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Showing 501 to 520 of 1255 Records
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2015 (5) TMI 761
Unexplained share capital - CIT(A)deleting the addition of ₹ 9 lacs out of the addition of ₹ 30 lacs made by the AO - Held that:- Assessing Officer is not justified on the basis of this inspector report to hold that the identity of the shareholder company [A.C. Steels & Holdings Pvt. Ltd, Grewal Steels & Holdings Pvt. Ltd. & Sumit Credit Co. Pvt. Ltd. ] has not been established. On the contrary, as rightly pointed out, the common surname “Grewal” is good enough to indicate that the office of these companies were at that premises. The inspector did not make any effort to make any further enquiry about these companies and also Assessing Officer did not make any effort to carry the investigation further. The sole basis for making addition about these companies is the inspector report. No doubts have been raised by the Assessing Officer about the documents filed by the assessee company. The inspector report as alleged above cannot be a basis for disbelieving the assessee’s version.
Further in the case of Sofed Comtrade Pvt. Ltd. we note that no enquiry whatsoever has been done by the AO. The observations made by him are only raising a doubt without carrying out any investigation. Surprisingly we note that the AO was having doubt in mind but he never issued any notice or summon to any of the directors. It is not a case where any confessional statement has been recorded by any entry provider of accommodation entry. It is a case of a doubt raised by the Assessing Officer but such doubt has not been converted into any evidence or material so as to substantiate the addition. We are of the view that the additions made by the AO in respect of share capital received from these four companies are not justified and accordingly the same is directed to be deleted.
As regards the fifth company i.e. Prime Vyapar Pvt. Ltd. we note that the inspector has carried out the enquiry and in this report the inspector has pointed out that on local enquiry it is revealed that there is no company called this name at the address and there is only a residential place at the said premise. The Ld. AR during the course of the hearing could not rebut this finding of the inspector. In view of this specific finding of the inspector which remains unrebutted, we are of the view that addition of ₹ 5 lacs in respect of the share capital received from Prime Vyapar Pvt. Ltd. has been rightly been made by the Assessing Officer and accordingly this addition is confirmed. - Decided partly in favour of assessee and revenue.
Disallowance u/s 14A read with Rule 8D - Held that:- The assessment year under consideration is 2005-06 and Rule 8D is effective from assessment year 2008-09. Accordingly the Assessing Officer was not justified in invoking the provisions of Rule 8D for the assessment year under consideration. We further note that assessee’s investment is mainly in group companies. Considering these facts we delete this addition - Decided in favour of assessee.
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2015 (5) TMI 760
Permanent establishment (PE) of the assessee in India - whether receipts on account of advisory services and guarantee commission had to be assessed in India? - Whether particular articles of the Agreement of the Avoidance of Double Taxation between India and Netherlands were applicable or not? - Held that:- We find that Rabo India [RI] had made payment to the assessee for providing advisory services to it and under the head guarantee commission,that RI was paying the assessee more than 30% of its income,that the basic dispute between the AO and the asessee is as to whether the assessee had permanent establishment in India or not and as to whether the services rendered by RI could be treated activities carried out by the assessee. Before proceeding further, we are of the opinion that there is nothing on record to prove that provisions of Article5(1)of the Agreement are applicable. Article 5(1) stipulates that PE for the purpose of convention meant a fixed of business through which the business of the enterprise was wholly or partly carried on. Thus it is clear that the asessee was not having fixed place of business in India. FAA had rightly held that provisions of said Articles i.e.5(1)were not applicable. - Decided in favour of assesse.
