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Showing 321 to 340 of 1477 Records
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2016 (4) TMI 1158
Unre-conciled difference between the books of account with the AIR information- Held that:- As decided in Shri S Ganesh V/s ACIT [2010 (12) TMI 851 - ITAT, Mumbai ] in absence any record contrary to the fact, the revenue authorities could not make any addition on account of AIR information.
Addition u/s 35D - expenditures pertained to increase in authorized capital and issue of share capital - Held that:- Where the assessee is a person other than a company or a co-operative society, no deduction shall be admissible under sub-section (1) unless the accounts of the assessee for the year or years in which the expenditure specified in sub-section (2) is incurred have been audited by an accountant as defined in the Explanation below sub-section (2) of section 288, and the assessee furnishes, along with his return of income for the first year in which the deduction under this section is claimed, the report of such audit in the prescribed form duly signed and verified by such accountant and setting forth such particulars as may be prescribed. After perusing the provisions of section 35(2)(iii) of the Act as above, we find that the expenses incurred for increasing the size of the authorized capital specifically mentioned in the said section to be admissible expenses. We, therefore, find no infirmity in the order of the ld. CIT(A) and dismiss the ground raised by the revenue. This ground of revenue stands dismissed.
TDS u/s 194A - non deduction of tds on payments of labour charges, painting, repairs and maintenance, electricity, godown charges etc - Held that: - As the assessee had made payment to four companies on account of repayment of finance borrowd from them by way of EMI which were inclusive of interest element and the assessee had not deducted any tax at source. Similarly, as regards the amount which represents the payments of labour charges, painting, repairs and maintenance, electricity, godown charges etc, the assessee did not deduct any tax at source and consequently, the AO during the course of scrutiny found that these payments are covered under the provisions of section 40(a)(ia) of the Act and added the same to the income of the assessee. In the appellate proceedings, the ld. CIT(A), the addition was confirmed on the ground that the payments were to be subjected to TDS which the assessee had failed to. Thus, the addition has rightly been made by the AO as is clear from the facts before us as the assessee had failed to deduct the tax at source which was required to be deducted under the provision of section 194A on EMIs interest element and also u/s 194C with respect to various expenses amounting to ₹ 436,958/- as stated hereinabove. Thus, the assessee had violated the provisions of the Act by not deducting the TDS at source. We, therefore, find no infirmity in the order of the ld. CIT(A) which had rightly confirmed, the addition with respect to ₹ 9,11,863/- on account interest of loans and ₹ 4,26,138/- for various expenses
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2016 (4) TMI 1157
Sale of land - nature of land - adventure in the nature of trade - whether the land sold by assessee in GAT No. 41 situated at village Sate as ‘Capital Asset’ u/s. 2(14) of the Income Tax Act, 1961? - agricultural land - municipal limits - Treatment to the surplus arising from sale of land as business income - Held that:- Land sale transaction undertaken by the assessee is not adventure in the nature of trade. The Revenue has not been able to show that the land was held as a trading asset. The authorities below have drawn inference only from the proximity of alleged date of purchase and sale of land to form a presumptive opinion that the transaction was a business transaction. Merely for the reason that land was held by the assessee for short duration, it cannot be said that the land purchased and sold by the assessee is in the adventure in the nature of trade. As has been held in the case of CIT Vs. Dhable, Bobde, Parose, Kale, Lute and Choudhari (1992 (9) TMI 45 - BOMBAY High Court ), the onus is on the Revenue to prove that the land was part of business assets. The Department has not been able to show that the assessee was engaged in the organized activity of sale and purchase of land or property dealing. Further, there is no document on record to show that the assessee had developed the land or has divided the land into plots. The Department has failed to controvert the assertions of the assessee that there has been no change of land use i.e. conversion from Agricultural to non-Agricultural use. Rather, the assessee has been able to show from records that the land has been sold to an agriculturist in compliance with the provisions of section 63 of the Bombay Tenancy Act. In our considered view the Revenue has failed to discharge its onus to show that the sale of land by the assessee was a business transaction. Thus, the first question raised before us is answered in favour of the assessee.
