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Showing 341 to 360 of 2015 Records
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2018 (12) TMI 1677
Maintainability of petition - Initiation of Corporate Insolvency Resolution Process - existence of dispute or not - HELD THAT:- It is a matter that the "claim" is not yet converted into 'debt', but it is still "dispute in existence" and the Insolvency and Bankruptcy Code, 2016 is not meant for chasing the payment.
Application dismissed.
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2018 (12) TMI 1676
Release of property - HELD THAT:- The OL has in this report agreed to the request of the said Bank for releasing the property situated at A-2/2-25, Site B, Surajpur Industrial Area, Greater Noida, U.P. subject to IDBI Bank Ltd. agreeing to meet the liabilities of the workmen under Section 529 A of the Companies Act, if any, and also the cost of security provided to the property.
Application and report disposed off.
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2018 (12) TMI 1675
Money Laundering - provisional attachment order - Section 5(1) of the Prevention of Money Laundering Act, 2002 - proceeds of crime - HELD THAT:- The PMLA is not a statute dealing merely with matters of procedure or evidence or which is declaratory in nature - the PMLA, 2002 underwent several amendments from the year 2005 onwards. Even the expression "proceeds of crime" defined in Section 2(1)(u) underwent an amendment by Act 2 of 2013 and later by Finance Act, 2016. Today, the definition includes any property derived or obtained directly or indirectly by any person as a result of criminal activity relating to a scheduled offence. Therefore, even the property in the hands of third parties can be attached and confiscated, if it is shown that they represent proceeds of crime. Hence, by its very nature, the provisions of the Act cannot have retrospective effect.
If the amount of ₹ 822 crores lying in fixed deposits represented the proceeds of crime, the Ministry of Corporate Affairs could not have auctioned the same through competitive price bids. After one wing of the Government had induced a third party like the strategic investor to come to the rescue of the company, another wing of the Government cannot take an action that will vitiate the entire process - the impugned order of attachment is liable to be set aside.
Petition allowed.
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2018 (12) TMI 1674
Attachment of Bank Accounts - Bank Accounts were attached prior to the Insolvency and Bankruptcy Code commencement date in view of the fact that the respondents have filed formal claim for their dues with the applicant - HELD THAT:- This bench takes a conscious decision under the powers granted to this Tribunal u/s 238 of the code that the Orders passed under Section 226 (3) of the Income Tax Act dated 16.11.2017 and 17.11.2017 by Income Tax Recovery Officer-4, Mumbai, Room No.210, Ayakar Bhawan, MK Road, Mumbai are hereby suspended forthwith and we further hereby direct the authorities concerned not to proceed further for the recovery of dues.
Resolution Professional are directed to approach the Banks with the copy of this order for the withdrawal of funds available in their respective accounts to keep the company as going concern.
Application disposed off.
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2018 (12) TMI 1673
Assessment u/s 153A - whether in respect of unabated assessments (no pending proceedings) as on the date of search, the AO could frame the search assessment u/s 153A of the Act by making certain additions without any incriminating materials found during the course of the search? - HELD THAT:- The scheme of the Act provides for abatement of pending proceedings as on date of search. It is not in dispute that the assessment for the assessment year from 2008-09 to 2011-12 falls under the ambit of unabated assessment as on the date of search. There is no differentiation as found in the intent of the legislature to differentiate whether the assessments were originally framed u/s 143(1) or 143(3) or 147 of the Act. Therefore, if any incriminating material is not found during the course of search related to those concluded years, the Act does not confer any power on the AO to disturb the finding given thereon and income determined thereon as finality has already been reached and no proceedings were pending on the date of search.
In respect of abated assessments, fresh assessments are to be framed by the AO u/s 153A of the Act which would have a bearing on the determination of the total income by considering all the aspects, wherein the existence of incriminating materials do not have any relevance. However, in respect of unabated assessments, the legislature has conferred powers on the AO to follow the assessments already concluded unless incriminating materials are found in the course of the search.
Disallowances made for the Assessment years i.e. 2008-09, 2009-10, 2010-11 & 2011-12, which were unabated/concluded assessments as on date of search cannot be made in the search assessments in the absence of any incriminating material found in the course of search and accordingly all those additions are directed to be deleted. Since the legal issues are addressed, we refrain from giving our findings on the merits of disallowances under the provisions of the Act. Accordingly, grounds raised by the assessee for Assessment Years i.e. 2008-09, 2009-10, 2010-11 & 2011-12, are allowed.
