Advanced Search Options
Income Tax - Case Laws
Showing 41 to 60 of 660 Records
-
2016 (11) TMI 1682
Reopening of assessment u/s 147 - payment of excise duty adjusting the excise duty towards the sale of old stock - HELD THAT:- AO was of the view that during the assessment proceedings it was found that the assessee is manufacturing utensils and sold them under payment of Central Excise Duty through Modvat credit. It was found that the assessee company has utilised the Modvat credit. Company has also concealed the sales - Assessing Officer was of the view that as per the books of accounts the provisions of excise duty on finished goods, as appearing in the books of accounts, as on 1.4.2002 was ₹ 732279/-. Out of the said provisions of excise duty, the assessee has adjusted the amount of ₹ 661612/- towards sale of old stock during the year under consideration. Thus, the assessee has made payment of excise duty adjusting the excise duty towards the sale of old stock. This, this was a new information. Assessing Officer has reopened the assessment and the reopening is justified. AO has reopened the assessment on the information which was available to him. CIT(A) is not justified in allowing the appeal on the ground that the reopening is not correct.
AO reopened the assessment order on the ground that the assessee has utilised the amount of Modvat credit as per the audit report which did not tally with the excise duty debited to the profit and loss account - The assessee has shown excise duty payment in his return of income. AO has taken up two figures of excise duty from the return of the assessee that the excise duty of ₹ 7512186/- claimed as expenses in profit and loss account and in tax audit report Modvat credit claimed was ₹ 7743268/-. Therefore, when these two figures were picked up from the return of income and audit report filed by the assessee, it cannot be proved that the Assessing Officer has any information.
Assessing Officer has, by booking the two figures, come to the conclusion that there are unaccounted sales but there is no tangible material to come to the conclusion that there is escapement of income from assessment and, therefore, the reopening of the case cannot be sustained. We find that the learned CIT(A) has verified the accounts, reconciliation statement of excise duty paid which was filed before the Assessing Officer and the learned CIT(A) and the learned CIT(A) has held that there is no reason to believe that there is separation of sale to the extent of ₹ 5160039/-. We also get support from the order in the case of Kelvinator of India Ltd. and Orient Craft Ltd. [2010 (1) TMI 11 - SUPREME COURT]. We, therefore, find no merit in this appeal of the revenue and dismiss the same.
-
2016 (11) TMI 1681
Disallowance u/s 14A r.w.r. 8D - disallowing the expenses relatable to exempted income - HELD THAT:- Admittedly, the only exempted income earned by assessee on account of dividend is ₹ 20,000/-. As we find that this issue is covered in favour of assessee as far as restricting the disallowance to the extent of exempted income only and for this placing reliance on the case of Daga Global Chemicals Pvt. Ltd. [2015 (1) TMI 1204 - ITAT MUMBAI] direct the AO to restrict the disallowance at ₹ 20,000/- and hence, this issue of the assessee’s appeal is partly allowed.
-
2016 (11) TMI 1679
Rectification of mistake - TP Adjustment - Tribunal observed assessee is the owner of two television channels, viz., The National Geographical Channel and FOX International Channel” - As submitted that the FOX International Channel is not owned by the assessee - HELD THAT:- It is pertinent to note that the assessee was having “Principal to Agent” relationship under “Advertising Sales Representation Agreement” dated 01-07-2004 entered with NGC India effective from 01-09-2004. The above said agreement was terminated and a new agreement was entered on 01-05-2006, wherein the assessee sold advertisement and sponsorship air time to NGC India. The tax authorities, after examining the agreements and related facts, came to the conclusion the relationship between the assessee and NGC India continues to be that of “Principal and agent”. The above said decision was upheld by the Tribunal by making a modification, viz., the Tribunal held that the provisions of Article 5(4)(a) of India-US DTAA shall be applicable. Thus we notice that the Tribunal has taken a conscious view in the matter. In view of the above, there was no necessity to deal with other submissions made by the assessee.We do not find any merit in the contentions of the assessee that there was incorrect appreciation of facts.
Whether “advertisement airtime” is “Goods” or not? - We notice that the assessing officer has discussed at length about this issue in the assessment order. We notice that the Tribunal has considered this issue in paragraph 18 & 19 of the order and has taken a conscious view that the advertisement airtime is not “goods”, by duly considering the characteristics of “airtime”. We notice that the Tribunal has taken into consideration the above said decisions in paragraph 18 of the order. In effect, the Tribunal has come to the conclusion that the “airtime” is not goods, since it is only allocation of a portion of telecasting time.Since the Tribunal has taken a view in this matter, the same cannot be considered to be a mistake apparent from record.
