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Showing 321 to 340 of 2028 Records
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2019 (5) TMI 1708
Disallowance of business loss - revenue submits that there was no business during the year. The assessee has not proved the expenditure that the expenses were incurred wholly and exclusively for the purpose of business and no documentary evidences was furnished by the assessee - in the return of income the assessee has shown the income under the head “Income from House Property” and under the head “Income from Other Sources” in its Profit & Loss A/c - HELD THAT:- As per Profit & Loss A/c, the assessee offered income under two heads only (i) Income from House Property and (ii) Income from Other Sources. In the Profit & Loss A/c, no business income was shown. As the assessee is already allowed the benefit under section 24(a). Therefore, the ld. CIT(A) concurred with the finding of Assessing Officer.
Before us the assessee has neither furnished any documentary evidence nor disclosed the details particulars of new business venture which was undertaken by the assessee. No name or municipal number of property in connection of which the assessee allegedly selected for such business venture. Moreover, while perusal of details of expenses, we have noted that the assessee has claimed depreciation, remuneration to Directors, appeal fees, audit fees, professional fees and telephone expenses. All the expenses were included in the standard deduction claimed by the assessee. In our view, the assessee failed to substantiate the business activities as no details particulars regarding the alleged new business venture undertaken by assessee is furnished. Therefore, we do not find any merit in the ground of appeal raised by assessee.
Disallowance of claim of interest under section 24(b) - assessee submits that the assessee purchased a property known as Dhanwatay House - from which date, the assessee is eligible to claim interest on the loan - HELD THAT:- There is no dispute that the agreement for acquisition of part of Dhanwatay House was executed only on 31.03.2008. There is no dispute that during the relevant period that the assessee has offered the rental income of part of Dhanwatay House. The intention of assessee was further to let out the property and to earn the rental income. In our view, when the availing of finance and payment interest thereon is not in dispute the assessee is entitled for interest allowance irrespective of fact that finally agreement to sale for change of ownership was executed subsequently. Therefore, in our considered view, the assessee is entitled for proportionate allowance of interest on the payments of ₹ 5.28 Crore paid to Vedant Property Pvt. Ltd. Hence, the Assessing Officer is directed to compute the interest allowance from the date of payment i.e. on 14.02.2008. In the result, this ground of appeal is allowed.
Determination of capital gain - NIL returned by the appellant - HELD THAT:- Before the ld. CIT(A), the assessee again not furnished any documentary evidence in respect of transfer/surrender of property. The ld. CIT(A) confirmed the action of Assessing Officer holding that in absence of any documentary evidence and on the basis of receipt on substantial payment, the transfer was within the period of three years. The ld. AR of the assessee vehemently argued before us that variation is only on account of capitalization of interest. Before us, the assessee failed to disclose the date of acquisition of different share of Dhanwatay House in earlier Assessment Year i.e. 2008-09, 2009-10 or 2010-11. In absence of any documentary evidence, we are unable to convince ourselves about the allowance of capitalization of interest for Assessment Year 2010-11 & 2011-12. In the result, ground of appeal raised by assessee is dismissed.
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2019 (5) TMI 1707
Forward contracts in respect of 'Foreign currency' being speculative profit can be set off of against the loss debited in gold desk account - contention was declined on the ground that no correlation between the forward contract transactions of gold and corresponding purchases and export of jewellery was established to satisfy the requirements of law - HELD THAT:- This Court is of the opinion that the assessee’s contention has some merit – the earlier portion of the main impugned order specifically noticed the compilation of documents produced during the proceedings, which contained specific contracts and the transactions which the Revenue alleged were speculative.
Given that the Revenue’s appeal has been remitted, the ITAT’s approach in our opinion was not correct. Accordingly, the assessee’s question with respect to the verification of the transactions and the correlation with specific contracts shall be examined having regard to the assessee’s contentions as well.
