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Case Laws
Showing 321 to 340 of 1733 Records
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2019 (6) TMI 1415
Disallowing interest on bank loan for purchase of flat - disallowance of depreciation on flat that was provided as residential accommodation to the Managing Director holding the same as non-business transaction - HELD THAT:- As decided in own case [2018 (10) TMI 1352 - ITAT MUMBAI] facts and circumstances are exactly identical and the issue is same. Even, the property transaction question is the same and this property was purchased in FY 2009-10 relevant to A.Y. 2010-1. Respectfully following the Tribunal’s order in assessee’s own case for immediate preceding year, delete both the disallowance and allow the appeal of the assessee.
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2019 (6) TMI 1414
Claim of loss on share transactions - genuineness of sale and purchase of shares - AO was of the view that the assessee has incurred such loss to avoid the long-term capital gain income earned by it. Thus the AO treated such loss as generated using the colorable device. - CIT (A) after considering the submission of the assessee deleted the disallowance made by the AO
Held that:- the Revenue has taken the different stand by taxing the gain with respect the transaction for the sale of shares within the group but disallowed the loss with respect the transaction for the sale of shares within the group. Thus the stand of the Revenue was contradictory.
ITAT in the own case of the assessee [2018 (12) TMI 1734 - ITAT AHMEDABAD] involving identical issues pertaining to the assessment year 2010-11 has decided the issue in favour of the assessee and against the Revenue.
Decided against the revenue.
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2019 (6) TMI 1413
Maintainability of application - initiation of CIRP - Corporate Debtor had defaulted in repayment of a sum - Section 7 of Insolvency and Bankruptcy Code, 2016, R/ w Rule 4 of Insolvency & Bankruptcy (Application to the Adjudicating Authority) Rules, 2016 - HELD THAT:- The Financial Creditor filed this petition under Section 7 of the Code to trigger CIRP against the Corporate Debtor. In order to prove its claim the Financial Creditor has relied on Annexure-I to Annexure -70 filed along with the Petition.
It is admitted fact that the Financial Creditor sanctioned the loan and the Corporate failed to repay the loan with in time stipulated. In effect the Corporate Debtor admitted the default. The Financial Creditor treated the account of the Corporate Debtor as Non - Performing asset as on 31.12.2016 in the books of the Financial Creditor. The Financial Creditor is no way responsible for happening of certain events which causes delay in implementation of the Project. Thus, there is no valid objection raised for admission of the Petition.
The corporate debtor admitted default. The Financial Creditor suggested the name of IRP and there is no compliant against proposed IRP. The financial creditor has fulfilled all the requirements as contemplated under Code. The petition is in order. Therefore the petition is fit for admission.
Petition admitted - moratorium declared.
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2019 (6) TMI 1412
Levying late fees u/s 234E while processing the statement of tax deducted at source u/s 200A (before the amendment was brought in w.e.f. 01.06.2015 in the provisions of section 200A of the Act) - HELD THAT:- As relying on State Bank of India, Genda Chowk and others [ 2018 (11) TMI 1714 - ITAT INDORE] and M/s. Madhya Pradesh Power Transmission Ltd. and others Vs. DCIT (TDS) [2018 (12) TMI 1323 - ITAT INDORE] are of the view that Ld. CIT(A) erred in confirming the levy of late fees u/s 234E of the Act by the assessing officer.
Accordingly findings of Ld. CIT(A) in all these 29 appeals are set aside and revenue is directed to delete the levy of fees u/s 234E of the Act in all these 29 cases. Thus, common issue raised in this bunch of 29 appeals is decided in favour of the assessee.
