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Income Tax - Case Laws
Showing 121 to 140 of 678 Records
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2016 (2) TMI 1177 - ITAT MUMBAI
Disallowance of expenditure incurred for Pooja/function - disallowance of consultancy charges holding it as capital in nature - disallowance of charges for services - denial of claim of exclusion of interest u/s. 244A - disallowance of proportionate amount of premium on lease hold land by treating it as capital expenditure - Not allowing deduction of profit derived from Himachal Unit (located in Industrially Backward District in computing the book profit as per clause 5 to the explanation of 2nd proviso of section 115JA (MAT) - Not granting exclusion of export profit as computed under the provisions of Act in book profit for the purpose of section 115JA - adjustment of MOVDAT in the opening stock u/s. 145A
Appeal filed by the assessee is partly allowed and the appeal of the Revenue is dismissed.
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2016 (2) TMI 1176 - ORISSA HIGH COURT
Writ application is dismissed as withdrawn with the liberty sought for. The original documents under Annexures-1 and 1A be returned to the learned counsel for the petitioner on being substituted by the authenticated Xerox copy thereof.
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2016 (2) TMI 1174 - RAJASTHAN HIGH COURT
Disallowance of Depreciation - appellant is a charitable institution u/s 12A - Held that:- It is well settled that in computing income of a charitable institution/trust depreciation of assets owned by such an institution is a necessary deduction on commercial principles, hence, the amount of depreciation has to be deducted to arrive at the income available. This view is substantiated by a Division Bench judgment of this Court in Commissioner of Income Tax-II, Jodhpur Vs. Krishi Upaj Mandi Samiti, Jaisalmer (2015 (3) TMI 11 - RAJASTHAN HIGH COURT). In view of it, we are of the considered opinion that this appeal does not involve any substantial question of law
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2016 (2) TMI 1173 - RAJASTHAN HIGH COURT
Depreciation on capital assets - whether the Tribunal was justified in allowing depreciation claimed by the assessee on capital assets for which capital expenditure has already been allowed in the year under consideration? - Held that:- The issue involved in this appeal is no more res integra in view of judgment given by Division Bench of this Court in Commissioner of Income Tax-II, Jodhpur Vs. Krishi Upaj Mandi Samiti, Jaisalmer [2015 (3) TMI 11 - RAJASTHAN HIGH COURT].
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2016 (2) TMI 1172 - ITAT DELHI
TPA - internal comparable adopted by assessee being segment “C” - commercial refrigeration for justifying the PLI of Transport Division being segment “A” - Held that:- We find from the orders of lower revenue authorities that they have not carried out detailed functional comparability and have rejected the assessee’s claim on broad parameters without going into the actual substance of functions carried out by segment ‘A’ and ‘C’. Under such circumstances, we are of the opinion that consideration of function performed by these two segments require technical expertise and, therefore, keeping in view the decision in the case of Bharti Cellular [2010 (8) TMI 332 - SUPREME COURT OF INDIA], it would be proper, as agreed by assessee, to restore the matter to ld. TPO with liberty to both the parties viz. assessee and ld. TPO to take the services of technical experts in the field before coming to any conclusion.
We are in agreement with ld. counsel for the assessee that by setting aside the matter to the file of ld. TPO, the controversy cannot be enlarged by allowing ld. TPO to examine the correctness of the segmental details furnished by assessee, which were not disputed by the ld. TPO, particularly when ld. TPO himself accepted the segmental details and also accepted the results of Segment “B”. If we accept the plea of ld. CIT(DR) then it would imply that even Segment “B” results will have to be examined afresh, if the Segment C details are not found to be correct. The very premise of the proceedings cannot be altered while setting aside the matter because it is not a case where entire order of ld. TPO is not acceptable to assessee.
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2016 (2) TMI 1171 - ITAT DELHI
TPA - companies functinal comparable - Held that:- Assessee is engaged in the business of providing services in supporting the development of client server applications, to assist customers in the successful development of Microsoft technology, both directly and through service providers and to provide training through authorized training centres to assist customers in the operation of Microsoft licensed software, thus companies functionally dissimilar with that of assessee need to be deselected from final list.
