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Showing 361 to 380 of 1903 Records

• 2015 (11) TMI 1543
  

  TDS u/s 194J - transaction charges paid to stock exchanges - disallowance u/s. 40(a)(ia) - Held that:- The matter is restored to the file of the assessing authority who shall delete the disallowance u/s. 40(a)(ia) upon verification of the assessee’s claim, i.e., of payment of the tax on the impugned sum by BSE (payee) as the assessee in the present case has already furnished a certificate from BSE by including the same in its income offered to tax for the year. In other words, that the condition of the amended section 40(a)(ia) stands met.

  Addition on account of brokerage income - Held that:- The assessee claiming to have paid tax in a higher sum, the onus to exhibit so is on it. The assessee’s accounts having been since audited, the (service) tax return, as furnished subsequently, would only be in conformity with the audited accounts, reflecting the service tax as having been paid in excess – by whatever amount. That is, the validity of the assessee’s claim would get proved with reference to its audited accounts and tax return/s. The matter cannot be decided on the basis of bald/unsubstantiated claims. The Revenue authorities ought to have called for the said returns. Under the circumstances, it is considered only proper and in the interest of justice that the matter is restored back to the assessing authority to allow the assessee an opportunity to establish its claim/s.

  Disallowance u/s. 14A r/w rule 8D - Held that:- Disallowance u/s. 14A is only of the expenditure incurred. However, when the assessee claims to have not incurred any expenditure, it is it on which the onus to exhibit the same lies. The law prescribes the said exhibition to be with reference to its accounts (section 14A(2) r/w s. 14A(3)), so that where not so done, the prescription of rule 8D shall apply. In the present case, the disallowance is not qua any direct expenditure or indirect interest expenditure, but qua indirect, administrative expenditure, covered under rule 8D(2)(iii). No material has been led even before the tribunal to show that no administrative expenditure, i.e., relating (directly or indirectly) to tax-exempt incomes, stands incurred by the assessee for the relevant year. The presumption in law would under the circumstances hold. The Revenue has in my view rightly invoked the decision by the Hon'ble jurisdictional High Court in Godrej & Boyce Mfg. Co. Ltd. (2010 (8) TMI 77 - BOMBAY HIGH COURT ), which is explicit on the point (refer paras 81 to 85 of the Reports). Decided accordingly, and the Revenue succeeds.

  Charge of interest u/s.234 (implying sections 234A, 234B and 234C in-as-much as there is no section 234) and initiation of penalty u/s.271(1)(c). The charge of interest is mandatory, while the initiation of penalty proceedings is not appealable. The ground is accordingly dismissed.

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• 2015 (11) TMI 1542
  

  TDS u/s 194A - non deduction of tds on payment of interest to its members on time deposits by bank - assessee in default - Held that:- Jurisdictional High Court in the case of CIT v. The Rajajinagar Co-operative Bank Ltd (2011 (7) TMI 666 - KARNATAKA HIGH COURT) though it was in relation to a levy of penalty u/s.271C of the Act, had held at para 10 of its judgment that by virtue of clause (v) of sub-section (3) of Section 194A of the Act, a cooperative bank was exempt from deducting tax at source on interest payable by it to its members. We are therefore, of the opinion that assesses could not have been treated as one in default u/s.201 (1) nor was it liable for of interest u/s.201(1A) of the Act. Ld. CIT (A) was justified in taking a view in favour of the assessee.

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• 2015 (11) TMI 1541
  

  Gross profit addition - CIT(A) in reducing the addition made to the gross profit from 0.5 percent to 0.1 per cent - assessee engaged in the business of Trading in Diamonds - Held that:- It is a known fact that the price of the diamond would depend upon various criteria, of which size and quality are more relevant. No transaction could take place in the diamonds trade without considering these criteria. Hence, non maintenance of quality-wise stock register was certainly a deficiency on the part of the assessee. Accordingly, in our view the ld. CIT(A) was justified in sustaining the addition to 0.1% of the turnover, considering the fact that the GP of the assessee has come down mainly due to foreign exchange loss. Accordingly, we do not find any infirmity in the order of ld. CIT(A) and confirm the same.

