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Showing 81 to 100 of 1467 Records
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2016 (4) TMI 1388 - SUPREME COURT
Benefit of interim order - continuation of employment of respondents - HELD THAT:- By way of an interim order by staying the operation of relieving order and by directing the Appellants to continue to employ the Respondents herein, the Tribunal has virtually decided the O.A. itself and granted the main relief by way of an interim order.
The order granted by the Tribunal dated 2.2.2016 and the confirmation of the same by the High Court vide impugned order dated 29.3.2016 cannot be allowed to stand.
Appeal disposed off.
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2016 (4) TMI 1387 - BOMBAY HIGH COURT
Allowable business expenditure - share issue expenses incurred or raising capital for purchase of plant and machinery, purchase of consumables like diesel, oil and coal, deduction u/s 80M on the entire dividend income received, payments made to Glaxo Sports Club do not fall within the purview of Section 40A(9),Head Office Administrative Expenses and interest cost be not allocated to the Nasik Units for computing the quantum of deduction under Section 80I/80IA for the Nasik Units and disallowances made by him as part of profit of eligible unit on proportionate basis for the purpose of deduction u/s 80IB and 80IB - HELD THAT:- This Court dismissed the Revenue's appeal in [2013 (2) TMI 789 - BOMBAY HIGH COURT] - The questions raised therein were identical to question arrived herein. No distinguishing features have been shown to us for the subject assessment year from that existing for the A.Y. 199596. In the above view, question nos. (1), (2), (5), (6), (7) and (8) do not give rise to any substantial question of law. Thus, not entertained.
Interest on DPEA liability allowed as expenditure on year to year basis - whether interest liability was neither claimed as deduction in the return of income nor claimed as expenses in its books of account and at the best was treated as liability in the nature of contingent liability which had neither accrued nor arisen? - HELD THAT:- Revenue had filed an appeal from the order of the Tribunal for A.Y. 1996-97 on an identical question this Court dismissed the Revenue's appeal.
Advance license receivable by the assessee - Whether is to be taxed in the year in which the benefits actually accrue after the imports are effected and not in the year in which the licence is granted to the licencee / assessee? - HELD THAT:- Issue raised herein stands concluded against the Revenue by the decision of the Apex Court in Commissioner of Income Tax Vs. Excel Industries Ltd. [2013 (10) TMI 324 - SUPREME COURT]. No distinguishing features are urged before us to warrant our taking a different view from that taken in Excel India Ltd. (supra).
Disallowances as part of profit of eligible unit on proportionate basis for the purpose of deduction u/s 80IB and 80IB - whether deduction u/s 80IB of the Act cannot be allowed more than what was claimed by the assessee? - HELD THAT:- Question arising herein stands concluded against the Revenue the the decision of this Court in Associated Capsules (P) Ltd. Vs. Commissioner of Income Tax [2011 (1) TMI 787 - BOMBAY HIGH COURT]. No distinguishing features have been pointed out in respect of the present assessee which would warrant taking a different view
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2016 (4) TMI 1386 - ITAT LUCKNOW
Addition on account of low house hold withdrawal - HELD THAT:- The section mandates that where in any financial year the assessee has incurred any expenditure and offers no explanation about the source of such expenditure or part thereof or the explanation, if any, offered by him is not in the opinion of the Assessing Officer, satisfactory, the amount covered by such expenditure or part thereof, as the case may be, may be deemed to be the income of the assessee. From these provisions, it is apparent that the onus is on the Revenue to prove that the assessee has actually incurred the expenditure.
There is no evidence or cogent material being brought on record or placed before us by learned D.R. which may prove that the assessee has incurred the expenditure much more than the sum of ₹ 85,000/- which has been withdrawn by the assessee as drawings except the payment of electricity.
AO just estimated the expenditure. Once the Revenue discharges its onus only then the onus gets shifted on the assessee to give explanation proving the nature and source of the expenditure to the satisfaction of the Assessing Officer. Since the Revenue did not discharge its onus we therefore, set aside the order of CIT(A) and delete the addition of ₹ 3 lac made on account of low drawings. Thus, ground No. 1 stands allowed.
Addition made on account of payment of electricity bill except the change in the figures - HELD THAT:- Assessee even though vehemently argued before us but could not prove or submit any cogent material or evidence which may prove the nature and source of these expenses incurred by the assessee. Revenue has discharged its onus by bringing the evidence on record but the assessee could not prove the nature and source therefore, we sustain the order of CIT(A) confirming the order of the Assessing Officer in respect of the addition being made for the payment of electricity bill - Decided against assessee.
