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Showing 441 to 460 of 1750 Records
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2018 (1) TMI 1313
Confiscation of goods - detention under Section 129 of the CGST and SGST Acts - "taxable supply" - case of petitioner is that the documents that accompanied the goods was absence of Form KER-1 declaration and that since Form KER-1 declaration was uploaded and made available to the first respondent immediately on receipt of notice, there is no justification for the continued detention of the goods - Held that: - A combined reading of Sections 129 and 130, especially the provision contained in sub section (6) of Section 129 indicates that the detention of the goods is contemplated under the statutes only when it is suspected that the goods are liable to confiscation. This aspect is seen clarified by the Central Board of Excise and Customs in the FAQs published by them on 31.3.2017 also. Section 130 dealing with the confiscation of goods indicates beyond doubt that the confiscation of goods is contemplated under the statutes only when a taxable supply is made otherwise than in accordance with the provisions contained in the statutes and the Rules made there under with the intent to evade payment of tax. If that be so, mere infraction of the procedural Rules like Rules 55 and 138 of the State GST Rules cannot result in detention of goods, though they may result in imposition of penalty.
The detention of goods merely for infraction of the procedural Rules in transactions which do not amount to taxable supply, is without jurisdiction.
Petition allowed.
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2018 (1) TMI 1312
Reopening of assessment - ‘reasons to believe’ - Held that:- Issue notice on the application for condonation of delay as well as on the special leave petition. There shall be stay of operation of the impugned judgment [2017 (1) TMI 1528 - DELHI HIGH COURT].
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2018 (1) TMI 1311
Penalty levied u/s 271(1)(c) - claim of deduction u/s 10B - Held that:- Commissioner (Appeals) has categorically found that there was no concealment of facts by the assessee, to which the Tribunal has concurred. The assessee made a bonafide claim which was not accepted by the revenue. Therefore, in the absence of any concealment, merely because the assessee had made a claim under section 10B of the Act, the same would not attract penalty under section 271(1) (c) of the Act. Therefore, no infirmity can be found in the impugned order passed by the Tribunal in upholding the deletion of penalty under section 271(1)(c) of the Act. - Decided in favour of assessee
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2018 (1) TMI 1310
Penalty u/s 271(1)(c) - immunity under section 271AAA - Held that:- In the present case, the assessee has admitted the undisclosed income in the statement given under subsection (4) of section 132. AO made the assessment on the basis of disclosure made by the partners of the assessee firm in their statements under section 132(4) and no further addition has been made in the assessment order. He has also provided all the details to that effect, and has offered an income of ₹ 3 crores. It was clearly explained in the statement dated 31.03.2011. No specific question was asked as regards the manner of earning the undisclosed income or substantiation thereof by the Assessing Officer. The assessee has also paid taxes as well as interest. Thus, the contention of the revenue that the assessee has not substantiated the manner in which the undisclosed income is derived, does not merit acceptance. No evidence was found which would suggest that the assessee had earned the undisclosed income from any other source instead of projects
Conditions mentioned in section 271AAA(2) of the Act for granting immunity from the penalty are satisfied in the present case as the assessee in his statement under section 132(4) of the Act has made a disclosure of unaccounted income; the manner in which the same was earned was also clearly stated and the taxes were also paid. It is pertinent to note that the revenue did not raise any ground before the Tribunal challenging correctness of the Commissioner (Appeals') order converting the penalty from section 271(1)(c) to section 271AAA of the Act. - Decided against revenue
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2018 (1) TMI 1309
Addition made on account of capitalization of revenue expenses - ITAT deleted the addition - Held that:- Both the Tribunal and the Commissioner (Appeals) have recorded concurrent findings of facts to the effect that the dies and tools as well as the machinery spares were consumable in nature and have accordingly held the expenditure to be revenue in nature. The fact that in earlier years such expenditure had been treated as revenue expenditure by the revenue has also been taken into consideration.
Having regard to the concurrent finding of facts recorded by the Commissioner (Appeals) and the Tribunal, it cannot be said that the conclusion arrived at by the Tribunal that the expenditure incurred on dies and tools and machinery spares was revenue in nature, suffers from any legal infirmity so as to give rise to any question of law, much less, a substantial question of law warranting interference.