Addition on account of dividend income - Year of assessment - HELD THAT:- Dividend income was not received by the assessee in the year ending 31-3-2012 and accordingly the same was not liable to be taxed in the year under consideration, i.e. AY 2012-13.
The assessee has declared the dividend income pertaining to the assessment year 2012-13 in the assessment year 2013-14 amounting to 15,29,220.00 which was duly accepted by the Revenue. AO has enquired the credit entries in the bank by issuing a common notice u/s 142(1) wherein he asked assessee to furnish the details of entries of dividend reflecting for each year.
Further, in reply of the same notice assessee submitted details of each year dividend received. However, even in reply assessee did not submit detail of any dividend for the year ending 31st March 2012. Once assessee contended that she has not received any dividend for the year and submitted all the relevant details the onus was on AO to establish that assessee had received dividend income.
The controversy also arises regarding the amount determined by the AO for the dividend income in the year under consideration. In this regard we find that the AO has taken the amount of dividend i.e. 43,12,165 for the year ending 31-3-2012 as recorded in the dividend warrant dated 27-9-2012 which was mentioned in Sri-Lankan currency. Thus the AO has also erred in treating the amount recorded in Sri-Lankan currency in dividend warrant as dividend income of the assessee - thus addition made on account of dividend income for the year under consideration is on without any basis and documentary evidence.
Once we have held that the assessee has not received any dividend income in the year under consideration - appeal of the assessee is allowed.
Time limit for completing the assessment under section 153A - HELD THAT:- The maximum time limit as per section 153B to complete the assessment for the assessment year 2013-14 was 31/03/2016.
It is evident from the assessment order that AO has passed the order on 23/12/2016 which is beyond the due date. This fact was also brought to the notice of the ld. DR, however, he also could not bring anything record to justify the delay in passing the assessment order as per the time limit given under the statute.
Therefore as per the above, as the AO could not pass the assessment order under the given time limit, the order passed by the AO is invalid and bad in the eyes of the law. Accordingly, we allow the grounds of appeal raised by the assessee on legal ground and refrain ourselves to adjudicate the issue raised on other ground and on the merit.
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2018 (12) TMI 1672
Deduction u/s 80P - AR submitted that the assessee is not having the banking licence and therefore is entitled to the benefit of Section 80P - HELD THAT:- As per Hon’ble Supreme Court in Citizen Cooperative Society [2017 (8) TMI 536 - SUPREME COURT] it is incumbent upon any society / bank to have the licence from RBI for the purposes of doing the business of banking. In the case before the Hon’ble Supreme Court, the assessee had obtained a certificate from the RBI clarifying that the assessee’s business does not fall under the category of cooperative bank. In our view, it will be equitable in the interest of justice if the matter is remanded back to the file of the AO with a direction to verify the activities of the assessee and further the assessee is directed to furnish the certificate / circular from the RBI to the effect that the activity / business functions of the assessee do not attract the Banking Regulations Act and hence do not require any licence from RBI. Needless to say if the assessee furnishes the certificate from the RBI clarifying that the activity of the assessee do not fall under the activity of cooperative bank then the AO shall allow the claim of deduction u/s.80P(4) of the Act.
Whether the assessee is a cooperative society or not? - HELD THAT:- In many cases, the Tribunal has held that the stand of the Revenue that a Souharda is a cooperative but not a co operative society under the ACT and hence, not eligible for deduction u/s.80P. In a recent order in the matter of M/s. Udaya Souharda Credit Co operative Society Ltd [2018 (8) TMI 1063 - ITAT BANGALORE] it was noted that Karnataka State has notified Karnataka Co – Operative Societies Act, 1959 as well as the Karnataka Souharda Sahakari Act, 1997 and both Acts are in force. Therefore, conversion from one into another is possible. Thereafter the Tribunal held that the deduction u/s.80P can only be applied to a cooperative society registered under the Karnataka Co- Operative Societies Act, 1959 and thereafter the matter was restored back to the AO for fresh decision after making necessary enquiry and investigation. - Decided in favour of assessee for statistical purpose
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2018 (12) TMI 1671
Admissibility of application - Initiation of Corporate Insolvency Resolution Process - Corporate Debtor - inability to liquidate debts - Section 8 of the Insolvency & Bankruptcy Code - HELD THAT:- On being served through the process of Bench, the Corporate Debtor entered appearance through their counsel, Mr. Simran Jot Singh. Ld. counsel has candidly admitted the claim made by the Operational Creditor and has expressed their inability to liquidate the same. This is corroborated by the Minutes of Meeting of the Board of Directors convened on 6th November, 2018, wherein it was resolved that the default in payment of the amount claimed in the petition be admitted. Copy of the resolution has been placed on record.