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2019 (6) TMI 1411
Interest income on margin money deposits - interest income arising from deposits made with the Bank during the pre-commencement period - Capital receipt or ‘income from other sources' - whether interest income derived from certain deposits placed with the banks (while the power project construction is under progress and in the process of being set up and has not commenced generating electricity) can be set off against the ongoing power project costs incurred of capital nature and consequently, whether such interest income would go to reduce project costs prior to its commencement or not? - HELD THAT:- It is primarily the case of the assessee that the interest income derived from margin money deposits is inextricably linked to the project being set up. Hence, the interest income is required to be regarded as income of capital nature for the purposes of project. We concur with the view taken by the CIT(A) that interest income so earned on deposits placed with Bank to obtain the bank guarantee have been rightly reduced from the project development expenditure incurred for set up of power plant. We note that identical issue came up for consideration of the co-ordinate bench in the case of M/s. Adani Power Rajasthan Ltd. [2019 (1) TMI 1132 - ITAT AHMEDABAD] in a similarly placed situation. We find that the CIT(A) has rightly applied the law laid down by the Hon’ble Supreme Court in Bokaro Steel Ltd. [1998 (12) TMI 4 - SUPREME COURT]
It is a case where the fixed deposits giving rise to the interest income has been placed as margin money with the State Bank of India for obtaining bank guarantee for the purposes of the project in progress and consequently, the fixed deposits are integrally connected with the setting up the power plant. The interest income therefore is not independent of the costs incurred for power project. Hence, we find ourselves in complete agreement with the action of the CIT(A) in upholding the action of the assessee to reduce interest income arising from deposits placed with banks out of the costs of project in progress and in reversing the action of the AO in treating the same as revenue de hors the development of the project. The grievance of the Revenue is bereft of any merit.
CIT(A) has rightly allowed the deduction of interest expenditure incurred for development of project (forming part of costs of project) against the interest receipts derived from margin money deposits. We do not see any error in the conclusion of the CIT(A) on this score.
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2019 (6) TMI 1410
Rectification of mistake - ITAT has rejected the assessee’s claim of gift from daughters who were themselves studying and son who has just taken up a job - ITAT also rejected explanation of gift coming from opening balance on the finding that no details were available - by way of this Miscellaneous Application it is submitted that various evidences of gifts were not properly appreciated by the ITAT - HELD THAT:- Upon careful consideration and going through the order of the ITAT as mentioned above, and the mistake pointed out by the assessee hereinabove, it is clear that the assessee seeks review of the order, which is not permissible u/s. 254(2) of the I.T. Act. Hence, this Miscellaneous Application filed by the assessee is dismissed.
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2019 (6) TMI 1409
Classification of services - Works Contract Services or not - providing railway siding for non-govt companies by the appellant - HELD THAT:- The exclusion under Section 65(105)(zzzza) is in respect of activities undertaken with respect to roads, railways, transport terminals bridges, tunnels etc. and it is the case of the department that the exclusion under railways is meant for the Indian railways themselves and does not extend to those cases where railway siding etc. is made for a private company.
The matter has already been decided by this very Bench in the case of KVR RAIL INFRA PROJECTS PVT. LTD. VERSUS COMMISSIONER OF CENTRAL TAX, SECUNDERABAD G.S.T. [2019 (5) TMI 376 - CESTAT HYDERABAD] and it has not been over-turned by any superior judicial forum and we do not find any reason to deviate from our earlier decision that the word “railways” in the section does not confine it to public railways or Govt railways.
Appeal allowed - decided in favor of appellant.
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2019 (6) TMI 1408
Addition u/s 68 - Unsecured cash credit - HELD THAT:- It is the finding of the CIT(A) that the assessee has proved identity, genuineness of the transaction and the credit worthiness of the lenders by furnishing requisite details, like confirmations, PAN details, return of income, bank statements etc. It is the finding of the CIT(A) that on perusal of the bank statements all the lenders have advanced monies to the assessee out of funds obtaining the bank statements out of deposits through bank transfers into their accounts.
It is the finding of the CIT(A) that first deposits are received through bank transfers from the lenders accounts and thereafter they were given to the assessee company by account payee cheque. It is the finding of the CIT(A) that AO has not disputed the above facts nor has brought any material on record to suggest that the said transfers are not genuine transfers as and the lenders also confirmed giving funds to the assessee through account payee cheque and shares were also allotted by the assessee company against such funds.
CIT(A) concluded that assessee has established not only the credit worthiness and identity of the said creditors but also established the genuineness of the transaction. None of the finding of the CIT(A) has been dislodged by the revenue with evidences. In the circumstances, we uphold the order of the Ld. CIT (A) in deleting the addition made u/s. 68 - Appeal is dismissed.
