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Showing 81 to 100 of 1545 Records
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2017 (2) TMI 1469
Disallowance of data processing cost u/s.40(a)(i) - CIT(A) deciding the issue in favour of the assessee - HELD THAT:- Findings of CIT(A) and relying on the decision of the Tribunal in assessee’s own case, we do not find any reason to interfere in the order of CIT(A) for deleting disallowance of data processing cost.
Taxability of interest paid to Head Office - HELD THAT:- CIT(A) while deciding the issue in favour of the assessee for the year under consideration has relied on the Order passed by the Tribunal in the assessee’s own case for the Assessment Year 2003-04.
Disallowance u/s.14A for earning exempt income - Contention of assessee that no expenditure has been incurred or claimed by the Indian Branch in respect of interest earned by the Head Office (which is not taxable)HELD THAT:- The issue has been decided in assessee’s favour by the Mumbai ITAT, in assessee’s own case for Assessment Years 2004-05, 2005-06, 2007-08 and 2009-10. The Indian Branch has not received / earned any interest income from its Head Office or other foreign branches and hence there can be no question of the interest expense in question being incurred to earn any exempt income and hence the same cannot be disallowed u/s.14A. The proposition that no disallowance can be made u/s.14A of the Income-tax Act,1961 in case there is no exempt income is now well settled and one can refer to the following cases wherein the said proposition has been upheld in CIT v/s. Delite Enterprises [2009 (2) TMI 498 - BOMBAY HIGH COURT].
We restore the matter back to the file of the AO to find out if assessee was in receipt of any exempt income vis-à-vis interest paid to head office. If the AO found that assessee was not in receipt of any exempt income, no disallowance is to be made. Accordingly AO is directed to decide afresh after verification.
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2017 (2) TMI 1468
Broken period interest - ITAT treated it as revenue expenditure - substantial question of law - HELD THAT:- The question is a substantial question of law that merits consideration. Accordiongly, we admit the same. The finding of fact is to the effect that securities are held as stock-in-trade and that the income from sale therefrom is offered to tax as revenue. In the light of the admitted facts as seen from the order of the authorities, the expenditure incurred by the assessee towards broken period is liable to be allowed as revenue expenditure. There is no infirmity in the order of the Tribunal in this regard.
Question stands answered in favour of the assessee, following the judgment of the Bombay High Court in American Express International Banking Corporation Vs. CIT [2002 (9) TMI 96 - BOMBAY HIGH COURT ] -The appeals are dismissed.
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2017 (2) TMI 1467
Correct head of income - premium received on account of the tenancy rights - capital gain v/s income from other sources - AO taxed the premium on transfer of tenancy rights as capital gains and also allowed deduction u/s 54EC - LD THAT:- Respectfully, following coordinate Bench decision in assessee’s own case [2016 (5) TMI 1532 - ITAT MUMBAI] and considering the facts of the case, we are of the view that the CIT(A) has rightly directed the AO to assess this receipt of premium as capital gain taxable in the hands of the assessee. Even otherwise, this issue is covered in favour of assessee by the principle of consistency in view of the decision of Radha Soami Satsang [1991 (11) TMI 2 - SUPREME COURT] and Gopal Purohit [2010 (1) TMI 7 - BOMBAY HIGH COURT]. We find no infirmity in the order of CIT(A) and hence the same is confirmed. These four appeals of Revenues are dismissed.
Reopening of assessment u/s 147 - return was processed under section 143(1) - HELD THAT:- Admittedly, the reopening was beyond four years and no assessment was framed under section 143(3) of the Act. The only processing was done under section 143(1) of the Act for these assessment years. Accordingly, we are of the view that no opinion was formed and assessee case does not fall under the proviso of section 147 of the Act. Accordingly, we confirm the finding of CIT(A) and this issue both the appeals of assessee is dismissed. The appeals of assessee are dismissed.
