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Showing 161 to 180 of 1611 Records
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2016 (5) TMI 1458 - SUPREME COURT
Validity of the Telecom Consumers Protection (Ninth Amendment) Regulations, 2015, notified on 16.10.2015, (to take effect from 1.1.2016), by the Telecom Regulatory Authority of India - amendment made in the exercise of powers conferred by Section 36 read with Section 11 of the Telecom Regulatory Authority of India Act, 1997 - credit only the calling consumer (and not the receiving consumer) with one rupee for each call drop (as defined), which takes place within its network, upto a maximum of three call drops per day.
Held that:- The power to make the Impugned Regulation is traceable to Section 36(1) of the Telecom Regulatory Authority of India Act, 1997 - though the Regulation making power under the said Act is wide and pervasive, and is not trammeled by the provisions of Section 11, 12(4) and 13, it is a power that is non-delegable and, therefore, legislative in nature. The exercise of this power is hedged in with the condition that it must be exercised consistently with the Act and the Rules thereunder in order to carry out the purposes of the Act. Since the regulation making power has first to be consistent with the Act, it is necessary that it not be inconsistent with Section 11 of the Act, and in particular Section 11(1)(b) thereof. This is for the reason that the functions of the Authority are laid down by this Section, and that the Impugned Regulation itself refers to Section 11(1)(b)(i) and (v) as the source of power under which the Impugned Regulation has been framed - Under clause 5, the licensor reserves the right to modify the terms and conditions of the licence if in the opinion of the licensor it is necessary or expedient so to do in public interest or in the interest of security of the State or for the proper conduct of telegraphs. It may be stated that no modification of the licence has in fact been attempted or has taken place in the facts of the present case.
Violation of Fundamental Rights - Held that:- One of the tests for challenging the constitutionality of subordinate legislation is that subordinate legislation should not be manifestly arbitrary. Also, it is settled law that subordinate legislation can be challenged on any of the grounds available for challenge against plenary legislation - the language of the Regulation is definite and unambiguous – every service provider has to credit the account of the calling consumer by one rupee for every single call drop which occurs within its network. The Explanatory Memorandum to the aforesaid Regulation further makes it clear, in paragraph 19 thereof, that the Authority has come to the conclusion that call drops are instances of deficiency in service delivery on the part of the service provider. It is thus unambiguously clear that the Impugned Regulation is based on the fact that the service provider is alone at fault and must pay for that fault. In these circumstances, to read a proviso into the Regulation that it will not apply to consumers who are at fault themselves is not to restrict general words to a particular meaning, but to add something to the provision which does not exist, which would be nothing short of the court itself legislating. For this reason, it is not possible to accept the learned Attorney General’s contention that the Impugned Regulation be read down in the manner suggested by him.
The other string to the bow of this argument is that the Impugned Regulation would be worked in such a manner that the service provider would be liable to pay only when it is found that it is at fault. This again falls foul of constitutional doctrine.
The appellants have strongly contended that a 2% allowance of call drops on the basis of averaging call drops per month has been allowed to them by the Quality of Service Regulations - Held that:- First and foremost, the 2009 Quality of Service Regulation is made under Section 11(1)(b)(v), which is the very Section which is claimed to be the source of the Impugned Regulation. Secondly, both regulations deal with the same subject matter – namely, call drops, and both regulations are made in the interest of the consumer. If an average of 2% per month is allowable to every service provider for call drops, and it is the admitted position that all service providers before us, short of Aircel, and that too in a very small way, have complied with the standard, penalizing a service provider who complies with another Regulation framed with reference to the same source of power would itself be manifestly arbitrary and would render the Regulation to be at odds with both Articles 14 and 19(1)(g) - it is clear that the Quality of Service Regulations and the Consumer Regulations must be read together as part of a single scheme in order to test the reasonableness thereof. The countervailing advantage to service providers by way of the allowance of 2% average call drops per month, which has been granted under the 2009 Quality of Service Regulations, could not have been ignored by the Impugned Regulation so as to affect the fundamental rights of the appellants, and having been so ignored, would render the Impugned Regulation manifestly arbitrary and unreasonable - Secondly, no facts have been shown to us which would indicate that a particular area would be filled with call drops thanks to the fault on the part of the service providers in which consumers would be severely inconvenienced. The mere ipse dixit of the learned Attorney General, without any facts being pleaded to this effect, cannot possibly make an unconstitutional regulation constitutional.