In view of the categorical admission of the Corporate Debtor expressing its inability to liquidate the amount claimed, the prayer of the Operational merits consideration and is hereby being admitted - the petition is Admitted.
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2018 (12) TMI 1670
Addition on account of understated production/suppressed production - AO alleged that wide gap in the claim of burning loss, remained un-explained - HELD THAT:- Assessee had supplied all the relevant details to the lower authorities such as register which are subject to regular check and subject to audit, Raw material Register, production register and audited books of account with tax audit report and there was specific no defect was found by the A.O. Therefore, in our considered opinion, ld. CIT(A) has rightly deleted the addition. Therefore, we do not want to interfere in the order passed by the ld. CIT(A).
Disallowance of interest expenses u/s.36(l)(iii) - HELD THAT:- As decided in BHOGILAL RAMJIBHAI ATARA [2014 (2) TMI 794 - GUJARAT HIGH COURT] AO undertook exercise to verify records of so called creditors and found that creditors had no dealing with assessee - Assessing Officer further having found that debts were outstanding since several years applied section 41(1) and added above amount in income of assessee as deemed income - There was nothing on record to suggest that there was remission or cessation of liability that too during previous year relevant to assessment year
Addition in respect of the old, brought forward liability - HELD THAT:- Addition originally made by the A.O. in respect of the old, brought forward liability of this amount towards M/s. Om Steel, which was reflected in the books under the head “Advance from custormers”. The finding of judgment in the case of CIT vs. Bhogilal Ramjibhai Atara [2014 (2) TMI 794 - GUJARAT HIGH COURT] will apply to this ground as well. Therefore, we allow this objection of the assessee.
Unexplained expenditure for setting up shed - HELD THAT:- For constructing a shed, assessee did not included the payment of labour charges and assessee did not submitted any evidence in support of its contention. Therefore, lower authorities rightly made the addition and same does not require any kind of any interference at our end and same is dismissed.
Non deduction of TDS u/s. 194J - professional fees paid to Shri D.G. Sompura - HELD THAT:- A.O. confronted the assessee about the issue of non deduction of TDS u/s. 194J of the Act and Authorized Representative agreed for such default as well as addition. So in these circumstances, ld. CIT(A) rightly confirmed the addition as same was agreed by the assessee before the lower authorities.
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2018 (12) TMI 1669
Maintainability of application - Initiation of Corporate Insolvency Resolution Process (CIRP) - Corporate Debtor - conversion of petition u/s 7 of the l&B Code - whether the loan advanced by the Financial Creditor to the Corporate Debtor is the financial debt? - whether for non-suggesting the name of I.R.P. in the application, the application is required to be rejected?
HELD THAT:- Section 7(3) of I&B code states that, “the Financial Creditor shall along with the application furnish -(a) record of the default recorded with information utility or such other record or evidence of default as may be satisfied; (b) the name of the resolution professional proposed to act as an interim resolution professional; and (c) any other information as may be specified by the Board.” - Section 7(5) of l&B Code further states that /’where the Adjudicating Authority is satisfied that- “(a) a default has occurred and the application under sub-section (2) is complete, and there is no disciplinary proceedings pending against the proposed resolution professional, if may, by order, admit such application; or (b) default has not occurred or the application under sub-section (2) is incomplete or any disciplinary proceeding is pending against the proposed resolution professional, it may, by order, reject such application.”
In this case, the Financial Creditor produced on record the statement of loan account of the Corporate Debtor maintained by them. A perusal of them proves that the loan was given to the Corporate Debtor and it has not been repaid. In fact, there is no dispute about this fact. It is the only say of the Corporate Debtor that since no interest is liable to be paid on the amount, it cannot be termed as the financial debt.