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2016 (4) TMI 1385 - SUPREME COURT
Classification of services - Business Auxiliary Services - Department took a prima facie view that the contract was for the purpose of packing, loading and unloading etc. of the goods, for which labour was supplied by the respondent to M/s Birla Corporation Ltd. - HELD THAT:- The High Court has simply gone by the contract in question, which was entered into between the respondent and M/s Birla Corporation Ltd. and taking into consideration all the averments, which were made in the show cause notice, on the basis of admitted facts, it has come to a conclusion that even when the allegations in the show cause notice are accepted, the said contract does not amount to providing any 'Cargo Handling Service' as defined under Entry 23 of Section 65 of the Act. Therefore, we are of the opinion that the High Court did not commit any mistake or illegality in entertaining the writ petition when no disputed questions of fact were involved and the legal issue was to be decided on the basis of the facts, as admitted by the parties, which were so specifically recorded by the High Court itself.
The High Court, on the interpretation of the aforesaid Entry, has observed that two conditions for considering any service to be 'Cargo Handling Service' need to be satisfied, namely; (1) there must be a cargo i.e. a packed or unpacked commodity accepted by a transporter or carrier for carrying the same from one destination to another. It is only after the commodity becomes a cargo, its loading and unloading at the freight terminal for being transported by any mode becomes a cargo handling service, if it is provided by an independent agency and; (2) the service provider must independently be involved in loading-unloading or packing-unpacking of the cargo - in the instant case, as per the contract entered into between the respondent and the customer, namely, M/s Birla Corporation Ltd., the respondent was to supply manpower for working at the packing plant as per the customer's requirement. The contractor-respondent was to ensure that manpower deployed on the work given by customer's officers is executed properly, diligently, uninterruptedly and to the satisfaction of the customer in the factory premises of its works.
It is significant to note that no part of loading or unloading was assigned to the workers of the respondent-assessee upto transportation of the cement bags out of the factory. This work was, in fact, been performed by the automatic machines. It is through these automatic machines, the cement bags were loaded, unloaded, packed or unpacked and this included Cargo Handing Services provided for freight in special containers or for non-containerized freight, services provided by a container freight terminal or any other freight terminal, for all modes of transport and cargo handling service incidental to freight, but does not include handling of export cargo or passenger baggage or mere transportation of goods.
The High Court has rightly concluded that the aforesaid services would not fall within the definition of 'Cargo Handing Services'.
The conclusion of the High Court that services provided by the respondent-assessee did not amount to Cargo Handling Services and, therefore, no such service tax was leviable is upheld - Appeal dismissed.
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2016 (4) TMI 1384 - ITAT MUMBAI
Disallowance u/s 14A read with Rule 8D - HELD THAT:- It is apparent that the provisions of Section 14A read with Rule 8D of the Act is not applicable for the assessment year in question i.e. 2006-2007 and was to be applicable from the assessment year 2008-09 onwards. The Bombay High Court has settled law in this connection in case Godrej & Boyce Mfg. Co. Ltd. Vs. DCIT [2010 (8) TMI 77 - BOMBAY HIGH COURT].
No doubt the expenditure incurred to earn the exempt income is liable to be disallowed on reasonable basis by providing the reasonable opportunity to the assessee in accordance with the law specifically in view of the observations made by the Hon’ble Bombay High Court (Supra). Accordingly this issue is hereby restored to the file of Assessing Officer to re-examine the matter afresh in accordance with law. Accordingly this issue is decided in favour of the Assessee.
Disallowance of expenditure incurred by the Appellant in respect of reimbursement of property taxes to Precision Component(P) Ltd.(PCPL) - HELD THAT:- As A.R. contended the reimbursement of property tax partakes the character of rent only. There is merit in its said contention also. Hence, what is required to be seen is as to whether to aggregate amount of rent plus reimbursements compares well with the earlier years payment. If it does not compare well, then it is the duty of the assessee to justify the payment, this issue required fresh examination at the end of Assessing Officer. Accordingly we set aside the order of learned CIT(A) on this issue and restore this issue to the file of Assessing Officer for fresh examination.