The licence conditions, which are a contract between the service providers and consumers, have been amended to the former’s disadvantage by making the service provider pay a penalty for call drops despite there being no fault which can be traceable exclusively to the service provider, and despite the service provider maintaining the necessary standard of quality required of it – namely, adhering to the limit of an average of 2% of call drops per month - it is clear that the laying down of a penalty de hors condition 28, which, as we have seen, also requires establishing of fault of the service provider when it does not conform to a quality of service standard laid down by TRAI, would amount to interference with the licence conditions of the service providers without authority of law. On this ground also, therefore, the Impugned Regulation deserves to be struck down.
Transparency - Held that:- Under Section 4(1) every public authority is not only to maintain all its records duly catalogued and indexed but is to publish, within 120 days from the enactment of the said Act, the procedure followed by it in its decision making process, which includes channels of supervision and accountability - Under Section 8, there is no obligation to give to any citizen information disclosure of which would prejudicially affect the sovereignty and integrity of India, the security of the State etc. Subject, therefore, to well-defined exceptions, openness in governance is now a legislatively established fact.
The Impugned Regulation is ultra vires the TRAI Act and violative of the appellant’s fundamental rights under Articles 14 and 19(1)(g) of the Constitution.
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2016 (5) TMI 1457 - ITAT INDORE
Additions u/s 153A - additions by invoking provisions of sec. 68 - Held that:- We allow the appeals filed by the assessees on the issue of section 153A r.w.s. section 143(3) of the I.T. Act wherein we have already held that in absence of any incriminating documents found and seized during the course of search, the Assessing Officer is not justified in making the additions in nonabated assessment orders while passing the orders u/s 153A r.w.s. 143(3) of the Act. Thus, we quash the non-abated assessment orders for the A.Ys. 2002-03, 2003-04 & 2005-06. Accordingly, this issue of incriminating material involved in the assessee’s appeals allowed in favour of assessee
Addition in respect of RIB Bonds, on protective basis - addition u/s 68 - addition on ground as assessee has purchased this bond by his own money by paying cash to the donor - Held that:- we find that during the course of search, no such documents or evidences establish any payment of cash by the assessee to the donor. We also find that on merit, this issue is covered by the decision of this bench in the case of ACIT vs. Phoolchand Agrawal [2012 (3) TMI 621 - ITAT INDORE] as held that gifts of RIBs received by an assessee from one NRI cannot be treated as income of the assessee - addition made by the Assessing Officer u/s 68 of the Act on account of RIB gift and subsequently, enhanced by the learned CIT(A) is not sustainable.
Issue of genuineness of LTCG/STCG - AO found that there was sudden increase in price of these cos. and as such increase in price was abnormal and not based on fundamentals - Held that:- During the course of assessment proceedings, we find that there was no incriminating documents or loose papers or any other evidence was found or seized from the assessee that the transaction of long term capital gain or short term capital gain is not genuine. various documentary evidences placed on record and in the light of the various judicial pronouncements, we are of the considered view that there was absolutely no justification for both the authorities below in disbelieving the genuineness of the long term capital gain and short term capital gain shown by the assessee in his return of income, merely on guesswork, conjectures and surmises. Accordingly, these additions are directed to be deleted. - decided in favour of assessee
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2016 (5) TMI 1456 - ITAT VISAKHAPATNAM
50% depreciation on plastic crates claimed by the assessee - Held that:- In assessee’s own case for the earlier assessment year, we are of the view that plastic crates used by the assessee in its business are coming under the separate block of containers made of glass or plastic used as refills eligible for 50% depreciation. Therefore, we direct the A.O. to allow 50% depreciation as claimed by the assessee.
Disallowance of bad debts u/s 36(1)(vii) - Held that:- Since assessee failed to prove the debt and the resultant income has been offered to tax in the earlier period, the assessee cannot claim bad debt. Once the debt has been written off in the books of accounts by passing necessary journal entries, the assessee need not to prove that the debt has become bad in the financial year. The assessee has fulfilled the conditions laid down in the provisions of sec. 36(1)(vii) by written off the debts in the books of accounts. CIT(A) after considering the explanations furnished by the assessee and also taken into account the remand report of the A.O. allowed bad debt claim out of the total bad debts claim - Decided against revenue
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2016 (5) TMI 1455 - ITAT INDORE
Addition u/s 68 - Additions on account of share capital/share application/share premium - huge share capital and share premium money were received by the assessee and other group companies during the periods under assessment - discharge of burden of proving the cash credit - Held that:- We find that while adjudicating the same issue in case of another group assessee namely, M/s. Bhatia International Ltd. we have held that the assessee could be able to discharge the burden of proving the cash credit as contemplated u/s 68 of the Act and have directed to delete the entire addition made by the Assessing Officer on account of share capital/share premium/ share application money.