We are of the considered view that since the identical issues for AY 2010-11 are already pending adjudication by the AO having been remanded by the Hon’ble Delhi High Court, the same issues qua for the year under assessment are also required to be remanded back to the AO to decide in accordance with the order passed by the Hon’ble High Court. Consequently, both the appeals are set aside to the AO to decide in accordance with the decision taken in AY 2010-11 by following the directions by the Hon’ble High Court.
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2019 (5) TMI 1706
Transfer Pricing (TP) adjustments - selection of comparable - TPO rejected all the comparables selected by the taxpayer and on the basis of fresh search chosen - TPO has not given adjustment claimed by the taxpayer on account of capacity utilization and customs duty - The taxpayer carried the matter before the ld. DRP by way of filing objections who has retained the final set of comparables chosen by the TPO by dismissing the objections raised by the taxpayer.
Held that:- TPO/DRP are required to provide working capital adjustment and risk adjustment to the taxpayer as well as comparable company to bring them at par with each other.
Further, TPO is directed to identify all the fixed expenses including depreciation and to adjust the same in capacity utilized by exercising his powers available under the Act by calling information qua the capacity utilization by comparable companies.
Following the order passed by the coordinate Bench of the Tribunal in taxpayer’s own case for AY 2011-12 [2019 (4) TMI 412 - ITAT DELHI], we direct the TPO to examine if non-cenvat-able customs duty of import paid by the taxpayer is materially affecting the PLI of taxpayer company as per mandate of Rule 10B(3) then suitable adjustment be provided to the taxpayer.
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2019 (5) TMI 1705
Addition being the profits of the company on account of large-scale client code modification - HELD THAT:- Hon'ble Bombay High Court in the case of PCIT vs. PAT Commodity Services Pvt. Ltd. [2019 (2) TMI 720 - BOMBAY HIGH COURT] has dismissed the appeal filed by the Revenue against the order of the Tribunal in deleting the addition being the profits of the company on account of large-scale client code modification.
Since, in the instant case, the AO has not pointed out any basis or material or evidence to support his finding that the assessee has received entry of fictitious losses and has not spelt out in the reasons recorded as well as the assessment order as to on which scrips the assessee has taken loss entries and in the order nowhere it has been mentioned of any statement of broker of the assessee regarding the admission of any fictitious client code modification, therefore, opinion that the addition made by the AO and sustained by the CIT(A) is not justified. Accordingly, the ground raised by the assessee on merit is also allowed. - Appeal filed by the assessee is allowed.
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2019 (5) TMI 1704
Rejection of books of account - invoking provisions of section 145(3) and consequential trading addition by applying GP rate of 0.80% - HELD THAT:- Merely because the assessee has not given the full particulars of the purchaser on the cash sale bills when the quantity as recorded in the books of account is not in dispute, then the sale transactions of the assessee without any other contrary record or finding cannot be doubted. AO has also doubted the genuineness of the godown rent, however, for rejection of books and estimation of income by applying the GP, the said item is not relevant as it is not part of the trading account.
We find that the minor adverse remarks by the AO without pointing out a specific and material defect in the books of account cannot be a reason for rejection of books even otherwise if the claim of expenditure is not found to be genuine otherwise the same can be disallowed but it cannot be a reason for rejection of books of account. AO was not justified in rejecting the books of account by invoking the provisions of section 145(3) and consequent estimation of income by the AO by applying the GP as declared in the immediately preceding year without considering the average of past history which should be at least 3 to 5 years. Hence the orders of the authorities below qua this issue are set aside and the trading addition made by the AO is deleted.
Adhoc disallowance - assessee has not controverted the findings recorded by the AO that the assessee has not produced any bill/voucher for verification of the AO - HELD THAT:- When the expenditure claimed by the assessee are not supported by the proper bills and vouchers, then the assessee has failed to discharge its onus to establish that the expenditure has been incurred wholly and exclusively for the business of the assessee. CIT (A) has restricted this disallowance to ₹ 50,000/- which we find as proper and reasonable having regard to the facts and circumstances of the case. Accordingly, we do not find any error or illegality in the impugned order of ld. CIT (A) qua this issue.