Expenditure incurred upon the advertisement and promotion - HELD THAT:- Keeping in view of the argument advanced by the learned representative of the parties and perusing the record, it is observed that this matter of controversy, has already been adjudicated by the Income Tax Appellate Tribunal in the assessee’s own case [2008 (4) TMI 535 - ITAT MUMBAI] Moreover, this matter of controversy has also been adjudicated by the Hon’ble Bombay High Court in assessee’s own case for the A.Y. 1998-99 wherein, such expenditure has been treated as revenue expenditure.
Commission accrued to the assessee on the date of actual receipt of commission or on the date of payment by the client directly to the principal and not on the raising of invoices - when the commission received by the assessee company is required to be taxed - HELD THAT:- No doubt, the A.O. disallowed the same but the Hon’ble Tribunal in his judgment as Star India Pvt. Ltd. Vs. ACIT [2006 (7) TMI 569 - ITAT MUMBAI] found justifiable to tax an amount at the time of receipt and appeal against the said order was dismissed by the Hon’ble Bombay High Court in [2009 (3) TMI 990 - BOMBAY HIGH COURT]. No doubt in the said circumstance the ground raised by revenue does not seems justifiable therefore we have arrived at this conclusion that the learned CIT(A) has passed the order correctly and judiciously on this issue which does not require to be interfered with at this appellate stage. Hence, this issue is in decided in favour of the assessee.
Allowance of depreciation @ 60% on computer peripherals like rack, printer, port, routers, cord etc. - HELD THAT:- This controversy has been decided by the Tribunal in case filed as DCIT Vs. Datacraft India Ltd. [2010 (7) TMI 642 - ITAT, MUMBAI] and by the Hon’ble High Court of Delhi while the deciding the case of CIT Vs. BSES Rajdhani Powers Ltd. [2010 (8) TMI 58 - DELHI HIGH COURT]. The plea which has been taken by the revenue is that the depreciation which has been allowed @ 60% and the value of the paper and other materials, is higher but the matter has been considered by the learned CIT(A) who allowed the same on the basis of the assessment held in the year of 2003-04, 2004-05 and 2005-06.
Determination of arm’s length compensation as per order of the Transfer Pricing Officer(T.P.O) - HELD THAT:- In view of the report of Transfer Pricing Officer no adjustment was made to declare the arm’s length price by the assessee, therefore, in view of the said circumstance no addition on account of transfer pricing adjustment was being made to taxable income declined by the assessee. Nothing came into notice that the findings given by the Assessing Officer as well as learned CIT(A) were wrong against law and fact. Hence this issue is decided in favour of assessee and against the revenue.
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2016 (4) TMI 1383 - KERALA HIGH COURT
Liability of service tax of respondent KSFE for the transactions which were subject of consideration - HELD THAT:- In Muthoot FinCorp. Ltd. v. CCE, Visakhapatnam [2009 (8) TMI 236 - CESTAT, BANGALORE], the Tribunal had taken the view that similar transactions were not exigible to service tax. The concept of the transaction is that KSFE provides service by releasing funds to a person in India, as a result of the money transferred through M/s. Paul Merchants Ltd., which is ‘PML’, for short. The Tribunal has noted that as a matter of fact, if a person pays money in England or elsewhere outside India to be given to his relative in India and the KSFE by virtue of the sub-representation agreement arranges to deliver the said money to the beneficiary on verification of identity, for this exercise, the KSFE does not charge any amount as commission or fee from the recipients of the amount. The charge if any levied by the company outside India on the person who pays the amounts is not a transaction in India.
The CESTAT was justified abundantly in following the ratio of Muthoot FinCorp and deciding that KSFE, which was in appeal before the CESTAT, was entitled to an order as has been granted by the Tribunal - Appeal dismissed.
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2016 (4) TMI 1382 - ITAT CHANDIGARH
Disallowance under section 14A - HELD THAT:- We observe that the assessee has more than sufficient owned funds to make investments. Since it is having huge owned funds and in comparison to that investments are of a very lesser amount, in view of the judgment of the Jurisdictional High Court in the case of Kapsons Associates Investment P. Ltd. [2015 (8) TMI 1277 - PUNJAB AND HARYANA HIGH COURT], we can safely infer that the investments have been made out of owned funds and not from borrowed funds. no disallowance under sect ion 14A of the Act with respect to interest expenditure can be made.
