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Income Tax - Case Laws

Showing 101 to 120 of 814 Records

• 2015 (9) TMI 1563 - ITAT CHANDIGARH
  

  Application under section 80G(5)(vi) rejected - the assessee has received anonymous donations - whether Commissioner of Income Tax (Exemption) cannot refuse to grant registration under section 80G of the Act only on the pretext that the particulars of the donors are not provided by it? - Held that:- While granting the approval under section 80G, the only provision as per these rules is that the rejection can only be made if one or more conditions as laid down in clauses (i) to (v) of sub-section (5) of section 80G of the Act are not fulfilled. It is quite clear that the rules have given the instances of rejection of the said application in the form of non-compliance of provision of section 80G(5) clauses (i) to (v).

  Coming to the provision of section 80G(5) we see on reading of clauses (i) to (v), there is no clause which says that the said approval be rejected if any institution or fund accepts anonymous donation. In the present case, this was the only reason given by the learned Commissioner of Income Tax for rejection of said registration. The provisions of section 115BBC of the Act are not relevant for granting approval under section 80G of the Act. There is no mention of this section 115BBC or even of anonymous donation in any of the provision of section 80G of the Act or rules made for the purposes of this section. The taxability of anonymous donations under section 115BBC of the Act can always be taken care at the time of assessment by the Assessing Officer and are not relevant for granting registration under section 80G of the Act. Thus e direct the learned Commissioner of Income Tax to grant registration to the society under section 80G of the Act. - Decided in favour of assessee.

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• 2015 (9) TMI 1562 - ITAT MUMBAI
  

  Rental income earned from leased premises - assessed as income from ‘House property’ or as ‘Business income’- Held that:- The assessee’s objects are not in respect of letting of any particular property, but it has the main objects of acquiring, constructing, operating and maintaining of the multiplexes, business center, I.T. Parks, software zones, commercial & residential complexes and to grant the same on lease/license also. The very object is the commercially exploitation of the properties. Besides that the assessee is also providing hosts of amenities and facilities, as discussed above, which amounts to composite business activity.

  We therefore hold that the income/loss from the multiplex is liable to be assessed as ‘business income/loss and not as income from house property. The assessee consequently is also entitled to the claim of deductions in respect of expenditure incurred and depreciation on assets etc. in relation to such income. Hence, we do not find any reason to deviate from the findings recorded by the Ld. CIT(A) on this issue. - Decided in favour of assessee.

  Interest on fixed deposits kept with bank - treated as business receipts or income from other sources - Held that:- Admittedly, the interest was earned from the bank receipts. The Ld. A.R. could not convince us as to how the interest earned on fixed deposits can be said to be business activity of the assessee. We do not agree with the finding of the Ld. CIT(A) that since the income from the letting out of the commercial complex has been treated as business income then the interest from FDRs is also to be treated as business income. The interest on FDRs has no relation with the business of letting out of the property of the assessee. This issue is accordingly decided against the assessee and in favour of the Revenue.

  Treatment of interest income - whether be assessed as ‘business income’ or ‘income from other sources’ - Held that:- As per the proposition of law laid down by the Hon’ble Jurisdictional High Court in the case of “Reliance Utilities and Power Ltd.” [2009 (1) TMI 4 - BOMBAY HIGH COURT] wherein it has been held that “if there be interest free funds available to an assessee sufficient to meet its investments and at the same time the assessee had raised a loan it can be presumed that the investments were from the interest free funds available.” The assessee had sufficient own funds and as per the law laid down by the Hon’ble Jurisdictional High Court (supra) the presumption will be that the advances were given out of the own funds. Considering the above submission of the assessee, we restore this issue to the file of the AO to examine whether the assessee was having sufficient own funds to meet the advances given to sister concerns, if the contention of the assessee is found to be correct then no disallowance would be attracted

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• 2015 (9) TMI 1561 - ITAT CHANDIGARH
  

  N.P. rate determination - AO applying the net profit rate @ 12% instead of 7% on the gross receipts as declared by the appellant - Held that:- CIT(A) has stated that in the nature of assessee’s business, the number of persons employed could not be large because otherwise the assessee would have been required to file statements to various State agencies administering various labour welfare laws. No muster roll was maintained. The assessee did not furnish information regarding number of persons employed and the name of the parties from whom consumables were purchased. In our considered view, the authorities below were fully justified in applying the net profit rate of 12% on gross receipts which is in consonance with the judgement in the case of CIT v M/s Prabhat Kumar (2008 (11) TMI 356 - PUNJAB & HARYANA HIGH COURT) relied on by the Assessing officer.