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• 2015 (11) TMI 1540
  

  Addition made on account of bogus creditors - Held that:- We find lot of force in the arguments of the Learned AR in respect of this addition that when the trading results are accepted by the Learned AO based on revised return filed by the assessee, there is no scope for disputing the veracity of the trade creditors as admittedly the trade creditors had emanated only out of purchases made by the assessee. Moreover, we find that in any case, there is no scope for making any addition towards the discrepancies, if any, in the opening balance of sundry creditors in the assessment year under appeal. We find that the Learned CITA had given a finding that the sundry creditors in Asst Year 2006-07 has been accepted by the Learned AO and not disputed. In these circumstances, we find no infirmity in the order of the Learned CIT-A in deleting the addition - Decided against revenue

  Applicability of provisions of section 194H read with section 40(a)(ia) - Held that:- We are in total agreement with the finding given by the Learned CITA that the subject mentioned payments made by the assessee are only discount paid to the purchasers of recharge coupons though wrongly categorized as commission on sales in the books of accounts. We also agree that the nomenclature in books of accounts would not be the determinative factor for understanding the real nature of the transaction and it is well settled that substance would always prevail over its form. We hold that in these facts and circumstances, the payments made by the assessee is in the category of principal to principal and the provisions of section 194H of the Act would come into play only when the payment is from principal to agent. Hence we find no infirmity in the order of the Learned CITA in this regard.- Decided against revenue

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• 2015 (11) TMI 1539
  

  Denial of CENVAT credit of service tax paid to avail the catering service for the factory - Held that:- Appellant availed catering service to discharge an obligation under the Factories Act. Therefore, there shall not be denial of CENVAT credit in respect of service tax paid to avail the catering service for the factory prior to 31.3.2011.

  So far as the CENVAT credit in respect catering service availed after 1.4.2011 is concerned, in view of the specific provision in law, appellant is not entitled to the CENVAT credit. Appellant agrees to reverse the same. If such a reversal is made there shall be no interest and penalty, subject to availability of sufficient credit on record.

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• 2015 (11) TMI 1538
  

  Addition u/s. 14A - CIT(A) restricted the addition - Held that:- We find that the relevant assessment year involved is 2007-08 and as held by Hon’ble Bombay High court in the case of Godrej & Boycee Mfg. Co. Ltd., [2010 (8) TMI 77 - BOMBAY HIGH COURT ] that Rule 8D of the Rules as inserted by the I. T (Fifth Amendment) Rules, 2008 w.e.f. 24.3.2008 is prospective and not retrospective. We find that the exempted income of dividend is to the extent of ₹ 37,34,300/- and long term capital gain of ₹ 5,62,20,229/- in AY 2007-08. Rule 8D of the Rules is not applicable in this assessment year in the assessee’s case as held by Hon’ble Bombay High Court in the case of Godrej & Boyce Mfg. Co. Ltd. (Supra) being prospective. We are of the view that the CIT(A) has rightly restricted the disallowance at 1% of the exempted income and we confirm the same. - Decided against revenue

  Disallowance on account of donation - Held that:- We find that the AO has disallowed the claim of donation on the basis that no evidence was produced by the assessee during the assessment proceedings but CIT(A) directed the AO to allow the claim of the assessee after verification of copies of receipts and declaration issued by approved charities and as produced by assessee before him.We find that the CIT(A) has directed the AO to examine the receipts for the donations mentioned above. He has not decided the issue. However, we feel that this issue can be verified by the AO and accordingly, this issue of revenue’s appeal is set aside and allowed for statistical purposes.

  Rebate u/s. 88E of the Act on the computed book profit u/s. 115JB - Held that:- This issue is not arising out of the order of CIT(A), hence, this issue cannot be adjudicated and this ground cannot be raised by revenue. On query from the Bench, Ld. Sr. DR fairly conceded that no such ground was raised before CIT(A) by the assessee and hence, he concedes that this issue cannot be raised before Tribunal for the first time. Accordingly, this ground of appeal of revenue is dismissed being infructuous.