Taxability of “Distribution revenue”- We notice that the Tribunal has restored the matter to the file of the AO with the observation that the AO has not critically examined the provisions of India-US DTAA and also the provisions of sec. 9(1)(vi) of the Act. We are unable to agree with the contentions of the assessee. As submitted by Ld D.R, the power of the Tribunal is wider and it is entitled to take its own decision as it thinks fit to dispose of the issues considered by it. The Tribunal, in respect of the above said issue, took the view that the same requires reconsideration at the end of the AO by considering the amendment brought in sec. 9(1)(vi) of the Act. Hence the Tribunal found it not necessary to address various contentions urged in that regard. Accordingly we are of the view that the Tribunal has taken a view in this matter and the same cannot be rectified u/s 254(2) of the Act.
It is an undisputed fact that a counsel named Ms. Sheetal Shah appeared on behalf of the assessee on 4th September, 2015 and hence her name was marked on that date. With regard to the submission made with regard to the time gap between the date of hearing and the date of order, the same may be outside the scope of sec. 254(2) of the Act. However, we notice that the Tribunal has considered all relevant facts necessary to adjudicate the issue from the angle from which it was considered.
-
2016 (11) TMI 1677
Validity of reopening of assessment u/s 147 - jurisdiction of AO to issue notice u/s.148 when time for issuance of notice u/s.143(2) of the Act has not expired before the issuance of notice - HELD THAT:- According to proviso to section 143(2) at the relevant time, no notice u/s.143(2)(ii) shall be served on the assessee after the expiry of 12 months from the end of the month in which the return is furnished. In the present case, the return of income was furnished by the assessee on 14.2.2008 and, therefore, notice u/s.143(2) (ii) of the Act could have been issued to the assessee on or before 28.2.2009.
It is also not in dispute that notice u/s.148 of the Act was issued to the assessee on 6.10.2008, which was much prior to the expiry of time for issuing notice u/s.143(2) of the Act. Therefore, the notice issued u/s.148 of the Act is bad in law - Hence, the reassessment order passed in pursuance to this notice is also bad in law. Cancel the reassessment order dated 31.12.2009 passed u/s.143(3)/147 of the Act and allow the grounds of appeal of the assessee.
-
2016 (11) TMI 1676
Income accrued in India - PE in India - receipts from airlines relating to booking of segments from India - installed computers in the premises of the travel agents for the purposes of display of airlines information - DTAA entered into between India and Spain - Whether CIT(A) erred in holding the computers on the desks of the travel agents/airlines, through which the bookings are made using the appellant's Computer Reservation System (CRS) constitutes a fixed place of business and, therefore, a PE of the appellant in India, in terms of paragraph (1) of Article 5 of the DTAA between India and Spain? - HELD THAT:- This issue is covered against the assessee by the order of Tribunal in the case of assessee itself for A.Y. 1996-97 to 1998-99, wherein the Tribunal observed The computers so connected and configured which can perform the functions of reservation and ticketing is a part and parcel of the entire CRS. The computers so installed require further approval from AIPL who allows the use of such computers for reservation and ticketing. Without the authority of AIPL such computers are not capable of performing the reservation and ticketing part of the CRS system. The computer so installed cannot be shifted from one place to another even within the premises of the subscriber, leave apart the shifting of such computer from one person to another. Thus the appellant exercises complete control over the computers installed at the premises of the subscribers. In view of our discussion in the immediately preceding para, this amounts to a fixed place of business for carrying on the business of the enterprise in India. But for the supply of computers, the configuration of computers and connectivity which are provided by the appellant either directly or through its agent AIPL will amount to operating part of its CRS system through such subscribers in India and accordingly PE in the nature of a fixed place of business in India. Thus the appellant can be said to have established a PE within the meaning of para 1 of art. 5 of Indo-Spain treaty.