It is now settled law that while considering application under section 7 of l&B Code, the authority has to record finding only on two aspects - (i) whether there is a debt and (ii) whether there is a default of the debt. In this case, the Financial Creditor has proved both the facts.
Application admitted.
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2018 (12) TMI 1668
Reopening of assessment u/s 147 - validity of notice u/s 148 issued during pendency of assessment proceedings initiated u/s. 142(1) - HELD THAT:- In this case, the assessment year involved is assessment year 2011-12 and the time limit for completion of assessment already initiated by issuing of notice u/s. 142(1) is 31-03-2014, therefore, issuing of notice u/s. 148 of the act during the pendency of assessment proceedings on 16-01-2013 is bad in law and invalid.
The existence of this fact is very clearly demonstrated from the findings of the AO mentioned in his order passed u/s. 143(3) r.w.s 147 on 27th March, that a notice u/s. 142(1) of the act was issued to the assessee on 1st December, 2011 and asked the assessee to file return of income for the assessment year 2011-12 by 9th December, 2011 and in response to the notice u/s. 142(2) the assessee has not filed return of income therefore the AO should have completed the assessment on or before 31st March, 2014 however the case was reopened u/s. 147 by issuing of notice u/s. 148 on 16th January, 2013 which was served upon the assessee on 17.01.2013.
In the case of Medapati Venkayamma vs. ITO [2017 (9) TMI 809 - ITAT VISAKHAPATNAM] we consider that the assessing officer has issued notice u/s 148 for reassessment during the pendency of assessment proceedings initiated by issuing of notice u/s 142(1) therefore, the assessment made u/s. 143(3) r.w.s. 147 was bad in law and cannot be sustained. Accordingly, assessment made u/s. 143(3) r.w.s. 147 by issuing of notice u/s. 148 is quashed. Since the assessment made u/s. 143(3) r.w.s. 147 has been quashed, therefore, there is no need to adjudicate the other grounds of the assessee on merit.
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2018 (12) TMI 1667
Employee’s contribution to PF & ESI beyond the due date for payment - addition u/s 2(24) and u/s 36(1)(va) - HELD THAT:- he fact remains that the assessee has paid the employee’s contribution to PF & ESI within the due date permitted under Income Tax Act before filing the return, although, it has not paid them within the due dates permitted under the respective Act. In this regard, the jurisdictional High Court decision in the case of CIT vs Industrial Security & Intelligence Pvt Ltd [2015 (7) TMI 1063 - MADRAS HIGH COURT] relied upon. - We do not find any reason to interfere with the order of the CIT(A). The Revenue’s appeal for assessment year 2013-14 is dismissed.
Disallowance u/s. 14A - HELD THAT:- The assessee has declared dividend income and that having accepted the applicability of sec. 14A of the IT Act, the assessee has disallowed on its own and added to the total income in this regard, in the computation of Total income filed along with the return of income furnished for A.Y 2014-15 - In view of that, since the facts and circumstances associated with the issue is not on record, this issue is remitted back to the AO for a fresh examination. The Assessing Officer shall decide the issue after affording adequate opportunity to the assessee, in accordance with law.
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2018 (12) TMI 1666
Revision u/s 263 - valuation and investment made in the fixed assets - as per Commissioner order passed by the AO is erroneous and prejudicial to the interest of the revenue as the AO failed to conduct the proper enquiry on the valuation of the cost of construction and for not referring the matter to the Departmental Valuation Officer - HELD THAT:- In the case in hand, admittedly, it is not a complete lack of enquiry on the part of the AO rather the AO has conducted a detailed enquiry on this issue and called for all the relevant records from the bank for the purpose of examining the cost of construction of the hotel building. It may be a case of inadequate enquiry so far as not referring the matter to the DVO. However, it is not mandatory for the AO to refer the valuation to the DVO once the AO was satisfied with the cost of construction and cost of fixed assets as recorded in the books of account. Further, even if the Pr. Commissioner found that the decision of the AO accepting the cost of construction/cost of fixed assets is contrary to the facts or otherwise not permissible as per the provisions of the Act, then the order of the AO could have been reversed by giving a concluding finding on the issue.