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2018 (1) TMI 1308
Disallowance of Bad Debts - treatment as business loss - Held that:- The assessee had initially received an amount of ₹ 70,00,000/from M/s. Maharishi Traders, which was duly reflected in the books of account. Subsequently, in view of the verdict of the court the assessee was required to pay an amount of ₹ 70,00,000/to M/s. Maharishi Traders. Thus, the assessee was required to pay such amount to M/s. Maharishi Traders in relation to a business dispute. The assessee had regular transactions with the said party. Moreover, it is not disputed that the assessee had shown ₹ 81,49,803/as part of the gross revenue for assessment year 2004-05. The Commissioner (Appeals) was, therefore, wholly justified in holding that since the assessee was required to pay such amount in relation to a business transaction pursuant to the court order, the same was required to be treated as business loss and business expenditure and required to be allowed.
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2018 (1) TMI 1307
Computation of capital gain - Tribunal accepting the cost Inflation Index taken by the assessee of the year in which the father of the assessee became the owner - property in question was transferred in favour of assessee after the death of his father through inheritance - Cost with reference to certain modes of acquisition - Held that:- The provisions of subsection (1) of section 49 of the Act would be squarely attracted and the cost of acquisition of the asset shall be deemed to be the cost for which the previous owner of the property acquired it. The material on record reveals that the property in question was acquired by the father of the assessee in the year 1945.
In view of the provisions of subsection (1) of section 49 of the Act read with the Explanation thereto, since the capital asset has become the property of the assessee under a will, the cost of acquisition is deemed to be the cost for which the previous owner, namely the assessee’s father, acquired it. The record of the case shows that the property was acquired by the father of the assessee in the year 1945. Therefore, in view of the provisions of clause (iii) to the Explanation to section 48 of the Act, the indexed cost of acquisition is required to be computed by considering the cost of acquisition for the year beginning on the 1st day of April, 1981.
In the light of the above discussion, it is amply clear that the view adopted by the Tribunal is in consonance with the above statutory provisions.
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2018 (1) TMI 1306
Reopening of assessment - Held that:- The findings recorded by the Commissioner (Appeals) indicate that during the course of the original assessment, the Assessing Officer had examined the same issue in respect of which assessment is sought to be reopened and after hearing the assessee, had not made any addition. Under the circumstances, it is apparent that the Assessing Officer, at the relevant time, during the course of scrutiny assessment had formed an opinion in respect of the ground on which the assessment is sought to be reopened. The reopening of assessment, therefore, is clearly based upon a mere change of opinion, which is not permissible in law. Tribunal did not commit any error in upholding the order passed by the Commissioner (Appeals) in setting aside the reopening of the assessment.
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2018 (1) TMI 1305
Depreciation claim of assessee trust - double deduction - Held that:- Supreme Court in Commissioner of Income Tax Vs. Rajasthan and Gujarati Charitable Foundation Poona [2017 (12) TMI 1067 - SUPREME COURT] has upheld the decision of this Court in Institute of Banking Personnel Selection [2003 (7) TMI 52 - BOMBAY High Court] and negatived the contention of the Revenue that by granting benefit of depreciation, the assessee would be availing double benefit for the period prior to Assessment Year 2015-16. - Decided in favour of assessee.
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2018 (1) TMI 1304
Eligibility for deduction u/s 10A - income directly related to the export business of the assessee - Held that:- The assessee was liable to receive the benefit of deduction under Section 10A of the Income Tax Act.
The Tribunal has recorded clear findings that no part of the income was used in the local area and that the jewellery made from the wastage was also exported ultimately.
Such being the facts and circumstances of the case, we are of the view that the Tribunal has committed no error in granting the benefit of exemption under Section 10A of the Act to the assessee. We uphold the order of the Tribunal.