Addition u/s 68 on account of unsecured loans treated as unexplained cash credit - HELD THAT:- Once the AO has brought on record all these material to show that the transactions of loans are not genuine, then the burden was shifted on the assessee to controvert the said material brought on record by the AO. The assessee has not produced any contrary material to controvert the evidence brought on record by the AO. Further, we note that the assessee never demanded cross examination of Shri Anand Sharma but raised this plea first time before us. Even otherwise the finding of the AO as well as of the ld. CIT (A) is not based solely on the basis of statement of Shri Anand Sharma but it is based on the investigation carried during the assessment proceedings as well as first appellate proceedings before the ld. CIT (A). As regards the decisions relied upon by the assessee in the case of Kota Dall Mills and other decisions of Coordinate Bench of this Tribunal, we find that in those cases the AO did not conduct any enquiry but relied upon the report of the Investigation Wing, Kolkata based on the search conducted in the case of Shri Anand Sharma. Therefore, the said decisions cannot be applied in the facts of the present case where the AO has conducted due and proper enquiry and the findings of the AO and ld. CIT (A) are based on the evidence in the nature of enquiry conducted. - Appeal of the assessee is partly allowed.
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2019 (5) TMI 1703
Short term capital gains - claim of expenditure incurred in leveling of the plot or otherwise relevant for the purpose of computation of short term capital gain - HELD THAT:- Revenue could not point out any difference in facts in the present year as compared to A. Ys. 2007-08, 2008-09 & 2010-11 [2018 (3) TMI 1823 - ITAT BANGALORE] or which the tribunal order is made available by the learned AR of the assessee. Hence, we find no reason to take a contrary view in the present year. Hence, on the same line, in the present year also, we set aside the order of CIT (A) and restore the matter back to the AO for fresh decision with the same directions as were given by the tribunal in the case of the present assessee in its order for A. Ys. 2007-08, 2008-09 & 2010-11 and in the case of the co owner. We find that the direction was this that the AO should reexamine the claim of expenditure incurred in leveling of the plot or otherwise relevant for the purpose of computation of short term capital gain. In the present year also, we give the same directions to the AO.
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2019 (5) TMI 1702
Reopening of assessment u/s 147 - Reason for the belief that income has escaped assessment - Escaped capital gain on sale of property - HELD THAT:- Validity of reopening of the assessment shall have to be judged with reference to the reasons recorded for reopening of the assessment. In the present case, the A.O. has mentioned in the reasons that assessee sold the property and his share comes to ₹ 43,04,000/-. Since, no compliance was made by the assessee, the A.O, therefore, presumed that there is an escapement of income on account of long term capital gains.
A.O, therefore, recorded reasons to believe that capital gains on sale consideration of ₹ 43,04,000/- chargeable to tax has escaped assessment. The A.O. did not verify the information and even did not compute as to how much capital gain have been escaped assessment in the facts of the case. The reasons are thus, vague and did not show any application of mind on the part of the A.O. The A.O. in the case of the co-owner of the same property Shri Iqbal has accepted the long term capital gains in a sum of ₹ 1,47,975/- on the same set of facts. It would show that A.O. did not verify the information as to how much capital gains has escaped assessment.
A.O, therefore, acted only on the basis of suspicion and it could not be said that it was based on belief that income chargeable to tax had escaped assessment. The A.O. had to act on the basis of the reasons to believe and not on reasons to suspect. The issue is, therefore, covered in favour of the assessee by the Order of ITAT, Agra Bench in the case of Rameshwar, Jhansi vs. ITO 6(2), Jhansi [2014 (10) TMI 332 - ITAT AGRA] . - Decided in favour of assessee.
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2019 (5) TMI 1701
CENVAT credit - input service distribution - credit in respect of input services utilised at the R&D centres of the appellant company and transferred to factory through input service distribution mechanism - it was held in the case that appellant have rightly taken Cenvat credit as permissible under Rule 3 read with Rule 2(l) of CCR, 2004 as the services in question have been admittedly used by the manufacturer indirectly in relation to manufacture of final dutiable products - HELD THAT:- There is no merits in the appeal - appeal dismissed.