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2019 (6) TMI 1407
TP Adjustment - treatment of royalty paid by assessee to its AE - AR submitted that, both authorities below proceeded on the footing that, no evidence has been provided by assessee to prove tangible benefit derived from AE for which royalty has been paid by assessee - HELD THAT:- As observed that assessee placed substantial evidence which was not before the authorities below for consideration. We are therefore inclined to set aside this issue back to Ld.TPO/AO, for determination of this issue in the light of these documents vis-a-vis exclusive license agreement entered into by assessee with its AE, as per which royalty has been paid. Ld.TPO is directed to verify details, and if necessary, called for any further documents in order to establish true nature of transaction regarding payment of royalties by assessee and consider the claim of assessee as per law.
Comparable selection - functional similarity - HELD THAT:- Assessee is mainly into offshore research and development service provider and these services are akin to software development services. Comparibility is to be carried out on broad object of benchmarking international transaction and according to the law laid down under section 92B of the Act, read with rule 10 B (2) Income tax Rules, 1963. Comparables must be similar in material aspects and must be compared on the basis of the products/services characteristics, functions undertaken, assets used and risk assumed. Merely because certain comparables has been upheld for its exclusion/inclusion by various decisions, does not ipso facto lead to exclusion/inclusion in a given set of facts. In our considered opinion, exclusion/inclusion of any comparables must be strictly analysed on basis of FAR, in accordance with rule 10 B (2). We also are of opinion that comparables selected must be for the relevant year which is to be compared and unless contemporaneous data as section 92D read with Rule 10 D (4), is not available for the relevant year, multiple year data should not be used.
Infosys technologies Ltd - This comparable has a high turnover with the huge margin of 40.3% as compared to 9% earned by assessee. The turnover filter fixed by Ld.TPO does not satisfy for inclusion of this comparable. Further it is observed that this comparable owns huge intangibles, as it undertakes, research and development activities, owns branded/proprietary products. Whereas, in case of assessee, is contract service provider for its AE’s. Further that in the process of software development, in the event any intangibles are created, the same is exclusively owned by AE. Under such circumstances we do not find appropriate for this comparable to be included to determine arms length price. Accordingly we direct Ld.TPO to exclude this comparable from the final list.
KALS Information Systems Ltd - Excellent from the audited accounts and annual reports placed in the paper book in respect of this comparable it is observed that this company is engaged in development of software and software products since its inception. Further it is observed that in the year 2000 this company has been converted into a public limited company is which itself makes it not a fit comparable with assessee who is a captive service provider to its AE is only in respect of technical assistance. Accordingly we direct this company to be excluded from the final list of comparables.
Tata Elxi Ltd (Seg.) - This comparable caters basically in providing software development services wherein, huge intangibles are generated owned by this comparable. It is also observed that this comparable is a group concern of TATA, which makes it to be economically different with that of assessee’s who undertakes limited risks and provides technical assistance to its AE’s in products developed for AE. We do not find this comparable to be functionally similar in any manner whatsoever with that of assessee. Accordingly we direct this comparable to be excluded from the final list.
Accel Transmatic Ltd (Seg.) - TPO used segmental information in respect of products of this comparable. However, from various products developed by this comparable, it is observed that, they are not into contract software development, which is the case of assessee, developing software for its AE only, for which assessee is remunerated on cost +10% markup. Further that in the process of software development, in the event any intangibles are created, the same is exclusively owned by AE. As we have already analyse the functions and the risks assumed, it is observed that assessee do not even undertake the pricing risk as the prices are decided by its AE only. Under such circumstances we do not find it functionally similar even though taking the segmental details of sale of products as there is a huge difference in the products sold by this comparable with that of assessee - direct Ld.TPO to exclude this comparable from the final list.
Megasoft Ltd - This comparable should not be used as there exists contradictions in the details available on public domain vis-a-vis the information gathered by Ld.TPO under section 133 (6).
Deduction u/s 10A - exclusion of telecommunication expenses while computing deduction - HELD THAT:- Hon’ble Karnataka High Court in case of CIT vs Tata Elxsi Ltd [2011 (8) TMI 782 - KARNATAKA HIGH COURT] on identical issue held that telecommunication expenses is to be included while computing deduction under section 10 A of the act as it is directly linked with earning of income. Ld CIT DR has not brought before us any contradictory/distinguishable facts in respect of present case before us. Respectfully following above we direct Ld.AO to include telecommunication expenses while computing exempt income u/s10A of the Act. Accordingly the grounds raised by assessee stands allowed.
