|
Advanced Search Options
Case Laws
Showing 41 to 60 of 1244 Records
-
2014 (8) TMI 1206
Penalty u/s 271(1)(c) - addition of capital gain AND on account of addition u/s 14A - addition made u/s 50C - CIT-A deleted the penalty - HELD THAT:- As per grounds of appeal, the Revenue is disputing only in respect of deletion of penalty imposed by the Assessing Officer for addition made u/s 50C although in ground No. 4, the Revenue is stating that this penalty of ₹ 29.60 lacs also included penalty in respect of disallowance u/s 14A. But in our considered opinion, since the penalty imposable in respect of long term capital gain is around ₹ 31 lacs, it has to be accepted that the Revenue is disputing the deletion of penalty imposed by the Assessing Officer in respect of addition on account of long term capital gain only. This aspect of penalty is covered in favour of the assessee and hence, respectfully following the judgment of Hon'ble Calcutta High Court in the case of Madan Theatres Ltd.[2013 (6) TMI 96 - CALCUTTA HIGH COURT] we decline to interfere in the order of CIT(A). - Decided in favour of assessee.
-
2014 (8) TMI 1205
Maintainability of petition - availability of alternative remedy of appeal - Section 45 of the HP VAT Act, 2005 - impugned orders have been issued by the Assistant Excise and Taxation Commissioner-cum-Assessing Authority - when an Act provides mechanism to have remedy (ies), can a writ lie in the given circumstances? - HELD THAT:- The answer is in the negative for the following reasons. It is well settled principle of law that High Courts have imposed rule of self limitation in entertaining the writ petition in terms of writ jurisdiction when alternative remedy is available. High Court must not interfere if there is adequate efficacious alternative remedy available and the practice of approaching the High Court, without availing the remedy (ies) provided, must be deprecated, unless express case is made out.
The Apex Court in Nivedita Sharma v. Cellular Operators Association of India, [2011 (12) TMI 536 - SUPREME COURT], after discussing its various earlier decisions, held that the High Court had committed error in entertaining the writ petition without noticing and referring to the relevant provisions of law applicable in that case, which contained statutory remedy of appeal and accordingly set aside the order of the High Court in terms of which the writ petition was entertained.
The writ petitioners-Company have remedies of appeal(s), before approaching the High Court by way of the writ petitions, for the redressal of their grievances. The petitioners ought to have exhausted the remedy of appeal before the Deputy Excise and Taxation Commissioner or Additional Excise and Taxation Commissioner or the Excise Commissioner, as the case may be, and if the petitioners were not successful in those appeal proceedings, another remedy available to them was to challenge the said order(s) by the medium of appeal before the Tribunal, and again, if they were unsuccessful, they could have availed the remedy of revision before the High Court in terms of Section 48 of the HP VAT Act, 2005 - Keeping in view the discussion made, read with the fact that the dispute raised in these writ petitions relates to revenue/tax matters, it can safely be concluded that the petitioners have sufficient efficacious remedy (ies) available.
The writ petitioners have alternative efficacious remedy available and these writ petitions are not maintainable. Accordingly, the same merit to be dismissed in limine - Petition dismissed.
-
2014 (8) TMI 1204
Stay application - disallowance relating to write off of stock under valuation of closing stock - HELD THAT:- From the submissions of the assessee there appears to be a prima facie case in favour of the assessee, so far the addition in respect of write off of inventory is concerned. However, the said observations are not conclusive and the final conclusion will be dependant on the material and evidences which will be considered at the time of disposal of the appeal - interest of justice will be well served, if, the demand in question is stayed subject to deposit of ₹ 10 lakhs by the assessee with the Revenue Authorities in two installments i.e. ₹ 5,00,000/- by 15th September 2014 and further installment of ₹ 5,00,000/- by 15th October 2014, as a part of the amount sought to be recovered from the assessee.
Before parting with the order it is pertinent to mention here that our observations made above, while disposing of the present stay application, will not have any bearing at the time of final disposal of the case.
