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Showing 81 to 100 of 1271 Records
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2015 (6) TMI 1200
Disallowance towards Employee Stock Option Plan (ESOP) expenses - Revenue or capital expenditure - HELD THAT:- An identical issue was considered by the Tribunal Special Bench Bangalore in the case of Biocon [2013 (8) TMI 629 - ITAT BANGALORE] has held that ESOP expenses is an allowable deduction u/s. 37(1). The same view was followed by ITAT Pune Bench in the case of Sandvik Asia [2014 (12) TMI 1236 - ITAT PUNE] . Respectfully following the decision of the Co ordinate Benches, we set aside the order of the Ld. CIT(A) and direct the AO to allow the ESOP expenses as revenue expenditure. - Appeal filed by the assessee is allowed.
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2015 (6) TMI 1199
Levy of penalty u/s.271(1)(c) OR 271AAA - search conducted u/s. 132 - in statement made u/s.132(4) assessee offered total additional undisclosed income - HELD THAT:- The entire penalty order refers to levy of penalty for the concealment of income because the income was offered only after the search and since income was not offered in the original return of income, penalty was leviable.
In the anxiety of levying the penalty u/s. 271(1)(c) of the Act, the Officer simply ignored the provisions of sec. 271AAA of the Act which have been introduced for the searches conducted on or after 01/06/2007. The Officer failed to appreciate that the assessee has fulfilled all the conditions mandatory to get immunity from the levy of penalty.
AO did not consider the fact that in his statement made u/s. 132(4) of the Act, the assessee has offered additional income for tax. The assessee has paid taxes on the said undisclosed income offered and the assessee has explained the source from which the said income has been earned. We, therefore, do not find any merit in the grievance of the Revenue. We, therefore decline to interfere with the findings of the Ld. CIT(A). - Decided against revenue
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2015 (6) TMI 1198
Interest accrued on the special fund created - taxabilty at the hands of assessee as it is the income of REC - whether the accrued interest on investments made by assessee of the loan amount received from REC is taxable at the hands of assessee ? - HELD THAT:- DR has not brought any other material to our notice to indicate that facts of the impugned AYs are in any way different from the facts considered by the Tribunal while deciding the issue in favour of assessee. Further, the department’s contention that interest income has not been shown by REC cannot justify the addition at the hands of assessee. In the aforesaid view of the matter, following the decision of the coordinate bench in assessee’s own case for the preceding AYs, we uphold the order of ld. CIT(A) by dismissing the grounds raised by the department in all the appeals under consideration. - Decided against revenue
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2015 (6) TMI 1197
Rectification u/s 254 - disallowance u/s. 14A r.w.r. 8D - HELD THAT:- Hon’ble Gujarat High Court in Assessee’s own case is A.Y. 2006-07 while deciding the Special Civil Application has held that provisions of Rule 8D are applicable from A.Y. 2008-09 and is not retrospective. Considering the aforesaid fact, we are of the view that there is an apparent mistake in the order of Tribunal and therefore recall the order for a limited purpose to decide the issue with respect to disallowance u/s. 14A of the Act. The Registry is directed to fix the hearing the appeal in due course.
Disallowance u/s. 36(1)(iii) - HELD THAT:- It is also well settled/established law that the Tribunal is not bound to discuss each and every argument made at the time of hearing of the appeal and the conclusion arrived by the Tribunal may be an error of judgment but cannot be considered to be an error apparent on record rectifiable u/s. 254(2) of the Act.
The powers of the Tribunal u/s 254(2) is very limited and the Tribunal has limited jurisdiction of rectification in its order if an error is crept therein which is apparent from the face of the record. Reappreciation of the evidence placed before the Tribunal during the course of hearing is not permissible to re-adjudicate the issue afresh under the garb of rectification.
