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Showing 321 to 340 of 2184 Records
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2018 (5) TMI 1867
Allowable business expenses - addition of business promotion, members’ gift, scholarship to children of members and payment to legal heirs of members - HELD THAT:- As decided in assessee's own case [2016 (9) TMI 1182 - ITAT AHMEDABAD] the volume of earning of the assessee bank are mainly made through its members. These expenses are incurred by the assessee bank to attract the members confidence and loyalty towards the bank in the prevailing competition so that the members place their deposits with the assessee bank and also continue to borrow funds from the assessee bank in order to improve the profit earning and income of the assessee bank. Amount spent on the aforesaid expenditures is very marginal compared to the amount of interest realized on the advances made to the members by the bank and amount of deposit made by the members with the bank. Amount spent on scholarship to the children of members, payment to legal heirs of members and gifts to members could be said to be expenditure incurred wholly and exclusively for the purpose of business since the amount was spent for keeping alive its good image amongst its members and ensuring that goodwill and continuity of business with the members. We allow the aforesaid expenditure as business expenditure under Section 37 . - Decided in favour of assessee.
Disallowance on amortized premium - HELD THAT:- As per RBI guidelines dated 16th Oct, 2000, the investment portfolio of the bank is required to be classified under three categories viz. Held to Maturity (HTM), Held for Trading (HFT) and Available for Sale (ATS). Investment classified under HTM category needs to be marked to market and are carried at acquisition cost unless these are more than the face value in which case the premium should be amortized over the remaining period. Allowable of amortized expenses on premium on government securities has been provided u/s. 36(1)(ii) of the act and explained by CBDT vide instruction No. 17 of 2008 dated 26-11-2008. In the case of CIT, Rajkot-II vs. Rajkot Dist. Co-op. Bank Ltd. [2014 (3) TMI 110 - GUJARAT HIGH COURT] held that instructions clearly provide for amortization of premium paid on securities when the same are acquired at the rate higher than the face value. Such amortization would have to be for the remaining period of maturity. - Decided in favour of assessee.
Disallowance u/s. 14A r.w. Rule 8D of the act incurred towards the exempt income - HELD THAT:- CIT(A) has deleted the addition following the decision of his predecessors in the case of the asssessse as the asssessee has more interest free fund available than investment made in securities. We have also noticed that the assessee has its own funds.
The assessee has also explained before the assessing officer that investment in central and state Government securities was stock in trade and part of banking business only. After considering the above facts that investment were made out of the interest free funds available with the assessee we do not find any error in the decision of ld. CIT(A) of restricting the disallowance to the extent of administrative expenses of ₹ 9,50000/. The Ld. Counsel has not pressed ground no. 3 of appeal of the assessee. Accordingly, the appeal of the Revenue is dismissed.
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2018 (5) TMI 1866
The Supreme Court of India dismissed the Special Leave Petition in the case. Judges were Mr. Rohinton Fali Nariman and Mr. Abhay Manohar Sapre. Petitioner's representatives were Mr. Salil Kapoor, Ms. Soumya Singh, and Mr. Praveen Swarup. (Citation: 2018 (5) TMI 1866 - SC)
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2018 (5) TMI 1865
Levy of tax - job-work - dyes and chemicals used in the execution of job work of bleaching and dyeing are transferred as in physical form or as their inherent properties - Held that:- The issue has been decided by this Court in M/s A.P. Processors, Faridabad Vs. The State of Haryana and others, [2018 (5) TMI 1797 - PUNJAB AND HARYANA HIGH COURT] of even date, wherein after examining the factual matrix and the relevant case law on the point, it has been held that while determining the actual loss of chemicals, dyes and colours where the fabric or the textile undergoes various processes depends upon factual aspect which can be considered only by the Assessing Officer where parties can produce evidence in respect of their respective claims/contentions - the matter has been remanded to the Assessing Officer to work out the details of quantity of chemicals, dyes and colours that would get washed out in the process of dyeing and printing of fabric undertaken by the assessee.