We find that the facts and circumstances of the present appeals of the assessee are the same with that of the appeal for assessment year 2002-03 (supra). The argument of both the parties are also the same and therefore, we direct to delete the addition made by the Assessing Officer on account of share capital/share premium/ share application money - Decided in favour of assessee
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2016 (5) TMI 1454 - CALCUTTA HIGH COURT
Winding up petition - company does not even exist at its registered office which appears in the records of the Registrar of Companies, West Bengal - deemed service of statutory notice - non-maintenance of the registered office - Held that:- This winding up application has been taken out by the petitioning creditor on the basis of a statutory notice dated 27th October, 2015, which was caused to be served upon the company at its registered address but was returned by the postal authorities after all attempts to render effective service failed.
As such, in the facts and circumstances of the instant case, the company shall be deemed to have been duly served with the statutory notice dated 27th October, 2015. Since there is a clear presumption of acknowledgement of debt by the company and its inability to pay off the debt, petition is admitted for a principal sum of ₹ 8,47,93,759/- – as claimed in the statutory notice dated 27th October, 2015 – together with interest thereon at the rate of 6% per annum to be calculated from the date of the statutory notice till actual payment.
If the company pays off the entire amount, including interest, within a period of four weeks from date, the instant petition will remain permanently stayed. In default, the winding up petition will automatically stand revived
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2016 (5) TMI 1453 - ITAT DELHI
Revision u/s 263 on share capital - AO's order erroneous and prejudicial to the revenue interest - Held that:- It is not the Department’s case that no information regarding the share application money was called for by the AO. That relevant details and documents were furnished by the assessee during the assessment proceedings has been acknowledged by the Ld. CIT in the impugned order also. Hence, no inference can be drawn that the AO has not examined the issue although he has not expressed it it in as many terms as may be considered appropriate by his superior authority and even if the same is found to be inadequate the same cannot be a ground for revision.
AO has conducted an enquiry. However, he has not launched a lengthy discussion on the issue of share capital but that does not lead to an inference that there has been a lack of enquiry on his part on the issue. It is clear that an order cannot be termed as erroneous unless it is not in accordance with law. If an AO, acting in accordance with law, makes a certain assessment, the same cannot be branded as erroneous by the Commissioner simply because, according to him, the order should have been written more elaborately.
This section does not visualize a case of substitution of the judgment of the Commissioner for that of the AO. Therefore, it cannot be held that in the instant case the AO’s order was erroneous and prejudicial to the interest of the revenue within the terms of section 263 of the Act. Once the issue of share capital was considered and examined by the Assessing Officer, Ld. Commissioner cannot set aside the order without recording contrary finding. - Decided in favour of assessee
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2016 (5) TMI 1452 - ITAT MUMBAI
Penalty u/s 271(1)(c) - defective notice - Held that:- Show-cause notice issued by the Assessing Officer u/s 274 for the year under consideration not being in accordance with law, the penalty order passed by the Assessing Officer in pursuance thereof is liable to be cancelled being invalid. We accordingly cancel the order passed by the Assessing Officer imposing penalty under section 271(1)(c) - Decided in favour of assessee.
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2016 (5) TMI 1451 - ITAT MUMBAI
Computation of income u/s 44B - service tax inclusion - Held that:- In view of the ratio of law laid down by the co-ordinate bench of the Tribunal in the case of “Marubeni Corporation vs. DCIT” [2013 (12) TMI 1550 - ITAT MUMBAI] and in the light of decision of the Hon’ble Delhi High Court in the case of “DIT vs. Mitchell Drilling International Pvt. Ltd.” [2015 (10) TMI 259 - DELHI HIGH COURT] we hold that service tax collected by the assessee and paid to the government account having no profit element, cannot be included in the gross receipts for computation of income under section 44B of the Act. This issue is accordingly decided in favour of the assessee.