  Disallowance of loss in business of purchase and sale of shares to be assessed as deemed speculation loss - applicability of Explanation to sec. 73 - Held that:- Where an assessee, being the company, besides dealing in other things also deals in purchase and sale of shares of other companies, the assessee shall be deemed to be carrying on a speculation business. The assessee, in the present case, principally is a share broker, as already indicated. The assessee is also in the business of buying and selling of shares for self where actual delivery is taken and given and also in buying and selling of shares where actual delivery was not intended to be taken or given. Therefore, the entire transaction carried out by the assessee, indicated above, was within the umbrella of speculative transaction. There was, as such, no bar in setting off the loss arising out of derivatives from the income arising out of buying and selling of shares. In view of the above facts and circumstances and the proposition of law as discussed above, we are of the view that assessee has a loss which is arising out of business and accordingly, the same is a business loss and not speculation loss as held by lower authorities. - Decided in favour of assessee

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• 2015 (11) TMI 1537
  

  Validity of the reassessment - sustenance of the addition to the extent of 20% of the purchases - Held that:- Reassessment quashed as barred by limitation.

  Now coming to the merit about the sustenance of the addition by the CIT(A) @ 20% of the purchases made by the assessee from Shri Bankey Bihari Trading Co., after hearing the rival submissions it is held tax has to be levied on real income and the profit cannot be ascertained without deducting the cost of purchases from the sales as otherwise it amount to levy of tax on gross receipt, she ought to have applied' profit rate in this nature of trade. Estimating profit at the rate of 20% by taking into consideration the or visions of section 40A(3) will not lead to determination of correct real income. Section 40A(3) is meant for a different purpose when the assessee has made purchases in cash. This provision cannot be applied in such cases. Once the purchases are held to be bogus then the trading results declared by the assessee cannot be accepted and right course in such case is to reject books of accounts and profit has to be estimated by applying a comparative profit rate in the same trade. Though there can be a little guess work in estimating profit rate but such profit rate cannot be punitive.

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• 2015 (11) TMI 1536
  

  Deduction u/s Section 80P denied - ITAT held that the assessee is entitled to deduction in terms of Section 80P(2)(a)(i) - Held that:- The contents of the order of the Tribunal in so far as they relate to the matter in issue in this appeal, categorically show that the findings rendered by the Tribunal do not warrant any interference, more particularly when the case does not involve any substantial question of law having regard to the contents of the first appellate order issued by the Commissioner of Income Tax (Appeals) and the manner in which it stands confirmed by the Tribunal to the extent it relates to the issues sought to be raised in this appeal.

  No substantial question of law - Decided against revenue

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• 2015 (11) TMI 1535
  

  Reopening of assessment - reasons to believe - Held that:- AO has merely relied on the report of the investigation wing but it is apparent that he has not applied his mind to the materials which were before him. In our view, without forming a prima facie opinion on the basis of only the report of the Investigation Wing of the Income Tax Department, it was not legal for the AO to have simply concluded that he has reason to believe that income chargeable to tax has escaped assessment. Unless the basic requirement is satisfied, an exercise in analysing the materials produced subsequent to the reopening will not rescue an inherently defective reopening order from invalidity. In the circumstances and respectfully following the judgment of the Hon’ble High Court of Delhi in the case of Pr. Commissioner of Income Tax-4 vs. G&G Pharma India Ltd. (2015 (10) TMI 754 - DELHI HIGH COURT ) we hold that the reopening of the case of the assessee for the assessment year is bad in law and we accordingly quash the reassessment proceedings. - Decided in favour of assessee

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• 2015 (11) TMI 1534
  

  Seeking supply of relied upon documents - Letters sent by the petitioner requesting for relied upon documents are on record, there is no letter issued by the appropriate authorities in response to the same - Held that:- while the petitioner made a request for the relied upon documents, the same were not supplied to the petitioner. As a result, the impugned order-in-original would have to be set aside on this ground alone. Adjudicating authority is directed to supply copies of all relied upon documents within a week to the petitioner. - Petition disposed of

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• 2015 (11) TMI 1533
  

  Seeking supply of relied upon documents - Letters sent by the petitioner requesting for relied upon documents are on record, there is no letter issued by the appropriate authorities in response to the same - Held that:- while the petitioner made a request for the relied upon documents, the same were not supplied to the petitioner. As a result, the impugned order-in-original would have to be set aside on this ground alone. Adjudicating authority is directed to supply copies of all relied upon documents within a week to the petitioner. - Petition disposed of

