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Showing 61 to 80 of 1467 Records
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2016 (4) TMI 1408 - DELHI HIGH COURT
Approval of scheme of amalgamation - section 230 to 232 of Companies Act - HELD THAT:- In view of the approval accorded to the scheme by the shareholders and creditors (i.e. secured and unsecured) of the petitioners and, given the fact, that the RD and the OL, have not articulated any objections to the scheme, as indicated above, in my opinion, there appears to be no impediment in the grant of sanction to the scheme. Consequently, sanction is granted to the scheme in terms of Section 391 and 394 of the Act.
Application allowed.
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2016 (4) TMI 1407 - KARNATAKA HIGH COURT
Simultaneous execution petitions - validity of filing two execution petitions for realizing or recovering the decretal amount due from two judgment debtors, which relates to same transaction - HELD THAT:- Under Order 21 Rule 11 CPC, a decree holder would be entitled to proceed simultaneously against the different judgment debtors in execution of his decree as already discussed herein above. There is nothing in the Code of Civil Procedure or in any other law which lays down positively that several applications for execution of a decree cannot be filed simultaneously. The rules of procedure are hand made of justice. Order 21 Rule 11 (2)(e) CPC mandates that the decree holder has to indicate in the execution petition as to “whether any, and (if any), what payment or other adjustment of the matter in controversy has been made between the parties subsequently to the decree” and not the amount for which the decree holder has filed any other execution petition which is pending. However, under Order 21 Rule 2(f) CPC, the decree holder has to state “whether any, and (if any) what, previous applications have been made for the execution of the decree, the dates of such applications and the results Thus, it would indicate that Order 21 Rule 11 CPC does not bar simultaneous executions.
However, in case of two execution petitions being filed namely, (1) for arrest of judgment debtor and other execution petition is filed to proceed against the property of same judgment debtor, then in such a situation, Executing Court may refuse execution against the person and property of said judgment debtor at the same time as indicated in Order 21 Rule 30 CPC.
A decree holder would be entitled to file two execution petitions for realizing or recovering the decretal amount due from two judgment debtors, when judgment and decree passed against them is joint and several.
Simultaneous execution petitions having been filed by decree holder for realization of amounts due from the Judgment debtors which decree is joint and several executing Court was not justified in dismissing the execution petitions - Petition allowed.
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2016 (4) TMI 1406 - ITAT BANGALORE
Expenditure relatable to R & D grants - nature of expenditure - revenue or capital expenditure - contention of the assessee was that its expenditure relatable to the grant received was incurred for design and development of weaponary for aircraft, combat aircrafts, avionics for combat aircrafts, development of light utility helicopter and for developing a fifth generation fighter aircraft to replace the aging jaguar and MIG 29 - alternate pleading of the assessee that it had to have been allowed deduction under Section 35(1)(iv) - HELD THAT:- As admitted by the assessee that expenditure incurred out of the grants received from the government would result in acquisition by the assessee of a capital asset in the form of indigenous and self-reliant technology for the manufacture of LCH / LCA, which were required for the defence of the country. Conditions of the Grant required the assessee to utilise it for the R & D of the LCA and LCH and related technology. Thus the expenditure incurred by the assessee using such grant which were debited to its profit and loss account were such that it would result in acquisition of a capital asset in the nature of indigenous self-reliant technology for manufacture of combat aircrafts and helicopter. As noted by the lower authorities such expenditure would be a part of the capital workin- progress, and could not have been claimed by the assessee as revenue outgo. Before the AO, assessee itself has stated that once the LCA was developed and certified, it would be commercially produced and at that time revenue would be offered to tax. Thus there is an indirect admission by the assessee that expenditure incurred out of the grant resulted in acquisition of a capital asset. Once it is considered so, in our opinion, assessee could not claim such expenditure as revenue out go.