The Assessing Officer has been directed to conduct the factual inquiry in this regard after giving liberty to the parties to produce evidence in respect of their respective contentions and, thereafter, he would be at liberty to proceed in the matter for adding percentage of the chemicals, dyes and colours in the value of the turnover, which are retained or embedded on the textile or fabrics as the case may be in accordance with law - petition disposed off.
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2018 (5) TMI 1864
Refund of service tax - N/N. 52/2011-ST dated 30/12/2011 - export of services - principles of unjust enrichment - Held that:- The Adjudicating Authority has observed that appellant assessee failed to establish any co-relation between bills/invoices/challans with specific export consignment, ARE- 1/Shipping Bill wise - The Adjudicating Authority has also observed that the appellant failed to submit essential and relevant documents and clarification pertaining to discrepancy pointed out regarding their refund claim.
Thus, the Lower Authority have not considered the documents placed by the appellant - matter is remanded to the Adjudicating Authority to decide afresh after considering the submission of the appellant and to pass order in accordance with law - appeal allowed by way of remand.
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2018 (5) TMI 1863
Levy of penalty u/s 271(1)(c) - non specification of charge - AO not struck off the inappropriate words in the penalty notice - Addition u/s 68 since the assessee could not satisfactorily explain the loan of ₹ 20,00,000/- obtained from Shri Sanjay Mongia - HELD THAT:- A perusal of the assessment order shows that the AO at the end of the assessment order has mentioned “penalty proceedings u/s 271(1)(c) have separately been initiated”. This does not show as to whether the penalty has been initiated for furnishing of inaccurate particulars of income or for concealment of income. As mentioned earlier, the Assessing Officer has not struck off the inappropriate words in the penalty notice issued u/s 274 r.w.s. 271 of the I.T. Act.
As relying on SSA'S EMERALD MEADOWS [2016 (8) TMI 1145 - SUPREME COURT]very initiation of penalty proceeding is bad in law since notice issued by the Assessing Officer u/s 274 r.w.s. 271 does not specify under which limb of section 271(1)(c), the penalty proceeding has been initiated i.e. whether for concealment of particulars of income or for furnishing of inaccurate particulars of income. - Decided in favour of assessee.
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2018 (5) TMI 1862
Addition of unsecured loans and interest u/s 68 - assessee failed to prove the identify, creditworthiness and genuineness of the said loan - accommodation entry provider admitted in the statement recorded u/s. 132(4) that he is involved in providing accommodation entries which was later retracted - CIT deleted the addition - HELD THAT:- The assessee has filed confirmation letter from the loan creditors along with PAN and Income Tax Return. Assessee also filed bank statements of the loan creditors. The learned CIT(A) has recorded a categorical finding that the assessee has filed various details to prove the identity and genuineness of transactions. Although the parties did not appear before the Assessing Officer in response to notices u/s. 133(6), the assessee has filed all evidences before the Assessing Officer to prove the loan taken from the above two parties.
AO has never disputed the identity of the parties. The Assessing Officer also has also not disputed that the assessee has filed confirmation letters from the parties but made addition on the basis of information received from DGIT (Investigation) and statement of Shri Bhanwarlal Jain. But the fact remains that later Shri Bhanwarlal Jain has retracted his statement made u/s. 132(4) by filing an affidavit. Therefore, we are of the considered opinion that the Assessing Officer was incorrect in making the additions towards unsecured loans only on the basis of statement of Shri Bhanwarlal Jain when such statement has been retracted by the party. - Decided against revenue
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2018 (5) TMI 1861
Taxability of license fee as Royalty - license fee from RBI in respect of software EB Guide Studio - Income deemed to accrue or arise in India - whether the licensed product/s developed by using the assessee’s software EB Guide Studio is a derivative program, or not? - HELD THAT:- The parties have in the instant case themselves regarded the consideration (license fee) as royalty, implying a grant of right to use the Intellectual Property Rights (IPRs) embedded in the software inasmuch as it gets transmitted/embodied in the licensed products, with the user (RBI) being invoiced on the basis of the licensed products supplied. The decision in Infrasoft Ltd. [2013 (11) TMI 1382 - DELHI HIGH COURT], rather, on facts, supports the case of the Revenue.
