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Showing 61 to 80 of 2121 Records
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2019 (2) TMI 2070
Penalty levied u/s 272(A)(1)(C) - no compliance by the assessee to file the said details in response to summons u/s 131 issued by the AO - assessee failed to file the specific details like ‘Consent Waiver Form’ before the AO as well as the Ld. CIT(A) - HELD THAT:- It is found that similar issue arose in the case of JAY KETAN PARIKH, RAJ HITEN PARIKH, SAUNAK JITENDRA PARIKH [2018 (10) TMI 1989 - ITAT MUMBAI] as held a bare reading of the summons show that a proforma of Consent Waiver Form was enclosed requiring the assessee to sign it, notarise it and thereafter submit it back. Therefore, it cannot be said that there was any default on the part of the assessee to submit a document which was already in his possession, as is the wont of the provision contained in clause (c) of Sec. 131(1) of the Act. What the Assessing Officer seeks to do in the present case is to compel the assessee to execute a document, as rightly put by the learned representative for the assessee before us, and not a case where a document already in possession of the assessee is being asked to be produced. Therefore, without going into any other aspect of the controversy, we find that the instant default is not of the type understood by a conjoint reading of clause (c) of Sec. 131(1) of the Act with clause (c) of Sec. 272A(1) of the Act. Therefore, on this count itself, we find no merit in the levy of penalty u/s 272A(1)(c) of the Act, which is hereby ordered to be deleted. - Decided in favour of assessee.
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2019 (2) TMI 2069
Denying exemption u/s 10(10AA)(i) - leave encashment received at the time of retirement - 263 days of leave as on the date of absorption - assessee had been in service under the Department of Telecommunication, Govt. of India and his stamps of appointment and pay-scale were governed by the Central Govt. Rules and assessee was absorbed in MTNL, a Govt. of India Undertaking, w.e.f 01.10.2000 vide order dated 19.01.2004 - HELD THAT:- As per the provisions of section 10(10AA)(i) of the Act, the assessee is entitled for exemption on the amount of leave encashment of leave earned during the period before absorption in MTNL as per section 10(10AA)(i) of the Act as applicable to Central Govt. because before that date he was employee of Govt. of India that the Central Government. The amount of leave encashment in respect of leave accrued after absorption in MTNL will be governed by the exemption as per section 10(10AA)(ii) of the Act.
Facts are clearly in favour of assessee and for 263 days of leave as on the date of absorption was available to the assessee, which was earned and unutilized from Government service i.e. Central Government and will be governed by 10(10AA)(i) - The balance 37 days of leave earned is from MTNL and will be governed as per the provisions of section 10(10AA)(ii) of the Act. Accordingly,allow the appeal of the assessee and direct the AO to recompute the exemption proportionately as directed above - Appeal of assessee is allowed.
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2019 (2) TMI 2068
Accrual of income - interest earned on fixed deposit - Real income theory - The said income was not the business receipt of the assessee company but was income from Other sources - AO rejected the contention of the assessee to hold that the interest accrued to the appellant was its income - HELD THAT:- CIT(A) deleted the addition stating that Income-tax is a tax on the real income, i.e., the profits arrived at on commercial principles subject to the provisions of the Income-tax Act. The real profit can be ascertained only by making the permissible deductions. There is a clear-cut distinction between deductions made for ascertaining the profits and distributions made out of profits. In a given case whether the outgoings fall in one or the other of the heads is a question of fact to be found on the relevant circumstances, having regard to business principles. Another distinction that shall be borne in mind is that between the real and the statutory profits, i.e., between the commercial profits and statutory profits. The latter are statutorily fixed for a specified purpose.
Facts of the case clearly show that the appellant never became the 'owner' of the money. It had to return the excess funds to the government. The addition made by the Ld. Assessing Officer cannot be sustained in appeal. Ground of appeal is allowed in favour of assessee.
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2019 (2) TMI 2067
TP Adjustment - TPO that in determining the ALP at NIL of the International Transaction of 'Receipt of Advisory and other services’ - Selection of MAM - HELD THAT:- Vide order Tribunal [2018 (6) TMI 1565 - ITAT PUNE] has held the TNMM to be the most appropriate method in preference to the CUP applied by the TPO. After giving certain directions, the matter has been sent back to the AO/TPO for deciding the issue accordingly. In reaching this conclusion, Tribunal relied on its own order for the A.Ys. 2009-10 and 2010-11 in which similar view was canvassed. Copies of all such orders of the Tribunal, right from the A.Ys. 2009-10 to 2013-14, have been placed on record in which similar view has been taken.