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2016 (5) TMI 1449 - BOMBAY HIGH COURT
Transfer pricing adjustment consequent to arriving at Arms Length Price(ALP) - international transactions or this adjustment is to be done in respect of all the business transactions of the assessee i.e. at the entity level - this Appeal was on board and detailed orders were passed indicating that the Revenue has not been bringing to the notice of the Court orders of admission in its favour in the subsequent Appeals filed by it an identical questions - Held that:- We find that the affidavit of the Principal Chief Commissioner of Income Tax merely indicates that the Department has decided to add a legal corner on its website where all questions of law which are admitted or dismissed by this Court will be entered section-wise. However, no indication is there in the affidavit as to when the proposed system of entering those questions on the website which have been admitted/dismissed would come into force.
During the hearing, Dr. Shivram who appears for the respondent-assessee suggested that the legal corner on the website should also indicate whether the question of law framed by the Revenue is rejected as the same been accepted by the Income Tax Department.
We find that the fields presently provided on entry into the website under the head “legal corner” only mentions the question which have been admitted or rejected. It is suggested that the Income Tax Department may add one more field viz. to cover cases where the question has been answered in the affirmative or in the negative.
These are suggestions for the Income Tax Department to consider and if thought appropriate the manner in which it could be implemented. To us it appears that if these suggestions are implemented, we could have transparency and consistency in the stand taken by the Revenue.
We direct the Principal Chief Commissioner of Income Tax to file an affidavit on or before 13th June, 2016 and a copy of the affidavit may also be served upon Dr. Shivram, the learned counsel appearing for the Respondent.
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2016 (5) TMI 1447 - CENTRAL ADMINISTRATIVE TRIBUNAL
Eligibility conditions for promotion to the grade of Commissioner of Income Tax and the APARs - Held that:- It is an admitted position of the respondents that at the time of holding DPC the DGIT (Vigilance) had accorded vigilance clearance and there was no disciplinary case pending against the applicant. In para 4 (viii) and (ix) of the counter reply it has been categorically stated that the case of the applicant did not fall under any one of the three categories mentioned in DOP&T OM dated 14.09.1992.
After a query raised by the ACC, the official respondents got in touch with the MHA who informed them that the first stage advice of CVC had been obtained for initiating major penalty proceedings against the officer. It is not clear as to how in respect of an officer of Indian Revenue Service working under respondents no.1 & 2, the CVC advice was obtained by MHA.
Leaving it at that, the fact of the situation is that the respondents have not moved beyond that stage and issued any charge sheet, or are taking any action that would come within the ambit of the three categories mentioned in DOP&T OM dated 14.09.1992. Therefore, there is no ground on which the promotion of the applicant could have been kept in abeyance. The respondents have admitted that the applicant was considered fit for promotion, and that some complaints on which CVC advice was obtained by MHA, came to their notice only after a query from the ACC. In our view, pending complaint or an intention to initiate major penalty proceeding against an officer is not sufficient ground to deny him promotion.
In the face of these facts and the judgment of Hon’ble Supreme Court in K.V.Jankiraman (1991 (8) TMI 292 - SUPREME COURT), the OA is allowed. The respondents are directed to promote the applicant from the date on which his immediate his junior was promoted. The applicant will be entitled to all consequential benefits.
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2016 (5) TMI 1446 - ITAT BANGALORE
TPA - comparables selection - functional dissimilarity - Held that:-When a sufficient number of comparable companies are available for determination of arm’s length price (ALP), then the tolerance limit of RPT at 15% is proper in the case of assessee. Accordingly, we direct the AO/TPO to exclude the following three companies from the list of comparables having more than 15% RPT - Aztec Software Ltd., Geometric Software Ltd. (Seg.) AND Megasoft Ltd.
Assessee is purely a software development service provider to its parent company thus companies functionally dissimilar with that of assessee need to be deselected from final list.
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2016 (5) TMI 1445 - ITAT PANAJI
Allowing deduction to the assessee u/s 80P(2)(a)(i) - Held that:- The appellant's case is not covered by section 80P(4) as it is not a 'co-operative bank' and therefore, it is entitled to the exemption u/s 80P(2)(a)(i) of the IT. Act.