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• 2015 (11) TMI 1532
  

  Allowability of the interest income from the interest expenditure on the basis of nexus between the interest expenditure and the interest income - Held that:- We find the Ld.CIT(A) on the basis of the various details filed by the assessee allowed the claim of the assessee on the ground that the AO has not examined the entire details furnished by the assessee and has been guided by the heading of the expenses such as Advertisement/Miscellaneous Expenses and concluded that interest expenditure includes number of other expenses whereas interest received includes certain miscellaneous expenses written off as nolonger payable. We find the Ld.CIT(A) has given a finding on the basis of the details filed by the assessee that the assessee has received interest amounting to ₹ 59,20,843/- from Brahma Finance Corporation upto F.Y. 31-03-2002 and from Brahma Builders amounting to ₹ 12,54,660/- for the F.Y. 2002-03. He has given a finding that there is a direct nexus between the loan taken from Rupee Cooperative Bank Ltd and the amount of advance to Brahma Finance Corporation and Brahma Associates. The Ld. Departmental Representative could not controvert the above factual finding given by the CIT(A). Further, the finding of the Ld.CIT(A) that the miscellaneous expenditure in the ledger account contains the entire details of expenditure which includes the interest expenditure and also the receipt of interest and dividend for F.Y. 2001-02 wherein the journal entries 447 and 448 are also mentioned could not be controverted by the Ld. Departmental Representative. The submission of the Ld. Counsel for the assessee before us that the loan obtained from the bank and given to the various concerns are back to back transactions could not be controverted by the Ld. Departmental Representative. In view of the above and in view of the detailed reasoning given by the Ld.CIT(A) we find no infirmity in his order. - Decided against revenue

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• 2015 (11) TMI 1531
  

  Waiver of pre-deposit - Valuation - Benefit of 67% abatement was not allowed on the ground that there was some free supply materials - Held that:- prima facie case is in favor of assessee - stay granted on this account.

  As regards the service provided to the so called charitable organization in the form of constructing buildings for Amity School, Amity University and Amity Engineering College at various locations, prima facie, it would fall under the Commercial or Industrial Construction Services because even if these institutions are run by charitable organization, the services rendered through these institutions per se cannot be said to be charitable. - stay granted partially.

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• 2015 (11) TMI 1530
  

  Rejection of books of accounts - estimated the net profit from contract receipts @ 10% on main contracts, 8% on sub contracts and 4% on sub contracts executed through third parties - Held that:- . In the present case on hand, the assessee declared a net profit of 5.28% on gross contract receipts. The assessing officer has estimated net profit of 10% on main contract works, 8% on sub contracts and 4% on sub contracts executed through third parties. The CIT (A) scaled down the net profit to 8%, 5% and 1% respectively. The CIT (A) after considering the facts and circumstances of the case, rightly estimated the net profit, therefore, his order does not require any interference. Therefore, we are of the opinion that there is no error or infirmity in the order passed by the CIT (A), hence, we are inclined to upheld the order of the CIT (A).

  Additions towards income from other sources being interest earned on fixed deposits - Held that:- The assessee earned the interest from bank deposits, which are kept as margin money for taking bank guarantees. Though these bank guarantees are furnished for obtaining contract works, the interest earned from these deposits, cannot be at any stretch of imagination considered as business receipts for the estimation of net profit. There is no nexus between the earning of interest and works contract, except the fact that it is kept in bank as margin money for obtaining bank guarantee. There should be direct nexus between business activity and earning of income. If these interest receipts are arises from the works contracts, then definitely these items forms part of contract receipts. But, in this case the interest earned is from bank deposits. Therefore, the AO rightly treated interest earned from bank deposits under the head income from other source but, the CIT (A) ignored the basic fact that there is no nexus between the earning of interest and the assessee’s contract works, deleted the additions made by the assessing officer. Therefore, considering the facts and circumstances of the case, we reverse the order of the CIT (A) and upheld the addition made by the Assessing Officer.