The license fee from RBI in respect of software EB Guide Studio earned by the assessee, in our view, in view of the fore-going, qualifies to be royalty.
We have as yet considered only the said license fee there-from, from RBI. As regards the software licensed to TCSL, we do not find any specific agreement on record, nor was the same referred to during hearing. In fact, no specific arguments were advanced by the parties in relation thereto. We are therefore unable to issue any definite findings with regard to the license fee from TCSL. The matter therefore shall accordingly have to travel back to the file of the AO for a decision on merits consistent and in accordance with the findings/observations made herein, of-course after allowing the assessee a reasonable opportunity to state its case in the matter. We may though clarify that if the development agreement on record is also applicable to TCSL our findings would be equally applicable to the license fee from TCSL as well. AO shall proceed accordingly. We decide accordingly.
Applicability of Education cess on DTAA rate - charged Education cess over and above the tax rate stipulated in the Indo-German DTAA, on the royalty income - HELD THAT:- ‘Education cess’ is only a ‘surcharge’ is clarified by the relevant Finance Act itself. Further, that surcharge is only a tax, stands clarified by the Apex Court in CIT v. K. Srinivasan [1971 (11) TMI 2 - SUPREME COURT]. We, accordingly, have no hesitation in, accepting the assessee’s plea, directing the non-imposition of the ‘education cess’ or any other ‘surcharge’, so that the tax rate per the DTAA only shall apply. See THE BOC GROUP LIMITED [2016 (1) TMI 414 - ITAT KOLKATA]- We decide accordingly.
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2018 (5) TMI 1860
Scheme of Merger - HELD THAT:- The Board of Directors of the First, Second and Third Applicant Companies, vide its resolution dated 14th December, 2017 approved the Scheme of Merger by Absorption of ZEUS MULTITRADE PRIVATE LIMITED (First Transferor Company) And HEXA PROPERTIES PRIVATE LIMITED (Second Transferor Company) With AGILITY MULTITRADEPRIVATE LIMITED (Transferee Company). Meeting of respective shareholders, creditors need to be adhered and informed accordingly.
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2018 (5) TMI 1859
Specific acts of commission or omission on the part of director - ex-directors of the company in liquidation are guilty of having committed breach of trust in discharge of functions and duties in managing the affairs of the company in liquidation - misfeasance or breach of trust within the meaning of section 543 of the Act of 1956 - acts for alleged transfer of property in preference to the other creditors reflects fraudulent nature of acts and prove their act of mismanagement - HELD THAT:- Sale deeds, which were sought to have been executed on the basis of duress and force have already been annulled by this court. Sufficient mitigating grounds, as noted above, are made out. Merely on the basis of report of N. C. Jain, chartered accountant, who has admittedly not examined the books of account, which makes it obvious that the case for initiating proceedings and punishing the respondents under section 543 of the Act of 1956 is not made out. It is also stated that the official liquidator had already sold the said properties.
Taking into consideration that the company application fails to detail narration of the specific acts of commission or omission on the part of each director and further the official liquidator has not been able to prove the case of misfeasance or committing any breach of trust in discharge of functions and duties and the respondents have been able to justify their action in not making available the records and selling their properties in duress, issues as framed by this court are not found to be proved and are answered in favour of the respondent. It is noted that non-handing over the possession of current stock, books of account is on the basis of reasonable excuse and this court is satisfied that keeping in view the law laid down by the apex court in the case of Official Liquidator v. Raghawa Desikachar [1974 (8) TMI 120 - SUPREME COURT OF INDIA], no case for holding the respondents guilty of section 543 of the Act of 1956 of misfeasance or breach of trust within the meaning of section 543 of the Act of 1956 is made out.