DR fairly conceded that the facts and circumstances of the instant appeal are mutatis mutandis similar to those of earlier years. Respectfully following the precedent, we set aside the impugned order and remit the matter to the file of AO/TPO for deciding this issue afresh in accordance with the directions given by the Tribunal in assessee’s own case for the earlier assessment years. Needless to say, the assessee will be provided adequate opportunity of hearing in such fresh proceedings.
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2019 (2) TMI 2066
Violation of principles of natural justice - non-service of notice - opportunity of personal hearing not provided (audi alterem partem) - HELD THAT:- The impugned orders dated 03.08.2015 are quashed and case remitted back to the respondent to pass speaking fresh orders after considering the representation of the petitioner within a period of three months from the date of receipt of a copy of this order. Before passing such orders, the respondent shall issue appropriate notice of hearing to the petitioner.
Petition disposed off.
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2019 (2) TMI 2065
Revision u/s 263 by CIT - credit card write off not allowable under section 36(1)(vii), wrong calculation on claim of special reserve allowable under section 36(1)(viii) and interest on perpetual bond wrongly allowed by the AO - HELD THAT:- It is clear from the order of CIT as reproduced above that Ld. CIT has given a direction to the AO to pass the order in a specified manner by giving the assessee an opportunity of being heard before passing the order and clearly noted that assessment order will be modified to that extent.
As per the provisions of section 263 CIT has the power to examine the assessment order passed by the AO and if he is of the view that the order passed by the AO is erroneous and prejudicial to the interest of the Revenue then the Ld. CIT may direct the AO to redo the assessment - section 263 does not contemplate setting aside an assessment order with a direction to pass the fresh assessment as per findings and directions of Ld. CIT. We are therefore of the considered view that the ld CIT has not exercised his revisionary jurisdiction as per the provisions of section 263.
The case of the assessee is supported by a decision of M/s. Dev Prakash Contractor [2015 (11) TMI 859 - ITAT CHANDIGARH].
Thus it is clear from the above that by setting aside the assessment order , the Ld. CIT has exceeded his jurisdiction by directing the AO to pass the order on the issues as raised by the Ld. CIT in the revisionary order passed especially by directing that the assessment order would be modified to that extent and as such the order u/s 263 of the act can not be sustained as the ld CIT has expressed final opinion and has left no scope for AO’s verification of the controversial issues - Decided in favour of assessee.
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2019 (2) TMI 2064
Suit for recovery of money - money was returned or not - Rejection of prayer of the appellants to quash the criminal proceedings instituted by the first respondent against them - whether the averments in the complaint disclose the ingredients necessary to constitute an offence under the Penal Code? - HELD THAT:- The High Court, in the exercise of its jurisdiction under Section 482 of the Code of Criminal Procedure, is required to examine whether the averments in the complaint constitute the ingredients necessary for an offence alleged under the Penal Code. If the averments taken on their face do not constitute the ingredients necessary for the offence, the criminal proceedings may be quashed under Section 482. A criminal proceeding can be quashed where the allegations made in the complaint do not disclose the commission of an offence under the Penal Code. The complaint must be examined as a whole, without evaluating the merits of the allegations. Though the law does not require that the complaint reproduce the legal ingredients of the offence verbatim, the complaint must contain the basic facts necessary for making out an offence under the Penal Code.
Entrustment is an essential ingredient of the offence. A person who dishonestly misappropriates property entrusted to them contrary to the terms of an obligation imposed is liable for a criminal breach of trust and is punished under Section 406 of the Penal Code.
There is nothing on the face of the complaint to indicate that the appellants dishonestly induced the first respondent to deliver any property to them. Cheating is an essential ingredient to an offence under Section 420 of the Penal Code. The ingredient necessary to constitute the offence of cheating is not made out from the face of the complaint and consequently, no offence under Section 420 is made out.