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2019 (5) TMI 1700
Unable to upload Form GST TRAN-I - transitional input tax credit - transition to GST regime - HELD THAT:- This Court has observed that the petitioner has to prefer an application before the Nodal Officer and the Nodal Officer, in turn, will send the request of the petitioner to the Information Technology Grievances Redressal Committee and the said Committee will decide the claim of the petitioner for getting imput tax credit by filling up the form of GST TRAN I - Hence, if the petitioner has already preferred such application before the Nodal Officer, the same will be forwarded by the Nodal Officer to the Information Technology Grievances Redressal Committee.
Petition disposed off.
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2019 (5) TMI 1699
TP Adjustment - Kals Information System Ltd., (Seg) (‘Kals’) - HELD THAT:- Tribunal in the case of Cerner Healthcare Solutions Pvt. Ltd. [2017 (1) TMI 1491 - ITAT BANGALORE] for Assessment Year 2010-11, we hold that Kals Information Systems Ltd., is not a good comparable to the assessee in the case on hand, who merely provides software development services and therefore direct the AO/TPO to exclude it from the set of comparable companies - Assessee is allowed.
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2019 (5) TMI 1698
CENVAT Credit - input - tower - shelter - input services - telecommunication services/passive infrastructure - HELD THAT:- The issue decided in the case of COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX-GURGAON VERSUS BHARTI INFRATEL LIMITED [2019 (2) TMI 1736 - CESTAT CHANDIGARH] where it was held that The assessee-appellant are entitled to avail cenvat credit on items, towers, shelter parts thereof being input used for providing output service.
The credit availed by the appellant is allowed - appeal allowed - decided in favor of appellant.
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2019 (5) TMI 1697
Disallowance u/s 40(a)(ia) - expenditure under various heads and to the payment of share of commission (paid to VAV Air conditioning) - HELD THAT:- In this case the assessee has not deducted and deposited the tax either during the current financial year or up to the date of filing of the return but tax was deducted and deposited in the assessment year i.e. 2013-14. We find merit in the contentions of the assessee that as per the amended provision of section 40(a)(ia) which is a retrospective in nature, the disallowance has to be made equal to 30% of the total disallowance as has been held in the case of M/s. Asphalt India Corporation vs. DCIT [2017 (5) TMI 1705 - ITAT MUMBAI]
In the context of the insertion of 2nd proviso to section 40(a)(ia), held that though it has been stated in the 2nd proviso to section 40(a)(ia) of the Act that the same is inserted from 01.04.2013 but the same has retrospective application as the insertion of 2nd proviso is declarative and curative in nature and would be effective from the date of main proviso to section 40(a)(ia). We, therefore, respectfully following the ratio laid down in the above decisions, direct the AO to restrict the disallowance equal to 30% of the total expenses
Disallowance of trade discount and commission paid to VAV Air Conditioning a proprietary concern of the assessee’s husband - HELD THAT:- We are of the view that the entire amount is paid to the sister concern without any deduction of TDS during the year and therefore as has been held by us in the ground No.1A (supra) the disallowance has to be restricted to 30% of the said expenditure. We are not convinced with the arguments of the ld DR that the genuineness of payments are in doubt as the payments were made to the related parties without proving the nature of services rendered. DR also stressed the point that reasonability of the payments is not the issue in this case but the allowability of the expenses u/s 37 is doubted by the AO on the ground of non rendering of services. However, we observe that the AO has not brought any materials on record to rebut the submissions of the assessee that the proprietary concern was a leading contractor and has been providing the information as to the requirements of the customers in that field on HVAC and air conditioning. So we are not in agreement with the conclusion of the ld CIT(A) on this issue. Accordingly, we set aside the order of Ld. CIT(A) and direct the AO to make the disallowance @ 30% as the assessee has not deducted tax at source on the same lines as decided by us in ground no. 1A supra.