Whether the exception provided in para 3 of art. 5 applies so as to hold that there is no PE in India? - The function of the PE in India is not only to advertise its products. The activity of the appellant is developing and maintaining a fully automatic reservation and distribution system with the ability to perform comprehensive information, communication, reservation, ticketing, distribution and related functions on a worldwide basis. The computers installed at the premises of the subscribers are connected to the global CRS owned and operated by the appellant. Using part of the CRS system, the subscribers are capable of reserving and booking a ticket. Thus it cannot be considered as ‘solely for the purpose of advertising’ of such CRS system. Similarly it is not in the nature of ‘preparatory or auxiliary’ character. It is difficult to distinguish between the activities which are ‘preparatory or auxiliary’ character and those which are not. The decisive criteria is whether or not the activity of the fixed place of business in itself forms an essential and significant part of the activity of the enterprise as a whole. Since part of the function is operated in India which directly contributes to the earning of revenue, the activities as narrated above carried out in India are in no way of ‘preparatory or auxiliary’ character. Thus the exception provided in para 3 of art. 5 will not apply and hence as stated above, the assessee shall be deemed to have a PE in India.
Whether the assesses has a PE in India in the form of a dependent agent? - In the present case we find that AIPL is totally dependent on the appellant. The entire business of AIPL is to provide data processing and software development services together with relative distribution of ‘Amadeus products’ to the subscribers in India. AIPL has also an authority to enter into agreements with the subscribers. AIPL installs the computers, configures the computers for accessing the CRS and also provides connectivity through SITA nodes. Thus functionally as well as financially it is dependent entirely on the appellant. It can therefore, be said that AIPL is a dependent agent of the appellant. - Decided against assessee.
Attribution of income to the ‘PE’ of assessee company in India - HELD THAT:- As decided in assessee's own case where the entire activities of an enterprise are not carried out in a Contracting State where the PE is situated, then only so much of the profit as is attributable to the functions carried through the PE can be taxable in such source State. While dealing with the question as to what is such part of income as is reasonably attributable to the operations carried out in India, we have held that only 15 per cent of the revenue generated from the bookings made within India is taxable in India.
Same proportion has to be adopted here while computing profit attributable to the PE. We have also held that since the payment to the agent in India is more than what is the income attributable to the PE in India, it extinguishes the assessment as no further income is taxable in India. It is to be noted that even in the first assessment framed by the AO, the entire expenses in the form of remuneration paid to AIPL were held as allowable deduction and were reduced while computing the income of appellant. If that be the case, the income attributable to PE in India being less than the remuneration paid to the dependent agent, it extinguishes the assessment and requires no further exercise for computation of income. We accordingly hold so and in view of the same the income of the appellant for asst. yrs. 1997-98 and 1998-99 will be ‘nil’.
Allowability of project development expenses incurred/allocated to the Indian activity and levy of interest u/s. 234A and 234B - HELD THAT:- Since we have held that the remuneration paid to the dependent agent is exceeding the income attributable to the PE in India, the question of allowability of various expenses as are in appeal do not survive. - Decided in favour of assessee.
-
2016 (11) TMI 1674
Maintainability of appeal - low tax effect - Effect of subsequent circulars - HELD THAT:- As tax effect for the impugned assessment years were less than Rupees Two lakhs and by virtue of Circular No.5/2008, dated 15.05.2008 of CBDT, the appeals will not maintainable.
Substitution of the earlier circulars with subsequent circulars would not in any way affect the applicability of earlier circulars, in so far as it covered direct tax matters other than income tax. Accordingly, we are of the opinion that appeals of the Revenue are not maintainable.
-
2016 (11) TMI 1673
Capitalisation of revenue expenditure - CIT(A) noticed that the assessee has incurred these expenditure as per contractual obligation in the joint venture project as per the agreement entered and held that the entire claim if allowable as revenue expenditure - HELD THAT:- As pointed out to us that the order passed by the ld. CIT(A) in A.Y. 2009-10 was challenged by the Revenue by filing appeal before the Tribunal and the Tribunal, [2016 (6) TMI 1399 - ITAT MUMBAI] has upheld the view taken by the ld. CIT(A).
As gone through the order passed by the co-ordinate Bench of this Tribunal and noticed that identical issue was considered by the Tribunal in para 14 of its order. We further noticed that the Tribunal upheld the view taken by the ld. CIT(A) in para 14.4 of its order. Consistent with the view taken therein, we uphold the order passed by the ld. CIT(A) on this issue. - Decided against revenue.
