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Showing 421 to 440 of 920 Records
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2020 (4) TMI 500
Extended period of limitation - CENVAT Credit - exempt goods - demand on the ground that Refined Cotton Seed Oil which is the major product of the appellant was exempted from payment of Excise Duty with effect from 01.03.2006 vide Notification No. 04/2005-C.E. dated 01.03.2005 as amended - HELD THAT:- A more or less similar issue has been addressed to by this Bench in the case of M/S SRIBA AGRO LTD., VERSUS CCE & ST, GUNTUR [2016 (12) TMI 272 - CESTAT HYDERABAD] wherein this Bench has held that the Show Cause Notice issued after invoking the extended period of limitation could not sustain.
The issue being identical, it is held that the appellant will have to succeed on limitation since the Revenue has not made out a case for invoking the extended period of limitation - demand set aside - appeal allowed - decided in favor of appellant.
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2020 (4) TMI 499
Reduction of input tax credit - reduction on the ground that the limitation of availing of the tax credit as provided under Section 11(3)((b) could be applied only once irrespective of the fact as to whether particular commodity purchased falls in more than one sub-clauses of Section 11(3)(b) of the VAT Act - whether Section 84A of the VAT Act is a validating Act?
HELD THAT:- It is evident that the amending Act specifically provides for validation of various aspects (namely assessment, reassessment, collection etc.) notwithstanding any judgement, decree or order of any court, Tribunal or authority to the contrary - Vide the Gujarat Value Added Tax (amendment) Act, 2018 (Gujarat Act No. 10 of 2017) Section 84A has been inserted in the Gujarat Value Added Tax Act, 2003 with retrospective effect. However, the amending Act does not provide for any validation of various acts of the revenue authorities namely the assessment, re-assessment, collection etc. Accordingly, the said Act cannot be treated as a “validating Act”.
Section 84A (as inserted by 2017 amendment Act), provides for exclusion of certain period spent by the revenue authorities in the appellate proceedings for the purpose of calculating time limit for (i) audit assessment (ii) turnover escaping assessment (iii) appeal and (iv) revision. All these provisions provide for outer time limit of the order to be made. In case where the orders are already made by the revenue authorities and matter is closed, the retrospectives amendment without validation may not validate such orders.
It is permissible for the Legislature, subject to its legislative competence otherwise, to enact a law which will withdraw or fundamentally alter the very basis on which a judicial pronouncement has proceeded and create a situation which if it had existed earlier, the Court would not have made the pronouncement - it is difficult to take the view that the VAT Amendment Act, 2018 is a validating Act.
Competence of the State Legislature to enact Section 84A of the Act - HELD THAT:- A law enacted by a legislature without having legislative competence would be void ab initio and the same cannot be revived or revitalised even if the legislative competence is conferred on that legislature subsequently. But in a case where the legislature has legislative competence to enact a law, and some of its provisions violate any of the fundamental rights contained in Part III of the Constitution, the same would be rendered void under Article 13(2) of the Constitution and would remain unenforceable. The law so enacted is not wiped off the Statute Book nor it stands repealed. Further if the offending provisions of the Statute which violate fundamental rights are removed the law would become effective and enforceable even without re-enactment. Such a law, whether preConstitution or post-Constitution, is not wholly dead if it violates fundamental rights; it is merely eclipsed by fundamental right and remains as it were in a moribund condition as long as the shadow of fundamental rights falls upon it - A law declared void by a court is not effected from the Statute Book; it is revived and revitalised if Constitutional limitations are removed by Constitutional amendment or by re-enactment by legislature.
Thus, Section 84A of the Gujarat Value Added Tax (Amendment) Act, 2018 is invalid on the ground that the same is beyond the legislative competence of the State Legislature.