Whether the land is situated within 8 Kms or beyond 8 Kms from the Municipal limits of Talegoan? - Held that:- Since, the certificate has been issued by the Govt. Department reliance can be placed on the same. However, a perusal of the certificate shows that the distance mentioned is between Talegaon and Sate. The certificate does not mention that village Sate is 10 KM from the Municipal limits of Talegaon. There is a difference between the distance from the Municipal limits and distance between to town/cities whih is generally measure from the center of the town were bus stand/railway station is situated. PWD being engaged in the construction of roads and bridges, for the purpose of measuring distance between the two cities generally measures the distance from bus stand/railway station of one city to the bus stand/railway station of the other. The certificate issued by PWD does not mention that whether the distance is from Municipal limits or any other point/landmark. Thus, in view of ambiguity in the certificate issued by the PWD, we deem it appropriate to remit the file back to the Assessing Officer for the limited purpose of ascertaining the distance of the land in question form the Municipal limits of Talegaon. The Assessing Officer may seek clarification on this issue from PWD or seek fresh certificate from any Government Agency other than village Talathi. The second issue raised in the appeal of the assessee is accordingly allowed for statistical purpose.
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2016 (4) TMI 1156
Issues involved: Determination of whether income received from the sale of carbon credit is revenue or capital in nature.
Analysis:
1. Nature of Income: The primary issue in this appeal is to ascertain whether the income generated from the sale of carbon credits should be classified as revenue or capital in nature. The Tribunal referred to a previous decision in the assessee's case for the assessment year 2010-11, where it was established that carbon credit receipts are to be treated as 'capital' in nature. The Tribunal highlighted that the receipts from trading carbon credits are not directly linked to power generation but rather stem from environmental concerns, leading to the conclusion that they are capital receipts. The Tribunal also noted that the assessee had initially declared the sale receipts as income to claim a deduction under section 80IA, but later sought to withdraw this declaration. Despite the CIT(A) applying the 'estoppel' principle against the assessee, the Tribunal accepted the alternative claim, emphasizing that the substantial legal question had been settled in favor of the assessee regarding the nature of the receipt.
2. Legal Interpretation: The Tribunal delved into the legal interpretation of the term 'derived' in section 80IA, emphasizing that profits eligible for deduction must be directly arising from the particular activity. Referring to the decision in CIT v. Sterling Foods, the Tribunal reiterated that the term 'derived' restricts qualifying profits to those directly stemming from the specific activity. Consequently, the Tribunal concluded that revenue from the sale of carbon credits cannot be considered eligible for deduction under section 80IA. The Tribunal further highlighted that the receipts from trading carbon credits are not derived from the power generation activity but are attributable to the business of generating electricity from non-conventional means.
3. Decision and Outcome: Based on the analysis and legal interpretation, the Tribunal ruled that the income from the sale of carbon credits is 'capital' in nature and therefore not eligible for deduction under section 80IA of the Act. The appeal of the assessee was partly allowed, aligning with the previous decision in the assessee's case for the assessment year 2010-11. The Tribunal left open the issue of excluding specific receipts from the sale of carbon credits pertaining to a previous assessment year for the Assessing Officer to address in accordance with the law. The final order was pronounced on 1st April 2016 in Chennai, marking the conclusion of the legal proceedings.
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2016 (4) TMI 1155
Issues: Appeals relating to Assessment Years 1998-99 and 2003-04; Interpretation of Circular No. 21 of 2015 regarding monetary limits for filing appeals in tax matters; Tax effect below prescribed limits in the appeals; Dismissal of appeals due to tax effect not exceeding the monetary limit.
Analysis:
1. The Appeals in question pertain to the Assessment Years 1998-99 and 2003-04. The central issue revolves around the interpretation and application of Circular No. 21 of 2015 issued by the Central Board for Direct Taxes. This circular sets monetary limits for filing appeals in income tax matters before different appellate authorities. The Circular emphasizes that appeals should not be filed solely based on the tax effect exceeding the prescribed monetary limits but should be decided on the merits of the case.