Eligibility for deduction u/s.35(1)(iv) - Assessee having claimed the expenditure as part of revenue outgo through its P & L account, when the AO found that such claim was not allowable considering it to be a capital out go, in our opinion, he ought have allowed a deduction as mandated u/s.35(1) of the Act. Section says assessee which satisfies the conditions set out therein shall be allowed and there is no condition therein which disentitles an assessee from getting this benefit for want of a specific claim. Nevertheless we find that CIT (A) has given a finding that assessee was not doing any scientific research, but only R & D. We are unable to appreciate this finding of the CIT (A). Development of avionics for modern LC air-craft and helicopter, radar systems for fighter aircrafts, requires considerable scientific research and cannot be considered as mere R & D expenditure.
As question as to what could be the amount of scientific research expenditure on which assessee is eligible for claim of deduction u/s.35(1) of the Act, require verification since it need not be equal to the grant amount received by the assessee. It could be either more or less. This aspect, in our opinion, requires a fresh look by the lower authorities. Thus, though assessee's claim that expenditure against government grant were wholly allowable as Revenue outgo is incorrect, it cannot be denied deduction available to it under section 35(1)(iv) of the Act, if it can show that other conditions set out therein are satisfied. Thus we uphold the order of the lower authorities, in so far as disallowance of expenditure is considered. However, vis-a-vis claim of the assessee it ought have been given deduction u/s.35(1)(iv) of the Act, to the extent it was eligible, we set aside the orders of the lower authorities and remit it back to the file of AO for consideration afresh in accordance with law. Ground 2 of the assessee is dismissed, whereas ground 3 is allowed for statistical purpose,
Disallowance u/s 14A r.w.r. 8D - HELD THAT:- For the assessee to say that no expenditure was incurred even when it was holding substantial investments was prima facie incorrect. What we note is that AO had made disallowance under Rule 8D(2)(iii) of the IT Rules, only for indirect expenditure. Argument of the assessee that the investments were for strategic purpose has not been substantiated and even if true, it cannot be disputed that it had earned substantial dividend during the relevant year.
We are alive to the judgment of the Hon’ble Delhi High Court in the case of Maxopp Investments Ltd [2011 (11) TMI 267 - DELHI HIGH COURT] where it was held that AO necessarily had to express his dissatisfaction on the inadequacy of the expenditure disallowed suo motu, by the assessee before invoking Section 14A of the Act. However this judgment cannot be stretched to include in its fold cases where no expenditure was claimed to have been incurred despite substantial holdings in investment, despite substantial change in investments and despite earning of substantial dividend income. We are therefore of the opinion that disallowance of 0.5% the average investments made under Rule 8D(2)(iii) of the Rules, was justified.
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2016 (4) TMI 1405 - ITAT MUMBAI
Disallowance made u/s. 14A r.w.r Rule 8D - assessee argued that investment in shares had been made out of non interest bearing funds - HELD THAT:- We find that the assessee had share capital of ₹ 60,48,00,000/-and reserves & surplus stood at ₹ 1,74,67,67,552/-,whereas the investment was at ₹ 2,06,66,62,442/-,that out of the said investment the assessee had made investment in properties also,that the fresh investment in the shares was not very huge,that it had made strategic invesment,that there was no evidence to prove that borrowed funds were utilised for making investment in shares.
In our opinion,the settled position of law stipulate that the if the assessee has sufficient own funds then it should be presumed that investment was not made from borrowed funds. Considering the availability of funds we are of the opinion that the AO was not justified in disallowing interest expenditure.Similarly, disallowance as per the provisions of section 14A r.w.rule 8D of the Rules cannot be made in a mechanical manner.Thirdly,the disallowance cannot be more than the expenditure claimed by an assessee. See K. RAHEJA CORPN. (P) LTD. [2011 (8) TMI 148 - BOMBAY HIGH COURT] - Decided in favour of assessee.
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2016 (4) TMI 1404 - CALCUTTA HIGH COURT
Legality of power of attorney, which was admittedly executed in Bangladesh, in India - authority to file an application under Section 47 of IBC - whether this Court can recognize a notarial act, which took place before a notary public at Bangladesh? - HELD THAT:- The Indian Evidence Act was enacted in 1872 and thereafter Notary Act was enacted. Therefore, provision of Section 85 of the Indian Evidence Act cannot be mechanically applied here, without considering Section 14 of the Notary Act, 1952 - Section 85 of the Indian Evidence Act cannot be read in isolation and it is to be considered along with Section 14 of the Notary Act 1952.