  In case of estimation, if the CIT(A) has passed an order by giving cogent reasons, the Tribunal in an appeal either by Revenue or assessee is required to apply its mind and consider the reasons given by CIT(A). CIT(A) has passed a well reasoned order and, therefore, we do not see any ground to interfere with the order of CIT(A). Considering the nature of assessee’s business, net profit rate of 12% on gross receipts is reasonable. Accordingly, we uphold the order of CIT(A) and dismiss the appeal of the assessee.

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• 2015 (9) TMI 1560 - ITAT PUNE
  

  Adoption of amount of sale consideration - long term capital gain - valuation report of an approved valuer - Held that:- It is an admitted fact that the properties sold by the assessee are tenanted properties having 52 tenants on both the properties and the assessee is not in possession of single square foot of land. At page 5 of the sale deed it has been clearly mentioned that “the entire building and the said property is in vacant and peaceful possession of the party of the first part”.

  From the sale instances given by the assessee, we find the tenanted property fetches lesser consideration which is apparent from the 4 sale instances given by the DVO. From the various details furnished by the assessee, we find the sq.ft rate of property at survey No.139 was ₹ 19,934/- and selling rate of property situated at survey No.540 was at ₹ 18,100/- whereas the property at survey No.273 which has been sold at ₹ 15,126/- per sq.ft. This shows that a tenanted property fetches lesser rate than a property free from any encumbrance and having vacant possession by the owner. Therefore, we find merit in the arguments of the assessee that when a property having 8 tenants fetches lesser price than a property free from encumbrance, the property having 52 tenants will definitely fetch lesser price than the property having 8 tenants. Therefore, the 4 instances taken by the DVO are not comparable instances.

  DVO has increased the valuation of the property of comparable instances on account of time gap and locational advantage. So far as the locational advantage is concerned we find all the properties are situated in the heart of the city and therefore benefit of locational advantage cannot be a factor for increasing the value of the property sold by the assessee. So far as the time gap is concerned, we find the DVO has not considered the cost inflation index published by the income tax department. Further the DVO has given reduction @25% on account of factors like size of the property, undivided share and occupation by the tenants etc. on presumption basis. There is no finding by the AO or material in his possession that the assessee has received any extra amount other than what is declared as sale consideration. The purchaser has also not given any evidence or stated before the AO that he has paid more than what is mentioned in the sale deed.

  Thus considering the objections raised by the assessee from the very beginning, i.e., before the DVO/AO and the CIT(A) that the valuation made by the DVO is not correct, we are of the considered opinion that the value determined by the DVO cannot be accepted. At the same time when the value adopted by the registered valuer appointed by the assessee herself has valued the property at Survey No.1157 & 1158 at ₹ 1,19,77,000/- the contention of the Ld. Counsel for adoption of ₹ 85,34,700/- as sale consideration also cannot be accepted since the registered valuer has considered all aspects as argued by the Ld. Counsel for the assessee. We accordingly hold that while the value of the property at Survey No.1157 & 1158 be held at ₹ 1,19,77,000/-, the value of the property at Survey No.990 be taken at ₹ 17,00,000/- as declared by the assessee. The AO is directed to recompute the capital gain accordingly.

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• 2015 (9) TMI 1559 - ITAT MUMBAI
  

  Gain earned on investments in shares and mutual funds - capital gain or business income - magnitude of transaction - Held that:- The assessment for A.Y. 2004-05, 2005- 06, 2006-07 and 2009-10 have been made u/s. 143(3) of the Act. In all these scrutiny assessments, we find that the assessee’s main source of income is from speculation income, Short Term Capital gains and income from other sources. Rule of consistency says that on same set of facts, the Revenue authorities should not take a different view. There has to be uniformity in treatment and consistency when the facts and circumstances are identical particularly in the case of the assessee. Our view is fortified by the decision of the Hon’ble Bomby High Court in the case of Gopal Purohit (2010 (1) TMI 7 - BOMBAY HIGH COURT ). We also find that the findings of the Ld. CIT(A) is heavily based on the fact that the assessee is indulged in intra-day trading of shares. We find that the assessee has shown the same as business income. Therefore, there is no merit in the findings of Ld. CIT(A). Respectfully following the above , we set aside the findings of the Ld. CIT(A) and direct the AO to treat the Short term Capital Gain as Short term capital gain. - Decided in favour of assessee.