2. Circular No. 21 of 2015, as highlighted in the judgment, specifies different monetary limits for filing appeals based on the appellate authority. For appeals before the High Court, the monetary limit is set at Rs. 20,00,000. However, the circular also clarifies that in cases of a composite order involving multiple assessment years and common issues, appeals should be filed for all such years, even if the tax effect is below the prescribed limit for any specific year. Each assessee in a composite order involving multiple taxpayers should be dealt with separately.
3. The tax effect in the present cases, as per the Appeal Memos, was below the prescribed limit for filing appeals before the High Court. Specifically, the tax effect for the Assessment Year 2003-04 was 9.26 lakhs and for the Assessment Year 1998-99 was 3 lakhs. Since none of the appeals had a tax effect exceeding Rs. 20,00,000, the learned Counsel for the Revenue decided not to press the appeals, leading to their dismissal.
4. Consequently, both Appeals were dismissed as not pressed due to the tax effect being below the prescribed monetary limit for filing appeals before the High Court. The judgment also ordered the refund of Court Fees as per Rules. This decision aligns with the principles outlined in Circular No. 21 of 2015, emphasizing the importance of considering the merits of each case rather than solely focusing on the tax effect for determining the filing of appeals in income tax matters.
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2016 (4) TMI 1154
Cenvat credit - availed on MS Angles, MS Plates, MS channels, MS Beams, HR sheets/coils etc. - MS items used for repair and maintenance of plant and machinery - also used for re-conditioning of worn out equipment and erection /fabrication of new equipment and connected ducting within the factory of production - Held that:- by following the dictum of judgments of Hon’ble High Court in the case of CCE & Cus. Visakhapatnam Vs Rashtriya Ispat Nigam Ltd [2011 (4) TMI 1098 - ANDHRA PRADESH HIGH COURT] held that credit on steel sheets and coal used in repair and maintenance of capital goods in the factory of manufacturer is admissible, the judgment of Hon'ble Apex Court in the case of Ramala Sahkari Chini Mills Ltd Vs CCE, [2010 (11) TMI 34 - SUPREME COURT OF INDIA], wherein the issue whether credit is admissible on welding electrodes used for repair and maintenance doubted the interpretation of ‘inputs’ rendered in the case of Maruthi Suzuki Ltd and referred the matter to the Larger Bench. The Hon’ble Larger bench of Apex Court in Ramala Sahkari Chini Mills Ltd case [2016 (2) TMI 902 - SUPREME COURT] answered the reference observing that the word ‘ includes’ used in the definition does not have a restrictive meaning, the credit availed on MS items used for repair and maintenance of plant and machinery is admissible. - Decided in favour of appellant
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2016 (4) TMI 1153
Imposition of penalty - Section 112 (b) of the Customs Act, 1962 - Section 117 of the Customs Act, 1962 – CHA – classification – food supplements – medicaments – Held that: - the imported goods were declared as classifiable under heading food supplements, as informed to the CHA. Further it was CHA only who applied for first check. The issue of classification is a complex issue and it cannot be said that the CHA should have opinion that the goods were not food supplements but were medicaments. Having made the declaration, it was for the Customs Department to find out the correct classification of the same – penalty not imposed – appeal allowed – decided in favor of appellant.
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2016 (4) TMI 1152
Levy of penalty as per Explanation-I Section 271(1)(c) - Company has gone into liquidation and the Official Liquidator has been appointed - Whether the assessee has been able to show that his conduct was bona fide – Held that:- HC order confirmed - 2014 (12) TMI 481 - DELHI HIGH COURT
The contention of the assessee cannot be accepted that all claims howsoever untenable, once certified by a Chartered Accountant or the Directors of the company, cannot be made a subject matter of penalty proceedings - most of the income tax returns are accepted without scrutiny or regular assessment and self-compliance of tax provisions - the assessee had not filed revised return voluntarily, but had filed the revised return after the AO confronted the assessee and they were asked to explain how and why loss on account of sale of fixed assets was claimed in the profit and loss account – the levy of penalty is upheld u/s 271(1)(c) – Decided against assessee.