Disallowance of 50% car running expenses used by directors - Held that:- Gujarat High Court in Sayaji Iron and Engineering Company v. CIT [2001 (7) TMI 70 - GUJARAT HIGH COURT] where it was held that once the directors of the Assessee company are entitled to use the vehicles of the company for their personal use as per the terms and conditions of their appointment, it cannot be said that the same was a personal expenditure.
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2016 (2) TMI 1168 - ITAT KOLKATA
Reopening of assessment - notices u/s 148 beyond period of limitation - Held that:- Notices issued u/s. 148 was dated 30.03.2005 and 31.03.2006 for AYs 1998-99 and 1999-2000 respectively but, these were issued, as admitted by Ld. Sr. DR, after 31.03.2005 and 31.03.2006. And records clearly shows that both the notices were handed over to Postal Authorities on 05.04.2005 and 07.04.2006 for AYs 1998-1999 and 1999-2000 respectively. Notices have been dispatched/left the control of the officer only after the end of the financial year and the same was served only on 16.05.2005 for AY 1998-99 and 05.06.2006 for AY 1999-2000 respectively. It means that the same have clearly been issued beyond the prescribed period of limitation - Decided in favour of assessee.
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2016 (2) TMI 1167 - ITAT AHMEDABAD
TDS u/s 194J - Disallowance u/s 40a(ia) for payment of air freight expenses without deduction of tax at source - relation between the assessee and the agent - Held that:- Amount that was paid by the assessee to the agents were towards freight reimbursements and that there was no income component in the hands of agents - In view of the case Commissioner of Income Tax III vs. Gujarat Narmada Valley Fertilizers Co. Ltd. [2014 (1) TMI 1708 - SUPREME COURT] it is held that the relation between the assessee and the agent is principal and agent - so far as the obligation to deduct tax at source from the payment of transport charges and other charges is concerned, the same was complied with by the agent, who had made payment on its behalf - Thus deleting the disallowance confirmed – Decided against Revenue.
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2016 (2) TMI 1165 - ITAT PUNE
Computation of deduction under section 10A - Held that:- The assessee is entitled to the deduction under section 10A of the Act at the stage when the profits and gains of each of the units are computed and there is no merit in adjusting the losses, if any, incurred by the assessee in any other unit, for computing the deduction under section 10A of the Act.
Not allowing set off of unabsorbed depreciation and losses while computing the total income of the assessee - Held that:- As decided in assesse's own case [2015 (11) TMI 1522 - ITAT PUNE ] the assessee is entitled to the claim of deduction under section 10A of the Act before setting up of brought forward losses and unabsorbed depreciation. The deduction under section 10A of the Act is first allowed against the eligible profits and in case there are certain left over profits for the year under appeal, then the same are to be adjusted against the brought forward losses and unabsorbed depreciation / loss as claimed by the assessee in return of income. Accordingly, we direct the Assessing Officer to re-compute the deduction under section 10A of the Act.
Adjustment with regard to the interest on loans to associate enterprises - Held that:- Hon’ble Bombay High Court in CIT Vs. Tata Autocomp Systems Ltd. (.2015 (4) TMI 681 - BOMBAY HIGH COURT) had also laid down similar proposition that the arm's length price in the case of loan advanced to associate enterprises would be determined on the basis of rate of interest being charged in the country where the loan is received / consumed - Also in Varroc Engineering Pvt. Ltd. Vs. ACIT (2015 (3) TMI 111 - ITAT PUNE) had also laid down similar proposition and directed the Assessing Officer/TPO to verify the claim of the assessee vis-à-vis the borrowals of loans, which in turn, were advanced at LIBOR + rate to the associate enterprises, in case the advancement of loan to the associate enterprises is on LIBOR+ / WIBOR+ rates, then the said transaction with the associate enterprises is within arm's length price, otherwise, the TPO may re-compute the arm's length price of international transactions. Following the same parity of reasoning, we direct the Assessing Officer to compute the adjustment, if any, in the hands of assessee, after verifying the claim of the assessee.
MAT -direction to exclude the disallowance made under section 14A of the Act, while computing the book profits u/s 115JB
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2016 (2) TMI 1164 - ITAT MUMBAI
TDS u/s 194J - Disallowance of Data/Circuit Bandwidth Charges(D/CBC) u/s. 40(a)(ia) - Held that:- Merely because for maintenance purpose certain human intervention was provided, cannot lead to the surmise that the DATA link charges paid to various telecom service providers, were in the nature of technical services governed by the provisions of section 194J of the Act.