Pr. Commissioner has set aside the impugned order only for the purpose of referring the same to the DVO. Therefore, the Pr. CIT was also not sure about the correctness of the cost of construction or cost of fixed assets either shown in the project report or recorded in the books of account. Accordingly, in the facts and circumstances of the case when it is not a case of lack of enquiry but the AO has taken a view by accepting the cost of fixed assets as recorded in the books of account which were also supported by the valuation report, then the order of the AO cannot be held to be erroneous on the ground of lack of enquiry. - Decided in favour of assessee.
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2018 (12) TMI 1665
TP Adjustment - Comparable selection - HELD THAT:- INFINITE DATA SYSTEMS PRIVATE LTD. (INFINITE) brought on record by the taxpayer that the profitability of Infinite is increased by 1496% as compared to the preceding year despite the fact that for computation of OP/OC, foreign exchange loss has been excluded from OC. We are of the considered view that super-normal profit to the tune of 1496% certainly affects OP/OC but, in this case, even foreign exchange loss has been excluded from the OC by the TPO and as such, it makes the Infinite not a valid comparable vis-à-vis the taxpayer. So, we are of the considered view that because of functional dissimilarity of Infinite vis-à-vis the taxpayer and earning supernormal profit by 1496% as compared to preceding years makes Infinite as invalid comparable. So, we direct the AO/ TPO to exclude Infinite from the final set of comparables.
INFOSYS LIMTIED (INFOSYS) - functional dissimilarity between Infosys vis-à-vis the taxpayer and the fact that Infosys is incurring huge expenditure to the tune of 2.1% of its total revenue on its R&D activities leading to the creation of significant intangible property and the fact that Infosys is a brand in itself and the fact that it assumes entrepreneurial risk and it also deals in software product and following the decision rendered in CIT vs. Agnity India Technologies Pvt. Ltd. [2013 (7) TMI 696 - DELHI HIGH COURT] it cannot be taken as a valid comparable. So, we direct the AO/ TPO to exclude Infinite from the final set of comparables.
PERSISTENT SYSTEMS LIMTIED (PERSISTENT) - we are of the considered view that Persistent is not a valid comparable vis-à-vis taxpayer. So, we direct the AO/ TPO to exclude Infinite from the final set of comparables.
SONATA SOFTWARE LTD. (SONATA) - when we examine Related Party Transactions of Sonata, available at page 726 of the paper book, it goes to prove that its RPT as percentage of sales is 53.83% whereas TPO himself has applied the filters to exclude the companies with more than 25% of RPT from the final set of comparables. So, keeping in view the functional dissimilarity as well as substantial Related Party Transactions, Sonata cannot be a valid comparable vis-à-vis taxpayer, hence ordered to be excluded.
TATA ELXSI - As relying on M/S. NEC TECHNOLOGIES INDIA LTD. [2017 (11) TMI 71 - ITAT DELHI] Tata Elxsi is being functionally dissimilar vis-à-vis tax payer is ordered to be excluded from the final list of comparable for benchmarking the international transactions.
ZYLOG SYSTEMS LIMITED (ZYLOG) - Zylog has undergone into business restructuring due to acquisition, which is an extraordinary event, the same cannot be a valid comparable hence order to be excluded from the final set of comparable
THIRDWARE SOLUTIONS LTD. (THIRDWARE) - following the decision rendered by Co-ordinate bench of Tribunal in Open Solutions Software Services Pvt. Ltd. Vs. DCIT [2017 (4) TMI 960 - ITAT DELHI] . We are of the considered view that Thirdware is also into development and sale of software products whereas the tax payer is purely into providing software development services. Moreover complete segmental financials are also not available. So keeping in view the fact that the Thirdware is having a different business model cannot be a valid comparables vis-à-vis tax payer who is a routine software development services provider, hence ordered to be excluded from the final set of comparables.
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2018 (12) TMI 1664
TP Adjustment - Comparable selection - HELD THAT:- Accentia Technologies Ltd. company is having its revenue from three sources, namely, medical transcription, coding and software development. Thus due to non-availability of segmental information and extraordinary events occurred during the year, this company cannot be considered as comparable.
Cat Technologies Ltd. - this company is primarily a software development company and, therefore, in absence of segmental information, this cannot be compared with the assessee company as a comparable. The various decisions relied on by the ld. counsel also supports his case. Under these circumstances, we do not find any infirmity in the order of the CIT(A) in excluding this company from the list of comparables.