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• 2015 (9) TMI 1556 - KARNATAKA HIGH COURT
  

  Eligibility to deduction under Section 80P(2)(a)(i) - though the appellant was said to be a Co-operative Society, it was in fact a co-operative bank, within the meaning as assigned to such bank under Part V of the BR Act - Held that:- there is a seriously disputed question of fact which the Authorities under the IT Act have taken upon themselves to interpret in the face of the BR Act prescribing that in the event of a dispute as to the primary object or principal business of any co-operative society referred to in clauses (cciv), (ccv) and (ccvi) of Section 56 of the BR Act, a determination thereof by the Reserve Bank shall be final, would require the dispute to be resolved by the Reserve Bank of India, before the authorities could term the assessee as a co-operative bank, for purposes of Section 80 P of the IT Act.

  Any opinion expressed therefore is tentative and is not final. The view expressed by this court in CIT v. Bangalore Commercial Transport Credit Co-operative Society Limited [2014 (6) TMI 913 - KARNATAKA HIGH COURT] however, as to the assessee being a co-operative society and not a co-operative bank in terms of Section 80P (4) of the IT Act, shall hold the field and shall bind the authorities unless held otherwise by the Reserve Bank of India. - Decided in favour of assessee.

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• 2015 (9) TMI 1555 - ITAT HYDERABAD
  

  Revision u/s 263 - unexplained cash deposits - Held that:- As seen from the data slips received by the AO from the bank, it refers to the same bank account and the transaction amount but the details were sent twice, as assessee’s account is a joint account with his wife. In fact AO issued a show cause notice letter dt. 04-02-2013, for which assessee replied on 25-02-2013. Ld. Pr.CIT was not correct in stating that AO has not examined vide the notice U/s. 142(1) dt. 03-07- 2012. He simply ignored the subsequent notice available on record and therefore, we are of the opinion that the opinion expressed by the Pr.CIT that AO has not examined second bank account is not correct, both on facts and/or on law. Since the issue was examined by the AO in the course of scrutiny proceedings and has concluded that there is only one account which was already accounted by assessee, no prejudice is caused to Revenue, at least in assessee’s case. Therefore, Pr.CIT is not correct in exercising jurisdiction on this issue.

  Excess credit - Held that:- AO had examined the turnover in this year and reduced the mobilization advance and also the turnover considered twice for deduction of tax by M/s. Megha Engineering & Infra and accordingly determined the gross receipts. He also concluded the assessee accounted the turnover in later AY. 2011-12 and gave credit for the taxes accordingly. Since this issue was also examined and determined by the AO, we do not find any reason to hold that order is erroneous. Pr.CIT himself has taken the excess credit as turnover, directed to be added as escaped turnover, which in our view is not correct. Moreover, an issue which was already examined by the AO and application of mind by the AO before passing the assessment order cannot be re-examined by Pr.CIT in the course of proceedings U/s. 263. - Assessee appeal allowed.

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• 2015 (9) TMI 1554 - DELHI HIGH COURT
  

  TPA - selection of comparable - Held that:- The orders of the TPO the DRP as well as the ITAT, this Court is not persuaded that the impugned order of the ITAT suffers from any illegality. The view taken by the ITAT that markets in the US and the India were fundamentally different and, that the results of the Indian segment of the US operations of Goldstone Technologies constituted an inappropriate a comparable cannot be said to be perverse. The view of the ITAT that basis of allocation of costs and, therefore, the working of the profits was also not clear, is another aspect on which the Court is unable to hold that the impugned order of the ITAT is perverse. The ITAT has passed the impugned order after examining all the relevant materials. No substantial question of law

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• 2015 (9) TMI 1553 - ITAT BANGALORE
  

  TPA - selection of comparable - Held that:- Transfer pricing was an evolving area and therefore an assessee, just because it had included certain comparables in its own list, could not be held back from seeking exclusion of such comparables, once proper reasons for seeking such exclusion were shown by it. Accordingly we are inclined to admit the additional grounds.

