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Showing 401 to 420 of 1764 Records
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2016 (11) TMI 1366
Addition under the provisions of section 292C - Unaccounted income - addition u/s 69/69B/69C - ingenuine transaction - Held that:- Here a paper is found during the course of search on 6.11.2008 and assessment of search made by the AO u/s. 143(3) of the Act. In fact AO should have proceeded to act u/s. 153A of the Act. AO should also have recorded his satisfaction in this case u/s. 153A of the Act. Even otherwise, the document shown before us does not have the date of transaction where amount of ₹ 96 lakhs is alleged to have been transferred by appellant to other person. Further the AO has also stated that the transaction is also corroborated by the date of cheque transaction.
We do not found any cheque transaction where assessee is involved in the present transaction which is allegedly taxed in the hands of the assessee. Much to say that there was no date of cash transaction as alleged then it is surprised how AO has correlated the date with other transaction. Even otherwise when the assessee had denied the transactions, AO should have examined the recipient of search stated in that document and then confronted the assessee with the same. All these exercise have not at all been carried out by the AO. Furthermore, the presumption stated u/s. 292C of the I.T. Act is a rebuttal presumption. Therefore, when the assessee herself denied any such transaction, it cannot be stated that the actual transaction has taken place between the assessee and the person concerned whose name mentioned therein. Further the Circular No. 24 of 2015 dated 31.12.2015 also supports the case of the assessee that satisfaction should have been recorded in the case of the appellant u/s. 153A of the I.T. Act.
Therefore, the Appellant succeeds on the issue of satisfaction in view of the CBDT’s Circular stated above and also on the merit as the sole addition has been based on the document in which one transaction is allegedly sold without mentioning the date and further no corroborative evidence of any investment made by the assessee was found. Further the document is also unsigned and undated, the addition made in the hands of the assessee of ₹ 96 lacs cannot be sustained. Thus we reverse the finding of the Ld. CIT(A) by confirming the addition in the hands of the assessee under the provisions of section 292C - Decided in favour of assessee
Addition of unexplained jewellery u/s. 69B - Held that:- Both the authorities below have made the additions and confirmed part addition without any basis and the same is totally based on assumption only which is not sustainable in the eyes of law. It is a settled law that addition on assumption is not permissible under the law. Even otherwise, the Appellant succeeds on the legal issue of satisfaction in view of the CBDT’s Circular as stated above and therefore, the addition is not sustainable in the eyes of law. Hence, we delete the addition confirmed by the Ld. CIT(A) of ₹ 5.67 lacs towards the unexplained jewellery u/s. 69B - Decided in favour of assessee
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2016 (11) TMI 1365
Addition of undisclosed income - cash against the sale of property - Held that:- We find that assessee has sold property no. ES95, Block R & T Nirvana Country, South City -II, Gurgaon during FY 2008-09 for ₹ 60 lacs. It has not made any sales during the FY 2007-08 and that all the payment against sale of this property has been received through cheques and that no other amount has been received by the assessee in cash against the sales consideration of this property.
The details mentioned on the right side of page 4 of Annexure A-I of party G- 3 are seem to be some rough working and it is not clear from the details whether these are for purchase /sale/investment in the property ES -95. It also seems that these are some wrongly mentioned figures noted by somebody. In the details below "Chq", figure of 15,700,000.00 is mentioned. As per record, there is no reference of any cash payment on these details and also there is no reference of any payment received or paid in cash on these details. Therefore, the allegation made by AO that a cash payment of ₹ 97 lacs has been made received against this property & out of which ₹ 15 lacs has been paid reed during the financial year 2007-08 is based on mere conjecture & surmises. That the chart does not reveal any such transaction dates/amount pertaining to any year. This is simply a dumb document. There is no other material on record other than this loose paper to corroborate the stand of the department.
We find that since assessee has not received paid any amount in cash against the sale of the above property, no unexplained and unaccounted income from unaccounted sources can be attached to the assessee with respect to above transaction. Therefore, the presumption u/s. 292C of the Act is a rebuttal presumption. The presumption as envisaged in section 292C is limited to the correctness of the documents found at the time of search or survey, but that presumption has not been extended by the statute to be presumed to be the income of the assessee. - Decided in favour of assessee.