As regards the administrative expenditure, we are in agreement with the submissions of the learned counsel for the assessee that in the case of CIT Vs. Deepak Mittal [2013 (9) TMI 764 - PUNJAB & HARYANA HIGH COURT] has held that in the absence of any satisfaction recorded by the Assessing Officer as to the claim of the assessee, the disallowance made by him on account of administrative expenses under Rule 8D of the Income Tax Rules is not as per law. In view of the above, the act ion of the learned CIT (Appeals) in deleting the disallowance made by the Assessing Officer under sect ion 14A of the Act is confirmed.
Disallowance of interest u/s 36(l)(iii) on investment in shares - shares were actually allocated much later and the money was not actually used by assessee for business purpose - HELD THAT:- From the perusal of record and submissions given by the learned counsel for the assessee, there is no dispute to the fact that the assessee is having more than sufficient owned funds much larger than the total investments made in the share capital of the subsidiary companies. Therefore, we are in agreement with the arguments of the learned counsel for the assessee in view of the judgment of the Jurisdictional High Court in the case of Bright Enterprises [2015 (11) TMI 342 - PUNJAB & HARYANA HIGH COURT] and Kapsons Associates Investments P. Ltd. [2015 (8) TMI 1277 - PUNJAB AND HARYANA HIGH COURT] we can very easily presumed that the investments have been made out of the non interest bearing funds. Therefore, no disallowance under sect ion 36(1) (iii) of the Act can be made. Since it is held that the investments were made out of non interest bearing funds, it is automatically presumed that with regard to these investments the assessee had not made any claim of interest under sect ion 36(1) (ii) - there is no need for the assessee to prove that the funds were lent for business purposes or not. In view of this, we do not find any need to interfere in the order of the learned CIT (Appeals) in this respect
Addition on account of capitalization of capital advance by holding that these were for "purchase of spares" - before AO the assessee claimed these to be for "machinery" and hence filed different facts before Ld. CIT(A) - HELD THAT:- We do not find any infirmity in the order of the learned CIT (Appeals) since he has been fair enough to confirm the disallowance made by the Assessing Officer on account of interest of advance meant for purchase of generator, which is a capital asset to be acquired. However, with regard to two other advances, no capital asset is expected to come into existence. Therefore, the interest on these advances cannot be disallowed by the Assessing Officer. The grounds of appeal raised by the Revenue are dismissed.
CIT(A) powers u/s 251(1)(a) to remand back the issue to AO - CIT(A) erred in directing A.O. to pass a speaking order on the issue of adjudication of provision of Wealth Tax from the statement of taxable income prepared u/s 115JB - HELD THAT:- On perusal of the provisions of sect ion 115JB of the Act and the Explanation appended thereto, we are in agreement with the argument of the assessee that the only amount to be added back for calculating the book prof it under sect ion 115JB is that of income tax. Since the assessee had omitted to exclude wealth tax out of computation of book prof it, the Assessing Officer also did not do the same and had discussed the weal tax provision, we are also in agreement with the content ion of the Department that the CIT (Appeals) having no powers to set aside the issue to the file of the AO. However, in the interest of justice, we would like to send this issue back to the Assessing Officer and direct him to re-compute the book prof it under sect ion 115JB of the Act after excluding wealth tax provision on the same. The ground raised by the Revenue is allowed for statistical purposes.
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2016 (4) TMI 1381 - ITAT JAIPUR
TDS u/s 194H - commission payment to various distributors - relation between assessee and distributor is that of principal to agent - HELD THAT:- As decided in own case [2015 (7) TMI 175 - ITAT JAIPUR] the relationship between assessee and its distributors qua the sale of impugned products is on principal to principal basis, the consideration received by assessee is sale price simpliciter.
