decided against Revenue.
Revision petition u/s 264 - refusal to issue refund - Held that:- Without going into the merits of the respective contentions, we allow the writ petition to be withdrawn with liberty to approach the Commissioner by way of revision petition under Section 264 of the Act. If any revision petition is filed, the same would be considered in accordance with law as expeditiously as possible.
Disallowance on account of bad debt u/s 36(1)(vii) - Held that:- As noticed that assessee has given advances to its sister concerns viz Shah Engineers & M/s. Tetra Tract. The assessee has charged interest of ₹ 32,04,890/- and ₹ 21,83,870/- respectively for the financial year 2001-2002 to 2002-2004. The interest income was reflected in the books of account of the assessee in the aforesaid years. The assessee had received interest of ₹ 26,37,064/- out of the outstanding interest of ₹ 32,04,890/-from its sister concern M/s. Shah Engineers and interest of ₹ 7,53,704/- out of the outstanding interest of ₹ 21,83,870/- from the other sister concern M/s. Tetra Tract. The assesse had included the above interest received of Rs. ( 26,37,064+ 7,53,704) in the amount claimed as bad debt. The Ld. CIT (A) has restricted the quantum of bad debt to the extent the debt on account of interest income remains unrecovered . Therefore, the total unrecoverable interest income from the above of Rs. (5,67,826 + 14,30,166) ₹ 19,97,992/-) and the amount of ₹ 13,02,182/- on account of customer balances was allowed as bad debt by the ld. CIT(A) - no reason to decline with the detailed findings of the Ld. CIT(A) - decided against revenue
Disallowance on account of interest on loans to Associate Concern - Held that:- In assessment year and subsequent years, assessee has stopped charging interest and accounting it in the income on accrual basis. This is not a sound accounting policy as at outset it should have been recognized the same as income on accrual basis and thereafter would have given the deduction of claim of bad debt which the assessee failed in these years. Further, when we visualize this situation as a whole traveling from three assessment years, then, it is observed that interest income was recognized on accrual basis and thereafter claimed as a bad debt of its non-realization, this has been allowed by ld. CIT(A). If we remit the issue to the file to assessing officer in subsequent years by holding that income is to be recognized on accrual basis and thereafter, it is to be claimed as bad debt whether allowable or not, then, to our mind, it will be an academic and futile exercise because in reality assessee has not received any interest income from its sister concern. It is to be recognized that in all the aforesaid three years the income from interest on accrual basis remained unrecoverable which was allowed as a bad debt. Thus, in order to avoid multiplicity of the proceedings, we allow the appeal of the assessee
Disallowance on account of general expenses on estimated basis - Held that:- Referring to claim of the assessee that all the transactions were duly supported by documentary evidences. In view of above and after considering that the ld. assessing officer has verified the entire books of accounts, bills, vouchers etc. and not pointed out any discrepancy in unaccounted sale, expenditure etc. Therefore, we restrict the disallowance out of general expenses to ₹ 10,000/- only. In the result the appeal of the assessee is partly allowed on this issue.
Cooperative bank is eligible for deduction u/s 36(1)(viia) - Held that:- The assessee has debited the same amount to the account of the customers. It is normal practice of the Banks to debit the expenses relating to the customer to their account so as to enable the bank to collect the entire outstanding along with the expenses incurred in the process of recovery of loans. Therefore, we agree with the assessee’s argument that if the expenditure is debited to the P&L account, bank would incur a loss, therefore, the assessee has rightly debited the expenses to the customer’s account. Hence the same should be included in the outstanding balance of the debts and while creating the provision the debt should be included by the expenses incurred by the bank. The Cooperative bank is eligible for deduction u/s 36(1)(viia) of the APCS Act @ 7.5% of the profits and 10% of its rural advances. The deduction claimed by the assessee as a provision for doubtful debts or NPA is within the limit provided by the Income Tax Act u/s 36(1)(viia) inclusive of the expenses. Therefore, the above sums are allowable u/s 36(1)(viia) of the Act, accordingly, we uphold the order of the CIT(A) and dismiss the appeal of the revenue on this ground.