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2018 (1) TMI 1303
Disallowing claim u/s 54F - the property on which the assessee claimed to have constructed house is owned by the mother of the assessee and not by the assessee - Held that:- As regards the property is owned by the mother of the assessee we are of the view that if the assessee has constructed a new on the plot of land which is owned by the mother of the assessee then, the investment made by the assessee in construction of new house is eligible for deduction u/s 54F. A residential house is not a personal effects but it is meant for residential purpose of the family. Therefore, the investment made by the assessee for purchase or construction of house even in the name of the mother is eligible for deduction u/s 54F as held in case of CIT vs. Kamal Wahal (2013 (1) TMI 401 - DELHI HIGH COURT). Thus merely because the new house is constructed on a plot of land owned by the mother of the assessee will not disentitle the assesee for claim of deduction u/s 54F
Whether it is a construction of new house after demolition of the existing house or it is only a renovation work carried out by the assessee ? - Held that:- To ascertain whether the assessee has constructed a new house or only renovated the existing house a proper investigation and enquiry is required to be conducted by physical verification of the property as well as the experts opinion may also be taken in this respect because the alleged demolition and reconstruction is without any permission from the Municipal Corporation.In the absence of sanctioned site plan or completion certificate the evidence produce by the assessee cannot be considered as conclusive proof to establish the nature of construction carried out by the assessee at the property in question. According, in the facts and circumstances of the case, we set aside this issue to the record of the Assessing officer for proper verification and investigation - Decided partly in favour of assessee.
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2018 (1) TMI 1302
Arm’s length price adjustment - applicability of transfer pricing provisions - termination of call options under the Framework Agreement 2007 - Held that:- The conditions precedent for invoking section 92B(1) are satisfied inasmuch as, with legally enforceable rights or not, foreign AEs, namely VIH-BV and HTIL-M are part of the arrangements and action in concert, and the transaction has a bearing on the profits of the assessee.
The present transaction before us is that of not only termination of options, but also, as we have seen in our analysis earlier, transfer of the shareholdings in SMMS Investments to of an Indian subsidiary of VIH-BV at a fraction of its market worth, and this arrangement involves an agreement between not only between Indian entities but also foreign AEs of the assessee, i.e. HTIL-M and VIH-BV.
It is really strange that an assessee, which makes these submissions before Hon’ble Bombay High Court, now contends that the arrangements for framework agreement donot involve the foreign AEs. The fact and evidence about the terms of arrangements of this transaction being decided, in substance, by the foreign AEs is something which is in exclusive knowledge domain of the assessee and its group entities and when the assessee decide not to share it and the circumstances are such that the terms of the transactions are established to not at all justified by the known commercial considerations of the assessee, the assessee cannot blame the revenue authorities for not brining on record the evidence of the terms of arrangement being decided by the foreign AE. In these peculiar facts, which are very unsusal facts by any standards, even in the absence of such an evidence, the terms of arrangements being decided by the foreign AE can be reasonably accepted. In view of these discussions, the arrangement, understanding and action in concert, with respect to framework agreement and termination thereof, is an international transaction under section 92B(2) as well. In other words, while foreign AE and parent company of the assessee is not only a party to the agreement but the terms of the agreement, in substance, are being decided by the foreign AE.
The arguments of the assessee proceed on the basis that there is a need of clearly conclusive evidence to the effect that the assessee and the AEs has acted in concert, but, as is the well settled legal position- discussed earlier in this order, it is not required to be established, with conclusive evidence, that the assessee and the foreign AE has acted in concert; all that is necessary is that the circumstances are such that human experience tells us that it can safely be taken that they must be acting together. In view of these discussions, as also bearing in mind entirety of the case, we see no legally sustainable merits in the aforesaid stand of the assessee.
Even if a transaction does not report or show any income but application of arm’s length prices are to result in an income, the conditions of Section 92(1) will be satisfied. Learned counsel, however, is interpreting the press release as a statute and is seeking a literal implementation of the words in the press release. Such a pedantic and literalistic approach cannot meet our approval. The words used in the press release are not the words of the statute; these are the words of the laymen which are required to be given contextual meaning. In any case, we are unable to read the press release as implying that when there is no income chargeable to tax is reported, the arm’s length standards can not be applied. As long as an income, within the meanings of section 2(24), can arise from an international transaction, the arm’s length standards are to be applied in computation of an income. We, therefore, see no legally sustainable merits in this plea as well.