Whether particular articles of the Agreement of the Avoidance of Double Taxation between India and Netherlands were applicable or not? - None of the receipts comprising in total amount of ₹ 1,30,21,079/-, is taxable in India as held by CIT(A) - hHeld that:- The agreements entered into by RI with outsiders and the agreements entered in to by RI with the asessee have to examined to understand the real nature of the transaction.It also appears that some material was made available to the FAA,but it is found that he did not call for a remand report from the AO in that regard.The role of expatriate Director deputed to India has not been inquired in to.What were his duties and what function actually he had performed,is not known. Similarly, the circumstances in which guarantee commission was paid by RI to the asessee are not discussed by the FAA.The circumstances,under which RI for approached the asessee which entitled it to get roughly one third of the commission,are not known.In short,the appeal has been decided by discussing the principles governing DTAA and not mentioning as to how those principles were applicable to the facts of the case.In our opinion,the matter needs further investigation.Therefore, in the interest of justice, the matter is restored back to the file of the AO to determine the issue afresh after affording a reasonable opportunity of hearing to the asessee - Decided partly in favour of revenue for statistical purposes.
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2015 (5) TMI 759
Non-grant of registration under section 12A - activities carried on by the trust were meant for members of the Christian community and thus it is established for the benefit of specific religious community attracting the provisions of section 13(1)(b) and therefore no purpose will be served by granting registration u/s.12A as held by CIT(A) - Held that:- Looking at the objects of the trust, we find that one of the objects of the assessee trust was to provide Ambulance facility to people at large. The object Nos. 2, 6 and 7 of the Trust, were admittedly relating to Christian community. However, other object Nos. 3, 4, 5 was to provide Ambulance facility to people at large, to establish and administer educational institutions for needy and deserving Christian students in particular and others in general, to establish hostels, libraries, etc. for Christian boys and girls in particular and other deserving & needy boys and girls in general. - trust was not established for Christian community only, but for the public at large.
The Hon'ble Gujarat High Court in Chandra Charitable Trust case (2006 (7) TMI 96 - HIGH COURT , GUJARAT) had laid down that even where the objects of the trust were not only to propagate the Jainism or help and assist maintenance of temples, Sadhus, Sadhvis, Shraviks and Shravaks, and other goals as set out in the trust deed, the trust was a charitable as well as religious trust and section 13(1)(b) of the Act would not be applicable. Similar proposition has been laid down in CIT v. Barkate Saifiyah Society [1993 (11) TMI 13 - GUJARAT High Court] wherein it was held that the exclusion from exemption under section 13(1)(b) of the Act applies only to charitable trust and charitable institution and if the trust was charitable as well as religious in nature, the assessee would be entitled to exemption under section 11 of the Act. Thus we hold that the assessee is a charitable religious trust and the provisions of section 13(1)(b) of the Act would not be applicable. In view thereof, we direct the Commissioner to grant registration to the assessee under section 12A of the Act as charitable religious trust - Decided in favour of assesseee.
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2015 (5) TMI 758
Penalty u/s 272A(2)(K) - delay filing the TDS return - Held that:- In the present case of the assessee, either Government bodies or aided by Govt., are public office and since the tax deduction and payment are made by treasury and there is undisputedly no default. There arises, no reason for non-filing of TDS return with an intentional act or willful act to attract a quasi-criminal, imposition of penalty. The assessee has relied on the decisions of CIT Vs. Superintendent Engineer [2002 (5) TMI 13 - RAJASTHAN High Court] and Royal Metal Printers Pvt. Ltd. Vrs. Asst CIT [2010 (1) TMI 938 - ITAT, Mumbai] wherein held that for such technical or venial breach supported by reasonable cause, penalty under sec. 272(A)(2) is not leviable and imposition of penalty is not justified for the reason that it was for the first time the requirement to convert the hard-copy into soft-copy was to be learnt by respective Government DDOs from the department officials. There is reasonable cause for delay in filing ETDS return U/s 273B. Considering the facts and circumstances of the cases in its entirety, we are of the considered view that the penalty so levied in the case of the assessee is not all justified. We, therefore, cancel the penalty levied u/s.272A(2)(k) for the assessee for the respective AYs. - Decided in favour of assessee.