Allowability of reserve created for sundry debtors Government - Held that:- A.R argument that on receipt of the subsidy the same was offered to the income in subsequent year is not tenable because the income of each assessment year has to be assessed independently and the assessee cannot postpone the income to the next assessment year. The assessee is a Cooperative Bank following the mercantile system of accounting. The subsidy released to PACS was not a loan, it was the assistance of funds in lieu of expected subsidy. Therefore, the order of the CIT(A) on this issue cannot be sustained, hence set aside and the order of the A.O. is restored and the addition is upheld. The appeal of the revenue on this issue is allowed.
DCCB’s share of 35% of waiver of penal interest and interest on overdue deposits - Held that:- In this case, during the appeal hearing, the Ld. A.R. did not furnish the details with regard to what was the exact nature of overdue interest created for reserve. As per the RBI guidelines, the assessee need not recognize the interest on bad and doubtful debts. Such interest neither credited to the profit & loss account nor offered as income. The assessee requires to record such accrued interest in a Memorandum of account in their books. It is not known whether the interest related to the overdue interest is on NPA advances or not. In case the interest is related to the non performing assets (NPA) as claimed by the assessee, the same required to be allowed as a deduction since the same cannot be recognised as income and the treatment given by the assessee in the profit & loss account appears to be correct. Since the issue involve verification with regard to the true and correct nature of the overdue interest, both the parties have agreed to remit the matter back to the file of the A.O. to verify the true and correct nature of interest whether it is relating to bad and doubtful debts or NPA or on performing assets. Therefore, we direct the A.O. to verify the true nature of the overdue interest and decide the issue afresh on merits. This ground of appeal of the revenue is allowed for statistical purposes.
Provision for NPA - deduction is allowable u/s 36(1)(viia) - Held that:- As perused the materials available on record and gone through the orders of the authorities below. The assessee is entitled for deduction u/s 36(1)(viia) of the Act to the extent of 7 ½% of total income and 10% of rural advances as NPA. The assessee has categorized the interest of ₹ 2,84,11,535/- as NPA provision. The assessee argued that it is an interest part of the advances which was categorized as NPA. The ld.AO did not dispute the fact that the sum represented the interest on advance which was categorized as NPA. The AO did not bring any evidence to show that the same was not NPA and not covered by the prudential norms of RBI. D.R did not controvert that the provision for Bad and doubtful inclusive of NPA provision crossed the limit provided in section 36(1)(viia). Since the deduction claimed by the assessee is within the limit of section 36(1)(viia) the same is allowable as per the provisions of section 36(1)(viia)no infirmity in the order of the CIT(A) and the same is upheld.
3% interest on agricultural stabilization fund - Held that:- A.O. disallowed the above expenditure under the impression that the said amount was not an expenditure but it was related to the investments. However, during the appeal hearing, before the CIT(A) and before us, the assessee argued that the item represents the interest paid by the bank to the depositors. Since the amount is interest paid on the deposits of the co-operative societies relating to fund called agricultural credit stabilization fund, the same is a business expenditure and the CIT(A) has allowed the same correctly. There is no dispute with regard to the genuineness of the expenditure and we agree with the Ld. CIT (A) that it was not an appropriation of the profits and it was the interest paid on the deposits of PACS. The appeal of the revenue on this ground is dismissed.
Reserve for Co-operative Educational fund - Held that:- As gone through the orders of the authorities below. As per section 45(1) of A.P. Co-operative Societies Act, 1964, the society was subject to such limits as may be prescribed credit of 1% of gross profit or gross income in a year as the case may be to the Co-operative Educational fund. As per the A.P. C-operative Societies Act, it is mandatory to the bank to create educational fund and Hon’ble M.P. High Court in the case of Keshkal Co-operative Marketing Society [1986 (4) TMI 13 - MADHYA PRADESH HIGH] held that the payment to the reserve fund was an obligation created under the statute. In the instant case, the assessee had created the educational fund as mandated by the co-operative credit society. The assessee submitted that the payment was made to A.P. State Cooperative union to give training to their staff but not the contribution to the Union. Therefore, as rightly held by the CIT(A), the payment or contribution to co-operative educational fund is diversion of profits at source by over riding title under the Act. Hence, we do not find any reason to interfere with the order of the Ld. CIT(A) and the same is upheld.