Disallowance of part of interest expenditure by treating the same as relating to WIP - CIT(A) noticed that he has considered an identical issue in A.Y. 2009-10 and has accepted the claim of the assessee and accordingly by following the same, the ld. CIT(A) set aside the order passed by the A.O. on this issue - HELD THAT:- As decided in own case [2016 (6) TMI 1399 - ITAT MUMBAI] issue decided against revenue
Addition of notional interest to the rental income - A.O. took a view that notional interest on interest free deposit is required to be considered as part of rental income in order to arrive at a fair market value of rent u/s 23(1)(a) - A.O. computed the interest @ 12% on the interest free deposits and added the same to the rental income declared by the assessee - CIT-A Deleted the same by following his decision rendered for A.Y. 2009-10 - HELD THAT: - We have gone through the order passed by the co-ordinate Bench of this Tribunal for A.Y. 2009-10 [2016 (6) TMI 1399 - ITAT MUMBAI]and noticed that an identical issue was discussed by the Tribunal in para No. 7 of its order and in para No. 7.3 of the order, the Tribunal has upheld the view taken by the ld. CIT(A). We have also noticed that the ld. CIT(A) has followed the decision rendered by the Hon’ble Delhi High Court in the case of Asian Hotel Ltd. [2007 (12) TMI 274 - DELHI HIGH COURT]Accordingly, we uphold the order passed by the ld. CIT(A) in this year also on this issue.
Assessment of hire charges under the head income from house property - HELD THAT:- We noticed that the tribunal has rendered this decision [2016 (6) TMI 1399 - ITAT MUMBAI]wherein it was observed that the amenities provided by the assessee constituted an integral part of the premises, i.e., it was seen that the amenities provided by the assessee consisted of electrical panels, AHU rooms and fire control system, water tanks, elevator etc. In view of the above, the Tribunal has accepted the view of the ld. CIT(A) that these amenities constitute integral part of the house property. Since there is no change in facts, consistent with the view taken by the Tribunal in AY 2009-10, we uphold the order passed by the ld. CIT(A) in this year also on this issue.
-
2016 (11) TMI 1672
Exemption u/s 10A - STP I unit and non-STP unit are using the same infrastructure, employees, etc - According to the D.R., STP I unit has not satisfied the condition stipulated u/s 10A - HELD THAT:- Objection of the D.R. is that STP I unit and non-STP unit are using the same infrastructure, employees, etc as examined by this Tribunal in the assessee's own case, for the earlier assessment year, and this Tribunal found that the assessee is eligible for exemption under Section 10A of the Act. In view of the above order of this Tribunal, there is no reason to take a different view for the year under consideration. Therefore, by placing reliance on the order of this Tribunal for the earlier assessment year, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed.
Exclusion of foreign currency expenditure from the export turnover - HELD THAT:- Even though no argument was advanced from either side, this Tribunal finds that both denominator and numerator shall be the same. Therefore, once the expenditure incurred in foreign currency was excluded from total turnover, the same is also to be excluded from export turnover. Therefore, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed.
Appeal filed by the Revenue is dismissed.
-
2016 (11) TMI 1671
TP Adjustment - upward adjustment of notional guarantee fees made by AO u/s 92CA - HELD THAT:- We find that this issue is now covered, in favour of the assessee, by a decision of the coordinate bench in the case of Siro Clinpharm Pvt Ltd Vs DCIT and vice versa [2016 (5) TMI 633 - ITAT MUMBAI] . While holding that no arm’s length price adjustment can be made in the hands of the assessee, on respect of corporate guarantees issued without incurring any costs,
As amendment in Section 92B, at least to the extent it dealt with the question of issuance of corporate guarantees, is effective from 1st April 2012. The assessment year before us being an assessment year prior to that date, the amended provisions of Section 92 B have no application in the matter. For this reason also, the impugned ALP adjustment must stand deleted. See ANSAL LAND MARK TOWNSHIP (P) LTD.[2015 (9) TMI 79 - DELHI HIGH COURT]- Decided in favour of assessee.
Disallowance u/s 14A - as per assessee no expenditure was incurred to earn such exempt income - HELD THAT:- We are inclined to accept the plea of the assessee to the extent that no part of interest expenses can be disallowed under section 14A inasmuch as the assessee indeed had interest free funds much in excess of investments yielding tax exempt income. Because of an inherent flaw in the formulae set out in rule 8D(ii), as noted by a coordinate bench in the case of ACIT Vs Champion Commercial Co Ltd [2012 (10) TMI 24 - ITAT, KOLKATA] and as approved by Hon’ble Delhi High Court in the case of PCIT Vs Bharti Overseas Pvt Ltd [2015 (12) TMI 1423 - DELHI HIGH COURT] application of this formulae does give incongruous result inasmuch as when no part of interest bearing funds are employed in investments yielding tax exempt income, there cannot be any disallowance of interest expenses.
