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Showing 81 to 100 of 2022 Records
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2017 (9) TMI 1947 - ITAT DELHI
Revenue expenditure allowance - Interest payable in EDC charges terming the same as penal in nature - allowable expenditure u/s 37 or penal in nature as interest has been charged by concerned authority for delay - HELD THAT:- We are of the considered view that the facts and circumstances of the case of the assessee’s case is exactly the similar and identical to the decision of the Hon’ble High Court in the case of CIT vs. Enchante Jewellery Ltd. [2012 (12) TMI 169 - DELHI HIGH COURT ] - Therefore, addition confirmed by the Ld. CIT(A) out of interest payable in EDC charges terming the same as penal in nature is hereby deleted and the ground of appeal raised by the assessee is allowed.
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2017 (9) TMI 1946 - NATIONAL COMPANY LAW TRIBUNAL CHANDIGARH BENCH
Approval of Resolution Plan - Seeking extension of period of completion of insolvency resolution process in accordance with Rule 12 (2) of I&B Code - HELD THAT:- The learned counsel for the applicant, however, submitted that the applicant remained in custody throughout the period in one FIR registered against him and ¡s still in custody but that cannot be a ground to consider for grant of extension of time as the order of admission and appointment of Interim Resolution Professional as proposed by the Corporate Debtor was passed in the presence of Corporate Debtor.
The scope of extension of time can be only on an application made by the Interim Resolution Professional on the basis of the resolution of the Committee of Creditors as provided in sub-sections (2) and (3) of Section 12 of the Code. After expiry of 180 days or 270 days, in case extension of 90 days is granted, the only recourse is to initiate the liquidation process as provided in Chapter III of the Code.
Application rejected.
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2017 (9) TMI 1945 - DELHI HIGH COURT
Modification of amount payable to the respondent as an interim measure - appellant had failed to pay the admitted rent with effect from 15.03.2015 forcing the respondent to terminate the lease through legal notice - entitlement to liquidated damages - balance of convenience - HELD THAT:- Order XV-A of CPC, applicable to Delhi, provides that in any suit of a owner/lessor for eviction of an unauthorized occupant/lessee or for the recovery of rent and future mesne profit from him, the Court may direct the defendant to deposit such amount on account of arrears, upto date of the order and thereafter continue to deposit in each succeeding month the rent claimed in the suit. Similarly, Order XXXIX Rule 10 of CPC empowers the Court to order payment of money which the other party admits to be due - though the said provisions have not been expressly mentioned in Section 9 of the Act, the principles thereof would certainly apply to such proceedings. These provisions are in the nature of interim protection which can be passed by the Courts.
The respondent has made out a strong prima facie case based on the admitted Lease Deed, which is a registered document. We further find that the balance of convenience is also in favour of the respondent and against the appellant. The respondent had taken a loan facility from Bank of India and a tripartite agreement had also been executed where under the appellant had undertaken to deposit the monthly rent in the designated escrow account. Therefore, the respondent shall suffer great irreparable injury in case the appellant is not directed to deposit the outstanding rent, till the date of its occupation of the Leased Premises, to the respondent.
Appeal dismissed.
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2017 (9) TMI 1944 - ITAT MUMBAI
Addition u/s 68 - burden of proof - identity of the creditor, the credit worthiness of the creditor and the genuineness of transactions proved or not? - HELD THAT:- Assessee has discharged the initial burden of proof placed upon it by furnishing the required documents to prove the three main ingredients, viz., the identity of the creditor, the credit worthiness of the creditor and the genuineness of transactions. AO has summoned the creditor and the creditor also has appeared before the assessing officer and confirmed the loan transactions. Despite these facts, I notice that the AO chose to place reliance on the general statement given by Shri Bhanwarlal Jain, meaning thereby, there is merit in the contentions of Ld A.R that the AO has failed to discharge the burden shifted upon his shoulders.
Identical addition was made in the case of M/s Reliance Corporation [2017 (5) TMI 1261 - ITAT MUMBAI] and the assessee therein also furnished all the relevant details in order to discharge the burden of proof placed upon it u/s 68 of the Act. The creditor also appeared before the AO and confirmed the transactions. The AO, however, made the addition by placing reliance on the statement given by Shri Bhanwarlal Jain. When the matter reached the Tribunal, the division bench deleted the addition. Since the facts of the present case are identical, hold that the Ld CIT(A) was not justified in confirming the addition made in AY 2008-09. - Decided in favour of assessee.