Contingent liability - provision and a contingent liability - quantum claim by the EPC contractors being highly excessive, and unreasonable - Held that:- Assessee has pointed out the agreement of MOU which has been entered between the company assessee and the original company. He has specifically taken us to the agreement which was part of paper book dated 1st March, 2002 and referred Clause-2 and incorporation was done on 1st April, 2002 which is part of record and the MOU which was entered between GVK Express Pvt. Ltd. and between the NOVOPAN Industreis Ltd. and invited our attention to Clause-1.
He has also referred the concession agreement which was entered between the NHAI and the assessee and he has taken us to the different clauses which we have gone through but we are not reproducing the same for the sake of brevity.
Taking into consideration the volume of work which was required to be done by the assessee and the dispute regarding excess claim by the other contractor, the matter was referred to the arbitrator and the claim was made for enhancement which was accepted by the CIT(A). Where contingent liability was made in view of the revised return filed by the assessee, the Tribunal has seriously committed an error in rejecting the claim of the present assessee. Thus, the issue no. 1 is answered in favour of assessee against the department.
Liability to charge of interest u/s 234B and 234C - Held that:- Tribunal has not committed an error.In that view of the matter, the issue is answered in favour of the department against the assessee.
Rejection of claim under Section 80G - Held that:- The payment was made on 31st March, 2006 and if the payment was taken to be made on 31st March, 2006 the person was having clear intention of paying through cheque nonetheless in the books of accounts entry was not made by the appellant, same was not reflected in Bank Account. In that view of the matter, merely because the provision/liability was shown, rejection of claim under Section 80G, in our considered opinion, is contrary to decision referred by counsel for the assessee. In that view of the matter, the issue no. 3 is required to be answered in favour of the assessee
Deduction of the benefit of 40a(ia) - Held that:- Disallowance pertains during the year under appeal and while considering the submissions made by Mr. Ranka senior counsel and Mr. Jain, it will not be out of place to mention that where the deduction or the benefit of 40a(ia), 35% of the same was payable to the respondent and the TDS was deducted on the claim made by the assessee and the same issue is required to be answered in favour of the assessee against the department.
Leave encashment as a contingent liability is not liability. Even this Court while deciding the matter has taken leave encashment as liability. In that view of the matter, the issue is answered in favour of the assessee against the department.
Disallowing expenditure on police stations - Held that:- the expenses which was done for protection of the employees and the other threat from the truck owners and having other instructions which has been construed liable expenses. In that view of the matter, disallowance of expenses of ₹ 5,45,264/- for the police stations is required to be answered in favour of the assessee against the department. Hence, the 6th issue is answered in favour of the assessee.
Assessment order being annulled the issue is answered in favour of the assessee against the department. The assessment is not required to be cancelled on the behest of department as held in our earlier decision which has been referred hereinabove.
Amount paid by the assessee for taking over the company - Held that:- Expenses which was done by the earlier company which has given it as a capital for this assessment year, the department could not have assessed such amount which has taken the whole amount against the capital gain but this company is entitled for the capital expenses as contended by counsel for the department. This could not have been allowed under the law if the assessee claim as revenue expenses but nonetheless since he has paid amount for taking over the management of the company, this would be a capital gain for the other company. The Tribunal has not committed any error in allowing the expenses. Hence, the issue is answered in favour of assessee
Claim of capitalization of expenditure towards tree cutting, tampling removal of debris and everything, while considering the matter, the Tribunal has considered the expenses prior to commencement of this company has taken the management and construction activity from the previous company on the basis of MOU, all expenses done was given a capital which was shown as an expenses by the previous company.
Regarding removal of debris and everything that work which was required to be done on the war footing and the time consumed therefore, the expenses which was done by the contractor employees which can be done on Jaipur road but no doubt it has to be done on war footing therefore, expenses are bound to be more than normal which has been done. In that view of the matter, the Tribunal has not committed an error in allowing their expenses regarding removal of trees tampling or removal or debris and other expenses. Hence, the issue is also answered in favour of the assessee against the department.
Depreciation @ 60% on EDP Equipments treating the same as the computer equipments allowed as in our considered opinion the optical fibers which are used exclusively for the computer configuration and it is mandatory for the operation. It is part of computer system.
Claim of depreciation on public roads treating the same as building to be allowed.
Validity of Search action against the petitioner under Section 132 - alternative remedy - Held that:- The assessee-petitioner obviously had an alternative, adequate and efficacious remedy against the said order passed by the learned CIT(A) before the Income Tax Tribunal again under Section 253 of the Act. There appears to be no justification for cutting short that regular remedy at this stage and to entertain these writ petitions on merits.
