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Income Tax - Case Laws
Showing 121 to 140 of 814 Records
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2015 (9) TMI 1529 - DELHI HIGH COURT
Validity of re-assessment proceedings - reference made by the AO to the TPO - Held that:- Section 92 CA (1) of the Act states that where any person "being the assessee" has entered into an international transaction "in any previous year" and the AO considers it necessary or expedient to do so, he may with the previous approval of the Commissioner refer the "computation" of ALP to the TPO under Section 92 C. These provisions proceed on the premise that the AO is in seisin of assessment proceedings when he forms an opinion about referring the issue of determination of ALP to the TPO. They do not envisage the AO making a reference to the TPO the issue of determination of ALP when there is no assessment proceedings pending before him.
In the present case, the reference by the AO of the issue of determination of ALP to the TPO was itself without jurisdiction. The resultant report of the TPO could not be acted upon for issuance of the notice of re-assessment to the Assessee under Section 148 of the Act. Moreover, in the present case, the Court notices that the reasons for reopening were recorded by the AO subsequent to the reply received from the Assessee to the notice.
Consequently, the Court finds no legal infirmity in the impugned order of the ITAT holding that the re-assessment proceedings were legally unsustainable. - Decided in favour of assessee
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2015 (9) TMI 1527 - ITAT MUMBAI
Addition u/s 68 - Held that:- Assessee furnished before the lower authorities a copy of the FIRC issued by the Bank. The identity and creditworthiness of the creditor and genuineness of the transaction stood satisfactorily explained. In the absence of any credible material with the Revenue to disprove the findings of the CIT(A), we hereby affirm the same - Decided in favour of assessee
Disallowance of Provision for doubtful debts - Held that:- The assessee company is in the business of transportation and the impugned sum has been found to be “short recovery of transportation charges from the clients on account of losses occurred on account of retention, loss of stock and damage to stock.” Furthermore, the CIT(A) has also recorded a finding that the invoices raised by the assessee which have been credited in the books of account as income cover the impugned sums also. Therefore, the CIT(A) has found that the conditions laid down in section 36(1)(vii) r.w.s. 36(2) of the Act have been complied with. We hereby affirm the aforesaid finding of the CIT(A) in the absence of any credible material or reasoning brought out by with the Revenue before us. - Decided in favour of assessee
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2015 (9) TMI 1522 - ITAT DELHI
Addition u/s 40A(3) - whether payments were not exceeding ₹ 20,000.00 in a day? - rejection of books of accounts - Held that:- As decided in the case of CIT vs. Banwari Lal Banshidhar, reported in (1997 (5) TMI 37 - ALLAHABAD High Court) once the books of account of assessee are rejected, profit has to be estimated by comparing the G.P rates adopted by the assessee in the preceding years. No addition u/s.40A(3) can be made once the books are rejected. The ld. A.O as well as ld.CIT(A) committed error in making addition u/s.40A (3) after rejection of books of accounts.
Applying the ratio to the facts of the present case before us, the ld. A.O as well as Ld. CIT(A) has wrongly made the disallowance u/s.40A(3) of the Act. In our opinion when the gross profit rate is to be applied, that would take care of the leakage, if any. Even otherwise, once the books have been rejected, the profits has to be arrived on estimation by applying the gross profit rate or net profit rate by considering the past history of the case. Thus set aside the issue to the file of ld. A.O, to arrive at the estimated profit on comparative basis of G.P rate, adopted by the assessee in the preceding years and decide the issue afresh - Decided in favour of assessee for statistical purposes.
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2015 (9) TMI 1521 - ITAT MUMBAI
Estimating the income from genuine transport charges at 5% - bifurcation of receipts pertaining to accommodation bills - Held that:- We notice that the receipts pertaining to genuine transport business was ₹ 14.47 lakhs out of which income was estimated at 5% thereof amounting to ₹ 72,355/-. The plea of the assessee is that the income should be estimated at 0.5% on the above said amount of ₹ 14.47 lakhs also. In support of this contention, the assessee has placed reliance on the affidavit filed by the assessee.