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2016 (11) TMI 1364
Permission to enhance the depreciation by revaluation of the assets upwards - whether assessee company has shown high depreciation in the Profit & Loss A/c during the year under consideration and defeated the provisions of Section 115J? - Held that:- As decided in Commissioner of Income Tax-II Kanpur Vs. M/S. J.K. Synthetics Ltd. Kamla Tower Kanpur [2015 (10) TMI 397 - ALLAHABAD HIGH COURT] following the decision of the Supreme Court in Apollo Tyres Ltd. Vs. Commissioner of Income-Tax (2002 (5) TMI 5 - SUPREME Court) wherein find from a perusal of the assessment order that the net profit shown in the profit and loss account of the company was prepared in accordance with Parts II and III of Schedule VI to the Companies Act. Once this finding has been given, the Assessing Officer could not go behind the net profit shown in the profit and loss account except to the extent provided in the Explanation to Section 115J of the Act. Provision of Section 115J does not empower AO to embark upon a fresh inquiry in regard to the entries made in the books of account of the company. The Supreme Court has categorically held in Apollo Tyres (Supra) that there cannot be two incomes, one for the purpose of the Companies Act and another for the purpose of income-tax.
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2016 (11) TMI 1363
Service tax liability - commission paid to the foreign commission agents - reverse charge mechanism - period 18.04.2006 to 31.02.2007 - Held that: - the Bombay High Court in the case of Indian National Shipowners Association [2008 (12) TMI 41 - BOMBAY HIGH COURT], clarified the law by their judgement dated 11.12.2008. We agree with the ld. Advocate that prior to declaration of law by the Hon’ble High Court, there was utter confusion in the field and the law got settled only with the said judgement. The period involved in the present case is admittedly prior to the said decision of the Hon’ble Bombay High Court and we find that the appellant deposited the dues on 23.03.2009 i.e. within a period of 3 weeks of declaration of law by the Bombay High Court. We also take note of the decision referred supra, wherein in an identical situation, the provisions of Section 80 were invoked and the benefit was extended to the appellant. Accordingly, we hold that in absence of any malafide on the part of the appellant, the imposition of penalty upon them is not justifiable, the same is accordingly set aside. The demand as also interest stands confirmed as not contested.
Appeal disposed off - decided in favor of assessee.
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2016 (11) TMI 1362
Transfer pricing adjustment - mandatory comparability analysis - Held that:- Transfer Pricing Officer has also adopted transactional net margin method (TNMM) as the most appropriate method and selected 7 comparables without carrying out FAR analysis of those comparables with the assessee. Therefore there is basic flaw in the transfer pricing mechanism adopted by the ld. Transfer Pricing Officer. Moreover, he has also not given an opportunity to the assessee to comment on the comparables selected by him. The ld. first appellate authority has relied upon the decision of Philips Software Centre (P.) Ltd. [2008 (9) TMI 466 - ITAT BANGALORE-B ] and has held that since the ld. TPO has not mentioned any of the four conditions prescribed u/s 92C(3) of the Act rendering his order void. During the course of hearing the ld. DR has submitted that Hon'ble Karnataka High Court [2009 (2) TMI 832 - HIGH COURT OF KARNATAKA] has stayed the above judgment and therefore, the decision of the first appellate authority is erroneous as it relied on the stayed judgment. The Hon'ble Karnataka High Court vide its order dated 16.02.2009 has stayed the operation of the judgment on which the first appellate authority has relied upon. Though the Hon'ble High Court admitted the several questions of the law but stayed the whole of the judgment of the coordinate bench. Hence, we reject the contention the ld. AR that the decision of the coordinate bench is stayed to the limited extent. In view of above facts it is apparent that ld. first appellate authority vide his decision dated 25.03.2010 relying on the decision of the coordinate bench which was stayed by Hon'ble Karnataka High Court vide order dated 16.02.2009 deserves to be set aside. Hence, we set aside all the four grounds of the appeal to the file of the ld. TPO to determine ALP of international Transactions after giving assessee a proper opportunity of hearing.
