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Showing 481 to 500 of 1387 Records
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2016 (2) TMI 908
Forger of documents - scope of the jurisdiction of the CLB - Held that:- We do find that the CLB has observed that it has summary jurisdiction and the question of document being forged or the signature being forged or not, cannot be examined in the proceedings of the Company Petition and the CLB has further observed that such an exercise can be undertaken in the civil suit by the Civil Court.
The observations made by the CLB on the question of limitation may remain only on the presumptive value but it should not be read to control or to curtail in any manner the jurisdiction of the Civil Court in the above referred two civil suits and further the consequential computation of the period of limitation.
Even otherwise also, as rightly observed by the CLB, the question of genuineness of forged document or forged signature could be examined in the proceedings of the Civil suit and there cannot be any dispute that the Civil Court on the said aspects will have wider jurisdiction vis-ŕ-vis jurisdiction of the CLB which is a summary jurisdiction. We leave it at that, since the Civil Court is yet to examine the matter in accordance with law.
In view of the aforesaid, we find it appropriate to observe that the Civil Court in the proceedings of Civil Suit shall be at liberty to take an independent view of the matter on the basis of material and the evidence produced before it and the observations made by the CLB on the point of limitation shall not operate as a bar upon the power of the Civil Court to examine the controversy in accordance with law.
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2016 (2) TMI 907
Transfer pricing adjustment - selection of comparable - analisation of comparables which are in dispute under the TNMM method - Held that:- ICRA MANAGEMENT CONSULTANCY SERVICES LTD - Under the TNMM, one has to see the transaction undertaken are comparable or not and whether any adjustment is required to obtain a reliable result, because under TNMM the net margin are less affected by transactional differences and is more tolerant to some minor functional differences between controlled and uncontrolled transactions. However, if any unique function or property significantly affects the operating costs or net margin or has a bearing in the generation of revenue itself, then it cannot be considered to be a fit comparable for benchmarking the net margins. Here it is not the case where there is any unique functions materially affecting the revenue or net margins vis-a-vis the functions performed by ICRA. Hence on functional level it is a good comparable. As stated earlier, in the earlier years, the TPO has accepted ICRA to be a comparable and in later years the Tribunal in AY 2008-09 & 2009-10 has held ICRA Management to be good comparable qua the functions of the assessee and there being no material change on facts, functional profile or any other factor in this year, then as matter of consistency, we do not want do deviate from our findings given in the earlier years. There cannot be a pick and choose of comparables every year unless there are some material difference in facts and circumstances compelling to take a different conclusion. Thus, we hold that ICRA Management is a good comparable and should be included in the list of final comparables.
Kinetic Trust Ltd. company as in the earlier two years, the Kinetic Trust Ltd has been held to be good comparable based on its functional profile. So far as functions are concerned, it is evident from the Directors’ reports, which are placed in the paper book from pages 187 to 230. It is seen that, the company is concentrating on its main activity of corporate consultancy services and financial services. Being a NBFC has not changed the nature of activity undertaken by the company and its core business competency and its revenue is from consultancy services. So far as the turnover filter applied by the TPO, we find that, first of all at the time of selection process, the assessee has not considered the turnover filter for accepting or rejecting the comparables. The turnover filter cannot be one of the tool for cherry picking by either of the parties at a later stage, as it has to be done at the threshold level only, i.e. at the time of search process and by applying quantitative filter. However, once turnover filter has not been applied then comparability has to be done at qualitative level based on FAR Analysis. If on FAR analysis there are differences on account of either assets deployed and risk assumed materially affecting costs or margins then probably such comparability can be rejected. But here in this case, merely on the ground that it has a low turnover cannot be the reason or criteria for rejection. As this comparable has been held to be a good comparable by the TPO himself and Tribunal in two years have accepted to be a good comparable. Thus as a matter of consistency, we hold that Kinetic Trust Ltd. should be included in the comparability list.
IDC India Ltd. - as discussed functions performed by the IDC India Ltd while dealing with Ld. Counsel’s argument that functions of advisory services are quite similar to the functions of the assessee and, therefore, we accept the assessee’s contention that this comparable cannot be rejected. Accordingly, same is directed to be included in the comparability list.
