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Showing 441 to 460 of 2041 Records
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2017 (9) TMI 1604
Addition u/s 68 - Proof of genuineness of creditors - Held that:- The assessee has submitted all the evidences including the confirmation of the creditors. This is not a case where the creditors have not given confirmations rather they have duly confirmed to giving loan to the assessee, the loans were received and returned through banking channels. The assessee has also submitted copies of bank accounts. The lender has not deposited cash into bank account. The assessee has duly discharged the onus with regard to identity of the lender, credit worthiness of the party and all supporting evidences as required u/s. 68 of the I.T.Act. Also see M/s. Komal Agrotech P. Ltd. Versus ITO [2017 (7) TMI 605 - ITAT HYDERABAD] - Decided in favour of assessee.
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2017 (9) TMI 1603
Valuation - rejection of declared value - case of Revenue is that the invoices recovered by the officers of DRI during investigation with reference to another importer is for similar goods and hence original authority validly relied on the same and by invoking Rule 8 of the Valuation Rules redetermined the assessable value - Held that: - There should be reason to hold that the invoices filed with the Bill of Entry is not bonafide reflecting the true transaction value. Thereafter, evidence to the effect that the value of comparable goods can be considered under Rule 8 on satisfactory fulfillment of various criteria like similarity of goods, similarity of transaction level, period etc. None of these issues were discussed at length in the present order - appeal allowed - decided in favor of appellant.
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2017 (9) TMI 1602
TPA - selection of comparable - selection criteria - Held that:- Referring to software development and quality analysis services undertaken by Mentor India for Mentor Group as an independent contractor the companies functionally dissimilar with that of assessee need to be deselected from final list of comparable.
Inclusion of communication charges in the gross turnover for the purpose of calculating the deduction u/s 10A - Held that:- As decided in assessee's own case we are inclined to accept the plea of the assessee that communication charges need to be excluded both from the export turnover as well as from the total turnover for the purpose of computing exemption u/s 10A and we direct the TPO/AO to recalculate the exemption by excluding the amount of impugned communication charges from both the total turnover as well as export turnover.
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2017 (9) TMI 1601
Disallowance of depreciation to assessee rust - Held that:- Respectfully following the judgment of the hon'ble jurisdictional High Court in the case of Al-Ameen Charitable Fund Trust (2016 (3) TMI 462 - KARNATAKA HIGH COURT ), we do not find any error or illegality requiring our interference in the impugned order of the learned Commissioner of Income-tax (Appeals), in allowing the assessee's claim for depreciation.
It cannot be held that double benefit is given in allowing claim for depreciation for computing income for purposes of section 11. The questions proposed have, thus, to be answered against the Revenue and in favour of the assessee.
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2017 (9) TMI 1600
Payment of cess on green leaf - whether production of green leaf which is 100% agricultural activity and not an admissible deduction under income chargeable ? - Held that:- We find that the issue under dispute is squarely covered by the decision of the Hon'ble Supreme Court in favour of the assessee in the case of CIT vs. APEEJAY Tea Co. Ltd. [2015 (8) TMI 1260 - SUPREME COURT] as held Expenditure on cess should be allowed as a deduction before computing the composite income under Rule 8 and the apportionment is to be made after the income is so computed.
Disallowance of depreciation on assets acquiring with NABARD fund - Held that:- As relying on decision of assessee’s own case we find force in the arguments made by the learned Counsel on behalf of the respondent assessee and we very much appreciate the conclusion arrived at by the Ld. CIT(A) while deleting the addition. Going through the provisions of law and appreciating the Scheme of NABARD the Ld. CIT(A) has rightly allowed the depreciation on the assets purchased from out of withdrawal of NABARD fund. We, therefore, uphold the order of the Ld. CIT(A) and dismiss the Revenue’s appeal
Disallowance of loss incurred on instant tea - CIT(A) allowing the loss incurred on instant tea export to be set off from the business income as arrived at after application of Rule 8 - assessee had only sought for rectification of a particular claim vide its letter dated 21.12.2005 before finalization of computing of total income of the assessee - Held that:- In the instant case, the time limit for filing revised return u/s 139(5) of the Act had already expired and in view of fact the assessee is only seeking to rectify the particular claim already made in the return, there is no need to make such a claim only by way of revised return. It is enough if the same is made by way of a letter filed duly before the Ld. AO.
