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Showing 341 to 360 of 1861 Records
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2018 (6) TMI 1523
Disallowance of interest u/s. 36(1)(3) - interest free loan given to subsidiary - Held that:- Issue covered in assessee’s own case [2017 (5) TMI 108 - ITAT DELHI] as held so long as funds have been given to the sister concern out of interest free funds, no disallowance u/s 36(l)(iii) can be made. Thus, without their being material to controvert the finding of the Learned CIT (Appeals) that advance standing in the name of the subsidiary is out of assessee's own interest free funds, we do not find any reason to deviate from such a finding of fact.
Disallowance u/s. 14A - average of investment - Held that:- Assessing Officer has considered average total investment appearing on the first day and last day of the financial year, which in our opinion is not justified. These investments may also include such investments from which no exempt income would have been earned by the assessee. As is clear from the Rule itself, the average of only such investments have to be taken into account, which yielded the income not forming part of the total income. Therefore, the AO was required to work out the average of such investment, the income from which did not form part of the total income instead of total value of investment. None of the parties before us, however, have laid any details to examine as to which of the investments have yielded such in come which did not form part of the total income. We, therefore, restore the matter back to the file of the Assessing Officer for calculating the disallowance u/s. 14A read with Rule 8D afresh
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2018 (6) TMI 1522
Addition as Prior Period Expenses - Held that:- Undisputedly, the assessee company has been following mercantile system of accounting, which is allowable only when the liability to pay the same stands crystallized. Moreover, when the assessee has not claimed the expenses in question while computing the total income, the same cannot be disallowed by the AO. So, when the assessee has not claimed deduction on account of prior period expenses, the same cannot be disallowed by the AO, hence, Ld. CIT(A) has rightly deleted the same. - Decided against the Revenue.
Addition on account of School Running Expenses - Held that:- When we examine school running expenses, in the light of the global concept of business it includes care and concern for the society at large, particularly for the people of the locality where business is located. Moreover, AO has not disputed the genuineness of the expenses nor it is the case of the AO that the expenses used by the assessee are for its personal purposes - expenditure made by the assessee for running the school for the employees of a company as well as residence of vicinity, the same are integrally related to the business activities of the assessee - Decided against the Revenue.
Addition on account of Club Membership Fee - Held that:- The approach of the assessee in spreading out the membership fee receipts over the period of membership cannot be faulted and as such the Ld. CIT (Appeals) was justified in deleting the addition made by Assessing Officer. - Decided against the Revenue.
Addition invoking the provisions u/s 14A read with Rule 8D - Held that:- when the assessee has come up with categoric plea that the entire investment have been made out of its own interest free funds available and the incurred expenses have been suo moto disallowed and the AO has not pointed out any defect in the computation made by the assessee company, provision s contained u/s 14A read with Rule 8D are not attracted which can only be invoked if the AO is not satisfied with the claim of the assessee.
Sustaining the addition under Rule 8D(2)(iii) by Ld. CIT(A) on account of administrative expenses to earn the exempt income is concerned, again, we are of the considered view that when the AO as well as Ld. CI T(A) have not recorded their dissatisfaction that the computation of expenses disallowed by the assessee are not correct nor has pointed out any specific computation defects, the same cannot be sustained as Rule 8D(2) has only prescribed a formula to determine expenditure incurred to earn the exempt income which does not form part of the total income under the Act, which cannot be invoked unless AO has not come up with specific dissatisfaction with the cl aim of the assessee. So, in these circumstances addition sustained by Ld. CIT(A) under Rule 8D(2)(iii) is not sustainable
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2018 (6) TMI 1521
Rectification of Mistake - it is submitted that the Appeal cannot be dismissed in limini under the litigation policy but a decision on merit is called for - Held that:- After considering the Misc. Application and noting that the issue is of a recurrent nature and involves classification of services, we recall our earlier Final Order - List the Appeal in due course for a decision on 30.07.2018 to issue notice to the respondent.
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2018 (6) TMI 1520
Claim of the assessee towards fringe benefit expended for the purpose of levy of FBT - Held that:- Referring to case of Gujarat Urja Vikas Nigam Ltd. (2013 (10) TMI 1502 - ITAT AHMEDABAD), we are of the view that the CIT(A) has rightly confirmed the value of fringe benefit expended by the assessee for the purpose of levy of FBT. Counsel himself admitted that there is no merit in this appeal. Therefore, it is dismissed.