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2019 (5) TMI 1696
Addition u/s 68 - unexplained cash credit - Undisputedly, the assessee has not produced the books of account during the assessment proceedings - CIT (A) has called the remand report from the AO and after accepting the remand report has accepted the contention of the assessee that addition is not sustainable u/s 68 but confirmed the addition u/s 69 - HELD THAT:- When no specific entry in the SOA/cash flow statement has been disputed by the AO but based his finding on the fact that there is a difference in accounts before PNB Account filed before Department but has failed to appreciate that before PNB the statement of earlier year was filed as loan was disbursed in January 2008. So, in these circumstances, earlier year’s details with subsequent years cannot be tallied in any circumstance. Consequently, grounds no.2 & 3 are determined in favour of the assessee.
Addition of sundry creditors - creditors have not appeared in person despite issuance of summons u/s 131 of the Act - HELD THAT:- So far as trade credits pertaining to Chaudhary Iron Traders is concerned, it is specifically explained by Chaudhary Iron Traders that the figures of debtors are deducted from creditors and accordingly, debtors not reflected separately in the ITR which has otherwise been confirmed by the AO with the bank account. Moreover, ledger account of Chaudhary Iron Traders, available at page 103 of the paper book, shows that all the purchases have been made through banking channel. Moreover, when purchases and sales have not been doubted by the AO/CIT(A) which are through banking channel then how the trade creditors can be doubted who have otherwise been accepted during subsequent years.
When books of account have been produced by the assessee during the penalty proceedings, the adverse view cannot be taken by the AO for not producing the books of account. Merely because of the fact that creditors have failed to attend the remand proceedings in person, the addition is otherwise not sustainable. So, we are of the considered view that addition made by the AO and confirmed by the ld. CIT (A) on account of trade creditors is not sustainable. So, AO is directed to delete the same after duly verifying the documents already brought on record by the assessee, hence grounds no.4 & 5 are determined in favour of the assessee.
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2019 (5) TMI 1695
Condonation of delay in filing first appeal - validity of exparte decree passed - sufficient cause to condone delay present or not - partition and separate possession of the suit property - right to appeal - regular appeal under Section 96(2) CPC - When an application filed under Order IX Rule 13 CPC has been dismissed on merits, whether regular appeal under Section 96(2) CPC is barred? - HELD THAT:- The right of appeal under Section 96(2) CPC is a statutory right and the defendant cannot be deprived of the statutory right of appeal merely on the ground that the application filed by him under Order IX Rule 13 CPC has been dismissed - In Bhanu Kumar Jain v. Archana Kumar and Another [2004 (12) TMI 676 - SUPREME COURT], the Supreme Court considered the question whether the first appeal was maintainable despite the fact that an application under Order IX Rule 13 CPC was filed and dismissed. Observing that the right of appeal is a statutory right and that the litigant cannot be deprived of such right, it was held that whereas the defendant would not be permitted to raise a contention as regards the correctness or otherwise of the order posting the suit for ex parte hearing by the trial court and/or existence of a sufficient case for non-appearance of the defendant before it, it would be open to him to argue in the first appeal filed by him under Section 96(2) of the Code on the merits of the suit so as to enable him to contend that the materials brought on record by the plaintiffs were not sufficient for passing a decree in his favour or the suit was otherwise not maintainable.
It is a fairly well settled law that “sufficient cause” should be given liberal construction so as to advance sustainable justice when there is no inaction, no negligence nor want of bonafide could be imputable to the appellant.
It is pertinent to note that as per Section 97 CPC where any party aggrieved by a preliminary decree does not appeal from such decree, he shall be precluded from disputing its correctness in any appeal which may be preferred from the final decree. The object is that the questions decided by the court at the stage of passing preliminary decree cannot be challenged at the time of final decree - In the interest of justice, the appellant and respondents No.14 and 15 are to be given an opportunity to challenge the ex-parte decree dated 04.07.2008 on merits, notwithstanding the dismissal of their application filed under Order IX Rule 13 CPC.
