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Case Laws
Showing 401 to 420 of 721 Records
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2010 (11) TMI 642
Demand, interest and penalty - Taxability - laying of cables under or alongside the road - As such the Board’s Circular No. 123/5/2010-TRU clarified that laying cables under or alongside the road is not a taxable service - Therefore, set aside the impugned orders after waiving the requirement of pre-deposit and remand the matter to the original authority for fresh decision in the light of the Board’s circular - Appeals are allowed by way of remand.
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2010 (11) TMI 638
Denial of input service credit - Rule 2(l) of the Cenvat Credit Rules, 2004 - post arrival of the goods at the port of destination. - Held and decided that assessee is entitled for input service credit on CHA service - Keeping in view the case of Maruti Suzuki Ltd.[2009 (8) TMI 14 - SUPREME COURT] - interpreting the scope of 'input service' ,in the light of the judgment of the Apex Court in the case of Maruti Suzuki Ltd. (supra), we hold that the services having nexus or integral connection with the manufacture of final products as well as the business of manufacture of final product would qualify to be input service under Rule 2(l) of 2004 Rules - appellants are entitled to avail input service credit on CHA service availed by them for export of goods - Appeal allowed.
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2010 (11) TMI 636
Rectification of mistakes - Depreciation - whether the purchase consideration paid by the assessee also includes payment for acquisition of intangible assets also which are eligible for depreciation as per the provisions of s. 32(1)(ii) - depreciation on intangible assets is allowable as per provisions of s. 32(1)(ii) but the term goodwill does not find place in the provisions of s. 32(1)(ii) and hence, allowing of depreciation on goodwill is not in accordance with law until and unless it is shown that the value of such goodwill is in fact the value of intangible assets such as know-how, patents, copyrights, trade marks or any other business or commercial rights of similar nature being intangible assets - Hence, to the extent the assessment order was in accordance with law in earlier years, we have approved the same and have directed the AO to allow depreciation on intangible assets as per the provisions of s. 32(1)(ii) but on the remaining amount of goodwill, if any, depreciation is not allowable as per law and hence, on this aspect, it cannot be held that depreciation should be allowed on goodwill as per the principle of consistency although the same is not allowable as per law - Appeal is allowed for statistical purpose Regarding rectification order - held that: this rectification was made by the AO on the basis of disallowance of depreciation in asst. yr. 2002-03. That issue has been restored back by us to the file of the AO in asst. yr. 2002-03 also. Similar issue in this assessment year i.e., asst. yr. 2004-05 is also restored back to the file of the AO for fresh decision and hence, on this aspect also, no adjudication is called for at this stage and this issue is also restored back to the AO for fresh decision in the light of final finding on the issue of depreciation in asst. yr. 2002-03 and in the present year - appeal of the assessee is allowed for statistical purposes
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2010 (11) TMI 634
Determination of ALP - It is claim of the assessee that the assessee has only utilized computer system and software for the purpose of preparing engineering designs, drawings, calculations and other relevant data-sheet instead of doing them manually - Therefore, unless the functional profiles of the assessee company are examined minutely and in detail, it is very difficult to say that the assessee is engaged in the business of software development - All these exercises had not been properly done by the TPO or DRP - Therefore, restore the matter back to the file of the AO/TPO for fresh adjudication after considering the assessee's activities or works and then to select the comparables having identical or similar functional profile to that of the assessee and then to determine the ALP in the light of the various guidelines laid down by Tribunal in the case of Mentor Graphics (Noida) (P) Ltd (2007 -TMI - 65518 - ITAT DELHI-H).- Thus, the appeal filed by the assessee is treated to be allowed for a statistical purpose.