Capital asset - right to nominate an assignee under framework options - Held that:- The right to nominate an assignee under framework options meets the tests laid down in Explanation to Section 2(14).6. In case we are to accept the contentions of the learned counsel, Explanation to Section 2(14) will have to be treated as otiose because if the an asset meets the description of ‘property’ without taking into the impact of Explanation to Section 2(14), there is obviously no need to look at the Explanation. In our humble understanding, Explanation to Section 2(14) should be read as enlarging the scope of expression ‘property’ in the main definition clause, and, when such is the position, whether or not the asset in question is a ‘property’ as per meanings in main provision of Section 2(14), as long as it meets the test laid down in Explanation to Section 2(14), it is to be treated as a ‘Capital Asset’ nevertheless. Thus the right to nominate the assignee of the option rights, which was exercised by the assessee during the relevant previous year, was a capital asset.
Whether there was any transfer of capital asset in the relevant previous year? - Held that:- As the assessee had exercised the right of nomination, which could have been done only once, the right of nomination came to end, and was thus, in terms of Explanation 2 to Section 2(47), this was covered by the definition of ‘transfer’.
Whether, even if there is a capital asset and it was transferred, such a capital asset had any cost of acquisition? - Held that:- Cost of acquisition in this case is clearly identifiable and, therefore, the provisions for computations of capital gain are workable. The law laid down by Hon’ble Supreme Court in the case of B C Srinivas Shetty (1981 (2) TMI 1 - SUPREME Court) does not come to the rescue of the assessee.
Whether there is no consideration for the transfer and, for this reason, the computation of capital gains in not possible? - Held that:- while the income is question is indeed of the nature which can may, in certain circumstances, can be taxable under the head ‘profits and gains from business and profession’, given the facts and circumstances of the present case, it is required to be taxed as capital gains.
Error in attributing 3.15% stake of SMMS indirectly held in VIL, through Omega, overlooking that CGP held 79.98% stake in SMMS, through TII, and, as a corollary held 2.52% in VIL, through TII via SMMS/Omega, with the balance controlled by Analjit Singh Group, which again, in an error that DRP failed to rectify - Held that:- The question that is relevant for finding out the ALP of consideration is as to what is really transferred, and undisputedly that is 100% equity shares in SMMS Investment which entitles the assignee to control 3.15% shareholding in VEL. What the assignee actually does with what he gets does not affect the consideration. In any event, sufficient specific details and complete facts were not placed on record at any stage, and even before us. In the absence of specific details in support of this plea and in view of the fact that the nomination was in respect of entire equity in SMMS Investments, we reject this plea as well.
Accepting the assignment of cashless options to Vodafone as a comparable case since this event took place more than three years ago, and, since, going by the stand of the revenue, it was an intra AE transaction anyway - Held that:- how liberal an adjustment is made for indirect holding, in any event, the ALP of nomination to buy the entire equity of SMMS Investments, which held 3.15% shareholding in VEL, for a consideration of ₹ 2 crores plus interest, this ALP will be far more than 1,588.85 crores. Since this Tribunal has no powers of enhancement, even if we discard the comparable as adopted (i.e. assignment of rights by IDFC to acquires 0.1234% shareholding in VEL for ₹ 50 crores), the assessee does not derive any advantage. The plea raised by the assessee is thus wholly academic and does not deserve any adjudication by us at this stage. As for issues raised by the learned counsel with respect to dissimilarities between the nomination rights exercised by the assessee and the transactions compared with, all we can say is that even if the comparable transaction is not a mirror image of the international transaction in question, it does not cease to be relevant in determination of ALP as long as, in substance, and in effect, things are comparable- though, depending upon the facts of the case, adjustments will be justified. - Decided against assessee