The lower Appellate Authorities of the Income Tax Department cannot be expected to look into these questions of validity of search under Section 132 of the Act at their own level independently. Therefore this Court does not find any good ground to allow the petitioner to bypass the said alternative remedy and directly assail the order of learned CIT(A) before this Court. The writ petitions being devoid of merit are accordingly dismissed.
Downward adjustment in respect of payment of royalty to Associated Enterprises (AEs) - royalty payment is in excess of limits prescribed under the provisions of Foreign Exchange Management Act, 1999 - Held that:- In this case, the Technology Transfer Agreement has been signed on 1st January, 2009. The assessee utilized the technology of the AE during the preceding year. However, no expenditure was booked by the assessee on the reason that no invoice has been received from its AE during the preceding assessment year. The assessee claimed that all the sales in F.Y 2009-10 were ex-works, installation of which was completed by it in F.Y 2010-11. The assessee paid the royalty in the year in which installation and commissioning was completed. Before TPO, the assessee not furnished the details of "product sold date" and "ex-work" details in relation to each supply agreement along with the copies of relevant agreement for the Financial years 2009-10 to 2012-13 and it was also not proved that there was carry forward one year to another year. Before the DRP, there was no details provided by the assessee regarding date of installation and only furnished the product sold date for FY 2009-10 and no such details of other years were provided and the assessee failed to substantiate its own claim. AR made a plea that since the invoice has been received from the AE during the assessment year under consideration, it was subject to TDS and it is to be allowed. In our considered opinion, if the expenditure was crystallized and accrued in the assessment year under consideration, the same is to be allowed subject to deduction of TDS as held by Delhi High Court in the case of CIT v. SMCC Construction India [2010 (1) TMI 10 - HIGH COURT OF DELHI]. The assessee has to furnish the details of product sold date and date of completion of installation work with corresponding agreements. The AO/TPO should examine the same and decide the issue in the light of above judgments. This ground is remitted to the file of AO for fresh consideration.
Downward adjustment in respect of management fee - Held that:- Regarding copy of correspondence with the AE for allocation of cost, it was observed by the DRP that no such document was furnished by the assessee. However, before us the assessee filed additional evidences for the A.Y 2012-13 as discussed in earlier para elsewhere in the order and we are in-principle agree with the contention of the assessee regarding the allowability of management fees and there is no requirement of transfer pricing adjustment on this issue, subject to verification of availing of actual services and allocation of its cost to the assessee. For the A.Y 2011-12, it was stated that all the relevant evidences were already available with the Assessing Officer/TPO and on that basis; it is required to be verified with regard to availing actual services and its allocation of cost to the assessee. Accordingly, this ground relating to Management fees is remitted to the file of ld. Assessing Officer for fresh consideration for both the assessment years and the Assessing Officer after going through the evidences filed by the assessee decide the issue fresh as indicated above. This ground is partly allowed for statistical purposes for both the assessment years.
Disallowance u/s. 14A read with Rule 8D - Held that:- Isuue is decided in favour of the assessee and there cannot be any disallowance u/s.14A when there is no exempted income. This ground of appeal of the assessee for the A.Y 2012-13 is allowed.
MAT - disallowance u/s.14A with Rule 8D while computing book profits u/s. 115JB of the Act - Held that:- We are of the opinion that this issue came for consideration before the Special Bench of the Tribunal in the case of Asstt. CIT v. Vireet Investments (P.) Ltd. [2017 (6) TMI 1124 - ITAT DELHI] wherein held that Sec.14A r.w. Rule 8D has no application while computing the book profit u/s.115JB of the Act. More so, in this case there is no exempted income, this provision cannot be applied. This ground of the assessee is allowed.
Deduction of interest on service tax and TDS - allowable business expenditure - Held that:- Interest on delay in payment of service tax, which is only compensatory nature paid on account of delay in these payments and to be allowed as business expenditure. However, interest paid for delay in payment of TDS cannot be allowed as business expenditure. This ground raised by assessee in its appeal for the assessment year 2011-12 is partly allowed.