DATA link charges were paid for utilizing the standard facilities which were provided by the individual service providers by way of use of technical gadgets which were made available vide DATA link satellite link line established from one service provider to be carried over to the other service provider, does not involve technical services as there was only interconnection of the networks to the equipments of other service providers. No human intervention for transmitting the DATA through such DATA link satellite link line, the payments made for utilizing such services was not in the nature of technical services governed by section 194J of the Act - DATA link charges were not liable for tax deduction at source under the provisions of section 194J.
Allowable busniss expenditure - lease rent payment - Held that:- The assessee had claimed the expenditure as per the provisions of AS-19, that the agreement entered into by the assessee was in the nature of operating lease as defined in AS-19, as per the accounting standard in such cases the payments have to be considered as an item of P&L account on a straight line basis over the lease period. The FAA had given a categorical finding of fact that the provision of ₹ 1. 08 crores was in respect of the liability that had accrued during the FY 2009-10. By following AS-19 the assessee has complied with the provisions of the Act, that AS-19 provides that in case of operating leases, the lease rent payment has to be treated as an allowable expenditure. Therefore, in our opinion, the order of the FAA does not require any interference from our side.
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2016 (2) TMI 1163 - ITAT BANGALORE
Transfer pricing addition - comparable selection criteria - functional similarity - Held that:-
The business of the assessee is engaged in providing software development and Information Technology Enabled Services (ITES) to its Associate Enterprise on a cost plus basis. Thus the assessee is providing services in two segments i.e. software development services and ITES, thus companies functionally dissimilar with that of assessee need to be deselected from final list.
Since we have directed the TPO to exclude some of the companies from the list of comparables as well as restored some of the companies to the list of comparables which were excluded by the CIT (Appeals), therefore, the TPO/A.O. is directed to recompute the ALP after exclusion and inclusion of the comparable companies as directed above. Needless to say the benefit of tolerance range of +/- 5% as per the proviso to section 92C be considered.
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2016 (2) TMI 1162 - ITAT DELHI
Transfer pricing adjustment - comparable selection criteria - functional similarity - Held that:- Assessee being into the business of software / I T enabled services,thus companies functionally dissimilar with that of assessee need to be deselected from final list.
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2016 (2) TMI 1161 - ITAT KOLKATA
Additions u/s 68 - increase in share capital, while the assessee has failed to establish the genuineness of the transactions - unaccounted purchase transactions and restricting the profit element to the extent of 13.39%. - Held that: - In the given facts the AO had not brought any material or evidence which would indicate that the share applicants were (a) benamidars or (b) fictitious persons or (c) that any part of the share capital represented the company's own income from undisclosed sources. In view of the facts and precedent before us, we are of the view that CIT(A) has rightly deleted the addition and we confirm the order of CIT(A) on this issue.
Regarding unaccounted purchase transactions - Held that:- AO issued summons u/s. 131 to Uttam Ray and Chinu Ray, who denied the diaries belonged to them but accepted that the contents of details of job work were undertaken by them and these diaries are maintained by assessee company on their behalf. - In view of the above and facts and circumstances, we are of the view that the CIT(A) has acted on the remand report of the AO and re-worked the unaccounted purchase and treating the same restricted the addition by applying profit rate. We find no infirmity in the order of CIT(A) and hence, the same is confirmed. This issue of assessee as well as revenue is dismissed.
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2016 (2) TMI 1160 - ITAT JAIPUR
Bogus purchases - trading addition - Held that:- We found force in the arguments of the Ld AR that when the department has accepted the sales made by M/s Clarity Gold Pvt. Ltd which is assessed to tax, how the purchases made by the assessee from the same party can be held to be unverifiable/non-genuine more particularly when the party has given the confirmation for the transaction. We accordingly agree with the contention of the assessee and the AO is directed to allow the said claim after verifying the assessment records of M/s Clarity Gold Pvt Ltd.
Further, the matter in respect of unverifiable purchases in case of Anuj Kumar Varshney vs. ITO (2015 (4) TMI 533 - ITAT JAIPUR) as referred by the ld AR has since been referred and pending adjudication before the Hon’ble Rajasthan High Court. Given the consistent stand taken by this Bench, we are inclined to set aside the issues raised in this appeal in respect of unverifiable purchases from the remaining three parties (other than M/s Clarity Gold) and restore the matter to the file of AO to decide the same afresh after the judgement of Hon’ble Rajasthan High Court in the case of Anuj Kumar Varshney and other vs. ITO(supra) is delivered, after giving adequate opportunity of being heard to the assessee.