The power to review is not available to the Tribunal. If we accept this petition, then this may tantamount to review of an order of the Tribunal and the law is settled that we have no such power. Further, we also find support to our aforesaid view by the decision in the case of Perfetti Van Melle India (P) Ltd. vs. CIT [2007 (5) TMI 214 - DELHI HIGH COURT] wherein the Hon'ble High Court has concluded that Assessee cannot be allowed to reopen and reargue the whole matter in the garb of rectification under section 254(2). We are of the view that since the assessee has failed to point out any mistake apparent from record in the order, we are not inclined to recall the order of the Co-ordinate Bench in M.A. with respect to disallowance u/s. 36(1)(iii).
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2015 (6) TMI 1196
TDS u/s 195 - non-deduction of TDS on payment of commission to Foreign Agent - place of business in India - CIT-A deleted the addition - HELD THAT:- Nothing has been brought on record by the Revenue in order to demolish the stand taken by the assessee and to establish that non-resident has ever rendered any technical services or consultancy or managerial services. Therefore, we are of the view that since the assessee has simply procured export orders through commission agent for which commission was paid, the assessee was not required to deduct tax at source on the commission paid to the foreign agent. Accordingly we confirm the order of the ld. CIT(A). - Decided in favour of assessee.
Disallowance on ad-hoc basis - as alleged non pointing out any specific defect in the accounts of the assessee - CIT-A deleted the same for the reason that the AO has made ad-hoc disallowance - HELD THAT:- During the course of hearing before us, similar is the position, as the Revenue could not point out any specific defect in the maintenance of accounts under different heads. No doubt the Assessing Officer can make disallowance if the assessee fails to produce the relevant evidence with respect to any particular expenditure, but the disallowance on ad-hoc basis is not permissible under the law. We, therefore, find no merit in these grounds of appeal - Decided in favour of assessee.
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2015 (6) TMI 1195
Characterization of income - Sales Tax subsidy receipt - revenue receipt or capital receipt - HELD THAT:- Unit of assessee was set up as per scheme formulated by Government of West Bengal and assessee has been allowed remission of sales tax for 12 years upto 100% of gross fixed capital investment/asset of the approved project. The incentive scheme was available for location of the unit. No incentive is available to units located in group ‘A’. The unit of assessee is located in group ‘B’ (Hooghly). The subsidy would help the growth of industry and not to supplement profit. Subsidy is determined with reference to the fixed capital investment/asset and not profit. No working capital is considered in the scheme. The ld. DR says that the subsidy is given for 12 years after production and as such it is revenue in nature. The arguments of ld. DR cannot be accepted in view of the above facts because the scheme is made to encourage the promotion of industries/setting up in the State of West Bengal. The incentives are provided to approved projects only. The purpose of giving subsidy is thus, to promote and set up industries in State of West Bengal.
The object/purpose of assistance under the subsidy scheme was to enable the assessee to set up new unit in State of West Bengal. Therefore, the receipt of the sales tax subsidy in the hands of assessee was capital in nature. The decisions relied on by ld. DR would not support the case of the revenue.
Considering case of Ponni Sugars & Chemicals Ltd. [2008 (9) TMI 14 - SUPREME COURT] and sales tax subsidy received by the assessee is capital receipt in nature and are not subjected to tax. The additions made by the AO on account of receipt of sales tax subsidy are accordingly deleted in all the assessment years in appeals. - Decided in favour of the assessee
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2015 (6) TMI 1194
Addition u/s 69A - unexplained cash deposit - assessee has not given any documentary evidence to prove that cash deposit was his business turnover - CIT-A treating the cash deposit as business turnover of the assessee and applying G.P. rate of 13.8% - HELD THAT:- Clear finding has been given that on perusal of the entries reflected in the said bank account, it was revealed that the cash deposits and withdrawals were made regularly during the year and therefore the AO was not justified in making the addition of ₹ 15,68,500/-. CIT(A) has held that these receipts should be treated as turnover of the assessee from trading of cloth and has directed the Assessing Officer to make addition of profit from such turnover outside the books at gross profit rate of 13% of this turnover.