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2018 (5) TMI 1858
Valuation of imported goods - Heavy Metal Scrap (HMS) - enhancement of value - no comparable contemporaneous imports showing import of identical goods at a higher value has been provided - Held that:- On the basis of these documentary evidence it is clear that the goods imported by the appellants were Heavy Melting Scrap. The revenue did not adduce any evidence to support the allegation that the goods is not Heavy Melting Scrap but an article of steel. It may be possible that the goods appear to be article of steel but if it is not usable and the same has been used as Melting Scrap by the appellant as evidenced by the end-use certificate, merely because the scrap is in the form of used article of steel it is not sufficient to deny the classification as Heavy Melting Scrap.
The revenue has arbitrarily enhanced the revenue from $600 to $700 only on the ground that the goods imported is not Heavy Melting Scrap. Neither any contemporaneous import has been relied upon nor any expert opinion from any technical expert was obtained - the revenue has decided the entire matter on assumption and presumption basis which is not permitted in law - appeal allowed - decided in favor of appellant.
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2018 (5) TMI 1857
Input tax credit - cancellation of registration of sellers - Held that:- The Tribunal has recorded a finding of fact that purchases made by the respondent-assessee from the aforesaid parties were of a date prior to the date of cancellation of their registration. The finding so recorded is a finding of fact which can not be interfered with in revisional jurisdiction. It is not the case of the revisionist that the finding so recorded are perverse - revision dismissed.
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2018 (5) TMI 1856
Winding up petition - Whether Company has neglected to pay the same to the petitioner or has not secured the same due to the petitioner - HELD THAT:- It is apparent that the amount, which the petitioner had advanced as loan as Director of the Company, has been repaid from time to time which is also admitted from the averments made by the petitioner in his Company Petition. It is accepted by the petitioner that he received an amount of ₹ 55,00,000/- and 10,00,000/- on 09/07/2007 and 10/07/2007 respectively in addition to a cheque of an amount of ₹ 20,709/- on 26/03/2008. The respondent-Company has also offered to pay the dues of the petitioner by securing flats constructed by it. However, as noted, the petitioner has refused to take the said flats. Thus, it cannot be said that the respondent- Company would be deemed to be unable to pay its debts within meaning of Section 434 of the Act of 1956.
No case is made out to initiate proceedings for winding up of the respondent-Company in terms of Section 433(e) of the Act of 1956. The petitioner would, however, be free to recover the amount as he claims by taking up other remedies available to him under the Civil Procedure Code or any other provisions of law.
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2018 (5) TMI 1855
Scope of scrutiny in cases selected under CASS - conversion the limited scrutiny in to unlimited - CBDT Instruction No.7/2014, dated 26-09-2014 - approval of the Pr.CIT/DIT for taken up for comprehensive scrutiny - case was picked up for limited scrutiny relates to the AIR information on the cash deposits in the savings bank account - HELD THAT:- It is an undisputed fact that the reason for which the case was picked up for limited scrutiny relates to the AIR information on the cash deposits in the savings bank account. It is also an undisputed fact that the AO did not obtain the written approval of the concerned Commissioner before extending the scope of scrutiny to the interest disallowed and denial of claim of deduction u/s.54 of the Act.
It is on record that the Board did not permit the AO to extend the scope of scrutiny to the issues other than the ones which are authorised the Board in this regard under CASS. It is also a fact that judgment cited by the DR for the Revenue in the case of Banque Nationale De Paris Vs. CIT [1999 (2) TMI 61 - BOMBAY HIGH COURT] was not issued in connection with the jurisdiction of the AO in matters relating to extension of areas of scrutiny to the ones than the authorised ones by the Board.
Board circular do not permit the AO from converting the limited scrutiny case like the present one to the unlimited one without the approval of Administrative Commissioner of Income Tax. AO did not mention the reasons for not taking such an administrative approval before making the said addition. As such, the Pune Bench of the Tribunal has already taken the favourable view in these matters in favour of the assessee. We do not understand why AO failed to take approval for such conversion. Considering the settled nature of the issue, we allow the legal ground raised by the assessee vide Ground No.1 and hold that the assessment order passed by the AO is bad in law and void-ab initio. Appeal of the assessee is partly allowed.