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2017 (2) TMI 1466
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT:- In the case on hand it is held that petitioner is financial creditor. It is also held that the amount due to the petitioner from the respondent is financial debt. There is also occurrence of default in repayment of financial debt. The petition filed by the petitioner is complete in all respects. Hence this application is admitted.
Application admitted - moratorium declared.
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2017 (2) TMI 1465
Rejection of application u/s 245R(2) - advance ruling - When can a question be stated to be 'pending'? - HELD THAT:- Special Leave Petition against the relied upon judgment has been dismissed by the order of HYOSUNG CORPORATION & ANR. [2016 (12) TMI 1725 - SC ORDER]. Thus the present Special Leave Petition is also dismissed.
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2017 (2) TMI 1464
Permanent injunction be granted to first Plaintiff with respect to property - restraint from interfering in peaceful enjoyment of the suit property - HELD THAT:- The issues which were decided as preliminary issues with respect to redemption of the mortgage as well as with regard to Limitation could not have been decided as preliminary issues by the trial court being mixed question of law and facts. The Plaintiff has clearly averred in the plaint that there was redemption and thereafter land acquisition of the land took place which was quashed and case was decided in their favour as such they continued to be in possession of land. In the circumstances, question of factum of redemption and its legality could not have been decided as preliminary issue. Consequently, the question of limitation also, which was dependent upon the aforesaid facts, could not have decided as preliminary issue.
It is made clear that any observation made in orders passed by the trial court, District court or by the High court shall not come in the way of the parties while the trial court decide the matter afresh after recording the evidence.
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2017 (2) TMI 1463
Sanction of Scheme of Amalgamation recalled - Revenue will suffer loss as it cannot recover tax on the income of the Transferor Company - Both the companies suffering losses - Provisions relating to carry forward and set off of accumulated loss and unabsorbed depreciation allowance in amalgamation or demerger u/s 72A - HELD THAT:- No bar either in the Companies Act, or in the Income Tax Act, which prevents the two companies, which are suffering losses, from amalgamating.
Section 72A of the Act deals with the post-amalgamation scenario. By no stretch of imagination, does Section 72A of the Act debar two companies from amalgamating. In fact, Section 72A of the Act deals with the relationship between the Income Tax Department, and the assessee in the post-amalgamated period. Therefore, the contention being raised by the learned counsel for the Revenue that under Section 72A of the Act, amalgamation between two companies suffering from losses is prohibited, the said argument is highly misplaced.
Since Section 72A of the Act does entitle the amalgamated company to claim set off and carry forward of losses and allowance depreciation, therefore, if any benefit accrues to the amalgamated Company, that benefit cannot be denied ostensibly on the ground that it is the Revenue Department that would suffer. Hence, the contention being raised by the learned counsel for the Revenue that in case the amalgamation were allowed, it is the Revenue Department that would suffer, as it would not be able to recover the tax, as it will be entitled to, even the said argument is unacceptable.
Almost three years have gone by since the amalgamation was permitted by this Court. To turn the historical clock back to the year 2014, may cause injustice to the amalgamated Company. Therefore, it is too late for the Revenue Department to argue that the order dated 4.4.2014 should be recalled by this Court.
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2017 (2) TMI 1462
SSI Exemption - Fire Tenders - exempt goods for the purpose of grant of benefit under Notification No. 6/2002-C.E., dated 1-3-2002 to the appellant manufacturing special purpose motor vehicle using above goods, or not - HELD THAT:- Fire Tenders came to the premises of the appellant is undisputedly manufactured by SSI enjoying duty exemption under the appropriate notification. SSI benefit is given to a SSI which manufactures excisable goods when its clearance does not cross the limit prescribed. That does not mean that SSI has sold duty free goods. The goods sold by SSI was dutiable goods but was exempt by virtue of exemption granted to it in terms of a notification. Therefore, the fire tender manufactured by SSI does not debar the appellant from the benefit of duty exemption vide Sl. No. 217 of the Notification No. 6/2002, dated 1-3-2002.
Appeal allowed.