Whether Section 84A of the VAT Act is manifestly arbitrary and is liable to be struck down being violative of Article 14 of the Constitution of India? - HELD THAT:- It is well settled that as long as the legislation has the necessary competence to frame a law and the law so framed is not violative of the fundamental rights enshrined in the constitution or any of the constitutional provision, the Court would not strike down the statute merely on the perception that the same is harsh or unjust. Particularly, in taxing statutes the Courts have recognized much greater latitude in the legislation in framing suitable laws - It is equally well settled that wherever the parliament has the power to frame a statute it also includes the power to make the law retrospective. In other words, the parliament also has wide powers to frame the laws including taxing statutes with retrospective effect. However, the Courts have recognized certain inherent limitations in framing retrospective tax legislations.
If unlimited time period is available to the Revenue for assessment/re-assessment/revision in any case based on a decision rendered in the case of any other dealer the same would lead to an irreparable situation and, in such circumstances, it renders Section 84A manifestly arbitrary and unreasonable - Section 84A of the VAT Act is liable to be struck down even on the ground of being manifestly arbitrary, excessive, oppressive and unreasonable.
Section 84A of the Gujarat VAT Act is ultra vires and beyond the legislative competence of the State Legislature - Section 84A of the Gujarat VAT Act is manifestly arbitrary, unreasonable and therefore, violative of the Articles 14 and 19(1)(g) of the Constitution of India - Section 84A of the Gujarat VAT Act is not a validating Act.
Section 84A of the Gujarat VAT Act is declared as ultra vires and beyond the legislative competence of the State Legislature under Entry 54 of List II of the Seventh Schedule to the Constitution of India and is also declared to be violative of Article 14 of the Constitution of India on the ground of being manifestly arbitrary, unreasonable and oppressive - the impugned notices in each of the writ applications issued under Section 75 of the Gujarat VAT Act is hereby quashed and set aside.
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2020 (4) TMI 498
Dishonor of Cheque - insufficiency of funds - Section 138 of the NI Act - HELD THAT:- The cheque was issued towards the amount due and payable by the appellant for purchase of pesticides. As rightly observed by the High Court production of the account books/cash book may be relevant in the civil court; but may not be so in the criminal case filed under Section 138 of the N.I.Act. This is because of the presumption raised in favour of the holder of the cheque - In view of the concurrent findings recorded by the Trial Court as well as by the High Court there are no ground warranting interference with the conviction of the appellant under Section 138 of the N.I.Act.
So far as the question of sentence is concerned, the cheque was issued by the appellant, for discharge of the debt, way back in the year 1999. Considering the fact that the cheque was issued in the year 1999 and having regard to the other facts and circumstances of the case and in the interest of justice we deem it appropriate to modify the sentence of imprisonment imposed upon the appellant and also the fine amount of ₹ 4,17,148/-.
Appeal allowed in part.
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2020 (4) TMI 497
Adjournment of the case - on the last date adjournment slip had been moved on behalf of defendant no. 5 & 6 as counsel was keeping unwell and even on 26.09.2019, same had been the reason for adjournment - HELD THAT:- List the matter for completion of cross examination of PW-1 on 10.07.2020 at 12 noon.
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2020 (4) TMI 496
Cancellation of his GST Registration of petitioner - cancellation on the ground that petitioner had not filed GST return for more than six months - HELD THAT:- The writ petition is disposed with liberty to the petitioner to make fresh representation to the Commissioner, CGST within four weeks from today along with an upfront amount of ₹ 30.00 lakh. If such a representation is made (along with aforesaid amount), the Commissioner, CGST shall consider petitioner’s request for revocation of cancellation order, in accordance with law, within ten days from the date of receipt of such representation.
Till decision is taken on petitioner’s representation the impugned cancellation order dated 13.03.2020 shall be kept in abeyance. However, the GST registration of the petitioner shall be restored once the nationwide lockdown is over.