-
2014 (8) TMI 1203
Unexplained deposit - Addition of peak credit - HELD THAT:- Assessee has claimed that assessee is agreeable if it is subject to taxation on the basis of peak credit in the account. We note that assessee has for the first time before us claimed for assessment of peak credit - we remit this issue to the file of AO. The AO shall review assessee’s claim and compute the peak credit and bring the same to tax. Accordingly the appeal filed by the assessee is allowed for statistical purposes.
-
2014 (8) TMI 1202
Interest on delayed payment of pension and gratuity amount - retiral benefits of the appellant were withheld by the respondents on the alleged ground that some amount was due to the employer - disciplinary proceedings were not pending against the appellant on the date of his retirement - HELD THAT:- It is an undisputed fact that the appellant retired from service on attaining the age of superannuation on 31-10-2006 and the order of the learned Single Judge after adverting to the relevant facts and the legal position has given a direction to the respondent employer to pay the erroneously withheld pensionary benefits and the gratuity amount to the legal representatives of the deceased employee without awarding interest for which the appellant is legally entitled, therefore, this Court has to exercise its appellate jurisdiction as there is a miscarriage of justice in denying the interest to be paid or payable by the employer from the date of the entitlement of the deceased employee till the date of payment.
Interest is awarded at the rate of 9% on the delayed payment of pension and gratuity amount from the date of entitlement till the date of the actual payment - appeal allowed.
-
2014 (8) TMI 1201
Materials seized in the search - Whether Revenue was not justified in drawing the presumption under Section 132(4)(A) on the ground the assessee name was not reflected in any of the seized materials? - HELD THAT:- They are not disputing the quantum of tax determined by the Authorities. As a consequence thereof, only if the presumption is held in favour of the Department, they would be entitled to the consequential claim regarding interest. The reason given by the Tribunal is, though there was a seizure and there were materials seized in the search, the said materials did not reflect the name of the assessee. Most of the cheques were stale and some other cheques were blank and some other cheques were in the name of the third parties.
In the facts of these cases, we are of the view that the finding recorded by the Tribunal on this aspect cannot be found fault with and therefore, we are not going into the legal issue regarding the scope of presumption, which arises under Section 147 read with Section 143(3) and infact in other three appeals also, similar finding was recorded by the Tribunal.
Undisclosed income - recipient of the income during the course of the search of the premises admitted the receipt of the said payment - Tribunal has not properly appreciated the case of the assessee and taking into consideration, a sum reflected in the statement of affairs filed on 31.03.1999 has granted the relief. The said statement was not put forth as a defence before the Assessing Authority or before the First Appellate Authority though an assessment order disclosing the said amount was placed before both the Authorities. Under these circumstances, it is not possible to affirm the said finding recorded by the Tribunal. The Tribunal shall re-hear the matter.
Unaccounted money lending cheques - Though the Tribunal has set out in detail the facts regarding the said claim and the contention of the assessee explaining the same, it has not appreciated the material on record, heard the arguments and recorded the finding one way or the other. Therefore, when the Tribunal holds appeal is allowed, if that claim is also set aside without assigning any reasons, it cannot be sustained. Therefore, the said claim also requires to be considered by the Tribunal afresh.
Cash found during the time of search - FAA has affirmed the finding recorded by the Tribunal. The assessee was in appeal. The Tribunal has not recorded any finding on this aspect of the matter. Again, in the operative portion of the order, states that the appeal is allowed, it cannot be construed as setting aside the order of the Appellate Authority as no reasons are given. Therefore, that aspect also requires to be considered by the Tribunal afresh.
-
2014 (8) TMI 1200
Business Auxiliary Services - selling products/packages for operation of computer systems and to motivate other associate for awareness of computer educational packages - period from July, 2003 to March, 2007 - HELD THAT:- The Explanation to Section 65(19) of Finance Act, 1994 provides that the Information Technology Service means any service in relation to designing, developing or maintaining of computer software or computerized data processing or system networking or any other service primarily in relation to operation of computer systems. As per the definition of Business Auxiliary Service, the activity of Information Technology Service is excluded therefrom and, therefore, it is not exigible to service tax.