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2018 (6) TMI 1519
Classification of services - deputation of certain qualified technical staff to joint venture companies for performing the assigned duties - whether to be classified under the head Manpower Recruitment or Supply Agency’s Service or otherwise? - Held that:- Identical issue decided in appellant own case M/S GAIL (INDIA) LTD. VERSUS CST, NEW DELHI [2017 (6) TMI 1232 - CESTAT NEW DELHI], where it was held that no tax liability arise for such activity under category “recruitment or supply of manpower” service.
The Appellant cannot be put to tax liability under the category of 'Manpower Recruitment or Supply Agency's Service' for the activity now under dispute - appeal allowed - decided in favor of appellant.
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2018 (6) TMI 1518
Deduction in respect of expenditure of acquisition of distribution rights of feature film - Deduction of the amounts in connection with the acquisition of satellite distribution rights on three Malayalam films denied - Held that:- Rule 9B(5) starts with a non-obstante clause laid down that deduction under Rule 9B shall not be allowed unless the distributor credits in the books of accounts, the amounts realised by the distributor in case where the distributor himself has exhibited the film on commercial basis. The assessee was therefore required to credit the amount realised by him by exhibiting the film in the profit and loss account.
Hence the deduction is permissible under Rule 9B only if the film has been commercially exploited and an income received. Sub-rule (4) of Rule 9B only permits carrying forward of the cost of acquisition to the next year for the purpose of claiming deduction, which can be claimed only if there is income generated by the film and the same is credited to the books of accounts as provided in the overriding sub-rule at Rule 9B(5). There can be no deduction permissible on the cost of acquisition without generation of income credited in the books of account. The subject films were never commercially exploited and generated absolutely no income.
It is an admitted case that the feature films were never exhibited and there was no amount credited in the profit and loss account as amount received on exhibition of films. The finding of the Appellate Authority as well as the Tribunal is therefore, to be upheld and we find no reason to interfere and the claim of the assessee fails.- Decided in favour of the Revenue
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2018 (6) TMI 1517
Recovery proceedings - Invocation of the provisions of Sections 230 and 179 - Liability of directors of private company in liquidation - Appellant was detained when Section 179 proceedings were initiated and proceeded with - Held that:- Time frame of six weeks has been granted for conclusion of the proceedings under Section 179 and further time of four weeks with respect to an order under Section 230. In such circumstances, we would issue specific orders fixing the time within which a notice has to be served, appearance has to be made and orders passed. We are also of the opinion that Exhibits P13 and P8 orders have to be quashed; but, however, with a restriction that the order not to travel outside India as is seen from Exhibit P8 shall continue till fresh orders are passed. It is so ordered. The appellant is directed to appear before the 2nd respondent on 29.06.2018, on which date he shall be issued with a fresh notice under Section 179 and under Section 230.
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2018 (6) TMI 1516
Section 10A deduction - Deduction of expenditure incurred for ‘Export Turn Over’ required to be deducted from ‘Total Turn Over’ for the purpose of computing the deduction u/s.10A - Held that:- The controversy is no longer res integra as held exclusions made from export turnover have to be considered for reduction from total turnover also while working out deduction available u/s.10A of the Act. Accordingly, we direct the AO to rework the deduction available to the assessee u/s.10A. See case of M/s. Tata Elxsi Ltd., vs. Asst. Commissioner of Income Tax, [2015 (10) TMI 634 - KARNATAKA HIGH COURT] affirmed by Income-tax, Central – III vs. HCL Technologies Ltd., [2018 (5) TMI 357 - SUPREME COURT].
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2018 (6) TMI 1515
Entitled to claim deduction u/s 80P(2)(iii) - denial of claim mere reason that no return was filed; when deduction as permissible under Section 80A(1) is of the total income - Held that:- Only when a return is filed claiming deduction under Section 80P, the AO will be enabled to first consider the question of eligibility of the assessee and then consider the allowability of deduction from the total income. - Decided against the assessee.
Agriculture produce or intoxicating liquor - Held that:- As has been found by the first appellate authority and the Tribunal, toddy is a product which is extracted from a tree just as any other agricultural produce is extracted. AO in his order as also his report before the first appellate authority had waxed eloquent about there being no activity of sawing and tilling and so on and so forth. A coconut or palm cultivation would not require such sawing and tilling as is required with a paddy cultivation. The mere fact of a particular agricultural activity having not been carried out would not be the sole ground for denying the exemption as available to the marketing of an agricultural produce when carried out by the Co-operative Society.