With regard to the receipts pertaining to accommodation bills, the assessee seems to have proved the same by showing his bank account wherein the cheque received from the parties have been immediately withdrawn by way of cash. The explanation of the assessee was that the cheques received from the parties were deposited into the bank accounts and the cash was immediately withdrawn thereafter and handed over to the parties. If the assessee is able to demonstrate that the very same modality was followed in respect of ₹ 14.47 lakhs also, then the assessee’s claim for estimating income at 0.5% plus TDS amount can be admitted. However, this fact requires verification at the end of the AO. Accordingly, we set aside the order of Ld CIT(A) on this issue and restore the same to the file of the AO with the direction to examine the bank accounts and other explanations furnished by the assessee and take appropriate decision in accordance with the law. - Decided in favour of assessee for statistical purposes
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2015 (9) TMI 1520 - ITAT MUMBAI
Eligible for deduction u/s 10A - interest received from fixed deposits - Held that:- We are of the opinion that the said interest receipts constitute business receipts and are eligible for deduction u/s 10A of the Act. Accordingly, the grounds raised by the assessee are allowed.
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2015 (9) TMI 1519 - DELHI HIGH COURT
Additions made under Section 68 - Addition made in the case of the conduit companies - Held that:- (AO) gave effect to the order of the Settlement Commission and determined the income of Mr. S.K. Gupta without making any addition for unexplained cash credit. During the course of assessment Proceedings of the intermediary companies, including the Respondent Assessees, the AO sought directions from the Additional Commissioner of Income Tax under Section 144-A. The Additional CIT passed an order in which after discussing the facts he inter alia directed that it would be in the best interest of the Revenue to tax these transactions in the hands of beneficiaries and Mr. S.K. Gupta “without making any additions on this account in the hands of conduit entities”. The said orders of the Settlement Commission or of the Additional CIT were binding on the AO.
It is not in dispute that the Respondent Assessees are the conduit entities and not the beneficiaries. Consequently, the order of the ITAT deleting the addition under Section 68 of the Act in their hands does not suffer from any legal infirmity. - Decided in favour of assessee.
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2015 (9) TMI 1518 - BOMBAY HIGH COURT
Disallowance u/s. 14A - Rule 8D applicability - Held that:- Questions stands concluded against the Revenue by the decision of this Court in Godrej & Boyce Manufacturing Co. Ltd. v/s. DCIT [2010 (8) TMI 77 - BOMBAY HIGH COURT ].
TPA - determining its Arms Length Price (ALP) - Respondent had adopted the Comparable Uncontrolled Price (CUP) method - grievance of the Revenue before us is that the impugned order ought to have not disturbed the findings of the TPO and Assessing Officer by adding the DEPB benefits obtained by the Respondent-Assessee to its turnover - Held that:- We find no fault with the order of the Tribunal, comparing the profit margin of the Respondent-Assessee with those of the Comparable companies after adding in the DEPB benefit obtained by it. This was particularly so as the comparison has to be between comparables and the Respondent on a like measure. The contention of the Revenue to ignore the DEPB in case of Respondent-Assessee when the same is taken into account for determining the price of comparables leads to distortion in comparison. On facts, two authorities have come to a concurrent finding of fact that no Transfer Pricing adjustment is called for as the difference between the profit of comparables and Respondent-Assessee is less then 5% i.e. well within the safe harbor Rules. This finding of fact has not been shown to be perverse and/or arbitrary.
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2015 (9) TMI 1517 - ITAT MUMBAI
Penalty u/s 271(1)(c) - accrual of income - year of assessment - difference of income due the re-computation of WIP - delay in filing appeal - Held that:- We find that the assessee had filed the death certificate of the accountant and we hold that there was a reasonable cause for not filing the appeal in time. We find that the FAA had dismissed the appeal not only because it was filed lat, but he had deliberated upon the issue on merits also. Therefore, in our opinion, the issue of delay in filing return is academic in nature.