There is no relationship of Principal and agent between assessee and distributors as held by authorities below their orders are reversed. Looking at the transaction being of sale/purchase and relationship being of principal to principal the discount does not amount to commission in terms of sec. 194H, the same is not applicable to these transactions. Therefore, assessee cannot be held in default, impugned demand raised applying sec, 194H is quashed. Assessee’s grounds are allowed
TDS u/s 194J on roaming charges paid for facilities provided by service provider - HELD THAT:- This issue squarely covered in favour of the assessee by the decision of the Co-ordinate Bench in assessee’s own case pertaining to the assessment year 2009-10 [2015 (7) TMI 175 - ITAT JAIPUR] these charges are not fees for rendering any technical services as envisaged in section 194J of the Act. Therefore, we reverse the order of the ld CIT(A) and assessee’s appeal is allowed on this ground also
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2016 (4) TMI 1380 - BOMBAY HIGH COURT
Cargo Handling Agent services - demand of service tax - invoking extended period - the appellant-Department has challenged the order of the Customs, Excise & Service Tax Appellate Tribunal, West Zonal Bench at Mumbai, dated 3-9-2014 that was based on the judgment of the Orissa High Court in the case of COAL CARRIERS VERSUS COMMR. OF C. EX., CUS. & ST., BHUBANESWAR [2011 (2) TMI 1140 - ORISSA HIGH COURT] - HELD THAT:- It appears that the Hon’ble Supreme Court has allowed the appeal preferred by the assessees and the Department before the Hon’ble Supreme Court and the judgment of the Orissa High Court in the aforesaid case has been set aside. It appears that the Hon’ble Supreme Court has directed the CESTAT to constitute a larger Bench immediately so that the controversy is decided finally within one year.
The impugned order passed by the CESTAT, dated 3-9-2014 is hereby quashed and set aside. The appeal filed by the respondent herein is restored before the CESTAT at Mumbai.
Appeal disposed off.
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2016 (4) TMI 1379 - DELHI HIGH COURT
Suit for recovery - recovery of the security amount against the plaintiff - HELD THAT:- The learned Local Commissioner shall videograph and also take photographs, while executing the commission for which the expenses shall be borne by the plaintiff. The Local Commissioner shall be paid an amount of ₹ 50,000/-, to be paid by the plaintiff. During the execution of the commission, the representatives of the parties shall be present. The Local Commissioner shall execute the commission on Saturday April 9, 2016 at 11.00 AM.
Application disposed off.
List before Joint Registrar for further proceedings on 20th May, 2016.
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2016 (4) TMI 1378 - ITAT MUMBAI
Depreciation computed by AO while completing the assessment - HELD THAT:- On a plain reading of the aforesaid Explanation–5, it is clear that grant of depreciation became mandatory irrespective of the fact whether the assessee has claimed the deduction or not while computing the total income. However, this provision is effective only from 1st April 2002 and not retrospectively, as held in the decisions relied upon by the AR. Hence, in our view, it will not apply to the impugned assessment year. Reading of the Explanation in the context of the provision of section 32(1), as it existed earlier, it becomes clear that had it been the intention of the legislature to make allowance of depreciation mandatory, they would not have brought Explanation–5 to section 32(1) w.e.f. 1st April 2002 only. Therefore, in our view, the conclusion drawn by the Departmental Authorities that the expression “shall” used in section 32 is mandatory is not correct and cannot be a correct interpretation of the statutory provisions.
In case of Mahendra Mills Ltd. [2000 (3) TMI 3 - SUPREME COURT] has laid down the proposition that provisions for claiming of depreciation is for the benefit of the assessee, hence, if the assessee does not wish to avail the benefit for some reason, the benefit cannot be forced upon the assessee as it is for the assessee to see if the claim of depreciation is to his advantage.
In the absence of any claim of depreciation by the assessee, it cannot be thrust upon it by the Assessing Officer. We direct the AO to compute income of the assessee after withdrawing depreciation granted to the assessee. Ground raised by the assessee is allowed.
Expenditure claimed by the assessee on account of Up Stream Rolling Mills (USRM) trial run expenditure - Revenue or capital expenditure - HELD THAT:- These expenses relate to production in as much as these have been incurred in the purchase of raw materials, consumable items required in the process of production, electricity consumption in the production activity, repairs and processing charges. Even if the expenses relate to trial run, the same in my considered opinion, constitute revenue expenditure in view of the fact that the trial run does not relate to any new line of the business and it is in respect of an existing manufacturing activity.
The assessee's business constitutes the same business and there was an inter-connection, inter-lacing and inter dependence and unity between the existing business and the machine installed for bringing about improvement in the process of production.
AO has missed to take note of the foregoing facts and circumstances and even the appellant‟s submissions during the course of assessment proceedings have not been incorporated in the body of the impugned order or assessment. It is held that the expenses in question are allowable as revenue expenditure.