The fact of the tree tax being paid by the Society is only on account of the license of tapping and vending having been obtained by the Society. The tax so paid is on behalf of the members of the Society. We also have to notice that tapping of toddy is a traditional agricultural enterprise within the State and the State also encourages it; as distinguished from the foreign liquor trade. We, hence, do not find any reason to interfere with the orders of the Tribunal. We answer the questions of law as framed by us in the appeals filed by the Revenue, against the Revenue and in favour of the assessee.
Income from toddy marketing as eligible for deduction - Held that:- Out of 636 members, 498 members are toddy tappers who have their own property from which toddy is extracted. The 498 members together have 3845 trees on their own land. A specimen of 974 trees were considered for the purpose of verifying the yield. As found that 90% of the total of 19,85,461 litres of toddy traded by the assessee came from 498 members having 3845 trees on their own land. It is hence the Tribunal found that 100% of the assessee's income from toddy marketing was eligible for deduction. We do not find any perversity in the findings on facts. We, hence, on that question also hold against the Revenue and in favour of the assessee. The appeals by the Revenue are dismissed.
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2018 (6) TMI 1514
Cost of acquisition of the asset - Mode of computation - sale of tenancy rights - Benefit of indexation - Cost of acquisition to be taken as NIL for Fair Market Value (FMV) as on 1.4.1981 - Scope of section 55(2)(a) and 55(2)(b) - Held that:- Section 55 (2)(b) of the Act is a residuary clause dealing with the cost of acquisition of the capital assets which are not covered by Section 55(2)(a). Capital asset in this case being tenancy rights is covered by Section 55(2)(a). Appellant cannot avail of Section 55(2)(b) of the Act. It is in the above context that the impugned order holds that the indexation by substituting cost of capital assets to the previous owners who acquired the property before 1st April, 1981 by the market value as on 1st April, 1981 which is specifically referred to in Section 55 (2)(b) (ii) of the Act, would have no application to determine the cost of acquisition of tenancy rights which was a subject matter of sale.
Cost of acquisition of tenancy, cannot be substituted by the fair market value as on 1st April, 1981, restored the issue to the Assessing Officer for the limited purposes to determine the cost of acquisition. This, in terms of Section 55(3) i.e. cost of acquisition to the previous owners or the market value on the date on which the capital asset become the property of the previous owner for the purposes of determining the income chargeable under the head 'capital gain' in respect of the sale of tenancy rights.
No impediment in the Appellants challenging the order passed by the Assessing Officer, before the Appellate Authorities, consequent to the remand by the impugned order of the Tribunal under the Act and in accordance with law. No liberty for the same is required.
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2018 (6) TMI 1513
Eligibility for exemption u/s 11 - proof of charitable activities - Testing of water and supplying good quality of water contribute to health of the people - Held that:- Assessee’s activity comes within the purview of exceptions provided sub-section (15) of sub-clause (i) for the reason that the activity of the assessee is testing of the water quality, which monitors quality in reservoirs and slum areas, for that, assessee has charged some fee and almost the entire fee was spent towards testing activity, as admitted by the CIT(A) himself.
Testing of water and thereby supplying good quality of water contribute to health of the people. Therefore, the activity carried out by the assessee as per its object to take care of health of the people and the activity of the assessee has to be considered as advancing of general public utility. Therefore, the assessee is eligible for exemption u/s 11. Assessee is entitled for exemption u/s 11. - Decided in favour of assessee.
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2018 (6) TMI 1512
Undisclosed income - Entries in the alleged diary - declarations made in his statement u/s 132(4) - Held that:- Burden is on the assessee to show that the entries in the alleged diary do not belong to the Asstt. Year 2011-12 by producing cogent evidence to show they relate to the year 1998-99. Revenue cannot be expected to prove that these entries relate to Asstt. Year 2011-12 because of the nature of the entries, which are in the personal knowledge of the assessee. It is always open for the assessee to produce relevant material to show that these entries relate to the Asstt. Year 1998-99 not for 2011-12, in the absence of which we find it difficult to accept the bald denial made by the assessee. The findings of the authorities below on this aspect, do not suffer any illegality or irregularity and they have to be confirmed. We, therefore, dismiss Ground Nos. 1 to 3.
Outstanding balance to be found from the diary - Held that:- Two amounts are surrendered separately, as such, they cannot be telescoped against each other is not sound and cannot be accepted. These two transactions have an intrinsic link as submitted by the learned AR that it is only out of the sale amount the receivable from the persons listed on the leaf relating to 1.1.1998 arise. We accept the same and direct the authorities to telescope ₹ 2.44 crores into ₹ 2.60 crores in which event nothing over and above the declaration of ₹ 4 crore is taxable. We accordingly answer Ground No.4 in favour of the assessee.