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2017 (2) TMI 1461
Penalty u/s. 271(1)(c) - assessee has suppressed its income by not considering specific provisions of section 50C for computation of capital gains - HELD THAT:- Assessee has furnished the registered sale deed. The assessing officer has made the addition by invoking deeming provisions of section 50C. No case has been made out of any incriminating document etc. being found. In such situation assessee cannot be held guilty of furnishing of inaccurate particulars of income or concealment of income. Further more the conduct of the assessee cannot be held to be contumacious so as to warrant levy of penalty. This proposition is also supported by the decision rendered in the case of Hindustan steel Ltd vs state of Orissa [1969 (8) TMI 31 - SUPREME COURT] - Decided in favour of assessee.
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2017 (2) TMI 1460
TP Adjustment - comparable selection - Functional similarity - HELD THAT:- Alpha Geo India Ltd. - Since the profile of this company is not similar to the assessee's profile, this company cannot be called a good comparable for determining the ALP. Therefore, we are of the view that this company has to be excluded from the list of comparables on account of functional difference.
Celestial Labs Ltd. - Since this company is also functionally different from the assessee company, it can also not be compared as a good comparable. Accordingly, this company has to be excluded from the list of comparables.
Vimta Labs Ltd. - This company offers wide spectrum of services and in the absence of proper revenue/segmental break-up, the company should not be considered as a comparable. The bifurcation of revenue is not available and for reference, our attention was invited to page 496, where the profile and services of this company was mentioned and from a careful perusal of these details of profile and services, we are of the view that this company is also functionally different, therefore cannot be taken as a good comparable. We accordingly direct the TPO/AO to exclude this company from the list of comparables.
Comparables Research Support International Ltd., Neeman Medical International Ltd., Pfizer Ltd. (Seg.), Choksi Laboratories Ltd. and Tata Life Sciences Ltd. - Though assessee has contended that these comparables are functionally similar and can be called to be good comparables, but it requires a proper verification by the TPO. Accordingly, we restore the matter to the AO/TPO to examine these comparables and if they are found to be good comparables, they can be considered for determining the ALP of the international transactions. The TPO is also at liberty to search more comparables which are similar to assessee's profile in order to determine the ALP of international transactions. Appeal of the assessee stands allowed for statistical purposes.
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2017 (2) TMI 1459
Utilisation of CENVAT Credit - allegation that Cenvat credit earned on manufacturing activity for payment of Service Tax liability - SCN did not cite any rule - HELD THAT:- There is no requirement for a person to keep separate Cenvat credit accounts for manufacturing and service activities. Rule 3(1) of the Cenvat Credit Rules provides that a person can avail credit in respect of the manufacturing activity as well as in respect of the activities of providing services. This is a common pool and no different pool for manufacturing and service related activities. Rule 3(4) of the Cenvat Credit Rules prescribes that such credit can be used for payment of excise duty or for Service Tax on any output services - there is no such condition that the Cenvat credit earned under Rule 3(1) of the Cenvat Credit Rules can be used for ‘X’ purposes and not for ‘Y’ purposes.
Other allegation is that the appellants are registered separately as manufacturer and service provider - HELD THAT:- There are two distinct different activities. Credit earned by one entity cannot be used by another entity. It is observed that both Central Excise registration and Service Tax registration are taken by same legal entity, therefore, despite two different registrations, a single Cenvat credit account can be maintained.
The demand do not sustain - appeal allowed - decided in favor of appellant.
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2017 (2) TMI 1458
Validity of Reopening of assessment u/s 147 - objection raised by the Revenue Audit regarding the allowability of loss on forward contract due to trade in foreign exchange derivatives - independent application of mind or not? - whether recording of the reasons and consequent issuance of notice u/s.148 was on the basis of an independent opinion of the Assessing Officer on the question of law and facts which may have been brought to her notice by the audit party ? - HELD THAT:- There is no other material in the hands of AO to reopen the assessment after concluded the assessment u/s.143(3) of the Act and to issue of notice u/s.148 of the Act on 214.03.2014.