Denial of opportunity to the TPO before admitting the additional evidence in case of Accentia Technologies Ltd., regarding acquisition, etc. - we find the same is without any merit. All these details are very much available in the audited accounts in the form of Notes to Accounts, therefore, there was no necessity of giving any opportunity to the Assessing Officer. Therefore, the ground No.2 raised by the Revenue is also dismissed.
Disallowance u/s 14A r.w.r. 8D - HELD THAT:- It is an admitted fact that the assessment year involved in A.Y. 2007-08. Therefore, in view of various decisions, the provisions of Rule 8D are not applicable for assessment year 2007-08. Therefore, the action of the AO in applying the provisions of Rule 8D is incorrect. However, since the assessee has earned dividend income of ₹ 2,52,976/- and has substantial investment in shares of various companies, therefore, it cannot be said that no expenditure has been incurred by the assessee for making the investment and earning the exempt dividend income. Disallowance on estimate for this year under the facts and circumstances of the case will meet the ends of justice. We, therefore, modify the order of the CIT(A) and direct the Assessing Officer to disallow an amount of ₹ 30,000/- u/s 14A of the IT Act. Ground No.8 is accordingly partly allowed.
Double disallowance being loss on sale of fixed assets since the said loss was suo moto disallowed by the assessee - HELD THAT:- We restore this matter to the file of AO with a direction to verify the claim of the assessee and adjudicate the issue afresh. Needless to say, the Assessing Officer shall give due opportunity of being heard to the assessee and decide the issue as per the fact and law. Ground of appeal No.9 is accordingly allowed for statistical purposes.
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2018 (12) TMI 1663
Determination of income u/s.153A - disallowance u/s.40A(3) - HELD THAT:- Disallowance out of expenditure could be made if payment or aggregate of payments made to a person in a day exceeds twenty thousand rupees. Ld. first appellate authority has examined this aspect and recorded a categorical finding of fact that payments made by the assessee on a single day did not exceed twenty thousand rupees to a person, if that be so, then how disallowance u/s.40A(3) of the Act could be made.
Thus, for the time being, if we do not take cognizance of the first fold of submission that addition ought to be made on the basis of seized material, then also, otherwise on merit this addition could not be made. Ld. first appellate authority has rightly appreciated the facts and circumstances and no interference is called for in the order of the Ld.CIT(A). - Decided in favour of assessee
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2018 (12) TMI 1662
Benefit of deduction u/s 80P(2)((a)(i) - interest income earned on investment in Bagalkot District Central Co-operative Bank and interest earned on savings bank account, FD with Jamkhandi Sugars Ltd. - HELD THAT:- The claim of the Assessee was that Co-operative Bank is essentially a Co-operative Society and therefore deduction has to be allowed under Clause (d) of Sec.80P(2).
The Tumukur Merchants Souharda Credit Cooperative 2015 (2) TMI 995 - KARNATAKA HIGH COURT followed the decision of the supreme Court in The Totgars Co-operative Sales Society Ltd. [2010 (2) TMI 3 - Supreme Court] and held that interest earned from Schedule bank or cooperative bank is assessable under the head income from other sources and therefore the provisions of Sec.80P(2)(d)of the Act was not applicable to such interest income.
It is thus clear that the source of funds out of which investments were made remained the same in AY 2007-08 to 2011-12 and in AY 1991-92 to 1999-2000 decided by the Hon’ble Supreme Court. Therefore whether the source of funds were Assessee’s own funds or out of liability was not subject matter of the decision of the Totagars Co-Operative Sale Society - 2017 (7) TMI 1049 - KARNATAKA HIGH COURT in the decision cited by the learned DR. To this extent the decision of the Hon’ble Karnataka High Court in the case of Tumukur Merchants Souharda Co-operative Ltd. (supra) still holds good. Hence, on this aspect, the issue should be restored back to the AO for a fresh decision after examining the facts in the light of these judgment of the Hon’ble Apex Court rendered in the case of The Totgars Co-operative Sale Society Ltd. (supra) and of Hon’ble Karnataka high Court rendered in the case of Tumukur Merchnts Souharda Co-operative Ltd. (supra). Appeal by the Assessee is treated as allowed for statistical purpose.