Adjustment of the seized amount against the advance tax liability - Held that:- Allow the credit for the cash seized towards the advance tax payable by the assessee on the date of seized viz. 11.11.2010 as requested by the assessee. See KANISHKA PRINTS (P.) LTD. VERSUS ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE - 2, SURAT [2013 (7) TMI 14 - ITAT AHMEDABAD]
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2018 (6) TMI 1511
Disallowance u/s 40(a)(i) on account of non-deduction of TDS - consultancy and legal service charges - depreciation disallowed to the assessee with the help of section 40(a-) Held that:- In the case of Sonic Biochem Extractions P.Ltd [2013 (9) TMI 193 - ITAT MUMBAI] Tribunal did not approve this line of reasoning adopted by the AO and held that depreciation cannot be disallowed to the assessee with the help of section 40(a) because section 40(a) is applicable if the assessee has claimed deduction of expenditure mentioned in the section. Other decisions referred by the ld.counsel for the assessee are also to this effect. CIT(A) has rightly deleted the disallowance
Assessment of interest income - whether without filing revised return, the assessee can raise new plea before the ld.CIT(A) in order to exonerate itself from tax liability? - Held that:- A ground would have a reference to an argument touching a question of fact or a question of law or mixed question of law or facts. A legal contention would ordinarily be a pure question of law without raising any dispute about the facts. Not only such additional ground or contention, the Courts have also, as noted above, recognized the powers of the Appellate Commissioner and the Tribunal to entertain a new claim for the first time though not made before the assessing officer. Income Tax proceedings are not strictly speaking adversarial in nature and the intention of the Revenue would be to tax real income.
This is primarily on the premise that if a claim though available in law is not made either inadvertently or on account of erroneous belief of complex legal position, such claim cannot be shut out for all times to come, merely because it is raised for the first time before the appellate authority without resorting to revising the return before the assessing officer.
Quantification of interest income available with the assessee for set off against pre-operative expenditure in power project implementation - Held that:- We find that the ld.CIT(A) has not independently examined any issue in this order, rather followed order of his predecessor in the assessment year 2008-09. The ITAT did not approve the order of the ld.CIT(A) in the assessment year 2008-09 and respectfully following the order of the ITAT in the assessment year 2008-09, we are of the view that interest income is available with the assessee for set off against pre-operative expenditure which is titled as “project development expenditure".
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2018 (6) TMI 1510
Reopening of assessment - assessee argued that the issuance of notice u/s.148 is not valid as the same was based on change of opinion - Held that:- In the instant case, no opinion was formed earlier by the Assessing Officer as no assessment was made and, therefore, it cannot be alleged that there was any change of opinion. We, therefore, do not find any merits in the arguments of the assessee. Accordingly, the cross objections filed by the assessee are dismissed.
Computation of MAT - Addition on debenture redemption reserve fund - treatment as a known liability - AO added back the amount which was debited in the profit and loss account under the head “debenture redemption reserve fund” and computed the book profit u/s. 115JA - CIT-A deleted the addition - Held that:- D.R. could not point out any specific error in the order of the CIT(A), which was passed following the order of the Tribunal in the case of assessee itself for the assessment year 2003-04 wherein held that the amount set aside to redeem debentures must be treated as a known liability and cannot be considered to be a reserve. Further, it is clear that such amount set aside towards debentures redemption is not an unascertained liability. Ground of appeal is accordingly allowed
Penalty u/s.271(1)(c) - write back of provision for contingencies of 24,60,00,000/- in computing' the Book Profits under Section 115JB - Held that:- Assessee had furnished all the details of its expenditure as well as Income In Its return, which details, in themselves, were not found to be inaccurate nor could be viewed as the concealment of income on Its part. It was up to did authorities to accept its claim in the return pinot. Merely because the assessee had claimed the expenditure, which claim not accepted or was not acceptable to the revenue, that, by itself, would not attract the penalty under section 271(1)(c). If the contention of the revenue was accepted, then in case of every return where the claim 'made was not accepted by the Assessing Officer for any reason, the assessee would invite penalty under section 271(1)(c), That is clearly not the Intendment of the Legislature - Decided against revenue
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2018 (6) TMI 1509
TDS u/s 194C - Non-deduction of TDS on freight and transportation expenses - Furnishing of PAN by the transporters (GTA) - Held that:- Undisputedly assessee provided the PAN Number of the transporters to the A.O. before the completion of assessment proceedings and has therefore complied to the provision u/s. 194C(6) of the Act. Once the assessee make sufficient compliance to the provision of section 194C(6), requirement to deduct tax at source seizes on the part of assessee. Section 194C(7) of the Act merely cast a duty on the assessee to furnish particulars of persons referred in section 194C(6) of the Act to the prescribed authority.