In the present case, the son of the appellants has instituted a civil suit for the recovery of money against the first respondent. The suit is pending. The first respondent has filed the complaint against the appellants six years after the date of the alleged transaction and nearly three years from the filing of the suit. The averments in the complaint, read on its face, do not disclose the ingredients necessary to constitute offences under the Penal Code. An attempt has been made by the first respondent to cloak a civil dispute with a criminal nature despite the absence of the ingredients necessary to constitute a criminal offence. The complaint filed by the first respondent against the appellants constitutes an abuse of process of court and is liable to be quashed.
The judgment of the High Court is set aside and the criminal proceedings arising from PCR 2116 of 2016 instituted by the first respondent against the appellants are quashed - appeal allowed.
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2019 (2) TMI 2063
The Supreme Court of India in 2019 (2) TMI 2063 - SC Order was presided by Hon'ble Mr. Justice Rohinton Fali Nariman and Hon'ble Mr. Justice Vineet Saran. The petitioner sought permission to withdraw the special leave petition, which was granted. The special leave petition was dismissed as withdrawn.
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2019 (2) TMI 2062
TP adjustment - Advertisement, Marketing and Sales Promotion Expenses [AMP] incurred by the assessee - HELD THAT:- As gone through the statement of expatriate employees which are extracted at pages 10 and 11 of the order of the TPO. A perusal of the statements show that LG Korea has control over the operations of LG, India. However, because of such services, the assessee has charged Asia Regional Headquarter expenses, but nowhere it proves that the assessee has incurred AMP expenses for the brand building of its AE. On the other hand, we find force in the contention of the ld. AR. An identical issue has been considered and decided by the Tribunal in assessee’s own case [2019 (1) TMI 1567 - ITAT DELHI] as held that Revenue has failed to demonstrate by bringing tangible material evidence on record to show that an international transaction does exist so far as AMP expenditure is concerned. Therefore, we hold that the incurring of expenditure in question does not give rise to any international transaction as per judicial discussion hereinabove and without prejudice to these findings, since the operating margins of the assessee are in excess of the selected comparable companies, no adjustment is warranted.
TP adjustment - Arm’s Length rate for international transaction of payment of royalty at 3.5% as against royalty paid @ 5% by the assessee - HELD THAT:- As decided in assessee own case [2019 (1) TMI 1567 - ITAT DELHI] we direct the TPO to determine the Arm’s length royalty @ 4.05%. Ground No. 5 is partly allowed.
International transaction of allocation of Asia Regional Head Quarters expenses allegedly holding that no specific services were received by the assessee in consideration for such payments - HELD THAT:- As decided own case [2019 (1) TMI 1567 - ITAT DELHI] the adjustment computed by the TPO/DRP on account of allocation of RHQ expenses is uncalled for and deserves to be deleted.
TP adjustment in respect of service warrantee charges received by the assessee by applying margin of 26% on such reimbursement - HELD THAT:- The assessee is not acting as an agent or a service provider for the associated enterprise but is seeking reimbursement of the actual cost incurred by it.
While making payment for third-party costs for services rendered by independent service providers, the assessee does not perform any service, discharge any function, or undertake any risk whatsoever and such payments are for the services rendered by independent service providers. This is clearly mentioned in the TP documentation also. In our view, such external costs being in the nature of pass-through costs, are not to be recovered along with a mark-up and a cost to cost reimbursement satisfies the arm’s length principle.
The operating margin of the assessee in the distribution segment at 4.52% is higher than that of the comparable companies at 3.93% and the after sale warrantee is closely linked with distribution function of the assessee. Therefore, no adjustment on account of international transaction of reimbursement of warranty claims is warranted on the facts of the case. Our view is fortified by the decision of Sony Ericsson Mobile Communications [2015 (3) TMI 580 - DELHI HIGH COURT] held that Clubbing of closely linked transactions is permissible in appropriate cases. The Hon’ble High Court further held that once the Revenue accepts the TNMM as the most appropriate method, then it would be inappropriate for the Revenue to treat a particular expenditure as a separate international transaction.
We find that the arrangement of receiving reimbursement for warranty transaction on actual cost basis was accepted to be at arm’s length by the DRP in assessment year 2007-08 and by the TPO in assessment year 2008-09. Considering the facts of the case in totality we do not find any merit in the impugned TP adjustment.