  Assessee offers a wide range of professional software development services and IT services through 4 distinct service offerings, thus companies functionally dissimilar with that of assessee need to be deselected from final list of comparable.

  Exclusion of expenditure incurred in foreign currency expenditure while working out the eligible relief u/s.10A - Held that:- As for the contention of the assessee foreign currency expenditure ought not to be excluded from the export turnover, we are unable to accede to. This is because of the definition of ‘export turnover’ given in Explanation 2 (iv) to Section 10A does not warrant such an interpretation. However in respect of parity between the export turnover and total turnover, in view of the decision of the Hon’ble jurisdictional High Court in the case of CIT v. Tata Elxsi Ltd [2011 (8) TMI 782 - KARNATAKA HIGH COURT] assessee has to succeed. We direct the AO / TPO to exclude what has been excluded from the export turnover from the total turnover also while computing deduction u/s.10A

  Deduction / exemption given u/s.10A has to be considered independently without setting off of loss incurred in other undertakings of the assessee. See CIT (LTU) v. Yokogawa India Ltd [2011 (8) TMI 845 - Karnataka High Court ]

  Depreciation on computer software - Held that:- Assessee has not been able to establish that computer software and related hardware acquired by it did not give it the benefit of enduring nature. However we are of the opinion that once it was treated as a part of computer, assessee was eligible for depreciation at 60%. Ordered accordingly, Grounds treated as partly allowed.

  Interest income earned - income from other sources OR profits and gains from business or profession - Held that:- Assessee in our opinion has not been able to show the nexus of its interest income with its business activities. Unless nexus with business is shown by the assessee, interest income will always fall under the head ‘income from other sources’. We do not find any reason to interfere with the orders of lower authorities in this aspect.

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• 2015 (9) TMI 1552 - ITAT KOLKATA
  

  Reopening of assessment - absence of reason to believe - Held that:- It is clearly evident from the reasons recorded by the Assessing Officer that there was actually no reason for him to have formed a belief about the escapement of any income of the assessee from the assessment, but the assessment was reopened by him to verify or examine certain particulars furnished by the assessee in the return of income, which according to the Assessing Officer, might have possibly involved introduction of her unaccounted money by the assessee. It is thus clear that the assessment was reopened by the Assessing Officer on the basis of suspicion and in order to make fishing and roaming enquiries, which, in my opinion, is not permissible. It is a settled position of law that the assessment can be reopened under section 147/148 on the basis of ‘reason to believe’ and not ‘reason to suspect’. - Decided in favour of assessee.

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• 2015 (9) TMI 1551 - ITAT HYDERABAD
  

  TDS u/s 194B - payments made to horse owners as “stake money” - assessee in default - Held that:- AO has applied the provisions of section 194B to the payments made to horse owners as “stake money” on the ground that by insertion of words ‘or card game and other game of any sort’ w.e.f. 1.6.2001, the horse racing income comes under the ambit of ‘other game of any sort’, we find that this issue had arisen in the case of Bangalore Turf Club Ltd. Vs. Union of India and others [2014 (12) TMI 843 - KARNATAKA HIGH COURT] has dealt with this issue at length and has held that the amended provision of section 194B do not apply to horse racing. Amendment brought about by Finance Act of 2001 to Section 2(24) and 194B would have no bearing on the income earned from 'owning and maintaining horses'. - Decided in favour of assessee

  Deletion of the demand raised by the AO u/s 201 (1) and 201(1A) of the Act by applying the threshold limit of ₹ 2500 on each payment for making TDS u/s 194BB - grievance of the Revenue is that the basic limit is on the aggregate payment made in a year and not on each payment - Held that:- CIT (A) had followed the order of this Tribunal in assessee’s own case for A.Ys 2002-03 to 2008-09 in granting relief to the assessee. Since the CIT (A) had followed the precedent on the issue and the Revenue has not been able to rebut this finding with any evidence or decision to the contrary, we see no reason to interfere with the same. Therefore, ground No.3 of the Revenue is also rejected. We find that in the A.Ys 2011-12 to 2013-14, the only issue is about the applicability of section 194B of the Act to the assessee. For the detailed reasoning given for the A.Y 2009-10 and 2010-11 respectively as above, the sole ground of appeal in all these years is rejected.- Decided against revenue