  Additions towards depreciation - difference in depreciation, in addition to estimation of net profit from the contract receipts - Held that:- As going through the orders of the Assessing Officer as well as the order of CIT (A). The A.O. estimated net profit from gross contract receipts. Once net profit is estimated, all expenditures deductible have been considered as allowed. Therefore, even if there is difference in original computation and revised computation and depreciation claim made by the assesse, which does not affect the computation of profit when the net profit is estimated from the gross receipts. Therefore, we are of the opinion that the CIT (A) has rightly deleted the additions and his order does not require any interference. Hence, we direct the AO to delete the additions made on account of depreciation.

  Deduction towards depreciation, remuneration to partners and interest on partners capital accounts - Held that:- Depreciation is a allowable deduction, even after estimation of net profit from the contract receipts. Therefore, we direct the assessing officer to allow the depreciation against the income estimated from the contract receipts. As far as the disallowance of remuneration to partners and interest on partner’s capital account is concerned, the statute itself in section 44AD of the Act, allowed separate deductions towards interest on capital accounts and remuneration to partner’s, after estimation of net profit from the gross receipts. The CIT (A) after considering the facts and circumstances of the case, has rightly directed the A.O. to allow remuneration to partners and interest on partner’s capital account from the net profit estimated. Therefore, we find no error or infirmity in the order of the CIT (A), hence, we inclined to upheld the order of the CIT (A).

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• 2015 (11) TMI 1529
  

  Addition to royalty - non deduction of tds - DTAA between India and USA - Held that:- The orders passed by AO in 2007-08 and 2008-09 have been placed wherein the AO accepted the contentions of ESI India that such payments cannot be treated as royalty and deleted the disallowance for non-deduction of tax at source under section 40(a)(i) of the Act. The assessee “ESI US” sold the software to “ESI India” and in the assessment of “ESI India”, it is the payments are treated as towards the purchase of software and not as payment towards Royalty. The principle needs to be applied consistently. In our view, in the hands of the Indian company, when it is not treated as Royalty, then, the same consideration should also be extended to the same transaction in the case of “AE” i.e. “ESI US”. In the present case, income towards sale of software to the Indian “AE” cannot be treated as “Royalty”. Hence, the addition made by the AO towards Royalty is deleted. - Decided in favour of assessee

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• 2015 (11) TMI 1528
  

  TDS u/s. 194C - labour charges, carriage inward charges and hire charges for non-deduction of TDS - Held that:- We are inclined to set aside the issue to the file of the AO and accordingly, we direct the AO to verify whether the recipients have included the income in their respective returns and also paid taxes on the same. The assessee will provide the details of recipients i.e. their assessment particulars etc. to the AO so that the AO can verify. In case the recipient parties are not cooperating in providing details, the AO can call for the information u/s. 133(6) of the Act for verification of the same. Accordingly, this issue is remitted back to the file of AO to decide in terms of the above directions. - Decided in favour of assessee for statistical purposes

  Disallowance of interest - Held that:- At the time of hearing Ld. Counsel for the assessee fairly stated that the issue can be set aside to the file of the AO for verification of availability of interest free funds invested in interest free loans. In view of the above plea of the assessee, we remit the issue back to the file of the AO with the direction to follow the decision of Reliance Utilities & Powers Ltd. [2009 (1) TMI 4 - BOMBAY HIGH COURT ] and accordingly, decide the issue.- Decided in favour of assessee for statistical purposes

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• 2015 (11) TMI 1527
  

  Transfer pricing adjustment - most appropriate method to be applied for bench marking the transaction relating to sale of metro trains - Held that:- As a methodology, under the TNMM the standard of comparability is relaxed relative to the other methods and requires similarity of functions. This finds support even in the OECD guidelines which provides that, where exact comparables (in terms of product or price) are not available, TNMM is the most ‘preferred’ methodology in analyzing transactions (at the net level) as it is more tolerant to differences between the tested party and comparable uncontrolled transactions. The use of TNMM method allows comparability of the functions rather than strictly focusing on product/service comparability as in the case of CPLM, Resale Price Method and CUP. Thus TPO finally held that TNMM method shall be used for benchmarking transaction pertaining to passenger and bogie segment. Thus, Ld. TPO has rightly applied the TNMM as most appropriate method by looking into the aspect that the assessee was unable to justify with documentary evidence the comparability on the issue of quality of the product or service, contractual terms, level of market, geographical market in which the transaction takes place, date of transactions, intangible property associated with the sale, foreign currency receipt, alternatives realistically available with the buyer and the seller.