Addition by treating sales tax subsidy as taxable revenue receipt - HELD THAT:- As decided in assessee own case [2010 (2) TMI 916 - ITAT, DELHI] collection of dealers' price has been made in the ordinary course of trading activities. When the assessee is not permitted to collect the sales tax under the notification issued by the State Govt. the collection of sales tax as a part of dealers' price is nothing but constitutes a trading receipt - Respectfully following the precedents we decline to interfere with the findings of the CIT(A). Ground is accordingly dismissed.
Disallowance of aggregate royalty paid to LG Electronics, Korea holding the same to be in the nature of capital expenditure - HELD THAT:- As relying on assessee own case [2019 (1) TMI 1567 - ITAT DELHI] we direct the Assessing Officer to treat royalty payment as revenue expenditure.
Deduction claimed by the assessee u/s 80JJAA - HELD THAT:- An identical issue was considered and decided by the Tribunal in assessee’s own case in [2019 (1) TMI 1567 - ITAT DELHI] direct the Assessing Officer to allow claim of deduction u/s 80JJAA of the Act as claimed by the assessee.
Charging of interest u/s 234B, 234C and 234D - HELD THAT:- Levy of interest is mandatory, though consequential to our decision. The Assessing Officer is directed to levy interest as per the provisions of the law. Interest u/s 234C to be charged on the returned income.
Error in granting benefit of advance tax / self assessment tax/TDS credited - HELD THAT:- We find that there is some error in granting tax credit to the assessee in respect of advance tax, self assessment tax and TDS. We direct the Assessing Officer to give credit to the assessee after verifying the tax challan /TDS certificates. Grounds are allowed for statistical purposes.
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2019 (2) TMI 2061
Addition u/s 68 - unsecured loans - CIT-A deleted the addition - HELD THAT:- In the instant case, as rightly held by the Ld. CIT(A), the assessee has filed sufficient documents to prove the genuineness of the loan transaction during the year. AO has relied exclusively on the statement of Shri Pravin Kumar Jain recorded u/s 132(4) of the Act. The AO has not brought on record any corroborative evidence to support the addition made by him. In fact, the assessment order is a narration of the statement given by Shri Jain.
In view of the above facts, we uphold the order of the Ld. CIT(A). - Decided in favour of assessee.
Reopening of assessment u/s 147 - assessment was processed u/s 143(1) - HELD THAT:- We find that in the instant case, the AO has linked the material to connect that the assessee has indulged in activities which give rise to reason to believe that income chargeable to tax has escaped assessment. Also the recorded reasons mention the amount which according to the AO has escaped assessment. Therefore, the decision in M/s Shodiman Investments Pvt. Ltd. [2018 (4) TMI 1287 - BOMBAY HIGH COURT] is distinguishable from the present case.
As mentioned earlier, the AO reopened the assessment which was processed u/s 143(1) of the Act. In the case of ACIT v. Rajesh Jhaveri Stock Brokers Pvt. Ltd. 2007 (5) TMI 197 - SUPREME COURT] held that intimation u/s 143(1)(a) is not an assessment and held valid the notice issued u/s 148. In the case of Kone Elevator India P. Ltd[2011 (3) TMI 1340 - MADRAS HIGH COURT], CIT v. Ideal Garden Complex P. Ltd. [2011 (9) TMI 731 - MADRAS HIGH COURT] it is held that in the case of return of income processed u/s 143(1), the only condition to be satisfied for reopening is taxable income has escaped assessment and the assessee’s plea that no fresh material before the AO warranting reopening, is not relevant. Cross objection filed by the assessee is dismissed.
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2019 (2) TMI 2060
Doctrine of merger - Seeking a direction to the respondents to pay interest at the rate of 9% per annum from August, 2006 till the date of its actual refund on the principal amount - HELD THAT:- It is not in dispute that the controversy involved in the present case is no longer res integra, inasmuch as the same stands decided by the above referred decision of this court in the case of M/s Syngenta Crop Protection Pvt. Ltd. v. State of Gujarat [2018 (4) TMI 1669 - GUJARAT HIGH COURT]. In the said case this court, relied upon an earlier decision of this court in the case of State of Gujarat v. Doshi Printing Press [2015 (3) TMI 211 - GUJARAT HIGH COURT] wherein the court turned down the contention that while giving effect to section 54(1)(aa) of the Act, the effect would be available to the assessment made by the assessing authority only and not the further modification made by the first appellate authority or thereafter, the second appellate authority or even third appellate authority, as the case may be. The court held that the interpretation canvassed by the revenue of section 54(1) (aa) of the Act, if accepted, would run counter to the basic principles of the doctrine of merger which is a well accepted doctrine incorporated in the system of administration of justice.
