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Showing 321 to 340 of 1387 Records
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2016 (2) TMI 1072
CENVAT credit - MS Items - Held that: - The appellants have furnished the Chartered Engineers certificate which shows the details of use of the MS items. The flowchart gives the details of the capital goods used in the manufacturing process by the appellant - The issue whether MS items used for fabrication/manufacture of capital goods are eligible for credit has been settled by various decisions - credit allowed - decided in favor of appellant.
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2016 (2) TMI 1071
Revision u/s 263 - ‘Change in opinion’ - Held that:- As far as the question of invocation of jurisdiction through a notice u/s 263 is concerned, we have perused the said notice, photo copies placed before us and in our considered opinion the learned Commissioner was very much clear in his mind about the genuineness of the claim of expenditure, therefore, he had issued the said notice providing an opportunity to the assessee to explain the legality of the claim. Moreover, the assessee has also answered this query vide a reply without raising any doubt at that point of time. Hence we hereby hold that the objection is not sustainable in the eyes of law.
As examined the findings of Commissioner according to which he has directed the AO to make necessary enquiries as regards the allowability of the said expenditure that too after providing opportunity to the assessee. This is not the case where the directions were to disallow the expenditure in question but the directions were simply to verify the admissibility of the claim. In such situation when the learned Commissioner has not directed to disallow the claim, or in other words, the directions were not conclusive in nature, we hereby hold at this stage that no prejudice has been caused to the assessee. The assessee has ample opportunity to explain his case.
We, therefore, conclude that there is no fallacy in the directions of the learned Commissioner to the AO to pass a fresh assessment after making necessary enquiries in respect of the expenditure claimed under the head “Corporate Social Responsibility.” The order of the learned Commissioner passed u/s 263 dated 27-03-2014 is hereby confirmed. - Decided against assessee.
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2016 (2) TMI 1070
Condonation of delay - whether the finding of the Tribunal that there was no sufficient cause for the delay is perverse or not ? - Held that:- The question of condonation of delay in filing the appeal lies within the discretion of the Tribunal and that therefore, the exercise of such a discretion one way or the other cannot give rise to a question of law in terms of Section 260A of the Act. Therefore, in essence, it is contended by the learned Standing Counsel that no question of law arises for consideration in this appeal.
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2016 (2) TMI 1069
Taxability of flavoured milk - classification of the product - case of Revenue is that flavoured milk being in the nature of soft beverages, is liable to tax under circular dated 12.10.1983 - flavoured milk, whether milk or milk product? - Held that: - The department does not dispute the existence of this circular. It is well settled law that the circulars issued by the department are binding on it. According to the circular flavoured milk reaches best quality of being milk and does not cease to be milk and is to be taxed as such.
Assessee contends that the benefit of this circular has been given in other districts to various dealers.
The matter, therefore, requires reconsideration by the Tribunal - appeal allowed by way of remand.
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2016 (2) TMI 1068
Information sought for in the RTI application - Held that:- The petitioner is an exempted organisation under the Right to Information Act. Even the information sought does not pertain to allegations of corruption and/or Human Rights Violation.
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2016 (2) TMI 1066
Penalty levied u/s. 271(1)(c) - disallowance u/s. 40(a)(ia) r.w.s. 194C - Held that:- Commissioner of Income Tax (Appeals) confirmed the addition. In second appeal, the Tribunal granted part relief to the assessee. Against the findings of the Tribunal, the assessee filed appeal before the Hon'ble Bombay High Court wheren Hon'ble High Court was pleased to admit the appeal as it involved substantial question of law. Hon'ble Bombay High Court in the case of CIT Vs. Nayan Builders & Developers (P.) Ltd.(2014 (7) TMI 1150 - BOMBAY HIGH COURT) has held that no penalty is leviable where the issue is debatable and the High Court has admitted the appeal as it involves substantial question of law. - Decided in favour of assessee
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2016 (2) TMI 1065
Duty drawback - rejected as time barred on the ground that the petitioner had not complied with the requirements pointed out in the deficiency memo within the statutory period of six months provided in R. 5 of the Re-export of Imported Goods (Drawback of Customs Duties) Rules, 1995 - whether Rule 5(4)(a) of the Re-export of Imported Goods (Drawback of Customs Duties) Rules, 1995 is applicable to a claim for drawback only, under S. 74 of the Customs Act? - Held that: - Where the claimant has applied for drawback on re-export of duty paid goods only under S. 74 of the CA, 1962, the time bar under R. 5(4)(a) and (b) of the Re-export of Imported Goods (Drawback of Customs Duties) Rules, 1995 cannot be applied; but it can be pressed into service, where the claim is for interest on drawback under S. 75(A) of the CA, 1962. Where any claim for interest on drawback is returned to the claimant as incomplete in any material particulars or is without the documents specified, unless the requirements specified in deficiency memo are complied within thirty days from the date of receipt of deficiency memo, the same will not be treated as claim filed under sub-rule (1) of Rule 5 of the aforesaid Rules - claim is for drawback only under S. 74 and interest is not claimed. So, R. 5(4)(a) and (b) will not come into application; but the 5th respondent Revisional Authority went wrong by applying R. 5(4) and (b) of the above Rule. But the 5th respondent failed to appreciate the distinction between R. 74 and 75A in its correct perspective - petition allowed - decided in favor of petitioner.