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2020 (4) TMI 495
Confiscation of goods alongwith conveyance - levy of penalty and fine - Section 130 of GST Act - HELD THAT:- By virtue of the order of this Court in M/S DEVASYA INDUSTRIES, PROPRIETOR KOKILABEN SURESHKUMAR PATEL VERSUS STATE OF GUJARAT [2019 (5) TMI 1771 - GUJARAT HIGH COURT], the truck as well as the goods have been released.
Notice in the form GST MOV-10 - HELD THAT:- The writ-applicant shall appear before the authority concerned and make good his case that the notice deserves to be discharged.
Application disposed off.
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2020 (4) TMI 494
Release of detained goods alongwith conveyance - section 130 of GST Act - While issuing notice, this Court directed that the vehicle as well as the goods be released, upon payment of the tax, in terms of the impugned notice - HELD THAT:- The writ applicant availed the benefit of the interim-order passed by this Court and got the vehicle, along with the goods released on payment of the tax amount. The proceedings, as on date, are at the stage of show cause notice, under Section 130 of the Central Goods and Services Act, 2017. The proceedings shall go ahead in accordance with law.
It shall be open for the writ applicant to point out the recent pronouncement of this Court in the case of [2019 (12) TMI 1213 - GUJARAT HIGH COURT].
It is now for the applicant to make good his case that the show cause notice, issued in Form GST-MOV-10, deserves to be discharged - Application disposed off.
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2020 (4) TMI 493
Detention of goods - levy of fine and penalty - case of petitioner is that goods detained under Section 129(1) was only 'promotional materials' consigned by the supplier, not intended for sale, and it will not attract any tax liability as contemplated under Section 7 of the GST Act - principles of natural justice - HELD THAT:- Subsection (7) of S.107 provides that where the appellant had paid the amount stipulated under sub-section (6), which in the case at hand is 10% of the remaining amount of tax in dispute, the recovery proceedings for the balance amount shall be deemed to be stayed - merely because the appellant had failed to furnish security, or to get the goods released, by paying the amount of tax and penalty imposed, the confiscation proceedings cannot be proceeded, because he had instituted a statutory appeal after compliance of pre-requisite condition.
Release of goods - HELD THAT:- The provision under Section 129 is clear and unambiguous that the goods under detention can be released only on compliance with the provisions of sub-section (6) of Section 67 of the Act, which is made applicable with respect to the condition under Section 129, by virtue of Section 129(2) of the Act. The procedure for compliance of the conditions stipulated under Section 67(6) is literally provided under Section 140 of the Central Goods and Services Tax Rules 2017. Therefore, unless the security as contemplated under Section 129(2), read with Section 67(6), is furnished with; or payment of the entire amount of tax and penalty imposed under Section 3 is made, the goods are not liable to be released.
Appeal disposed off.
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2020 (4) TMI 492
Time limitation for Finalization of assessment - case of appellant is that the proceedings for finalization of the assessment was initiated beyond the time limit stipulated under Section 25 (1) of the Kerala Value Added Tax Act, 2003 - validity of Section 174 of the KSGST Act - HELD THAT:- The grounds raised in the writ petition other than the one relating to validity of Section 174 of the KSGST Act, has not been looked into by the Single Judge. Under such circumstances, a remand of the writ petition for a fresh consideration and disposal, on the grounds raised other than the one relating to validity of Section 174 of the KSGST Act, would suffice to meet the ends of justice.
Appeal allowed by way of remand.
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2020 (4) TMI 491
Addition u/s 41(1) - waiver of unsecured interest free loans taken - accounting entries to be determinative of the nature of receipt or not ? - HELD THAT:- In the year under consideration, the assessee was not carrying any business activity in terms of the main object of the assessee company - while assessee had borrowed monies from Matrix Logistics Private Limited, it had not claimed any deduction or allowance in respect of the same - As decided in Kedarnath Jute Manufacturing Co. Ltd. v. CIT [1971 (8) TMI 10 - SUPREME COURT] the accounting entries cannot be determinative of the nature of receipt and what can be added to income under section 41(1) of the Act is something in respect of which, deduction has been allowed in the past
In CIT v. Mahindra & Mahindra Ltd [2018 (5) TMI 358 - SUPREME COURT] on a perusal of sub-section (1) of section 41 of the Act, it is evident that there is a sine qua non that there should be an allowance or deduction claimed by the assessee in any assessment for any year in respect of loss, expenditure or trading liability incurred by the assessee. Then, subsequently, during any previous year, if the creditor remits or waives any such liability, then the assessee is liable to pay tax under section 41 of the Act.