The Tribunal had failed to consider the following expression used in the Explanation “or any other service primarily in relation to operation of computer systems”. According to the Learned Counsel for the appellant, the activity of the assessee falls in this expression. Thus, it would be appropriate that the matter is remitted to the Tribunal to adjudicate the same and record a finding as to whether the activity of the assessee falls under the expression “or any other service primarily in relation to operation of computer systems” and termed to be ‘Information Technology Service’ or not.
The matters are remitted to the Tribunal to decide afresh in accordance with law after affording an opportunity of hearing - Appeal allowed by way of remand.
-
2014 (8) TMI 1199
Revision u/s 263 - addition on account of “Damages for remittance to Pension Fund Trust” and office expenses of the Chairman - HELD THAT:- A bare reading of section 36(1)(iv) makes is amply clear that the sum should be contributed by the employer towards a recognized provident fund or approved superannuation funds subject to such limits as may be prescribed for recognizing provident fund or approving the superannuation fund. The section does not lay down any specific condition that the fund should be approved by the jurisdictional Commissioner or Chief Commissioner only.
In the present case, the assessee is contributing in the Pension Fund Scheme jointly floated by twelve State Transport Corporations operating in different districts of the state of Tamil Nadu. All the State Transport Corporations are signatories to the Trust Deed for setting up of joint State Transport Employees Pension Fund Scheme. It is not in dispute that the said fund has been recognized by the CIT-VII, Chennai. Once the assessee is contributing towards recognized fund, the assessee is entitled to get the benefit for the contributions made to the said fund.
Reimbursement of free passes - assessee is crediting the amounts received from the Government on account of issuance of passes in the year of receipt - objection raised by the Revenue is that, since the assessee is following mercantile system of accounting, the assessee should offer to tax, reimbursement amount in the year of claim itself - HELD THAT:- A perusal of the records does not make it clear, whether the assessee is issuing free passes as per the scheme of Department of Social Welfare, Government of Tamil Nadu or Welfare Scheme formulated by its own and is thereafter claiming reimbursement from the Social Welfare Department. The moot point which has to be looked into for including the income in tax net is, ‘When does the income crystalises’? In case the assessee is issuing free passes to physically handicapped, freedom fighters etc., under the scheme of Government, the assessee is assured to get the reimbursement of the amount on the issuance of passes itself. In case the claim of the assessee is subject to scrutiny by Social Welfare Department, the income crystalises after the claim of the assessee is approved by the competent authority. The Assessing Officer is directed to look into this issue and thereafter, pass necessary orders in accordance with law.
-
2014 (8) TMI 1198
Penalty u/s 271(2) - Concealment of refundable empty bottle deposit -Whether the Tribunal is justified in upholding the levy of maximum penalty u/s 271(2) of the Act - Penalty for unreconciled difference in balance sheet - HELD THAT:- No reason to entertain this Special Leave Petition, which is, accordingly, dismissed.
-
2014 (8) TMI 1197
Eligibility of sales tax exemption - sale of BOPP tapes and PVC adhesive tapes - applicability and scope of G.O.Ms. No.1772 (Revenue) dated 25-09-1958 - contention of the revenue, before the Tribunal, was that, in view of the addition of Entry 191 to the First Schedule, with effect from 15-02-1989, the earlier order of exemption in G.O.Ms. No.1772 (Revenue) dated 25-09-1958 ceased to remain in force; and the intention of the legislature was to bring adhesive tapes to tax.
HELD THAT:- The power to grant exemption from tax is referable to Section 9 of the Act. Section 9 empowers the State Government to notify exemptions from tax or interest and, under sub-Section (1) thereof, the State Government may, by notification in the Andhra Pradesh Gazette, make an exemption, in respect of any tax payable under the Act, on the sale or purchase of any specified class of goods. G.O.Ms. No.1772 (Revenue) dated 25-09-1958 was issued, in the exercise of the powers conferred under Section 9 (1) (i) of the Act, exempting "all kinds of tapes, nawars and laces" from tax - As an exemption notification was issued under Section 9 (1) of the Act, and was published in the A.P. Gazette, the order of exemption can only be rescinded or revoked by way of another notification published in the Andhra Pradesh Gazette. It is not in dispute that no notification was issued rescinding or revoking G.O.Ms. No.1772 (Revenue) dated 25-09-1958 after Entry 191 was added, to the First Schedule of the Act, by Act 4 of 1989 with effect from 15-02-1989.