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2016 (4) TMI 1151
Penalty under section 271(1)(c) - excess deduction claimed on account of interest on borrowed capital in respect of self– occupied property - Held that:- The assessee has paid the interest amount claimed as deduction. It may be a fact that due to oversight or ignorance of relevant statutory provision, the assessee had claimed the excess deduction on account of payment of interest payment of the self–occupied property. However, for claiming such deduction, no malafide intention can be imputed to the assessee. As such deduction claimed possibly could be on account of human error, no penalty can be imposed under section 271(1)(c), as held by the Hon'ble Supreme Court in Price Waterhouse Coopers Pvt. Ltd. (2012 (9) TMI 775 - SUPREME COURT ). In view of the aforesaid, we delete the penalty imposed under section 271(1)(c) of the Act. - Decided in favour of assessee.
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2016 (4) TMI 1150
Availment of credit without receipt of goods - Held that:- Revenue has established that the material received by M/s.Cethar Vessels Pvt. Ltd. was of greater thickness than the material allegedly supplied by the appellant. It is seen that duty paying invoices on the basis of which the appellant who are a registered dealer have issued the invoices contained the thickness of the plate. The main noticee M/s.Cethar Vessels Pvt. Ltd. have accepted their liabilities and have paid their dues, after the same was adjudicated by the Additional Commissioner. It is seen that the case of appellant is not covered by Section 11A (2) as in this case the dues were paid after the matter was adjudicated and not immediately on issue of information. Section 11A(2) requires payment of duty within 30 days of the issue being raised. In the instant case the payment has been done much later than the issue of show-cause notice and 30 days after adjudication. Since in this case, the provisions of 11A (2) are not attracted the co-noticees cannot get any benefit in terms of the decision of the Tribunal in the case of Raman Gandhi Vs. CCE, Delhi (2015 (3) TMI 1110 - CESTAT NEW DELHI ) & Tikam P Bhojwani Vs. CCE, Ahmedabad (2011 (3) TMI 893 - CESTAT, AHEMDABAD ) cited by them. - Decided against assessee
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2016 (4) TMI 1149
Wrong availment of CENVAT Credit - appellant have availed CENVAT Credit of the certain services received exclusively for use in respect of exempted products and therefore, they were not entitled to avail credit on the same - extended period invoked - Held that:- The credit taken by the appellant is clearly inadmissible as the said services were used for the purpose of a totally exempted final product. This is an undisputed fact. The appellant s contention that they had declared the same correctly in their return is mis-placed.
Also find that the declaration (b) of the Self Assessment Memorandum is incorrect as they have not taken the credit as per law. This fact has not been disputed by them. Furthermore, in the era of self assessment, the onus of taking credit correctly has been put on the appellant and this self assessment memorandum requires them to take the credit correctly and as per law. Further, in view of the observation of the Tribunal in the case of Balmer Lawrie & Co. (2014 (2) TMI 545 - CESTAT MUMBAI ) find that the extended period can be invoked in such circumstances. - Decided against assessee
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2016 (4) TMI 1148
Application for early hearing rejected by the tribunal - recurring issues - out of turn hearing - Held that:- While the Tribunal is right and justified in holding that all appeals should actually come in queue, it is not easy to reject the contention that there must be an emergency ward also. Some cases, which require urgent attention, not merely due to any reason attributable to the assessee, but also for the reason that the issue raised therein may cover the issues raised in several appeals, may have to be taken up out of turn.
Therefore, the appeal is allowed, the order of the Tribunal is set aside and the matter remitted back to the Tribunal to fix a date for early hearing depending upon the convenience of the Tribunal, taking note of the fact that the issue is of recurring nature and that one disposal may enure to the benefit of several appeals.