Cash deposit and withdrawal in the bank account was made regularly by the assessee during the year, it is very reasonable to say that the same was business turnover outside books and therefore, only gross profit addition is justified in the facts of the present case. Hence, we do not find any reason to interfere in the order of CIT(A) and therefore, we decline to interfere in the same. - Decided against revenue.
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2015 (6) TMI 1193
Rejection of Gross loss declared by the assessee - Rejection of Gross Profit declared by the assessee for its Nashik Unit and instead estimating the same at 10% of the sales - HELD THAT:- We notice that the assessee has failed to furnish convincing explanations with regard to the Gross loss declared by it. Even though, it is claimed that the Gross loss has occurred due to higher interest and depreciation, yet the CIT(A) noticed that the assessee has followed identical method of accounting in the immediately preceding year and declared profit. In the absence of any convincing reason for occurring of Gross loss, we are of the view that the Ld CIT(A) was justified in confirming the rejection of Gross loss declared by the assessee.
AO has estimated the Gross Profit @ 10% of the Gross sales. We notice that the AO has compared the Gross profit rate declared in the Pune unit and accordingly determined the rate of GP at 10%. The Ld CIT(A) also confirmed the same. Before us, though the assessee contended that it was not correct to estimate the Gross profit, yet no material was placed before us in order to compel us to disturb the estimate made by the AO. Accordingly, we confirm the order of Ld CIT(A) on this issue.
Computation of deduction u/s 10B in respect of Pune Unit and also the disallowance of loss declared by the Nashik Unit - HELD THAT:- In the instant case, has assessed the interest income under the head Income from other sources. On the contrary, the coordinate bench of Mumbai Tribunal, in the case of Larsen & Toubro Infotech Ltd [2012 (9) TMI 292 - ITAT MUMBAI] has expressed the view that the other income having no direct nexus with export of articles or things are not eligible for deduction u/s 10A of the Act. Accordingly, we confirm the reduction of profit eligible for deduction u/s 10B of the Act by the amount of interest income.
Rejection of deduction u/s 10-B of the Act relating to sub-contract works - AO the reduced the deduction u/s 10B of the Act to the extent of profit attributable to subcontracting works - HELD THAT:- A perusal of the provisions of sec. 10B(1) would show that the deduction prescribed therein is allowed to profits and gains as are derived by a hundred per cent export-oriented undertaking from export of articles or things or computer software i.e., section 10B nowhere provides anything about the mode of manufacture. Accordingly, we are of the view that the assessing officer was not right in holding that the assessee was not eligible for deduction u/s 10B of the Act in respect of profit attributable to sub-contract works. Accordingly, the Ld CIT(A) was not justified in confirming the same. Accordingly, we set aside the order of Ld CIT(A) as well as the AO on this issue.
Disallowance made u/s 14A - HELD THAT:- No requirement of making any disallowance out of interest expenditure. However, since the year under consideration is AY 2007-08 to which the provisions of Rule 8D are not applicable as per the decision of Godrej & Boyce manufacturing Co. [2010 (8) TMI 77 - BOMBAY HIGH COURT] , the disallowance u/s 14A is required to be computed in a reasonable manner. 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 this issue afresh and after hearing the assessee, take appropriate decision in accordance with the law.
Loss incurred in Nashik unit should not be set off against the Pune unit for computing deduction u/s 10B of the Act in respect of Pune unit - HELD THAT:- We notice that the co-ordinate bench of ITAT in the case of Larsen & Toubro Infotech Ltd [2012 (9) TMI 292 - ITAT MUMBAI] has taken the view that the deduction u/s 10B is allowable each undertaking wise and hence the loss incurred in one eligible unit should not be set off against the income from other eligible unit. We direct the AO to compute the deduction u/s 10B accordingly.
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2015 (6) TMI 1192
Levy of fees under section 234E - intimation issued under section 200A - 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. - Decided in favour of assessee
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2015 (6) TMI 1191
Levy of fees u/s 234 E - intimations u/s 200A in respect of processing of TDS statements for the second and third quarter of the financial year 2013-14 - HELD THAT:- Appeal is 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] wherein it has been held that prior to 01.06.2015, there was no enabling provision u/s 200A of the Act for raising a demand in respect of levy of fee u/s 234E - Decided in favor of assessee.