We find that the assessee had brought to the attention of the Ld. AO vide its letter dated 21.12.2005 seeking for rectification of aforesaid mistakes committed by it in the return. This is evident from the copy of the said letter dated 21.12.2005 which is placed on record before us. We find that the Ld. AO had considered the other mistakes pointed out by the assessee while completing the assessment, but had omitted to consider the rectification pleaded on account of loss on instant tea amounting to ₹ 55,85,622/- alone. No infirmity in the direction given by the Ld. CIT(A) to the ld. AO to consider the instant tea loss of ₹ 55,85,622/- to the computation of composite income and correspondingly exclude the same from the business income computing after application of Rule 8(1) of the Rules
Revenue appeal dismissed.
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2017 (9) TMI 1599
Assumption of jurisdiction u/s 153A - no search action has been carried out on the assessee - Held that:- It is clear from the perusal of the provisions of section 153A that notice u/s 153A can only be issued where a search is initiated u/s 132 of the Act or books of account or other documents other documents are requisitioned under section 132A after the 31st day of May, 2003. Thus the AO has power to issue notice to such person requiring him to furnish return of income in respect of each assessment year falling within six assessment years falling immediately preceding assessments relevant to the previous year in which the search is conduced or requisition is made.
Therefore, it is clear that for the purpose of assumption and exercise of powers u/s 153A of the Act in case of a person, the initiation of search in terms of section 132 of the Act or 132A of the Act on the said persons is mandatory and therefore whether there is no initiation of search as contemplated u/s 132 of the Act , the fundamental conditions for issuance of notice u/s 153A is not fulfilled. Thus, the person in respect of whom the search is initiated u/s 132 of the Act is the same persons against whom the notice is to be issued u/s 153A of the Act. In view of this legal position , we are of the considered view that since no search has been initiated u/s 132 of th4e Act in the case of assessee ,therefore notice issued u/s 153A of the Act is without jurisdiction and the consequent assessment so framed u/s 143(3) r.w.s 153Á of the Act was also void ab-initio - Decided in favour of assessee.
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2017 (9) TMI 1598
Weighted deduction u/s 35(2AB) - Held that:- We find that the certificate is issued by the prescribed authority i.e. the Secretary to the Govt. of India, Ministry of Science & Technology, Department of Scientific Research and Industrial Research (DSIR), New Delhi. The prescribed authority has approved the expenses claimed by the assessee u/s 35(2AB) of the Act. However, only for the limited purpose of verifying the authenticity of the said documents so produced by the assessee, this issue is set aside to the file of the AO. Ground No.2 is thus treated as allowed for statistical purposes.
Disallowance of derivate loss - whether the loss claimed by assessee is only a notional loss and such notional liability would be contingent in nature which is not allowable under any of the provisions of the Act? - Held that:- The loss which is incurred on account of forward contract to sell currency at an agreed price at a future date falling beyond the last date of accounting period is a loss incurred by the assessee on account of the valuation of the contract on the last date of the accounting period and before the date of the maturity of the forward contract and hence is not a contingent liability but an accrued liability and is allowable as an expenditure. We find that the facts of the case before us are similar to the facts of the case before the Special Bench in the case of Bank of Bahrain and Kuwait (2010 (8) TMI 578 - ITAT, MUMBAI).
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2017 (9) TMI 1597
Treating loan as gift u/s. 56 (2)(vi) - Held that:- We find that the assessee had claimed to have received a loan of ₹ 70 lakhs from NTK, that the AO had rejected the claim made by her, that he had recorded the statements of assessee and the creditor, that he held that the amount in question was to be taxed as per provisions of section 56(2)(vi) of the Act, that the FAA has passed a very cryptic and non speaking order. We find that at para 5. 3. 10. 1 to 5. 3. 10. 6 he had simply copied the order of the AO. He had not given any reasons as to why he was not convinced by the submissions made during the appellate proceedings.
