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Showing 461 to 480 of 1843 Records
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2017 (1) TMI 1385
Works contract - the confirmation of demands under “erection, installation and commissioning services” is on the ground that there is an identifiable component of service as per the contract - Held that: - there can be no tax liability on such contracts prior to 1.6.2007, on which date the new tax entry “Works Contract Service” was introduced in the FA, 1994. For the period post 1.6.2007, the services rendered to railways were excluded from the scope of the service tax liability under “Works Contract Service”. The exclusion is with reference to works contract in respect of, among other things, railways, bridges, etc. - “Works Contract Service” provided to Indian Railways as well as DMRC are excluded for tax liability - appeal dismissed - decided against Revenue.
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2017 (1) TMI 1384
CENVAT credit - Welding Electrodes and Gases - MS Plates, Sheets, etc. - used for repair and maintenance and also for fabrication of capital goods - Held that: - This Tribunal vide Final Order No. A/30930/2016 dated 30.09.2016 in the appellants own case has held that the credit is admissible on Welding Electrodes and Gases - The issue whether credit is admissible on MS items used for fabrication of as capital goods and support structures has been decided in the case of India Cements Ltd., Vs. CESTAT Chennai [2015 (3) TMI 661 - MADRAS HIGH COURT]. The said issue was held in favor of the assessee - credit allowed - appeal allowed - decided in favor of assessee.
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2017 (1) TMI 1383
Validity of reopening of assessment - as per assessee notice was never served on the assessee or his agent - Held that:- Examination of the materials produced in this regard do not reflect any effort on the part of the AO to service the notice by post or by other ordinary means of service as required by section 282. This fact is evident from the date of issue of notice and the date of affixture being the same. The above clearly reveals that the AO has not taken reasonable steps to serve the notice in the ordinary course
There is no report of notice server to the effect that there was any refusal of notice by the assessee. In the report of Inspector, names of two witnesses are referred. The addresses of the witnesses are far away from the premises of the assessee. The report of the Inspector does not state that witnesses have identified the place or was known to them personally. As a matter of fact despite assessee’s repeated submission that notice has not been served properly, the AO has not bothered to serve the notice upon the assessee or his agent even though there was adequate time for the said service of notice through the ordinary means for subsequent years. This clearly shows as can’t regard on the part of the assessee to the legal procedures. It is settled law including that from the Hon’ble Apex Court in the case of CIT vs. Ramendra Nath Ghosh (1971 (8) TMI 26 - SUPREME Court ) that in absence of proper service of notice the assessment procedure lose their validity. - Decided in favour of assessee.
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2017 (1) TMI 1382
Exemption u/s 10 (37) eligibility - Held that:- Appeal admitted on following substantial questions of law:
(i) Whether the Ld. ITAT was justified under law while reversing the findings of Ld. CIT(A) in respect of granting of relief of ₹ 56,94,231/- exemption u/s 10 (37) of the Act of 1961 by considering the Khasra Girdavari Report dated 05.12.2011 integral part of the order of Assessment as Annexure-A not furnishing information in respect of growing of Crop on the agricultural land during the year 2007-08?
(ii) Whether the Ld. AO was justified under law to denying exemption u/s. 10(37) of the IT Act on the compensation received by the Assessee in respect of its land acquired by RIICO and making Addition of ₹ 1,30,33,036/- as Capital Gain by considering a Khasra Girdavari which does not disclose the information for growing of crop during two years immediately preceding the date of transfer?
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2017 (1) TMI 1381
Evasion of the duty - Seizure - Invoices are fictitious - No registration under VAT - Held that: - Facts of the present case as noted above, leave no manner of doubt that the alleged invoices accompanying the goods are fake, the TIN numbers printed therein are fictitious, the alleged consignors are non-existent and identity of real owners of the goods have been concealed by the respondents with only motive to evade tax under the Act or to help undisclosed persons to evade tax.