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2015 (5) TMI 757
Reopening of assessment - specific information was received from the Dy. Director (Inv.) Mumbai as to assessee providing bogus speculation profit/loss, Short Term /Long term capital gain/loss, commodities profit/loss on commodity trading and had been continuing this business for many years - Held that:- Section 147 and 148 are charter to the Revenue to reopen earlier assessments and are, therefore protected by safeguards against unnecessary harassment of the assessee. They are sword for the Revenue and shield for the assessee. Section 151 guards that the sword of Sec. 147 may not be used unless a superior officer is satisfied that the AO has good and adequate reasons to invoke the provisions of Sec. 147. The superior authority has to examine the reasons, material or grounds and to judge whether they are sufficient and adequate to the formation of the necessary belief on the part of the assessing officer. If, after applying his mind and also recording his reasons, howsoever briefly, the Commissioner is of the opinion that the AO’s belief is well reasoned and bonafide, he is to accord his sanction to the issue of notice u/s. 148 of the Act. In the instant case, we find from the perusal of the order sheet which is on record, the Commissioner has simply put “approved” and signed the report thereby giving sanction to the AO. Nowhere the Commissioner has recorded a satisfaction note not even in brief. Therefore, it cannot be said that the Commissioner has accorded sanction after applying his mind and after recording his satisfaction. - Decided in favour of assessee.
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2015 (5) TMI 756
Income from sale of shares - income from capital gain or business income - Held that:- The assessee though had classified all unsold shares as on the close of accounting year as investments yet he was a both trader and an investor.
CBDT in its circular No. 4 of 2007 has also emphasized that it is possible for a tax payer to have two portfolios one as investment portfolio and another as trading portfolio and where, the assessee has both portfolios, the income has to be assessed under both heads i.e. capital gain and business income. Moreover, we find that assessee had earned significant income from portfolio schemes and therefore the nature of income as to whether the same was capital gain or business income, has to be looked into keeping in view the objectives of such schemes and other terms and conditions of such schemes and also on the basis of settled law with respect o taxation of income from portfolio schemes.
In view of the above facts and circumstances, we set aside the order of Ld. CIT(A) and direct him to re-adjudicate on the issue after taking into account all facts and circumstances as enumerated above. The Ld. CIT(A) should examine the three years independently as entire facts in one year may not be available in another year. The case laws relied upon by Ld. A.R. are distinguishable on the facts as in the case law as M/s. Devasan Investments (P) Ltd.[2014 (4) TMI 682 - DELHI HIGH COURT] the number of scripts was quite low and there was no frequency of transactions. Moreover, in determination of the nature of income of an assessee as to whether income is from capital gains or from business, a combination of factors has to be considered and no case law can be made as a precedent. - Decided in favour of revenue for statistical purposes.
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2015 (5) TMI 755
Transaction through PMS and market broker - capital gain v/s business income - CIT(A) directed the Assessing Officer to treat the appellant as an investor and treat the profit on sale of shares as "capital gains" - Held that:- As decided in assessee's own case for the Assessment Years 2004-05 and 2005-06 when totality of all the above facts are considered, the inference drawn by the CIT (A) that the assessee is an investor in shares, appears to be correct. Apart from the above, on the principle of consistency also order of the CIT (A) on this point deserves to be upheld because in the original returns income from sale of shares was disclosed under the head "capital gain" and the same was accepted by the Revenue. Income tax proceedings the rule of res judicata does not apply but there should be uniformity in treatment and consistency under the same facts and circumstances. See CIT vs. Gopal Purohit,[2010 (1) TMI 7 - BOMBAY HIGH COURT] - Decided against revenue.