When assessee an has interest bearing as also interest free funds available to him, as long as interest free funds are cover to such investments, it cannot be assumed that interest bearing funds are used for the purpose of tax exempt investments. The presumption thus is in favour of the assessee as a matter of routine, and unless it is proved to be incorrect. Accordingly, disallowance is to be deleted. - Decided in favour of assessee.
Disallowing advances written off as bad debts in the books - HELD THAT:- AO has proceeded on the assumption that the deduction is claimed as bad debts, and it was for this reason that he disallowed the claim on the ground that the related income is not shown to have been included in income of the earlier years. These small amounts have stated to become unrecoverable in the course of carrying on of the business. Given the facts of this case, and clear position that deduction was claimed for the business loss, the objection taken by the Assessing Officer was clearly unwarranted. The impugned disallowance cannot, therefore, be sustained - bearing in mind smallness of the amounts written off, we deem it and proper to delete the impugned disallowance. - Decided in favour of assessee.
-
2016 (11) TMI 1670
Computation of deduction u/s.10AA - excluding foreign exchange gain from the profits of the business - HELD THAT:- Foreign currency expenditure cannot be considered as part of export turnover and at the same time, it also cannot be formed part of the total turnover as held by ITO Vs. SAK SOFT LTD. [2009 (3) TMI 243 - ITAT MADRAS-D]. Accordingly, we direct the AO not to include the same in export turnover as well as total turnover while computing deduction u/s.10A of the Act. Accordingly, this ground of Revenue is remitted back to the file of AO to reconsider.
DRP directing the AO to include forex gain from profits of the business for computing deduction u/s.10AA - HELD THAT:- This issue came for consideration before the jurisdictional High Court in the case of CIT Vs. Pentasoft Technogies Ltd. [2010 (7) TMI 75 - MADRAS HIGH COURT] wherein held that gain due to fluctuation in foreign exchange rate directly related to export sales could not be treated as other than part of profit from export of the assessee. Accordingly, we do not find any infirmity in the direction of the DRP and the same is confirmed.
-
2016 (11) TMI 1669
Nature of expenditure - expenditure towards construction of compound wall, store room, underground sewage, design charges and temporary repairs to the building - revenue or capital expenditure - AO treated the expenditure as capital in nature and allowed depreciation at the rate of 10% - HELD THAT:- Admittedly, the assessee incurred expenditure for construction of compound wall, watch tower, godown, underground drainage, etc. This Tribunal is of the considered opinion that the assessee has constructed compound wall, sewage drain, godown, etc. for permanent use in the business. It cannot be said that the infrastructures created by the assessee are for temporary use of the assessee. Therefore, the Assessing Officer has rightly treated the expenditure as capital in nature and allowed depreciation at the rate of 10%. This Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed.
Disallowance u/s 14A r.w.r. 8D - Whether there was no direct expenditure under first limb of Rule 8D(2)? - Referring to limb (ii) of Rule 8D(2), the Assessing Officer found that under Rule 8D(2), disallowance was made - HELD THAT:- For the purpose of limb (ii), the Assessing Officer has to compute the disallowance by following the method prescribed under Rule 8D(2)(ii). Similarly, for the purpose of limb (iii), the Assessing Officer has to take 0.5% of the average of value of investment which resulted in income which would not form part of total income. Therefore, for the purpose of limb (iii) alone, the disallowance cannot be extended beyond the income which does not form part of total income. Rule 8D(2) provides disallowance of average of all the three limbs therein. Therefore, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed.
-
2016 (11) TMI 1668
Unexplained cash credits u/s 68 - assessee had failed to furnish satisfactory explanation with regard to the identity of the parties and the source and genuineness of the transactions - HELD THAT:- Since it was a common point between the parties that the respondent-assessee is also a part of group of entities controlled by Mr. Mukesh Choksi, in our view, the aforesaid precedents are relevant to assess the income of assessee. In this view of the matter, we find that the CIT(A) made no mistake in coming to the impugned decision, which is in conformity with the position upheld by the Tribunal in the group concerns of the instant assessee. Therefore, we hereby affirm the order of CIT(A) and accordingly, Revenue fails in its appeal.
-
2016 (11) TMI 1665
Interest on the loan taken which is utilised for giving advances to the sister concerns - Tribunal held that the interest deduction claimed by the assessee is an allowable deduction on the premise that the loan was utilised by the assessee for giving advance to the sister concern - HELD THAT:- As decided in M/S. GOLF VIEW HOMES LTD [2016 (11) TMI 1664 - KARNATAKA HIGH COURT] activity of the assessee was also of acquiring property rights in sister concers, any advance given by the assessee them is to be treated for acquiring property rights and once it is treated as for acquiring property rights may be of a sister concern, it would be an allowable deduction under section 36 of the Income-tax Act, since it is for the business activity. - Decided in favour of assessee.