In our opinion being FAA, the CIT(A) should pass a reasoned and speaking order. The size of the order may not be of material importance, but what is important is reasoning for accepting/rejecting the arguments/submissions of the AO/assessee. It is right of AO as well as assessee to get a reasoned and speaking order. Considering the facts and circumstances of the case, we are of the opinion that in the interest of justice matter should be sent back to the file of FAA and he is directed to pass a reasoned and speaking order after considering the submissions of the assessee and case laws relied upon by the assessee. Effective Ground of appeal , raised by the assessee is allowed her favour in part.
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2017 (9) TMI 1596
Excess cash found during the course of survey - excess stock found during the course of survey - Held that:- In the present case, the assessee had surrendered ₹ 58,00,000 on account of shortage of stock which was claimed to have been sold outside the books of account and the value the inventory relating to work-in-progress weighing 43,803 kg. worked out at ₹ 49,06,000. In the present case, the total value of the sales outside the books of account and the work-in-progress found during the course of search come to ₹ 1,07,06,000 (Rs. 49,06,000 + 58,00,000) which the assessee had already disclosed in its profit and loss accounts from April 1, 2008 to March 16, 2009 i.e., date on which the survey was conducted. In that view of the matter, we arc of the view that no addition was required to be made except the surrendered amount which has already been disclosed by the assessee at ₹ 58,00,000. Therefore, the addition of ₹ 7,18,000 on account of cash found during the course of survey and of ₹ 74,82,000 on account of alleged excess stock was not justified because there was no excess stock rather the stock was short. Accordingly, both those additions are deleted. Appeal of the assessee is allowed.
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2017 (9) TMI 1595
Nature of expenditure - whether the expenditure on ESOP is allowable or not? - Held that:- This issue was decided in favour of assessee-company by the Special Bench of Bangalore Tribunal in the case of M/s. Biocon Ltd. [2013 (8) TMI 629 - ITAT BANGALORE] as held that there is no difference between a case where the company issues shares to the public at market price and pays a part of the premium to the employees for their services and another where the shares are directly issued to employees at a reduced rate. In both situations, the employees stand compensated for their effort. By undertaking to issue shares at a discount, the company does not pay anything to its employees but incurs the obligation of issuing shares at a discounted price at a future date. This is nothing but "expenditure" u/s 37(1). - Decided in favour of assessee
Disallowance of provision for standard and non-performing assets - Held that:- The issue in the present ground of appeal is squarely covered by the Hon'ble Apex Court in the case of Southern Technologies Ltd., Vs. JCIT [2010 (1) TMI 5 - SUPREME COURT OF INDIA] wherein it was held that the provision on non-performing assets and debited to P&L A/c in terms of the guidelines of the RBI governing the income recognition cannot be allowed to be deductible expenditure either u/s. 36(1)(vii) or (viia) and it was further held that the guidelines of RBI does not override the provisions of Income Tax Act, 1961. Also the Hon’ble Delhi High Court in the case of Housing & Urban Development Corporation Ltd. vs. Addl. CIT (2017 (7) TMI 144 - DELHI HIGH COURT) observed that based on guidelines issued by the Reserve Bank of India governing recognition of income, no deduction can be claimed. - Decided against assessee
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2017 (9) TMI 1594
Treatment to expenses claimed on crockery, cutlery, utensils, etc. - capital v/s revenue expenses - AO treating the expenses to be capital in nature on the premise that they were incurred in respect of a ‘resort launched for the first time’ - Held that:- By the impugned order of the ITAT, the Assessee’s appeal was allowed and the Revenue’s appeal was dismissed. The Court is not persuaded by the learned counsel for the Revenue that the above concurrent factual finding of the CIT (A) and the ITAT is perverse. No substantial question of law arises as regards the said issue. The entire expenditure incurred on crockery, cutlery, utensils, etc. should be treated as revenue expenditure.
Addition on the basis of certain documents retrieved from the hard disc of the computer impounded during survey proceedings - Held that:- CIT (A) has in the order discussed in detail the reconciliation statement, which was prepared twice – once during the proceedings before the CIT (A). No discrepancy was found in the balance sheet and profit and loss account. This finding again has been concurred with by the ITAT in the impugned order. Revenue has been unable to persuade the Court that the concurrent factual finding is perverse.
Revenue appeal dismissed.