Denying depreciation on goodwill on account of its amortization - Held that:- Goodwill in question forms an intangible asset u/s.32(1)(ii) of the Act or not to be entitled for depreciation relief is no more res integra as hon’ble apex court’s land mark judgment in Smiffs Securities Ltd. case [2012 (8) TMI 713 - SUPREME COURT]. We see no substance in the instant argument since there is no change so far as all facts pertinent to this issue vis-a-vis those involved in preceding assessment years are concerned. The authorities below have already adopted the very reasoning as in said earlier years to reject assessee’s instant claim. It is not clear as to what is the fate of these assessment years before this Tribunal. Learned counsel at this stage submits that assessee’s appeal for the said earlier assessment year 2011-12 is pending but the position of the earlier years is not clear. In any event, there is no independent adjudication on this issue by the Assessing Officer. In view of these discussions, in our considered view, the matter is required to be remitted to the file of the Assessing Officer for adjudication de novo
Invoking Section 14A r.w. Rule 8D disallowance - Held that:- The lower authorities fail to dispel assessee’s basic plea of having not derived any exempt income in the impugned assessment year. Hon’ble jurisdictional high court’s recent judgment in CIT Vs Corrtech Energy (P) Ltd. [2014 (3) TMI 856 - GUJARAT HIGH COURT] holds that such a disallowance under section 14(A) is not sustainable in absence of any exempt income having been derived in the relevant previous year
Disallowing club membership expenditure - Held that:- We find from assessment order that the assessee itself had clarified to have paid subscription fee regarding Puna Club for seven years in the nature of entrance fee etc. This has made the Assessing Officer to accept its case qua the corresponding 1/7th extent coming to ₹ 3,97,080/- only thereby disallowing the remaining amount of ₹ 23,82,480/-. Learned counsel fails to dispute that the assessee had not filed the relevant details qua a similar time duration relating to latter Karnavati Club. We therefore reject assessee’s arguments qua former club payment issue after concluding that the authorities below have rightly followed matching concept in accepting the impugned expenditure pertaining to the relevant assessment year. Coming to latter club, we direct the AO to verify the relevant facts as to whether the impugned membership expenditure has been incurred for the relevant previous year in entirety or not
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2018 (1) TMI 1301
Brought forward business loss to be set off with the income of current year - power of the Income Tax Appellate Tribunal u/s 254 - Held that:- As from the assessment order for the assessment year 2009-10 framed in the hands of the assessee u/s 143(3) of the Act dated 22.12.2011 wherein the Ld. AO categorically had mentioned the business loss as being eligible to be carried forward for future adjustment. Hence, it is very clear that the assessee has got assessed business loss of assessment year 2009-10 which is eligible to be set off against future business income in accordance with provision of section 72 of the Act. Even though the assessee has not made this claim either in its original return of income or in the revised return of income, it is incumbent on the part of the Ld. CIT(A) to direct the Ld. AO to consider the legitimate claim of set off of brought forward business loss so as to determine the true and correct income of the assessee.
The appellate authority could entertain fresh claim made by the assessee even though the same had not been made by way of a valid return. Accordingly, we hold that the Ld. CIT(A) ought to have considered the legitimate claim of set off of brought forward loss of assessment year 2009-10
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2018 (1) TMI 1300
Reopening of assessment - treating the LTCG as bogus - Held that:- As we have already seen that the assessment was reopened for the reason that the jewellery purchased by the Assessee was from undisclosed sources and the purchases were bogus. That addition has not been sustained now. The Assessing Officer however, proceeded to make an addition on account of Long Term Capital Gain (LTCG) on sale of shares. This was clearly beyond the scope of the proceedings under section 148 of the Act. The Assessing Officer, therefore, could not have proceeded to make the impugned addition of bogus LTCG. See CIT vs. Jet Airways India Ltd [2010 (4) TMI 431 - HIGH COURT OF BOMBAY]
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2018 (1) TMI 1299
Addition u/s. 14A r.w.r. 8D - Held that:- We find that while invoking the provisions of Rule 8D(2)(iii)the AO had not considered the details of the expenses, that he had not established nexus between the exempt income and the expenditure incurred for earning the said income. After considering the details of Schedule 19, we are of the opinion that the expenditure incurred by the assessee during the year was not related to earning of tax free income. Provisions of section 14A can be invoked only when some expenditure is claimed against the exempt income. As in the case under consideration the AO /FAA had not specified the items of expensed incurred for earning exempt income, so, we are able to persuade ourselves to endorse the views of the FAA - Decided in favour of assessee.