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2015 (5) TMI 754
Transfer pricing adjustment - entity M/s. E-Infochips Bangalore Ltd. taken by the Assessing Officer/TPO as comparable should be excluded from the list of final comparables for the purposes of transfer pricing analysis on the ground of functional differences as well as on the ground of insufficient information available in respect of the said entity in public domain - Held that:- The profit margin of such entity in the immediately preceding year(s) may also be taken into consideration and the FAR analysis in such cases may be reviewed to ensure that the potential comparable earning higher profit satisfies the comparability condition. Since this exercise has not been done either by the AO/TPO or the DRP in the present case, we are of the view that the matter should go back to the Assessing Officer/TPO for fresh consideration. This, in our opinion, will also take care of the grievance of the assessee relating to the lack of sufficient information in respect of M/s. E-Infochips Bangalore Ltd. available in the public domain in as much as the TPO can obtain such information in the form of relevant schedules of the Profit & Loss Account of the said entity as well as the segmental details, if any, directly from the said entity. We therefore, set aside the impugned order of the Assessing Officer as well as the direction given by the DRP on this issue and restore the matter to the file of the Assessing Officer/TPO for deciding the same afresh in the light of the observations already made by us, after giving the assessee proper and sufficient opportunity of being heard - Decided in favour of assesse for statistical purposes.
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2015 (5) TMI 753
Penalty U/s.272A(2)(k) - whether appellant has not deliberately and consciously deposited the TDS amount in time? - Held that:- We do find that the penalty so levied by the AO and confirmed by the learned CIT(A) appears to be leaning more on holding assessee in default for such penalty as a mechanical/ automatic levy insofar as it is the Department itself, who has insisted the e-filing of such returns as late as making the assessee literate about the data to be uploaded on the basis of tax deducted at source already given credit to by the I.T. Department on the basis of TDS certificates furnished by the assessee namely the deductee. The bonafide is established beyond doubt when the very fact that the quarterly returns for more than four quarters and less than eight quarters were filed simultaneously on the same date when assuming but not accepting that the assessee in default become suddenly computer literate.
Concluding, we observe that it is only a question of delayed filing of the e-TDS quarterly return, which was entrusted to an authorized service provider and the delay has occurred unintentionally. The assessee deductor is law compliant and the delay occurred only due to the reason that the assessee deductor is dependent on information of TDS and its deposit from the sub treasury of the Government and filing of e-return through the designated service provider of Income-tax Department. The assessee deductor has no technical competency to file the return by itself without external aid. The assessee is also not competent to do so by itself as per rule 37B and "Filing of Return of Tax deducted at source" scheme 2003, which requires the submission of quarterly statement through NSDL or other approved agencies i.e third party, not under the control of the assessees. There is neither any willful negligence nor any malafide on the part of the assessee in the matter of compliance and the delay was due to reasonable cause, the default being beyond the control of the assessee deductor. It is at best a technical or venial breach of the provisions of the act or where the breach flows from a bonafide belief that the assessee is not liable to act in the manner prescribed by the statute. The penalty u/s 272 (A)(2) cannot be levied in a routine manner. Law is well settled that a bonafide breach cannot lead to a penalty u/s. 272(A) [Hindustan Steel Ltd. Vs. State of Orissa (1969 (8) TMI 31 - SUPREME Court)]. - Decided in favour of assessee.
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2015 (5) TMI 752
Application for grant of registration under section 12A of the Act - Rejection of application on the ground that it is not established for charitable purpose - Held that:- The first objection of the CIT is with regard to the fact that the assessee is not imparting any education, but only giving coaching for EAMCET examination. However, in our view such finding of the CIT is not based on facts on record. As can be seen the assessee has established a Jr. College in the name and style of R.K. Science and Commerce Jr. College which is imparting education in two year intermediate course. This fact is clearly evident from the affiliation granted on 9.4.2012 by the Board of Intermediation, A.P. Therefore, there cannot be any doubt that the assessee is running an educational institution which is as per the objects of the society.