-
2016 (11) TMI 1664
Deduction of the interest on the loan taken which is utilised for giving advances to the sister concerns - Tribunal holding that the interest deduction claimed by the assessee is an allowable deduction - HELD THAT:- CIT (Appeals) was satisfied about the activity of the assessee as of construction of one building after another and acquiring of property rights in Diamond District and Platinum City - two sister concerns.
If such was the finding that the activity of the assessee was also of acquiring property rights in M/s. Diamond District and M/s. Platinum City, any advance given by the assessee to M/s. Diamond District and M/s. Platinum City is to be treated for acquiring property rights and once it is treated as for acquiring property rights may be of a sister concern, it would be an allowable deduction under section 36 of the Income-tax Act, since it is for the business activity.
The attempt on the part of the Revenue to contend that the finding arrived at by the Tribunal is perverse by misconstruing the order of Commissioner of Income-tax (Appeals) cannot be countenanced for three fold reasons as the Department itself before the Tribunal did not dispute the aforesaid finding of fact recorded by the Commissioner of Income-tax (Appeals) - it is not only at one place the aforesaid finding of fact is recorded but subsequently as observed earlier at two places similar factum is also recorded and when such finding of fact was not disputed and was also reiterated by the Commissioner (Appeals) and the said reiteration was also not disputed and the Tribunal has relied upon the same and has proceeded as an undisputed fact, such a view on the part of the Tribunal cannot be said to be perverse view.
When one talks about perversity, the test would be that no reasonable person would take such view. But if the view taken by the Tribunal is a possible reasonable view, such view cannot be said to be perverse. If the perversity is tested from the material on record, then also, we cannot accept the contention that the finding of fact so recorded by the Tribunal is perverse or without there being any material on record.
No perversity in the finding of the Tribunal in allowing the appeal of the assessee so far as the deduction of the interest on the loan taken which is utilised for giving advances to the sister concerns - Decided in favour of assessee.
-
2016 (11) TMI 1663
Computation of tax u/s 115JB - MAT credit utilization - MAT credit excluding Surcharge and Education Cess and not allowing the MAT credit utilization as claimed under section 115JAA - short allowance of credit on account of MAT credit i.e. restriction in the quantum of refund to be issued to the assessee - HELD THAT:- Issue of allowance of tax credit for tax paid on deemed income i.e. computation of eligible MAT credit arose before the Hyderabad Bench of Tribunal in Virtusa (India) (P) Ltd. Vs. DCIT [2016 (3) TMI 245 - ITAT HYDERABAD] held that the tax liabilities for normal provisions as well as MAT to be calculated with Surcharge and Education Cess and the assessee was entitled to total MAT credit adjustments i.e. against taxes and Surcharge and Cess. In this regard, reference was made to sub-section (5) to section 115JAA of the Act i.e. for setting o ff in respect of brought forward tax credit and it was held that the term used ‘tax’ included surcharge and AO cannot overlook these formats and (interpret it in his own method of calculating tax credit while making assessment u/s 143(1) of the Act.) proceed to calculate the MAT credit to compute assessment u/s 143(1) applying different methods when the proper and correct method as proposed by CBDT in ITR-6. The Assessing Officer is expected to follow the ITR-6 format to complete the assessment u/s 143(1) or 143(3) of the Act.
Thus we hold that the assessee is entitled to MAT credit utilization of ₹ 1.48 crores i.e. MAT credit including surcharge and education cess. Accordingly, we direct the Assessing Officer to re-compute the refund in the hands of assessee. The grounds of appeal raised by the assessee are thus, allowed.
-
2016 (11) TMI 1661
Non appearance on the date of hearing - assessee submitted that Shri Deepanshu Jain, who was to appear in this case on the date of hearing could not appear due to sudden demise of his grandfather on 27.06.2016 itself - HELD THAT:- Considering explanation of the assessee, we are satisfied that assessee’s counsel was prevented by sufficient cause from appearing on the date of hearing. Further, appeal of the assessee has not been decided on merits. Therefore, one more chance could be given to the assessee to argue the appeal on merits.
In this view of the matter, we recall our earlier order dated 27.06.2016 and restore the appeal of the assessee. The Miscellaneous Application is allowed.