Exercise of power under Section 40, to amend the schedules to the Act, is distinct from the exercise of power to grant exemption under Section 9 of the Act. The mere fact that power was exercised under Section 40 to add an Entry to the First Schedule did not, by itself and without anything more, result in the exemption order, issued under Section 9 of the Act, ceasing to remain in force. It is only on a notification being issued in the A.P. Gazette, canceling or rescinding the earlier notification granting exemption, would the said order of exemption stand revoked. The mere fact that Entry 191 was added to the First Schedule, with effect from 15-02-1989, would not automatically result in the respondent being denied the benefit of exemption under G.O.Ms. No.1772 (Revenue) dated 25-09-1958, in as much as the said order of exemption, passed by the Government under Section 9 (1) of the Act, was not rescinded or revoked by way of a notification in the A.P. Gazette even after Entry 191 was added to the First Schedule. As long as the order of exemption in G.O.Ms. No.1772 (Revenue) dated 25-09-1958 remained in force, the assessing authority could not have denied them the benefit of exemption - there are no error in the order of the Tribunal necessitating its Revision.
Tax revision dismissed.
-
2014 (8) TMI 1196
Rectification of mistake u/s 254 - Entitlement for deduction u/s. 80IA denied - HELD THAT:- Tribunal has dismissed the assessee’s appeal [2010 (10) TMI 1206 - ITAT MUMBAI] by relying on the decision of Larger Third Member Bench in the case of B.T. Patil & Sons Belgaum Construction Private Ltd. [2013 (11) TMI 197 - ITAT PUNE]. This decision was subsequently recalled and was finally decided in favour of the assessee by relying on the decision of Hon’ble jurisdictional High Court in the case of CIT Vs. ABG Heavy Industries Ltd. [2010 (2) TMI 108 - BOMBAY HIGH COURT]. Thus, an apparent mistake has been crept in the order of Tribunal dated 27-10-2010, which is amenable to rectification u/s.254(2) - we recall the order passed by the Tribunal and direct the Registry to fix the appeal for hearing on merits. Registry is also directed to issue fresh notice to both the parties. Miscellaneous application filed by the assessee is allowed
-
2014 (8) TMI 1195
Rectification of Mistake - errors apparent on the face of the record - sufficient reason present or not - HELD THAT:- In the present case, SAIL-BSP is a State embedded entity whose schedule is prepared by Chhattisgarh SLDC. However, the scheduling of NSPCL, being an ISGS is done by WRLDC. Therefore, WRLDC prepares schedule for whole Chhattisgarh and Chhattisgarh SLDC in turn prepares schedule for SAIL-BSP. Therefore, WRLDC applies zonal charges and losses as per Sharing Regulations. Further, as per implemented schedule available at SLDC Chhattisgarh web site, the drawal schedule of BSP is prepared considering CSPDCL as buyer of power from NSPCL and path of their power is shown as transmission system of WR and CSPTCL.
NSPCL-BSP-SAIL dedicated transmission lines are connecting two entities viz. NSPCL and SAIL-BSP in two different control areas coordinated respectively by WRLDC and SLDC, Chhattisgarh. If the petitioner’s contention is to be upheld, then NSPCL may have to dedicate one unit purely as captive plant to cater to the captive load of SAIL-BSP and it needs to be fully disconnected from the other unit having long term allocation to other beneficiaries. In that case, WRLDC will schedule only one unit of NSPCL and the other unit along with SAIL-BSP will be with the Chhattisgarh SLDC control area - there is no error of fact or law, apparent on the face of record.
Review petition dismissed.