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2017 (9) TMI 1943 - ITAT KOLKATA
Exemption u/s 11 - cancelling the registration of the appellant u/s 12AA(3) - assessee had received a corpus donation - genuineness of the donations given by HHBHRF - HELD THAT:- There is no evidence whatsoever brought on record to show that the cash was paid by the assessee which in turn reached the hands of HHBHRF which was returned in the form of donation to the assessee after retaining the commission. As already observed that the answer to question no.22 given by Shri Swapan Ranjan Dasgupta referred to donations given in the financial year 2011-12 as bogus donations.
With regard to the donations received/given prior to 31.03.2011 there is no reference to such donations given or received by HHBHRF being in the nature of bogus donations. The assessee had received the donation from HHBHRF on 03.03.2011. It is therefore not possible to place reliance on the statement recorded at the time of survey and come to a conclusion that the assessee has been indulging in money laundering.
In answer to question no.23 Shri Swapan Ranjan Dasgupta founder director of HHBHRF has made reference to certain middle men who are engaged in money laundering using HHBHRF as a medium for money laundering. There is no evidence brought on record to show any connection between those brokers and the assessee. In the absence of such corroborative evidence, it is not possible to come to any conclusion that the assessee indulged in money laundering and that the donation received by the assessee from HHBHRF was a bogus donation.
As the grounds for cancellation for registration u/s 12AA(3) of the Act is that the activities of the trust should not be genuine or the activities of the trust are not being carried out in accordance with the objects of the trust. There is neither an allegation in the impugned order nor finding that any of the aforesaid conditions exist in the case of the assessee. We therefore are of the view that the cancellation of registration granted to the assessee u/s 12A of the Act cannot be sustained and the impugned order is hereby quashed. The appeal of the assessee is accordingly allowed.
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2017 (9) TMI 1942 - RAJASTHAN HIGH COURT
Maintainability of appeal - Whether the Hon’ble CESTAT has jurisdiction to entertain an appeal relating to loss of goods in storage, in a factory, or in a warehouse, in contravention of the provisions envisaged in the proviso(a) to the Section 35B of the Central Excise Act, 1944 or not? - HELD THAT:- From the record it is clear that no such contention was raised before the tribunal. Therefore, it will not be appropriate to entertain the question of law at this stage.
The appeal stands dismissed.
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2017 (9) TMI 1941 - ITAT PUNE
Revision u/s 263 - rejection of books of accounts - profit estimated on undisclosed sales in the bank accounts - HELD THAT:- As during the course of assessment proceedings, the AO had made enquiries, raised questions for which notices u/s 142(1) of the Act were issued on different dates and after considering the reply of assessee on various aspects, the said view was taken by the AO. Once the AO has taken a view on the basis of assessee having not correctly disclosed its turnover from the business, then the same cannot be substituted by the Commissioner on the surmise that the view of AO is not a reasonable view, where the said view was adopted by the AO after going through the factual and legal aspects of the issue before him.
In any case, the Commissioner has not found any fault with the rejection of books of account but has exercised jurisdiction on the profit estimated on undisclosed sales in the bank accounts being not justified in the absence of any cogent evidence - even if there is some loss of revenue but the Commissioner is not empowered to exercise his jurisdiction u/s 263 of the Act for substituting the view adopted by the Assessing Officer by a view of the Commissioner which is at variance.
While setting aside the issue, the Commissioner has not come to a finding but has asked the AO to do a fresh examination and hence, the matter was set aside to the file of AO with direction to re-examine the issue. We find no merit in such setting aside of the issue. He has directed the AO to re-assess the case and examine the evidence in perspective of the provisions of the Act, whereas which amounts further enquiries and substitution of the view adopted by the AO and the same is not merited. Accordingly, we find no merit in the directions of Commissioner and hold that exercise of jurisdiction u/s 263 of the Act is unwarranted and the same is held to be invalid in law. Accordingly, the same is cancelled. Appeals of assessee are allowed.