Addition of commission payment - Held that:- In respect of 17 parties who have complied with the summons, tax has been deducted at source and they have also reported the commission receipts in their return of income, we donot see a rationale basis which prompted the AO to disallow the commission payment. More so, where the matter is covered in favour of the assessee by earlier orders of the Coordinate Bench which has been referred to by the ld CIT(A). We accordingly upheld the deletion of additions of commission payments to these 17 parties.
In respect of other 4 parties, it is noted that Shri Sudhir Jain has already complied with the summons and further assessee has filed additional evidence before the Bench. The additional evidence is accepted and the matter is set-aside to the file of the AO in respect of these 4 parties to examine the same afresh considering the additional evidence after giving proper opportunity to the assessee.
Addition of travelling expenses including foreign travelling - expenditure for busniss purpose - Held that:- The assessee has provided the necessary explanation in respect of travel of tourist guide Vikas Kaul and Neeta Dadda who is a partner in the firm. Further, it is noted that on similar facts, the disallowance was deleted by ld CIT(A) for AY 2008- 09 against which the department has not filed any appeal. Keeping in mind the nature of the business of the assessee and the explanation provided by the assessee, we see not reason to interfere with the order of ld CIT(A) who has deleted the disallowance of ₹ 1 lacs towards foreign travel expenses.
TDS u/s 194H - disallowance on payment to BOB and ICICI - non deduction of tds - Held that:- As in assessee’s own case for A.Y. 2008-09 [2012 (2) TMI 521 - ITAT JAIPUR], we hereby delete the disallowance of ₹ 726312 under section 40a(ia) in the hands of the assessee.
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2016 (2) TMI 1159 - ITAT AMRITSAR (SMC).
Reopening of assessment - reasons to believe - unexplained cash deposits - vague information - non independent application of mind - Held that:- A bare perusal of the reasons recorded for issuance of notice u/s 148 of the Act, shows that the only material available before the AO was the AIR information of the assessee having deposited an amount of ₹ 11.60 lakhs in his savings bank account. Remarkably, the reasons recorded did not even mention the bank in which such savings bank account was maintained. The assessee, as available from the first page of the assessment order, was issued a notice u/s 148 of the Act, in pursuance to the aforesaid reasons. The assessment order under section 143(3) of the Act is dated 25.03.2013. The assessee had filed the return of income on 05.10.2005 and it had been stated in response to the notice u/s 148 of the Act that this return be treated as having been filed in response to this notice.
The factum per se, of deposits in the bank account of the assessee could not be made the basis for holding the view that income had escaped assessment, over-looking that the sources of the deposits need not necessarily be the income of the assessee; and that as such, the reasons recorded were not sufficient to believe escapement of income; that rather, they were reasons to suspect escapement of income, which was not enough for issuance of a notice u/s 148 of the Act.- Decided in favour of assessee.
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2016 (2) TMI 1158 - ITAT AMRITSAR
Dismissal of appeal due to non appearance - Miscellaneous application for recalling of the order - assessee stated that due to certain extraordinary urgency and being situated at Delhi, the assessee could not follow up the case promptly. He further stated that the assessee had also deputed one of his employees to be present at the time of hearing but he could not reach in time due to traffic problems - Held that:- The assessee has explained reasonable and sufficient cause for recalling of the order dated 29.11.2012. Therefore, in the interest of justice, the order dated 29.11.2012 is hereby recalled. The appeal is ordered to be restored to its original number and the Registry is directed to fix the main appeal for hearing. M.A. of assessee allowed.