Future Capital Advisors Ltd - DRP has rejected this comparable on the ground that it is in the process of shutting down its business. However, during the year, it has continued to render the investment advisory services and the realignment agreement was effective from 1st January, 2010, the realignment is also for investment advisory activities. Thus, there is not much impact on the net margins especially in the assessment year 2010-11, therefore, this company cannot be rejected and TPO is directed to include the same in the final comparability list.
Integrated Capital Services Ltd comparable has rightly been rejected and shall not be included in the final comparables.
Motilal Oswal Investment and Advisor Ltd cannot be put into the comparability list and is directed to be excluded as the wide range of activities include portfolio management, credit syndication, counseling on M&A, etc. This whole range of functions and activities carried out by Motilal Oswal is definitely are far wider and much different from investment advisory services where core functions is to give advices for making the investments in diversified fields
Addition of 3% markup additionally made over and above the comparative margin arrived at - Held that:- We agree that such an additional mark-up applied by the TPO is without any FAR analysis or without any benchmarking exercise with any comparables and more importantly without any analysis of assessee’s own facts. The assessee is providing non-binding investment advisory services to its AE and such services as highlighted by Ld. Counsel include; identifying and analyzing potential investment opportunities, evaluating and making recommendations to THPL with respect to specified investments. The monitoring functions performed by the assessee are part and parcel of the portfolio advisory services rendered by it because, the activities carried out by the assessee while undertaking portfolio monitoring activities include analysis of the latest development in the industry, ongoing performance of the industries and providing necessary information to its AE from time to time. This aspect has been noted by the ITAT, Mumbai Bench in the case of Carlyle India Advisors Private Limited (2013 (4) TMI 486 - BOMBAY HIGH COURT ) and in other decisions cited above by the Ld. Counsel. Thus, we hold that no such addition or adjustment on account of extra markup can be made
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2016 (2) TMI 906
Seeking de-sealing of business premises - Invokation of powers under Section 60(2)(f) of the Act - Outstanding tax demand - Held that:- decision to invoke the powers under Section 60(2)(f) of the Act was taken in undue haste virtually in continuation of invocation of the power under Section 59 of the Act to search the premises for information and documents. Sufficient opportunity was not afforded to the Petitioner to explain why the premises should not be sealed by the Department. With there being no assessment made and communicated to the Petitioner , that there is an outstanding tax demand of ₹ 3 crore, there could not be a presumption that the Petitioner has avoided or evaded the said tax demand. Therefore, business premises of the petitioner be directed to de-sealed and the documents/records seized at the time of the sealing will be returned to the Petitioner. - Petition disposed of
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2016 (2) TMI 905
Disallowance u/s 14A - Held that:- Addition made on account of section 14A where investments are made in sister concerns such as equity shares and share application money. However, if the investments are made from borrowed funds, section 14A of the Act would be applicable and learned Assessing Officer shall compute the disallowance under section 14A read with rule 8D in accordance with law.
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2016 (2) TMI 904
Deduction under section 80IA - initial assessment year selection - Held that:- Choosing of initial assessment year for claiming deduction under section 80IA of the Act in a block of ten years out of fifteen years is with the assessee i.e. it is the option of the assessee to choose the initial assessment year for claiming deduction under section 80IA of the Act. Further, the loss claimed by the assessee in respect of eligible business is to be set off against the income of the assessee from other ineligible business as in respect of assessment years and there is not need to notionally carry forward these losses up to the initial assessment year and write off the same out of the profits of eligible business.
Disallowance u/s 37 - Held that:- CIT (Appeals) has given detailed finding with respect to each and every individual item of the expenses incurred under the head ‘business promotion’ and as regards the disallowance sustained by the learned CIT (Appeals), the assessee has not been able to give any evidence to prove that these expenses were incurred wholly and exclusively for the purposes of business. Wherever required, the CIT (Appeals) has given relief to the assessee. We hereby confirm the order of the learned CIT (Appeals) in this regard.
Disallowance of rental expenses - Held that:- We are in agreement with the findings of the learned CIT (Appeals) that even though the sister concerns have not paid their part of rental expenses for using the premises but to arrive at the correct computation of taxable income of the assessee, it would be necessary to claim deduction on account of rental expenditure to that extent which is only attributable to the assessee company
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2016 (2) TMI 903
Issues Involved:
Claim of deduction under section 80P of the Income Tax Act for interest income.