Deduction on account of lease rental payment - HELD THAT:- Hon'ble Supreme Court in M/s. I.C.D.S. v/s CIT, [2013 (1) TMI 344 - SUPREME COURT], has held that such lease back transactions are permissible in law. In the present case, as evident on record, the lessor has duly accounted for the lease rentals in their account and claimed depreciation on such leased assets. Thus, it is clear that the lease back transaction has been accepted as genuine in case of lessor. That being the case, genuineness of such transaction cannot be questioned in case of the assessee. In the aforesaid view of the matter, we do not find any infirmity in the order of the learned Commissioner (Appeals) and accordingly the same is upheld by dismissing the ground no.2 raised by the Department.
Deduction on account of debit balance written–off - HELD THAT:- Since the amount was not paid back by the Austrian company, it became irrecoverable. From the aforesaid facts, it is clear that the advance of money by the assessee to the Austrian company was in the normal course of its business. It is also a fact that the provisions for bad debt made by the assessee in the assessment year 1994–95, was disallowed and added back to the income. Therefore, when in the impugned assessment year, the assessee has actually written–off the amount in its books, the assessee is eligible to claim deduction of their recoverable advance as it is in the nature of business loss. This view is supported by the decision of the Hon'ble Jurisdictional High Court in IBM World Trade Corporation [1988 (12) TMI 23 - BOMBAY HIGH COURT] and other decisions relied upon by the learned Authorised Representative. Therefore, we do not see any reason to interfere with the order of the learned Commissioner (Appeals). Accordingly, we uphold the same by dismissing the ground raised by the Department.
Claim of deduction being professional fee paid towards re–structuring of financial loan - HELD THAT:- expenditure incurred can be treated as capital in nature has disallowed assessee’s claim. He has not established on record that by incurring such expenditure, assessee has acquired some assets providing benefit of enduring nature. On the other hand, as demonstrated by the Assessing Officer, the consultation fee was paid for financial re–structuring of loans which has resulted in rejection of interest cost and as a consequence, assessee has derived benefit of ₹ 14.86 crore, which was offered as income for the impugned assessment year. That being the case, corresponding expenditure incurred by the assessee for earning such income has to be allowed as deduction. The decisions relied upon by the learned Authorised Representative also supports this view. In the aforesaid view of the matter, we do not find any infirmity in the order of the learned Commissioner (Appeals) which is accordingly confirmed. Ground no.3 raised by the Department is dismissed.
Disallowance of legal and professional charges - HELD THAT:- Primary reason on the basis of which assessee’s claim of expenditure was disallowed is the expenditure does not pertain to the impugned assessment year. However, as demonstrated by the assessee and which has not been controverted by the Department, ISFS raised the invoice for professional services rendered on 17th October 2000, which is within the financial year 2000–01. Therefore, only when the invoice was raised by ISFS and assessee receives it the expenditure having been quantified crystallized and the assessee has accounted for it in its books of account. That being the case, the assessee’s claim cannot be disallowed on the ground that the expenditure pertains to prior period. Therefore, we direct the Assessing Officer to allow the expenditure of ₹ 11.25 lakh.
Disallowance of product development expenses - Revenue or capital expenditure - HELD THAT:- It has to be ascertained whether the expenditure incurred has resulted in acquisition of any asset of enduring nature or the expenditure incurred is towards purchase of raw material, consumables and processing charges in regular course of its manufacturing activities. These facts have not at all been examined either by the Commissioner (Appeals) or by the AO as they heavily relied upon the accounting treatment given by the assessee in the books of account. It is a settled principle of law that entries in the books of account are not conclusive. A deduction or allowance cannot be allowed or disallowed only on the basis of entries in the books of account. Further, it has been submitted by the assessee that similar expenditure incurred towards product development was allowed by the Department in the earlier assessment year. This fact also requires examination.
Considering the fact that the Departmental Authorities before disallowing the expenditure claimed by the assessee by treating it as capital in nature have not properly examined the relevant facts relating to the expenditure claimed, we are inclined to restore the matter back to the file of the Assessing Officer for deciding afresh after due opportunity of being heard to the assessee
Claim of deduction towards expenditure incurred on watch and ward - HELD THAT:- Documentary evidence to demonstrate that the amount crystallized during the assessment year after negotiation with the third parties have not been placed before us. The learned Commissioner (Appeals)’s order is also silent on the issue whether he has himself examined any documentary evidence to demonstrate that the expenditure pertaining to earlier assessment year was quantified and crystallized during the year under consideration after negotiation. In view of the aforesaid, we restore the matter back to the file of the Assessing Officer to verify the fact whether expenditure claimed was quantified and crystallized after negotiation with third parties. If the assessee through proper documentary evidence proves such fact, then there is no difficulty in allowing assessee’s claim of expenditure in the impugned assessment year. This ground is allowed for statistical purposes.