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2017 (9) TMI 1593
Additions made under Section 153C - tangible material of incriminating nature found in search - Revenue submitted that although the amendment to Section 153C bringing on par the period for which the assessments could be reopened in the case of both the searched person and the ‘other person’, was effective from 1st April 2017 it should be viewed as clarificatory and therefore applicable even to the case on hand
Held that:- It is seen that as far as AY 2010-11, in terms of Section 153 C, the assessment had to be completed by 31st December 2012. Even the satisfaction note was prepared only on 8th August 2013.
The Court is unable to agree with the revenue's submission. It is plain that the amendment to section 153 C of the Act is prospective. In the present case the assessment for AY 2010-11 had abated by the time the satisfaction note was prepared by the AO of the Assessee. The said assessment could not be reopened in the absence of tangible material of incriminating nature relevant for that AY being found. On facts it has been found that there was no tangible material of incriminating nature for the AY in question that could justify the addition made by the AO. See CIT v. RRJ Securities Limited (2015 (11) TMI 19 - DELHI HIGH COURT) - Decided in favour of the Assessee
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2017 (9) TMI 1592
Recovery of tax - Certain transfers to be void - Petitioner’s application for permission u/s 281 - guard against fraudulent transfers designed to defeat recovery by the revenue - Held that:- The section is asset-specific and transfer-or charge-specific. The section demands, above all, precision. An application is for prior permission to create a charge or effect a transfer in respect of a defined asset.
Such an application cannot be disposed of by resorting to generalities (“likelihood”, “huge demands”, “might be revoked”, etc). There is no room in considering an application under Section 281 for a response that is speculative, predicated on imponderables and unknowns such as litigation outcomes, or on suppositions that all stay orders obtained by an assessee are bound to be vacated and an assessee’s appeals lost. Nothing in our experience suggests this to be remotely true.
We have considered Mr. Pardiwala’s submission in regard to the tenability of the impugned order. We agree with him that it cannot be sustained for the precise reasons we have outlined, and which we find unacceptable. There is no discussion on the merits of any particular application, proposed transfer or individual asset.
Hence, keeping the contentions of both sides open, and without rendering a decision on the merits of the application by the Petitioner, we will set aside the impugned order and direct the 1st Respondent to consider the Petitioner’s application afresh, uninfluenced by the previous order and subject to certain conditions that we will set out hereafter. The 1st Respondent will consider the Petitioner’s application (including subsequent correspondence) under Section 281 de novo by 17th November 2017 (we have extended time because of the intervening Diwali holidays). The 1st Respondent will indicate whether he requires any clarifications or further documents or materials from the Petitioner
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2017 (9) TMI 1591
Reopening of assessment - addition u/s 14A - Held that:- AO is obliged to indicate the tangible material on the basis of which he has formed the reason to believe that expenditure in relation to exempt income by the Assessee during the year in question must, in terms of Section 14A of the Act, be disallowed. If indeed there has been no exempt income during the AY in question and that explanation of the Assessee should be accepted by the CIT(A), it is incumbent on the AO to explain on what basis he infers that some expenditure from the alleged income has actually to be disallowed. This appears to be a clear case of non-application of mind. Further, considering that the assessment took place under Section 143(3) of the Act and a specific query was raised in this regard by the AO, revisiting the same issue on the basis of the same material was not justified. Consequently, the first reason for reopening the assessment appears not to be sustainable in law.
Excess depreciation was claimed by the Petitioner @ 15% in respect of the electrical installation instead of at the eligible rate of 10% - Held that:- AO has failed to indicate the basis for forming reason to believe that income has escaped assessment. This appears to be based on mere change of opinion. As is the case with the first reason, Explanation 2(c)(iv) to Section 147 would not come to the aid of the AO unless the basis for forming such reason to believe is indicated in the reasons for reopening the assessment.
Excess credit of tax deducted at source - Held that:- Nothing has been indicated by the AO in the reasons for reopening the assessment that should explain the basis for forming reasons to believe that income had escaped
Expenses claimed on account of payment made to approved gratuity fund assessment - Held that:- Petitioner, in its objections, pointed out that the above reason was based on the original income tax return and not the revised return filed by the Petitioner in which the Petitioner had claimed ₹ 1,98,317/- instead of ₹ 1,98,06,804/- on account of gratuity paid during the AY in question. Obviously, the AO failed to note the changed figures in the revised return. This, being an instance of non-application of mind by the AO, could not constitute a valid reason to believe that income had escaped assessment.