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2016 (4) TMI 1147
Denial of Cenvat credit of the service tax paid on the services used for cleaning and maintaining the factory - Held that:- Section 11 of the Factories Act, 1948 having casted the responsibility on the appellant to keep its factory clean as a statutory obligation, there cannot be denial of the Cenvat credit of the service tax paid on the services used for cleaning and maintaining the factory. Tribunal has already taken a view in this manner in the case of Delphi Automotive Systems Pvt. Ltd., Vs Commissioner of Central Excise, Noida (2015 (11) TMI 714 - CESTAT NEW DELHI ). - Decided in favour of assessee
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2016 (4) TMI 1146
Transfer pricing adjustment - addition on AMP expenses - Held that:- Considering the facts-like absence of an agreement between the assessee and the AE. s. for sharing AMP expenses, payment made by the assessee under the head AMP to the domestic parties, failure of the TPO prove that expenses were not for the business carried out by the assessee in India-and following the judgments of the Hon’ble Delhi High Court delivered in the case of Bausch and Lomb (India) Pvt. Ltd (2015 (12) TMI 1332 - DELHI HIGH COURT ), we are of the opinion that the transaction in question was not an international transaction and that the TPO had wrongly invoked the provisions of Chapter X of the Act for the said transaction. First effective ground of appeal (GOA1-16) is decided in favour of the assessee and the additions made by the AO are directed to be deleted.- Decided in favour of assessee
Linking of AMP expenses and recovery of AMP expenses on sales support service - TPO held that the assessee was rendering brand promotion services, that it should have recovered 94 crores plus markup from AEs in addition to sales support services - Held that:- While deciding the issue of adjustment on account of AMP expenses, we have held that expenditure incurred by the assessee under the head AMP was beyond the purview of section 92 of the Act, as it was not an international transaction. As no adjustment could be made with regard to AMP expenses, so, there is no justification for mark up of AMP and resultant adjustment on sales support services - Decided in favour of assessee
Adjustments on account of purchase of raw materials from the AE - Held that:- We find that the assessee had shown [email protected]% for AE-transaction and had suffered loss @15. 73% on non-AE transaction, that the assessee was purchasing raw material for manufacturing whisky from the AE. s. , that for manufacturing other alcoholic beverages the raw material was procured locally from unrelated parties, that the TPO did not approve the segmented results, that he selected 15 comparables, that after considering the objections of the assessee, he selected ten comparables, that he adopted margin of 2. 13% and proposed an addition of ₹ 13. 56 Crores, that the DRP passed certain directions while dealing with the objections raised by the assessee, that it had directed the AO to recalculate the margin taking into account the adjustment on account of AMP expenses, that while passing the final order the AO had made no adjustment. As we have held that no adjustment can be made under the head AMP, so, the issue will revive. Considering the peculiar facts and circumstances of the matter, we are of the opinion that the matter needs further verification. Therefore, issue is restored back to the file of the AO for fresh adjudication - Decided partly in favour of assessee by remanding
Addition made on account of surplus stock - Held that:- We find that during the course of survey at the business premises of the assessee, variation in stock was found, that the assessee had submitted a letter from the excise official of the state government, that the AO and the DRP were of the opinion that the letter was of no help to the assessee to reconcile the difference, that the assessee was not provided the copy of the statements, that it also had no access to the documents that resulted in addition, that the DRP held that there was no infringement of the principles of natural justice. In our opinion, approach of the DRP was suffering from fundamental defect-it ignored the principles of natural justice. Non-supply of the copy of statements and documents that led to an addition of Rs. more than one crore, in itself is sufficient to set aside the order of DRP. Principles of natural justice have to be observed in letter and spirit especially when the assessee proves that the AO had not followed them and raised demand unilaterally. Considering the peculiar facts and circumstances of the case, we are of the opinion that in the interest of justice issue should be restored back to the file of the AO for fresh adjudication - Decided partly in favour of assessee by remanding
Disallowance of club expenditure - Held that:- his issue now stands covered in favour of the assessee in assessee’s own case for assessment year 2006–07, wherein identical issue raised by the assessee has been allowed by the Tribunal. We also find that the issue before us is also covered in favour of the assessee by the judgment of Hon'ble Jurisdictional High Court in CIT v/s Raychem RPG Ltd. [2011 (7) TMI 953 - Bombay High Court ). - Decided in favour of assessee
Disallowance of royalty - Held that:- We find that sales of brand Smrinoff for the A. Y. s 2007-08, 2008-09 and 2009-10 stood at ₹ 76. 31 crores, ₹ 107. 98crores and ₹ 115. 06 crores respectively, that the payment of royalty has not been doubted either by the AO or the DRP, that the assessee had suo moto had disallowed the royalty u/s. 40(a)(ia) of the Act, that TDS on royalty was deposited with the Government Treasury in the AY 2011-12, it was submitted by the assessee that royalty had to be allowed in the year in which TDS had been deposited i. e. 2010-11. As far as the year under consideration is concerned the expenditure has not been claimed. Whether it is allowable in the AY. 2011-12 has to be decided in that year. Therefore, the ground raised by the assessee is treated as infructous.