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2018 (5) TMI 1854
Income from house property - Deemed annual lettable value of flats - Assessee mainly received income from dividend, property income and profits from partnership firm of which the assessee is partner - HELD THAT:- The Hon‟ble Bombay High Court held in Tip Top Typography [2014 (8) TMI 356 - BOMBAY HIGH COURT] that when the monthly rental shows a total mismatch or does not reflect the prevailing rent, then AO is not prevented from carrying out necessary investigations and enquiry to find out the going rent of the property in question. The AO must have cogent material/evidences in his possession that parties have concealed the real position. The AO is required to disclose the material in his possession to the tax-payer for rebuttal before proceeding to adopt the prevailing market rent. The AO has to make comparative analysis of the comparable properties of similar nature before applying the prevailing market rent of the property under question. The satisfaction of the AO that the bargains reveal inflated or deflated rent based on fraud, emergency, relationship and other considerations which make it unreasonable must precede the undertaking of above exercise.
Thus, under these circumstances keeping in view factual matrix of the case discussed in extenso above and recent decision in the case of Tip Top Typography (supra) we are of the considered view that this matter need to be restored back to the file of the AO for making making denovo assessment after make necessary enquires and investigation in line with decision of Hon‟ble Bombay High Court in the case of Tip Top Typography(supra) and after providing proper and adequate opportunity of being heard to the assessee. The evidences/explanation submitted by the assessee in its defence shall be admitted by the AO and adjudicated on merits in accordance with law. This ground no. 1 of the Revenue is allowed for statistical purposes.
Addition u/s.68 - HELD THAT:- Mere suspicion on part of the AO that the assessee may claim this expenses of ₹ 35.07 lacs in some future distant point of time is not sufficient to fasten tax-liability merely on basis of suspicion of the AO that some event may happen in future at some point of time which is unknown wherein the assessee may try to claim these expenses which it has not claimed now as deduction , and the same will cause prejudice to the Revenue at that unknown distant point of time. This is too far-fetched and have no legs to stand to fasten tax-liability on the assessee as these are baseless suspicions. In any case 1961 Act is a living and robust statute which is capable of taking care of such contingent events if at all and when they happens. We confirm the appellate order of learned CIT(A) and sustain the deletion of the addition as was made by learned CIT(A). The Revenue fails on this ground. The ground no. 2 is adjudicated against Revenue.
Disallowance u/s. 14A r.w.r.8D - suo motu disallowance of 50% expenses offered by the assessee and non recording of satisfaction by the AO u/s 14A(2)- HELD THAT:- Section 14A clearly speaks of disallowance of the expenditure incurred by the assessee in relation to earning of an exempt income and no notional expenditure can be disallowed u/s 14A which had not even been incurred at all by the assessee. Also there is no allegation or incriminating material on record that the assessee incurred any expenditure out of books of accounts which was not recorded in books of accounts warranting any additions to income to bring to tax the said unrecorded expenditure - on suo motu disallowance of 50% expenses offered by the assessee and non recording of satisfaction by the AO u/s 14A(2) before invoking Rule 8D, we are of the considered view that the appellate order of learned CIT(A) needs to be upheld/sustained which we sustain and hence the disallowance offered by the assessee u/s 14A suo-motu voluntarily to the tune of ₹ 5,44,975/- stood accepted.
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2018 (5) TMI 1853
International transaction u/s 92B - corporate guarantee - HELD THAT:- Where a fee has been charged for the intra service which has been rendered (in the context of corporate guarantee), and, therefore, the assessee or the Court has treated it as an international transaction, then the charge of corporate guarantee has to be in accordance with Arm's Length principle. This means that the price for corporate guarantee should be that which would have been paid and accepted by independent enterprises in comparable circumstances. In that case transfer pricing adjustments are required. In that case, it has to be determined what will be the ALP of corporate guarantee commission paid by associate enterprise to the parent company providing corporate guarantee. Since that is not the case before us, we need not go into it.
Explanation was introduced by Finance Act 2012, the rules were notified only on 10.6.2013. Hence the assessee cannot be expected to report this transaction also as an international transaction in its transfer pricing study and the audit report thereon.