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2016 (2) TMI 1064
Computation of deduction u/s 10A - HC [2015 (6) TMI 1044 - BOMBAY HIGH COURT] held Section 10A is a provision which is in the nature of a deduction and not an exemption - the deduction under Section 10A has to be given effect to at the stage of computing the profits and gains of business - Section 80B(5) defines for the purposes of Chapter VI-A “gross total income” to mean the total income computed in accordance with the provisions of the Act, before making any deduction under the Chapter . Appeal divided against revenue
Delay condoned. Revenue appeal against HC accepted.
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2016 (2) TMI 1063
Section 23 of the Travancore-Cochin High Court Act applicability - difference of opinion - Held that:- The principal subject matter contained in the present case is appeals before the High Court of Kerala. The particular perspective that we are concerned with is what is to happen, in such appeals, if there is a difference of opinion between two Judges hearing such appeals in the High Court. Viewed from this perspective there can be no doubt that the subject matter pertains to appeals in the High Court alone and not other courts. Those appeals can deal with civil, criminal, and other matters. The particular perspective therefore demands the application of a uniform rule to all such appeals, which rule is provided by the special rule contained in Section 23 of the Travancore-Cochin High Court Act, which in turn displaces the general rule which applies under Section 98(2) of the Code of Civil Procedure to all Courts and in civil proceedings only.
If the Letters Patent, being the Charter of the High Courts in British India, was a special law governing the High Courts untouched by any specific provision to the contrary in the Code of Civil Procedure, so would the High Court Acts, being the Charter of other High Courts, similarly remain as special laws untouched by any specific provision in the Code of Civil Procedure for the self-same reason. Viewed from any angle, therefore, it is clear that Section 23 of the Travancore-Cochin High Court Act, alone is to be applied when there is a difference of opinion between two learned Judges of the Kerala High Court in any appeal, be it civil, criminal, or otherwise, before them.
Hemalatha’s case [2002 (5) TMI 865 - SUPREME COURT] was wrongly decided and answer Question 1 referred to us by stating that Section 23 of the Travancore-Cochin High Court Act remains unaffected by the repealing provision of Section 9 of the Kerala High Court Act, and that, being in the nature of special provision vis-à-vis Section 98(2) of the Code of Civil Procedure, would apply to the Kerala High Court.
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2016 (2) TMI 1062
Bail application - Prevention of Money Laundering - Held that:- If the Schedules to the Act are perused, the applicant is not charged with any of the offences punishable under PMLA referred in the Schedule. It is pertinent to note that the applicant is facing charge only for the offences punishable under PMLA and is not the accused wherein the allegations of cheating, forgery etc. have been made against other accused which are scheduled offence. Therefore, there might be some illegal activities committed by the applicant i.e. with regard to cricket betting, but in my prima facie opinion, the said income would not be covered under the definition of proceeds of crime.
Application is allowed and the applicant is ordered to be released on bail in connection with ECIR No.- ECIR/03/AMZO/2015 [Now PMLA Complaint Case No.10 of 2015] registered at the instance of the respondent No.2, on executing a bond of ₹ 1,00,000/- (Rupees One Lac only) with two local sureties of ₹ 50,000/- each to the satisfaction of the trial Court and subject to the conditions that he shall;
[a] not take undue advantage of liberty or misuse liberty;
[b] not act in a manner injuries to the interest of the prosecution;
[c] surrender passport, if any, to the lower court within a week;
[d] not leave State of Gujarat and State of Maharashtra without prior permission of the concerned Sessions Judge;
[e] mark presence with the respondent No.2 on every Monday of each English Calendar month for a period of three months and thereafter on any day of the first week of each English Calendar month for a period of one year;
[f] furnish the present address of residence to the I.O. and also to the Court at the time of execution of the bond and shall not change the residence without prior permission of this Court;
The Authorities will release the applicant only if he is not required in connection with any other offence for the time being.