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2017 (9) TMI 1940 - BOMBAY HIGH COURT
Winding up of the respondent company - inability to pay its debts as and when they arise - due towards repayment of credit facilities due towards repayment of credit facilities - HELD THAT:- The Company is clearly bound and liable to pay amount guaranteed under the Corporate Guarantee. They have failed and neglected to pay their debts, thus inviting the deeming provisions of the act of commercial insolvency. Learned Counsel for the respondent submitted that apart from the defences raised in affidavit in reply dated 30th January, 2017, there are no other defences that the company can press. The affidavit in rejoinder reiterates the claim and denies contentions in the reply.
The petition is also advertised as directed in the order of 19th October, 2015. Learned Counsel for the petitioner submitted that the affidavits of service are already on record and find that they are already filed as of 13th April, 2017. Affidavit of publication in two local newspapers and a further affidavit of publication in Maharashtra Government Gazette on 13th April, 2017 is also seen to have been filed in this Court on 25th April, 2017.
The respondent Company M/s. Classic Diamond (India) Limited shall be wound up by and under the supervision, direction and order of this Court in accordance with the provisions of the Companies Act, 1956 - Petition is allowed.
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2017 (9) TMI 1939 - ITAT PUNE
Deduction u/s 80IB(10) - Non completion of project on time - projects approved by the local authority or not? - Housing Projects approved prior to the amendment - comparison between the pre-amended and post-amended provisions of clause (a) of section 80IB(10) - HELD THAT:- As the assessee’s project, since approved prior to the amendment to sub-section (10) of section 80IB of the Act by the Finance (No.2) Act, 2004 w.e.f. 01-04-2005 is required to be completed by 31-03-2008 - assessee should have completed his project on or before 31-03-2008 for becoming eligible for claim of deduction u/s.80IB(10) of the Act. It is an undisputed fact that the project in question has never been completed even till date for some reason or the other and sustainable reason or otherwise.
The assessee is having obligation to complete the project before the due date for becoming eligible to claim deduction u/s.80IB(10) of the Act. Assessee failed to discharge the same. It appears to be assessee’s case that he wants to avail the benefit of said provisions and does not want to pay taxes on the income of the project while the same is incomplete. Therefore, we dismiss the said ground holding that the amended provisions of clause (a)(i) of section 80IB(10) of the Act apply to the Housing Projects approved prior to the said amendment. - Decided against assessee.
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2017 (9) TMI 1938 - SUPREME COURT
Custodial violence and unnatural deaths in prisons - Overcrowding in prisons - Gross inadequacy of staff - Available staff being untrained or inadequately trained - lack of proper medical attention or timely medical attention - the need to reform - need to compensate - Custodial death of Children.
Compensation for unnatural deaths - HELD THAT:- There are several cases - documented and undocumented-all over the country but in spite of repeated decisions delivered by this Court and perhaps every High Court there seems to be no let up in custodial deaths. This is not a sad but a tragic state of affairs indicating the apparent disdain of the State to the life and liberty of individuals, particularly those in custody. The time to remedy the situation is long past and yet, there seems to be no will and therefore no solution in sight.
The need to reform - HELD THAT:- The issue of unnatural deaths in prisons was debated and discussed before us in great detail by the learned Amicus, the learned Attorney General and learned Counsel for the National Forum. All of them have painstakingly taken us through a plethora of documents but, as mentioned above, the existence of volumes of documents relating to unnatural deaths in prisons does not necessarily resolve the problem that we are confronted with and which was brought to our notice by Chief Justice Lahoti - However, we do hope that the highlighting of this issue will bring about awareness in the mind and heart of the powers that be and consequential reforms in prisons which may ultimately reduce, if not eliminate, the number of unnatural deaths in prisons and also improve the conditions of prisoners all over the country.
The need to compensate - HELD THAT:- Over the last several years, there have been discussions on the rights of victims and one of the rights of a victim of crime is to obtain compensation. Schemes for victim compensation have been framed by almost every State and that is a wholesome development. But it is important for the Central Government and the State Governments to realize that persons who suffer an unnatural death in a prison are also victims-sometimes of a crime and sometimes of negligence and apathy or both. There is no reason at all to exclude their next of kin from receiving compensation only because the victim of an unnatural death is a criminal. Human rights are not dependent on the status of a person but are universal in nature. Once the issue is looked at from this perspective, it will be appreciated that merely because a person is Accused of a crime or is the perpetrator of a crime and in prison custody, that person could nevertheless be a victim of an unnatural death. Hence the need to compensate the next of kin.