Analysis:
The appellant appealed against the order of the ld.CIT(A) upholding that interest income is taxable as "income from other sources" instead of business income. The primary issue revolved around the claim of deduction under section 80P of the Act. The appellant contended that the interest earned on deposits with the bank is attributable to carrying on the business of banking and hence eligible for deduction under section 80P. The Co-ordinate bench of the Tribunal in a similar case had already decided in favor of the assessee, emphasizing that the interest income is liable to be deducted under section 80P(1) of the Act. The Tribunal referred to the decision of the Hon'ble Karnataka High Court in a related case, which supported the deduction of interest income. The Tribunal found the facts of the case identical to the precedent and, in the absence of any contrary binding decision, allowed the claim of the assessee under section 80P.
The appellant further relied on a decision by the ITAT Bench and a judgment of the Hon'ble Karnataka High Court to support the claim for deduction under section 80P. The ITAT, Ahmedabad Bench, and the Hon'ble Karnataka High Court had previously ruled in favor of similar claims. After considering the submissions and case laws cited, the Tribunal found no reason to deviate from the established view and allowed the claim of the assessee under section 80P. Consequently, the Tribunal disapproved the order of the ld.CIT(A) on this issue and allowed the appeal of the assessee. The judgment was pronounced in the Court on 26th February 2016 at Ahmedabad.
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2016 (2) TMI 902
Entitlement for Cenvat credit - Whether the definition of the term "input" in Rule 2(g) of the CENVAT Credit Rules, 2002 is to be understood to include items beyond the six items mentioned specifically in Rule2(g) - Held that:- as per three judge bench decision of this Court in Regional Director, Employees' State Insurance Corporation vs. High Land Coffee Works of P.F.X. Saldanha and Sons & Anr. [1991 (7) TMI 367 - SUPREME COURT OF INDIA], the word "include" in the statutory definition is generally used to enlarge the meaning of the preceding words and it is by way of extension, and not with restriction. Therefore, it is left for the appropriate bench of this Court to decide on the factual parameters of the case(s) and the entitlement of the assessee(s) to CENVAT credit in the facts of each case. - Appeal disposed of
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2016 (2) TMI 901
Entitled to a claim of deduction on account of depreciation in respect of the assets which has been acquired and used for the purpose of activities of the trust - Held that:- Amount spent on acquiring assets are taken as application of income for the purposes of Section 11 of the Act and the depreciation claimed thereafter on the same amount i.e. the value of fixed assets during the subsequent years is being granted on the user of the same. There is no question of double deduction in allowing of depreciation in respect of assets acquired and used by the Trusts. See M/s.Jawaharlal Nehru Port Trust (2015 (6) TMI 684 - BOMBAY HIGH COURT ) and The Watch Tower Bible & Tract Society of India [2015 (1) TMI 480 - BOMBAY HIGH COURT] - Decided in favour of assessee.
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2016 (2) TMI 900
Extension of stay - Held that:- On a consideration of the peculiar facts and circumstances of the case and the position of law as considered including the arguments of the parties before us on the issues involved we find that non-disposal of the appeal in the facts of the present case is solely on the grounds of adjournments sought by the Revenue on each of the dates the appeal came up for hearing;
Where no arguments assailing the assessee’s claim that prima facie the issue is covered in assessee’s favour having been advanced by the Revenue. Nothing has been placed before us by the Revenue disputing the assessee’s claim of irreparable loss to the running of the business has been placed before us nor there is any rebuttal on the plea of Liquidity crunch faced by the assessee.
In these above peculiar facts we are of the view that the present case is a fit case for extending stay for a further period of 3 months or disposal of appeal whichever is earlier. We find that the appeal is listed for hearing on 16th Feb. 2016. The Revenue is directed to file Paper Books if any well in advance. Needless to state that no adjournment on any reasonable ground shall be sought by the assessee.