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2010 (11) TMI 632
Reassessment - Addition - It was found that there was understatement of stock of 87191 bags of sugar as the quantity of stock pledged with the bank was in excess of what appeared in the books of account of the assessee - the company's entire closing stock is reconciled with the Excise Records which is verified, confirmed and certified by the Excise Officials from time to time - Since the quantity of sugar manufactured and sold during the year is not in doubt, if there is any difference arising in the closing stock then it automatically originates from the opening stock of finished sugar - It is apparent that finished stock of sugar of the season 1996-97 to the tune of 84,258 Qtls. cannot exist as on 31.03.1999 and the Bank statements are wrong as confirmed by the Excise records duly verified, confirmed and certified by the Excise Inspector - Hence, it proves that the total non-existing stock of sugar of 87,191 Qtls. (84,258 + 2,933) as appearing in the Bank statement is wrong and cannot be relied upon for making any addition on the company - It is not a case of simple hypothecation where goods remain in the possession of the assessee. Therefore, the burden is on the assessee to prove that what was stated in the stock statement submitted to the bank was not correct and what is existing in the books is the real state of affairs - Held that: onus shall lie upon the assessee to prove as according to sworn statement submitted to bank, the assessee has submitted the quantity of stock on the strength of which it has drawn the money from the bank - Decided in favour of the assessee by way of remand to CIT(A)
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2010 (11) TMI 631
Block Assessment - Provisions of section 158BD - Search u/s 132 - Assessment of person other than the person whose premises were searched - The appellant (revenue) submitted that the satisfaction of the Additional Director of Income-tax was sufficient compliance with the provisions of section 158BD - Cannot agree with this submission because the plain reading of the provisions of section 158BD specify that it is the Assessing Officer who is to be satisfied that there is any undisclosed income belonging to such other person - The Additional Director of Income-tax (Investigation) was not the Assessing Officer of Yadav & Co. - It is only the satisfaction of the Assessing Officer of the person in respect of whom the search is conducted that is relevant - Held that the Tribunal has correctly applied the law as laid down by the Supreme Court in the case of Manish Maheshwari v. Asstt. CIT [2007 -TMI - 2889 - SUPREME COURT OF INDIA] in arriving at the conclusion that the proceedings under section 158BD/BC in respect of the assessee were without jurisdiction - Thus, the appeal is dismissed accordingly.
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2010 (11) TMI 630
Arms length price - Reference to TPO - Addition - TNMM or cost plus method - Advertising business - method of computing profit/TC margin whether on gross basis as done by the TPO or net basis as worked out by the assessee - Held that:- a mark-up is to be applied to the cost incurred by the assessee company in performing its agency function and not to the cost of rendering advertising space on behalf of its AEs. - the method adopted by the assessee while submitting transfer pricing study based on net revenue has been accepted by the Department in earlier year and, therefore, there is no reason to depart from that stand already accepted by the Department in earlier year. - Decided in favor of assessee. Regarding depreciation at the rate of 60 per cent on computer peripherals and accessories - the addition on this issue was made and Tribunal, Delhi Bench vide their order No. ITA No. 1451/Delhi/2008, dt. 13th Feb., 2009 have allowed the claim of depreciation of 60 per cent on printers, scanners etc - it is pertinent to note that the order of the Tribunal allowing depreciation at higher rate of 60 per cent on computer accessories and peripherals instead of the normal rate of 25 per cent has been upheld by the Hon'ble Delhi High Court in the case of CIT v. BSES Rajdhani Powers Ltd. [2010 -TMI - 78240 - DELHI HIGH COURT] - Decided in the favor of the assessee
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2010 (11) TMI 628
Addition - Commission from undisclosed sources - Unexplained cash u/s 68 - Held that :- CIT(A) relied on the decision in 'CIT vs. Lovely Exports,[2008 -TMI - 76942 - SUPREME COURT OF INDIA], wherein it has been held to the effect that where the assessee has discharged its onus u/s 68 of the Act, even if the creditor companies are found to be bogus addition, if any, can only be made in the hands of those creditors and not in the hands of the assessee - Decided in favour of assessee. Share application money in the form of stock from different entities - It is seen that the assessee had taken over the business of three concerns - Before the AO, the assessee had furnished full details of the stocks taken over - The income-tax assessment particulars of the concerns, whose businesses were taken over, were also furnished - Besides, the assessee had filed details of person-wise stock, as available on the records of the Income-tax Department in the cases of these concerns - In fact, the taking over process did not involve any presumption of any undisclosed or unaccounted income - The directors of the concerns had contributed their stocks to the assessee company as share capital - The assessee had duly established the identity and creditworthiness of the persons, as well as the genuineness of the transactions - The details filed included the names, addresses, firms, PAN, copies of income-tax return, copies of cheques received, copies of PandL A/c and copy of balance-sheet showing the closing stock of the three proprietary business - That being so, the AO was unable to show as to how the stock/cheques received remained unexplained - Decided against the revenue.