Transfer Pricing Adjustment - interest on loan given by the assessee to its AE - determining the cost of interest on the international transaction in respect of interest to be charged on the loan advanced to AE - HELD THAT:- In this regard we are of the view that for the purpose of credit rating of the assessee as well as the credit rating of the AE should be taken into account. In similar facts & circumstances in the own case of the assessee. We restore the issue to the file of TPO/AO for the fresh adjudication according to law and in the light of above stated discussion. Thus the ground of appeal of the assessee is allowed for statistical purposes.
Disallowance u/s. 14A r.w.s. Rule 8D - HELD THAT:- Disallowance made under the second limb of Rule 8D(2)(ii) of the Rules is hereby directed to be deleted.
With regard to the third limb of Rule 8D(2)(iii) of the Rules, we hold that the assessee has got investments in foreign companies, the dividend earned from which would be taxable income and hence should be outside the ambit of disallowance u/s 14A read with Rule 8D of the Rules. Similarly, investments made in subsidiary companies would have to be reckoned as strategic investments and hence the same should be excluded while working out the disallowance under Rule 8D(2)(iii) of the Rules. Similarly, the investments which had yielded dividend income alone, are to be considered while working out the disallowance under Rule 8D(2)(iii) of the Rules as has been held by the decision of this tribunal in the case of REI Agro Ltd [2013 (9) TMI 156 - ITAT KOLKATA] - if the disallowance made under second limb of Rule 8D(2) of the Rules is deleted, then the disallowance made by the ld AO would remain at ₹ 23,77,882/- and whereas the assessee itself had voluntarily disallowed ₹ 42,48,850/-. Hence we direct the ld AO to adopt the disallowance figure of ₹ 42,48,850/- which had already been disallowed by the assessee and hence no further disallowance in that regard is to be made.
Addition on account of lease rental expenses as capital expenditure - HELD THAT:- There was a clause in the lease agreement giving an option to the lessee to buy back the asset on termination of the lease agreement. In the instant case, the assessee (lessee) falls in a better footing, in as much as there is no clause in the lease agreement, enabling the lessee to buy back the assets on termination of the lease arrangement.
Disallowance of aircraft maintenance charges including the depreciation - HELD THAT:- No addition could be made on an estimated basis towards running and maintenance of aircrafts. Accordingly, the grounds raised by the assessee in this regard for various assessment years are allowed and grounds raised by the revenue in this regard are dismissed.
Not allowing set off of long term capital loss against the Short-Term Capital Gains (STCG for short) u/s 74 - HELD THAT:- Assessee is indeed entitled to set off the brought forward long term capital loss of ₹ 9,77,54,843/- against the deemed short term capital gain of ₹ 7,18,74,000/- in the facts of the case. The ld AO is accordingly directed to give benefit of the same to the assessee based on the correctness of the claim of brought forward loss figure made by the assessee.
Non-deduction of tax u/s 195 r.w.s. 40(a)(i) - HELD THAT:- Assessee had even provide the certificate of tax residency of the parties to whom payments were made in foreign currency and declaration form them that no PE existed for them in India. The assessee had even furnished the copies of agreements entered into with those parties, copy of advertisements, copy of invoice, subscription renewal forms etc.
We find that in the earlier years in assessee’s own case, the CIT-A had granted relief to the assessee by placing reliance on ‘make available’ clause prevailing in various tax treaties , but the same is not done by the AO and DRP in the instant case. Assessee had filed various documents with detailed factual and legal submissions with supporting evidences before the ld AO, which had not been appreciated by the AO and DRP in the proper perspective. Hence we deem it fit and appropriate, to remand this entire issue to the file of the AO, for de novo adjudication of this issue afresh in accordance with law. The assessee is also directed to cooperate with the ld AO by producing the necessary evidences in support of its contentions.