Once a transportation of goods under the cover of Section 52 of the Act is shown to be fraudulent, sham, bogus, circuitous or a device designed to evade tax under the Act, the statutory authorities under the Act and the court can always examine the substance of the transaction because the legislature never intends to guard fraud - Hence section 52 of the Act cannot be considered and understood in a manner so as to encourage tax evaders and to discourage those who abide by law. It is the obligation of every citizen to pay the taxes honestly without resorting to subterfuges. No doubt, when a person transports goods from outside the State of U.P. to outside the State of U.P. in terms of Section 52 of the Act and Rule 58 of the Rules, the authorities under the Act have no power to seize the goods and demand security for release thereof but where, as in the present case, the transaction is sham, not genuine and make believe and originated for transportation from a place within the State of U.P. or intended to be sold within the State of U.P. with intent to evade tax then it would be a case falling under Section 48 of the Act - Decided against the assessee.
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2017 (1) TMI 1379
Entitlement to benefit of section 44BB(1) on the income from contracts of non-PSC companies or such receipts would be taxable u/s. 115A/44DA as per normal provisions of the Act - Held that:- This issue is squarely covered by the order of ITAT, Delhi Bench in the case of SBS Marine Ltd. vs. ADIT (Intl. Taxation) [2015 (3) TMI 147 - ITAT DELHI ]in favour of the assessee wherein held that the revenue’s reliance on section 9(1)(vi) to categorize the assessee’s income for hire of vessels as ‘royalty’ is also not correct since clause (iva) of section 9(1)(vi) excludes amounts referred to in section 44BB. The other arguments, decisions relied on by the learned DR including the one on ‘Base erosion profit shifting’ are also not relevant in the factual matrix of the present case and considering what we have already held. In view of the above, we hold that the income of the assessee for the year under consideration is to be computed in accordance with section 44BB of the Act.- Decided in favour of assessee.
Inclusion of Service Tax and Vat in gross amount for the purpose of deeming profit @ 10% u/s 44BB - Held that:- The service tax and VAT are statutory dues which are paid to the Government as liability of the assessee. A perusal of the record as well as the assessment order nowhere reveals that the Service Tax and VAT have been separately charged by the appellant company on the bills. The record further does not reveal whether the assessee has separately accounted for the amounts of Service Tax and VAT so charged, in the books of account. The assessment order also does not whisper anything as to whether the Service tax and VAT have been charged by the appellant company in terms and conditions of the agreements. These aspects, in our opinion, need proper examination and verification at the stage of Assessing Officer before deciding the question whether the Service Tax and VAT charged by the assessee would form part of the receipts or not. We, therefore, direct the AO to examine – (i) the procedure for collecting the Service Tax and VAT; (ii) whether the assessee has issued bills for charging Service Tax & VAT and if yes, whether the Service Tax and VAT have been separately charged in the bills or not and (iii) whether the Service Tax and VAT have been separately accounted for and have been accordingly paid to the Government. Accordingly, this issue is restored to the file of Assessing Officer for deciding the same afresh
Interest received on Income-tax Refund - should be taxed @ 15% under Article 12 of DTAA, treaty with UK or should be taxed @ 40% as per normal provision of the Act - Held that:- This issue is covered against the assessee by the decision of Uttaranchal High Court in the case of assessee itself [2015 (5) TMI 1036 - UTTARAKHAND HIGH COURT ] wherein it has been held that interest on Income-tax Refund is taxable @ 40%.