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2019 (6) TMI 1406
Liquidation order - Extension of CIRP - exclusion of 43 days from the total time period of 270 days of CIRP - HELD THAT:- Since the CoC has not been restrained by the Adjudicating Authority or by any external agency from taking a decision over the Resolution Plan pending before the CoC, the facts herein do not deserve either for exclusion of CIRP period or for extension of CIRP period as prayed in this application.
It is a fit case for liquidation on two grounds- (i) CIRP Period of 270 days is over (ii) even in the event of liquidation is ordered, it is still open to the Liquidator to sell the Corporate Debtor as a going concern. Normally, the Resolution Plan is viable if the Resolution Plan Value is more than Liquidation Value, in this case, one - Plan is not approved by the CoC till date, two - the Resolution Plan value is far below to the liquidation value, three - not taking a decision by the CoC without any reason will not become a reason for exclusion of the time period from the CIRP period. Besides this, CoC has not even passed a resolution seeking exclusion or extension of time as prayed by the Resolution Professional.
This application for exclusion is hereby dismissed.
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2019 (6) TMI 1405
Assessment u/s 147/148 or 153C - addition u/s 69A - information relating to the assessee was found from the documents seized - HELD THAT:- The issue raised in the present appeal is squarely covered by the issue before the Tribunal in Joshi Wadewale Hadapsar Vs. DCIT [2018 (3) TMI 1583 - ITAT PUNE] and following the same parity of reasoning, we hold that re-assessment proceedings initiated against the assessee under section 147 / 148 of the Act are not warranted. The Assessing Officer after receipt of information belonging to the assessee should have invoked provisions of section 153C of the Act and not section 147 / 148 of the Act. Accordingly, we hold so. Consequently, re-assessment order passed under section 148 of the Act does not stand. The Assessing Officer is thus, directed to cancel the same. Consequently, the additional ground of appeal raised by the assessee is allowed and we hold that assessment framed by the Assessing Officer is null and void. - Decided in favour of assessee.
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2019 (6) TMI 1404
Disallowance of commission expenditure - HELD THAT:- The genuineness of the commission expenditure and, the fact that the said expenditure was incurred wholly and exclusively for the purpose of the business of the assessee, admittedly stands established beyond any scope of doubt. Apart there from, we are also of the considered view, that now when on the basis of similar details filed by the assessee the commission expenditure of less than ₹ 1 lac per party, aggregating to ₹ 62,91,155/-, had been accepted by the A.O/DRP, therefore, a different yardstick could not have been adopted by them for verifying the veracity of the balance commission expenditure of ₹ 1,62,05,703/-.
On the basis of our aforesaid observations, we are of a strong conviction that now when the assessee had placed on record substantial material to substantiate the genuineness and veracity of the commission expenditure, which has already been accepted by the DRP while disposing off the objections of the assessee, therefore, there was no justifiable reason for disallowing the aforesaid commission expenditure. Accordingly, we vacate the disallowance of commission expenditure made by the A.O. The Ground of appeal No. 2 is allowed.
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2019 (6) TMI 1403
Disallowance of unrealized foreign exchange loss on account of reinstatement of assets and liabilities - HELD THAT:- A detailed explanation was submitted by the assessee before the AO in support of allowability of unrealized foreign exchange loss which assessee incurred on account of re-statement of foreign currency denominated trade assets/liabilities. The foreign exchange loss had been provided for by the assessee pursuant to the mandatory Accounting Standard (AS-11) issued by the ICAI.
The assessee is consistently followed the this policy of restating foreign exchange assets/liabilities as per the exchange rate prevailing on the last day of previous year and accounting for the resultant profit/loss. AO totally ignored this fact as well as the decision of the Hon’ble Apex Court in case of CIT vs. Woodward Governor India Pvt. Ltd. [2009 (4) TMI 4 - SUPREME COURT] . Thus, there is no need to interfere with the findings of the CIT(A). Ground No. 1 of Revenue’s appeal is dismissed.
Addition of interest on refund - HELD THAT:- The records show that no refund has been received by the assessee in A.Y. 2011-12 which was received in June 2014 after adjustment of outstanding demands. The interest income was offered to tax in A.Y. 2015-16 by the assessee. Therefore, the CIT(A) has given a proper finding and there is no need to interfere with the same. Ground No. 2 of Revenue’s appeal is dismissed.