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2016 (2) TMI 899
Violation of the principles of natural justice - fictitious payments of commission - Held that:- While the wisdom of applying Section 33 of the IEA to the evidence of Mr. Meattle may be doubtful, the Court is of the view that de hors the evidence of Mr. Meattle, the evidence of Mr. Jhunjhunwala was by itself sufficient to draw an adverse inference against the Assessee that the payments of commission were fictitious. The Court is not persuaded to hold that Mr. Jhunjhunwala had made contradictory and inconsistent statements particularly since he was never confronted with those inconsistencies and contradictions by the Assessee. If, as is urged by the Assessee, Mr. Meattle’s statements are to be entirely kept aside, then Mr. Jhunjhunwala’s statements can be examined for their intrinsic worth. The Assessee took a calculated risk in declining to cross-examine Mr. Jhunjhunwala on the understanding that it had to be preceded by the cross-examination of Mr. Meattle.
Two conclusions that could be drawn from the above narration are that there is no violation of principles of natural justice as far as the Assessee is concerned, and the uncontroverted statements of Mr. Jhunjhunwala were sufficient to substantiate the case of the Revenue against the Assessee.
Penalty u/s 271(1)(c) - Held that:- Here the question is not mere making of a wrong claim but in making a claim that is demonstrably false. With the Assessee failing to establish the genuineness to the commission payments the essential conditions for attracting penalty under Section 271 (1) (c) of the Act stood fulfilled. The impugned orders of the ITAT and the CIT (A) deleting the penalty are hereby set aside. The penalty as ordered by the AO is restored. The question framed is answered in the negative, i.e., in favour of the Revenue and against the Assessee.
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2016 (2) TMI 898
Applicability of relied upon Tribunal's judgment which is seized with the Apex Court - Whether supplies from DTA to SEZ to be treated as exports or not - Tribunal by relying on the judgment of its own allowed the appellant's appeal - Revenue contended that Tribunal cannot rely upon the judgment which is pending in the Hon'ble Apex Court - Held that:- the appeal can be decided in appellant's favour by relying on the judgment which is pending before the Hon'ble Apex court. However, in the event the Revenue succeeds in the proceedings before the Apex Court and a different view is taken, the question may be required to be considered by the Competent Authority and at that stage, rights and contentions of both the sides should remain open. - Appeal disposed of
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2016 (2) TMI 897
Validity of assessment - Jurisdiction of AO - Held that:- An draft assessment order passed under Section 144C(1) of the Act bestows certain rights upon an eligible assessee such as to approach the DRP with its objections to such a draft assessment order. This is for the reason that an eligible assessee's grievance can be addressed before a final assessment order is passed and appellate proceedings invoked by it. However, these special rights made available to eligible assessee under Section 144C of the Act are rendered futile, if directly a final order under Section 143(3) of the Act is passed without being preceded by draft assessment order.
The assessment order dated 23rd March, 2015 passed by the Assessing Officer for the assessment year 2012-13 is completely without jurisdiction. This is so as it has not been preceded by a draft assessment order. Hence, the foundational/basic order viz. the assessment order dated 23rd March, 2015 is set aside and quashed as being without jurisdiction. Consequent orders passed on rectification application as well as on penalty are also quashed and set aside being unsustainable.
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2016 (2) TMI 896
Short deduction of tax at source - payment to non-residents - eligibility for the benefit of DTAA - Computing the rate of 20% under section 206AA - Held that:- The provisions of TDS has to be read along with DTAA for computing the tax liability on the sum in question and therefore when the recipient is eligible for the benefit of DTAA then there is no scope for deduction of tax at source @ 20% as provided under the provisions of section 206AA. Similarly, on the issue of jurisdiction, the question of computing the rate of 20% under section 206AA of the Act is a debatable issue when the recipient is eligible for the benefit of provisions of DTAA and therefore the Assessing Officer cannot proceed to make the adjustment while issuing the intimation under Section 200A. This is beyond the scope of the said provisions. - Decided in favour of assessee
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2016 (2) TMI 895
Invokation of power under Section 60 of the Delhi Value Added Tax Act, 2004 - Three premises of the petitioner sealed for non production of documents on time - Held that:- there is nothing in the file which shows what reasons weighed with the Commissioner to order a survey under Section 59 of the DVAT Act and subsequently order sealing of the premises under Section 60 of the DVAT Act. The Petitioner was at the time of inspection not functioning at H-45 but from D-4 Udyog Vihar. It had recently shifted from the address at Okhla Estate to Nehru Place. The deployment order was not in respect of the aforementioned two addresses and yet those were sealed. How this was possible without a fresh deployment order being issued is unexplained. There is no indication as to what prompted the extreme step of sealing of the three premises. The order in that behalf has been passed not by the Commissioner but by the VATO but there is nothing to indicate that the VATO was authorised to do so by an order issued in Form DVAT 50 as on 15th March 2013. With the sealing order bristling with so many illegalities, there can be no manner of doubt that the sealing action was undertaken mechanically and only for the reason of failure to produce records as sought by the notice under Section 59 of the Act. There was no satisfaction arrived at by the Commissioner, as mandatorily required by Section 60 (1) of the DVAT Act, that there was any deliberate attempt by the Petitioner to avoid or evade tax or to conceal its tax liability in any manner. Therefore, the sealing order is set aside.