Commissioner of Income Tax (Appeals) has allowed the claim of deduction under sec. 80P(2)(a)(i) of the Act after following the decision at Panaji in the case of M/s. The Quepem Urban Cooperative Credit Society Ltd. Vs. ACIT [2015 (6) TMI 573 - BOMBAY HIGH COURT]. No contrary decision could be cited by the Departmental Representative. We, therefore, do not find any good and justifiable reason to interfere with the orders of the Commissioner of Income Tax (Appeals), which are hereby confirmed and this ground of appeal of the Revenue is dismissed.
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2016 (5) TMI 1444 - CESTAT KOLKATA
CENVAT Credit - Rule 6(3) of the CCR - whether Respondent is required to discharge an amount equivalent to 5% / 8% of the value of Bagasee, Press mud & Bio-compost sold by the Respondent? - Held that:- Provisions of Rule 6(3) of the CCR are applicable only to a situation where exempted as well as dutiable products are manufactured by an assessee out of common inputs and no separate records are maintained.
Apex Court’s decision in the case of Union of India vs. DSCL Sugar Ltd. [2015 (10) TMI 566 - SUPREME COURT] held that provisions of Rule 6 of CCR shall have no application as Bagasee is not a product of manufacture - The same is true to the products Press mud and Bio-compost.
Respondent is not liable to pay 5% / 8% of the sale proceeds of these products - appeal dismissed - decided against Revenue.
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2016 (5) TMI 1443 - ITAT DELHI
Deduction u/s.80 IB - CIT (A) directed the AO to allow the netting of royalty to the profit and loss account while calculating the deduction under section 80 IB in respect of Jammu unit - Held that:- Present facts of assessee’s case stands squarely covered by the ratio laid down by Hon’ble Bombay High Court in the case of Zandu Pharmaceuticals Works Ltd (2012 (9) TMI 620 - BOMBAY HIGH COURT). The assessee has paid certain royalty towards the technical know-how obtained by itand it had received certain license fee in respect of the same technical know-how as it was passed out to an outside party. The assessee could not exploit the technical knowhow for manufacture of goods at Jammu unit and therefore the assessee had shown the sums under corporate division. Respectfully following the decision above we hold that the sums of rupees for ₹ 4.25 crores and ₹ 1.96 crores has to be shown under corporate division and the excess along with other corporate expenses has been rightly been allocated to the 3 manufacturing units by the assessee.
Deflation in the inter-unit transfer of goods - Difference in the price - Held that:- Difference in the price is due to quality of shashet manufactured as per the requirement of the client. A.O. has only taken the highest value of shashet sold to the outside parties especially M/s. Kothari Products Ltd. and has compared with the lowest value of shashet charged to inter unit transfers. M/s. Kothari Product Ltd. Being a leading entrepreneur in Pan Masalas, would definitely opt for a high quality of shashet as compared to other parties. Such a comparison cannot be made as the requirements in respect of quality and quantity of each party would be different. Further, it has been observed that there has no other material / document / evidences brought on record by the A.O. to prove that the assessee has deflated the expenses of inter unit transfers. Thus no deflation in the inter-unit transfer of goods proved - decided against revenue.
Whether the excise duty refund in respect of Jammu unit has been “derived for”, for the purposes of deduction under section 80 IB? - Held that:- The paramount consideration of the central Government in providing the incentives to the new industrial units and substantial expansion of the existing units, was the generation of employment through acceleration of industrial development, to deal with the social problem of unemployment in the State, additional creating opportunities for self employment, hence a purpose in public interest - test of proximity, i.e., direct nexus with the industrial activity is not necessary while claiming deduction under section 80-IB of the Act. – Deduction allowed u/s 80IB – See CIT vs. Dharam Pal Pream Prakash Ltd [2008 (11) TMI 231 - DELHI HIGH COURT] also confirmed by SC [2010 (2) TMI 1202 - SUPREME COURT]- decided against revenue.