In the case in hand, the opposite party has produced the notarial certificate before the Court below but that is not authenticated by Indian Embassy. Learned Counsel appearing on behalf of the opposite party could not furnish any notification published by the Central Government in the official gazette that the notarial acts lawfully done by the notaries of Bangladesh shall be recognized within India for all purposes or as the case may be for such limited purposes as may be specified in the notification. Therefore, learned Court below's order is demonstrably unsustainable.
The instant revisional application is a prematured one. Accordingly, it is dismissed at this stage.
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2016 (4) TMI 1403 - KARNATAKA HIGH COURT
Income chargeable to tax in India - Royalty Income - Whether fees received can be treated as royalty as defined under section 9(l)(vi) of the Income-tax Act, 1961, and under Article 12 of the applicable DTAA? - HELD THAT:- As conceded the questions which arise for consideration are already answered by the decision of this Court in the case of Commissioner of Income Tax Vs. Synopsis International Old Ltd.[2013 (2) TMI 448 - KARNATAKA HIGH COURT]. However, she submitted that the matter is carried before the Apex Court.
When the issues are already covered by the above referred decision of this Court, we do not find that any substantial question of law would arise for consideration.
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2016 (4) TMI 1402 - DELHI HIGH COURT
Issuance of Summons u/s 108 of Customs Act - requirement of petitioner to present himself in person before the Senior Intelligence Officer, DRI , DZU, New Delhi - HELD THAT:- The summons in original has been placed on record by the petitioner. A perusal thereof reveals that the summons under Section 108 of the said Act is completely bereft of all necessary and material particulars. It does not even specify the inquiry/investigation in relation to which the petitioner has been summoned. It is also evident that the impugned summons is completely silent in respect of any case being registered against the petitioner as well as absent of any information as to why he has been called.
The impugned summons is ex facie unsustainable. Consequently, the summons dated 19.03.2016 is set aside and quashed - Petition disposed off.
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2016 (4) TMI 1401 - RAJASTHAN HIGH COURT
Benefit u/s 10(23BBA) - Benefit not available to the assessee as the Bade Mathureshji Temple Board created u/s 92 of the CPC, 1908 was not registered - HELD THAT:- In our opinion section 10(23BBA) of the Act applies to a body or authority (whether or not a body corporate or corporation sole) established, constituted or appointed by or under any Central, State or Provincial Act which provides for administration of any public, religious or charitable trusts or endowments etc.
In the instant case, the Board was constituted by the District Judge under s. 92 CPC for administration of a public religious charitable trust. In view of above, we find that the Board was established under the Central Act, that too, for administration of a public religious charitable trust.
In view of above u/s 10(23BBA) of the Act of 1961 has rightly been applied by the Tribunal. Sec. 11 and 12 apply where a body or authority is not created in the manner given u/s 10(23BBA) of the Act but the case in hand is not covered by ss. 11 and 12 of the Act of 1961.
We find that the learned Tribunal has rightly decided the issue and the present appeal against the said order does not involve any substantial question of law so as to entertain it.
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2016 (4) TMI 1400 - ITAT DELHI
Denial of deduction u/s 11, 12 and 13 - applicability of mutuality clause to Bank interest income on deposits made out of the funds contributed by members of society - HELD THAT:- As decided in own case [2012 (2) TMI 700 - ITAT DELHI] principle of mutuality applies to interest income derived by the assessee from deposits made out of contributions made by members of the society. Therefore, ground raised by the Revenue in relation to applicability of principle of mutuality to interest income is dismissed.
When the assessee is registered charitable trust its income cannot be computed on the principal of mutuality but is required to be computed u/s 11, 12 and 13 - Decided in favour of assessee.