Addition AIR information for which the assessee asked the Assessing Officer to give party-wise/date-wise details of the information as mentioned in the AIR - HELD THAT:- But the Assessing Officer did not provide the same. Thus, without giving proper opportunity and without verifying the details from the assessee, the Assessing Officer proceeded on the basis of AIR information and made the addition which is not correct. CIT(A) has rightly deleted this addition. Ground No. 3 of the Revenue’s appeal is dismissed.
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2019 (6) TMI 1402
Stay on demand - Assessment Year 2009-10 - addition of Arms Length Price adjustment of payment of commission to Associated Enterprises - HELD THAT:- The issue whether Arms Length Price adjustment is justified or not, requires verification of various factual aspects. Therefore it cannot be said that assessee company is having prima facie case in its favour on merits. Further, assessee could not make out any case of financial hardship.
It is not a fit case for stay of demand - Registry is directed to post the appeal for hearing on 17.07.2019 for which no separate notice of hearing is required to be dispatched.
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2019 (6) TMI 1401
Maintainability of appeal - quashing the complaint and FIR - HELD THAT:- The power exercised by the learned Single Judge for quashing the complaint and FIR is under Section 482 of Code of Criminal procedure, 1973. Therefore, writ appeals are not maintainable against the impugned order.
Appeal disposed off as not maintainable.
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2019 (6) TMI 1400
Application for Extension of a Bank Guarantee furnished by the respondents - HELD THAT:- Learned Counsel for respondent no.1, after taking instructions from his clients, states that the respondents shall execute a fresh Bank Guarantee on the same terms as the old Bank Guarantee, referred to in the prayer clause of the Miscellaneous Civil Application, valid up to 15/07/2019. Liberty to the respondents to apply for variation of the order dated 22/04/2019.
Application disposed off.
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2019 (6) TMI 1399
Taxability of “Excess Sugarcane Price” paid by the assessees to sugarcane suppliers - the price over and above the Statutory Minimum Price (SMP) fixed by State Government for purchase of cane - HELD THAT:- In view of the assertions made by both the sides that the facts in the present set of appeals being identical to the issue relating to excess sugarcane price paid by the assessee the issue is restored to the file of Assessing Officer with similar directions as above in the cases of M/s. Vasant Rao Dada Patil SSK Ltd. [2019 (3) TMI 1637 - ITAT PUNE] and also consider the contentions of assessee with respect to SMP vis-a-vis FRP regime, where ever raised. The Assessing Officer shall decide the issue, after affording reasonable opportunity of hearing to the respective assessees, in accordance with law. Thus, the issue of excess cane price paid to sugarcane suppliers is allowed for statistical purposes in the aforesaid terms.
Taxability of “Concessional Sugar Price” qua the levy price and the manner of giving effect to the directions of the Hon’ble Apex Court in the case of CIT vs. Krishna SSK [2004 (9) TMI 6 - SUPREME COURT] - HELD THAT:- We find there is merit in the submissions of the AR. In all these appeals, the CIT(A) has failed to decide the appeals of the assessees in consonance with the above discussed direction of Hon‟ble Apex Court in the case of Krishna SSK Ltd. (supra). Accordingly, in these bunch of appeals the issue of sale of sugar at concessional price to the members should be ideally remanded to the file of Assessing Officer for fresh consideration and adjudication of the issue on merits and law. In fact, the Hon‟ble Supreme Court remanded the issue to the file of the CIT(A) for complying its direction in the case of Krishna SSK Ltd. (supra). However, in order to avoid multiplicity of the proceeding before different officers, and to be in tune with our findings given in para 7 of this order, we find, remanding to the file of the Assessing Officer is appropriate. Thus, we order accordingly. The Assessing Officer shall grant reasonable opportunity of hearing to the assessees, in accordance with law. Accordingly, the grounds raised in the appeals of the Revenue and the assessee are allowed for statistical purposes.
Disallowance of carried forward business loss and unabsorbed depreciation - HELD THAT:- We observe that the assessee in appeal before the CIT (Appeals) has raised specific ground qua allowability of carried forward losses and unabsorbed depreciation. However, the same was not adjudicate by the CIT(Appeals). In the facts of the case we deem it appropriate to restore this issue back to the file of Commissioner of Income Tax (Appeals) to adjudicate the ground raised by the assessee in first appeal.