It is well settled principle that the AO can form an independent opinion on an issue which may have been brought to his notice by Audit Party and seek to reopen the assessment , provided it is AO’s independent belief that income chargeable to tax has escaped assessment. Reference in this aspect may be made to the decision of Adani Exports [1998 (12) TMI 51 - GUJARAT HIGH COURT] that though the audit objection may serve as information, the basis of which the Income-tax Officer can act, the ultimate action must depend directly and solely on the formation of belief by the Income- tax Officer on his own where such information passed on to him by the audit that income has escaped assessment.
AO has explained before the Audit party that loss and cancellation of forward contract is an allowable expenditure ad not a speculation loss. Later on the same reason, when the audit party did not accept the version of the AO, the AO opted to reopen the concluded assessment. This is nothing but there is no independent formation of opinion by the AO and it is only on account of compulsion exerted by the Revenue Audit Party. It cannot be a reason for reopening of the assessment. In other words, in the absence of independent belief of AO to hold that, income chargeable to tax has escaped assessment, no assessment can be re-opened at the instance of the audit party. See C. SESHACHALAM CHETTY (DECD) [1999 (11) TMI 49 - MADRAS HIGH COURT] - Decided in favour of assessee.
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2017 (2) TMI 1457
Reopening of assessment - time limitation - notice issued beyond the five year period from the end of the assessment year - Section 25A of the Kerala Value Added Tax Act, 2003 - HELD THAT:- In the present case, limitation expires on 31.03.2015. The first notice is issued on 31.10.2015 as is seen from Ext.P2. The order passed is also produced at Ext.P5. In such circumstance for reason of limitation, the proceedings have to be set aside. Ext.P5 assessment order is set aside, finding the initiation of proceedings to be beyond the limitation period.
The writ petition would stand allowed to the extent of setting aside the assessment order.
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2017 (2) TMI 1456
Subsidy receipt - Addition on receipts of Industrial Promotion Assistance(IPA) - revenue or capital receipts - whether sum received by the assessee as Industrial Promotion Assistance under the West Bengal Incentive Scheme 2000 for establishing the industry in the state of West Bengal which is disbursable by way of sales tax paid is a capital receipt not chargeable to tax? - HELD THAT:- As decided in S M/S. BUDGE BUDGE REFINERIES LTD. [2016 (10) TMI 1307 - ITAT KOLKATA] - Keeping in view the objects of the West Bengal Incentive Scheme 2000 and various judicial precedents relied upon hereinabove, we hold that the subsidy is to be treated as capital receipt not chargeable to tax in the hands of the assessee and not in the years under appeal
Sole purpose behind the grant of assistance is to tide over the financial crisis and promotion of industries and that both these activities are related to capital field and cannot be linked up with day to day operations of the appellant in any manner. Respectfully treat WBIPA as a capital receipt and direct the A.O to delete the addition - Accordingly, the grounds raised by the revenue dismissed.
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2017 (2) TMI 1455
TP Adjustment - adjustment to the transfer price of the Appellant in respect of its IT enabled support services in the nature of back office and customer support services - rejection of comparability analysis of the Appellant in the TP documentation and accepting the comparability analysis performed by the learned TPO in the TP Order - Disregarding application of multiple year/prior year data - HELD THAT:- Order on TP issue is very cryptic and not a speaking and reasoned order. Therefore, We feel it proper to restore the matter regarding TP issue to his file for a fresh decision. We order accordingly. The TP issue is restored back to his file with a direction that he should pass a speaking and reasoned order after affording adequate opportunity of being heard to both sides.