-
2016 (11) TMI 1660
TP Adjustment - upward adjustment made on the value of its international transactions with its Associate Enterprises (‘’AEs’’) - MAM selection - Lower authorities selecting CUP method over TNM method - geographical difference between supplies made to Associated Enterprise and Non Associated Enterprise - HELD THAT:- When uncontrolled comparables are available internally on some of the items which was sold to Associated Enterprise then such comparables would form a separate class of its own. TPO had considered forty nine thread types for which there were internal uncontrolled transactions available for comparison. TPO had not made an adjustment for any of the other varieties of thread sales made by the assessee to its Associated Enterprise.
We do find that atleast for eight items among these forty nine thread types, mentioned at Sl. No.27,28,30,35,37,38,39 & 44, there was negative differences adjustment which were ignored by the TPO, in the work out at annexure A of its order. When a class of items are considered for adjustment, the negative effect of some of the items therein cannot be ignored. As for contention of the assessee is that there were geographical difference between supplies made to Associated Enterprise and Non Associated Enterprise, there is a clear finding by the ld. DRP that assessee was catering to Asian countries and Associated Enterprise were located in Sri Lanka, Mauritius, Pakistan and Egypt and Non Associated Enterprises were located in Srilanka, Bangladesh, Malawi etc with not much of a geographical difference. Viz-a-viz volume discount mentioned by the ld. Authorised Representative, ld. DRP had given a clear finding that there were substantial sales in alteast in five items falling in the table appearing in para 2.10 of its order. Considering all these, we are the opinion that lower authorities were justified in selecting CUP method over TNM method. However, as mentioned by us, computation of the Arms Length Price adjustment required on forty nine number of items mentioned in the order of TPO requires to be reworked, so that negative amounts are also considered for aggregation and for working out the Arms Length Price adjustment that is required. For this limited purpose of recalculation, we remit the issue back to the file of the Assessing Officer/TPO.
Downward adjustment on commission paid to its Associated Enterprises - payment was for agency commission or management commission fees - HELD THAT:- As already noted by us the orders on which commission was paid was only on items sold to group concerns and not to any third parties. There is much strength in the argument of the ld. Departmental Representative that in such a situation onus of the assessee was much more than in a scenario where orders on which commission was received were on supplies to third parties. Assessee had failed to discharge this. Consolidation of fragmented orders could have been done by the assessee itself and did not require services of an Associated Enterprise or knowledge of any sublims stalls. When assessee was unable to bring on record anything to show for what reason agency commission was paid, in our opinion there arose an exceptional circumstance where by Arms Length Price could be taken as Nil. As for decision of the Delhi Bench of the Tribunal in the case M/s. McCann Erickson India (P) Ltd [2012 (7) TMI 728 - ITAT, DELHI] strongly relied by the ld. Authorised Representative, assessee therein was able to demonstrate the type of services, description of service and benefits received by the it from its Associated Enterprise. Further, the payment was not agency commission but management commission fees. In the host of other judicial decisions relied by the ld. Authorised Representative also the question dealt was on the management fees and not on agency commission. In these circumstances, we do not find any reason to interfere with the orders of the lower authorities
-
2016 (11) TMI 1659
Unexplained cash credit u/s.68 - Unsecured loan received - HELD THAT:- Source of deposit of cash by the loan creditor Shri Simachal Panda could not be satisfactorily explained by the assessee either before the Assessing Officer or before the ld CIT(A) or even before me. Thus, the creditworthiness of the loan creditor Sri Simachal Panda could not be proved. Hence, find no good reason to interfere with the order of the ld CIT(A) and, therefore, this part of ground of appeal is dismissed.
Laon from Late Banamali Besoyee, it is observed from the bank statement of United Bank of India, B.D.Pur placed at page 5 of PB that ₹ 4 lakh was advanced out of agricultural loan obtained from UBI and thus, the creditworthiness of the loan creditor is proved for advancing the loan of ₹ 4 lakh to the assessee. Hence set aside the orders of lower authorities on this issue and delete the addition - Ground No.1 of the appeal is partly allowed.