The issue of unabsorbed depreciation and carried forward business loss was also raised in some of the other appeals mentioned in the title. We find that this issue is consequential to the core issues of excessive cane price and sale of sugar at concessional rate. The outcome of the findings on the core issues will have bearing on the allowability of unabsorbed depreciation and carried forward business loss. Consequently, we deem it appropriate to restore this issue back to the file of Assessing Officer for reconsideration
Provision for Vasantdada Sugar Institute (VSI) Contribution - HELD THAT:- CIT(A) has determined this issue in favour of the assessee
Disallowance of Cane Harvesting and Transportation Expenditure - HELD THAT:- In view of CBDT Circular No. 6/2007, dated 11-10-2007 harvesting and transportation expenditure are allowable. Consequently, the issue is decided in favour of the assessees.
Disallowance of prior period expenditure - HELD THAT:- AR submitted that if an opportunity is granted, the assessee would furnish necessary documents before the Commissioner of Income Tax (Appeals) in support of his contentions. In view of the prayer made by the assessee, this ground of appeal is restored to the file of Assessing Officer. The assessee shall furnish relevant documentary evidence to support its contentions and the Assessing Officer after considering the same shall decide this issue afresh after affording reasonable opportunity of hearing to the assessee, in accordance with law. Consequently, this ground is allowed for statistical purpose.
Sale of bio-compost at concessional rate - HELD THAT:- We observe that this addition is akin to one of the core issues i.e. sale of sugar at concessional rate to the members. Since, we have restored the said issue to the file of Assessing Officer, we deem it appropriate to restore this issue as well to the file of Assessing Officer for deciding it afresh by applying the same principle. Accordingly, this ground of appeal by the assessee is allowed for statistical purpose.
Disallowance of advertisement expenditure - HELD THAT:- With respect to nature of expenditure and have also perused the decision on which the ld. AR has placed reliance. The Tribunal in the case of Commissioner of Income Tax Vs. Shri Panchganga S.S.K. Ltd.had allowed the advertisement expenditure on account of Subhechcha greetings holding that the expenditure was necessary to maintain cordial relations with the members. The Department assailed the findings of Tribunal before the Hon‟ble High Court. The Hon‟ble High Court upheld the findings of Tribunal by following the earlier decision rendered in the case of Commissioner of Income Tax Vs. Shri Panchganga S.S.K. Ltd. [2001 (6) TMI 61 - BOMBAY HIGH COURT]
Disallowance of Sabha Samarambh expenses - HELD THAT:- In the instant case the authorities below in the absence of complete set of documents has disallowed 10% of such expenditure. We are of considered view that disallowance of 10% is fair and reasonable. We find no reason to interfere with the impugned findings. Thus, ground of appeal by assessee is dismissed.
Disallowance of late payment of Provident Fund - HELD THAT:- The assessee‟s eligibility to claim deduction on delayed deposit of employees share in Provident Fund scheme but before due date of filing return of income is no more res integra. The Hon‟ble Bombay High Court in the case of Commissioner of Income Tax Vs. Ghatge Patil Transports Ltd. [2014 (10) TMI 402 - BOMBAY HIGH COURT] following the ratio laid down in the case of Commissioner of Income Tax Vs. Alom Extrusions Ltd. [2009 (11) TMI 27 - SUPREME COURT] held that deduction to the assessees in respect of statutory payment of Provident Fund is to be allowed only on actual payment before the due date of filing return of income. In the present set of appeals it is not disputed by the Revenue that the contribution was made before the due date of filing return of income. Thus, in view of well settled law and undisputed facts, this issue is decided in favour of the assessees.
Disallowance of Government Guarantee Fee - HELD THAT:- The Hon‟ble Rajasthan High Court in the case of Commissioner of Income Tax Vs. Udaipur Distillery Co. Ltd. [2003 (9) TMI 23 - RAJASTHAN HIGH COURT] has held that “tax‟, “duty‟, “cess‟ or “fee‟ constituting a class, denotes various kinds of imposts by State in its sovereign power of taxation to raise revenue for the State. Within the expression of each specie each expression denotes different kind of impost depending on the purpose for which they are levied - merely levy of charge as tax or fee is not conclusive of its character. It is only if any amount becomes payable by way of tax, duty, cess or fee, it falls within the purview of section 43B of the Act. Thus, in the light of above, we hold that the Government Guarantee Fee cannot be put in same bracket as tax, cess or duty and hence, no disallowance u/s. 43B in respect of non-payment of such fee can be made. Accordingly, this issue is decided in favour of the assessee.