In the facts of the present case, since the assessee has not claimed any allowance or deduction in respect of the unsecured loan obtained by it from Matrix Logistics Private Limited in any previous year, the provisions of sub-section (1) of section 41 of the Act would not apply. The Tribunal has, therefore, rightly applied the decisions of the Supreme Court in Kedarnath Jute Manufacturing Co. Ltd. v. CIT and CIT v. Mahindra & Mahindra Ltd. (supra) to the facts of the present case.- Decided against revenue
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2020 (4) TMI 490
Bogus purchases - Addition @ 12.5% - purchases from grey market - HELD THAT:- Having regard to the fact that goods were in fact purchased though not from the named parties but from the grey market, no infirmity can be found in the approach adopted by the Commissioner (Appeals) in restricting the addition to 12.5% of such bogus purchases, which would be the approximate differential amount between the actual price of the goods and the expenditure claimed on the basis of the bogus bills. The Tribunal was, therefore, wholly justified in upholding the order passed by the Commissioner (Appeals). The controversy raised vide proposed question (A), therefore, does not give rise to any question of law.
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2020 (4) TMI 489
Depreciation u/s 32 - conversion of partnership firm into private limited company - assessee-company claimed depreciation on the enhanced value of assets as per the revaluation of assets made as on 30.06.2007 by the firm - HELD THAT:- Since the issue has been decided by the ITAT in earlier year in assessee's favour the disallowance of depreciation by the AO for this year is not sustainable as the same is consequential to the depreciation allowed and WDV of assets in earlier year. Therefore, following the order of the Coordinate Bench in assessee’s own case for AY 2009-10 I [2019 (3) TMI 1764 - ITAT MUMBAI] wherein held assessee is entitled to depreciation on the enhanced cost at which the assessee has taken over the assets and direct the AO to allow the depreciation as claimed by the assessee - Decided in favour of assessee.
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2020 (4) TMI 488
Bogus purchases - hawala purchases - CIT-A confirming addition of 12.5% - HELD THAT:- After reopening assessment, AO made detailed enquiry by issue of notice to the suppliers and found that assessee has taken accommodation bill of the purchases - considering the reply filed by AO, AO only added profit element in such alleged bogus purchases which works out at 12.5%.
CIT(A) has observed that before the AO, assessee himself has conceded for addition of 12.5% of hawala purchases, therefore, assessee should not have any grievance at all to file appeal before him. CIT(A) has considered various judicial pronouncements on the issue and after applying the same to the facts of the case, confirmed the addition to the extent of 12.5% of the alleged bogus purchases. Nothing was placed before us so as to persuade us to deviate from the findings of the CIT(A).
Accordingly, we do not find any reason to interfere in the order of CIT(A) for upholding addition of 12.5% of alleged bogus purchases. - Decided against assessee.
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2020 (4) TMI 487
Deduction u/s 80IB - manufacturing activities - Proof of commencement of production - HELD THAT:- Assessee tried to justify that the production was commenced on 30.03.2012. During the course of hearing, ld. AR drew our attention to the certificate issued by the General Manger, DIC, Kathua on 07.01.2013, scanned copy of which has been incorporated in the assessment order that the General Manager, DIC, Kathua has clearly mentioned that the commencement of production is with effect from 30.03.2012. This has not been controverted by the ld. DR before us.