Allowability of ₹ 9 crores on account of license fee paid - Held that:- The assessee has not been able to justify the sudden rise in the license fee in the middle of the year. There does not seems to be any valid reason for such an increase of the license fees. It is also evident from the order passed by the Ld. AO that there is no material on the basis of which he has made an addition of ₹ 9 crores towards the license fees. It is therefore just and proper to consider the license fee for the period from 01.03.2005 to 31.01.2006 at ₹ 50 Lacs per month and ₹ 2 crores for the remaining months from 01.02.2006 to 31.03.2006. To meet the ends of Justice we therefore confirm the addition to an extent of ₹ 6 crore. - Decided partly in favour of revenue
Addition u/s 68 - unverifiable and unconfirmed advances from customers - Held that:- The trade customers as appearing in the list are the regular customers making purchases from the assessee from past many years it is evident from the Ledger account for the current as well a subsequent years shows that the assessee has been supplying goods to these parties in the normal course of the business and therefore the realisation of proceeds thereof is an ongoing process during the course of the business activity. The only finding of the AO that the assessee has not been able to produce confirmations from few of the parties cannot be the basis to arrive at a conclusion that these are unverifiable and unconfirmed. - decided against revenue
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2016 (5) TMI 1442 - ITAT DELHI
Transfer pricing adjustment - computation of profit margin of the assessee - comparable selection - Held that:- The payment of ₹ 2.00 crore to Voltas Ltd. is not a pass through cost, but, a value added cost. We fail to appreciate any difference between the payment made by the assessee to Voltas Ltd. and to its own employees in the context of the so called pass through costs. If the contention of ld. AR that payment to Voltas India Ltd. made exclusively for rendering services by the assessee to its AE is a pass through cost, is taken to a logical conclusion, then the payment to assessee’s own employees, which was also made for the same purpose, should also get a similar tag of a pass through cost. Going a step ahead with the same logic, all other expenses including rent and depreciation should also become pass through costs as these were also incurred in rendering services to the AE. Obviously, it is an absurd proposition. We, therefore, approve the view taken by the TPO in adopting the gross figure of revenue at ₹ 4.24 crore and payment of commission to Voltas Ltd., as a part of operating cost for the purpose of calculating the operating profit margin of the assessee.
Comparable selection - Assessee incorporated to carry on the business of buying, selling, importing, exporting, developing, designing, manufacturing, assembling or otherwise dealing in all kinds of cranes including used cranes and material handling equipments with other related components. This is the first year of the assessee’s business operations - controlled transactions are not contemplated for comparison with the international transaction undertaken by an enterprise - companies functional dissimlar with that of assessee need to be deselected from final list.
Remit the matter to the file of the TPO/AO for confronting the assessee with the calculation of RPT to Sales filter of 25.30%. Apart from that, the TPO will be fully competent to consider the functional similarities/dissimilarities of this company before considering its inclusion or otherwise in the final tally of comparables - Assessee appeal allowed for statistical purposes.
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2016 (5) TMI 1441 - ITAT CHENNAI
Deduction u/s 80IB - two flats were sold to the same persons, namely, Smt. Latha Ramachandran and Shri K. Ramachandran - Held that:- As far as the sale of residential unit to Smt. Latha Ramachandran and Shri K. Ramachandran was concerned, the issue was settled by Madras High Court and now pending before Apex Court. Unless the judgment of Madras High Court was reversed by the Apex Court, there cannot be any reason for the Revenue to reopen the issue once again. Therefore, this Tribunal do not find any justification in disallowing the claim of the assessee merely because two flats were sold to Smt. Latha Ramachandran and Shri K. Ramachandran.
For flats exceeding 1500 sq.ft., a co-ordinate Bench of this Tribunal found that flat Nos.403 & 404, in fact, exceeded 1500 sq.ft. The language employed in Section 80- IB(10)(c) of the Act does not warrant deduction claim altogether if some of the units exceed the specific dimensions. The Tribunal in the earlier assessment year found that consequent disallowance has to be only on proportionate basis. This Tribunal placed its reliance on the judgment of Madras High Court in Arun Excello Foundations (P) Ltd. (2012 (12) TMI 415 - MADRAS HIGH COURT). No reason to confirm the orders of the lower authorities and accordingly, the same are set aside.
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2016 (5) TMI 1440 - ITAT NEW DELHI
Reopening of assessment - reopening on the basis of AIR information - notice in the name of dead person - Held that:- Both the parties and carefully gone through the material available on the record. On perusing the assessment order dated 21.3.2013 in the name of Smt. Bimla Devi, deceased through legal heir Shri Chet Ram, it would be clear that the return of income was filed by Shri Chet Ram legal heir of the deceased assessee on 6.11.2012, therefore, the AO was having the knowledge that the assessee had already expired when the return of income was filed on 6.11.2012.