Addition on account of contribution towards Chief Minister relief fund - HELD THAT:- We find that this issue has been considered by Co-ordinate Bench in the case of Majalgaon Sahakari Sakhar Karkhana Ltd. Vs. ACIT [2019 (3) TMI 906 - ITAT PUNE] there is no dispute that the assessee did make contribution to the Chief Minister Relief Fund. As against the assessee claiming the entire amount as deduction in its Profit and loss account, the AO opined that the said contribution was eligible for deduction u/s. 80G(iiihf) of the Act at the rate of 50% along with other qualifying sums. The ld. CIT(A) sustained the entire addition overlooking the fact that deduction u/s.80G(iiihf) was not allowed by the AO on such contribution in the computation of total income. Under these circumstances, we cannot uphold the disallowance of the entire amount claimed as deduction by the assessee in its Profit and loss account. Approving the additions made, we remit the matter to the file of the AO for granting the deduction u/s.80G(iiihf) as per law
Loan refund - HELD THAT:- A perusal of the assessment order reveal that the Managing Director of the assessee Sahakari Sakhar Karkhana had agreed for the addition. Thereafter, the assessee assailed the said addition before the Commissioner of Income Tax (Appeals). In First Appellate proceedings again the Counsel for the assessee made statement that the assessee does not wish to press this ground of appeal. Once, the ground has not been contested before the First Appellate Authority and the addition has been made on the basis of concession made before the Assessing Officer, the assessee cannot be granted liberty to assail the same addition before the Second Appellate Authority. It is not the case of assessee that the concession was wrongly recorded. We find no reason to interfere with the findings of lower authorities. Accordingly, the addition made on account of loan refund fund is upheld.
Disallowance of unpaid professional tax u/s. 43B - HELD THAT:- A perusal of impugned order shows that the Commissioner of Income Tax (Appeals) has granted relief to the assessee on the ground that the assessee has not claimed any amount as deduction in respect of Unpaid Professional Tax. If the amount has not been claimed by the assessee as deduction, no disallowance can be made. We do not find any infirmity in the impugned order. Accordingly, the findings of Commissioner of Income Tax (Appeals) on this issue are confirmed.
Disallowance of VAT - HELD THAT:- A perusal of impugned order reveal that the CIT (Appeals) has allowed part relief to the assessee in respect of above said disallowance after appreciating the facts and examining the books of assessee. CIT (Appeals) has deleted the addition only to the extent of amount that was outstanding in the beginning of year and did not form part of debits to the Profit and Loss Account during the relevant previous year. DR has failed to controvert the well reasoned findings of CIT (Appeals). We find no infirmity in the impugned order in deleting the addition. Accordingly, the findings of CIT (Appeals) on this issue are confirmed and the grounds raised by the Revenue in its appeal are dismissed.
Disallowance of Khodki charges - HELD THAT:- This issue had came up for consideration in DCIT Vs. Manjara Shetkari SSK Ltd. [2007 (8) TMI 260 - BOMBAY HIGH COURT] in allowing deduction for payment of Khodki Charges. CIT(A) has recorded that the SLP filed by the Department in the case of Jadamba SSK Ltd., on similar issue, has been dismissed by the Hon‟ble Supreme Court on 23-03-2009. In view of the fact that Khodki charges have been held as deductible by the Hon‟ble Jurisdictional High Court, this issue has to be decided in favour of the assessee. We hold and direct accordingly.