Custodial death of Children - HELD THAT:- There is no documentation on the number of unnatural deaths (if any) of children in child care institutions and this should now be on the agenda of the Central Government and the State Governments (particularly the Department concerned with the welfare of children) with far greater concern than has been shown so far. The unnatural death of any child in need of care and protection or in conflict with law and in a child care institution needs attention since it is these voiceless children who need to be heard. It is time that unnatural deaths of children in child care institutions are seriously looked into by all concerned if we are to provide the children of our country with a better future.
On the facts and in the circumstances before us, the suggestions put forward by the learned Amicus and the learned Counsel appearing for the National Forum deserve acceptance and, therefore, we issue the following directions:
1. The Secretary General of this Court will transmit a copy of this decision to the Registrar General of every High Court within one week with a request to the Registrar General to place it before the Chief Justice of the High Court. We request the Chief Justice of the High Court to register a suo motu public interest petition with a view to identifying the next of kin of the prisoners who have admittedly died an unnatural death as revealed by the NCRB during the period between 2012 and 2015 and even thereafter, and award suitable compensation, unless adequate compensation has already been awarded.
2. The Union of India through the Ministry of Home Affairs will ensure circulation within one month and in any event by 31st October, 2017 of (i) the Model Prison Manual, (ii) the monograph prepared by the NHRC entitled "Suicide in Prison-prevention strategy and implication from human rights and legal points of view", (iii) the communications sent by the NHRC referred to above, (iv) the compendium of advisories issued by the Ministry of Home Affairs to the State Governments, (v) the Nelson Mandela Rules and (vi) the Guidelines on Investigating Deaths in Custody issued by the International Committee of the Red Cross to the Director General or Inspector General of Police (as the case may be) in charge of prisons in every State and Union Territory. All efforts should be made, as suggested by the NHRC and Ors. to reduce and possibly eliminate unnatural deaths in prisons and to document each and every death in prisons - both natural and unnatural.
3. The Union of India through the Ministry of Home Affairs will direct the NCRB to explain and clarify the distinction between unnatural and natural deaths in prisons as indicated on the website of the NCRB and in its Annual Reports and also explain the sub-categorization 'others' within the category of unnatural deaths. The NCRB should also be required to sub-categorize natural deaths. The sub-categorization and clarification should be complied with by 31st October, 2017.
4. The State Governments should, in conjunction with the State Legal Services Authority (SLSA), the National and State Police Academy and the Bureau of Police Research and Development conduct training and sensitization programmes for senior police officials of all prisons on their functions, duties and responsibilities as also the rights and duties of prisoners. A copy of this order be sent by the Registry of this Court to the Member-Secretary of each SLSA to follow-up and ensure compliance.
5. The necessity of having counselors and support persons in prisons cannot be over-emphasized. Their services can be utilized to counsel and advice prisoners who might be facing some crisis situation or might have some violent or suicidal tendencies. The State Governments are directed to appoint counselors and support persons for counselling prisoners, particularly first-time offenders. In this regard, the services of recognized NGOs can be taken and encouraged.
6. While visits to prison by the family of a prisoner should be encouraged, it would be worthwhile to consider extending the time or frequency of meetings and also explore the possibility of using phones and video conferencing for communications not only between a prisoner and family members of that prisoner, but also between a prisoner and the lawyer, whether appointed through the State Legal Services Authority or otherwise.
7. The State Legal Services Authorities (SLSAs) should urgently conduct a study on the lines conducted by the Bihar State Legal Services Authority in Bihar and the Commonwealth Human Rights Initiative in Rajasthan in respect of the overall conditions in prisons in the State and the facilities available. The study should also include a performance audit of the prisons, as has been done by the CAG. The SLSAs should also assess the effect and impact of various schemes framed by NALSA relating to prisoners. We request the Chief Justice of every High Court, in the capacity of Patron-in-Chief of the State Legal Services Authority, to take up this initiative and, if necessary, set up a Committee headed preferably by the Executive Chairperson of the State Legal Services Authority to implement the directions given above.
8. Providing medical assistance and facilities to inmates in prisons needs no reaffirmation. The right to health is undoubtedly a human right and all State Governments should concentrate on making this a reality for all, including prisoners. The experiences in Karnataka, West Bengal and Delhi to the effect that medical facilities in prisons do not meet minimum standards of care is an indication that the human right to health is not given adequate importance in prisons and that may also be one of the causes of unnatural deaths in prisons. The State Governments are directed to study the availability of medical assistance to prisoners and take remedial steps wherever necessary.