The time spent in pursuing the application under Order IX Rule 13 CPC is to be taken as “sufficient cause” for condoning the delay in filing the first appeal - impugned judgment of the High Court cannot be sustained and is liable to be set aside - Appeal allowed.
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2019 (5) TMI 1694
Bogus unexplained cash credits - Short Term Capital Loss (STCL) arising from sale of shares after payment of Security Transaction Tax (STT) - HELD THAT:- Addition as per respective stands of the parties. There is hardly any dispute that Revenue has placed on reliance of the circumstantial evidence on statement of an alleged entry operator indicating artificial rigging of scrip prices in issue. AO as well as CIT(A) are of the view that the said clinching evidence in the nature of search statement make it clear that the assessee’s STCL is not genuine.
DR places strong reliance on hon'ble apex court’s landmark decisions in Sumati Dayal vs. CIT [1995 (3) TMI 3 - SUPREME COURT] and CIT vs. Durga Prasad More [1971 (8) TMI 17 - SUPREME COURT] that suspicious circumstances highlighted in the lower appellate discussion extracted hereinabove deserves to be upheld as per the human probabilities by removing all blinkers.
This tribunal’s co-ordinate bench’s decision in Mahavir Jhanwav vs. ITO [2019 (3) TMI 210 - ITAT KOLKATA] holds that such circumstantial carries no significance - Decided in favour of assessee.
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2019 (5) TMI 1693
Addition of bogus loans u/s 68 - creditworthiness of the creditors, genuineness of the transactions and identity of the creditors - HELD THAT:- Assessee has discharged its onus cast upon it by filing all the necessary details as called for by the AO to corroborate the transactions of borrowing the money and thereby satisfied all the three main ingredients i.e. creditworthiness of the creditors, genuineness of the transactions and identity of the creditors by filing all the details as discussed above which proved that the identity of the creditors, genuineness of the transactions and creditworthiness of the creditors have been established by the assessee.
So much so that the loan creditors in response to the notice issued under section 133(6) of the Act appeared before the AO and confirmed that they have given interest bearing loans to the assessee on which TDS have been deducted and paid and form no.16A issued to the loan creditors also filed before the AO. Once the assessee has filed all the necessary documents before the AO then the onus is shifted to the department to disprove the stand of the assessee, which department has failed to do so in the present case. AO has merely proceeded and relied on the information received from the DGIT(Inv), Mumbai that the assessee is one of the beneficiary of the accommodation entries without bringing any material against the assessee on record by contrary to the defense put up by the assessee during the course of appellant proceedings - Decided in favour of assessee
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2019 (5) TMI 1692
Addition u/s 40A(3) - AO observed that certain payments exceeding ₹ 20,000/- were made in cash to certain parties from whom the assessee purchased his trading goods - HELD THAT:- Assessee’s claim is not covered by any of the exceptions provided under Rule 6DD. However, the first proviso below Section 40A(3) clearly takes into consideration the nature of expenses, banking facilities, consideration of business expediency and other relevant factors. Rule 6DD in intent and purpose takes into consideration all these aspects for prescribing various exceptional circumstances.
Therefore, Rule 6DD cannot be mechanically applied and I have to consider the overall explanation of the assessee having regard to the business consideration. The assessee’s explanation is that assessee had to make payment in business exigency as during the month of February, 2012, generally marriages takes place and during odd hours, the assessee made transactions and in some cases seller was insisting for cash payments. The payments had been made to the seller because of that reason. The genuineness of purchases had not been doubted by the AO.
In this case, there is no dispute to the fact that the genuineness of the transaction and the payment and identity of the receiver are established. This view is supported by the decision of in the case of Gurdas Garg [2015 (8) TMI 569 - PUNJAB & HARYANA HIGH COURT] and also the decision of Hon’ble Supreme Court in the case of Attar Singh Gurmukh Singh [1991 (8) TMI 5 - SUPREME COURT]. Under such circumstances, disallowance of these expenses by applying to section 40A(3) would not be justified. Accordingly, set aside the order of ld CIT(A) on this count and allow the grounds of appeal of the assessee. Appeal of the assessee is allowed.