In the month of March, the consumption of electricity was 1536 units and the documents were also placed before the AO and these documents have not been disregarded by the AO and the AO has accepted that the electricity consumption was made in the month of March, 2012. The assessee has also shown in the trading account as on 31.03.2012 wages expenses and the AO could have examined the payment of wages showing in the trading account for the financial year ending as on 31.03.2012. The labour register was produced before the AO, which has not been denied. Even the labour register for the subsequent year has also been placed before the AO. If the AO has doubted the commencement of production, he could have examined the labourers for being satisfied himself, however, he Just strengthened his analysis of the electricity consumption and the date of certificate issued by the General Manager, DIC, Kathua.
We consider the date of commencement of production as 30.03.2012, and, therefore, the assessee is eligible for claiming deduction u/s.80IB(4) of the Act on the profit derived from the industrial undertaking as claimed by the assessee.- Decided in favour of assessee.
Addition u/s.68 - unexplained investment in purchase of land - As per assessee there are no cash credits which are appearing in the books of account and as such application of wrong provisions of the Act not remotely connected is arbitrary and unjustified - HELD THAT:- Submission made by the assessee before the AO and other related documents and considering to the request of ld.AR of the assessee, we restore the issue raised in both the grounds to the file of AO for further verification. The assessee is also directed to appear before the CIT(A) with necessary documents for substantiating his claim as raised before us. Ground raised by the assessee are allowed for statistical purposes.
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2020 (4) TMI 486
Excess Cane Price Paid to Sugarcane Suppliers - price over and above the Statutory Minimum Price (SMP) fixed by State Government for purchase of cane - HELD THAT:- As decided in MAJALGAON SAHAKARI, SAKHAR KARKHANA LTD. VERSUS ACIT, SHRI CHHATRAPATI SHAHU, DCIT, ITO [2019 (3) TMI 906 - ITAT PUNE] set aside the impugned orders on this score and remit the matter to the file of the respective A.Os. for deciding it afresh as per law in consonance with the articulation of law by the Hon’ble Supreme Court in TASGAON TALUKA S.S.K. LTD. [2019 (3) TMI 321 - SUPREME COURT]
The amount relatable to the profit component or sharing of profit/distribution of profit paid by the assessee, which would be appropriation of income, will not be allowed as deduction, while the remaining amount, being a charge against the income, will be considered as deductible expenditure. At this stage, it is made clear that the distribution of profits can only be qua the payments made to the members. In so far as the non-members are concerned, the case will be considered afresh by the AO by applying the provisions of section 40A(2).
Sale of Sugar at Concessional to the Members/Shareholders - HELD THAT:- As decided in MAJALGAON SAHAKARI, SAKHAR KARKHANA LTD. [2019 (3) TMI 906 - ITAT PUNE] it would be just and fair if the impugned orders on this score are set aside and the matter is restored to the file of AOs, instead of to the CIT -(A), for fresh consideration as to whether the difference between the average price of sugar sold in the market and that sold to members at concessional rate is appropriation of profit or not, in the light of the directions given by the Hon’ble Supreme Court in the case of Krishna Sahakari Sakhar Karkhana Limited [2012 (11) TMI 669 - SUPREME COURT]
Government Guarantee Fees - disallowance u/s. 43B - authorities below have held that Government Guarantee Fee is akin to tax, cess or fee and hence, non-payment of same would result in disallowance u/s. 43B - HELD THAT:- In the present case, payments made by the assessees on account of Government Guarantee Fees to the Maharashtra Government are in respect of pre seasonal loans. It is neither emanating from the records, nor the Revenue has brought before us any material to show that the assessee is under obligation to pay Government Guarantee Fee on account of statutory requirement as ‘revenue’ to the State. In the case of Commissioner of Income Tax Vs. Udaipur Distillery Co. Ltd. [2003 (9) TMI 23 - RAJASTHAN HIGH COURT] has held that ‘tax’, ‘duty’, ‘cess’ or ‘fee’ constituting a class, denotes various kinds of imposts by State in its sovereign power of taxation to raise revenue for the State. Within the expression of each specie each expression denotes different kind of impost depending on the purpose for which they are levied - merely levy of charge as tax or fee is not conclusive of its character. It is only if any amount becomes payable by way of tax, duty, cess or fee, it falls within the purview of section 43B - Government Guarantee Fees cannot be put in same bracket as tax, cess or duty and hence, no disallowance u/s. 43B of the Act in respect of non-payment of such fee can be made. Accordingly, this issue is decided in favour of the assessee.
