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Income Tax - Case Laws
Showing 121 to 140 of 783 Records
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2017 (3) TMI 1742 - ITAT PUNE
Royalty receipt - License fee for the use of customized software received by the assessee from its affiliate concern - DTAA between India and Sweden - income accrued and taxable in India - services rendered by assessee company to its Indian group companies - HELD THAT:- Assessee is providing IT support and advisory services for solving IT related problems by its users and various application softwares. In order to qualify the payment as Royalty, it is necessary to establish that there is transfer of all or any rights (including the granting of any licence) in respect of copyright of a literacy, artistic or scientific work. Further in order to meet the consideration paid by the licencee as royalty, it is to be established that the licencee by making such payments has obtained all or any of the copyright rights.
The assessee has not made available any technical knowledge or expertise to the recipient Indian company. In our opinion, the assessee has only provided the back-up services and IT support services for solving IT related problems to its Indian subsidiary. Hence, unless and until the services are not made available, same cannot be taxable in India
The issue is identical to that of Sandvik Australia Pty. Ltd. [2013 (4) TMI 643 - ITAT PUNE]. We therefore following the aforesaid decision and INFRASOFT LTD. [2013 (11) TMI 1382 - DELHI HIGH COURT]held that the amount received by assessee cannot be considered to be royalty or FTS and therefore not taxable in India. We therefore hold accordingly. Thus, the grounds of the assessee are allowed.
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2017 (3) TMI 1741 - ITAT JAIPUR
Unascertained liability towards the ‘Provision made for development expenses” - in the year under consideration for the first time ignoring the rule of consistency, the department has made such an addition by way of disallowance - HELD THAT:- Though, prima facie, the assessee appears to have an arguable case as canvassed before us. However, arguments have to be supported on facts and this is an area, which is required to be considered. Since the evidence and supporting facts have not been taken into consideration by the ld. CIT(A), we deem it appropriate to set aside the impugned order.
We are of the view that since facts were brought to the notice of the CIT(A) it was incumbent upon him to first address the facts and then proceed to consider the law applicable thereon. It is seen that the decision making process of the CIT(A) is flawed and open to the challenge of being perverse as he has straightway proceeded to decide the issue on the basis of legal precedence without first caring to marshal the facts.
Legal precedent is available both for and against a general proposition of law and it is only when the facts are first addressed and the material facts are culled out that the conclusion can be supported by legal precedent. Considering the fact that it is a recurring issue for the assessee and the tax authorities, we deem it appropriate to set aside the impugned order and restore the issue back to the file of the ld. CIT(A) with a direction to pass a speaking order in accordance with law by first marshalling the facts of the instant case and thereafter consider the precedent available on those set of facts. - Appeal of the Revenue is allowed for statistical purposes
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2017 (3) TMI 1740 - BOMBAY HIGH COURT
Depreciation allowable on the assets of the trust - Held that:- So far question no.(i) is concerned, it has been concluded against the Revenue by the decision of this Court in the order passed today in the case of DIT (Exemptions) Mumbai v/s. M/s. Aditya Birla Foundation [2017 (3) TMI 1738 - BOMBAY HIGH COURT]. No substantial question of law.
Claim of the assessee for carry forward of the said deficit - Held that:- The question no.(ii) as proposed does not give rise to any substantial question of law as it stands concluded by the decision of this Court in M/s. Gem & Jewellery Exports Promotion Council [2011 (2) TMI 1511 - BOMBAY HIGH COURT] as well as CIT v/s. Institute of Banking Personnel Services [2003 (7) TMI 52 - BOMBAY HIGH COURT]
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2017 (3) TMI 1739 - ITAT DELHI
Penalty u/s 271(1)(c) - assessee claimed deduction under the head ‘Power purchase price.’- Held that:- The penalty under identical circumstances was also imposed on the assessee for the immediately preceding assessment year i.e., 2007-08. The Tribunal, has deleted the penalty. A copy of such order has been placed on record. The ld. DR could not point out any distinguishing feature for this year vis-à-vis the immediately preceding year which has been considered and decided by the Tribunal. Respectfully following the precedent, we uphold the impugned order in deleting the penalty. - Decided in favour of assessee.