Coming to the merits as found that the AO had re-calculated the WIP and had taxed it in the year under appeal. The assessee has not proved, during the assessment and appellate proceedings, that the income had not accrued to it-even after receiving the OC and CC. It had to produce documentary evidence that even after getting the certificates the projects remained incomplete and it had to incur substantial expenditure for completing them. We do not find any such exercise was done by it. Therefore, if the AO and the FAA held that the assessee had completed the projects in the year under appeal and had not offered the corresponding income in the year in which it should have been offered, then they were not unjustified.
While deciding the concealment penalty cases what is to be considered is the explanation filed by the assessee in response to the notice issued by the AO for levying penalty. During the course of survey proceedings and enquiries made by the Department, it was found that the projects undertaken by the assessee had already completed and were occupied by the purchasers. Thus in absence of any contrary evidence it could not be said that projects were in the stage of work in progress it is a fact that the assessee was following method of project completion. The FAA has given categorical finding of fact that after 31.3.2002 very little expenses was incurred by the assessee for completing the so called projects and that it had incorrectly claimed in the return of income that the projects were incomplete. - Decided against assessee.
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2015 (9) TMI 1507 - ITAT DELHI
TPA - selection of wrong comparables for benchmarking the international transaction - Held that:- Four comparables (i) Allsec Technologies Ltd., (ii) Maple E-solutions Ltd.; (iii) Asit C. Mehta and (iv) Vishal Information Technologies Ltd. (Coral Hub Ltd.) - et aside the matter to the file of the Assessing Officer/TPO to examine the validity of grievances shown by the assessee before the ITAT on the issue of choosing of the above four comparables for benchmarking the assessee’s international transactions after affording opportunity of being heard to the assessee.
Inclusion of functionally dissimilar companies as comparables for benchmarking the international transaction during the year - Held that:- This issue requires fresh consideration of the submissions of the assessee to meet the ends of justice. We thus set aside the matter to the file of the Assessing Officer to decide the issue of application of the twelve comparables with the assessee for benchmarking its international transaction and to decide as to whether the international transaction entered into by the assessee during the year are at arm’s length.
Disallowance of deduction under sec. 10A in respect of assessee’s undertaking at Hyderabad acquired by way of slump sale from Digital Think (India) Pvt. - Held that:- We find that there is substance in the contention of the Learned AR that mere change in ownership does not result in denial of the deduction under sec. 10A of the Act. The only dispute raised in the ground is as to whether sec. 10A(2) of the Act applies or not. The CBDT Circular F. No. 178/84/2012 – ITA-1 dated 17.1.2013 has made it clear in relation to availability of tax benefit under sec. 10A, 10AA and 10B of the Income-tax Act, 1961 in case of slump sales of an undertaking that on the sole ground of change in ownership of an undertaking, the claim of assumption cannot be denied to an otherwise eligible undertaking and the tax holiday can be available of for the unexpired period at the rate as application for the remaining years, subject to fulfillment of prescribed condition. We thus set aside the matter to the file of the Assessing Officer to decide the issue afresh in view of the above submissions of the assessee supported by the CBDT Circular and the decisions relied upon after affording opportunity of being heard to the assessee. Ground N0.4 is accordingly allowed for statistical purposes.
Disallowance of interest paid to Kotak Mohindra Primus Ltd. (KMPL) under sec. 40(a)(ia) of the Act for not withholding taxes - Held that:- We prima facie, find substance in the contention of the Learned AR that the assessee was under the bona fide belief that no tax was required to be deducted at source from the payment made to KMPL in terms of the exceptions carried out in sec. 194A of the Act as the provisions of sec.194A shall not apply where income is credited or paid to any banking company to which the Banking Regulation Act, 1949 applied, especially when there is no dispute that Kotak Mohindra Bank Ltd. is a banking company to which the Banking Regulation Act, 1949 applies and further that section 19 of Banking Regulation Act, 1949 provides that a banking company shall not form any subsidiary company except a subsidiary company formed for under taking of any business which is permissible for a banking company to undertake.