The next objection of the CIT is, the assessee is charging fee over and above the fee prescribed by the govt. However, the learned Authorised Representative has demonstrated before us by referring to the relevant G.O issued by the Govt. that fees charged by the assessee is more or less at par with the tuition fees prescribed by the govt. Moreover, whether the assessee is charging fees in excess or what is prescribed can be considered by the Assessing Officer while examining assessee’s claim of exemption under section 11. At the time of granting registration, the CIT has to act in accordance with the provisions contained under section 12AA of the Act. As per the said provision at the time of granting of registration, the CIT has to examine the object of the society and the genuineness of its activities. If the objects of the society are charitable and its activities are genuine, then registration cannot be refused to the assessee. The same views are supported by decisions in the case of Kusumba Dhirajlal Parekh & Lila Nautamlal Parekh Foundation [2014 (1) TMI 933 - ITAT HYDERABAD] and Lucknow Educational and Social Welfare Society [2011 (2) TMI 1185 - Allahabad High Court] - Decided in favour of assessee.
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2015 (5) TMI 751
Disallowance of deduction claimed u/s.80P - the assessee had violated the provisions of AP Mutually Aided Co-Operative Societies Act, 1995 - whether, having given a finding that Nominal/Associate Members are not Members of the society, the incomes from them are excluded while calculating deduction u/s.80P(2)(a)(i)? - Held that:- Assessee-society is clearly a co-operative society and Assessing Officer herself has stated that assessee is a co-operative society, but violated the provisions of the Co-operative Societies Act.
There is no restriction of getting any deposits from outsiders, leave alone from nominal Members and Associate Members. As rightly pointed out by the Ld.CIT(A), the source of funds for doing the business is not a criteria. What is required to be examined by the Assessing Officer is whether the deduction u/s.80P(2)(a)(i) is from the profits and gains of providing credit facilities to its Members. To that extent the Assessing Officer can examine the assessee's transactions. Just because assessee has deposits from Non Members, it does not prevent being a co-operative society nor it prevents claiming deduction u/s.80P(2)(a)(i), if it is otherwise eligible on the said incomes.
In view of this, while accepting in principle that assessee is eligible for deduction u/s.80P(2)(a)(i) and 80P(2)(d), quantification of income ie. income/profits and gains on credit facilities provided to Members, is restored to the file of Assessing Officer for necessary examination of the details of the transactions and quantifying the same. Therefore, while upholding the order of the CIT(A) on the principles of law, the quantification of deductions made by CIT(A) is therefore set aside and restored to the file of Assessing Officer to examine it afresh, in the light of the above observations/ directions. - Decided in favour of revenue for statistical purpose.
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2015 (5) TMI 750
Bogus purchases - CIT(A) deleting the addition - Held that:- As relying on precedent of assessee's own case it was only on the basis of the documents put-forth by the assessee that purchases from the said parties have been held to be bogus. Notably, assessee had furnished the invoices raised by the said parties and had also explained that all the payments were made by the cheques. Assessee had also furnished their sales-tax numbers. With respect to the transportation, assessee had explained that the responsibility of transportation was of the supplier and therefore assessee could not produce the transport receipts. The explanations put-forth by the assessee were not subject to any enquiry or verification by the Assessing Officer but have been merely disbelieved. The Assessing Officer, in our view, was influenced by the outcome of enquiries made with respect to the other six parties. However, in the absence of any material on record to negate the position canvassed by the assessee with respect to the said five parties, the explanation of the assessee could not be disbelieved. Under these circumstances, in our view, the CIT(A) made no mistake in deleting the addition with respect to the aforesaid five parties. As a consequence, on this aspect Revenue fails - Decided in favour of assessee.
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2015 (5) TMI 749
Promotion expenses - revenue v/s capital expenditure - Held that:- Claim of expense as revenue has been rejected, but the AO and CIT(A) have held the acquisition of furniture and fixture as capital in nature. But at the same time, even if to be treated as capital asset, the proof of acquiring the same had to be brought on record, which the AR submitted that the assessee is unable to so. In such a case, when we do not find anything on record, as a proof of acquisition of the furniture and fixtures, we cannot even direct the AO to allow depreciation thereon, as we cannot make any observation with regard to the ownership of the asset, having been brought into existence and used for the purposes of business. Thus disallow the expense claimed by the assessee. - Decided against assessee.