None of the reasons for re-opening of the assessment could be said to be valid. - Decided in favour of assessee.
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2017 (9) TMI 1590
Share premium received by the assessee-company - whether cannot be taxed under section 68 - whether the amount received as share premium on issue of share by the respondent-assessees-companies could be taxed as profits and gains of business in the hands of the assessees under section 28(iv)? - Held that:- We find that the issue of bringing the share premium to tax under section 68 of the Act was not an issue which was urged by the appellant-Revenue before the Tribunal. The only issue which was urged before the Tribunal as recorded in para 11 of the impugned order is the addition of share capital and share application money in the hands of the assessee as income under section 28(iv) of the Act. We find that the Commissioner of Income-tax (Appeals) did consider the issue of applicability of section 68 of the Act and concluded that it does not apply. The Revenue seems to have accepted the same and did not urge this issue before the Tribunal. Mr. Bhoot, learned counsel appearing for the Revenue also fairly states that the issue of applicability of section 68 of the Act was not urged by the Revenue before the Tribunal.
It is a settled position in law as held by this court in CIT v. Tata Chemicals Ltd. [2002 (4) TMI 42 - BOMBAY High Court] that in an appeal under section 260A of the Act, the High Court can only decide a question if it had been raised before the Tribunal even if not determined by the Tribunal. Therefore, no occasion to consider the question as prayed for arises.
Also the amendment to section 68 of the Act by the addition of proviso thereto took place with effect from April 1, 2013. Therefore, it is not applicable for the subject assessment year 2012- 13. So for as the pre-amended section 68 of the Act is concerned, the same cannot be invoked in this case, as evidence was led by the respondents- assessees before the Assessing Officer with regard to identity, capacity of the investor as well as the genuineness of the investment. Therefore, admittedly, the Assessing Officer did not invoke section 68 of the Act to bring the share premium to tax. - Decided in favour of assessee
Whether the share premium receipt is capital in nature? - Held that:-We find that the impugned order of the Tribunal upheld the view of the Commissioner of Income-tax (Appeals) to hold that share premium is capital receipt and therefore, cannot be taxed as income. This conclusion was reached by the impugned order following the decision of this court in Vodafone India Services Pvt. Ltd. (2014 (10) TMI 278 - BOMBAY HIGH COURT ) and of the apex court in G. S. Homes and Hotel P. Ltd. (2016 (8) TMI 613 - SUPREME COURT). In both the above cases the court has held that the amount received on issue of share capital including premium are on capital account and cannot be considered to be income.
Also the definition of income as provided under section 2(24) of the Act at the relevant time did not define as income any consideration received for issue of share in excess of its fair market value. This came into the statute only with effect from April 1, 2013 and thus, would have, no application to the share premium received by the respondent-assessee in the previous year relevant to the assessment year 2012-13 - Decided against revenue
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2017 (9) TMI 1589
Reopening of assessment - Reasons recorded for initiating proceedings u/s 148 - unexplained subscription to assessee's capital of assessee - Held that:- The law on this subject is well settled. As held in Kelvinator (2010 (1) TMI 11 - SUPREME COURT OF INDIA), the powers under Section 147 of the Act have to be exercised after a period of four years only if there is a failure to disclose fully and truly all material facts and information, by the Assessee.
In the present case, the reasons to believe contained the names of the very same five companies which were initially disclosed by the Petitioner during the assessment proceedings. The number of shares subscribed to by the said companies is the same and the amount received has been disclosed by the Assessee. There is no new material which has been found or mentioned in the reasons to believe which were not contained in the information provided by the Assessee prior to the conclusion of assessment under Section 143 (3) of the Act.
In the facts of this case, the primary facts have not been shown to be false. The five companies do exist. They did subscribe to the share capital of the Petitioner. They did pay the money to the Petitioner. All the five companies are assessed to tax. These are the primary facts. The reasons to believe rely upon a letter received from the Investigation Wing and Mr. Chaudhary submits that this letter was in fact an investigation report. The report does not form part of the reasons and neither was it annexed to the reasons. Interestingly, even the counter affidavit is silent as to the material which has not been disclosed by the Petitioner. The counter affidavit merely states that the information was specific and the information would be provided to the Petitioner during the assessment proceedings. Thus, if the Revenue had any basis to show that the primary facts were incorrect, the same ought to have been set out in the reasons to believe. That has not been done in the present case.