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2016 (2) TMI 1156 - ITAT MUMBAI
Deduction under section 10A in respect of interest income - Assessee has claimed exemption on the reasoning that it was derived from the business of undertaking - Held that:- Similar issue arose in case of assessee’s sister concern M/s. Syntel Ltd. for the assessment years 1997–98, 1998–99 and 2001–02. The Tribunal, while deciding the issue accepted assessee’s claim by allowing deduction under section 10A, in respect of interest income as well as some other income such as exchange fluctuation gain and reversal of provisions, also confirmed by HC [2009 (12) TMI 689 - BOMBAY HIGH COURT] - Decided in favour of assessee
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2016 (2) TMI 1155 - RAJASTHAN HIGH COURT
Reopening of assessment - Availability of alternative efficacious statutory remedy of appeal under Section 246A of the Act is also pleaded in the return for non-suiting the petitioner-assessee - Held that:- The remedy of appeal before the ITAT is available if the outcome of the appeal under Sections 246/246A of the Act is not productive for the assessee. The jurisdiction and powers of the appellate authority under the Act are very wide so as to examine the legality and propriety of the impugned action of the AO and the consequential orders. Appellate authority, while exercising its jurisdiction, can take care of about the grievance of the assessee in right perspective and if feel persuaded can very well redress.
Though for the Assessment Year 2008-09, fresh assessment order by AO has not been passed under Section 147/143(3) of the Act but the bone of contention for reopening of the assessment remains the same i.e. land consolidation expenses whether allowable or not to the assessee. Therefore, the objection of the Revenue about availability of alternative, efficacious remedy deserves credence vis-a-vis both the assessment orders and cannot be by-passed in the peculiar facts and circumstances of the instant case.
The verdict of Supreme Court in Chhabil Dass Agarwal (2013 (8) TMI 458 - SUPREME COURT ) clearly clinches the issue in favour of the Revenue. The ratio decidendi of this judgment can very well be pressed into service vis-avis both the writ petitions and consequently objection of the Revenue is liable to be sustained to non-suit the petitioner in both the petitions. Supreme Court in an earlier decision in Champalal Binanai V/s. The Commissioner of Income-tax, West Bengal & Ors. [1969 (12) TMI 3 - SUPREME Court], while considering availability of alternative remedy of appeal under the Income-tax Act, 1922, opined that before exhausting the said remedy, an assessee is not entitled to invoke extraordinary jurisdiction enshrined under Article 226 of the Constitution.
The argument of learned counsel for the assessee that statutory remedy of appeal is illusory and harassing cannot be countenanced in the backdrop of facts and circumstances of these matters, especially when against the original assessment orders, petitioner-assessee has successfully availed the remedy of appeal and the appellate authority has annulled the assessment orders to the extent of charging of interest under Section 234A/B/C of the Act.
Availability of alternative efficacious remedy for maintainability of writ petition is a self-imposed restriction from which court, at times, may depart in certain special circumstances of an individual case. Such eventualities are (i) when the authority has acted arbitrarily without the sanction of law (ii) when the action of the authority is palpably wrong or (iii) when High Court is confronted with an unprecedented extraordinary situation.
As afraid such very exceptional circumstances are not available in these petitions to bypass statutory alternative remedy.
In view of foregoing discussions, both these petitions cannot be entertained on account of availability of efficacious alterative remedy of appeal.
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2016 (2) TMI 1154 - ITAT, PUNE
Addition on account of estimation of gross profit - Held that:- We fail to comprehend the action of the Revenue in benchmarking higher G.P. of one centre and in consequence extrapolate the same to another centre. No tangible material has been brought on record by the Revenue to enable it to displace the actual G.P. declared by the assessee. It is well-settled that the assessee is not obliged to maximize its it profits. In the light of the aforesaid discussion, we find considerable merit in the plea of the assessee that such addition based on assumptions and presumptions are totally uncalled for and deserves to be deleted. In the result, the Grounds taken by the assessee.
Disallowance invoking section 40(a)(ia) - Held that:- We find that the Co-ordinate Bench of the Tribunal on the identical point has decided the issue in favour of the assessee in the case of M/s S. & S. Wire Products vs. ITO [2016 (1) TMI 1347 - ITAT PUNE] held that Second proviso to section 40(a)(ia) is clarificatory and therefore retrospective in operation and as a consequence, once the payee has discharged in tax obligation in accordance with law, operation of section 40(a)(ia) stands dispensed with. The Assessing Officer is directed to adjudicate the issue in accordance with law after affording reasonable opportunity of hearing to the assessee. Thus, on this Ground assessee succeeds for statistical purposes.
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2016 (2) TMI 1153 - ITAT BANGALORE
TPA - comparable selection criteria - functional difference analysis - Held that:- Assessee is a provider of ITES services and also BPO services, thus companies functionally dissimlar with that of assessee need to be deselected from final list.
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