Disallowance of spill over of additional depreciation u/s. 32(1)(iia) on plant and machinery put into use during the preceding year - disallowance of spill over of additional depreciation u/s. 32(1)(iia) on plant and machinery put into use during the preceding year - Held that:- Similar issue was considered by the Karnataka High Court in the case of Rittal India (P.) Ltd. [2015 (1) TMI 1248 - KARNATAKA HIGH COURT] as held tribunal has rightly held that additional depreciation allowed under section 32(i)(iia) of the Act is a one time benefit to encourage industrialization, and the provisions related to it have to be construed reasonably, liberally and purposively, to make the provision meaningful while granting additional allowance. We are in full agreement with such observations made by the Tribunal - decided in favour of assessee.
Validity of assessment order - CST Act, 1956 - whether the petitioner is entitled to claim exemption on the sale of zip fasteners to a readymade garment manufacturer, who has exported the readymade garments outside the territory of India?
Held that:- The petitioner has sold zip fasteners to a manufacturer of readymade garments, who has fixed the zips in the garments and exported the garments outside the territory of India. Therefore, the transaction between the petitioner and the exporter was inextricably connected with the export of the goods outside India - Thus, when the transaction between the petitioner and the exporter and the transaction between the exporter and the foreign buyer were inextricably connected with each other, the “same goods” theory would have no application to the case on hand.
Addition u/s 69 - admission of addition evidence to prove the source of cash deposited in saving bank account - peak credit of the cash deposits - Held that:- The appellant was unwilling to give any information regarding the taxability of such accruals in the hands of the appellant’s mother during the relevant period. Under these circumstances, the appellant was denied the opportunity of adducing the new evidence and the request was overwhelmingly rejected. As further observed by the CIT(A) that the appellant could not explain the source of cash deposits in the bank account even in the preceding assessment year which was confirmed in first appeal. From the consideration of the observation of the Ld. CIT(A) for rejecting the request of assessee for admission of additional evidence, we are of the view that he has passed well reasoned and logical order, hence, does not suffer from any illegality, perversity and impropriety.
The alleged agreement to sale on which the assessee relying, is undisputedly unregistered, therefore, it has no efficacy in the eyes of law and obviously no “transfer” can be said to have been taken place under the said document, therefore, the same cannot be taken into consideration for establishing the claim. Under the Income Tax Act specifically sub-clause (vi of Sec.2 (47) of the I.T. Act and finally no profit or gain can be taken into consideration from the unregistered agreement to sale. The case relied upon by the assessee are altogether dissimilar to the instant case and hence not applicable to the case in hands, hence, the ground Nos.1 to 3 stands dismissed.
Addition on account of net profit @5% on the total amount of cash deposits in the saving bank account of the assessee - Held that:- From the order passed by the CIT(A), we realized that although the assessee has raised the ground before the Ld. CIT(A) with regard to the ground No.4 herein, however, from the order passed by the Ld. CIT(A) it appears that the said issue was taken by the assessee in the grounds of appeal before the Ld. CIT(A), however, neither specific agitation made by the Assessee nor adjudicated by the Ld. CIT(A), therefore, we feel it appropriate to remand back the issue raised in ground No.4 of instant appeal to the file of Ld. CIT(A) to adjudicate the same on merit by offering proper and reasonable opportunity of being heard.
Charitable activity - approval under s. 10(23C)(vi) rejected - educational institution - Held that:- We are of the opinion that as of now the petitioner society running educational institution which imparts education to students from Class VI to XII, in the absence of any allegation or material, the object clause providing for other charitable activities, would not disentitle the society from approval under s. 10(23C)(vi) of exemption. The proviso added to s. 10(23C)(vi), specially provisos 2, 3, 12 and 13, give sufficient powers to check the abuse of the exemption. The mere possibility, therefore, that the society may in future pursue activities, which are not charitable, or closely connected with education for making profit, would not constitute the grounds to reject the approval under s. 10(23C)(vi).
Perusal of the impugned order shows that the pleading in this regard has not been taken into consideration. Further, in the impugned orders, although, there is a finding that the society is having many objects other than educational, but there is no application of mind to the assertion made by the society that it is only pursuing the educational activity and no other. In view of case of C.P. Vidya Niketan Inter College Shikshan Society (2013 (7) TMI 367 - ALLAHABAD HIGH COURT), in case, the society is pursuing only educational objects and no other activity then the application by such a society for grant of approval under s. 10(23C)(vi) cannot be rejected on the ground that its aims and objects contain several other objects apart from educational and application by such a society is perfectly maintainable. The respondent-Chief Commissioner of Income Tax is directed to grant exemption to the petitioner-Society for the relevant assessment year - Decided in favour of assessee.