Again there is substance in the alternative submission of the assessee that the amendments made by the Finance Act, 2012 to section 201 and Section 40(a)(ia) of the Act sought to be applied to cases prior to 01.07.2012 since the amendments are procedural in nature and are intended to remove the hardship being faced by the assessee, the amendments are declaratory and curative in nature and shall have retrospective effect. We thus set aside the matter to the file of the Assessing Officer to examine the submission of the assessee that KMPL had duly furnished the return of income and had considered the interest income received from the assessee while computing its total income for the year under consideration and further that the taxes had also been paid by KMPL on such interest income for the year under consideration and decide the issue afresh in view of above submissions and cited decisions by the Learned AR after affording opportunity of being heard to the assessee. The ground No. 5 is accordingly allowed for statistical purposes.
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2015 (9) TMI 1505 - ITAT NAGPUR
Rejection of books of accounts - NP determination - reservation on valuation of work in progress and large outstanding liability for labour payments - applicability of provisions of the section 44AD - Held that:- As the assessee is a contractor, the purchased materials and they are straight away used without any processing or conversion into other items where some overheads expenses are incurred. The items purchased and remained to be consumed in the construction of road are treated as stock in trade. Their value is the cash actually paid for acquiring and inward freight expenses. Hence it is not the cash system of accounting but the cash value of items. Hence the AO is not correct in holding that the assessee is following cash system of accounting. Nevertheless it is not the case of the AO that a system of valuation of the work in progress is not as per the preceding years. The consistent system of accounting is not to be interfered unless there is a change in the facts or law.
As regards the outstanding payment of labour charges CIT(Appeals) has observed that the assessee has made the payments through Mukadams in cash for which register and supporting vouchers are there. That the assessee in the course of assessment proceedings has also produced the registers maintained by Mukadams in which payments made to local labourers in cash below `.20,000/- each were produced. In such circumstances we agree with the learned CIT(Appeals) that there is no reason to disbelieve that the expenses incurred are bogus. Thus from the above it is apparent that the reasons found by the AO to reject the books of accounts i.e. improper valuation of work in progress and huge outstanding liability for labour cannot be a basis for rejection of books of accounts. Moreover as evident from the above discussion the profitability of the assessee is in line with the profitability declared in preceding years rather there is slight improvement. In such circumstances there is no reason to reject the books of accounts. Further even if the books of accounts are rejected, the profitability applied should be the profit declared by the assessee and accepted by the Department in preceding years. In this case the AO after rejecting the books has applied 8% profit which is at variance with the profitability declared by the assessee in preceding years. Hence on this account also the AO’s order is not sustainable and deletion of the addition by the learned CIT(Appeals) has been correctly done.
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2015 (9) TMI 1503 - ITAT DELHI
Allowable business expenditure - non set up of business - Held that:- In the instant case, the assessee has not only purchased the land at Ooty but also made agreement for the purchase of land at various places. The MOU with AWHO was put into operation and so, in view of the above we are of considered opinion that the business of the assessee was set up, and therefore, the action of the ld. CIT(A) in holding that business activity was not carried out, is not justified. Accordingly, we hold that interest and other expenses incurred by the assessee and claimed as business expenditure are allowable subject to other provisions of the Act.
Payment of interest was not a penalty and therefore the same is allowable u/s 37(1) of the Act. As regards to balance interest expenditure payable to the AWHO is concerned, we agree with the contention of the ld AR that the assessee has paid advances for the purpose of purchase of land and which is one of main business activity of the assessee. Merely withdrawing capital by one of the partner at the fag end of the previous year out of the capital of partners lying in the firm, it cannot be said that the assessee has utilized interest bearing fund for the purpose of activity other than business, hence, the interest expenditure is held to allowable business expenditure. Therefore, the entire interest is allowable as business expenditure subject to the allowability under the provision of section 40(a)(ia) of the Act.