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2019 (5) TMI 1691
Nature of expenditure - revenue or capital expenditure - Expenses for removing encumbrances, settlement of pending issues in various legal Forums, acquisition of clear development right - HELD THAT:- Assessee incurred/paid expenses of ₹ 50.84 Crore for removing encumbrances, settlement of pending issues in various legal Forums, acquisition of clear development right pertaining to clock underneath the project Fantasia. Therefore, the disallowance made by AO and reducing the same from work-in-progress was not justified. Thus, he we set-aside the order of lower authorities and direct the Assessing Officer to treat the expenses as Revenue Expenditure. In the result, the grounds of appeal raised by assessee are allowed.
Accrual of income - addition on account of Capital Expenditure worked out the profit of project and added the same to the income of assessee - HELD THAT:- There is no dispute that initially Occupancy Certificate of the project was issued on 21.10.2011 by NMMC. The operation of Occupancy Certificate was stayed by NMMC on the application of Rohit Reddy. It is an admitted fact that ld. Civil Judge of City Civil Court restrained the assessee and directed to maintain status quo till the disposal of Suit. The Reddy Group withdrew the said suit on 14.12.2012, during the Assessment Year 2013- 14. The assessee has shown the Project Completion in Assessment Year 2013-14. The treatment of revenue recognition on project completion is not in dispute. Therefore considering the facts that the assessee was restrained to handover the units in the project by the order of Civil Court and the occupancy certificate was also stayed by operation of injunction order. The injunction order was lifted on the withdrawal of the civil suit on 14.12.2013. The assessee has shown the completion of the project in assessment year 2012-13, therefore, the action of the assessing officer in bringing the profit in the year under consideration was not justified. Thus, we affirm the view taken by the ld CIT(A). In the result, the grounds of appeal raised by the revenue are rejected. Appeal of the revenue is dismissed.
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2019 (5) TMI 1690
TP Adjustment - comparable selection - inappropriate selection of comparables which are functionally different from that of the assessee - HELD THAT:- Asessee is engaged in the “business of designing and development of chip, integrated circuits and storage components and allied services” for its holding company AMCC, USA thus companies functionally dissimilar with that of assessee need to be deselected from final list.
Two comparables i.e. (i) Eclerx Services Limited and (ii) Genesys International Corporation Limited are required to be excluded for the purpose of benchmarking of the international transactions.
Rejection of the risk adjustment - We set-aside the orders of the DRP/TPO on this issue and direct the Assessing Officer to allow the risk adjustments. The Assessing Officer shall grant reasonable opportunity of being heard to the assessee in accordance with the set principles of natural justice.
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2019 (5) TMI 1689
Income from house property - deemed income - “Annual Lettable Value‟ of the vacant unsold units held by the assessee as stock-in-trade of its business of a real estate developer, were liable to be brought to tax under the head “Income from house property”, or not ? - HELD THAT:- We find that the Hon‟ble High Court of Gujarat in the case of CIT Vs. Neha Builders (P) ltd. [2006 (8) TMI 105 - GUJARAT HIGH COURT] had observed that if the business of the assessee is to construct property and sell it or to construct and let out the same, then any income derived from the immovable properties held by it as its stock-in-trade cannot be assessed under the head “Income from house property”.
In HAWARE ENGINEERS & BUILDERS PRIVATE LIMITED [2018 (10) TMI 1500 - ITAT MUMBAI] had concluded that if an immovable property in the shape of flats/shops is held by the assessee as stock-in-trade of its business, then it becomes part of its trading operations, and any income derived there from would be its “business income‟ and not “Income from house property‟. On the basis of the aforesaid deliberations, the Tribunal while disposing off the aforesaid appeal had vacated the addition of the “ALV‟ that was made by the lower authorities in respect of the flats/shops which were held by the assessee before them as stock-in-trade of its business of a real estate developer. - Decided in favour of assessee.
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9911796707