Exemption as granted u/s 10(19A) - contention of the petitioner-appellant is that the legal heirs of the original Ruler are no longer Ruler - contention emphasised was ‘palace’ not ‘Ruler’ - Held that:- While matter was pending before the Supreme Court in Maharao Bhim Singh of Kota Thr. Maharao Brij Raj Singh, Kota vs. Commissioner of Income Tax, Rajasthan-II, Jaipur [2016 (12) TMI 418 - SUPREME COURT] same position was existing. Since legal heirs are on record right from 1992 and the question whether the legal heirs is Ruler or not was never raised before the AO, CIT(A) or Income Tax Appellate Tribunal, no substantial question of law has been framed.
In that view of the matter, it will not be appropriate to allow these review petitions. If the department desires they may get clarification from the Supreme Court. We cannot sit over the decision of Supreme Court in appeal, since Supreme Court has already decided the issue and we have followed the same.
The other contention regarding exemption u/s 10 (19A) given to the palace, in our considered opinion, Ruler, individual or HUF is not required to be considered at this stage. It will be open for the department to get clarified the same from the Supreme Court.
Rebate claim - time limitation - Section 11B of the Central Excise Act, 1944 - Held that:- The Commissioner (Appeal) has correctly observed that the applicant should have filed the rebate claim in this case on or before 1-11-2012 and because the rebate claim has been filed actually on 5-4-2013 it is time-barred in the light of Section 11B of the Act.
Since, the Rebate claim in this case has been filed undoubtedly beyond one year from the date of export it is hit by time limitation and it cannot be relaxed by the Government under Section 11B as there is no legal provision for doing so.
The Revision Application filed by the M/s. Svarn Telecom Ltd. is rejected.
Reopening of assessment - Addition on account of change in accounting policy with respect to recovery of non-performing advance where assessee has filled suits, decree or compromised accountsbonafide belief - Held that:- Reopening is with respect to reappraisal of the "notes on accounts" of the assessee which was there at the time of original assessment also. The bank has disclosed all material facts to the LD AO at the time of original assessment. There was no failure on the part of the assessee to disclose fully and truly material fact of the computation of total income. This stand of the assessee is also supported by the order of the Hon'ble Supreme Court in case of CIT Vs. Corporation Bank [1999 (2) TMI 16 - SUPREME COURT]. Thus assessee has not failed to disclose fully and truly the material facts
Addition on account of change in method appropriating partial recovery with respect to NPA account where suits filed or accounts are compromised - Held that:- In the present case the revenue has failed to establish that how the change in the method of accounting is not permissible. The finding of fact which was arrived at by the Commissioner (Appeals) was that the change in the method of accounting was bona fide and it has been followed regularly and consistently. The changed method has been held to be a better method for preparing and presenting financial statements of income of the assessee. DR could not show us any reason that the change in the method of accounting is detrimental to the interest of the Revenue. DR also could not controvert that the change was bona fide and consistently followed after the year in which it was changed - addition of ₹ 10.43 crores on account of change in method appropriating partial recovery with respect to NPA account where suits filed or accounts are compromised to be deleted - Appeal decided against revenue.
Clandestine removal - Confiscation of excess stock - Rule 25(1) of Central Excise Rules, 2002 - Held that:- It is apparent on the face of record that no physical weighment of the finished goods was done and only some bundles of bars of different sizes were weighed and thereafter the number of bundles was counted and multiplied with sample weight, which is clear cut case of eye estimation - In such manner, of stock taking by way of estimation, the variation of about 10% is normal - appeal allowed - decided in favor of appellant.
The Bombay High Court directed the applicant to remove all office objections within four weeks, failing which the appeal would be dismissed. An ad-interim relief was granted to prevent recovery proceedings based on the impugned judgment for six weeks.
Denial of exemption u/s 54 - non completion of the construction the flat by the builder within the stipulated period - Held that:- In view of the decision of Sambandam Udaykumar [2012 (3) TMI 80 - KARNATAKA HIGH COURT] the assessee cannot be denied exemption u/s 54 to the extent of investment in the new property, even though the construction of the new asset is not completed within the eligible period of 3 years for the date of sale/transfer of the original asset.