The refund claim of the assessee, therefore, cannot be stated to have arisen from an order other than the order of assessment. The court further held that the amounts were recovered from the petitioners only in the month of February 2010, that is, long after the VAT Act was brought in force and that the petitioner cannot seek interest on the refund at the rate prescribed under the repealed Gujarat Sales Tax Act merely because the amount involved was in relation to a period when the Gujarat Sales Tax Act was in force. To that extent, the petitioner’s contention was negatived.
The respondents are directed to forthwith pay interest to the petitioner at the rate of 6% per annum from August, 2006 till the date of actual refund on the principal amount of Rs.1,28,63,365/-, and not later than four weeks from the date of receipt of a copy of this judgment - Petition allowed.
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2019 (2) TMI 2059
Non-disbursal of incentive receivable by the petitioners under the West Bengal State Support Incentive Scheme, 2008 - HELD THAT:- In the facts of the present case, interest of justice would be subserved by requiring the Managing Director of West Bengal Industrial Development Corporation to decide the issue as to the entitlement of the petitioners under the scheme of 2008, if there be any.
The Director, Electricity Duty, will consider and decide the claim for waiver of electricity duty. He will afford a reasonable opportunity of hearing to the petitioners. He is at liberty to hear such other parties and consult such documents as deemed necessary by him. He will pass a reasoned order which he will communicate to the petitioners forthwith thereafter.
Petition disposed off.
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2019 (2) TMI 2058
Validity of Reopening of assessment u/s 147 - Necessity to issue notice u/s 143(2) - HELD THAT: - In the instant case, admittedly, no notice u/s 143(2) of the Act was issued and served on the assessee after the return in response to notice u/s 148 of the Act was filed by stating that the original return filed may be treated as return filed in response to notice u/s 148, therefore, the reassessment order passed by the AO is not sustainable in law. We, therefore, accept the additional ground raised by the assessee and quash the order passed u/s 143(3)/147 for non-issuance of notice u/s 143(2) of the Act which is mandatorily required. Appeal filed by the assessee is allowed.
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2019 (2) TMI 2057
Assessment beyond the period of limitation prescribed - Assessment of Global Depository Receipt (GDR) received by the assessee from foreign entities - HELD THAT:- We find that the CIT(A) has categorically observed that the provisions of Income Tax Act empowers the AO to make a reference to the competent authority for collecting information with regard to the transactions executed by the assessee outside India and on account of that the AO referred the matter to the JS(FT&TR) in respect of the Global Depository Receipt (GDR) received by the assessee from foreign entities. The time frame for framing assessment was accordingly extended by the competent authority. We, therefore, do not find any merit on this issue and this ground of appeal of the assessee is hereby dismissed.
Addition u/s 68 - proceeds of GDRs issued by the appellant holding the same as unexplained credit - HELD THAT:- We note that there is a contradictory observation of the Assessing officer and that of the CIT(A) in this respect. AO has observed that the promoters i.e Saluja family was holding 57.27% of the shares as on March 2009 and that after GDR’s issue came, that the holding of Saluja family came down to 19.45%. AO has tried to infer that because the shareholding of the promoter had come down after the GDR’s issue, it was not a company in which the public was interested and, hence, the proviso to section 68 of the Act was to be applied. CIT(A) has observed that from the details of shareholding of the promoter family given by the AO in the assessment order that it had increased from 95.30 lacs shares to 2.77 crores shares as a result of the conversion of GDR into shares.
A perusal of the details / chart, as reproduced of the assessment order reveals that though after conversion, the number of shares had increased which was obvious, however, the percentage of holding i.e. from 57.27% before the issue of GDR’s had decreased to 8.37%, though the number of shares increased to 2.77 Crores. It is a matter of fact that once the GDR’s were cancelled for conversion to the shares, the number of shares will increase. The observation of the Ld. CIT(A) that shareholding has increased is against the facts on the file. As likely that once the GDR is issued, the shareholding of the promoter is likely to decrease.