Addition on account of depreciation on rental assets - Held that:- infirmity in the order of the ld CIT(A) in allowing the claim of deduction of the depreciation to the assessee as assessee owns the assets and also uses it for the purposes of its business. The revenue's another aspect of this ground is that ld CIT(A) has admitted the affidavit of the assessee before him. We have perused the order of the ld CIT(A) wherein the affidavit only says that the assessee has not received any rent or installment on account of these machines. We reject the argument of the revenue as the information in the form audited financial statement is available on record as assessee has not shown any rental income in its profit and loss account and further in its fixed assets schedule it has shown the rental assets. - Decided against revenue
Depreciation claimed on computer peripherals - Held that:- CIT(A) has correctly allowed the claim of the assessee of depreciation @ 60% on such assets following the decision of the Hon'ble Delhi High Court in CIT v. BSES Rajdhani Power Ltd [2010 (8) TMI 58 - DELHI HIGH COURT ] - Decided against revenue
Disallowance of seminar expenses - Held that:- CIT(A) has held that these are the expenses for the marketing of new products launched by the assessee in the same line of business. They are routine in nature and further the decision of Hon'ble Supreme Court in case of Madras Industrial Investment Corpn. Ltd. v. CIT [1997 (4) TMI 5 - SUPREME Court ] does not apply to the facts of the case. We do not find any infirmity in the order of the ld. CIT(A) - Decided against revenue
Allowance of expenditure on display stand - Held that:- CIT(A) has deleted the disallowance after verification of the invoices which demonstrated that expenses were incurred for display panel, banner stand and other kinds of display literature. He therefore held that looking to the nature of the expenditure and durability and longitivity of these items such expenditure is revenue in nature. We find no infirmity in the order of the ld. CIT(A). - Decided against revenue
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2016 (11) TMI 1361
Grant of registration u/s. 12A and approval u/s. 80G denial - denial of claim holding that the aims and objects of the Society are not charitable and activities conducted by the appellant are not genuine - Held that:- From the analysis of the financial statements, we find that the nominal surplus amounts shown above remained with the society and not distributed amongst its. The appellant society has charged fees from students, but the same has been utilized for running of school for education purpose. Therefore, the view of the ld. CIT that society has charged hefty fees from students and hence, operating commercial activities is wrong and not supported by any material on record. The finger raised by ld. CIT on the activities of appellant society and its aims and objects being not charitable is, therefore, based on no good reasons relevant for refusal to grant registration. Therefore, in view of several decisions relied on by the ld. Counsel for the assessee and in the attending facts of the case, we direct the ld. CIT to grant registration u/s. 12A and approval u/s. 80G of the Act as prayed for.
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2016 (11) TMI 1360
Revision u/s 263 - Held that:- In respect of both the issues, i.e., allowing credit of deemed taxes paid on dividend in Oman as well as capitalisation of interest under section 36(1)(iii) detailed enquiries as well as verification have been made by the Assessing Officer. Further it is also not the case of the learned Principal Commissioner of Income-tax that the order is not in accordance with any instruction/direction issued by the Board or is not in accordance with any decision of the honourable Delhi High Court or the apex court of India. Accordingly the order passed by the Assessing Officer cannot be regarded as deemed to be erroneous or prejudicial to the interests of the Revenue under Explanation 2 of the Act.
In view of the above, we hold that the impugned order passed by the learned Principal Commissioner of Income-tax under section 263 of the Income-tax Act is without jurisdiction and not sustainable in law. - Decided in favour of assessee
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2016 (11) TMI 1359
Bogus purchases - Held that:- As decided in assessee's own case for immediately preceding A.Y.2005-06 the sale of the assessee is not disputed by AO and ld CIT(A). Thus, evidences are sufficient to show that actual delivery of goods was received by assessee from the said parties. While making the submission, DR for Revenue has not countered any of the evidence placed on record by the assessee. With these observations, we hold that AO made the addition on the basis of mere presumption and the ld CIT (A) also sustained the 25% of addition without giving any reasoning. Therefore, keeping in view the pacularity of facts and circumstances of the case, the entire addition made by the AO deserves to be deleted. Hence, this Ground of appeal raised by the assessee is allowed.