With respect to the amount invested in construction of the new property before the date of transfer of the original asset, it is well settled law that the amount invested within one year before the date of transfer of the original asset is to be allowed exemption u/s 54 of the Act. From the details of investments for purchase of the new asset as submitted by the assessee, it is stated that the assessee has only invested an amount of ₹ 2,26,82,097/- towards construction of the property. The AO is therefore directed to restrict the exemption allowable to the assessee to the actual amount spent on construction after due verification.
Short Credit of TDS - assessee contends that the ld CIT(A) has not disposed off the ground raised for directing the AO to grant the assessee full credit for TDS - Held that:- As submitted that the assessee had claimed TDS credit of ₹ 25,67,776/- in the return of income and the assessee’s grievance is that it has been allowed TDS credit of only ₹ 25,09,137/- by the AO. We, therefore, restore this issue to the file of the AO with direction for examination and verification of the assessee’s claim and to grant the assessee the TDS credit entitled to as per law
Penalty u/s 76 and 78 of FA - Contravention of section 73 of the Finance Act, 1994 - it is alleged that assessee had not disclosed the receipt of services to the department and did not pay the service tax on these services until pointed out by the audit team - Held that:- The appellant has paid the service tax liability immediately on pointing out the same by the audit and the appellant has paid the service tax along with interest prior to the issue of show cause notice and therefore the case of the appellant is covered under section 73(3) of Finance Act, 1994 - the revenue has not brought any evidence to show that there was suppression on the part of the appellant - penalty set aside - appeal allowed - decided in favor of appellant.
Intermediate goods - sugar syrup - N/N. 67/1995-CE dated 16.03.1995 - excisability/marketibility - demand of Central Excise duty on intermediate product ‘sugar syrup’ captively consumed in the manufacture of biscuits - Held that:- Tribunal in the said case of M/s Bhagwati Food Pvt. Ltd. and others [2016 (9) TMI 678 - CESTAT ALLAHABAD] held that, there was no evidence to prove that sugar syrup captively consumed is classifiable under Tariff Item No. 17029090 nor there is any evidence to prove that the goods in question in the form in which they come into existence in the appellants’ factory are marketable and finally held that Sugar syrup coming into existence during the manufacture of biscuits was not attracting Central Excise duty.
Sugar syrup coming into existence during the manufacture of biscuits and captively consumed does not attract Central Excise duty for the reason that there is no evidence that the same is marketable - appeal allowed - decided in favor of appellant.
Validity of re-assessment u/s. 147/148 - Information was received on the basis of search and seizure action u/s. 132 - specific information and admission of Shri Mukesh Chokshi - bogus entries of speculation profit/loss, commodities profit/loss - Held that:- Information was received on the basis of search and seizure action u/s. 132 of the act carried out in the group cases of M/s, Mahasagar Securities Pvt. Ltd. (now known as Alang Securities Security Pvt. Ltd.) wherein in the course of search Shri Mukesh Chokshi, who was managing and controlling the said group had admitted in his statement that the group was engaged in providing bogus entries of speculation profit/loss, commodities profit/loss.
AO has initiated action u/s. 147 by issuing notice u/s. 148 after analyzing the information received from the investigation wing on the basis of action carried out u/s. 132 as the main person has admitted that these companies were not doing genuine business. Reopening of the case assessee was initiated on the basis of specific information and admission of Shri Mukesh Chokshi in this order. Therefore, we do not find any error in the findings of the ld. CIT(A) on this issue. Accordingly, this ground of the assessee is dismissed.
Corporate insolvency procedure - existence of dispute - Held that:- Admittedly, operational creditor issued notice under sub-section (1) of Section 8 of I & B Code to the Corporate Debtor; in spite of receipt of the such notice, the Corporate Debtor had not disputed the claim nor submitted any reply under sub-section (2) of Section 8 within a period of ten days. It was in the aforesaid circumstances application under Section 9 was filed in Form 5, wherein it was specifically mentioned that ‘no objection has been filed by Corporate Debtor’ under sub-Section (2) of Section 8. In the aforesaid circumstances and in absence of any specific evidence brought on record, we are not inclined to interfere with the impugned order dated 16th August, 2017.
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