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2010 (11) TMI 627
Search and seizure - Penalty - concealment of income - Undisclosed income - assessee filed return declaring estimated income of Rs. 65,000 - Though the Tribunal in their quantum order referred to certain inconsistencies in the explanation filed by the assessee before the learned CIT(A) in respect of the amount of Rs. 10 lacs, ultimately, addition of only Rs. 3.50 lacs was sustained on the preponderance of probabilities - However, notwithstanding the difference in the two circumstances, it is now well established that they lead to the same effect namely, keeping off a certain portion of the income from the return - It is, therefore, necessary to reappreciate and reconsider the matter so as to find out as to whether the addition made in the quantum proceedings actually represents the concealment on the part of the assessee as envisaged in s. 271(1)(c) of the Act and whether it is a fit case to impose the penalty by invoking the said provisions - As already stated, in the instant case the assessment was completed under s. 144 of the Act in pursuance to return declaring estimated income and completion of such assessment under s. 144 of the Act has been upheld by the learned CIT(A) - Since the additions have been sustained on estimate or preponderance of probabilities, in our opinion, it is not a fit case to attract the levy of penalty under s. 271(1)(c) of the Act. A mere rejection of the claim of the assessee by relying on different interpretations does not amount to concealment of the particulars of income or furnishing inaccurate particulars of income by the assessee - Decided in favour of the assessee
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2010 (11) TMI 626
Exemption u/s. 10(23G) - Since the issue is squarely covered in favour of the assessee by the decision of ITAT Hyderabad Bench-B in the case of VBC Ferro Alloys Ltd. vs. ACIT Circle [2005 -TMI - 66812 - ITAT HYDERABAD-B], wherein it was held that Explanation 2 to section 10(23G), as introduced by the Finance Act, 1999 is declaratory and has to be construed as retrospective as it is retroactive in nature - Therefore, the assessee is entitled to exemption u/s. 10(23G) in respect of the investments made prior to 1-6-1998 - Decided in favour of assessee.
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2010 (11) TMI 625
DTAA between U.S.A. and India - Application of stay - Demand - Arm length price - there are no hard and fast rules regarding grant of stay, but prudence, discretion and circumspection are called for and that stay should not be granted as a matter of course - since the assessee has prima-facie arguable case, it would be in the interest of justice to stay the demand raised by the Revenue subject to condition specified in this order and deposit of 25% of the total outstanding - Decided in favour of the assessee
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2010 (11) TMI 623
Period of limitation - Manufacture - Assessbale value - affixing the hardware items to the door, and installing the door in the building - Suppression of facts - Writ petition against SCN - Held that:- A show-cause notice does not infringe the rights of anyone - The purpose of issuing a show-cause notice is to afford an opportunity of hearing to the person concerned, and Courts should be reluctant to interfere at that stage as it would be premature - The appropriate course for the recipient is to reply to the show-cause notice enabling the authorities to record their findings and then, if necessary, the matter can be carried in appeal to the Tribunal and, thereafter, to this Court.