Amounts written off - held to be capital in nature and therefore disallowed and sustained by the CIT(A) - Held that:- On going through the submissions, we appreciate that the AR accepted that no details could be placed before revenue authorities and no details can be placed now before us to justify its claim. In these circumstances, we are left with no alternative, but to sustain the orders of the revenue authorities & consequentially reject the ground as raised by the assessee.- Decided against assessee.
Disallowance of holding expense - reimbursement made to its C & F agents at Delhi, Gujarat & Kolkat - Held that:- The expense could not be held to be capital in nature, as no enduring benefit could be attained. We therefore, accept that the expense shall be revenue in nature. - Decided in favour of assessee.
GP addition - Held that:- As being produced now before us, pertaining to the disallowance, we are of the opinion that this issue of sale of scrap of ₹ 11,76,000/- be restored to the file of the AO. We therefore, set aside the order of the CIT(A) on this issue and restore this issue to the file of the AO for reconsideration - Decided in favour of assessee for statistical purposes
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2015 (5) TMI 748
Registration to appellant trust u/s 12AA(1)(b) denied - CIT(A) held the appellant trust has entered into the franchise agreements with Mount Litra Zee School, whereby the applicant trust has given franchisee fee to Zee Learn Ltd thus under the agreement, the school will be run under the guidelines and specification from franchisor and therefore there is no scope with the assessee to get into any charitable activity and this venture in education is purely commercial - Held that:- As relying on case of CIT Vs. Highlanders Educational Academy [2012 (12) TMI 497 - UTTARAKHAND HIGH COURT] wherein held the Assessing Officer held that the assessee is not existing solely for educational purposes, but, at the same time, it clearly and in no uncertain terms recorded a finding that the assessee is running a school with Nursery and Kindergarten classes. No other existence of the assessee was noticed. Therefore, the conclusion would be that the assessee was existing for the purpose of running the said school with Nursery with Kindergarten classes and, accordingly, was existing solely for educational purposes and not for purposes of profit. If the existence of the assessee was not for the purposes of profit, but solely for educational purpose, then the receipts of the assessee, if the same did not exceed ₹ 1 crore per annum, will be outside the purview of total income as is the mandate contained in Section 10(23C)(iiiad) of the Act. That having not been held by the Assessing Officer was reversed by the Commissioner of Appeals and the same having been affirmed by the Tribunal, there is no scope of interference.
Thus the basis adopted by the CIT to decline registration was not in accordance with law and in view thereof, CIT is directed to grant the registration to appellant trust u/s 12AA(1)(b) of the Act. - Decided in favour of assessee.
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2015 (5) TMI 747
Addition to cash deposits in various bank accounts - peak credit addition - Held that:- Considering the findings given in the CIT(A)’s order including that of AO’s comment in the remand report, it is seen that assessee has been unable to explain the source of cash deposits vis-a-vis any corroborative evidence. Whatever material has been placed on record though establishes that assessee was in some kind of money transfer business, however, the onus is upon the assessee to correlate the cash deposits with some evidence or the same has been recorded in regular books of account. It is also an undisputed fact that three of the assessee’s bank accounts was not disclosed, either in the balance sheet or in the books of account. In such a case ones lies heavily upon the assessee to prove the source of the cash deposits in the bank account. Since there was a regular cash deposits and regular withdrawals from same nature of transaction, then positive peak credit has to be worked out for the purpose of addition which has rightly done by the Ld. CIT(A). Accordingly, the Ld. CIT(A)’s conclusion that peak credit should be added is affirmed.