-
2014 (8) TMI 1194
Issue not raised by the assessee before the lower authorities - notice under section 153C r.w.s. 153A was issued in this case after expiry of two years from the date of search - HELD THAT:- We find that the issue raised by the assessee in this ground of the appeal being legal in nature, has to be admitted. However, this issue was not raised by the assessee before the AO and the CIT(A). Accordingly, we are of the view that it shall be in the interest of justice to restore this issue to the file of the AO with direction to decide about the legal issue regarding legality of the notice dated 13.6.2008 issued by the DCIT after allowing reasonable opportunity of hearing to the assessee.
Addition u/s 68 - HELD THAT:- We find that since the legal issue raised regarding legality of the notice dated 13.6.2008 has been restored to the file of the AO, it shall be justified to restore other issues raised of the appeal of the assessee to the file of the AO with direction to decide the same afresh in accordance with the law after allowing reasonable opportunity of hearing to the assessee - Decided in favour of assessee for statistical purpose.
-
2014 (8) TMI 1193
Waiver of 20% of the interest demanded u/s 234B - delay in payment of the capital gain tax - assessee is a retired Scientist from the Indian Defence Organisation - Learned single Judge directed the assessee to pay 20% of the interest demanded as against 100% claimed by the Revenue - HELD THAT:- Assessee claimed exemption of payment from ‘Capital Gains Exemption Bonds’ by investment in the Government bonds. Though the amount was acknowledged, for want of Pan number, bonds were not issued. Though, he rectified the mistake, still he could not get the benefit. In the meanwhile, law was amended imposing limitation to the extent of only ₹ 50 Lakhs notified by way of a Notification, subsequently, by way of amendment about which the assessee was completely ignorant. After coming to know of the same, he hasdeposited ₹ 50 Lakhs and thereafter he has paid capital gain tax of the balance amount. The demand of interest is for the delay in payment of the capital gain tax.
The learned single Judge has carefully taken note of the facts and circumstances of the case, the statutory provisions, the Circulars issued and also the orders passed by the Authorities and was of the view that there was no intention to evade payment of tax. The delay is on account of bona fide mistake and therefore, he reduced the interest to 20%, thus, waiving 80% of the interest payable.
No justification to interfere with a well considered order passed by the learned single Judge. In that view of the matter, we do not see any merits in this appeal.
-
2014 (8) TMI 1192
Allowability of foreign exchange loss - CIT(A) held that the unrealized foreign exchange loss had resulted on capital account - as per assessee ECB borrowings are on general account of expansion of three existing industrial unit and hence, the ECB borrowings are not on capital account - HELD THAT:- As during the assessment year 2009-10, the assessee company has claimed foreign exchange loss which consist of loss of reinstatement of outstanding liability on account of ECB loans in foreign currency and the same has been accepted by the department. It is also pertinent to mention that during the previous AYs from 2001-02 to 2006-07, the department has accepted the gain offered by the assessee as income on account of similar foreign exchange fluctuation.
When the facts are being, we do not find any justification on the part of the authorities below to disallow the loss claimed by the assessee during the year under consideration. AO is directed to verify the correct computation and allow the claim of the assessee accordingly. Appeal filed by the Assessee is treated as allowed.
-
2014 (8) TMI 1191
Dishonor of Cheque - section 138 of NI Act - summon order - appellant though they were not directly involved nor dealt with the matter of the company, they were impleaded as accused in the petition under Section 138 Negotiable Instrument Act - HELD THAT:- It is clear that merely being a Director of a company is not sufficient to make the person liable under Section 141 of the Act, till it is shown that the said Director was in- charge of and responsible for the conduct of his business.
The Court below and the High Court erred in not appreciating the fact that the complainant in the mechanical way cited the names of the appellants which alleged to have been obtained from the website of the Ministry of Corporate Affairs and unnecessary dragged the appellants in litigation who were not directly charged or responsible for the company for the conduct of business. The requirement of Section 141 of the Negotiable Instrument Act is against the persons responsible for the conduct or business of the company at the relevant time. In absence of such allegation against the appellants, the complainant misused the mandate of Section 138 of the Negotiable Instrument Act.
Appeal allowed - decided in favor of appellant.