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• 2015 (9) TMI 1550 - ITAT AMRITSAR
  

  Cancelling registration granted U/s 12A - effect of amendment U/s 12AA(3) made by the Finance Act - 2010 - Held that:- CIT-II, Jalandhar passed order U/s 12AA of the Act on 24/10/2013 w.e.f. A.Y. 2004-05 but in Section 12AA(3), the amendment was made by the Finance Act, 2010, which was effective prospectively as clarified by the CBDT as well as various ITATs. The case laws relied by the AR of the assessee also support the case of the assessee, therefore, from A.Y. 2004-05, the cancellation is out of jurisdiction. The Hon'ble Delhi High Court in the case of Director of Income Tax (Exemption) Vs. Mool Chand Khairati Ram Trust (2011 (4) TMI 563 - DELHI HIGH COURT )339 ITR 622 (Delhi) has held that power of cancellation of registration obtained U/s 12A came to be incorporated by way of amendment introduced in Section 12AA(3) by the Finance Act, 2010 w.e.f. 1st June, 2010. The Director of the Income Tax was, therefore, no justified in cancelling the registration U/s 12AA(3) w.e.f. December 2002-03 vide his order dated 30th June, 2009. - Decided in favour of assessee.

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• 2015 (9) TMI 1548 - ITAT CHANDIGARH
  

  Penalty levied u/s 271(1)(c) - capital gain - Transfer exigible to tax by reference to Section 2(47)(v) read with Section 53-A of the Transfer of Property Act, 1882 - JDA entered by assessee - Held that:- On perusal of the case of the assessee bunched alongwith the case of C.S Atwal [2015 (7) TMI 878 - PUNJAB & HARYANA HIGH COURT] we find that the High Court has decided the quantum issue in favour of the assessee by holding that the assessee was liable to pay tax on capital gain earned on only that portion of the land which had been duly transferred by way of Registered sale deed and consideration relating to which had been received by the assessee. With respect to the balance land, the High Court held that no transfer of the same had taken place even by virtue of the JDA and hence the assessee was not exigible to capital gain tax on the same. Also see Shri Balwinder Singh case[2015 (8) TMI 1384 - ITAT CHANDIGARH ]

  In view of the above, since the addition made to the income of the assessee does not survive, the question of levy of penalty u/s 271(1)(c) does not arise at all. - Decided in favour of assessee.

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• 2015 (9) TMI 1547 - ITAT BANGALORE
  

  TPA - selection of comparable - Held that:- The assessee is a products development company and has developed innovative product lines, thus companies Functionally different and diversified operations with that of assessee need to be deselected from final list of comparable.

  Expenditure incurred on computer spare parts and consumables - nature of expenditure - Held that:- RAM is a frequently replaceable part of the computer and does not have any enduring benefit to assume the character of a capital expenditure and hence we allow the same. See CIT v/s Southern Roadways [ 2007 (6) TMI 193 - MADRAS HIGH COURT ]

  TDS u/s 194C - Non deduction of tds - disallowance of payment made to Club Cabana and Golden palms and for business training and conference expenses u/s. 40(a)(ia) - Held that:- As in the case of East India Hotels Ltd. v. CBDT [2009 (3) TMI 8 - BOMBAY HIGH COURT] wherein it was held that services rendered by hotel to its customers by making available certain facilities/amenities like providing multilingual staff, 24 hour service for reception, telephones, select restaurants, bank counter, beauty saloon, barber shop, car rental, shopping centre, laundry/valet, health club, business centre services, etc. do not involve carrying out any work which results into production of the desired object and, therefore, would be outside the purview of section 194C of the Act. Thus we are of the opinion that payment made to Club Cabana and Golden Palms are outside the purview of section 194C of the act. The appeal on this issue is allowed.