Respectfully following the decision of the Kolkata Tribunal in the case of Soma Rani Ghosh (2016 (10) TMI 55 - ITAT KOLKATA) and given fact and circumstances of the case are of the view that section 194C(6) and 194C(7) are independent of each other and cannot be read together to attract disallowance u/s. 40(a)(ia) of the Act r.w.s. 194C of the Act. In the given case as the compliance to the provision u/s. 194C(6) of the Act has been duly performed, no disallowance was called for u/s. 40(a)(ia) of the Act. - decided in favour of assessee
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2018 (6) TMI 1508
Taxability of the amount received for supply of software as royalty - Held that:- We hold that the amount received by the assessee not being in the nature of royalty as per Article–12 of the India–Israel DTAA is not taxable as such in India, but, has to be treated as business profit of the assessee.
Dependent agent PE in India - Held that:- We hold that TTI India cannot be treated as assessee’s dependent agent PE in India, hence, the amount is not taxable at the hands of the assessee. The grounds are allowed.
The amount received by the assessee from supply of software to Reliance Communication Ltd. and Indus Towers Ltd. are not in the nature of royalty, this ground becomes redundant
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2018 (6) TMI 1507
Addition of Labour Charges - addition on account of Cutting charges - Held that:- Addition is made on presumption basis and without enquiry. Even then, the alternative plea of the assessee was considered and 50% of the income was reduced. When a factual finding is given by the CIT(A) that the addition is made on presumption and that no evidence was found in the impounded material that cutting charges have been levied on the quantity of 2400 MT and when the assessee has furnished confirmations from three parties to that effect, the question of making of addition on this issue does not arise. Hence the entire addition should have been deleted. Hence the addition is deleted and the ground is allowed.
Computation of profit of sale of land - Held that:- Merely because the assessee offered income of the purchase and sale of agricultural land, the income cannot be taxed under the Income Tax Act, 1961. Allow the additional grounds filed by the assessee.
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2018 (6) TMI 1506
Addition u/s 41(1) - Held that:- No other alternative but to delete the addition for the reason that there is neither remission or cessation of liabilities in this case. Merely because evidence of repayment of sundry creditors is not produced, an addition u/s 41(1) cannot be made. CIT(A) has not followed the basic proposition of law laid down by the Court on application of Section 41(1) - delete the disallowance and allow the ground of the assessee.
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2018 (6) TMI 1505
Rate of depreciation allowable on printers and UPS/inventories i.e. computer accessories - Held that:- CIT(A) followed the proposition of law laid down by the ITAT, Kolkata Benches in the case of ITO vs. Samiran Majumdar [2005 (8) TMI 293 - ITAT CALCUTTA-B] and allowed 60% depreciation on these computer accessories. We see no infirmity in the same. Hence we uphold the same and dismiss the grounds of appeal.
Disallowance of bad debts - Held that:- Claim u/s 36(1)(vii) of the Act is allowable once the assessee writes off debts as bad debts in its accounts and no further conditions need be satisfied. In the case appellant, the trade debts had been written off in the books of accounts in the year under consideration and hence allowable as deduction. In view of the above facts, and respectfully following the decision TRF Ltd [2010 (2) TMI 211 - SUPREME COURT] direct the AO to delete the disallowance made by him on account of bad debts.
Computing book profits u/s 115JB - Held that:- AO that the provision for reduction of slow moving goods should be reduced from computation of book profits u/s 115JB. Adjudicating ground no.1 of the assessee’s appeal, we uphold the order of the CIT(A) and dismiss this ground of the revenue.
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2018 (6) TMI 1504
Credit of TDS - arrears of tax demands arose only on account of TDS mismatch - Held that:- As the issue under consideration is materially identical to that of AY 2007-08, following the decision therein, we set aside the order of the CIT(A) and direct the AO to give credit of TDS of ₹ 62,92,887/- after verification of the claim of the assessee. Needless to say that assessee may be given proper opportunity of being heard. Accordingly, the grounds raised by the assessee on this issue are allowed.- Appeal of the assessee is allowed for statistical purposes.
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