-
2014 (8) TMI 1190
Deduction u/s 80IB(10) in respect of the Dharavi Project approved by SRA - Deduction denied as condition of size of the plot of land had not been fulfilled by appellant - Whether the proviso inserted in clause (b) to section 80IB(10) by the Finance (No.2) Act, 2004 and the subsequent notification No.67/2010 dated 3/8/2010 issued by CBDT notifying the SRA projects is clarificatory in nature and is retrospective in operation? - HELD THAT:- The Registrar (Judicial)/Registrar, High Court, Original Side, Bombay to ensure that the original record in relation to this Appeal is summoned from the Tribunal and offered for inspection of the parties.
This paper book is treated sufficient for the purpose of admission of this Appeal. However, the Registry must further ensure preparation of complete paper book in accordance with the Rules. The Registry in the first instance must send intimation of admission of this Appeal enclosing therewith a copy of this order so as to enable the Tribunal to act accordingly.
-
2014 (8) TMI 1189
TDS u/s 194C - payment made to a resident for the services rendered - local agent of non-resident company has rendered services to the assessee - HELD THAT:- Agent of the foreign shipping company is only a conduit but the destination of the payment is the foreign shipping company and therefore, it is not liable to TDS provisions. Though the AO has observed that the local agent has rendered services to the assessee, his order is silent as to the nature of services rendered by the local agent of the foreign shipping company. The Board’s circular No.723 dated 19-91995,in force during the relevant assessment year, clearly provides that payments made to the shipping agent of non-resident ship-owners or charterers for carriage of passengers, etc., from the port in India is not liable for TDS u/s 194C and 195 of the Act. The Board’s circulars are binding on the Revenue authorities. Before disallowance u/s 40(a)(ia) of the Act, the AO ought to have examined and brought on record the nature of services rendered by the local agents of the non-resident company which he has failed to do so. Neither has the CIT(A) done this exercise. In view of the same, we deem it fit and proper to remit this issue to the file of the AO to re-consider the same in accordance with law and if it is found that the recipient of payment is only a local agent of the non-resident company and has not rendered any independent services but has received the payment on behalf of the non-resident company for the services rendered by the non-resident company, then no disallowance is required to be made. With these observations, the issue is remitted back to the AO for consideration in the light of our observations above. These grounds are accordingly allowed for statistical purposes.
Claim of bad debt - disallowance on the ground that the same has not been written off in the books of account of the assessee - HELD THAT:- We find that there is a finding of the AO which is not disputed by the assessee that the bad debts have not been written off in its books of account for the relevant assessment year. In view of the same, the said claim is not allowable and the AO has rightly disallowed the same and brought to tax. As regards the assessee’s prayer to give a direction that the same may be considered in the next assessment year, we are not inclined to accept this contention, as a direction can be given only for the issues arising in the assessment of income for the relevant assessment year and not to any earlier or subsequent assessment year. It is for the assessee to make a claim and the AO to consider such a claim, if made, during the assessment proceedings of the relevant assessment year. In view of the same, these grounds of appeal are dismissed.
Discrepancy in the valuation of closing stock both with regard to the quantum and the value as on 31-3-2005 - HELD THAT:- We find that the CIT(A) has also not verified the contention of the assessee and has merely confirmed the additions made on account of difference in the valuation of closing stock. We find that none of the authorities have, in fact, examined the contentions of the assessee and have not verified the explanation of the assessee with regard to the alleged discrepancies in the valuation of the closing stock. In view of the same, we are inclined to set aside the order of the CIT(A) as well as the order of the AO on this issue and remit the issue to the file of the AO for reconsideration in accordance with law. The AO shall allow the assessee to explain the discrepancies, if any, in the valuation of closing stock by giving a fair opportunity of hearing to the assessee. These grounds are thus allowed for statistical purposes.
-
2014 (8) TMI 1188
Disallowance of remuneration - disallowance by invoking section 184(5) of IT Act, 1961, considering the firm as an Association of Persons (AOP) - HELD THAT:- There is no dispute that the assessee had not filed any return voluntarily, as prescribed u/s 139(1) of the IT Act, 1961 or belatedly or prescribed u/s 139(4) of the IT Act, 1961. The returns filed by the assessee were pursuant to notices issued u/s 148 of the IT Act, 1961.