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2016 (4) TMI 1377 - ITAT AHMEDABAD
Levy of late filing fees under section 234E - intimation issued under section 200A in respect of processing of TDS - Held that:- We find that the issue in all these appeals is now squarely covered in favour of the assessee by the decision of ITAT Amritsar Bench in the case of Sibia Healthcare Private Limited vs. DCIT [2015 (6) TMI 437 - ITAT AMRITSAR] adjustment in respect of levy of fees under section 234E was indeed beyond the scope of permissible adjustments contemplated under section 200A.
The impugned levy of fees under section 234E is unsustainable in law. We, therefore, delete the impugned levy of fee under section 234E of the Act. - Decided in favour of assessee.
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2016 (4) TMI 1376 - ITAT AHMEDABAD
Validity of the assessment order passed u/s. 153A - Addition of unexplained gifts u/s. 68 - HELD THAT:- Co-ordinate Bench of Mumbai Tribunal in the case of Gurinder Singh Bava Vs DCIT [2014 (2) TMI 731 - ITAT MUMBAI] has after relying on the decision of Special Bench of Tribunal in the case of Alcargo Global Logistics Ltd. has held that when the assessment had been completed under summary scheme under section 143(1) and time limit for issue of notice under section 143(2) had expired on the date of search and therefore there was no assessment pending in and in such a case there was no question of abatement.
In the present case, the assessment had been completed under summary scheme under section 143(1) and time limit for issue of notice under section 143(2) had expired on the date of search. Therefore, there was no assessment pending in this case and in such a case there was no question of abatement. Therefore, addition could be made only on the basis of incriminating material found during search. The gift deeds and the copies of return of income of the donors that were found at the time of search could not be considered to be incriminating material for the purpose of addition in view of the fact that these very documents were the basis of the gifts that were considered by the assessee while crediting the capital account.
In view of the aforesaid facts, we are of the view that these assessments framed u/s.153A need to be quashed. - Decided in favour of assessee.
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2016 (4) TMI 1375 - ITAT MUMBAI
Addition of unsecured loans u/s. 68 - HELD THAT:- Assessee has proved identity, genuineness of the transaction and the credit worthiness of the lenders by furnishing requisite details like confirmations, PAN details, return of income, bank statements etc. It is the finding of the CIT(A) that on perusal of the bank statements, all the lenders have advanced monies to the assessee out of funds obtaining the bank statements out of deposits through bank transfers into their accounts. CIT(A) that first deposits are received through bank transfers from the lenders accounts and thereafter they were given to the assessee company by account payee cheque.
CIT(A) that AO has not disputed the above facts nor has brought any material on record to suggest that the said transfers are not genuine transfers and the lenders also confirmed giving funds to the assessee through account payee cheque and shares were also allotted by the assessee company against such funds. CIT(A) concluded that assessee has established not only the credit worthiness and identity of the said creditors but also established the genuineness of the transaction. None of the finding of the CIT(A) has been dislodged by the revenue with evidences. We uphold the order of the CIT(A) in deleting the addition made u/s. 68 - Decided against revenue.
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2016 (4) TMI 1374 - MADRAS HIGH COURT
Sanction of scheme of arrangement and compromise - convening, holding and conducting of the meeting of the shareholders - sections 391 to 393 of the Companies Act, 1956 - HELD THAT:- The Scheme is not prejudicial to the interest of any person or entity, which has a stake/interest in the petitioner company. The said scheme as framed is not violative of any statutory provisions - The scheme as formulated is fair, just, sound and is not contrary to any public policy or public interest. No proceedings appear to be pending under the provisions of Sections 231 to 237 of the Companies Act, 1956. All the statutory provisions appear to have been complied with.
Consequently, there shall be an order approving the scheme of arrangement and compromise between the petitioner company, viz., Cognizant Technology Solutions India Private Limited and its shareholders, with effect from the date on which the sanctioned Scheme is filed with the Registrar of Companies, Chennai, Tamil Nadu by the petitioner company, as the procedure laid down under Sections 391 to 393 of the Companies Act are duly complied with.