9. The constitution of a Board of Visitors which includes non-official visitors is of considerable importance so that eminent members of society can participate in initiating reforms in prisons and in the rehabilitation of prisoners. Merely changing the nomenclature of prisons to 'Correction Homes' will not resolve the problem. Some proactive steps are required to be taken by eminent members of society who should be included in the Board of Visitors. The State Governments are directed to constitute an appropriate Board of Visitors in terms of Chapter XXIX of the Model Prison Manual indicating their duties and responsibilities. This exercise should be completed by 30th November, 2017.
10. The suggestion given by the learned Amicus of encouraging the establishment of 'open jails' or 'open prisons' is certainly worth considering. It was brought to our notice that the experiment in Shimla (Himachal Pradesh) and the semi-open prison in Delhi are extremely successful and need to be carefully studied. Perhaps there might be equally successful experiments carried out in other States as well and, if so, they require to be documented, studied and emulated.
11. The Ministry of Women & Child Development of the Government of India which is concerned with the implementation of Juvenile Justice (Care and Protection of Children) Act, 2015 is directed to discuss with the concerned officers of the State Governments and formulate procedures for tabulating the number of children (if any) who suffer an unnatural death in child care institutions where they are kept in custody either because they are in conflict with law or because they need care and protection. Necessary steps should be taken in this regard by 31st December, 2017.
List for follow-up in December, 2017.
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2017 (9) TMI 1937 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, CHENNAI
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - HELD THAT:- It is established that the Corporate Debtor has committed the default in making the payment of the outstanding debt to the Corporate Debtor along with interest as claimed by the Operational Creditor - Operational Creditor has fulfilled all the requirements of law and has also proposed the name of IRP after obtaining the written consent in Form-2.
It is satisfying that Corporate Debtor committed default in making payment of the outstanding debt.
Application admitted - moratorium declared.
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2017 (9) TMI 1936 - ITAT AHMEDABAD
Addition u/s 40A(2)(b) - fair market value of interest paid by the assessee on the loans obtained from the persons covered u/s.40A(2)(b) - according to the AO loans ought to have been taken at the interest rate of 12% and not the interest rate of 15 or 16% - assessee ought to have provided a security for the loans taken from the bank, These are unsecured loans. It has avoided a lot of formalities by taking loans from the associate concern - HELD THAT:- The payment of interest at a little higher rate to the person even if covered u/s.40A(2)(b) cannot be termed as exorbitant when the fair market value of such interest cost is being considered. The assessee has paid interest commensurate with the interest rate prevailing in the open market. An order rendered in case of Vipul Y. Mehta [2010 (7) TMI 1051 - ITAT AHMEDABAD] has been brought to our notice, wherein Tribunal has upheld the allowance of the interest rate @18% per annum to the relatives on unsecured loan. Considering all these aspects, we are of the view that ld. First Appellate Authority has appreciated the controversy in right perspective. Assessee has not extended any undue benefit to the persons covered u/s.40A(2)(b).
Deemed dividend u/s.2(22)(e) - HELD THAT:- If assessee is not a share holder of both the companies then Section 2(22)(e) of the Income Tax Act cannot be attracted or effected. As it has been held by the Hon'ble Delhi High Court, in the case of CIT vs. Ankitech (P.) Ltd [2011 (5) TMI 325 - DELHI HIGH COURT] that the assessee should be a share holder in the lender company and such holding should be more than 10% of the voting rights, only then Section 2(22)(e) would be attracted. Therefore, this Ground of debarment is dismissed.
Disallowance in respect of late payment to PF & ESIC treating the same as income u/s.2(24)(x) r.w.s. 36(i)(vi) and not allowing the said payment as expenditure in computing total income - HELD THAT:- CIT(A) has decided the matter against the assessee quoting the judgment of CIT(A) vs. Gujarat State Road Transport Corporation, in which it is held (supra) the section 36(1)(va) of the Income Tax Act, 1961 read with sub-clause(x) of clause 24 of section 2 was applied, the assessee shall be entitled to deduction in computing the income referred to in section 28 with respect to such sum credited by the assessee to the employees' account in the relevant fund or funds on or before the "due date" mentioned in explanation to section 36(l)(va).