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2016 (2) TMI 1061
Reopening of assessment - loss as a result of fluctuation in foreign exchange derivatives - Held that:- The escapement of income by itself is not sufficient for reopening the assessment in a case covered by the first proviso to Section 147 of the said Act and unless and until there was failure on the part of the assessee to disclose fully and truly all the material facts necessary for assessment, the power to reopen the assessment should not be invoked. It was insisted that the reasons for reopening of the assessment should specifically indicate which material fact was not disclosed by the Assessee in the course of the original assessment under Section 143(3) of the Act failing which there should not be any reopening of the assessment.
The submission of Mr. Manchanda that relevant and material facts have to be specifically discussed in the returns of income of the tax audit report appears to overlook the fact that the Assessee cannot be expected to guide the AO on how he should scrutinize the accounts. In the letter dated 28th November 2011 of the Assessee in reply to the query of the AO in the original assessment proceedings, there was a whole note on exchange fluctuation enclosed in the form of Annexure-B. Despite this it cannot be said that the AO was ignorant of what the Assessee was doing in respect of foreign exchange loss while accounting for derivatives contracts. The change in the method of accounting and the consequential change in the loss figure have been adequately explained by the Assessee. Under Note J in the “Statement of significant accounting policy” in Schedule 22 to the audited annual accounts, the Assessee had made a distinction between foreign exchange contracts not intended for trading and speculative purposes and those for trading and speculative purposes. It is, therefore not possible to accept the plea of the Revenue that there was any deliberate failure on the part of the Assessee to make full and true disclosure of the change in the accounting policy that led to computation of loss as a result of fluctuation in foreign exchange derivatives.
This has to be also appreciated in the context of the Assessee following the mercantile system of accounting and Section 145 of the Act. The income of the Assessee is to be computed consistent with the regular method of accounting followed by the Assessee. The Assessee has been following AS-11 and AS-30 issued by the ICAI, in terms of which the loss/gains on outstanding derivatives contracts are to be recognized on mark to market basis. The Assessee is right in contending that CBDT Instruction No. 3 of 2010 cannot possibly override the existing decisions of the Supreme Court/ High Court on similar issues. - Decided in favour of assessee.
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2016 (2) TMI 1060
Assessment u/s 153A - disallowance of the claim of the interest expenditure incurred by the assessee on loans borrowed against the interest income - Held that:- We uphold the orders of the CIT(A) and delete the additions made on account of disallowance of the claim of the interest expenditure incurred by the assessee on loans borrowed against the interest income on the short ground itself by holding that completed assessments can be interfered with by the AO while making assessment under section 153A of the Act only on basis of some incriminating material unearthed during the course of search which was not produced or not already disclosed or made known in course of original assessment and undisclosed income or property discovered in course of search , while in the instant appeal the AO has in the assessments framed vide orders dated 31.12.2009 u/s. 153A read with Section 143(3) of the Act in pursuance to the first search on 19.07.2007 has duly examined and allowed the claim of the assessee for deduction of interest of ₹ 47,22,282/- being interest paid on loan borrowed against the interest income earned on loans advanced by the assessee and no new incriminating material has been found or unearthed during the course of second search on 29-03-2011 . See Commissioner of Income Tax (Central) -III Versus Kabul Chawla [2015 (9) TMI 80 - DELHI HIGH COURT ] - Decided in favour of assessee
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2016 (2) TMI 1059
Restoration of appeal dismissed - dismissal on the ground of non-compliance with the direction of pre-deposit - Held that: - It is reported under letter dated 09th November, 2015 by the Assistant Commissioner, Service Tax, Kolkata that the applicant had not deposited the amount of ₹ 23,12,868/- - application dismissed - decided against assessee.