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2016 (4) TMI 1399 - GUJARAT HIGH COURT
Levy of VAT - purchases is required to be excluded for computing “taxable turnover of purchases” - purchases on which value added tax is neither claimed nor granted are required to be excluded for computing “taxable turnover of purchases” - section 11(3)(b) of Gujarat VAT Act - HELD THAT:- Section 11(3)(b) of the GVAT Act provides that notwithstanding anything contained in the section, the amount of tax credit in respect of a dealer shall be reduced by the amount of tax calculated at the rate of four per cent on the taxable turnover of purchases within the State - (i) of taxable goods consigned or dispatched for branch transfer or to his agent outside the State, or (ii) of taxable goods which are used as raw materials in the manufacture, or in the packing of goods which are dispatched outside the State in the course of branch transfer or consignment or to his agent outside the State, (iii) of fuels used for the manufacture of goods. Thus, the amount of tax credit in respect of a dealer is required to be reduced by the amount of tax calculated at the rate of four per cent on taxable turnover of purchases within the State. The controversy involved in the present case is as regards the taxable turnover of the purchases made by the petitioner.
It would, therefore, be germane to refer to the definition of “taxable turnover” as defined under section 2(30) of the GVAT Act which provides that “taxable turnover” means the turnover of all sales or purchases of a dealer during the prescribed period in any year after deducting therefrom, the matters enumerated thereunder. Sub-section (32) of section 2 defines “taxable turnover of purchases” to mean the aggregate of the amounts of purchase price paid or payable by a dealer in respect of any purchase of goods made by him during a given period after deducting the amount of purchase price, if any, refunded to the dealer by the seller in respect of any goods purchased from the seller and returned to him within the prescribed period. Thus, turnover of purchases is the aggregate of the amount of purchase price paid or payable by a dealer in respect of purchases made by him.
When the word “includes” is used in a definition as in the case of section 2(18) of the GVAT Act, it is clear that the legislature does not intend to restrict the definition; it makes the definition enumerative and not exhaustive, that is to say, the term defined will retain its ordinary meaning but its scope would be extended to bring within the term certain matters which in its ordinary meaning it may or may not comprise. Inclusion of the words “duties levied or leviable under the Central Excise Tariff Act, 1985 or the Customs Act, 1962” is an inherent indicator of the legislative intent to include only those duties/taxes within the purview of the expression “purchase price”. Therefore, the intention of the legislature to exclude value added tax from the ambit of purchase price is clear, as otherwise, the same would also have found place in the categories - the view adopted by the Tribunal is in consonance with the construction of section 2(18). Since the interpretation of “purchase price” as defined under section 2(18) of the Act is the foundation for interpretation of the expressions “turnover of purchases” and “taxable turnover”, once it is held that the purchase price does not include the value added tax component, it follows that calculation of input tax credit under section 11(3)(b) of the GVAT Act is also required to be made by excluding the value added tax component from the total turnover of the dealer.
It is not possible to state that the impugned order passed by the Tribunal suffers from any legal infirmity so as to give rise to any question of law, much less, a substantial question of law - Appeal dismissed.
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2016 (4) TMI 1398 - ITAT MUMBAI
Characterization of income - nature of income - rental receipts of the assessee - business receipt or income from house property - HELD THAT:- For Asst. Year 2006-07 in assessee’s own case [2015 (10) TMI 2743 - ITAT MUMBAI] tribunal has confirmed the order of CIT(A) and considered the business centre service charges as business receipts - premises are in the control of the assessee and the assessee is required to provide services as per the agreement for which personnel on permanent basis were to be employed. Thus, the management and administration of the mall vested with the assessee. The detailed finding recorded by the CIT(A) has not been controverted by the department by bringing any positive material on record.
Issue in favour of the assessee for holding that such commercial exploitation renders income from business rather than income from house property. - Decided against revenue.