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2018 (12) TMI 1661
Validity of reopening of assessment - validity of reason to believe -notice beyond the period of 4 years - HELD THAT:- A perusal of the assessment order clearly shows that ld. Assessing Officer has issued a notice u/s.148 of the Act beyond the period of 4 years without having any fresh evidences nor pointing out what is the failure on the part of the assessee to truly and fully disclosed material facts required for his assessment. This being so, the reopening of the assessment itself is invalid. Even on merits, it is not disputed that interest receipt has been taxed. Once the interest receipt has been taxed, obviously the expenditure incurred in respect of earning such interest receipt being the interest outgo is also liable to be allowed. This being so, even on merits no addition is called for. - Decided in favour of assessee.
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2018 (12) TMI 1660
Claim of deduction u/s 10B - profit enhanced due to voluntary adjustment to ALP of export of services made to AE as eligible for deduction - HELD THAT:- As decided in I GATE GLOBAL SOLUTIONS LTD. VERSUS ASSISTANT COMMISSIONER OF INCOME-TAX [2007 (11) TMI 444 - ITAT BANGALORE] if income increased, as a result of computation of aim's length price, then such increase is not to be considered for deduction under section 10A. In the instant case, the assessee himself has computed the arm's length prices and has disclosed the income on the basis of arm's length prices. It is not a case, where there is an enhancement of income due to determination of arm's length price. Hence, it is held that assessee was entitled to deduction under section 10A in respect of income declared in the return of income on the basis of computation of arm's length price
Also in M/S I. GATE GLOBAL SOLUTIONS LTD [2014 (6) TMI 1007 - KARNATAKA HIGH COURT] held that the error committed by the AO was relying on Section 92(C)(4) to a case where Arm’s Length Price was determined by the assessee, whereas the said provision applies to a case where Arm’s Length Price was determined by the AO, that mistake has been corrected by the tribunal, set aside the order passed by the commissioner as well as the assessing authority - thus we direct the AO to delete the addition made by the AO. Hence, the ground of appeal of the assessee is allowed.
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2018 (12) TMI 1659
Addition u/s 68 - unexplained cash credit - HELD THAT:- CIT(A) has examined the documents furnished by the assessee and has come to the conclusion that the assessee has discharged the initial burden of proof placed upon his shoulders u/s 68 i.e., he has proved the identity of the creditor, creditworthiness of creditor and genuineness of transactions. Once the assessee discharges the initial burden placed upon him, then the onus shifts to the shoulder of the AO to prove otherwise.
In the instant case, we notice that the AO has failed to prove that the documents furnished by the assessee are wrong. The above view is supported by the decision rendered by the co-ordinate bench in the case of Reliance Corporation [2017 (5) TMI 1261 - ITAT MUMBAI] . Hence we do not find any infirmity in the order passed by CIT(A) on this issue and accordingly uphold the same. - Decided against revenue.
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2018 (12) TMI 1658
Penalty u/s 271(1)(c) - disallowance of commission expenses u/s 37(1) - HELD THAT:- While deliberating upon the quantum addition, the Tribunal noted that certain documents were not produced before the AO as well as before the Ld. CIT(A), which were relevant to decide the matter and in that situation, the quantum addition was restored to the file of the ld. AO for fresh adjudication.
So far as, the penalty is concerned, it depends upon the outcome of the quantum addition which has been restored to the file of AO therefore, in all fairness, the penalty appeal is also restored to the file of the ld.AO for fresh consideration in accordance with law. Thus, this appeal of the Revenue is allowed for statistical purposes.
Disallowance of commission expenses u/s 37(1) - HELD THAT:- The assessee is expected to prove the actual services rendered by these agents for business purposes which have not been established. The assessee is directed to prove the nexus and the commercial expediency for such claim. AO is also directed to ascertain whether the payment of commission is prohibited by law as has been observed by him. AO is further directed to ascertain whether such expenses are legitimate and also whether payment of such commission is against public policy of the government.
The assessee is also directed to explain whether such agents are registered with the respective government department/PSUs for which they have been paid commission. Section 37(1) contains the general provisions of allowance. The assessee is directed to produce the necessary evidence in support of its claim because as per section 37(1) explanation-1, any expenditure incurred by the assessee for any purposes, which is an offence or which is prohibited by law shall not be deemed to have been incurred for the purposes of business or profession and shall not be allowable. Thus, the appeal of the Revenue is allowed for statistical purposes.
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9911796707