Reading of sub-sec.1 of Sec.148 of the IT Act, 1961, clearly show that a return filed in pursuance of notice u/s 148 of the IT Act, 1961 is to be treated as a return required to be furnished u/s 139 of the It Act, 1961. Failure of an assessee to file the return u/s 139(1) of the IT Act, 1961 would give powers to the AO to issue a notice for filing return as set out in Sec.142(1) of the IT Act, 1961. Once an AO chose not to issue such notice but to proceed u/s148, the consequence mentioned therein has to follow.
Once a return has been filed by the assessee pursuant to a notice u/s 148 of the IT Act, 1961, the clause that would apply to him is clause(c ) of sub-sec.(1) of Sec.144 of the IT Act, 1961. He goes out of the ambit of clause(a). For applying clause(c ), it is necessary that assessee should have failed to comply with the terms of notice issued under sec.143(2) of the IT Act, 1961 - Thus, it is clear that there was no failure in complying with the notices issued u/s 143(2) of the IT Act, 1961. The result is that assessee could not have been fastened with the consequences that arise out of a best judgment assessment u/s 144 of the IT Act, 1961. It is not that section 184(5) come into operation whenever an assessment is made u/s 144.
The claim for deduction by way of payment of interest, salary, bonus, commission or remuneration to the partners could not have been disallowed. The disallowance of remuneration to partners for impugned assessment year therefore, stands deleted - Appeal of the assessee allowed in part.
-
2014 (8) TMI 1187
Delay in filing appeal u/s. 248 extending upto 933 days - TDS on payments made to non-resident payees, and deposited the same in the State Exchequer - assessee approached the CIT(A) u/s 248 claiming that on the payments made to three non-resident payees, no tax was required to be deducted at source and CIT-A accepted the same - Indo-Thailand DTAA - HELD THAT:- Section 248 of the Act primarily deals with a situation where a person has deducted and paid tax to the Government, but thereafter denies his liability to deduct such tax. Thus, an appeal u/s 248 of the Act is preferred by a person only after he has actually paid the tax to the credit of the Central Government, whose liability he seeks to deny. In such a situation, where the bonafides of the assessee are not in challenge, the reasons advanced for the delay ought to be construed liberally. In conclusion, we hereby affirm the action of the CIT(A) condoning the delay in filing of the appeals before him. Thus, Revenue fails on this aspect.
TDS on payments made to non-resident payees - DTAA between Indo-Thailand - PE in India - In the present case, there is no material to suggest that the recipient concerns have a permanent establishment in India or that they were present in India for a period exceeding 183 days during the previous year relevant to the assessment year under consideration. In this context, learned counsel for the assessee furnished appropriate certificates from the three recipient concerns tabulating the period for which their representatives were present in India during the relevant period which show that the presence in India was for less than 183 days. Therefore, on this aspect also, we find no merit in the plea of the Revenue and the discussion made by the CIT(A) in para 3.8 of his order in this context is hereby affirmed.
As revenue CIT(A) has not considered the taxability of the impugned income as ‘business income’ under Article 7 of the DTAA - Article 7 of the DTAA deals with business profits to be considered for taxation. The said Article states that the income or profits of the enterprise of a contracting State shall be taxable only in that State unless the enterprise carries on business in the other contracting State through a Permanent Establishment (PE) situated therein. The taxability is only of so much income as is attributable to that PE for the sales in that other State of the goods or merchandise. In this context, having regard to the definition of PE provided in Article 5(2)(j) of the Indo-Thailand DTAA, we find that the three recipient concerns cannot be said to have any PE in India so as to bring the impugned income to tax as business profits in India as per Article 7 of the DTAA. Therefore, on this count also we find no reason to interfere with the conclusion of the CIT(A) to the effect that assessee was not required to deduct tax on payments to the three recipient concerns. - Decided in favour of assessee
........
|