Disallowance of interest u/s. 36(1)(iii) - assessee has failed to substantiate the commercial expediency of giving interest free advances to the sister concerns out of its interest bearing borrowings - HELD THAT:- Assessee before us clearly stated that the assessee and its sister concerns are engaged in the business of real estate and this fact was argued before CIT(A) by assessee. He explained that the assessee has embarked upon setting up malls/business centre in a very big way in India . Developing and managing malls/shopping complexes is a very complex specialized business activity. It requires huge capital investment, manpower and, above all, expertise and knowledge in retail market and consumer behavior. The sister concerns of the assessee were in mall management and development business since many years due to which they had acquired relevant expertise and knowledge in the field of Mall Management Co. Ltd. As these concerns were already in mall business and the assessee had advanced amounts to these concerns as a part of its short term and long term strategy to expand its mall business, including construction of premises for the assessee in popular commercial centre for enabling the assessee to establish itself mall business. In view of the above facts and circumstances, we are of the view that the CIT(A) has rightly deleted the disallowance of interest - Decided against revenue.
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2016 (4) TMI 1397 - ITAT DELHI
Maintainability of appeal - low tax effect - HELD THAT:- The departmental appeal has been filed wherein the tax effect involved is much less than ₹ 10 lakh.We dismiss the departmental appeal considering the material available on record.
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2016 (4) TMI 1396 - SUPREME COURT
Scope of Review - the review petitions were ordered to be heard by a Five-Judge Bench - HELD THAT:- After giving our thoughtful and due consideration, we are of the view that the judgment delivered in Christian Medical College [2013 (10) TMI 432 - SUPREME COURT ] needs reconsideration. We do not propose to state reasons in detail at this stage so as to see that it may not prejudicially affect the hearing of the matters.
Suffice it is to mention that the majority view has not taken into consideration some binding precedents and more particularly, we find that there was no discussion among the members of the Bench before pronouncement of the judgment.
Review petition allowed - the judgment dated 18th July, 2013 recalled and the matters are directed to be heard afresh.
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2016 (4) TMI 1395 - ITAT CHENNAI
Reopening of assessment u/s 147 - eligibility of reasons to believe - HELD THAT:- Under the substituted section 147 existence of only the first condition suffices - if the AO for whatever reason has reason to believe that income has escaped assessment it confers jurisdiction to reopen the assessment. It is, however, to be noted that both the conditions must be fulfilled if the case falls within the ambit of the proviso to section 147. The case at hand is covered by the main provision and not the proviso.
Ingredients of section 147 are fulfilled, the Assessing Officer is free to initiate proceeding under section 147 of the Act. While issuing the notice u/s.148 of the Act, for the purpose of reopening of assessment, the final outcome of the proceedings is not relevant and at the initial stage, what is required is “reason to believe” but not established fact of escapement of income.
At the stage of issue of notice, the only question is whether there was relevant material on which a reasonable person could have formed a requisite belief, whether the material would conclusively approve the escapement is not the concerned, at the time of reopening of the assessment. AO has not required to establish by conclusive evidence that the issue raised in reopening assessment would be calculated with the addition of income in reassessment order.
Issue of notice u/s.148 of the Act, for the purpose of reopening of assessment u/s.147 of the Act is based on material available before the Assessing Officer in respect of undisclosed bank account in foreign countries so as to believe that the income was escaped from the assessment, while framing the original assessment. Hence, reopening of assessment is valid. - Decided against assessee.
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2016 (4) TMI 1394 - ITAT CHENNAI
Set off of income offered u/s.68 against the loss incurred by the assessee - AO had not allowed the set off of the income offered u/s.68 against the loss incurred in all the regular heads of income specified in Section 14 - HELD THAT:- As in M/S. ERODE ANNAI SPINNING MILLS P. LTD. [2015 (11) TMI 587 - ITAT CHENNAI] business loss of the assessment year under consideration could be set off against the income assessed u/s.68 under the head ‘other sources’. However, the issue on hand before us in this appeal is whether unabsorbed depreciation of earlier years could be set off against deemed income u/s.69 of the Act or not, which is totally different issue. Section 72 of the Act does not permit set off of accumulated losses and unabsorbed depreciation against any other head of income other than the income from “profits and gains of business or profession”. Being so, the above order of the Tribunal has no application to the facts of the present case.