Taxability on reimbursement of expenses - Held that:- This issue is covered against the assessee and in favour of the Revenue by the decision of Hon’ble Uttarakhand High Court in the case of CIT vs. Halliburton Offshore Services Inc. [2007 (9) TMI 230 - UTTARAKHAND HIGH COURT] wherein held Sec. 4 is the charging section of the IT Act and definition as well as the incomes referred in ss. 5 and 9 are for the purpose of imposing the income-tax under s. 143 (3). Sec. 44BB is a complete code in itself. It provides by a legal fiction to be the profits and gains of the non-resident assessee engaged in the business of oil exploration @ 10 per cent of the aggregate amount specified in sub-s. (2). It is not in dispute that the amount has been received by the assessee company. Therefore, the AO added the said amount which was received by the non-resident company rendering services as per provisions of s. 44BB to the ONGC and imposed the income-tax thereon
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2017 (1) TMI 1378
Validity of reopening of assessment - on money paid by assessee in respect of land - Held that:- From the reasons recorded, it appears that all the allegations are with respect to Shri Kamal M. Gohil and ISCON Group and in most of the transactions, which are referred in the reasons recorded, the petitioner – assessee is not at all connected. So far as the petitioner – assessee is concerned, the petitioner – assessee is connected with the transactions with respect to the lands situated at Sanathal, Taluka Sanand in which as observed hereinabove the petitioner – assessee is the purchaser, who has paid the entire sale consideration by cheques and as observed hereinabove, there is no allegation whatsoever that any on money is paid by the petitioner – assessee.
Under the circumstances on the ground that there is no tangible material available with the Assessing Officer to form an opinion that the income chargeable to tax has escaped the assessment in the case of the petitioner – assessee, the Assessing Officer is not justified in reopening the assessment on such belief, which has no base. Under the circumstances, on the aforesaid ground alone, the impugned reassessment proceedings deserves to be quashed and set aside. - Decided in favour of assessee
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2017 (1) TMI 1377
Wife of the assessee in default as proceeded against for the income-tax dues - recovery proceedings - Held that:- The petitioner has produced two documents to contend that the consideration paid, as seen from Exhibit P1, is in consonance with the consideration as seen from the documents produced, being Exhibits P3 and P4. The Revenue has refuted such contention and has also produced, along with its counter affidavit, two documents as Exhibits R1(b) and R1(d) to contend that the consideration was inadequate. These are factual issues, which are to be examined by the original authority, on the basis of the location of the properties and the then prevalent market value.
The contention of the petitioner that the property did not have a proper access and, hence, was not of value but for the petitioner who has the adjoining land, cannot be countenanced for two reasons. The title deed produced at Exhibit P1 in its Schedule shows a pathway on one of the boundaries. Then there is nothing produced to show that the adjoining property belongs to the petitioner. The boundary shown in the Schedule also does not indicate a property belonging to the petitioner to be adjoining to the subject property. Be that as it may, the question of under-valuation having not been specifically considered in Exhibit P9, the same would have to be considered. The petitioner would appear before the Tax Recovery Officer within two weeks from the date of receipt of a certified copy of the judgment and file objections producing documents, if any, within that time. The Tax Recovery Officer would grant an opportunity for hearing within two weeks therefrom and pass orders within two weeks from the date of hearing. It is made clear that the directions are issued by this Court itself, since otherwise the time would run out on notice being issued and hearing being posted by a further notice.
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2017 (1) TMI 1376
Reopening of assessment - addition on LTCG - Held that:- Considering the material produced by the petitioner – assessee, the Assessing Officer framed the assessment under Section 143(1) read with Section 147 of the Act and it appears that addition of ₹ 1,66,997/- was made to the total income of the petitioner – assessee towards long term capital gain. Thereafter, again reassessment proceedings have been initiated on the very ground doubting the genuineness of the bills, vouchers etc. for cost of improvement and doubting the long term capital gain claimed by the petitioner – assessee. It does not appear that there is any further material collected by the Assessing Officer after the assessment under Section 143(3) read with Section 147 of the Act was framed, and therefore, the impugned reopening is nothing but change of opinion by the successor Assessing Officer - Decided in favour of assessee.
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2017 (1) TMI 1375
Substantial question of law - Assessment done u/s 153A - addition made on account of 'unaccounted purchases - Held that:- The learned counsel for the appellants had re- worded the substantial questions of law as framed in the appeal memoranda and as framed by this court at the stage of final hearing as on June 14, 2016 as above. It is evident from a reading of section 260A of the Income-tax Act that the appeal would lie to this court from an order of the Income-tax Appellate Tribunal only if there is a substantial question of law that arises for consideration. In Vijay Kumar Talwar's case (2010 (12) TMI 2 - Supreme Court of India ), the Supreme Court has held that it is mandatory for the High Court to formulate the substantial question of law on which the appeal would be considered. But that the expression "a substantial question of law" is not defined in the Income-tax Act. However, it has acquired a definite connotation through various judicial pronouncements.