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2016 (2) TMI 1058
Natural justice - Form WW - the respondent has not appreciated the audit report and wrongly taken four years total turnover for framing an assessment prior to submission of the report required u/s 63-A of TNVAT, 2006 - Held that: - The respondent is directed to receive Form “WW” u/s 63-A of TNVAT Act, 2006 and decide the matter afresh, after giving an opportunity of personal hearing to the petitioner, on merits and in accordance with law - appeal allowed by way of remand.
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2016 (2) TMI 1056
Natural justice - waiver of pre-deposit - the TDS has been deducted, there is no liability and therefore, waiver should be granted, certificate of same has been produced now, which is not taken note of by the Tribunal - Held that: - once the tax is found to be deducted at source and TDS Certificate issued indicates that nothing further has to be paid. If that be the position, even the pre deposit amount is not necessary - it is a fit case where the Appellate Authority should be directed to examine the appeal on merit and decide it in accordance to law - appeal allowed by way of remand.
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2016 (2) TMI 1055
Scope and validity of order cum-show cause type letter, which is at Annexure-2 - it is the case of petitioner that Annexure-2 should be given effect to only as a notice and the direction given in the last paragraph of Annexure-2, may not be treated as a concluded amount to be paid by this petitioner - Held that: - it appears that Annexure-2 is merely a notice given to the petitioner for payment of taxes under Jharkhand Value Added Tax Act, 2005 and for curtailment of the Input Tax Credit as well as for the penalty - The amount mentioned in Annexure-2 is not a final figure at all, the decision inclusive of penalty shall be taken after hearing the petitioner - Till Annexure-2 notice is decided by the Competent Authority under the Jharkhand Value Added Tax Act, 2005, no coercive steps for recovery of the said amount, which is referred to in Annexure-2, shall be initiated against the petitioner - petition allowed - decided in favor of petitioner.
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2016 (2) TMI 1054
Addition being the profit on sale of investments - Held that:- Clause (b) was omitted by the Finance Act, 1988 leading to the situation that now neither the loss written off or reserved in the accounts to meet depreciation is required to be reduced from the profits nor appreciation in or gain on the realization of investments is to be added. This position has been clarified by the Memorandum Explaining the Provision in the Finance Bill, 1988. As seen from the legislative intent made explicit through Memorandum Explaining the Provision, Notes and Clauses and also circular issued by the CBDT exemption is to be provided in respect of the profits earned by the insurance company on sale of investment and consequently no deduction is to be allowed towards losses incurred on the realization of investments. In simple words the prescription of the hitherto cl. (b) of r. 5 has been taken back, which granted deduction towards the depreciation reserve or loss on realization of investments and increment towards appreciation in or gains on the realization of investments.
The AO’s viewpoint cannot be accepted for the reason that with the omission of cl. (b) of r. 5 it has been made clear that neither the loss on account of diminution in the value of investment shall be allowed as deduction nor any income on investment shall be subjected to tax. Both the items of loss and income from the investments are to be considered as neither deductible nor includible in the total income of the assessee. Therefore the CIT(A) was justified in deleting the addition made by the AO. We do not find any grounds to interfere with the order of the CIT(A). Accordingly the appeal of the revenue is dismissed.
Addition u/s 14A - Held that:- The Assessee’s case being for the Assessment Year 2006-07, there cannot be any applicability of the above-referred subsection (2) of section 14A or Rule 8D in the Assessee's case for the Assessment Year 2006-07. In the given circumstances, the quantum of disallowance had to be decided in the light of the decisions rendered by the ITAT Kolkata Benches in the cases referred to by the CIT(A) in the impugned order. In those decisions, the ITAT, Kolkata Benches have consistently taken a view that 1% of the exempted income/dividend shall be considered as expenses/expenditure relating to the earning of exempted income u/s 14A in the assessment years where the rule 8D was not applicable.
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2016 (2) TMI 1053
Deduction of discounts - The petitioner claims that it is a dealer in cars and is entitled to deduction of discounts allowed to customers in the sale price of cars after the cars were sold by issuing credit notes - reliance was placed by the petitioner in the case of Pratham Motors Pvt. Ltd. v. Additional Commissioner of Commercial Taxes [2012 (9) TMI 907 - KARNATAKA HIGH COURT], where the issue was Whether it is permissible for the assessee to show the discount given by a separate credit note subsequently and claim deduction even though the said discount is not shown in the tax invoice or sale bill and it was held that Ratio laid down in Southern Motors' case [2008 (7) TMI 862 - KARNATAKA HIGH COURT] does not prohibit the issuance of credit note subsequent to the sale bill. It is held that such modification in the sale bill is permitted if it is done within six months from the date of sale transaction - Held that: - Interpreting rule 31 of the KVAT Rules, this court held that a dealer was entitled to give further discount even after the sale has been completed provided the discounts are customary practice in the trade or otherwise known as trade discount and that the onus of proving the said fact was on the assessee and he ought to demonstrate that the discount given was in accordance with the provisions of the Act and Rules - the referred case by petitioner is squarely applicable to the present case - the petitioner has made out a case - petition allowed - decided in favor of petitioner.