Once unabsorbed depreciation is considered as part of current depreciation, no doubt, the net result of computation under the head 'Profits and gains of business or profession' for any given year would be inclusive of such unabsorbed depreciation. Needless to say that any loss as a result of such computation whether on account of unabsorbed depreciation or not would not be susceptible to a set off against income under the head salaries on account of specific Bar contained in sub-s. (2A) of s. 71 of the Act. Neither s. 72 nor s. 32(2) of the Act would in any way affect the inter-head adjustments specified u/s 71 of the Act nor the application of specific bar contained in sub-s. (2A) thereof. This being the case, we are of the opinion that the AO as well as the learned CIT(A) was well justified in not allowing the claim of the assessee for having its unabsorbed depreciation from earlier years to be set off against salary income.
Accordingly, we are of the opinion that the CIT(A) is justified in disallowing set off of unabsorbed depreciation from earlier years against income from other sources. Hence, the appeal of Revenue is allowed.
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2016 (4) TMI 1393 - ITAT COCHIN
Addition of cash credits or investments unexplained u/s 68 / 69 - Assessee submitted that documents may help the assessee to substantiate the claim of receipt from his son-in-law - HELD THAT:- As in the interest of natural justice, the assessee should be provided with one more opportunity to prove the claim of receipt from his son-in law, since the same has been claimed to have been received in 2001. If it is proved that the above said amount was received in 2001, the same cannot be assessed during the year under consideration, since what was received during the year under consideration was only refund of amount given to Shri Prasad.
It is the responsibility of the assessee to substantiate the claim of receipt of loan in the year 2001. According to Ld A.R, the documents relating to criminal proceedings may throw light on the above said claim. Accordingly, we set aside the order of Ld CIT(A) on this issue and restore the same to the file of the AO with the direction to examine the same afresh in the light of documents that may be furnished by the assessee in this regard.
For remaining amount of ₹ 3.00 lakhs, the claim of the assessee is that the same is required to be given to Shri Ruban Thomas, the son in law of the assessee, i.e., according to the assessee, the same represents reimbursement of litigation expenses met by his son-in-law. This issue is connected with the claim of receipt of loan from sonin- law of the assessee. Accordingly, set aside this issue also to the file of the AO - Appeal of the assessee is treated as allowed for statistical purposes
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2016 (4) TMI 1392 - ITAT MUMBAI
Disallowance of guest house expenses - HELD THAT:- Identical issue has been decided by the Tribunal against the assessee in the earlier years. We find that while deciding the appeal for the AY 1996-97 [2013 (8) TMI 520 - ITAT MUMBAI] - Ground No. 1 is decided against the assessee.
Interest credited to interest suspense account taxed in earlier years - HELD THAT:- During the course of hearing before us, representatives of both the sides conceded that issue stands decided in favour of the assessee subject to verification by the AO with respect to the earlier years.
Disallowance in respect of payment for scientific research - HELD THAT:- AR agreed that assessee had not challenged the order for the year 1996-97 before the Tribunal. As the assessee had accepted the order of the FAA for the earlier year, we are of the opinion that there is no need to disturb the order of the CIT(A) for the current year as facts for both the years are identical- except that the amounts involved are different. Confirming the order of the FAA Ground No. 3 is decided against the assessee.
Exemption u/s. 10(15)(iv)(h) - assessee had claimed entire interest received on tax free securities exempt u/s. 10(15)(iv)(h) - as per assessee expression “income” meant “net income” i. e. receipt minus expenditure - HELD THAT:- AO had allowed expenditure to the extent of ₹ 25. 43 crores and had disallowed expenditure of ₹ 45. 51crores on proportionate basis, that the FAA directed the assessee to furnish details to prove that borrowed funds were not used for making investment yielding exempt income, that the assessee had admitted that it was not possible to co-relate the investment with own funds, the assessee had claimed that its own funds including reserves and surpluses were about ₹ 30, 000 crores for the year under consideration. The AO had applied the provisions of section 14A of the Act. In our opinion law relating to allowing expenditure with regard to exempt income has evolved since the appeal was decided by the FAA for the year under consideration. The AO/FAA did not have the benefit of the cases dealing with the provisions of section 14A, while making the assessment /deciding the appeal. Matter needs further verification/investigation. Therefore, in the interest of justice we are restoring back the issue the file of the AO for fresh adjudication. He is directed to afford reasonable opportunity of hearing to the assessee . Ground No. 4 is decided in favour of the assessee in part.