The principle that if a finding of fact is not challenged as being perverse, the High Court is bound to accept such finding. Therefore, as no such substantial question of law has been framed and the questions pertain to findings of fact, which cannot be said to be perverse as it is evident that the books of account of the respondent had been rejected by the assessing authority, in which case the same books of account could not be relied upon in an addition on account of trade creditors and also for arriving at the closing stock. There is no substantial question of law that arises for consideration and the findings of the Tribunal cannot be said to be perverse, as the reasons assigned by the Tribunal are certainly acceptable and do not warrant interference.
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2017 (1) TMI 1374
Validity of reopening of assessment - whether the reassessment proceedings u/s. 148 are illegal and without jurisdiction in the absence of any tangible evidence or material in respect of any undisclosed income and recording of requisite satisfaction in respect of any such undisclosed income or not? - Held that:- AO has not applied his mind so as to come to an independent conclusion that he has reason to believe that income has escaped during the year. In my view the reasons are vague and are not based on any tangible material as well as are not acceptable in the eyes of law. The AO has mechanically issued notice u/s. 148 of the Act, on the basis of information allegedly received by him from the Income Tax Department. Keeping in view of the facts the reopening in the case of the assessee for the asstt. Year in dispute is bad in law and deserves to be quashed. - Decided in favour of assessee
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2017 (1) TMI 1373
Estimation suppressed professional receipts - Held that:- AO estimated suppression at ₹ 21,46,481/- to 13,06,481/- and even the CIT(A) confirmed the same without any basis. After going through the facts narrated by the AO, the same are only on the basis of conjunctures and surmises and not facts. The entire estimation is without any basis because the assessee on daily basis receives cash and deposits the same in the very same day in the bank account. This fact has been corroborated by the statement of Dr. Archana Sangeakar and the assessee himself, wherein, it is accepted by the Revenue that the receptionist collects consulting charges and the accumulated cash from the clinic is deposited in the bank account. Once this is the position that the estimation made by the AO and confirmed by the CIT(A) is without any basis. Thus a reasonable estimate offered by the learned Counsel for the assessee at ₹ 3,00,000/- is fair and reasonable. This estimation is for both the addition and AO is directed to add a sum of ₹ 3,00,000/- instead of ₹ 11,00,000/-. This two connected issues are allowed partly.
Disallowance of foreign travel expenses of wife - Held that:- We find that Dr. Sheila Balsekhar, wife of the assessee is a gynecologist and she is assessed to tax independently. The assessee’s contention for claim of this expenditure was that he travelled to US along with wife on the call of children’s hospital Los Angles to study the process of setting up of the obesity clinic for children, but no such evidence was produced before the lower authorities or even now before us. In view of the above facts, we also confirmed the action of the lower authorities and dismiss this issue of assessee’s appeal.