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2016 (4) TMI 1145
Exemption u/s 11 denied - violation of section 13 - whether the entire income of the trust is chargeable to tax at maximum marginal rate as against only that income which has violated section 13 as mandated by provision to section 164(2) of the IT Act, 1961? - Held that:- Where there is violation of section 13, the entire income of the trust is not chargeable to tax at maximum marginal rate and it is only that income which has violated section 13 which shall suffer maximum marginal rate as per proviso to section 164(2) of the Act.
Further, the appellant has submitted that the amount of ₹ 20,00,000 with interest of ₹ 2,16,000/- i.e. ₹ 22,16,000/- was received back by the trust and the interest income of ₹ 2,16,000/- was offered in the return for AY 2012-13 and there is no income generated on amount of ₹ 20 lacs advanced to M/s Rajakala Industries Limited during the year. There is nothing on record to controvert the said submissions of the appellant. Thus, there is no income during the year which can be brought to tax at maximum marginal rate in the hands of the trust in a scenario where it is held that there is violation of provisions of section 13. In view of the same, we don’t think it would be relevant to examine whether the appellant trust has violated the provisions of section 13 of the Act as the same has become infructious in the facts and circumstances of the present case. The AO is accordingly, directed to allow exemption to the appellant trust u/s 11 and the addition made by the AO and confirmed by CIT(A) is hereby deleted. - Decided in favour of assessee.
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2016 (4) TMI 1144
Job work - Business Auxiliary Services (BAS) - activity of chilling of milk - Held that:- the process of chilling of milk to make it fit for long distance transportation without getting spoiled, is an activity not covered under the Business Auxiliary Service definition. - demand of service tax set aside - Decided in favor of assessee.
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2016 (4) TMI 1143
Addition made on account of gain arising out of repurchase of debentures - CIT(A) deleted the addition - Held that:- We find that the order passed by the Commissioner of Income Tax (Appeals) is well reasoned and thus no interference is called for placing reliance on the decision of Hon'ble Karnataka High Court in the case of CIT Vs. Industrial Credit & Development Syndicate Ltd.(2006 (3) TMI 90 - KARNATAKA High Court ) wherein held to the reality of the situation, as the assessee has not derived any income, he is entitled not to treat it as an income. Therefore, the Tribunal was fully justified in its conclusion that the said surplus amount reflected in the balance-sheet cannot be treated as an income of the assessee. - Decided in favour of assessee
Addition made on account of Bad debts - the assessee company could not prove the Bonafide of the said bad debts and the accounting entries thereof - CIT(A) deleted the addition - Held that:- The issue in present appeal is identical to the issue adjudicated by the Co-ordinate Bench of the Tribunal in assessee’s own case in earlier assessment years wherein held that the impugned disallowance has been made by the Assessing Officer on mere conjectures and surmises. It is quite clear that the claim of the assessee for the bad debts written-off is in terms of section 36(1)(vii) r.w.s. 36(2) of the Act. It is also quite clear that the debts in question have been actually written-off as irrecoverable in the account books of the assessee. It is also not disputed by the Revenue that the impugned debts have arisen in the course of carrying on assessee’s business of financing. Therefore, having regard to the factual position and the parity of reasoning laid down by the Hon’ble Supreme Court in the case of TRF Ltd. (2010 (2) TMI 211 - SUPREME COURT ), we find no error on the part of the CIT(A) in deleting the impugned addition - Decided in favour of assessee