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• 2015 (9) TMI 1545 - DELHI HIGH COURT
  

  Assessment u/s 153C - validity of notice against non existent entity - Held that:- In the present case the defect of the AO in framing an assessment on 31st December 2010 against the Assessee by which time it was not in existence on account of its merger with WPCL (effective 1st April 2008) was not a curable defect. Consequently, the impugned order of the ITAT setting aside the order of the CIT (A) does not suffer from any legal infirmity. - Decided against revenue

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• 2015 (9) TMI 1544 - DELHI HIGH COURT
  

  Depreciation claimed by the Assessee on its block of assets - Held that:- There has been no occasion for the ITAT to seriously consider whether, for the AYs in question, there were any working units of the Assessee and if, in fact, the entire block of assets in respect of which depreciation was claimed was actually put to use. The ITAT also did not consider that there is no longer a requirement for the COD to grant permission to the Revenue to file an appeal.The Court accordingly sets aside the impugned order of the ITAT on the issue of depreciation and remands the appeals to this extent to the ITAT for a fresh decision in accordance with law.

  Quarry Development Expenditure claimed as revenue expenditure - Held that:- It is seen that even before the AO, the Assessee offered an explanation for treating one part of the Quarry Development Expenditure pertaining to the removal of the over burden etc. at the mines which was utilized for capital works like laying of roads, stock yards crushed ramp etc. as capital expenditure whereas the rest of the expenditure was claimed as revenue expenditure.The concurrent order of the CIT (A) as well as the ITAT on this aspect accepting the explanation of the Assessee does not appear to be suffering from any legal infirmity. The Court accordingly declines to frame a question on this issue.

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• 2015 (9) TMI 1540 - ITAT CHENNAI
  

  Entitlement to claim benefit of deduction under section 80P - assessee is providing credit facilities to Class ‘B’ Members or associate Members who are not recognized as Members of the society - Held that:- We find that the issue of whether the assessee is entitled for deduction under section 80P(2) was considered in assessee’s own case for the assessment years 2007-08 to 2009-10 and held that assessee is entitled to claim benefit under section 80P(2) CIT(Appeals) has denied deduction to the assessee only for the reason, that credit facilities have been extended to a particular class of Members, who are not normal Members of the society. We do not agree with the CIT(Appeals) on the issue.

  As in case M/s. SL(SPL) 151, Karkudalpatty Primary Agricultural Co-operative Credit Society Ltd. Versus The Income Tax Officer [2014 (5) TMI 556 - ITAT CHENNAI] wherein held as evident from the definition of ‘member’ u/s 2(16) that the same includes an ‘associate member’ u/s 2(6) appended therein. In other words, the ‘nominal’ members also enjoy statutory recognition as per the Act. The net result is that once the ‘nominal’ members or non-voting members are themselves included in the definition of ‘members’, they satisfy the relevant condition imposed by the legislature u/s 80P(2)(a)(i). Under the very provision that for the purpose of impugned deduction, it is irrelevant so far as classification of the members in ‘A’ or ‘B’ category is concerned. We follow the same and accept contentions of the assessee - Decided in favour of assessee

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• 2015 (9) TMI 1539 - BOMBAY HIGH COURT
  

  Computation of deduction u/s 10A - Whether Tribunal was justified holding that there was nothing on record to show that the profits arrived by the assessee in respect of the 10A unit carrying on the business of manufacturing of sewing machine needles was not in normal course of business and that the abnormally high profit was due to extraordinary arrangement between the assesee and the German Company entered into only with a view to boost the profits of the assessee and therefore, allowing deduction ? - Held that:- The question as proposed stands concluded against the Appellant Revenue by the decision of this Court for the Assessment Year 2004-05 [2012 (9) TMI 407 - BOMBAY HIGH COURT ] and AY 2005-06 [2015 (6) TMI 1044 - BOMBAY HIGH COURT] wherein held Section 10A is a provision which is in the nature of a deduction and not an exemption - the deduction under Section 10A has to be given effect to at the stage of computing the profits and gains of business - Section 80B(5) defines for the purposes of Chapter VI-A “gross total income” to mean the total income computed in accordance with the provisions of the Act, before making any deduction under the Chapter - Decided against revenue

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• 2015 (9) TMI 1535 - ITAT MUMBAI
  

  Disallowance u/s. 14A - Held that:- No disallowance u/s. 14A can be made in a year in which no exempt income has been earned or received by the assessee. See Cheminvest Limited Versus Commissioner of Income Tax-VI [2015 (9) TMI 238 - DELHI HIGH COURT ] - Decided in favour of assessee