The petition is allowed - The learned Senior Central Government Standing Counsel is entitled to a fee of ₹ 5,000/- from the petitioner company.
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2016 (4) TMI 1373 - SC ORDER
Entitled to the benefit u/s 10-B - most of the activities are "outsourced" and very small part of the manufacture was undertaken by the assessee - HELD THAT:- Delay condoned. Leave granted.
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2016 (4) TMI 1372 - SUPREME COURT
The High Court ought not to have interfered with the ad-interim order passed by the Company Law Board when the matter of interim relief was yet to be heard by the Board - We request the CLB to expedite the hearing. It would be open to the CLB to confirm, vary or vacate the interim order, after hearing the parties.
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2016 (4) TMI 1371 - CESTAT NEW DELHI
Renting of immovable property - renting of property to M/s. Royal Orchid Banjara Pvt. Ltd., who are running a hotel on the said premises - scope of which excludes the buildings used for purposes of accommodation, including hotels - HELD THAT:- The issue stand decided in the appellant's own case for the prior period in [. 2014 (10) TMI 872 - CESTAT NEW DELHI .]where it was held that
Demand set aside - appeal allowed - decided in favor of appellant.
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2016 (4) TMI 1370 - ITAT MUMBAI
Addition u/s 14A r.w. 8D - HELD THAT:- Necessary details was very much made available before the AO/ CIT (Appeal). The investment was made out of own funds for the purposes of earning dividend. The availability of funds, details of capital share and reserve and surplus is even available at page-6 of the impugned order. So far as, applicability of rule-8D is concerned, so far as, assessment year involved is 2007-08, therefore, rule 8D is applicable but at the same time it cannot be applied mechanically. The assessee invested ₹ 5 crore in equity share capital of CIAL and further invested ₹ 5 crore in the equity share capital, therefore, in the absence of any contrary material and since the own funds were invested and no expenses were claimed, the disallowance is not justified, consequently, this ground of the assessee is allowed.
Disallowance of prior period expenses - argument on behalf of the assessee that in earlier assessment years, no such disallowance was made and in the present assessment year, the facts are identical - HELD THAT:- The relief was denied to the assessee on the plea (para 5.5 of the impugned order) that the assessee could not produce the evidence with respect to these liabilities whether crystallize during the year. However, the assessee drew our attention with respect to rejections/refunds and we found the explanation of the assessee to be correct.Considering the facts and the explanation of the assessee, this ground is allowed. The appeal of the assessee, is, therefore, allowed.
Interest income - treated as short term deposits as business income OR income from other sources - HELD THAT:- Deposits are kept in Current Accounts or in short term deposits for their immediate use for business purposes. On these facts it is to be held that the funds are being used in the business and the incidental business income on the short term deposits abroad are to be considered as business receipts only. This view is also supported by the action of the CBOT in taking up the assessee's case before the inland revenue authorities of UK when the same was being taxed as "Income from Other Sources" not covered by the OTAA between UK and India. These facts are established in the order for the assessment year 1993-94 of the CIT(A) and as submitted by the assessee, the matter was not challenged and accepted upto Assessment Year 1996-97. For these reasons, we are of the opinion that the interest earned on short terms deposits is to be considered “income from business”. Consequently, the Assessing Officer is directed to treat the interest income as income from business. The assessee’s grounds are allowed on this issue
Disallowance on account of frequent flier program (FFP) - HELD THAT:- Liability in respect of FFP miles accrues simultaneously with a passenger undertaking travel on a fare paying ticket, therefore, it cannot be a contingent liability.
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2016 (4) TMI 1369 - ITAT MUMBAI
Reopening of assessment u/s 147 - case reopened after four years - HELD THAT:- Re-opening notice was admittedly beyond a period of four years.
It is also an undisputed position that reasons recorded for reopening of an assessment does not mention any failure on the part of the Respondent to disclose fully and truly all material facts necessary for the assessment. As decided in TITANOR COMPONENTS LTD. VERSUS ACIT, CIT AND UOI [2011 (6) TMI 138 - BOMBAY HIGH COURT] it is necessary for the AO to first observe that there is a failure to discloser fully and truly all material facts necessary for assessment and having observed that there is such failure to proceed under Section 147 - no substantial question of law - decided against revenue
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