As regards to the alternative disallowance of interest u/s 40(a)(ia) interest of ₹ 50.00 lakhs, being already paid before the end of the relevant previous year and therefore provision of section 40(a)(ia) of the Act are not applicable in respect of said interest paid of ₹ 50.00 lakhs. As regards to the balance interest of ₹ 17,36,671/- which was payable at the end of the years, the assessee has already not pressed for allowance of the same u/s 40(a)(ia) of the Act. So, although same is otherwise held as allowable business expenditure, but it is not allowed in the current assessment year in terms of section 40(a)(ia) of the Act.
Considering the interest income from fixed deposit with bank as income from other sources as against the business income claimed by the assessee - Held that:- The assessee has made fixed deposit for the purpose of bank guarantee to be submitted to the AWHO for the purpose of getting advance. Further the ld AR has also relied on the judgement of the Hon’ble jurisdictional High Court in the case of Snam Progetti Vs. Additional CIT reported in [1981 (2) TMI 50 - DELHI High Court ]. In that case the assessee was an Italian company and came to India as a Contractor and extra funds available were deposited in Bank. The interest earned on funds with bank has been held as business income by the Hon’ble Court. In view of the above judgements of the various courts, we are of the considered opinion that the assessee was required to make a fixed deposit for the purpose of business necessity and therefore, the interest income earned thereon falls under the head “Profit and Gains of business and Profession”.
Charging of notional interest - Held that:- The finding of the ld. ld. AO that the fund of ₹ 5.50 crores was invested elsewhere and details of which was not disclosed, is found not to be correct. The assessee has submitted details of utilization of the funds before the ld CIT(A) and according to which it is clear that the funds were invested for the purpose of purchasing land or investment in Fixed Deposit. The ld. CIT(A) has rightly held that the ld. AO cannot dictate terms and conditions of business to the assessee. The Hon’ble Gauhati High Court in the case B&A Plantation (1999 (12) TMI 43 - GAUHATI High Court ) held that no notional amount of interest could be assessed on loan given to sister concern on the ground that interest ought to have been charged. Therefore, in our considered opinion, charging of notional interest has rightly been deleted by the ld CIT(A)
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2015 (9) TMI 1502 - ITAT AMRITSAR
Registration u/s 12AA cancelled - powers of the Commissioner under section 12AA(3) for cancellation of registration already granted - Held that:- As decided in Kapurthala Improvement Trust Versus Commissioner of Income Tax [2015 (7) TMI 77 - ITAT AMRITSAR] the action of the learned Commissioner, in withdrawing the registration under section 12AA(3), was well beyond the limited scope of the powers conferred on him by the statute. The assessee, therefore, must succeed in the appeal for this short reason alone.
There is, however, a much more fundamental reason for the assessee succeeding in this appeal. In our considered view, the considerations with respect to the first proviso to Section2(15) coming into the play and, for that reason, the objectis of an assessee trust or institution being held to be not covered by the definition of ‘charitable purposes’, have no role to play in the matters relating to registration of a trust or institution under section 12A or 12AA-whether in respect of granting or declining of a registration or in respect of cancellation, even if otherwise permissible, of a registration. - Decided in favour of assessee
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2015 (9) TMI 1501 - ITAT HYDERABAD
Unexplained deposits made in bank account with ICICI Bank - unexplained business receipts of the assessee - Held that:- It is no doubt true that the assessee has been changing his version as to the source of the amounts deposited into his SB Account with ICICI Bank. However, it is evident from the nature of the transactions, with transactions taking place several times on the same day, and deposits made in cash from different locations at the same time, that as correctly held by the CIT(A) in the impugned order, they represent the business receipts of the assessee. That being so, in the absence of proper books or complete details of receipts maintained by the assessee, it is only a reasonable fraction of such receipts which could be brought to tax as the income of the assessee. As against a rate of 8% suggested by the assessee, the CIT(A) has estimated such income of the assessee against the business receipts at 20%, which we find to be quite reasonable. In this view of the matter, we find no merit in the grounds raised by the Revenue in this appeal. We accordingly uphold the order of the CIT(A) and reject the grounds of the revenue in this appeal.