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2015 (6) TMI 1190
Condonation of delay - delay in filing the appeal by 315 days - Penalty u/s 271(1)(c) - assessee made a conditional surrender of ₹ 50,00,000/- and paid the tax on the said surrender subject to no penalty u/s 271(1)(c) - HELD THAT:- In the present case, it appears that the assessee made a conditional surrender of ₹ 50,00,000/- and paid the tax on the said surrender subject to no penalty u/s 271(1)(c). The assessee also furnished copy of order sheet dated 21.12.2009 which is placed at page no. 2 of the assessee's compilation, in the said order sheet also it is mentioned "subject to no penal action." Therefore, the assessee under bona fide believe that no penalty will be levied, surrendered ₹ 50 lacs and did not prefer an appeal. In our opinion, there was a reasonable cause in filing the appeal belated, therefore the delay is condoned and the appeal is admitted.
Reopening u/s 147 read with section 148 - unexplained entries in the bank account - HELD THAT:- AO initiated the proceedings u/s 147 of the Act on the basis that there were certain entries in the bank account of assessee for which there was no proper explanation. AO also noticed that the assessee produced fabricated copy of bank account along with books of accounts and as such formed the belief that the assessee's income had escaped assessment.
In the present case, the assessee although filed the objection against the initiation of re-assessment proceedings u/s 147 of the Act, however, withdrew those objection and surrendered a sum of ₹ 50,00,000/- subject to no penal action. In the instant case, when the assessee himself withdrew the objection filed against the initiation of re-assessment proceedings u/s 147 of the Act, surrendered a sum of ₹ 50,00,000/- and paid the tax thereon, in our opinion, the ld. CIT was fully justified in upholding the proceedings initiated by the AO u/s 147 of the Act and in confirming the addition of ₹ 50,00,000/-. We, therefore, don't see any merit in this appeal of the assessee
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2015 (6) TMI 1189
Penalty u/s 271(1)(c) - difference in the value of stock shown by the assessee and as estimated by the AO by applying the rate of last purchase bill dated 28.3.2009 - HELD THAT:- The only basis of addition is the estimate of valuation made by the AO in valuing the closing stock @ ₹ 200.50 per bag, being the cost price of cement bags vide last purchase bill dated 28.3.2009. Apart from this estimate made by the AO, there is nothing to show that the way in which the assessee valued its closing stock was incorrect. This divulges that the addition has been made only on the basis of estimate made by the AO. It is a settled legal position that when income is estimated, then, there can be no question of imposing penalty u/s 271(1)(c) .
The Hon’ble Delhi High Court in CIT vs. Aero Traders Pvt. Ltd., [2010 (1) TMI 32 - DELHI HIGH COURT] , has held that no penalty u/s 271(1)(c) can be imposed when income is determined on estimate basis. Similar view has been taken by the Hon’ble P&H High Court in Harigopal Singh vs. CIT [2002 (8) TMI 65 - PUNJAB AND HARYANA HIGH COURT] and the Hon’ble Gujarat High Court in CIT vs. Subhash Trading Company, [1995 (11) TMI 37 - GUJARAT HIGH COURT] . In view of the foregoing precedents it is apparent that when the bedrock of instant penalty is the estimate of valuation of closing stock, the same cannot be sustained. Thus Penalty deleted - decided in favour of assessee.
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2015 (6) TMI 1188
Addition u/s 14A - disallowance of expenditure incurred in earning dividend income - HELD THAT:- Since the Tribunal has taken a view in the assessee’s own case that once the provisions of section 14A of the Act are to be invoked, disallowance is to be computed as per rule 8D of the rules, we find no justification to take a contrary view in this appeal.