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2017 (1) TMI 1372
Penalty under section 271 (1) (c ) - Deduction u/s 80P (2)(a) (i) - Whether the assessee is eligible for deduction under section 80 P (2) (D) relating to income derived from investment in other cooperative societies? - Availability of deduction of expenses under section 57 regarding income from other sources - Held that:- It is a case where penalty has been levied by the assessing officer on a issue in respect of which Hon’ble Delhi High Court in assessee’s own case for the relevant assessment year under consideration had sent back the issue for re-adjudication before Ld. CIT (A), by framing specific question of law in respect of the deduction claimed by the assessee. When the Hon’ble High Court has framed substantial question of law, it becomes apparent that the addition is certainly debatable. The framing of a substantial question of law by Hon’ble High Court lends credence to the bona fides of the assessee in claiming deduction. Once it turns out that the claim of assessee could have been considered for deduction as per instructions, which is not completely debarred at all, the mere fact of confirmation of the disallowance of deduction would not per se lead to imposition of penalty. Since the addition in respect of which penalty has been levied by the authorities below has been held by the Hon’ble High Court to be involving a substantial question of law, in our considered opinion, penalty is not exigible under this section. We therefore are inclined to delete the penalty. - Decided in favour of assessee
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2017 (1) TMI 1371
Penalty u/s. 271(1)(c) - Held that:- No satisfaction for concealment was recorded for penalty of in dispute. We further note the AO observed that assessee furnished inaccurate particulars of its income and is liable for penalty u/s 271(1)(c), which did not establish from the facts and circumstances of the case that how the assessee has furnished inaccurate particulars of its income. Section 271(1)(c) postulates imposition of penalty for furnishing of inaccurate particulars and concealment of income. I
Hon'ble Apex Court in the case of CIT vs. Reliance Petroproducts Pvt. Ltd. (2010 (3) TMI 80 - SUPREME COURT ) wherein the Hon'ble Supreme Court has held that 'where there is no findings that any details supplied by the assessee in its return are found to be incorrect or erroneous or false, there is no question of inviting the penalty u/sec. 271(1)(c) of the Act. A mere making a claim, which is not sustainable in law, by itself, will not amount of furnishing inaccurate particulars regarding the income of the assessee - Decided in favour of assessee
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2017 (1) TMI 1370
Addition of undisclosed net profit - addition relying upon one piece of paper which was provisional P&L Account subject to further verification of the accounts of entire unit - Held that:- It is required to be noted that as such the learned Assessing Officer did not dispute other expenses and/or the amount mentioned in the final P&L account and/or audited account. There was no other material available with the learned Assessing Officer while making addition of ₹ 2,72,78,269/-as undisclosed net profit. The provisional P&L Account was explained by the assessee in detail which has been accepted by the learned CIT(A) as well as the learned Tribunal. We are in complete agreement with the view taken by the learned CIT(A) and the learned Tribunal while deleting the addition of ₹ 2,72,78,269/-made by the learned Assessing Officer as undisclosed net profit. There was no other material available with the learned Assessing Officer while making the addition of ₹ 2,72,78,269/-as undisclosed net profit except one piece of paper / provisional P&L account which was explained by the assessee. Under the circumstances, present Tax Appeal deserves to be dismissed qua proposed question No.(1)
Addition on account of difference in stock - Held that:- As rightly observed by the learned CIT(A) and the learned Tribunal, the learned Assessing Officer was justified in neglecting the transactions in between the period. The learned CIT(A) also placed much reliance on the audited accounts. On reconsideration of the stock statement the stock difference was arrived at at ₹ 63,597/-and therefore, the learned CIT(A) rightly restricted the addition made on account of difference in stock to ₹ 63,597/-. Considering the aforesaid it cannot be said that both the learned CIT(A) and the learned Tribunal have committed any error. The findings recorded by the learned CIT(A) and the learned Tribunal are on appreciation of evidence and the material on record. No substantial question of law arise. We are in complete agreement with the view taken by the learned CIT(A) and the learned Tribunal while restricting the addition to ₹ 63,597/-on account of difference in stock. Under the circumstances, question No.(2) also deserves to be dismissed.