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2015 (9) TMI 1491 - ITAT KOLKATA
Allowability of higher rate of depreciation amounting claimed on Dumper and Payloader - Held that:- We find that the Learned DR did not refute the findings given by the Learned CITA with regard to the nature of business carried on by the assessee and income disclosed thereon. It is seen that the assessee has disclosed income from transportation by dumpers and pay loaders in its profit and loss account and therefore we hold that the assessee is using these vehicles for transportation of goods of other persons. It is pertinent to note that CBDT Circular No. 652 dated 14.6.1993 on this subject states that assessee is entitled to higher rate of depreciation when the vehicles are used by the assessee in his own business of transportation of goods on hire. Thus We find that the Learned DR did not refute the findings given by the Learned CITA with regard to the nature of business carried on by the assessee and income disclosed thereon. It is seen that the assessee has disclosed income from transportation by dumpers and pay loaders in its profit and loss account and therefore we hold that the assessee is using these vehicles for transportation of goods of other persons. It is pertinent to note that CBDT Circular No. 652 dated 14.6.1993 on this subject states that assessee is entitled to higher rate of depreciation when the vehicles are used by the assessee in his own business of transportation of goods on hire.- Decided in favour of assessee
Addition in respect of trade creditor - Held that:- We find that the Learned DR did not refute the findings given by the Learned CITA with regard to the fact that the assessee had fully discharged its onus by giving the name and address of the Sundry Trade Creditor M/s Bijay Hardware Stores before the Learned AO. We find that the provisions of section 68 of the Act could not be invoked for the trade creditoRs.We hold that the assessee had duly discharged its onus by placing all the details of the sundry creditor before the Learned AO and just because no reply has been furnished by the said creditor to the Learned AO u/s 133(6) of the Act, that cannot automatically lead to a situation that the said creditor is not having any creditworthiness. We also find that the Learned AO had not disputed the genuinity of the purchases, sales and trading results of the assessee. - Decided in favour of assessee
Addition made towards excess payment of dumper and payloader charges and excess expenditure incurred on general account - Held that:- We find that the entire addition has been made only on an estimated basis and the provisions of section 40(A)(2)(b) of the Act could not be invoked without bringing any comparative data for ascertaining the fair market value of goods and charges. Hence we are not inclined to interfere with the order of the Learned CIT A on this ground.- Decided in favour of assessee
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2015 (9) TMI 1490 - PUNJAB & HARYANA HIGH COURT
Unexplained cash credits under Section 68 - Held that:- There is no dispute to the fact that the assessee had not submitted any explanation in case of the cash creditors, namely Shri Jatinderpal Singh, Jasbir Singh, Smt.Ritu and Shri Parshotam Lal respectively before any of the authorities below that the said amounts have actually been invested by such cash creditors. The assessee has not brought on record before any of the authorities below or in the paper book before us that the said amount of ₹ 50,00,000/- surrendered includes ₹ 7,00,000/- in case of Shri Jasbir Singh. In any case, in the absence of any explanation with regard to cash credits mentioned in these grounds the assessee appeal is dismissed. - Decided against assessee
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2015 (9) TMI 1489 - KARNATAKA HIGH COURT
TDS u/s 194C - payment made against the supply of materials included in composite contracts for executing Turnkey Projects - Held that:- As from clause 3.5 of the contract agreement, made it clear that there were three separate contracts entered into, but all the separate contracts were integral parts of a composite contract on single sale responsible basis. The invoices raised on the basis of the said composite contract separately mentioning the value of the material supplied, no deduction was permissible under section 194C of the Act. The said provision could not be pressed into service to deduct tax at source. The whole object of introduction of that section was to deduct tax in respect of payments made for works contracts. No division was, therefore, permissible in respect of a contract for supply of materials for carrying out the work as in case of distinct contracts. The contract for supply of material being a separate and distinct contract, no division was permissible under section 194C of the Act. Section 194C was amended with effect from October 1, 2009 and the provision is unambiguous. Therefore, it was concluded by this court that if a person executing the work, purchases the materials from a person other than the customer, the same would not fall within the definition of "work" under section 194C of the Act.