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2016 (2) TMI 1051
Wrong valuation of the closing stock - method of valuation of closing stock - return subsequently revised under section 139(5) - Held that:- The closing stock included rice, rice bran, phak, husk and bardana and the assessee revised the value of rice husk, rice bran and bardana. The assessee took a plea that since the valuation of certain finished goods was wrongly adopted at higher rates, their realizable value needed to be rectified. The assessee in the revised return filed under section 139(5) of the Act also had not depicted the true and correct value of the finished goods. Accordingly, the Assessing Officer assessed the income of the assessee at ₹ 9,38,600 by making an addition of ₹ 8,52,513. On appeal by the assessee, the Commissioner of Income-tax (Appeals) restricted the said addition of ₹ 8,52,513 to ₹ 14,344. On further appeal by the Revenue, the Tribunal sustained the addition of ₹ 8,52,513 made by the Assessing Officer by holding that the said addition was made on the basis of sale instances and not on hypothetical basis. It was further held by the Tribunal that nothing was produced by the assessee to show the basis of wrong valuation.
The assessee itself adopted the value of rice at ₹ 1050 per quintal and no reason had been given for revaluing the same at ₹ 950 per quintal. The stock had to be valued either at the market rate or at the cost price but the assessee had adopted a different view which was not realistic. Further, for husk, the original value was taken at ₹ 55 per quintal which was revised to ₹ 48 per quintal but in the case of Pooja Fats Pvt. Ltd., a sister concern of the assessee, the closing stock of husk was valued at ₹ 60 per quintal. For rice bran, the value of rice was worked at ₹ 328 per quintal which was revised to ₹ 280 per quintal whereas during the relevant financial year, it was at the rate of ₹ 295 per quintal. - Decided against assessee
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2016 (2) TMI 1050
Transfer pricing adjustment - selection of comparable - Held that:- Assessee had considered itself to be software development services provider and the TPO had also accepted this. The most appropriate method selected both by assessee and TPO were TNM method. This method obviates necessity for complete product identity or services identity between the tested party and the comparables. Broad functional similarities would suffice. However, where the functional profile show that the dissimilarity, even within the very same segment was so significant so as to erode the comparability, then there is a good case for exclusion. Assessee has mainly relied on the decision of the Co-ordinate Bench in the case of M/s Cisco Systems (Ind.) Pvt.Ltd (2014 (11) TMI 849 - ITAT BANGALORE ). The said company was also engaged in the business of rendering software development services. Nothing has been brought before us by the revenue to show that the functional profile of M/s Cisco Systems (Ind) Pvt.Ltd(Supra) was so different from that of the assessee so as to erode the comparability of the comparable companies considered in the said case with that of the assessee. In our opinion, assessee is justified in relying on the said decision which was also for the very same assessment year.
Hon’ble Delhi High Court in the case of CIT Vs M/s Agnity India Technologies Pvt. Ltd. (2013 (7) TMI 696 - DELHI HIGH COURT ) had affirmed an order of this Tribunal were M/s Infosys Technologies Ltd was directed to be excluded from the list of comparables considering the peculiar features of the said company. Hence, no purpose will be served in remitting the question of comparability of M/s Infosys Tech.Ltd back to the TPO/AO. In view of the above discussion, we direct exclusion of M/s Bodhtree Consulting Ltd., M/s Tata Elxsi Ltd.(Seg.) and M/s Infosys Tech.Ltd from the list of comparables.
Working capital adjustment - Held that:- AO cannot force an artificial limitation to the actual working capital adjustment ratio derived from the comparable companies considered for the arm’s length study. The restriction of working capital adjustment based on PLR of SBI will be appropriate since it is based on a presumption with all lending or credit are having uniform interest rates as decided by the SBI. We therefore, direct the AO to give working capital adjustment considering the comparable companies after exclusion of the three companies mentioned above
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