Validity of condition of de-sealing - Demand of ₹ 600 crores - Held that:- VATO simply totals up the turnover figures for 2011-12 and 2012-13, deducts 25% therefrom in terms of Rule 3 (2) of the DVAT Rules 2005 and arrives at a figure of ₹ 124.11 crores towards tax and approximately ₹ 31.02 crores as penalty. It then adverts to the assessment order for 2008-09 and the challenge thereto by the Petitioner in the Supreme Court and this Court (which is pending as of date) and in terms of the rectified assessment and penalty orders the demand created worked out to ₹ 614.60 crores. Then it seeks to create a demand "on the basis of same proportions" for 2009-10 to 2012-13 and arrives at a figure of approximately ₹ 2190.44 crores. It is on this basis that the VATO has ordered that as a condition for de-sealing the Petitioners three premises, the petitioner should deposit ₹ 600 crores. This figure is therefore based entirely on guess work and 'projections' without any adjudication. The only description that can fit such a de-sealing order is that it is 'preposterous'. Therefore, the de-sealing order which requires the Petitioner to deposit ₹ 600 crores as a condition for de-sealing is an abuse of the powers under Section 60 (4) of the DVAT Act and is unsustainable in law. - Decided in favour of petitioner
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2016 (2) TMI 894
Seeking grant of bail - Consignment of gold seized - No procedure under Chapter XIV of the Act, has been initiated for confiscating the goods - Held that:- the applicant was arrested on 24.02.2015 and was in judicial custody pursuant to the lodgment of FIR by the police department, the Custom Department has arrested the applicant on 28.08.2015 i.e. after more than six months. There might be some investigation during this period, however it is desirable to comment anything about the reasons for not arresting the applicant for considerable long time. The complaint has also been filed on 60th day from his arrest. This also suggests that customs department has sufficient time to investigate the case i.e. from 24.02.2015 to 27.10.2015 i.e. date of filing the complaint before the learned Magistrate. As far as allegations that in past also, the applicant had indulged in similar activities, which is under investigation, that would not be the ground to reject the application, since the authority had sufficient time to complete the investigation. By relying upon the decision rendered by Apex Court in the case of State of Kerala V/s. Raneef [2011 (1) TMI 1396 - SUPREME COURT] and in the case of Sanjay Chandra[2011 (11) TMI 537 - SUPREME COURT], the applicant is behind bar since more than 10 months which is considered as long period and it is equally true that investigation is almost over. Therefore, this is a fit case to exercise the discretion and enlarge the applicant on regular bail and hence the applicant is ordered to be released on regular bail. - Decided in favour of appellant
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2016 (2) TMI 893
Issues:
1. Applicability of disallowance under Section 14A of the Income Tax Act.
Analysis:
The case involved an appeal by the assessee against an order passed by the Commissioner of Income Tax (Appeals) concerning the disallowance of interest under Section 14A of the Act for the assessment year 2009-10. The primary issue was whether the provisions of Section 14A applied to the assessee's case, considering the nexus between investments and borrowed funds. The Assessing Officer (AO) disallowed an amount under Rule 8D, leading to the addition of a substantial sum to the assessee's income. The assessee contested this disallowance, arguing that Section 14A was not applicable to their situation due to the nature of their business activities.