However, it is noted that while arriving at the peak credit of all the bank accounts, it is seen that firstly, the Ld. CIT(A) has not given credit of opening balance as on 1st of April 2005 and secondly, he has also included the cash deposits made SBI bank account of Lalganj Azamgarh which belongs to his brother. If the said bank account belongs to his brother then no addition on account of unexplained credit can be made in the hands of the assessee. Though the said bank account may be relevant to work out the assessee’s commission income but definitely cannot be taken as undisclosed bank account of the assessee as it belongs to assessee’s brother who is separate and distinct from the assessee. Thus, we direct the AO to work out the peak credit only from three undisclosed bank account of the assessee, after excluding the opening balance and the entry in bank account belonging to his brother for the purpose of addition on account of unexplained deposits in the bank account.Once the addition on account of peak credit is being made, then no separate addition on account or commission income should be made separately as made by CIT(A) because the unexplained peak credit itself takes care of income element and secondly, if commission income is to be added then it leads to an inference that all the credits and deposits are accepted and only the income qua the transaction is to be taken as an income. Thus addition on account of commission income should be deleted. - Decided partly in favour of assessee.
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2015 (5) TMI 746
Ad hoc disallowance - N.P. estimation @ 12% - Held that:- Assessee's conduct during the course of assessment and appellate proceedings does not give a conducive picture, in the entirety of facts and circumstances of the case, there is no infirmity in the order of ld. CIT(A) holding that the assessee's books of account should have been rejected and NP should be estimated at 12%. This way of estimation in case of rejection of books is also a recognized manner.
It is trite law that while challenging the estimate made by the income tax authorities, the burden is on the assessee to convincingly demonstrate that the estimate is arbitrary, so as to enable the appellate authority to interfere. In absence of any convincing arguments or evidence in this behalf, we see no reason to interfere in the order of estimate made by the learned CIT(A). In these circumstances, we see no reason to interfere with the rate of N.P. as estimated by the learned CIT(A). However, we find merit in the alternate prayer of the learned counsel for the assessee that a relief of interest of ₹ 42403/- and depreciation of ₹ 26641/- should be given which is allowed to the assessee. - Decided partly in favour of assessee.
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2015 (5) TMI 745
Validity of Revision of assessment order - Set-off of losses against income enhanced vide TPO order u/s 92CA(3) of IT Act - Income under Double Taxation between India and United Kingdom - Applicability of Surcharge & Education cess on income covered under DTAA - Held that:- As far as the first objection of the Ld. Commissioner about the correct method of the computation of assessed income is concerned, since other authority of the Revenue Department i.e. DRP has already held that the benefit of set offcarry forward of losses are to be computed as per the regular provisions of the Act, therefore, we hereby hold that there was no legal sanctity on the part of Ld. Commissioner to direct the AO to verity and decide afresh this issue. Further, we hereby hold that the decision of Hon’ble Delhi High Court pronounced in the case of DG Housing Project Ltd. [2012 (3) TMI 227 - DELHI HIGH COURT] is applicable wherein it was held that the Ld. Commissioner again remitting the matter for a fresh decision to the AO to conduct further inquiries without a finding that the order of the AO is erroneous is not sustainable. Therefore, we are of the view that the manner in which the Ld. Commissioner has given direction to the AO are not in line with several decisions of Hon’ble courts namely, Arvind Jewellers [2005 (7) TMI 90 - GUJARAT High Court].
About the second issue raised by Ld. Commissioner, we hereby hold that firstly the AO has examined that issue on those relevant facts hence cannot be said to have committed an error and secondly the issue can not be said to be controversial because in the case of DIC Asia Pacific Lt. [2012 (6) TMI 686 - ITAT, KOLKATA], it was held that Surcharge and education cess is not applicable on income covered under DTAA . Moreover,We have noted that Ld. Commissioner has not demonstrated any breach of law or procedure by the AO to allege that the impugned order of the AO was prejudicial to the interest of the revenue. Rather the direction of Ld. Commissioner appears to be general in nature asking the AO to verify the facts again afresh. In the absence of any independent finding and leaving the AO to start a fresh investigation is not within the powers assigned us. 263 of the IT Act. We therefore hold that the order us. 263 is not sustainable in the eyes of law. - Decided in favour of assessee.