  Disallowance u/s. 41(1) - Held that:- As gone through Annexure XIII of the statement of account, which is details of Sundry Creditors – Unmoved. We find force in the contention of the learned counsel. The balance outstanding in the name of Acquatech Proflow Pipe Lining Pvt. Ltd, is not ₹ 19,84,908/- but ₹ 9,67,180/- and as per the list of sundry debtors, Tolani Fabricators is debtor and not creditor. Therefore, atleast to this extent i.e. balance of Tolani Fabricators cannot be added u/s. 41(1) of the Act. We accordingly, direct the AO to delete the addition of ₹ 10,08,641/-. In so far as the balances of other creditors are concerned, in our considered opinion, the claim of the assessee needs to be verified at the assessment stage. We, therefore, restore the issue to the file of the AO. The assessee is directed to demonstrate that the impugned creditors have been written back in the subsequent years to the satisfaction of the AO and the AO is directed to verify the same and if the claim of the assessee is found correct the additions should not be made.

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• 2015 (9) TMI 1532 - ITAT MUMBAI
  

  Permanent Establishment in India under Article 5(2)(k) of India UK DTAA - Held that:- This matter has been decided against assessee by the Tribunal in assessment year 1995- 96 again been followed by the Tribunal in AYs 1996-97 & 1997-98 wherein held specific provisions for professional services or independent personal services or included services exist under art. 15, when services are rendered by the enterprise, art. 5(2)(k) will come into play, and when services are rendered by an individual, art. 15 will find application. Therefore, while we agree with the learned counsel that art. 15 will not be applicable on the facts of the present case, this finding does not really come to the rescue of the assessee since, as we have already held, the assessee did have a PE in India under art. 5(2)(k) of the India-UK tax treaty, and, accordingly, profits attributable to the PE are taxable under art. 7 of the India-UK tax treaty.

  The very plea of the assessee proceeds on fallacy that arm's length price adjustment can be made in respect of the transactions with the clients of the assessee. The revenues earned by the assessee are to be taken at actual figures and no adjustments are permissible in the same is to be rejected as well. The action of the authorities below is confirmed on this count as well. - Decided against assessee

  Reimbursement of expenses - considered as ‘income’ by the revenue - Held that:- As decided by Tribunal in AY 1995-96 we are inclined to uphold the grievance of the assessee. The reimbursements received by the assessee are in respect of specific and actual expenses incurred by the assessee and do not involve any markup, there is reasonable control mechanism in place to ensure that these claims are not inflated, and the assessee has furnished sufficient evidence to demonstrate the incurring of expenses. There is thus no good reason to make any addition to income in respect of these reimbursements of expenses.- Decided in favour of assessee

  Taxability of income related to work performed in India - Held that:- The Tribunal though in AY 1995-96 had decided this issue against the assessee after invoking the principle of “force of attraction”, however, later on, the Special Bench of the Tribunal in the case of ADIT vs Clifford Chance reported in [2013], (2013 (6) TMI 544 - ITAT MUMBAI ) has decided the issue in favour of the assessee and against the revenue, whereby the specific finding of the Tribunal on this issue has been reversed. Accordingly, following the binding precedence of Special Bench in the case of ADIT vs Clifford Chance (supra). We hold that the profits, which are attributable to the PE can only be assessed in India and thus ground no.1 raised by the revenue stands dismissed.

  CIT(A) excluding receipts from Serium Institute of India Ltd - Held that:- As it has been admitted by both the parties that this issue is not arising in this year and, therefore, no adjudication is required. Accordingly, the issue raised is treated as dismissed as there is no receipt of this kind in this year.

  Denial of benefit under Indo-UK DTAA - Held that:- It has been admitted that the treaty benefit of Indo-UK DTAA has been allowed by the Tribunal in the earlier years, therefore, in AY 1995-96, this issue has been concluded in favour of the assessee as held that the assessee was indeed eligible to the benefits of India-UK tax treaty, as long as entire profits and the partnership firm are taxed in UK – whether in the hands of the partnership firm though the taxable income is determined in relation to the personal characteristics of the partners, or in the hands of the partners directly.

  Charging of interest u/s 234D as introduced from 1st June, 2003 will have retrospective effect. Accordingly, following the binding judicial precedence, we hold that interest u/s 234D will be leviable in case of the assessee for this year also. See case of Indian Oil Corporation Ltd [2012 (9) TMI 517 - BOMBAY HIGH COURT]

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