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2016 (11) TMI 1358
TDS u/s 195 - nature of payment made - reimbursement of expenses or payment towards product development fees to assessee - Double Taxation Avoidance Agreement - falling under the ambit of the term FTS - non deduction of tds - assessee treated as 'assessee in default' under Section 201(1) and 201(1A) - Held that:- The payment in question were made by the assessee in respect of research and development and operation towards clinical trial carried out by the Malaysian subsidiary of the assessee. As per the tripartite Memorandum of Understanding (MOU) between the assessee, its Malaysian subsidiary and Cipla, it was agreed upon between the parties that Cipla would make the payment towards product development fees to assessee to be utilized by it for its clinical trial, research and development and operational expenditure in India as well as in Malaysia.
There is no dispute that as per the MOU between the parties, the cost of R & D as well as clinical trials undertaken by the assessee and its Malaysian subsidiary was to be borne by Cipla and in turn outcome of the R & D as well as clinical trials will be belonging to Cipla. Thus the outcome product of the R & D as well as clinical trials would not belong to the assessee or its subsidiary but the Cipla had the right over the same. Therefore the Cipla has right to acquire the outcome in the shape of technical information, technology documentation, know how and process involved in all clinical R&D. Though the assessee has reimbursed the expenses to its subsidiary however in case the payment is considered as tax for technical services then the element of profit becomes irrelevant as the gross payment is taxable.
Thus it is clear under Article 13(3) of DTAA in question there is no clause of make available and the terms FTS means payment of any kind in consideration for rendering of managerial, technical or consultancy services/provision for services by technical or other personnel. Conducting clinical trials & R&D is clearly a service which is technical in nature therefore providing the outcome of the research to Cipla through the assessee clearly falls under the ambit of the term FTS as per the Article 13 of the DTAA between India & Malaysia. Thus, we do not find any error or infirmity in the orders of the authorities below in holding that the payment in question is FTS and consequently the assessee was liable to deduct tax at source under Section 195 of the Act. - Decided against assessee
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2016 (11) TMI 1357
Additions towards alleged short valuation of closing stock - Held that:- On verification of the details furnished by the assessee, we find that while analyzing the closing stock details, the A.O. has taken raw materials issued for production and goods manufactured for the particular month without considering brought forward stock available at shop floor, which is the reason for arriving at a shortage/excess production loss on monthly basis. Therefore, we are of the opinion that when the books of accounts maintained by the assessee are accepted without any discrepancies, the A.O. was not correct in tinkering with the method of closing stock adopted by the assessee to determine the value of closing stock of raw materials. Hence, we are of the view that the A.O. was completely erred in adopting average price method to determine the closing stock as against the consistent method of accounting followed by the assessee i.e. cost price method to determine the closing stock. Hence, we direct the A.O. to delete additions made towards short valuation of closing stock.
Additions towards alleged excess production loss - A.O. made additions towards excess production loss by stating that the assessee has claimed excessive production loss when compared to previous financial year - Held that:- Though the A.O. analysed raw materials consumption according to his own method, the method followed by the A.O. is inconsistent with the accepted principles of calculation of production loss, therefore, in our considered view, the A.O. has completely erred in coming to the conclusion that the stock registers maintained by the assessee are not showing true and correct pictures, when the assessee has clearly demonstrated with necessary evidence that the stock figures declared in the financial statements are tallied with the stock registers maintained in accordance with the Central Excise rules. The A.O. after analyzing raw materials, failed to arrive at a correct figure of production loss instead, proceeded with estimation of production loss based on certain articles published in some magazine which is not a binding nature, ignoring the stock registers furnished by the assessee which are approved by another authority of the revenue department and also certified by a certified accountant under the provisions of Income Tax Act, 1961. Therefore, we are of the view that the production loss estimated by the A.O. is not correct and accordingly, we direct the A.O. to delete additions made towards production loss.
Addition towards alleged low gross profit - Held that:- We are of the opinion that the A.O. was incorrect in estimating gross profit by taking in to account average of last 3 years gross profit declared by the assessee, without pointing out any specific error or defect in the financial books of accounts or stock registers maintained by the assessee. The assessee, on the other hand clearly demonstrated with evidences that the quantitative details furnished by the assessee are consistent with the stock registers maintained in accordance with the Central Excise rules. Therefore, we are of the considered view that the A.O. was erred in estimating the gross profit. Hence, we direct the A.O. to delete additions made towards alleged low gross profit.