The mode of computation as per rule 8D of the rules was also examined by the Tribunal in the case of Income Tax Officer vs. M/s Shruti Finsec Pt. Ltd. [2014 (11) TMI 172 - ITAT LUCKNOW] in which it has been held that while adopting the procedure for computation of disallowance as per rule 8D of the rules, all aspects of direct and indirect expenses are to be considered Accordingly following the view taken by the Tribunal in assessment year 2009-10, we decide this issue in favour of the Revenue. Accordingly, the order of the ld. CIT(A) is set aside and that of the Assessing Officer is restored.
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2015 (6) TMI 1187
Agricultural income - income from sale of breeder and foundation seeds - HELD THAT:- It is not denied that for growing breeder and foundation seeds, seeds are sown in field and usual agricultural operations, basic and subsequent, are undertaken utilizing human skill. In addition to this, measures are taken for restricting role of nature. Such measures are only taken in enhancing the yield. Such measures, thus, have nothing to do with the biological growth that takes place in the soil or such other substratum where the seeds are sown.
An agriculturist while growing his crops, is known to have used conventional as well as scientific method for reducing hostile interplay of natural forces on his crop. When such activity is taken to highest standard, it would still not make the growing operation a synthetic one. Thus, growing seeds can never be non-agricultural. In view of this, we do not see any substantial question of law in these appeals.
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2015 (6) TMI 1186
Rejection of books of accounts - GP addition - CIT-A held that both the books of accounts could not be rejected and consequently the GP could not be estimated and GP addition made @ 2.5% is hereby deleted - ad-hoc disallowance restricted by CIT-A - HELD THAT:- CIT (A) has rightly adjudicated the issue relating to the GP addition as well as the restricting the ad-hoc disallowance. In our considering opinion, since there is no infirmity in the order of the CIT (A) and the decision taken by the CIT (A) is fair and reasonable, therefore, it does not call for any interference. Accordingly, on this Ground assessee succeeds.
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2015 (6) TMI 1185
Addition made on protective basis - amount deposited in the joint bank account with Ms. Chandbibi Zaidi - assessee is a student, studying outside India, with no independent source of income - Unexplained credits - Unexplained investment - Addition u/s 69B - search and seizure action u/s 132 (1) - HELD THAT:- We find that the facts and the issue is identical to the case of Ravish P. Zaidi [2015 (6) TMI 1184 - ITAT MUMBAI]] wherein, while coming to a particular conclusion, CIT (A) considered the remand report from the Assessing Officer who himself, on verification of accounts from the bank and other material found that no addition is warranted. In view of this factual position, CIT (A) deleted the addition and the Bench affirmed his stand. Thus, being on identical fact, find no merit in the appeal of the Revenue, consequently, dismissed
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2015 (6) TMI 1184
Unexplained credits - Unexplained investment - Addition u/s 69B - search and seizure action u/s 132 (1) - Addition made on protective basis - case of the assessee, who was the daughter of the sister of Chandbibi Zaidi was centralized. A bank account in the joint name of Ms. Ravish Zaidi and Chandbibi Zaidi was with Nova Scotia Bank, Nariman point Branch, Mumbai, was found - HELD THAT:- The assessee filed confirmation from Mumbai Majdoor Sabha for Ms Ravish Zaidi’s Accounts, along with balance-sheet as on 31/12/2001, confirmation of copy of account of Ms. Chandbibi, letter of gift from Ms. Chandbibi, copy of balance sheet and capital account of Ms. Chandbibi as on 31/03/2002, copy of acknowledgement of return, bank statement of Mumbai Majdoor Sabha for repayment of loan in May 2004 (₹ 10 lakhs) and the investment made, appearing in the balance sheet, as on 31/03/2002. All these documents were forwarded to the Assessing Officer for his comments and the ACIT vide letter dated 31/11/2013, through Ad CIT sent the remand report that too after verification of bank accounts. In the remand report, the Assessing Officer found no unexplained cash credits.