Revenue has failed to prove that the transaction relating to the GDR’s issue was a sham transaction or that it was money of the assessee which was routed through foreign channels through GDR’s. Despite of the fact that all the information which the assesse was supposed to provide was provided by the assessee and also that the information regarding the investors was also received by the AO from the foreign entities through competent authority, no adverse fact has been pointed out against the assessee. In view of this, we do not find any justification on the part of the lower authorities in making the impugned addition on assumption of facts and thereby on the basis of suspicion only. In view of this, this issue is allowed in favour of the assessee and the additions, if any, made on this ground are ordered to be deleted.
CIT(A) framing / upholding the assessment observing that the principles of natural justice have been grossly violated by the AO - HELD THAT:- The assessment framed by the Assessing officer was not passed on the proper appreciation of the evidences. Even otherwise, in view of our observation made above, even despite information received during the appellate proceedings, no adverse view is established. Moreover, we have already discussed the issue in detail in our findings given above while adjudicating ground - In view of this, it is held that principles of natural justice also stood violated as the Assessing officer did not give proper opportunity to the assessee to rebut the allegations and the assessment was framed in a hurry as the limitation period to frame the assessment was expired. The assessment framed by the AO was thus bad in law because of denial of proper opportunity to the assessee, no substantial information available against the assessee as well as on account of violation of principles of natural justice.
Disallowance of expenditure u/s 14A - additional income on account of disallowance u/s 14A of the Act for taxation in the return of income - HELD THAT:- It will be proper to restrict the disallowance u/s 14A for the respective assessment years upto the total tax exempt income earned by the assesse irrespective of the amount of disallowance offered/s 14A in the return of income.
Assessment u/s 153A - Since we have already, while adjudicating ground No.1 of the appeal for assessment year 2010-11 have held that the additions made in the absence of any incriminating material in an assessment made u/s 153A of the Act, as per settled position of law, are not sustainable and thus the assessment framed u/s 153 A has been set aside, hence under the circumstances, the income assessed as per the original assessment framed/finalized for AY 2010-11 will remain sustained as such including the disallowance, if any made u/s 14A of the Act, subject to modification by any decision of any appellate authority on any issue in an appeal / rectification application in respect of originally framed assessment order dated 17.09.2017.
Disallowance u/s 14A is restricted to the extent of tax exempt income earned by the assessee.
Value of the short stock as undisclosed income - addition by estimating the profit at 25% as against declared by the appellant at 3.54% - HELD THAT:- CIT(A) has not pointed out any extra facts and circumstances of the case to enhance the estimation of the GP rate from 10% to 25%. In view of this, the action of the CIT(A) in this respect is set aside and we direct that the addition of unaccounted profit to be computed @ 10% as was applied by the Assessing officer on the amount of unaccounted sales in respect of stock shortage found in the course of search. This ground is accordingly partly allowed in favour of the assessee.
Addition u/s 36(1)(iii) - addition @12% on the amounts advanced) out of interest account - HELD THAT:- CIT(A) while deleting the impugned addition has followed the decision of the Hon'ble Supreme Court in the case of ‘Hero Cycles Ltd.’ [2015 (11) TMI 1314 - SUPREME COURT] and in the case of ‘CIT Vs. Kaspons Associates’ [2015 (8) TMI 1277 - PUNJAB AND HARYANA HIGH COURT] and further this issue is squarely covered by the recent decision of the Coordinate Chandigarh Bench of the Tribunal in the case of ‘ACIT Vs. Janak Global Resources Pvt Ltd’ [2018 (12) TMI 902 - ITAT CHANDIGARH] wherein, the issue has been decided in favour of the assessee by considering the decision of the Hon'ble Apex Court in the case of ‘Hero Cycles [2015 (11) TMI 1314 - SUPREME COURT] and also findings arrived in the case of Avon Cycles Ltd. [2014 (9) TMI 207 - PUNJAB & HARYANA HIGH COURT]. Moreover the issue now is squarely covered by the latest decision of the Hon'ble Supreme Court in the case of ‘CIT (LTU) Vs. Reliance Industries Ltd.’ [2019 (1) TMI 757 - SUPREME COURT]
Hence, we do not find any reason to interfere in the order of the CIT(A) on this issue. The ground raised by the Revenue, thus, stands dismissed.