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2017 (1) TMI 1369
Validity of reopening of assessment - exemption under Section 54B eligibility - reasons to believe - Held that:- The issue with respect to exemption under Section 54B of the Act was gone into by the Assessing Officer while framing assessment under Section 143(3) of the Act and same was not disturbed in reassessment proceedings. That thereafter, again Assessing Officer is issued the impugned notice on the very ground i.e. on the ground that the assessee was not entitled to exemption under Section 54B of the Act. Under the circumstances, on the ground that the subsequent reassessment proceedings have been initiated on change of opinion by the subsequent Assessing Officer and also on the ground that there was no failure on the part of the assessee in not disclosing true and correct facts and therefore, condition precedent to assume the jurisdiction under Section 147 of the Act are not satisfied, impugned reassessment cannot be sustained. - Decided in favour of assessee
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2017 (1) TMI 1368
TDS u/s 194J OR 194C - whether incorrect deduction of tax has led to disallowance of expenditure under Section 40(a)(ia)? - Held that:- The grievance raised herein could be raised by the petitioner's before the Income Tax Appellate Tribunal and appropriate interim reliefs should be sought from the Tribunal, if so entitled. Mr. Suresh Kumar, on instructions, to allay the fears of the petitioner states that the respondent Revenue will not act upon the final assessment order passed by the Assessing Officer consequent to the direction of the DRP for a period of 4 weeks from the date of its communication to the petitioner on the above account. Mr. Suresh Kumar further states that there shall be no recovery and / or adjustment of the amounts refundable against the amounts payable by the petitioner on the disallowance of expenses under Section 40(a)(ia) of the Act on account of channel placement fees paid to the cable operators, for a period of 4 weeks from the date of communication of the final assessment order of the Assessing Officer to the petitioner.
In view of the above statement made on behalf of the Revenue, Mr. Kaka, learned Senior Counsel appearing for the petitioner seeks to withdraw the present petition.The Petition is disposed of as withdrawn.
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2017 (1) TMI 1367
Taxability in India - whether the said offices (LOs) could be regarded as PE ? - whether its income from imports in India were not taxable by reason of the Indo-Japan Double Taxation Avoidance Agreement (Indo-Japan DTAA)?- Held that:- In the present case, both the CIT(A) and ITAT have found that the four expatriate employees posted in India performed purely preparatory functions: identifying a JV partner, negotiating with parties, seeking regulatory approvals and clearances, consulting management experts, lawyers and accountants toward setting up of the JV, towards entering into agreements, etc. They did not even enter into agreements on behalf of the assessee; instead they merely signed them as witnesses. These could not per se or by themselves amount to a business connection as to create a PE in India.
The DTAA clearly envisions that offices that perform auxiliary and preparatory services are not to be treated as business connection.
In the present context, the expression means carrying on activities, other than the main business functions, that aid and support the assessee. In the context of the contracts in question, where the main business is insurance business - coverage of industries and others who are subject to general insurance policies by entering into contracts of insurance, collecting premia, setting up networks of distributors or offices for that purpose etc., the functions performed by the expatriates in the liaison office were of auxiliary character - an activity which aids and supports the Assessee in carrying on its main business, but not the business itself. The findings of the authorities below, therefore, were warranted and call for no interference. - Decided against the Revenue and in favour of the assessee.
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2017 (1) TMI 1366
Issues:
Wealth tax appeal under Section 27(A) of Wealth Tax Act, 1956 for Assessment Year 1991-92.
Analysis:
The appeal in question arose from a judgment and order passed by the Income Tax Appellate Tribunal concerning the deletion of additions made by the Assessing Officer in respect of the wealth of two trusts. The substantial question of law admitted for consideration was whether the ITAT was justified in upholding the CWT(A)'s order deleting the said additions. The counsel for the Revenue pointed out a similar case where the court had ruled in favor of the assessee, citing Commissioner of Income Tax Vs. Comilla Mohan. The court had previously answered similar questions in favor of the assessee and against the Revenue in cases involving trusts and dividend income. The court referred to its decision in CWT v. Rakesh Mohan, where questions were answered in favor of the assessee, leading to the dismissal of the appeal in question. The court ruled against the Revenue and in favor of the Assessee, following its previous decisions in similar cases. Consequently, the appeal was dismissed, and any interim order was vacated.
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2017 (1) TMI 1365
Valuation - Clearing and Forwarding services - reimbursement on account of actual expenses incurred on behalf of the principle, whether liable to tax or not? - Held that: - remuneration or commission received by the agent for providing C&F Service should alone be considered as gross amount for computation of the service tax liability and that since the service tax statute does not provide for inclusion of reimbursable exposes therein, the same should be outside the scope and purview of Levy of Service tax - demand set aside - appeal dismissed - decided against Revenue.
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