In the remand report submitted by the assessing officer ACIT Central Circle-43, Mumbai through Additional CIT Central Range 6, Mumbai, the credits in the bank accounts were verified and it was submitted that no unexplained credits were found. Hence the addition made of ₹ 20,00,000/- in AY 2005-06 and ₹ 5,80,000/- for AY 2006-07 are deleted. The ground of appeal no. 1 is to this extent allowed.
In view of the submission of the assessee and remand report by the AO, the impugned addition was deleted by the CIT (Appeals). No contrary evidence was produced by the Revenue in support of the ground raised, therefore, find no infirmity in the conclusion drawn by CIT (Appeals). It is upheld.
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2015 (6) TMI 1183
Legal and professional fee - nature of expenditure - revenue or capital expenditure - CIT(A) accepted assessee’s explanation without giving the Assessing Officer an opportunity in terms of Rule 46 of the Income Tax Rules, 1962 - HELD THAT:- CIT(A) has not violated the provisions of rule 46A of the Rules. According to the Ld. Representative, even in the past years such expenditure has been allowed as revenue expenditure and that in the current year assessment year, the AO has based his disallowance on a complete misreading of the submissions put-forth by the assessee. We find that Revenue has not specified any material or evidence relied upon by the CIT(A) which was not before the Assessing Officer and, therefore, in our opinion, the objection of the Revenue in Ground of appeal no. 2, based on Rule 46 of the Rules, is quite misconceived and the same is hereby dismissed.
TDS u/s 194H - assessee has paid commission to banks on credit card transactions - Addition invoking sec 40(a)(ia). HELD THAT:- In the case of JDS Apparels P. Ltd. [2014 (11) TMI 732 - DELHI HIGH COURT] . As per the Hon’ble Delhi High Court, payment of commission to banks with regard to the processing of credit card transactions was not liable to be considered as a ‘commission’ within the meaning of section 194H. Bank does not act as an agent of the assessee while processing the credit card payments and a charge collected by the bank for such service does not amount to ‘commission’ within the meaning of section 194H. In view of the aforesaid Judgment of Hon’ble Delhi High Court in the case of JDS Apparels P. Ltd. (supra), we hereby affirm the conclusion of the CIT(A) to the effect that the impugned disallowance made by the Assessing Officer by invoking section 40(a)(ia) is unsustainable. Thus, Revenue fails on this Ground also. - Appeal of the Revenue is dismissed.
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2015 (6) TMI 1182
Deduction u/s 10A - computation of deduction - HELD THAT:- The issue is covered in favour of the assessee by the decision of the jurisdictional High Court in the case of Tata Elxsi [2011 (8) TMI 782 - KARNATAKA HIGH COURT] wherein it was held that where any expenditure is required to be reduced from export turnover, then the same has to be excluded from total turnover as well, which is binding on us and therefore, respectfully following the said judgment, we direct the Assessing Officer (AO) to exclude the said amount from both the export turnover as well as the total turnover for the purpose of computing deduction u/s 10A of the Act.
Not granting set off of unabsorbed depreciation brought forward from earlier years against the income arrived at after allowing deduction u/s 10A - HELD THAT:- As decided in YOKOGAWA INDIA LTD. [2011 (8) TMI 845 - KARNATAKA HIGH COURT] income of the section 10A unit has to be excluded before arriving at the gross total income of the assessee. The income of the section 10A unit has to be deducted at source itself and not after computing the gross total income. The total income used in the provisions of section 10A in this context means the global income of the assessee and not the total income as defined in section 2(45). Hence, the income eligible for exemption under section 10A would not enter into computation as the same has to be deducted at source level.
TP adjustment - comparable companies adopted by the TPO for determining the ALP and making addition of the adjustment - HELD THAT:- Assessee is providing software design and development services to its parent company thus companies functionally dissimilar with that of assessee need to be deselected from final list.
Companies not satisfied the 25% employee cost filter and thus has to be excluded from the list of comparables
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2015 (6) TMI 1181
TP adjustment - Comparable selection - HELD THAT:- Referring to assessee's international transactions of provision of contract IT services and provision of marketing support services companies functinally dissimilar with that of assessee need to be deselected from final list.
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