Ceremony Expenses Disallowance - HELD THAT:- Commissioner of Income Tax (Appeals) has allowed 1/4th of the expenditure by following the order of Tribunal in the case of Shivamrut Maryadit vs. DCIT [1998 (12) TMI 120 - ITAT PUNE] and restricted the addition to ₹ 65,627/-. We do not find any infirmity in the findings of Commissioner of Income Tax (Appeals). Accordingly, this issue is dismissed.
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2020 (4) TMI 485
Penalty u/s 271D - Period of limitation - urgency and compulsion to take loan in cash - default u/s 269SS - HELD THAT:- Clause (c) of section 275(1) of the Act provides that no order u/s 271D of the Act shall be passed after expiry of the financial year, in which the proceedings are completed or six months from the end of the month in which the action for imposition of penalty, is initiated. The relevant financial year, is 2016-17 in this case and the relevant month of initiation of penalty, is April, 2016. Therefore, the order passed by the Assessing Officer on 29.11.2016 is very much valid and not time barred.
On merits we find this is a clear case of receipt of cash by the assessee in violation of section 269SS - no justification for accepting loans in cash even through banking channels were available and also utilized by these two lenders. The appellant required money for hospital premises but there were no compelling reasons for accepting the cash as such - appellant is well educated doctor and cannot claim to be ignorant of law in this regard - Decided against assessee.
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2020 (4) TMI 484
Penalty u/s 271(1)(c) - addition invoking provision of Section 50C and Capital Gain was levied - matter was referred to the DVO - revision of belated return seeked - amount was inadvertently shown in unsecured loan - whether assessee cannot be exonerated of its liability by claiming that it had filed an invalid revised return? - HELD THAT:- The assessee has submitted that this was an inadvertent mistake on the part of the Accountant of the assessee which has not been accepted by the authorities below
In the case of CIT vs Fortune Hotels and Estates (P.) Ltd., [2014 (10) TMI 783 - BOMBAY HIGH COURT] had expounded that when in respect of sale of property, matter was referred to DVO to determine sale consideration at a higher amount, that by itself would not amount to furnishing inaccurate particulars of income so as to levy penalty under Section 271(1)(c)
As in the case of Price Waterhouse Coopers (P.) Ltd. vs CIT [2012 (9) TMI 775 - SUPREME COURT] had expounded that an inadvertent error cannot lead to rigours of penalty. Furthermore, a larger bench of the Honourable Court in the case of Hindustan Steel Ltd. vs State of Orissa [1969 (8) TMI 31 - SUPREME COURT] had expounded that when the conduct of the assessee is not contumacious, the authority may not levy the penalty. That technical and venial breach may not lead to levy of penalty.
Conduct of the assessee in this case is not contumacious to warrant levy of penalty and assessee's plea that there was an inadvertent error on the part of the Accountant deserves to be accepted. - Penalty deleted. - Decided in favour of assessee.
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2020 (4) TMI 483
TDS u/s 195 - payments made to non-residents - assessee’s appeal is against not providing sufficient opportunity to rebut the material gathered by the Assessing Officer on the basis of which additions have been made - HELD THAT:- We find that the assessee had taken a specific ground for not providing sufficient opportunity in the form of Ground No.1 in form No.35. CIT has duly reproduced the same. However, while disposing of the appeal, the Ld. CIT(A) has not adjudicated this ground. Ld. CIT(A) has only decided the other grounds. Therefore, we set aside the impugned order being contrary to the principles of natural justice. The Ld. CIT(A) ought to have adjudicated this ground. Therefore, the impugned order deserves to be set aside on this ground alone - Appeal of the assessee is allowed for statistical purposes.