Interest income earned from debts - CIT(A) not considering the income from services in the nature of interest on the delayed payments made by associated enterprises for the provision of IT enabled services as an operating income and hence erred in computing the effective mark-up on total, cost earned by the Appellant - HELD THAT:- Delhi Bench rendered in the case of EFunds International (P.)Ltd. v. Dy. CIT [2008 (4) TMI 354 - ITAT DELHI-F] wherein it was held by the Tribunal that the assessee was not eligible to claim deduction u/s 10A of the IT Act, 1961 on the interest income earned by the assessee from the housing loans advanced to its employees because it did not form part of the business of the assessee. CIT(A) as noted by him in his order, we find no infirmity in the order of the ld. CIT(A) on this issue and since the working capital adjustment has already been allowed by the TPO, we are of the considered opinion that non interference is called for in the order of the ld. CIT(A) on this issue. Accordingly, ground no.5 of the assessee is rejected.
Working capital adjustment - HELD THAT:- Working of risk adjustment claimed by the assessee is not available in the TP study and is not made available before the TPO or before the ld. CIT(A) or before us. This is also true that apart from various risk faced by uncontrollable comparables, the assessee providing services to AE is also having risk of single customer and, therefore, in the absence of any scientific working in respect of the claim for risk adjustment, the same cannot be considered and allowed and therefore, we are of the considered opinion that the ld. CIT(A) was not justified in holding that the assessee is entitled to risk adjustment as per prevailing- norms which shall be worked out by the TPO and granted to the assessee. If such adjustment was possible to be worked out in the facts of the present case, the ld CIT(A) should have worked out himself instead of asking the TPO to work it out. Such working is not made available before us also by the ld. AR of the assessee and therefore, we reverse the order of the ld. CIT(A) on. this issue and restore the order of the AO. Accordingly, ground no.2 of the revenue is allowed.
Deduction u/s 10A - computation of deduction - HELD THAT:- This issue is fully covered in favour of the assessee by the judgment of the Hon'ble Karnataka High Court rendered in the case of CIT v. Tata Elxsi Ltd. [2011 (8) TMI 782 - KARNATAKA HIGH COURT] wherein it was held that Total Turnover is sum total of Export Turnover and Domestic Turnover and therefore, if an amount is reduced from export turnover then total turnover also goes down by the same amount automatically. - Decided against revenue
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2017 (2) TMI 1454
Reassessment proceeding - HELD THAT:- Appeal is admitted on the following substantial questions of law:
“(a) Whether under the facts and circumstances of the case the ld. Tribunal was justified in not declaring the reassessment proceedings and the consequential assessment order passed thereto as nullity?
(b) Whether under the facts and circumstances of the case the ld. Tribunal has not committed grave legal error in setting aside the entire quantum proceedings?”
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2017 (2) TMI 1453
Deposit of Provident Fund under the Employees Provident Fund Scheme - additions made by the Assessing Officer have been interfered with by the Appellate Authority and, therefore, this appeal by the department - HELD THAT:- We find that the learned tribunal [2015 (7) TMI 1350 - ITAT JABALPUR] of the aforesaid order had given reasons for allowing the appeal. Today before us an order of assessment dated 30.12.2010 is produced, whereby in a proceeding held under Section 143(3) for the year 1.4.2003 to 31.03.2014 also the Assessing Officer has accepted the same principle and has decided the assessment order in favour of the respondent assessee.
No substantial question of law involved, warranting consideration, the appeal is, therefore, dismissed.
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2017 (2) TMI 1452
Addition on account of interest payments - borrowed funds have been diverted for non business purposes - Whether the assessee had sufficient capital and interest-free funds? - AO found that the assessee has advanced interest bearing funds to some of persons from which either no interest is charged or the same is charged at lesser rate whereas the assessee has paid interest @ 12% on loan taken - HELD THAT:- A.O. has failed to establish that interest free advances to above stated parties were out of interest bearing funds. It is the contention of the assessee that it had sufficient non-interest bearing funds to the tune of ₹ 34.42 crores as per balance sheet as on 31.03.2010 as against interest bearing funds offered at ₹ 10.74 crores. Hence, interest-free funds of ₹ 34.52 crores have been utilised for giving interest-free advances to aforesaid above parties on which no interest was charged. Thus interest-free advance were given out of interest-free funds available with the assessee during the year for which sufficient interest-free funds were available. Therefore, we are of the view that the Ld. A.O. has failed to establish that interest free advances to above stated four parties were out of interest bearing funds.