Disallowance on account of delayed deposit of employees’ contribution to PF and ESI - assessee failed to furnish the supporting evidence evidencing that the amount of PF/ESI has been deposited within time of income tax return filing as specified u/s 139(1) - HELD THAT:- assessee failed to furnish the supporting evidence evidencing that the amount of PF/ESI has been deposited within time of income tax return filing as specified u/s 139(1) of the Act. However, in the interest of justice and fair play we are inclined to restore the issue to the file of Assessing Officer for fresh adjudication in accordance with law. Accordingly, assessee is directed to produce necessary documents justifying that employees’ contribution to PF/ESI has been deposited within due date of income tax return filing as specified u/s 139(1) of the Act. Hence, this ground of assessee’s appeal is allowed for statistical purpose in terms of above direction.
Deduction of provision for bad and doubtful debts written back under normal provision as well as under the computation of book profit - HELD THAT:- We direct the AO to adjudicate the additional filed by the assessee during the course of assessment proceedings in accordance with law. Thus, this ground of assessee is allowed for statistical purpose.
Non granting TDS/TCS credit - HELD THAT:- We remit this issue back to the file of AO with a direction to allow the credit of TDS/TCS and adjudicate the same as per law. Hence, this ground of assessee’s appeal is allowed for statistical purpose'
Calculating dividend distribution tax on the gross amount without excluding the dividend receipt from its subsidiary company - HELD THAT:- AO should charge the dividend distribution tax after excluding the dividend income from subsidiary company. Therefore, we direct the AO to adjudicate the issue of dividend distribution tax after giving effect of the amount of dividend received from subsidiary company. Hence, in terms of above, this ground of assessee’s appeal is allowed for statistical purpose.
Non granting set off of Minimum Alternate Tax (MAT for short) credit brought forward from Assessment Year 2011-12 - HELD THAT:- As observed that the grievance of assessee relates to non-granting of set off MAT credit brought forward from AY 2011-12. In this regard we direct the AO to grant the MAT credit brought forward from earlier years as per the provision of law. Hence, the matter is remitted back to the file of AO in terms of above direction and to adjudicate the same in accordance with law.
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2018 (5) TMI 1852
Valuation of imported goods - mis-declaration of value - rejection of declared value - High Seas Sales basis - Held that:- As against the declared goods of H.R. Sheets of 2.5 mm thickness, the goods were found to be of entirely different specification of 25 mm as found during the search on 5-12-2007. Since entirely different goods were found, misdeclaration on the part of the importer is established and hence is liable to be sustained. Consequently, the order of confiscation made under Section 111(l) as well as (m) of the Customs Act, 1962 by the lower authority is justified and hence upheld.
The redemption fine and penalty is on the higher side. Accordingly, while upholding the re-assessment of value and payment of differential duty, the redemption fine and penalty reduced by 50%. Thus the appellant will get partial relief - appeal allowed in part.
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2018 (5) TMI 1851
Levy of service tax - fees charged for giving permission for providing space by private parties to advertising agency - Municipal Corporation - Held that:- The issue is no more res-integra and the Tribunal in the case of M/s Pimpri Chinchwad Municipal Corporation Vs Commissioner of Central Excise, Pune-I [2017 (12) TMI 167 - CESTAT MUMBAI] have observed that such charging of fees to agencies, a statutory levy for which municipal corporation had powers and such levies did not amount to any service, requiring payment of service tax - appeal dismissed - decided against Revenue.
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2018 (5) TMI 1850
CENVAT Credit - input services - house keeping service - insurance service - legal and professional consultancy services - lodging expenses - repair and maintenance of show room & office - telecommunication service - Held that:- With regard to telecommunication services, the appellant should be entitled for the Cenvat benefit since such services were used for smooth operation of the manufacturing activity of the appellant. Therefore, the impugned order denying CENVAT credit in respect of telecommunication service is not proper and justified - Credit on these services are not allowed.
The impugned order to that extent it denies CENVAT benefit on the services other than the services of telecommunication is upheld - Appeal allowed in part.
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2018 (5) TMI 1849
TP adjustment - comparable selection - consideration of appropriate risk related adjustment - HELD THAT:- Essential requirement for allowing a risk adjustment is that the assessee should have quantified and claimed the risk adjustment in its TP documentation based on a clear and logical workings, considering the risk profile of tested party and comparables companies and not based on surmises. Just because assessee was serving a single customer would not mean that it was bearing market risk different from any other competitor. As already mentioned by us, assessee had simply estimated risk adjustment at 5% without properly quantifying the difference in the risk profile between assessee and M/s. Suprajit Engineering Ltd. We are of the opinion that lower authorities were thus justified in not allowing the risk adjustment claimed by the assessee. Grounds of the assessee stand dismissed.