During the assessment proceedings, it was found that the assessee, a company engaged in manufacturing and selling veterinary vaccines and medicines, had investments and had debited a significant amount as interest expenses. The AO, upon not receiving a satisfactory explanation regarding the connection between borrowed funds and investments, applied Rule 8D to make the disallowance. The Commissioner of Income Tax (Appeals) partially allowed the assessee's appeal, deleting a portion of the disallowance but upholding the rest based on precedents and case laws.
The Tribunal analyzed the contentions raised by both parties and examined the facts on record. Despite the assessee's claims that investments were made for trading purposes and not to earn dividend income, the Tribunal observed that the assessee failed to provide concrete evidence supporting this assertion. The Tribunal noted that the AO had correctly invoked the provisions of Section 14A based on the lack of clarity regarding the expenditure incurred for earning exempt income. The Tribunal upheld the disallowance under Rule 8D(2)(iii) as the assessee's investments were generating exempt income, necessitating the confirmation of the amount added to the income.
In conclusion, the Tribunal dismissed the appeal, affirming the disallowance made under Rule 8D(2)(iii) of the Income Tax Act. The decision was based on the specific circumstances of the case, where the assessee's investments were yielding exempt incomes, justifying the application of Section 14A and Rule 8D. The Tribunal's ruling emphasized the importance of establishing a clear nexus between investments, income earned, and the provisions of the Act, ultimately leading to the rejection of the assessee's contentions and the dismissal of the appeal.
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2016 (2) TMI 892
TDS u/s 194J OR 194C - design & drawings of the work are prepared by BHEL which is executed by the contractors under the supervision of BHEL - technical services - work by subcontractors - short deduction of tax - Held that:- CIT (A) has rightly observed that the scope of work given to the sub-contractors is for erection, testing, commissioning and trial operation and handing over of boiler units, electrostatic precipitators etc. and these activities involve construction work, welding, erection, alignment, transportation of equipment and materials etc. with the help of men & machines, which cannot be termed as technical services as per the definition given in section 9 of the Act. The ld. CIT (A) correctly stated that the contracts awarded by the assessee are for the Erection/Testing/ Commissioning of Plant & Machinery and are in the nature of carrying out any work including supply of labour for carrying out such work. We take note that the supply of labour to carry out the work/contract involves both skilled & unskilled labour. Further, we take note that for commission of power plant, qualified engineers and skilled manpower along with unskilled labour need to use by the sub-contractors for execution of the contract including testing/trial operations. The nature and scope of the subcontract as rightly held by the ld. CIT (A) was actual execution of work involving the services of technical personnel as well as non-technical personnel. In a turn-key project like commissioning of power plant etc. what the assessee intended to get from its sub-contractor was a physical output, a tangible structure and not merely the services of its qualified engineers/ staff.
CIT (A) has rightly observed that any payment for technical services in order to be covered u/s 194J, should be a consideration for acquiring or using technical know-how provided or made available by human element. The work entrusted for the sub-contractors is part of the contract offered to the assessee by its client and hence the sub-contractors also come in the purview of the Act and the assessee has deducted the tax is u/s 194C from the payments made to it. The amounts paid to sub-contractors is either for erection, installation, fabrication, commissioning, testing & trial operation of some parts of the Power Plant and therefore cannot be termed as technical services as per the definition in Explanation 2 to section 9 (1) (vii).