Reduction u/s. 80M - HELD THAT:- As decided in M/S. MODERN TERRY TOWELS LTD., [2012 (8) TMI 776 - BOMBAY HIGH COURT] the provisions of section 80HHC of the Income-tax Act, 1961, are entirely different from those of sections 80M and 80AA. There is no basis for importing the provisions of section 80HHC for interpreting section 80M. That would not lead to a satisfactory computation of the net dividend under section 80M. Tribunal was justified in law in allowing special deduction under section 80M in respect of gross dividend without deducting estimated expenses therefrom.
Disallowance of depreciation on leased assets - HELD THAT:- In the case of bank it is not permitted under the Banking Regulation Act to engage in the business of leasing of equipments. Following the decision of Special Bench of this Tribunal in case of IndusInd Bank Ltd. [2012 (3) TMI 212 - ITAT MUMBAI] we hold that the transaction in question is finance lease and not operating lease. Accordingly, we uphold the orders of the authorities below qua this issue - Decided against assessee.
Un-earned interest on doubtful advances as per sec. 43D - AR stated that the amount in question had already been disallowed in the past, that there cannot be disallowance of the same amount in two years - HELD THAT:- We find that the claim made by the assessee of double disallowance of the same amount has not been considered. Therefore, in the interest of justice we are reverting back the issue to the file of the AO to decide the issue afresh after affording reasonable opportunity of hearing to the aa. Gr. No. 7 stands partly allowed in favour of the assessee.
Deduction for provision for bad and doubtful debts u/s. 36(1)(viia) - HELD THAT:- FAA after considering the assessment order and the assessee’s order held that section 36(1)(viia) prescribed upper limit for deduction in respect of provision for bad and doubtful debts, that the assessee could not allow deduction for any amt exceeding the limit even if the provision had been created as per the directions of the RBI. During the course of hearing before us, representatives of both the sided agreed that issue stand decided against the assessee by the Tribunal in own case [2013 (8) TMI 520 - ITAT MUMBAI] - When the allowable claim has been accepted by the AO under the provision of section 36(1)(viia) then merely the provision made on the basis of RBI guidelines does not become allowable for deduction in contravention of the provision of section 36(1)(viia). It is pertinent to note that when the claim of deduction specifically provided u/s 36(1)(viia) then the same cannot be allowed by applying any other provision. - Decided against assessee.
Contribution to SBI Retired Employees Medical Fund - Addition u/s 40A - HELD THAT:- Tribunal was of the opinion that provisions of section 40A(9) should not make any harm to the expenditure incurred bonafide, that the contribution by the assessee bank was not disputed by the AO, stating that the same was not bonafide, that the funds were not controlled by the assessee banks, that the bonafide contribution made by the assessee as an employer was not hit by section 9 of section 40A of the Act. In the case under consideration, there is no doubt about genuineness of payment nor it is the case of the AO or FAA that Trust was not bonafide or the expenditure was not incurred wholly and exclusively for the employees. Considering these facts of the case and following the judgment of State Bank of Travancore [1986 (1) TMI 1 - SUPREME COURT] Ground No. 9 is decided in favour of the assessee.
Write off bad debts u/s. 36 (1) (iii), Recovery of bad debts written off u/s. 41(4) and Income earned from foreign branches - HELD THAT:- Remitting back all the three issue to the file of the AO for fresh adjudication. AO may afford a reasonable opportunity of hearing to the assessee.