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2010 (11) TMI 622
SSI unit - clubbing of clearance - simultaneous manufacture of branded and unbranded goods - Notification No. 8/2003-C.E., dated 1-3-2003. - Held that: - Once a brand/trade name is used in the course of trade of the manufacturer, who is indicating a connection between the "goods" manufactured by him and the person using the brand/trade name, the SSI exemption is lost - Apex Court decision in Kohinoor Elastics Pvt. Ltd. v. CCE, Indore (2005 -TMI - 47406 - SUPREME COURT OF INDIA) wherein it was held that, Clause 4 of the Notification is clear and unambiguous. It says that the exemption is lost if the "goods" bear the brand/trade name of another - the words "Bharti Airtel" was a brand name and clubbing of clearances, both branded and unbranded was unwarranted for which orders of the authorities below are set aside - Decided in favor of the assessee
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2010 (11) TMI 618
Demand - 100% EOU - Notification No. 8/97-C.E. - Since the fabrics procured from other 100% EOUs free of duty have been illicitly sold in DTA, there is no question of extending the benefit of duty exemption under Notification 125/84-C.E., as this exemption is applicable only to the goods manufactured in a 100% EOU which are not sold in DTA As regards the duty exemption under Notification No. 8/97-C.E., this exemption is available only in respect of the DTA clearances of the goods manufactured by a 100% EOU wholly out of indigenous raw material and the DTA clearances are in accordance with the proviso of the EXIM policy i.e. with the permission of the Development Commissioner - This exemption, obviously, will not be applicable to this case where the duty free goods procured from other 100% EOUs for export production have been illicitly diverted and sold in DTA - Appeals are dismissed
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2010 (11) TMI 617
Disallowance - Administrative expenses - The Assessing Officer noted that the assessee has claimed an amount of Rs.5.78 lakhs towards the administrative expenses, therefore, some portion of the same must have been incurred for the purpose of earning dividend income - He accordingly disallowed an amount of 1 lakh on adhoc basis out of the administrative expenses - Further find the Tribunal in assessee's own case for Assessment Year 2000-01 has also upheld the similar disallowance to which one of us (Accountant Member) is a party - Therefore decided against of assessee. Interest on borrowing - Find the assessee company has started borrowings from 27.12.1997 onwards whereas the scrips on which tax free dividend income earned were purchased much prior to the same - find similar issue had come up before the Tribunal in assessee's own case for Assessment Year 2001-01 and the Tribunal decided in favour of assessee.
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2010 (11) TMI 614
Deduction u/s 10A - The assessee was engaged on site development of software programme - The programmes are delivered at the clients premises at work site in South Korea -There is no doubt that the activities carried out by the assessee are falling under the purview of the sec. 10A as specified by the explanation provided under the said sec. 10A and further clarified by the Circular No.694 dated 22.11.94 - The CIT(A) has examined the question of splitting up of an existing business as alleged by the Revenue - As rightly pointed out by him, as the activities were finally culminated at the work site of the clients in Sourth Korea, there was no need for full fledged infrastructural facilities in India - Such facility is not called for in the line of business carried on by the assessee- Decided in favour of assessee. Deduction u/s 10A - Negative income for assessment the year - Assessee has maintained separate set of account for its new STPI unit - if the assessee has earned a positive income in the STP business as an independent unit, the assessee must be entitled for the exemption - But as the details of such loss or profit is not available , remit back this issue to the Assessing Officer for the limited purpose of examining whether STPI set up by the assessee has earned positive income for the impugned assessment year as an independent unit - If such independent profit is available in the hands of the assessee, the assessee is entitled for deduction u/s 10A. Bad debts written off - it clear that wherever the assessee has credited gross amounts of the bills issued to the customers and the assessee has not realized a part of that amount, the said unrealized part should be allowed as a deduction in the hands of the assessee as business loss - This needs verification - Therefore, this issue is set aside and sent back to the Assessing Officer for quantifying such unrealized bill amounts caused because of the non acceptance of the clients of the assessee - Once they are quantified, the officer has to verify whether the said amount has already been offered by the assessee as income in its Profit and loss account - If these two conditions are satisfied, then the Assessing Officer may allow the deduction as business loss and pass orders in accordance with law.