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2018 (1) TMI 1298
Remission of principal amount of loan obtained from financial institutions and banks - whether constitutes a benefit or perquisite arising from business and would fall within the ambit of Section 28(iv)? - Held that:- Even otherwise the loan which was taken was capital investment and always treated in the capital account as liability and if it is so, it will naturally go as wiping out the capital liability. See Modern Denim Limited Vs. Asstt. Commissioner of IT Jaipur [2017 (4) TMI 1287 - RAJASTHAN HIGH COURT]
In that view of the matter, the contention taken by the appellant is required to be accepted. The view taken by the CIT(A) is required to be restored and that of the tribunal is required to be reversed.In view of the above, the issue is answered in favour of the assessee and against the department.
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2018 (1) TMI 1297
Addition treating income of the assessee received from Vodafone Essar South Ltd. - Held that:- The full address of the retailers had been furnished before the AO. In the given circumstances we are of the view that there was no basis for the CIT(A) to conclude that the assessee has not explained as to how the sum in question is payable to the retainers. It is clear from material on record that the sum as reflected in the TDS certificate given by Vodafone was not the assessee’s income or money on which the assessee had any title except to the extent of ₹ 94,381/- which was reimbursement of van charges. The sum reflected in the TDS certificate cannot therefore be treated as assessee’s income. The fact that the money payable to the retailers and runners is outstanding in the balance sheet cannot be a ground to hold that the sum reflected in the TDS certificate is income of the assessee.
On the question of credit for TDS the assessee has reflected a sum of ₹ 94,381/- in the total income declared for the relevant assessment year and to this extent is entitled to credit. As far as the remaining sum is concerned since the sum in question is not the income of the assessee and further it has not been offered to tax in the relevant assessment year the assessee cannot claim credit for TDS. To this extent the action of the revenue authorities have to be held as proper. Therefore delete the addition
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2018 (1) TMI 1296
Disallowance u/s. 43B(d) on account of payment to LIC - Held that:- We find that the Tribunal had directed the assessee to file details of interest payment to decide the issue. But till the passing of this order, the assessee has not filed any detail that could prove that the stand taken by the AO was factually incorrect. We do not know how the FAA arrived at the conclusion, that the payment made by the assessee under the head interest expenditure was relatable to loans and not about the restructured loans. We agree with the argument of DR that the order of the FAA was non-speaking and very cryptic. We are unaware of the reasons as to why the assessee did not file details of interest payments to prove his case. Therefore, in our opinion the matter should be investigated and verified further.
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2018 (1) TMI 1295
Revision u/s 263 - Correctness in passing the order under section 143(3)- assessee not deducted TDS u/s 194A on the payments made to the eight payees on account of filing of Forms No. 15G/15H before the ld. Pr. Commissioner on 07/04/2012 - Held that:- Once, assessee has filed Forms No. 15H/15G from the payees before the Pr.Commissioner and the Assessing Officer by considering the same, assessment is completed, therefore, in our opinion, the order passed by AO is neither erroneous nor prejudicial to the interest of the revenue. It is not a fit case to exercise powers under section 263 of the Act. - Decided in favour of assessee.
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2018 (1) TMI 1294
Penalty u/s 271D - violation of conditions of section 269SS - taking unsecured loan in cash - Held that:- As rightly observed by the CIT(A), that during the appellate proceedings, the assessee filed copies of the drafts by which the payments were made. These drafts were available with the Assessing Officer and Additional Commissioner, the total amount paid through draft was at ₹ 26 lakhs.
Regarding the balance amount of ₹ 3 lakhs, the assessee had shown them to be payments through two cheques with Nos. 390102 drawn against lndian Overseas bank for ₹ 1. 50 lakh and 390102 drawn on lndian Overseas Bank for an amount of ₹ 1. 50 lakh both dated 1. 6. 2006 in the name of Khairun Begum and Narmada Devi respectively.
As regards, the other cheques payments, the assessee produced the relevant bank accounts. We find that there is nothing on record to show that any cash payments were actually made by any of the payers. The assessee has also filed the sale deeds in which the names of the sellers have been reflected. These transactions relate to before incorporation of the assessee company therefore the assessee company is not liable based on the factual position narrated above. There does not seem to be any reason for invoking the provisions of section 269SS either on the fact of the mode of such conveyance or on the legality of holding the assessee company responsible for acts committed before its incorporation. We quash the penalty order u/s 271D - Decided in favour of assessee.
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