Consequently, it is held that ribunal has erred in deleting respective disallowances being employees' contribution to PF Account / ESI Account made by the AO as, as such, such sums were not credited by the respective assessee to the employees' accounts in the relevant fund on or before the due date as per the explanation to section 36(l)(va) of the Act i.e. date by which the concerned assessee was required as an employer to credit employees' contribution to the employees' account in the Provident Fund under the Provident Fund Act and/or in the ESI Fund under the ESI Act.
Section 36(1)(va) and section 43B(b) operate in different fields, i.e. former takes care of employee’s contribution and later the employer’s contributions. Therefore, an assessee is entitled to get benefit of deduction u/s.43B(b) as provided under the proviso thereto only with regard to portion of amount paid by the employer to contributory fund. So far as the employee’s contribution is concerned, the assessee is entitled to get deduction of amounts as provided under section 36(1)(va) only if amounts so received from the employee is credited in specified account within due date as provided under relevant statue - Cross Objection of the assessee is also dismissed.
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2017 (9) TMI 1935 - ITAT MUMBAI
Estimation of income - bogus purchases - CIT(A) restricted the addition to 10% of the amount of bogus purchases - HELD THAT:- Hon’ble Bombay High Court In CIT Vs. Nikunj Eximp Enterprises Pvt. Ltd. [2013 (1) TMI 88 - BOMBAY HIGH COURT] has held that merely because the suppliers had not appeared before the Assessing Officer or the CIT (A) one could not conclude that the purchases were not made by the respondent/assessee. The Hon’ble Gujrat High Court in CIT vs. Simit P. Seth [2013 (10) TMI 1028 - GUJARAT HIGH COURT] upheld the decision of the Tribunal and sustained the addition 12.5% of the total bogus purchases holding that only profit element embedded in such purchases can be added to income of the assessee.
We uphold the decision of the Ld. CIT(A) and in the interest of justice, restrict the addition to 10% of the total amount of bogus purchases made by the assessee during the year relevant to the assessment year under consideration. We accordingly dismiss all the grounds of the appeal of the revenue and direct the AO to compute the addition in terms of this order.
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2017 (9) TMI 1934 - CALCUTTA HIGH COURT
Inter-Corporate Deposit - privity of contract between the plaintiff and Gati or not - HELD THAT:- The confirmation of accounts by the respondent clearly shows that the respondent is indebted to the plaintiff for a sum of ₹ 10,83,55,294/-. The admission of liability is unequivocal. Moreover, there is no privity of contract between the plaintiff and Gati. The present transaction is independent of the contract between the plaintiff and Gati. The respondent has no lien, either statutory or contractual, over the said fund.
In view of such unequivocal admission of liability and in absence of any defence to the aforesaid claim, there shall be a decree for a sum of ₹ 10,83,55,294/-. In the event the aforesaid amount is paid by 20 monthly equal instalments commencing from 10th October 2017 and payable by the 10th day of each succeeding month, no interest is awarded on the aforesaid sum - Application disposed off.
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2017 (9) TMI 1933 - ITAT MUMBAI
Undisclosed cash receipts - Year of assessment - assessee is following accrual based accounting - CIT(A) deleted the addition as directed the AO to ensure that the unaccounted cash forms part of the assessed income of AY 2014-15 - HELD THAT:- Having gone through the return of income filed by ISAE for the AY 2008-09 to AY 2014-15, we find that it is following the project completion method. It filed its return of income for the AY 2014-15 on 04.04.2015 declaring total income. The above income has been accepted without any variation by ACIT-20(1), Mumbai in the assessment dated 28.12.2016 completed u/s 143(3) of the Act.
We have mentioned earlier that the return of income for A.Y. 2014-15 filed by the assessee declaring total income has been accepted by the ACIT-20(1), Mumbai u/s 143(3) of the Act. Therefore, we uphold the order of the Ld. CIT(A). - Decided against revenue.
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2017 (9) TMI 1932 - ITAT MUMBAI
Reopening of assessment u/s 147 - HELD THAT:- We find that in this case, the appeal has been filed against the order of ld.CIT(A) arising out of the order passed by the AO u/s 143(3) of the Act dated 24.12.2010 and thereafter the case has been reopened under section 147 r.w.s.148 of the Act. The reassessment was framed vide order dated 31.2.2015 in which various issues as have been raised by the revenue by way of present appeal were taken care of. As a result, the present appeal filed by the revenue has become infructuous and dismissed accordingly.