Non inclusion of interest on Non- performing assets - overriding of provisions of RBI Act over the provisions of Sec. 145 of the Income Tax Act - Held that:- As decided in assessee's own case as per the CIT(A), unrecognized income on NPAs classified in terms of RBI guidelines cannot be assessed on actual basis. The aforesaid stand of the CIT(A) is directly supported by the judgement of the Hon’ble Delhi High Court in the case of Brahamputra Capital Financial Services Ltd. (2011 (5) TMI 321 - Delhi High Court ), which is also a case of a NBFC. The CIT(A) has also relied upon the decision of the Pune Bench of the Tribunal in the case of Alfa Laval Financial Services Ltd. (2011 (9) TMI 1083 - ITAT PUNE), which is also a copy of a NBFC. The Revenue has not brought to our notice any decision to the contrary. - Decided in favour of assessee
Disallowance made u/s. 14A of the Act read with Rule 8D - Held that:- In assessment year 2009-10 disallowance has been made for the similar reasons and the Commissioner of Income Tax (Appeals) has made observations with regard to the satisfaction recorded by the Assessing Officer for invoking the provisions of Rule 8D in identical words, as was recorded in assessment year 2008-09. We respectfully follow the order of Co-ordinate Bench of the Tribunal and delete the addition made u/s. 14A r.w. Rule 8D. In assessment year 2008-09 the assessee had made disallowance of ₹ 57,600/-, which includes ₹ 7,600/- towards demat charges and ₹ 50,000/- based on past assessments. Similarly, in the assessment year under appeal we direct the Assessing Officer to make disallowance of ₹ 26,951/- towards demat charges and ₹ 50,000/- to cover other expenditure. Thus, total disallowance u/s. 14A would be ₹ 76,951/-. Accordingly, the first issue raised in the appeal by the assessee is partly allowed.
Non grant of TDS credit - Held that:- The issue relating to grant of TDS credit was considered by the Co-ordinate Bench of the Tribunal in assessee’s own case in assessment year 2008-09. After perusal of the order of Co-ordinate Bench of the Tribunal in appeal by the assessee for assessment year 2008-09 (supra), we find that this issue was remitted back to the file of Assessing Officer to allow the credit for the TDS on behalf of the assessee in the light of judgment of Hon'ble Allahabad High Court in the case of Rakesh Kumar Gupta Vs. Union of India & Others (2014 (5) TMI 520 - ALLAHABAD HIGH COURT ). Since, the issue in the present appeal is identical we deem it appropriate to remit this issue back to the file of Assessing Officer to decide the issue in similar terms.
Claim for deduction in respect of amortization of premium paid for securities forming part of business assets - Held that:- We remit this issue back to the file of Assessing Officer to decide the issue in accordance with the judgment of Hon'ble Bombay High Court in the case of Commissioner of Income Tax Vs. M/s. Lord Krishna Bank Ltd. (2014 (7) TMI 997 - BOMBAY HIGH COURT ) holding that the assessee is entitled for deduction with respect to the diminution in value of the investment and amortization of premium on investment held to maturity on the ground of mandate by RBI guidelines – Decided against revenue.
Claim of deduction in respect of Employee Stock Options (ESOP) expenditure - Held that:- It is an admitted fact that the assessee has claimed ESOP expenditure for the first time before the Tribunal. The Hon'ble Supreme Court of India in the case of Goetze (India) Ltd. Vs. CIT [2006 (3) TMI 75 - SUPREME Court ] has held that the powers of the Appellate Tribunal are not impinged to accept the claim of assessee which has not been made before the Assessing Officer. We deem it appropriate to remit this issue back to the file of Assessing Officer to consider the claim of the assessee in the light of decision of Special Bench of the Bangalore Tribunal in the case of Biocon Limited (2013 (8) TMI 629 - ITAT BANGALORE ). The assessee shall file fresh computation of income before the Assessing Officer. The Assessing Officer shall consider the same and decide the claim of assessee in accordance with law. Accordingly, this ground of appeal of the assessee is allowed for the statistical purpose.