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2015 (5) TMI 744
Disallowance of 20% of the discount and credit notes allowed to clients - CIT(A) deleted the disallowance - Held that:- In the present case since the AO had accepted the books of accounts maintained by the assessee in regular course of business and also did not bring any material on record to substantiate that the expenses on account of credit notes / discounts were not related to the business of the assessee. Therefore, the ad hoc disallowance made by the AO was not justified and the Ld. CIT(A) rightly deleted the same. In that view of the matter and by considering the totality of the facts as discussed hereinabove, we do not see any merit in this appeal of the department. - Decided against revenue.
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2015 (5) TMI 743
Disallowance of dividend / interest paid to chit subscribers due to non deduction of TDS - Disallowane of expenses on collection of subscription for other group companies - Disallowance of expenses - Additional evidence put before tribunal for consideration by assessee - Held that:- We find that this issue has been decided by the ITAT in the assessee’s own case [2015 (4) TMI 938 - ITAT HYDERABAD] for A.Y. 2005-06 dated 24th September, 2014 wherein it has been held that the issue involved in the appeal of the Revenue is squarely covered in favour of the assessee by the decision of the coordinate bench of this Tribunal in assessee’s own case [2012 (2) TMI 468 - ITAT HYDERABAD] for assessment year 2008-09 rendered vide order dated 24.2.2012, wherein a similar disallowance made by the Assessing Officer was held to be unsustainable, following the decision of the Madras high Court in the case of Bilahari investments (P)Ltd. [2006 (6) TMI 59 - MADRAS HIGH COURT], wherein it was held that the dividend distributed by the assessee did not part-take the character of interest and consequently, the assessee was not liable to deduct tax at source.
Disallowance of expenses - We do not find any infirmity in the CIT (A)’s disallowing meager expenditure of ₹ 2.00 lakhs only, as a very little expenses would be actually deployed for collection of subscription from other group companies. Collection was done as minor additional work along with their regular employment. We confirm the order of the CIT (A) on this issue.
Additional evidence - We admit the additional evidence as the same substantiated the merits of the case and the evidence goes to the root of the issue, relying on the decision of the Hon'ble Bombay High Court in the case of Smt. Prabhavati S. Shah [1998 (2) TMI 107 - BOMBAY High Court] and Abhay Kumar Shroff [1997 (6) TMI 75 - ITAT PATNA]. We set aside the issue to the file of the AO to consider the additional evidence and re-decide the issue in accordance with law. - Appeal filed by the Revenue is dismissed and the appeal of the assessee is allowed for statistical purposes.
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2015 (5) TMI 742
Export of services - Non-availabity of exemption notification during the period 1.3.2003 to 19.11.2003 - Contravention of the provisions of Section 68 - Penalty u/s 76 & 78 - exemption granted under Notification No. 21/2003-ST - Held that:- It is indisputable position that the respondent assessee was being allowed and had the benefit of exemption of service tax under Notification No.6/99 till it was rescinded on 1.3.2003. Also a circular had been issued clarifying that the service tax is not leviable on export of services. Subsequently exemption has been reinstated to the services wherein consideration was being received in convertible foreign exchange. - clients who were serviced were residents abroad, and as such the services rendered to them being export services can hardly be amenable to any debate. The service being exempted from payment of service tax is also clear from two exemption notifications No.6/99 and 21/03, consideration for the same being received by the respondent assessee in convertible foreign exchange in India - Decision in the case of Commissioner of Service Tax, Mumbai-III Versus M/s. SGS India Pvt. Ltd. [2014 (5) TMI 105 - BOMBAY HIGH COURT] followed - decision for the reasons given by the Tribunal can hardly be faulted with. - Decided against Revenue.
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