  Aggregating the transaction pertaining to sale of metro train sets with other international transaction in the Mainline division and testing the overall margin of the division under the Transactional Net Margin Method - Held that:- TPO has rightly excluded the consortium supply value/cost, revised segmental of BEML. The consortium agreement clearly reveals that both are similar and the consortium formed by the assessee with AE is functionally comparable with MRMB consortium. The activities undertaken by the assessee in the PGR & BOG division with respect to RS2 contract was similar those carried out by BEML in its "Railway Customer Segment" with respect to RS3 contract. Therefore, Ld. DRP’s finding is set aside herewith and BEML is allowed as comparable in assessee’s case.

  While deciding the comparables Ld. TPO has not taken into consideration the proper information related to the free of cost material provided by the Railways to Titagarh Wagons Ltd. as well as to Texmaco Ltd. and thus the said information is necessary to take into account the functions performed, assets employed and risks assumed ("FAR"). Ld. DRP in his finding also has directed Ld. TPO to take these aspect while allowing the said comparables. There is no doubt that these two companies are having the major role in supplying coaches to the Indian Railway and these are proper comparables if all the aspects are taken into consideration including the free of cost material value. Therefore, Ld. TPO is directed to take into account 30% additional cost base to account "free of cost" material and revised the OP/TC margin of 13.65% for determining the arm’s length margin as claimed by the Assessee.

  The companies operating on negative margins is an industry reality and companies incurring persistent losses cannot be accepted as comparable. The negative margin earned by these companies is reflective of the industry. This company i.e. Bharat Wagon & Engineering Co. Ltd. was rightly rejected by the Ld. TPO stating that the company was earning persistent losses over the past several years. The finding of Ld. TPO is right, as this company was persistently incurring losses over the past several years. As relates to Braithwaite & Co. Ltd. it is properly rejected by Ld. TPO because the Annual Report for A.Y. 2010-2011 was not available and thus the Profit Margin and the relevant deciding factors for comparability will be lacking if the said company is taken as comparable. Therefore, Ld. TPO’s findings are just and proper.

  Modification of the Profit Level Indicator (PLI) i.e. Operating Profit/Operating Revenue (OP/OR) used by the Assessee for benchmarking with Operating Profit/Operating Cost (OP/OC) - Held that:- Popularly used ratios include operating profit / sales, operating profit / total cost, gross profit / operating expenses, operating profit by capital employed, etc. The choice of the appropriate ratio must be done keeping in mind the characterisation and the nature of business of the tested party, as well as, the nature of comparables selected and the quality of information available. In present case, Ld. TPO after taking into consideration all factors, decided that the Profit level indicator which has to be used for benchmarking the captioned transaction has to be Operating Profit /Operating Cost. Operating Profit Margin by subtracting selling, general and administrative (SG&A), or operating, expenses from a company's gross profit number, we get operating income. Thus, it needs to be looked into and as per the submissions made by Ld. AR, OP/Sales has to be taken into consideration by the revenue as the untainted base of the Profit Level Indicator (PLI). Ld. TPO is directed to consider the same and give finding to that effect.

  Intra group services - when AEs transact with each other, for the purpose of transfer pricing they must replicate the dynamics of market forces, as there is no concept of free lunch in business dealings. Thus, Ld. DRP rightly held that the benefit test which is well recognized by OECD and other developed countries Tax regime have to be seen for allowing the payment in case of Intra-Group Services. The expected benefit must be sufficiently direct and substantial so that an independent entity in similar circumstances, would be prepared to pay for it. If no benefits have been provided (or was expected to be provided), then the services cannot be charged for. Since the assessee just explained in generic nature about the benefits vis-à-vis the intra-group services payment to its AEs, therefore, we uphold the orders of Ld. DRP and Ld. TPO.