Addition u/s.68 for deposit of cash and cheque in the bank - assessee failed to explain the source of the same - HELD THAT:- Source of the deposit also could not be explained before the ld CIT(A). Before us A.R. submitted that the deposit of ₹ 8 lakhs in the bank was the sale proceeds from the business of the assessee of fruits and bricks. However, he could not place any evidence on record to substantiate his claim. Therefore, the argument of the ld A.R. of the assessee that entire ₹ 8 lakhs cannot be treated as income of the assessee but the income embedded of such receipts from the business of fruits and bricks of the assessee of ₹ 8 lakhs could only be treated as income of the assessee, cannot be accepted
Assessee could not produce the creditors before the Assessing Officer for examination - action taken by the Assessing Officer to secure the appearance of the creditors before him. In our considered view, in the above circumstances, CIT(A) was not justified in confirming the additions action taken by the Assessing Officer to secure the appearance of the creditors before him. In my considered view, in the above circumstances, the ld CIT(A) was not justified in confirming the additions Under the Income tax Act, the power has been conferred on the Assessing Officer to secure the presence of a person and no power has been conferred upon the assessee by exercise of which he can compel the creditors to appear before the Assessing Officer. - Decided in favour of assessee.
-
2016 (11) TMI 1657
Revision u/s 263 - assessment made by AO is set-aside with the directions to the Assessing Officer to complete the assessment afresh by taxing interest income earned by its units entitled for deduction u/s.80IC, under the head “Income from other sources”- HELD THAT:- It is not a case of a total set aside of assessment, but to a limited extent, so that it has to be modified to the stated extent only. The AO in the revised assessment is to interfere with the assessment only to the stated extent and, further, in doing so is only giving effect to the said directions by the ld. CIT. Clause (c) of Explanation 1 to section 263(1) is, again, specific, excluding parallel exercise of jurisdiction by the Administrative and the Appellant Commissioner. Once, therefore, the ld. CIT has, in exercise of his power of revision, held the interest income as assessable under section 56, the matter cannot be re-agitated before or revisited by the Appellant Commissioner, whose view is thus in accordance with the clear mandate of law. Reference in this context, explaining the clear position of law, may be made to the decision in the case of CIT v. Shri Arbuda Mills Ltd. [1996 (1) TMI 11 - SUPREME COURT] being in fact clarified, in a similar fact situation, in the case of Herdillia Chemicals Ltd. (1995 (12) TMI 411 - BOMBAY HIGH COURT), so that the matter can only be said to be no longer res integra, being squarely covered by both, the clear position of law as well as said binding decisions. This is precisely the reason for our stating, at the outset, of the assessee as having no case. The assessee’s appeal having been upheld by us as not maintainable, the question of adjudicating its grounds assailing the assessment on merits does not arise.
Order u/s.263 filed only on 03.09.2015 which is time barred by 458 days - In our clear view, even as expressed during hearing, the assessee had clearly, and presumably, only on the basis of a legal opinion, taken a conscious decision not appeal against the revision order, passed with reference to and relying on several decisions, including by the Apex Court. No reasonable, much less sufficient, cause has been advanced for condonation of delay
We have already expressed that the impugned order stands passed relying on several decisions, including by the Apex Court. The assessee could not make out a prima facie case, i.e., on the merits of the impugned directions issued by the ld. CIT, before us, with we on the contrary observing the assessee to have taken a conscious decision accepting the same. The said decision would thus also have no application in the present case. The instant appeal is not maintainable, and is accordingly dismissed. We decide accordingly.
-
2016 (11) TMI 1656
Addition on account of long-term capital gain - Sale of a residential house - Interest in property - Section 50C applicability - assessee had transferred the land and building, which was under his possession as mentioned in the sale deed HELD THAT:- Since the assessee has transferred his interest in the land and building under consideration, therefore, consideration arising out of such transfer is definitely chargeable under the provisions of Income-tax Act, 1961. In the aforesaid case, by declaring sale as null and void, the land remained in the possession of the owner, who had transferred the said land in defiance of the statutory provisions, whereas in the case of the assessee, he has transferred his ownership and by virtue of Court’s order dated 01.03.2013, the assessee has not remained the owner of the land and building, but already received consideration in respect of the property. Since the underlined asset transferred is being land and building, therefore, provision of Section 50C are very much applicable. In view of these facts, we are of the considered opinion that the AO and ld. CIT(A) have justified in their action, hence, no interference on our part is required.
Taking cost of the market value of the property as on 01.04.1981 in place of cost of acquisition while computing the capital gain - HELD THAT:- AO has considered the indexation cost of acquisition at ₹ 40,920/- as against actual cost of ₹ 6,000/- while computing the capital gains. Therefore, we are of the view that the benefit of indexation has already been allowed by the AO. Hence, this ground of appeal is rejected.
........
|