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2016 (11) TMI 1356
Transfer pricing adjustment - RPT filter application - Held that:- Where the DRP has applied 0% RPT filter and as per the settled position of law by now, the RPT filter should be applied at the rate of 15%, we set aside the order of the AO/TPO and restore back the matter to the file of the AO/TPO for a fresh decision by applying RPT filter of 15%. We also hold that since the matter is going back to the file of the AO/TPO and much development has taken place in the legal position on the TP issue, now the entire matter should be reexamined and decided afresh by the AO/TPO as per the present legal position, which may result into fresh consideration of those comparables which were rejected earlier for some reasons.
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2016 (11) TMI 1355
Waiver of pre-deposit - Club Association service - Renting of immovable property service - Health Club fitness service - Development & Supply of Content service - GTA service - IPR service - Held that: - prima facie, the demand made in club and association services to the tune of ₹ 1.41 crores is covered by decision of Hon'ble High Court of Gujarat in the case of Sports Club of Gujarat Ltd, Vs. UOI [2013 (7) TMI 510 - GUJARAT HIGH COURT], in favour of the applicant. In respect of the various other services like renting of immovable property as well as GTA services we find that significant amount already stands deposited. Considering overall demand, we are of the view that the amounts already deposited would suffice for the purpose of hearing the present appeals.
We waive the requirement of the balance amount of service tax demanded, interest thereon and on the penalty till the disposal of the appeal - stay granted
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2016 (11) TMI 1354
Whether the activity of construction of residential complex by the respondent, in terms of agreement entered into with M/s. Jindal Power Ltd, for the occupation of flats by their employees, would attract Service Tax liability under the category of ‘construction of residential complex’ or not? - Held that: - Reference can be made to the decision of Tribunal in the case of Commissioner of Central Excise, Aurangabad vs. Mall Enterprises [2015 (11) TMI 333 - CESTAT MUMBAI] as also to the decision in the case of Nithesh Estates Ltd. vs. CCE & ST & Cus., Bangalore [2015 (11) TMI 219 - CESTAT BANGALORE], where it was held that From the definition it is quite clear that if the complex is constructed by a person directly engaging any other person for design or planning or layout and such complex is intended for personal use as per the definition, service tax is not attracted. Personal use has been defined as permitting the complex for use as residence by another person on rent or without consideration.
Appeal rejected - decided against Revenue.
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2016 (11) TMI 1353
Imposition of penalties u/s 76 and 77 of the FA, 1962 - taxability - reverse charge basis - As per facts on record, the appellant availed the services of foreign commission agent for procuring their orders from various Customers. With the insertion of section 66A in the Finance Act effective from 18.4.2006, the appellant was required to pay the service tax on such services, so received by them, on reverse charge basis - Held that: - I find that whatever Service tax was required to be paid by the appellant, was available to them as cenvat credit. As such, the entire situation is revenue neutral, in which case, no malafide can be attributable to the appellant. Accordingly, I am of the view that imposition of penalty upon them are not justifiable. The same are accordingly, set aside while upholding the service tax and interest as not challenged - appeal allowed - decided in favor of assessee.
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2016 (11) TMI 1352
Refund claim - accumulated service tax paid for various input services - export of services without payment of tax - Scientific or Technical Consultancy Services - Held that: - the credit has been allowed on various services following the decisions as held in various cases, except for fleet management services/ Rent-a cab services.
The appellant has claimed refund of credit of service tax paid on Rent-a cab services. The appellant has changed the nomenclature of the services from Rent-a-cab service to Fleet Management Services. Such change of name will not make the appellant eligible for credit because the services are used after 01.04.2011. The definition of input services expressly excludes Rent-a cab service and the appellant has not adduced evidence to prove that how they are eligible for credit on such service. Therefore the claim of credit in respect of Rent-a cab service is disallowed. In regard to other services, I hold that they qualify as input services and therefore are eligible for credit. The appellant having produced sufficient details with regard to the service provider and ISD challans and after verification as conceded by the Ld. AR, I hold that this issue is clarified and solved in favor of assessee.