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2020 (4) TMI 482
Disallowance of interest expenses - interest bearing funds were diverted for purchase of a land - Assessee submitted that being the assessee firm’s asset, the same will be utilised for its business and the interest expenses incurred cannot be disallowed - HELD THAT:- For the assessment year 2008-09, an identical issue was considered by the Tribunal in assessee’s own case [2020 (2) TMI 206 - ITAT COCHIN] amounts borrowed have been diverted for purchase of an asset which belongs to the assessee’s firm. Admittedly, the said asset was not put to use even as on date of hearing of this appeal. Therefore, going by the proviso to section 36(1)(iii) interest expenses on capital borrowed for purchase of asset cannot be allowed as deduction - interest expenditure has to be necesssarily capitalised - proviso to section 36(1)(iii) of the Act is applicable during the relevant assessment year, namely 2009-10 and since the asset (land) has not been put to use by the assessee, the interest expenditure for acquiring the same cannot be allowed as a deduction - Decided against assessee.
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2020 (4) TMI 481
Disallowance of deduction u/s 80JJA - assessee has claimed deduction u/s 10JA - AO disallowed the claim holding that employees working in software unit cannot be treated as workmen as envisaged under the Act and deduction u/s 80JJAA cannot be allowed in respect of additional wages paid to be employees who are working in 10A units, by virtue of provisions of section 80A(iv) - HELD THAT:-As per the decision rendered by the co-ordinate bench in the case of Manhattan Associates (India) Development Centre (P.) Ltd [2019 (10) TMI 1192 - ITAT BANGALORE] salary paid to software engineers are eligible for deduction u/s 80JJAA of the Act. Hence the first reasoning given by the AO shall fail. With regard to the second reasoning, as per the submission made by the learned AR, there appears to be some confusion with regard to facts relating to the deduction u/s 80JJAA of the Act claimed by the assessee.
The assessee has also furnished certain additional evidences to substantiate its claim. Under the set of facts, we are of the view that this issue requires fresh examination at the end of the Assessing Officer. Accordingly, we set aside the order passed by the learned CIT(A) on this issue and restore the same to the file of the Assessing Officer for examining it afresh.
Disallowance u/s 14A - HELD THAT:- We find force in the submission made by the learned AR. As per the decision rendered by Delhi Special Bench of the Tribunal in the case of Vireet Investments Ltd [2017 (6) TMI 1124 - ITAT DELHI] only those investments which have yielded exempt income should be considered for computing the average value of investment. In view of the above, we direct the A.O. to re-compute the disallowance u/s 14A of the Act by excluding the investments made in foreign subsidiaries while computing average value of investments.
Disallowance of Provision made by valuing derivatives at the year end, i.e, marked to market rate of valuation of derivatives - AO by following the CBDT Circular No.3/2010 dated 23.03.2010, disallowed the claim of the assessee by holding that the loss arising on account of revaluation of foreign exchange derivatives on marked to market basis is a notional loss - CIT(A) also confirmed the same - HELD THAT:- When a specific query was put to the learned AR as to whether the assessee has revalued all foreign exchange derivatives, trade receivables and trade payables in respect of import and export activities, the learned AR submitted that the matter may be restored to the file of the Assessing Officer for examining the claim of the assessee afresh. It is pertinent to mention here that the assessee should have valued all trade payables and trade receivables and foreign exchange forward contract entered in foreign currencies, which are outstanding as at the year end, in order to avail the claim of deduction of net amount of loss, in any, arising on account of marked to market valuation of those items at the year end. Since this aspect has not been examined by the Assessing Officer, we deem it appropriate to restore the same to the file of the Assessing Officer for examining it afresh. The order of Ld CIT(A) passed on this issue is accordingly set aside.
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