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• 2015 (11) TMI 1526
  

  Addition made on account of alleged bogus purchases - Held that:- As pointed out by us, in the facts of the present case, the assessee had admitted to the addition of the purchases made from the aforesaid parties before the Assessing Officer and in view thereof, no further verification was made by the Assessing Officer. Once the assessee had prevented the Assessing Officer from carrying on any exercise of any kind of verification, then on a later date, the assessee cannot take the stand that no such addition is warranted in the absence of any verification exercise carried out by the Assessing Officer. The assessee has failed to furnish the confirmation from the parties and the Sales Tax Dep artment has not been able to trace the said parties. In the absence of any confirmation being filed by the said parties or the evidence of the bank statement of the said parties having been placed on record by the assessee to prove its case, merely because such view has been taken in any other decision, the same cannot be applied where the assessee has not discharged its onus. Even before us, the assessee has not furnished any evidence of payment except for making the statement that the amounts were paid by way of cheques. In view thereof, we find no merit in the said stand of the assessee. - Decided against assessee.

  Addition under section 68 - Held that:- Both the lower authorities had time and again asked the assessee to furnish the complete details in respect of loan creditors, but the assessee failed to furnish the details and before the Assessing Officer, he admitted that the same may be added as his income. In the absence of the assessee having filed the necessary bank details and the income-tax acknowledgements of filing the return of income, the creditworthiness of the creditors as well as the genuineness of the transaction could not be proved and hence, we uphold the order of CIT(A) in confirming the aforesaid addition - Decided against assessee.

  Addition made on account of stock valuation - Held that:- Assessee submitted that due to large number of items involved, it was not practical to maintain day-to-day stock register. Though the assessee claims that the stock register was prepared on the basis of physical verification, but no proof of physical verification was filed before the Assessing Officer, hence, the Assessing Officer made lump sum addition. Before the CIT(A), the claim of the assessee was that no such addition could be made since the books of account were audited under section 44AB of the Act. The CIT(A) upheld the addition holding that though the books of account were audited under section 44AB of the Act, but considering the fact of bogus purchases, unexplained creditors, which were the subject matter of earlier grounds of appeal, the books of account could not be held to be reliable and where the assessee was not maintaining stock register, to make tally of stock was impossible. Therefore, the disallowance made by the Assessing Officer was held to be justified. - Decided against assessee.

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• 2015 (11) TMI 1525
  

  Reopening of assessment - Held that:- AO has merely relied on the report of the investigation wing but it is apparent that he has not applied his mind to the materials which were before him. In our view, without forming a prima facie opinion on the basis of only the report of the Investigation Wing of the Income Tax Department, it was not legal for the AO to have simply concluded that he has reason to believe that income chargeable to tax has escaped assessment. Unless the basic jurisdictional requirement is satisfied, a post mortem exercise of analysing materials produced subsequent to the reopening will not rescue an inherently defective reopening order from invalidity. In the circumstances and respectfully following the judgment of the Hon’ble High Court of Delhi in the case of Pr. Commissioner of Income Tax-4 vs. G&G Pharma India Ltd. (2015 (2) TMI 104 - ITAT DELHI) we hold that the reopening of the case of the assessee for the assessment year is bad in law. In the circumstances, no interference is called with the order of the Ld. CIT (A). - Decided against revenue.

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• 2015 (11) TMI 1524
  

  Transfer pricing adjustment - computation of income from international transactions having regard to the ALP - Held that:- Appeal is admitted on question no. (ii).

  Whether on the facts and in the circumstances of the case and in law, the order of the Tribunal is not perverse in view of the fact that considering the mean margin figure of 5.34% as adopted by the Tribunal, the ALP determined by the TPO is ₹ 53,68,52,698/whereas in para 12 of its order, the Tribunal states that the ALP of AE sales as computed by the TPO after applying 5.34% comes to ₹ 50,20,74,010/and assessee's sales to AE is ₹ 49,81,00,499/and there is thus disparity in the figures arrived at though the PIL value of 5.34% for both the TPO and Tribunal remain the same and that there is no basis for its conclusions based on the computation figures so derived?

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