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2017 (9) TMI 1931 - SUPREME COURT
Attachment of Bank accounts - fraudulent inducement to make investment - principal submission which has been urged on behalf of the State is that there was a manifest abuse of the process by the Respondent and that in consequence, he was disentitled to any relief - HELD THAT:- The MPID Act is intended to secure the interests of small depositors. The Respondent initially filed an undertaking before the Special Judge to set out the manner in which he would secure an amount of ₹ 14,26,36,300/-. Besides an amount of ₹ 2 crores which he had deposited, the Respondent undertook to deposit an amount of ₹ 1.5 crores every month commencing from 15 February 2016. He was released on bail by the Special Judge on 11 January 2016 by requiring him to deposit an amount of ₹ 1.5 crores each month, commencing from 15 February 2016. The Respondent applied for modification of the condition of deposit in Miscellaneous Criminal Application No. 350 of 2016 which was dismissed on 1 July 2016. The High Court was then moved in an application (Criminal Application No. 178 of 2016) Under Section 482 of the Code of Criminal Procedure, with a specific prayer for de-freezing his bank accounts. This prayer, together with the other reliefs (including that for quashing the FIR) was not pressed and the application was disposed of as withdrawn on 29 June 2016 by the Division Bench.
The learned Single Judge was evidently not apprised of the fact that the earlier application seeking virtually the same relief had not been pressed before the division bench and had been withdrawn - there are merit in the submission urged on behalf of the State of Maharashtra. The learned single Judge ought not to have entertained the application Under Section 482 - appeal allowed.
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2017 (9) TMI 1930 - ITAT DELHI
Addition of interest income earned on the deposits by the assessee during the construction period - whether total income of a person includes all the income earned (received) or deemed to be earned (received) by the person in the previous year? - CIT-A deleted the addition - HELD THAT:- It is noticed that an identical issue having similar facts was a subject matter of the departmental appeal for the assessment year 2010-11 in NTPC Tamil Nadu Energy Co. Ltd., New Delhi [2016 (3) TMI 49 - ITAT DELHI] wherein held interest incomes are also inextricably linked with the setting up of the power plant and such incomes have gone on to reduce the expenses for setting up of the plant and as there was no surplus funds available with the appellant company, therefore, such income is required to be capitalized to be set off against the pre operative expenses. As such the A.O. is not justified in adding the sum as income from other source u/s 56 - Decided in favour of assessee
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2017 (9) TMI 1929 - ITAT AHMEDABAD
Disallowance u/s 14A r.w.r. 8D - HELD THAT:- Assessee rightly points out, rule 8D has no application in the present year as it is held to be applicable with effect from the assessment year 2008-09 in the case of Godrej Boyce Mfg Co Ltd vs. DCIT [2010 (8) TMI 77 - BOMBAY HIGH COURT]. The only basis of impugned disallowance is Rule 8D but then, as noted above, it was not really applicable in the year before us. In this view of the matter, we uphold the plea of the assessee and delete the impugned disallowance .
TDS u/s 195 - disallowance u/s 40(a)(i) - failure to comply with the provisions of Chapter XVII-B from the commission paid to BG Energy Holding Ltd., a non-resident company - HELD THAT:- We find that the issue of taxability of commission in the hands of a non-resident came up for a detailed examination before this Tribunal, in the case of DCIT vs. Welspun Corp Ltd[2017 (1) TMI 1084 - ITAT AHMEDABAD] and the Tribunal decided the issue in favour of the assessee
In the present case, the commission payments have been made to an entity tax resident in United Kingdom. The benefit of Indo UK Double Taxation Avoidance Agreement is thus clearly admissible to the recipient. Coming to the treaty provisions, it is not even the case of the Assessing Officer that the UK based entity had a permanent establishment in India, and the commission paid to this entity, therefore, cannot be taxed as business profits. It is only elementary that, in the absence of a PE, Article 7 of the applicable DTAA does not allow taxation of business profits in the source country.