Disallowance on account of employees contribution of ESIC, FP and EPF u/s 36(1)(iii) - HELD THAT:- CIT(A) has given a categorical finding that he has gone through the details of payments made by the appellant and has found that all the payments have been made by the appellant on account of EPF and ESIC before the due date of filing of return of income. Since the Ld. CIT(A) has given a factual findings, after going through the details, hence, at this stage, we do not find it a fit case to refer the matter to the file of the Assessing officer to verify the details of payments. In view of this, we do not find any merit in the appeal of the Revenue on this issue also.
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2019 (2) TMI 2056
Classification of Fuel oil in the engine room tank of the vessel - whether to be classified with the ship under Heading No. 89.08 of Customs Tariff Act, 1975 or under it’s own heading? - HELD THAT:- The issue is no longer res-integra in respect of the bunker stored in the tank in the engine room and it was held in appellant own case M/S DIAMOND INDUSTRIES VERSUS COMMISSIONER OF CUSTOMS-JAMNAGAR (A) [2015 (9) TMI 1365 - CESTAT AHMEDABAD] that the same will be classifiable as per by Hon’ble Gujarat High Court in PRIYA HOLDING (P) LTD VERSUS COMMISSIONER OF CUSTOMS, PREVENTIVE [2012 (11) TMI 532 - GUJARAT HIGH COURT] under the heading of the ship i.e. 89.08. Accordingly, the judgment of Priya Holding P Ltd and the appellant own case directly applicable to the facts of their own case.
Appeal allowed.
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2019 (2) TMI 2055
TDS u/s 195 - assessee is in the business of brand management, engaged in posting advertisements in the social portal on behalf of their clients - payment made by the assessee to the owner of the search engine - AO held that face book is social networking site, placing advertisements in the social networking sites are patented and provide valuable services, which are essentially technical in nature, receiving such kind of expertise and knowledge from Face Book, Ireland is nothing but technical services rendered by Face Book which clearly attracts the provisions of section 195 and hence tax is deductible @ 10% on the payments to be made - HELD THAT:- As per decision of Google India (P)Ltd. [2018 (5) TMI 896 - ITAT BANGALORE] wherein after referring the Tribunal decisions in the cases of Right Florist P.Ltd., [2013 (4) TMI 338 - ITAT KOLKATA] and Pinstorm Technologies P.Ltd. [2012 (12) TMI 601 - ITAT MUMBAI] Yahoo India (P) Ltd., etc. [2011 (6) TMI 162 - ITAT, MUMBAI] it is held in para 116 that “In all these cases, the assessee was either an advertiser or act on behalf of some other advertiser and has purchased space from the owner of search engine to display its advertisements online. Therefore, the payment made by the assessee to the owner of the search engine was considered to be business receipt/business profit in the hands of the owner of search engine, who is non-resident and in the absence of permanent establishment (PE) in India, the business profits/business receipts received by them were not chargeable to tax in India”.
As the assessee is engaged in the business of posting advertisement in the social portal on behalf of their clients. The payments (to be) made for making advertisement in the social portal of M/s. Face Book Ireland Ltd., a non-resident, who is not having a PE in India, on behalf of the assessee’s client M/s. Cholamandalam General Insurance Company Ltd. was not chargeable to tax in India, as held by the Tribunal decisions, supra, and hence, there is no need to deduct tax on such payments. The assessee’s appeal is allowed.
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2019 (2) TMI 2054
Permission to Official Liquidator to invite claims from workers and secured creditors of the company in liquidation under Section 529, 529A & 530 of the Companies Act, 1956 - permission to Official Liquidator to appoint Chartered Accountant from the panel maintained by the Official Liquidator for verification and adjudication of claims - permission to Official Liquidator to make payment of advertising charges as well as professional fees of Chartered Accountants on receipt of their bill from the Account of the Company in liquidation being liquidation expenses.
HELD THAT:- It is stated that presently amount of Rs.1,93,000,00/- is available in the account of the company in liquidation for disbursement and claims under Section 529, 529A and 530 of the Companies Act, 1956, (the Act) are yet not invited and that after receipt of claims, the chartered accountant shall be required to be appointed to verify the claims and after verification of the claims by chartered accountant for disbursement to the funds amongst the creditors as per their entitlement, the further report will be filed.
The report stands disposed of.