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2016 (4) TMI 1142
Reopening of assessment - reasons to believe - Held that:- AO has not applied his mind so as to come to an independent conclusion that he has reason to believe that income has escaped during the year. In our view the reasons are vague and are not based on any tangible material as well as are not acceptable in the eyes of law. The AO has mechanically issued notice u/s. 148 of the Act, on the basis of information allegedly received by him from the Directorate of Income Tax (Investigation), New Delhi. Keeping in view of the facts and circumstances of the present case and the case law applicable in the case of the assessee, we are of the considered view that the reopening in the case of the assessee for the asstt. Year in dispute is bad in law and deserves to be quashed. Even otherwise, a perusal of the above demonstrates that the Addl. CIT has written “Approved” which establishes that he has not recorded proper satisfaction / approval, before issue of notice u/s. 148 of the I.T. Act. Thereafter, the AO has mechanically issued notice u/s. 148 of the Act, on the basis of information allegedly received by him from the Directorate of Income Tax (Investigation), New Delhi. Keeping in view of the facts and circumstances of the present case and the case law applicable in the case of the assessee, we are of the considered view that the reopening in the case of the assessee for the asstt. Year in dispute is bad in law and deserves to be quashed. - Decided in favour of assessee
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2016 (4) TMI 1141
Validity of reopening u/s 147 - Held that:- The reasons to believe recorded by the Assessing Officer in the present case to initiate the proceedings under sec. 147 of the Act without application of her own mind on the information received were not as per the requirement of the provisions of the law laid down under sec. 147 of the Act, hence, the initiation of the proceedings was not valid and nor the assessment made in furtherance to the said initiation of the proceedings. The assessment framed under sec. 147 read with 143(3) of the Act in the present case in question is thus held as void-abinitio - Decided in favour of assessee
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2016 (4) TMI 1140
Depreciation computation - capital subsidy reduction from the cost of machinery - Held that:- Capital subsidy is not required to be deducted from the cost of plant and machinery
Revenue v/s capital receipt - Held that:- Subsidy received as Excise duty reimbursement cannot be taken as revenue receipt
MAT computation - Held that:- AO is not entitled to add the above said two items to the book profit computed u/s 115JB of the Act.
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2016 (4) TMI 1139
Addition on account of AMP adjustment - Held that:- In the present case it is an admitted fact that the T.P.O. proposed the adjustment by applying the “Bright Line Test”, on account of excessive AMP incurred by the assessee on behalf of the A.E. But subsequently the D.R.P. held that the application of “Bright Line Test” has been over ruled in the case of M/s. Sony Ericsson Mobile Communication India Pvt. Ltd. [2015 (3) TMI 580 - DELHI HIGH COURT]. However, the D.R.P. declined to apply the decision of Maruti Suzuki India Ltd. [2015 (12) TMI 634 - DELHI HIGH COURT] on the ground that it was rendered in the context of a manufacturer and not a distributor. Recently, the Hon’ble Delhi High Court, subsequent to the said decision of Maruti Suzuki India Ltd. (supra), examined this aspect and applied the same principle to the distribution business also in the cases of Bausch & Lomb Eyecare (India) Pvt. Ltd. vs. A.C.I.T. [2015 (12) TMI 1332 - DELHI HIGH COURT] and C.I.T. & Ors vs. Whirlpool of India Ltd. [2015 (12) TMI 1188 - DELHI HIGH COURT]. These decisions of the Hon’ble Jurisidctional Court which are applicable to the facts of the present case were not considered by the T.P.O. and the D.R.P. since these were not available to them. We, therefore, by considering the totality of the facts and the ratio laid down by the Hon’ble Delhi High Court in the aforesaid judicial pronouncements, deem it appreciate to set aside the issue relating to the adjustment on account of AMP to the file of the TPO/AO to be decided afresh in accordance with the law after providing due and reasonable opportunity of being heard to the assessee.
Claim of warranty expenses - Held that:- It is noticed that the objection of the assessee before the DRP was that the AO had not corrected the claim of warranty expenses made by the assessee with respect to the warranty provisions while computing the taxable process. The DRP directed the AO to verify and correct, if any errors were detected. It appears that the AO did not follow the said directions given by the D.R.P. relating to warranty claim, therefore, this issue is set aside to the file of the AO to be decided afresh as directed by the DRP.
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