The notice u/s 143(2) and u/s 142(1) dated 05.02.2013 were issued in the name of Smt. Bimla Devi the deceased assessee which had already expired. It is well settled that the issuance of notice u/s 143(2) is the pre-requisite condition for framing the assessment u/s 143(3) of the Act. However, in the present case, it is noticed that the AO issued the notices dated 05.02.2013 u/s 143(2) & 142(1) of the Act in the name of dead person i.e. Smt Bimla Devi. Therefore the assessment framed on the basis of said notice was void- ab initio.
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2016 (5) TMI 1439 - ITAT PUNE
Levy of penalty u/s 271(1)(c) - not coming to the conclusion as to the proper limb, which has not been satisfied for issuing notice - Held that:- Penalty proceedings have been initiated in respect of additional income offered. AO had recorded satisfaction that the assessee has concealed its income but had levied penalty on account of concealment of income by furnishing inaccurate particulars of income. Such an order imposing concealment penalty is not sustainable for not coming to the conclusion as to the proper limb, which has not been satisfied.
In respect of second set of penalty i.e. unexplained investment in jewellery and on account of on-money received, penalty proceedings were initiated without mentioning the limb which has not been satisfied by the assessee and penalty has been levied for violation of both the limbs of section and such order imposing concealment penalty is not sustainable and hence, the same is held to be invalid in law. We direct the Assessing Officer to delete penalty levied under section 271(1)(c) of the Act in all the years under appeal. - Decided in favour of assessee.
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2016 (5) TMI 1438 - ITAT DELHI
TPA - ALP determination - comparables selection criteria - India USA Double Taxation Avoidance Agreement effect - Held that:- In earlier years, the assessee had taken distributors as comparables, a stand not accepted by the department which used service provider as comparable and that the assessee itself had accepted this stand by going in far MAP proceedings and accepting that decision, the learned TPO has failed to appreciate the fact that for the earlier years, on behalf of associated enterprises, an application was made under Article 27 of India USA Double Taxation Avoidance Agreement (DTAA) to settle the disputes arising from their assessments and it was pointed out that assessments in India resulted in double taxation especially in view of transfer pricing adjustment made in the case of assessee.
In the settlement reached between competent authorities of India and United States, the latter agreed to provide co-relative relief in the assessments of associated enterprises for the transfer pricing adjustment made in the hands of the assessee to avoid double taxation. We thus agree with the submissions of the Learned AR that such act of assessee’s should not be considered as a consent of the assessee about the adjustment proposed by the department in earlier years as the assessee, in good faith had not pressed for any appeal.
We in the interest of justice and to meet out ends of justice set aside the matter to the file of the Assessing Officer to decide the issue afresh after undertaking fresh search of comparable companies. It is needless to mention over here that while deciding the issue afresh, the Assessing Officer will afford opportunity of being heard to the assessee and will meet out the submission of the assessee by speaking order.
Addition on account of interest on borrowed capital amount - Held that:- Under similar set of facts, the ITAT in the appeal of the present assessee for the assessment year 2004-05 had decided the identical issue as held Assessing Officer had not brought on record any material to show that the loan obtained by the assessee under ECB was diverted to group companies. In the absence of such nexus, it cannot be said that amount borrowed for the purpose of business was diverted for non-business purposes. In the absence of any such material on record, in our considered opinion, CIT(Appeals) was justified in deleting the addition on the ground that there was no nexus between the money borrowed and expenses incurred by the assessee - Decided in favour of the assessee.
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2016 (5) TMI 1437 - ITAT HYDERABAD
International transaction - ALP adjustment - remittances towards investment in share capital - Held that:- There is no dispute that the assessee had remitted $ 3387182 towards investment in share capital. The shares were allotted to the extent of $ 2654797 in the same AY. The subsidiary company has treated the balance remittance as interest free unsecured loan and repayable on demand in their financial statement. In the next AY, the subsidiary company has allotted the shares on 15/03/2012.
In our considered view, the amount $ 732.385 is towards investment in share capital of the subsidiary outside India and the transactions are not in the nature of international transaction referred to section 92-B of the IT Act and transfer pricing provisions are not applicable as there is no income as well as there is no mutual agreement between the companies for such payment of interest. Moreover, the subsidiary company also disclosed as ‘interest free'
In the similar situation with uncontrolled transaction, the allottee company in normal course of transaction will not be expected to receive any interest leave away the international transaction. Without any certainty or any agreement on receiving any interest but merely relying on the accounting method and disclosure of the subsidiary in their financial statement cannot lead to this transaction as international transaction which require ALP adjustment. - Decided in favour of assessee
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