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2019 (2) TMI 2053
Validity of Reopening of assessment u/s 147 - no notice was issued u/s 143(2) - CIT(A) held that since no valid return of income was filed by assessee under section 148 of the Act, there is no requirement for issuance of notice under section 143(2) - HELD THAT:- Assessment was framed by the AO under section 143(3) read with section 147 - Admittedly, if the CIT(A) feels that the assessee has filed no return of income or the return filed by the assessee as null and void in the eyes of the law, the AO should have made assessment under section 144 - In the absence of return of income, no assessment can be framed under section 143(3) of the Act.
For framing assessment under section 143(3), the principle requisite condition is issuance of notice under section 143(2) of the Act. Admittedly, the AO failed to issue mandatory notice under section 143(2) of the Act before proceeding to complete the assessment. This issue is covered by the decision of Hotel Blue Moon [2010 (2) TMI 1 - SUPREME COURT].
Thus once no notice under section 143(2) of the Act was issued, it is a mandatory jurisdictional issue and hence, assessee is invalid. We quash the assessment order and allow this appeal of the assessee.
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2019 (2) TMI 2052
Deduction u/s 54B - Denial of deduction as purchase of agricultural land in the name of assessee’s son - agricultural land sold by the assessee was a property of HUF and the agricultural land was also purchased for the HUF in the name of son of the assessee who were the coparceners of the HUF - HELD THAT:- In the present case, it is noticed that a similar issue has been already decided by ITAT Chandigarh Bench in case of Dalbir Singh [2018 (9) TMI 2096 - ITAT CHANDIGARH] assessee is an illiterate and old retired person, the sale proceeds from the agricultural land belonging to the family, were invested in purchase of the agricultural land in the name of the sons who were co-parceners in the HUF of the assessee. So the impugned order is set aside and the AO is directed to allow the claim of the assessee for deduction under section 54B. - Decided in favour of assessee.
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2019 (2) TMI 2051
Assessment u/s 153A r.w.s. 143(3) - Proof of incriminating material found during the course of search - whether, an addition can be made in an assessment u/s 153A r.w.s. 143(3) of the Act, which is not based on any incriminating material found during the course of search and seizure, when the assessment for the Assessment Year in question has not abated? - HELD THAT:- In the case on hand, the assessee filed its original return of income on 26/09/2010. The time limit for issual of notice u/s 143(2) of the Act, was 14/08/2014. The search and seizure operation was conducted in this case on 18/02/2013. The statutory period for issual of notice u/s 143(2) of the Act, in the case of the Assessment Years had expired prior to the date of search operation. Hence the assessment for the impugned Assessment Year has not abated.
Additions in question are not based on any incriminating material found during the course of search. DR could not controvert this factual finding of the ld. CIT(A). His arguments do not reflect the findings and basis on which the Assessing Officer made the additions.
Only addition made is of share application received u/s 68 of the Act and addition of commission paid allegedly for the share application money and finally a disallowance u/s 14A of the Act. No incriminating material has been found during the course of search. The alleged statements recorded from entry operators have admittedly been retracted and the Assessing Officer has not based the additions on these statements - when copies of the alleged statements recorded by the revenue officials have not been given to the assessee, no addition can be made based on such evidence which is not confronted to the assessee. The contents of the statements are also not brought out in detail in the assessment order.
Only a general reference is made that there were certain statements recorded from various entry operators by the investigation wing. No addition can be made on such general observations. We also find that the assessee has not been given an opportunity to cross-examine any of these persons, based on whose statements, the revenue claims to have made these additions.
Cross-examination a witness - The Hon’ble Supreme Court in the case of Kishinchand Chellaram [1980 (9) TMI 3 - SUPREME COURT] had held that opportunity of cross-examination must be provided to the assessee. The Jurisdictional High Court in the case of CIT Vs Eastern Commercial Enterprises [1993 (12) TMI 26 - CALCUTTA HIGH COURT] held as matter of fact, the right to cross-examination a witness adverse to the assessee is an indispensable right and the opportunity of such cross-examination is one of the cornerstones of natural justice.
Even otherwise, it is not clear as to which of these statements were recorded during the course of search operation or whether the statements were recorded during the course of survey operations. It is well settled that a statement recorded during the course of survey operation cannot be used as an evidence under the Act.
As none of these material gathered by the Assessing Officer can be categorized as incriminating material found during the course of search or found during the course of any other operation under the Act. Thus, we hold that the additions in question are not based on any incriminating material. Appeal of the revenue is dismissed.
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