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2010 (11) TMI 612
Claim of loss from sale and purchase of shares / mutual fund units as expenditure - AO treated the same as speculative loss - Section 73 - fiction u/s 32(3) of UTI Act - whether UTI is a company - Held that:- Since the assessee has incurred this loss of Rs. 68,91828/- in delaying in units it cannot be considered as speculative. - Held that:- Explanation to Section 73 is attracted only when part of the business of the assessee company consists of purchase/sale of shares of other companies. Transactions in shares undertaken by the share brokers as its own under compulsion after client disowned part of such transactions did not constitute business of the assessee in share dealing and therefore loss incurred by the assessee in such transactions did not fall within the ambit of the section 73. Claim of bad debts - Held that:- the amount receivable by the assessee, who is a share broker, from his clients against the transactions of purchase of shares on their behalf constitutes debt which is trading debt. - it satisfies the condition stipulated in section 36(2)(i) and the assessee is entitled to deduction u/s 36(1)(vii) by way of bad debts after having written of the said debts from the books of account as irrecoverable.
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2010 (11) TMI 611
Whether any requisite and reasonable steps had been taken by the appellant to recover the export proceeds from the overseas buyers - specific charge against the appellant was that for the non-repatriating the outstanding proceeds by way of foreign exchange to the country within the stipulated period, the appellant contravened the provisions of Section 18(2) read with 18(3) of the FERA - It is, no doubt the appellant was continuously in touch with their Agent- Commercial at France to take steps to recover the amount and finally the Agent-Commercial expressed his inability to recover the amount - according to the appellant, further steps such as filing a suit at France, contacting the Indian Embassy at foreign countries, etc. would amount to expending huge amount of good money for bad dues whether the correspondence produced by the appellant that had been exchanged between themselves and their Agent-Commercial and the Legal Representative are sufficient enough to come to the conclusion that the appellant had taken necessary and reasonable steps to recover the amount or not - any amount of correspondence sent by the appellant to the foreign buyers or to the Legal Representative or to the Agent-Commercial, is only an internal correspondence - The letter correspondence between the appellant and their foreign buyers is not sufficient enough to prove the reasonableness of the appellant to secure the foreign proceeds within the purview of the Act - civil miscellaneous appeals are dismissed
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2010 (11) TMI 609
DTAA - TDS - commission and reimbursement of expenses - commission paid for entertainers / artiste in India - Held that:- the payment of commission to Colin Davie is not covered by article 18 of DTAA between India and U.K. as Colin Davie himself has neither taken any part in events during the dates of engagement nor exercised any personal activities in India - The services are rendered outside India by Colin Davie and income arising from that Article 7 of DTAA between India and U.K. covers services rendered - Not taxable in India - No TDS u/s 195. Reimbursement of expenses - The law is well settled that any payment made towards reimbursement of expenses is not chargeable to tax - There was no obligation to deduct TDS
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2010 (11) TMI 606
Reassessment - Validity of notice - Business income or other sources - assessment of firm - Consequent on decontrol of coffee trade, the Coffee Board dispensed with the business with the assessee and then the assessee let-out its go-downs for storage of commercial goods and collecting ware-housing charges - assessee, according to the AO, vide its letter dated: 26.11.2008 had admitted that it was a partnership firm and also provided a copy of Deed of Partnership entered into on 1.8.1995 - it is clear that when there is a change in the constitution of a firm, it is for the assessee to seek again status of a 'firm' for the purpose of an assessment by filing a certified copy of the revised deed of partnership - assessee had provided a copy of the partnership deed dated: 1.8.1995 and as per clause 6 of the Deed of partnership entered into the partnership is terminable AT WILL - Held that: status of the assessee is of firm Regarding business or other income - assessee had not continued the business of curing on its own as it did when it was tagged with the Coffee Board, however, permitted others like Longway Trade-links to cure coffee in its premises for a consideration - It is also seen that the expenses incurred, employees employed, books of accounts maintained were common and, thus, income derived from this business has, no doubt, to be assessed as business income only. - In a nut-shell, the income of the assessee is to be assessed under the head 'income from business' only in stead of bifurcating its income under various heads as did by the AO in his impugned orders for all the AYs under challenge - Appeals are partly allowed
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9911796707