Provisions of section 194J or section 194C - payments made by an assessee towards bill management services - Held that:- The services rendered by the agencies engaged by the assessee at several places are not professional services, and, therefore, section 194J was not attracted. The demand towards the alleged short deduction of tax deducted at source and interest, was hence improper and the contract was rightly held to be a service contract by the Tribunal. This court had affirmed that it was a contract, which should be covered under section 194C of the Act.
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2015 (9) TMI 1481 - ITAT JAIPUR
Payment of Privilege fees paid to the State Government - - Nature of expenditure - Held that:- As decided in Rajasthan State Beverages Corporation Ltd [2013 (9) TMI 557 - ITAT JAIPUR ] there is no contravention in paying the privilege fee as the fee is paid under section 24 of the Excise and the provisions of section 28, 29 are not applicable as they are on separate aspect - held as business expenditure - Decided in favour of assessee.
Addition in respect of depositing the ESI and PF - Held that:- As the assessee deposited the payment of PF and ESI before the due date of filing of return for the impugned assessment year which is in accordance with the provisions of section 43B of the Act addition need to be deleted. See CIT Versus Vinay Cement Ltd.[2007 (3) TMI 346 - Supreme Court of India ] - Decided in favour of assessee.
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2015 (9) TMI 1479 - ALLAHABAD HIGH COURT
Receipt of interest on loans land deposits given to various parties - income from "Income profits and gains of business and profession" OR "income from other sources" - Held that:- Issue is covered against the assessee in assessee's own case for the Assessment Year 1990-1991 reported in [2004 (9) TMI 37 - ALLAHABAD High Court ]
Claim in respect of rent in "Transit Guest House" - Held that:- Issue is covered against the assessee in the assessee's own case by judgment for the Assessment Year 1993-94 reported in [2013 (12) TMI 832 - ALLAHABAD HIGH COURT ]. Consequently, the issue is decided against the assessee and in favour of the Department.
Depreciation on tube well at a higher rate of 25%? - Tribunal holding that claim of depreciation on assets in respect of Radico Textile Unit which had not yet commenced during the year under consideration? - Held that:- Issues which were allowed in favour of the assessee for the year 1993-94, in which order of the Tribunal was accepted by the Department as the same was not challenged in a higher forum. Since no distinguishing features have been pointed out and the principle of consistency is required to be maintained inter se between the parties, we are of the opinion that the Department cannot be permitted to question these issues when it was accepted by them in the previous years. Our view is supported by decisions of the Supreme Court in Radhasoami Satsang Vs. Commissioner of Income Tax, (1991 (11) TMI 2 - SUPREME Court ), Berger Paints India Ltd Vs. Commissioner of Income Tax, (2004 (2) TMI 4 - SUPREME Court ) and Commissioner of Central Excise Vs. Bal Pharma Limited, Bangalore and others (2010 (9) TMI 307 - SUPREME COURT OF INDIA ). In view of the aforesaid, the issue is decided in favour of the assessee and against the Department.
Treatment to various capital expenses as revenue expenses - Held that:- The similar issue arose for consideration before this Court in the assessee's own case for the Assessment Year 1993-94, wherein the Court in its judgment held that the issue did not arise for consideration. On the facts and circumstances of the case, we find that the said issue also does not arise for consideration. Consequently, the issues is decided against the Department and in favour of the Assessee.