Appeal allowed - decided partly in favor of appellant.
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2016 (11) TMI 1351
Levy of tax - transport of goods by air - the chargeability of service tax on the amount collected from passengers as charges for transportation of their ‘excess baggage’ by the appellant Airline during the period of 10.9.2004 to 13.09.2006, when the service of ‘Transportation of Passengers by Air’ was not under taxable category - Held that: - carrying excess baggage on payment of certain fee/tariffs for the passengers who have opted to use air services of the appellant is an integral part of the main service provided by the appellant. The incidental service of ‘transportation of excess baggage by air’ cannot be charged service tax under the category of service of ‘transportation of goods by air’ as defined under Section 65 (105) (zzn) of the Finance Act, 1994, CESTAT Mumbai in the case Kingfisher Airlines Ltd. Vs. Commissioner of Service Tax, Mumbai [2015 (11) TMI 54 - CESTAT MUMBAI (LB)], where it was held that The excess baggage charges collected by the appellants are an integral part of the main service namely transportation of passengers by air. Therefore, the demand of service tax is set aside.
Appeal allowed - decided in favor of appellant.
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2016 (11) TMI 1350
Refund claim - N/N. 41/2012 ST - export of services - GTA services - Held that: - The Notification No. 41/2012-ST has been issued in terms of Section 93A of the Finance Act, 1994. The notification provides for grant of rebate by way of refund of the service tax paid on the specified services used for export of goods. It is nobody’s case that the GTA services for which the appellant has claimed rebate of service tax under the notification has not been used for export of goods. Consequently, there is no doubt that the appellant falls within the gamut of the notification whose stated purpose is to grant refund of service tax on services used for export.
It is not in dispute that the service tax was paid by the appellant and such services have been used for export of the goods by the appellant. Consequently, I am of the view that rebate under Notification No. 41/2012-ST is required to be paid to the appellants - appeal allowed - decided in favor of appellant-assessee.
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2016 (11) TMI 1349
Imposition of penalty u/s 78 - imposition of simultaneous penalty after amendment - section 76 - Held that: - Section 78 has been amended w.e.f. 16/5/2008 according to which simultaneous penalties under Section 76 and 78 of the Finance Act, 1994 cannnot be imposed. In the present case the show cause notice is issued on 11/12/2008 which is after the amendment of Section 78 of the Finance Act, 1994. Therefore, it is held that penalties under Section 78 of the Finance Act, 1994 are not attracted when Section 76 penalty has been imposed upon the appellant.
Penalty under Section 78 of the Finance Act 1994 is not sustainable when penalty under 76 of the Finance Act is already paid by the appellant - appeeal allowed - decided in favor of appellant.
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2016 (11) TMI 1348
Search - Demand - Held that: - As is evident “case” means a proceeding in the Act or any other Act for the levy, assessment and collection of excise duty – (this provision has been incorporated for reference in the relevant provision of Customs Act), pending before an adjudicating authority before which the application under Section 32E is made - In respect of two sets of show cause notices potentially there even could have been six but these do not detract from the fact that investigation was a seamless one in relation to the same trigger, i.e., same search and seizure which took place on 17.07.2014. In that proceeding there was only one cause that resulted in the issuance of show cause notices - Petition allowed.
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2016 (11) TMI 1347
Presumptive SCN - Clandestine removal - Principle of natural justice - Held that: - In view of the aforesaid electricity consumption report, per tonnage, it appears that the variation is from 555 units to 1800 kWH/Per Ton. This is mainly because of the nature of the machinery utilized by the noticee - the electricity consumption pattern as has been given in Annexure- RUD-7, as stated in paragraph 4 of the show cause notice, which is at page no. 63 of this memo of writ petition which reveals that this petitioner has consumed electricity absolutely in consonance with the report given by Joint Plant Committee, constituted by the Ministry of Steel, Government of India and for few months it is even less than that - one could not have been chosen by the respondents, arbitrarily, without carrying out the experiment of consumption of electricity for one ton of manufacturing at the noticee's manufacturing unit - Thus, without experiment is being carried out at the premises of the noticees, use of any of the committee's report for electricity consumption pattern always leads to arbitrariness on the part of the respondent-department - Petition is allowed by way of remand.
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