As for the taxability under the fees for technical services clause, it is important to bear in mind the fact that the Indo UK DTAA has a ‘make available’ clause in its article dealing with fees for technical services. As for the connotations of make available clause in the treaty, there are at least two non-jurisdictional High Court decisions, namely Honble Delhi High Court in the case of DIT v. Guy Carpenter & Co Ltd. [2012 (5) TMI 31 - DELHI HIGH COURT] and in the case of CIT v. De Beers India Minerals (P.) Ltd. [2012 (5) TMI 191 - KARNATAKA HIGH COURT] in favour of the assessee, and there is no contrary decision by Honble jurisdictional High Court or by Honble Supreme Court.
The rendition of services for earning commission cannot be of such a nature that there is a transfer of technology, in the sense it is required to fulfil the ‘make available’ clause in the Indo UK DTAA. It is also elementary that in a case in which the provisions of the DTAA are applicable, the provisions of the Income Tax Act apply only to the extent the same are beneficial to the assessee. In view of these discussions, quite clearly, even if the commission income in the hands of the recipient is taxable under the provisions of Section 9, the provisions of the Indo UK DTAA will come to the rescue of the assessee. Whichever way one looks at it, whether in the light of the provisions of the Act or the Indo UK DTAA, the conclusions of the CIT(A) do not call for any interference.
Disallowance u/s 14A r.w.r. 8D - HELD THAT:- In respect of Assessment Year 2008-09, it is important to bear in mind the fact that this is the year in which the Rule 8D had admittedly come into force and as per assessee’s claim that it had sufficient interest free funds. No disallowance is made by the Assessing Officer in respect of interest payments. The disallowance has been made on the basis of the formula set out in Rule 8D in respect of administrative expenses and we see no infirmity in the order of CIT(A) in confirming this disallowance. Ground No.2 is thus dismissed.
Purchase commission and guarantee commission for AY 2003-04 which was not claimed in AY 2003-04 and disclosed by way of a note in statement of total income filed along with return of income that the same will be claimed in the year of payment - HELD THAT:- So far as this grievance of the assessee is concerned, it is sufficient to take not of the fact that the assessee had incurred certain expenditure on account of purchase commission and guarantee commission in respect of assessment year 2003-04 which was not claimed in that particular year on the ground that tax was not deducted at source, with the caveat as set out in the note to the computation of income, that deduction will be claimed in the year in which the payment is made Learned Counsel submits that though the stand so taken by the assessee was erroneous inasmuch as no tax was deductible but the assessee cannot be put to the double disadvantage in the sense that neither the amount is deductible in the year in which expenditure is incurred nor the deduction is permitted in the year in which the tax is deducted, though wrongly, in respect of such payments. We are, therefore, urged to direct the Assessing Officer to allow the payment of purchase commission and guarantee commission for the year 2003-04 which was not claimed in that year on the ground that taxes were not deducted from the same and has been claimed in the present year on the basis that now taxes has been deducted and paid. Learned Departmental Representative very fairly does not oppose the contention so advanced by the assessee.
Thus bearing in mind entirety of the case, we see merits in the stand of the assessee and direct the Assessing Officer to allow the claim, upon verification about the factual elements embedded in the submissions of the learned Counsel, in accordance with law. This issue is thus remitted to the file of the Assessing Officer for necessary factual verification. The additional ground is thus allowed for statistical purposes.
Addition made on account of refund of value added tax receivable by the applicant for AY 2007-08 - CIT(A) deleted the addition on the ground that “VAT has not been routed through profit and loss account and therefore , it has not been claimed as expenditure” - HELD THAT:- We see no merits in the stand of the Assessing Officer. Once it is not in dispute that the assessee has not claimed any deduction at the time of making payment of VAT, the refund of such VAT cannot be brought to tax in the hands of the assessee. The action of the CIT(A) does not indeed call for any interference. We, therefore, approve the order of the CIT(A) on this point and decline to interfere in the matter.
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2017 (9) TMI 1928 - DELHI HIGH COURT
Validity of order passed under Section 142(2A) - ITAT has declined to permit the Petitioner to raise additional ground - HELD THAT:- In the considered view of the Court, the ITAT ought to have permitted the Petitioner to raise the aforementioned additional ground and ought to have decided the said additional ground on its merits in accordance with law.
The writ petition is allowed and the impugned order passed by the ITAT is set aside. The petitioner is permitted to urge the additional ground no.22 before the ITAT, which would decide the Petitioner’s appeal including the above additional ground, in accordance with law, while passing the final order.
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