Deduction for loss on goods in transit - Held that:- Tribunal had directed the Assessing Officer to allow the said loss in the year 1993-94 under consideration provided the assessee's company gives up its claim for deduction in respect of the same for the Assessment Year 1993-94.We are of the opinion that no prejudice has been caused to the interest of the Revenue in allowing the claim of the assessee in the present Assessment Year subject to assessee's giving up its claim in the previous Assessment Year i.e. 1993-94. In the light of the aforesaid, the issue is decided against the Department and in favour of the assessee.
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2015 (9) TMI 1476 - ITAT MUMBAI
Transfer pricing adjustment - selection of comparable CG–Vak Software and Exports Ltd. - Held that:- No reason to sustain the order of the DRP in rejecting CG–Vak Software and Exports Ltd. as a comparable. Accordingly, we direct the Transfer Pricing Officer to include this company as comparable and determine the arm's length price. In the course of hearing, learned Counsel for the assessee submitted a working indicating the margin of comparables finally selected after including CG–Vak Software and Exports Ltd. as comparable. It was submitted, if CG–Vak Software and Exports Ltd. is included as a comparable, then the arithmetic mean of comparable companies would be 17.60% compared to assessee’s 13.50%. Hence, there would be no need for further adjustment to the arm's length price, as assessee’s margin would be within the tolerance band of ± 5%. Thus, he submitted, there will be no need to adjudicate other grounds on T.P. adjustment. On a perusal of the working submitted before us by the learned Counsel, we find the aforesaid submissions of learned Counsel for the assessee to be correct. In view of the aforesaid, as we have directed the Transfer Pricing Officer to include CG–Vak Software and Exports Ltd. as a comparable, by virtue of which assessee’s margin comes within the range of 5% of average arithmetic mean of comparables requiring no further adjustment, there is no need to adjudicate the other grounds relating to selection / rejection of comparables as well as risk and working capital adjustment raised by the assessee as they are of mere academic interest. However, we leave the issue raised in these grounds open for adjudication if they arise in future in any other assessment year.
Short credit of TDS while computing the tax liability - Held that:- We cannot direct the Assessing Officer to give tax credits to the assessee without verifying the factual details. However, considering the fact that assessee has filed petition under section 154 of the Act before the Assessing Officer raising the aforesaid issues which is still pending, we direct the Assessing Officer to consider assessee’s petition under section 154 of the Act on merits and in accordance with law.
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2015 (9) TMI 1469 - ITAT DELHI
Penalty u/s 271(1)(c) - Addition u/s 68 - Held that:- Failure of M/s G.R. Overseas to appear before the Assessing Officer after denying the payment had a most crucial angle which the Assessing Officer simplistically ignored’. The above recording amply proves that the assessee did require the cross examination of M/s G.R. Overseas, which has eventually not taken place. As regards the other two parties, the assessee contended that they were small parties, whose whereabouts were not ascertainable. This has again not been demolished by the AO. These circumstances need to be seen in the backdrop of the fact that the amounts were in fact, receivable from these trade debtors. The above discussion divulges that the explanation given by the assessee for receipt of the amount from its old debtors has not been disproved by the AO.
Though the assessee could not satisfactorily explain the receipt of cash from these three parties, the fact that this amount was actually receivable, which was claimed to have been received during the year, goes to show that the explanation of the assessee about the receipt of such amount was a possible one albeit not satisfactory. The Tribunal has also noticed in the quantum order that: ‘it was obligatory on its part to produce the parties or give their proper addresses to the Department.’ It further observed that: ‘it failed to discharge its burden cast by section 68.’ The above observations of the Tribunal along with the position as discussed above, makes it clear that though the addition u/s 68 was properly made as has also been confirmed by the Tribunal because of unsatisfactory explanation given by the assessee in support of the receipt of the amounts, but, it is not a good case for imposition of penalty because it relates to lack of tendering explanation to the satisfaction of the AO and not disproving the contention of the assessee about the genuineness of receipts. We, therefore, order for the deletion of penalty. - Decided in favour of assessee.
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