Disallowance of depreciation on matured investments - HELD THAT:- Identical issue has been decided by the Tribunal against the assessee in the earlier years. We find that while deciding the appeal for the AY 1996-97 [2013 (8) TMI 520 - ITAT MUMBAI] - Ground No. 1 is decided against the assessee.
Loss on revaluation of permanent category investments - HELD THAT:- A security capital is employed, it is a part of normal course of business of a bank and the money which was not lend to the borrower but was invested in the form of deposits in another bank cannot be said to have become ceased to be part of stock in trade of bank. Keeping in view the ratio of these judicial pronouncements, we hold that the investment in question very much represented stock in trade of the baking business of the assessee and the loss on the revaluation thereof is allowable as deduction. Accordingly, the impugned order of the ld. CIT(A) on this issue is set aside and the A. O. is directed to allow the deduction claimed by the assessee on account of loss on revaluation of investment.
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2016 (4) TMI 1391 - ITAT KOLKATA
Correct head of Income - FD interest - business income or income from other sources - HELD THAT:- Not in dispute that the assessee had to invest funds in fixed deposits and offered them as security for the overdraft facilities it received from banks.
In the case of Indo Swiss Jewels Ltd. [2005 (9) TMI 47 - BOMBAY HIGH COURT]had held that where interest is earned on inter corporate deposits made from surplus funds which are set apart for payment of imported machinery, the said interest income has to be assessed as business income.
In the case of Koshika Telecom Ltd. [2006 (2) TMI 140 - DELHI HIGH COURT] has taken the view that where deposit of margin money by an assessee with a bank was linked with the furnishing of bank guarantee to be given to the Department of Telecommunications, for obtaining a licence by an assessee who was in the business of telecommunication, the same has to be treated as business income.
In the case of Commissioner Of Income-Tax v. Lok Holdings [2008 (1) TMI 365 - BOMBAY HIGH COURT] held that money received by a property developer from prospective purchases during the progress of construction and where such funds were deposited by an assessee with the bank, interest earned on such deposits was held to have arisen out of business activity and, therefore, the same had to be construed as income from business. In view of the above, we are of the view that the order of CIT(A) holding that the interest income is income from business has to be upheld. - Decided in favour of assessee.
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2016 (4) TMI 1390 - CALCUTTA HIGH COURT
Validity of Section 22(12)(d)(a) of the West Bengal Value Added Tax Act, 2003 - challenge on the ground that merely because a registered dealer deals with another registered dealer whose registration is subsequently cancelled does not imply that the concerned transaction at a time that both the dealers held valid registration certificates could be questioned - HELD THAT:- There appears to be substantial merit to the challenge. All that a registered dealer has to do before entering into any transaction with another registered dealer is to assess whether such other dealer has a valid registration certificate. Once a dealer satisfies himself as to the validity of the registration certificate of other dealer, it may be too harsh to question the transaction upon the subsequent cancellation of the registration of the selling dealer, unless an element of connivance is established.
The report dated February 22, 2016 is set aside inasmuch as the same denies the input tax credit cited by the petitioner merely on the ground that the other dealers' registration certificates were cancelled ab intio and without taking into account that at the time that this petitioner entered into the relevant transactions with the other dealers, the other dealers held the valid certificates the other dealers' names figured on the respondents' website.
Petition disposed off.
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2016 (4) TMI 1389 - GUJARAT HIGH COURT
Setting aside of notice inviting tenders for completing the residual work, for which, contract was awarded to the respondent No.2 agency - privity of contract - HELD THAT:- The petitioner has no privity of contract with either respondent No.2 or IOC, the principal assigner of the contract. In fact, counsel for the IOC has stated that whatever outsourcing agreements executed were without the permission of IOC. Be that as it may, under no condition the petitioner can claim any relief against IOC, particularly in facts of the present case. Firstly, the entire issue is in realm of contractual relations. Secondly, large number of disputed questions of facts are involved. Thirdly, there is no privity of contract between the petitioner and the IOC - Mere completion of the work even by the principal agency need not always be the sole criteria for payment when complex contractual obligations are to be performed.
Petition dismissed.
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