Thus, the Petitioner cannot be said to have failed to disclose fully and truly all the material facts. This being a jurisdictional issue, the assumption of jurisdiction under Sections 147 and 148 of the Act was erroneous. - Decided in favour of assessee.
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2017 (9) TMI 1588
Surrender made by the assessee in the course of the survey and confirmed two months later in writing - retraction made by the Assessee two years after the declaration - No reason to entertain this special leave petition, which is, accordingly, dismissed.
HC order confirmed [2017 (5) TMI 172 - DELHI HIGH COURT] as Court is not satisfied that the retraction made by the Assessee two years after the declaration was bonafide. There was no satisfactory explanation for not including the said amount in the return of income filed by the Assessee on 26th September, 2009. - Decided against the assessee.
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2017 (9) TMI 1587
Registration as a Trust under Section 12AA cancelled - proof of charitable object of trust - HC has held [2016 (9) TMI 307 - DELHI HIGH COURT] formal deed of trust was not necessary for the grant of registration under Section 12A/12AA of the Act. It is not necessary that present aims and objects of the Trust should be the same at the time of its establishment and registration u/s 12AA allowed - Held that:- We do not find it to be a fit case for interference under Article 136 of the Constitution. It is more so, in view of the fact that the main grievance of the Revenue is that the Respondent should get its Trust registered under the Trust Act and learned counsel appearing for the respondent states that they will take necessary steps in this behalf immediately and get the Trust registered. After getting it registered, they will submit the same to the Income Tax Department.
The special leave petition stands dismissed.
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2017 (9) TMI 1586
TPA - ALP determination - Applying the entity level turnover - Held that:- It is undisputed and apparent from the directions of the Hon’ble DRP that the Hon’ble DRP had directed the TPO to calculate the ALP by restricting the adjustment to the international transaction and also allowing credit of amount of ₹ 3698683/- already added back by the assessee in the computation of taxable income. It is very much evident that while passing the order subsequent to the directions of the Hon’ble DRP, the AO has not followed the directions of the Hon’ble DRP in this regard and has proceeded to calculate the ALP by applying the entity level turnover. Therefore, we deem it fit to restore this issue to the file of the TPO/AO for giving effect to the directions of the Hon’ble DRP in a proper manner after verification and after affording due opportunity to the assessee to present its case. Accordingly, ground no. 6 and 8 of the assessee’s appeal stand allowed for statistical purposes.
Challenging selection of two comparables viz. ITDL Imagetic Ltd. And Tirupati Incs Ltd. - Held that:- On going through the profiles of these two comparables, it is undisputed that ITD Imagetic Ltd. is not manufacturing business whereas Tirupati Inc. Ltd. manufacturers printing inks on the other hand, the assessee is a trading company. It is undisputed that the risk profile of a manufacturing company is different from that of a trading company. We are of the considered opinion that the risk profile and the functionality of these two companies being different than that of the assessee company, these two companies should not have been selected as a comparable. Accordingly, we restore these two comparables to the file of the TPO with the direction that these two companies be excluded from the final set of comparables if on verification it is confirmed that both these two companies carry out manufacturing operations. Needless to say, the assessee will be afforded due opportunity of being heard at the time of verification by the TPO. Accordingly, ground no. 7 stands allowed for statistical purposes.
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2017 (9) TMI 1585
Disallowance of contribution towards Gratuity Fund(GF)maintained by Life Insurance Corporation (LIC) - Held that:- We find that the assessee was making payment to LIC towards Employees Group cum Life Assurance Scheme after creating a trust deed that it had made an application to the CIT for approval. Thus there is no doubt that payments had been made by the assessee to LIC in a particular Scheme. The granting of approval for a GF is not in the hands of the assessee. It could only make an application and deposit the money. We find that in the case of Baroda Gujarat Gramin Bank similar issue had arisen and the Tribunal referring to the case of Bitoni Lamps Ltd. (2004 (9) TMI 74 - PUNJAB AND HARYANA High Court) as held that if payments towards funds were made no disallowance should be made even if approval was pending and had decided the issue in favour of the assessee
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