We find that the AO has not been able to establish the nexus between interest bearing funds utilized for non business purpose as held in SA BUILDERS LTD. VERSUS COMMISSIONER OF INCOME-TAX [2006 (12) TMI 82 - SUPREME COURT].
In CIT vs. Reliance Utilities & Power Ltd. [2009 (1) TMI 4 - BOMBAY HIGH COURT]wherein it was held that if there was funds available both, interest-free and overdraft and or/loans taken, then a presumption would arise that investments would be out of the interest-free funds generated or available with the company, if the interest free funds were sufficient to meet the investments. In the present case, the sufficient interest free funds were available at the disposal of the assessee. Therefore, presumption would go in favour of the assessee that the interest free funds were given out of interest free funds available at the disposal of the assessee as per balance sheet of the assessee. - Decided in favour of assessee.
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2017 (2) TMI 1451
Recovery towards liquidated damages together with interest - whether the complaint lodged by the defendant was without any probable and reasonable cause to maintain a suit for malicious prosecution? - HELD THAT:- It is well settled that in a suit for malicious prosecution, the entire burden lies on the plaintiff to establish the case. Similarly, it is also well settled that a Civil Court has to conduct independent enquiry before satisfying itself with regard to the absence of reasonable and probable cause for lodging the First Information Report. Therefore, it is the duty of the Court to assess materials independently to satisfy itself as to the absence of probable and reasonable cause. If the Expert was examined before the Court and established that only the defendant has signed the pay slip and signature found in the pay slip is that of the defendant, then it can be easily concluded that the defendant having signed the pay slip, fraudulently implicated the plaintiff in a false case.
It is not the case of the plaintiff that defendant having signed the pay slip, has filed a false complaint. Whereas, it is the contention of the defendant that on verification of the accounts and seeing debit entry in her account, she found that a sum of ₹ 2,25,000/- was withdrawn and her signature has been forged. She has given a complaint on genuine apprehension. That being the case, it is the duty of the plaintiff to establish that the pay slip infact was signed by the defendant and thereafter, the defendant has falsely given a complaint. Without establishing the same, it cannot be contended by the plaintiff that there is no probable and reasonable cause for lodging a complaint. When some amounts have been debited from one account, it is normal conduct of any human being to lodge a complaint to the lawful authorities to investigate the matter. The above complaint cannot be construed as a false complaint without any probable and reasonable cause and the same has been made with malicious intention.
Merely because, the defendant has not got into the box, the same is not a ground to hold that the plaintiff case is true. Even drawing adverse inference against the defendant at the most this Court can hold that defence of the defendant is not true. Still the plaintiff is not relieved from the initial burden of establishing her case of malicious prosecution. It is for the plaintiff to establish that the complaint lodged against her was without probable and reasonable cause. Admittedly, except the police report and the closure report by the Magistrate, as discussed above, no other evidence is available. Further, it is not established by the plaintiff that the defendant has in fact signed the pay slip by examining the expert or the Investigating Officer. Therefore, this Court is of the view that merely because the defendant has not been examined, the plaintiff cannot succeed automatically.
The issues are answered against the plaintiff - suit dismissed.
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2017 (2) TMI 1450
SSI Exemption - use of brand name of others - allegation that the Diesel Generator sets were branded in the name of ‘Mahindra Powerol’ which was not belonging to the appellant - HELD THAT:- One of the clauses, i.e. clause-4 of the notification exempts the goods, specifically exempts the branded goods and manufactured in the rural area. The documents produced by the ld. consultant for the proposition that the factory lies in a rural area, prima-facie, seems to indicate that the claim may be correct. Since these documents were not produced before the lower authority, the factual position needs to be appreciated by the adjudicating authority.
In the interest of justice the documents which are produced, needs to be considered by the adjudicating authority - Appeal disposed off by way of remand.
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