We also take note that in any case, the sub-contractors have already offered the payments received from the assessee to tax and so the short deduction of tax cannot be demanded from the assessee as per the case law of Hon'ble Supreme Court in Hindustan Coca Cola Beverage (P) Ltd. V. CIT (2007 (8) TMI 12 - SUPREME COURT OF INDIA). - Decided in favour of assessee
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2016 (2) TMI 891
Addition u/s 42 - application filed by for extending the exploration period as AO held that there was no voluntary surrender of the oil fields, that the assessee could not claim deduction u/s. 42(1) - FAA allowed the claim - Held that:- Purposive interpretation of the provisions of the Act will be useful to decide the issue. Section 42 of the Act was brought on statute with a very specific purpose- to encourage oil exploration. Purpose to introduce it was to tide over the ever increasing import bill of petroleum products. PSC is the testimony of the efforts and intention of the government to deal with the oil crisis. To encourage the oil exploration area incentive in form of introduction of section 42(1)was given to the assessees. As an exception capital expenditure and other expenditure are fully allowed, under section 42(1)(a)of the Act, even when the exploration of oil results in failure. Such expenditure is not being amortised or not is being allowed partially year after year-it has to be allowed in full. If the background of the legislation is considered it becomes clear that there was no scope for bringing in the concept of voluntarily surrender/forced surrender. The Act has not provided such terms in the section and therefore there was no justification in denying the assessee a legitimate benefit. We find that the PSC had distinguished relinquishment and termina -tion of contracts. As per Article4 of PSC(Pg-1. 19 of the PB)‘if the contractor exercises the option provided in paragraph (b)of Article 3. 5 the contractor shall, after any development area has been designated, relinquish all of the contract area not included within the said develop ment area’. Article-30of PSC(pg. 1. 84)deals with termination of contract. It provides 10 circumstances under which the government could terminate the contract. Clearly relinquishment and termination of agreement are two different concepts as per the PSC. In his letter, dated 28. 03. 2007, the DGHC has informed the assessee that its contract stood relinquished
The termination condition of the PSC deals with totally different situations. We find that the letter dt. 28. 3. 2007 talks of Article -4 and not of Article- 30 of the PSC. Clearly, the case of the assessee does not fall in the category of termination. Considering the above, we are of the opinion that the order of the FAA does not suffer from any legal or factual information. So, confirming his order, we decide effective ground of appeal against the AO. - Decided in favour of assessee
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2016 (2) TMI 890
Levy of fees under section 234E - intimation issued under section 200A in respect of processing of TDS - Held that:- We find that the issue in all these appeals is now squarely covered in favour of the assessee by the decision of ITAT Amritsar Bench in the case of Sibia Healthcare Private Limited vs. DCIT [2015 (6) TMI 437 - ITAT AMRITSAR] adjustment in respect of levy of fees under section 234E was indeed beyond the scope of permissible adjustments contemplated under section 200A.
As intimation under section 200A, raising a demand or directing a refund to the tax deductor, can only be passed within one year from the end of the financial year within which the related TDS statement is filed, and as the related TDS statement was filed on 19th February 2014, such a levy could only have been made at best within 31st March 2015. That time has already elapsed and the defect is thus not curable even at this stage. In view of these discussions, as also bearing in mind entirety of the case, the impugned levy of fees under section 234E is unsustainable in law. We, therefore, delete the impugned levy of fee under section 234E of the Act. - Decided in favour of assessee.
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2016 (2) TMI 889
Set off interest on income tax refund received from interest on income tax paid - Held that:- The set off of interest paid against that received shall accordingly be subject to the two being for the same period, and to the extent of interest income for the said period. Two, the interest rate paid to the Revenue is higher than the interest rate paid by it. Now, without question, interest as an expenditure u/s. 57(iii), i.e., under which provision deduction in its respect is claimed and allowed, could only be allowed to the extent of interest attributable to the rate at which interest is received from the Revenue. This is as nobody can be said to have borrowed funds at a rate (of interest) to earn interest income at a lower rate – there being no scope for earning any income, which is only net of expenditure, under such an arrangement. It needs to be appreciated that it is only toward earning (net) interest that the expenditure is allowed u/s. 57(iii), presuming a nexus between the ‘funds’ borrowed and lent. True, the interest rates are not in the control of the assessee, but statutorily defined. That, in fact, is a basis on which we have opined of the interest suffered as being a statutory liability, unconnected with the earning of interest, so that it is not admissible as a deductible in the first place. However, even granting deductibility, the parameters of section 57(iii) do not admit of expenditure being incurred to sustain a predetermined loss, which again points to the expenditure being involuntary - another aspect of the matter emphasizing its’ non-deductibility. The deduction for interest paid would thus be limited to the quantum of interest received on the like (principal) amount for the same period, defined as from a particular date to a particular date. Subject to these two caveats, forming part of the application of the principle of deductibility of interest expenditure to Revenue against that received from it, accepted by us in principle respectfully following the decisions by the co-ordinate benches of this tribunal, we allow the assessee’s claim - Decided in favour of assessee
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9911796707