Inclusion of loss on forex exchange as part of operating expenditure - HELD THAT:- This Tribunal in assessee’s own case for assessment year 2012-2013 , this issue is squarely covered by the judgement of Madras High Court in the case of CIT Vs. Pentasoft Technogies Ltd. [2010 (7) TMI 75 - MADRAS HIGH COURT] decide the issue against the assessee holding that foreign exchange loss is a part of operating expenditure
'Working Capital Adjustment' for Determination of arm's length price by the TPO’’ - non production sufficient data for proving its claim of working capital adjustment. - HELD THAT:- The basis of the calculation was the number of days of holding of the inventory, receivables and creditors of the comparables viz-a-viz the assessee. However, while working out the rate of interest for calculating working capital adjustment, assessee had considered the prime lending rate @18.5% and this is clear which gives the work-out of the working capital adjustment. There is nothing on record to show that the interest paid by the assessee or the comparables, on their respective loans were at the rate of 18.5% or the rates were significantly different. This in our opinion reduced the claim of working capital adjustment at 3.18%, to a mere estimate. Actual interest paid was never considered by the assessee. Hence, we are of the opinion that lower authorities were justified in taking a view that assessee had not produced sufficient data for proving its claim of working capital adjustment. We do not find any reason to interfere with the orders of the lower authorities. Ground of the assessee stands dismissed.
Disallowance of employees contribution to Provident Fund/ remitted after the due date mentioned in the relevant statute, but before the due date of filing the return of income - HELD THAT:- The issue raised by the assessee is covered by the judgment of Hon’ble Jurisdictional High Court in the case of CIT vs. Industrial Security & Intelligence India Pvt. Ltd [2015 (7) TMI 1063 - MADRAS HIGH COURT]. Assessee having remitted the amount before due date of filing of return, by virtue of the above judgment of Hon’ble Jurisdictional High Court a disallowance could not have been made. Such disallowance stands deleted. Ground of the assessee is allowed.
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2018 (5) TMI 1848
Transitional credit - transition to GST regime - pipes used in pipeline network - inputs contained in semi-finished or finished goods - sub-section (6) of Section 140 of the Central Goods and Services Tax Act, 2017 - Held that:- The entire quantity of pipe was supplied by the appellant to RMC before the appointed date. The work of supply of pipes at location specified by RMC and work of excavation of trenches and laying of pipes had already been completed before the appointed date and only the work of testing and commissioning of network of pipeline was pending on the appointed date and will now be completed in the Goods and Services Tax regime. In view of this factual position, the appellant cannot be said to be holding pipes in stock as inputs or inputs contained in semi-finished or finished goods, on the appointed day.
Also, even if the contract of the appellant was on work-in-process stage on the appointed day, the same would not be covered within the terms ‘semi-finished or finished goods’ as the term ‘goods’ covers movable property and not immovable property.
Thus, the appellant is not entitled to avail input tax credit of Central Excise Duty and VAT paid on pipes, under sub-section (3) and (6) of Section 140 of the CGST Act, 2017 and the GGST Act, 2017.
Works contract - Activity of construction of pipeline network which becomes immovable property - levy of GST - Held that:- As per clause 6(a) of the Schedule II read with Section 7 of the CGST Act, 2017 and the GGST Act, 2017, the composite supply, namely works contract as defined in clause (119) of section 2 shall be treated as a supply of services. The provisions related to determination of time of supply of services are contained in Section 13 of the CGST Act, 2017 and the GGST Act, 2017 - the part of the supply made by the appellant wherein time of supply of service is on and after the appointed date (01.07.2017) i.e. after implementation of the CGST Act, 2017 and the GGST Act, 2017, the appellant is required to discharge Goods and Services Tax liability.
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