Disallowance of contribution towards Area Development Fund - HELD THAT:- Contention of the assessee in para 45 that the realisations made towards the Area Development Fund were impressed with the specific legal obligation to spend the money for specified purposes which were unrelated to the business of the sugar factory and hence, could not be treated as income of the assessee. Eventually, the Hon‟ble Supreme Court remitted the matter back for fresh determination. It is noticed that in the appeals under consideration, the ld. CITs(A) have not considered the impact of the judgment of the Hon‟ble Supreme Court in Siddheshwar Sahakari Sakhar Karkhana Limited [2004 (9) TMI 6 - SUPREME COURT] and decided the issue without taking note of the factors directed to be considered in the aforenoted case. In view of the above decision of Hon‟ble Supreme Court, we set-aside such impugned orders and remit the matter to the file of the respective AOs for deciding the issue afresh in conformity with the guidelines laid down by the Hon‟ble Apex Court in the above judgment
Disallowance of contribution towards Sakhar Sangh - HELD THAT:- No infirmity in the directions given by the Commissioner of Income Tax (Appeals) in allowing the claim of assessee u/s. 35(1) subject to verification. We further observe that in view of directions given by the Commissioner of Income Tax (Appeals) the ground raised by the assessee assailing disallowance and adding back of contribution on account of Sakhar Sangh is misconceived. The same is dismissed, accordingly.
Disallowance of vehicle and repair expenditure - HELD THAT:- After examining the impugned order and taking into consideration the submissions of assessee, we hold that in the absence proper supporting vouchers/record and complete details of expenditure, some disallowance has to be made. To meet the ends of justice it would be fair and reasonable to restrict the disallowance to 5% of total expenditure claimed under the impugned head. We hold and direct accordingly. The ground is partly allowed in the terms aforesaid.
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2019 (6) TMI 1398
Refund of SAD - Time limitation - N/N. 102/2007-Cus, dt.14.09.2007 - Doctrine of merger - HELD THAT:- Undisputedly, the refund of 4% SAD filed was in relation to import made on 15.12.2015 involving the amount of ₹ 1,25,920/- and the applicable duty was paid on 18.12.2015, i.e. beyond the period of one year as prescribed under the said notification.
The issue is no more res integra and covered by the judgment of Hon’ble Bombay High Court in the case of THE COMMISSIONER OF CUSTOMS NSIII VERSUS DSM SINOCHEM PHARMACEUTICALS (I) PVT. LTD. [2017 (11) TMI 558 - BOMBAY HIGH COURT] where it was held that It is well settled that doctrine of merger is not applicable when a Special Leave Petition against a decision of a High Court is summarily dismissed without recording reasons.
Appeal dismissed.
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2019 (6) TMI 1397
TP Adjustment - comparable selection - determination of Arms Length Price (ALP) in respect of international transaction u/s 92 - HELD THAT:- Infosys BPO Ltd - brand image of Infosys BPQ Ltd. in the market, the company incurs substantial selling and marketing expenditure whereas the assessee being a contract service provider does not incur such expenses to maintain its brand has not been controverted by them. Further, Infosys BPO Ltd. being a subsidiary of Infosys has an element of brand value associated with it. This can be further confirmed by the presence of brand related expenses incurred by Infosys BPO Ltd. Further, Infosys BPO Ltd. has acquired Australian based company M/s Portland Group Pty Ltd. during financial year 2011-12. They provide sourcing and category management services in Sydney, Australia. Therefore, this company also failed the TPO's own filter of rejecting companies with peculiar circumstances
BNR Udyog Ltd. - this company was carrying out medical transcription, medical billing and coding whereas the Assessee was a captive service provider. The Tribunal followed its own ruling in the same Assessee’s case in AY 2011- 12 in BT e-Serve (India) Pvt.Ltd. Vs. ITO [2017 (11) TMI 64 - ITAT DELHI] giving identical reasons for excluding BNR Udyog Limited from the list of comparable companies in the field of companies rendering ITES such as the Assessee.
Excel Info Ltd. - As decided in BT e-Serve (India) Ltd. [2018 (6) TMI 1639 - ITAT DELHI] there was abnormal volatility of revenue of this company from 2009-10 to 2014-15 and therefore this company should not be regarded as comparable company. Respectfully following the aforesaid decision, we direct exclusion of the aforesaid company from the list of comparable companies chosen by the TPO.
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2019 (6) TMI 1396
TP Adjustment - assessee has provided ITES activities to its Associated Enterprise - Comparable selection - HELD THAT:- Small companies cannot be compared with large companies. Accordingly, the assessee herein being a small company cannot be compared with large companies.
Companies functionally different, fails on RPT filter and error in margin computation need to be deselected from final list.
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