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2017 (3) TMI 1738 - BOMBAY HIGH COURT
Claim of depreciation to assessee trust - Held that:- Revenue very fairly states that the issue arising herein stands concluded against the Revenue and in favour of the assessee. This by the decision of this Court in Director of Income Tax (Exemption) Mumbai v/s. M/s. G.D. Birla Medical Research and Educational Foundation [2016 (2) TMI 901 - BOMBAY HIGH COURT] decided on 1st February, 2016. In view of the above submission, the question no.(i) as proposed does not give rise to any substantial question of law. Thus not entertained.
Allowing the claim of the assessee for carry forward of the said deficit - Held that:- The issue arise herein stands concluded by the decision of this Court in CIT v/s. Institute of Banking [2003 (7) TMI 52 - BOMBAY HIGH COURT] and Director of Income Tax (Exemption) v/s. M/s. Gem & Jewellery Exports Promotion Council [2011 (2) TMI 1511 - BOMBAY HIGH COURT]. In view of the above submission, question no.(ii) as proposed also does not give rise to any substantial question of law. Thus not entertained.
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2017 (3) TMI 1735 - ITAT KOLKATA
Penalty u/s 272A(2)(k) - Filing quarterly TDS returns in Form No. 24Q and 26Q with huge delay - acute shortage of funds with assessee - reasonable cause of delay - Held that:- We find that the assessee has been facing acute shortage of funds even for payment of salary and other charges. Hence it had contributed to the delayed remittance of TDS.
As stated by assessee that even the TDS portion of ₹ 4,265/- was remitted on 4.3.2011 by the sister concern of the assessee M/s Arunachal Plywood Industries Ltd in support of which he placed on record the bank statements of the said company. We find lot of force in the argument of the ld AR that the TDS returns could be electronically filed only after remittance of the requisite tax and interest thereon. Since the assessee had remitted the TDS portion itself belatedly by requesting the sister concern to make payment thereon and by mobilizing its own resources , it had eventually led to the belated filing of TDS returns. Hence this itself would, in our considered opinion, constitute reasonable cause u/s 273B of th Act. Hence assessee should not be invited with penalty for mere technical venial breach - decided in favour of assessee
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2017 (3) TMI 1734 - ITAT BENGALURU
TPA - Loss on Derivatives disallowed - DRP upholding, the provision for mark-to-market loss on derivatives created by your appellant during the year "based on the principles articulated in .Accounting Standard-1 and pursuant to the pronouncement of Institute of Chartered Accountants of India dated 29/03/2008 - Held that:- It is seen from the DRP order that it has not considered the assessee's submissions independently but held that that the view taken by the A O do not call for any interference. This issue is remitted back to the DRP for passing a reasoned order after giving due opportunity to the assessee.
Customs Duty disallowance - sum added to the cost of such equipments/ items and disallowed the revenue expenditure and the DRP upholding the same - Held that:- The Panel after taking into consideration of the facts deems it appropriate to direct the AO to revisit this issue and examine the claim that the impugned customs duty on imports pertaining to equipments/items procured for clients projects and the same was subsequently billed to the client. This ground is disposed off with the directions as above
Disallowance of rent equalization - assessee provided this sum towards rent equalization in accordance with AS 19-Leases, as notified by the Ministry of Corporate affairs under the Companies (Accounting Standards) Rules 2006 - AO held that since no such known liability exists, the claim is not allowable - Held that:- As pointed out by the DR, we find that the assessee has not raised any objection on this issue before the DRP. Since, this issue has attained finality, we don't entertain this ground.
TPA - ALP determination - MAM - assessee had adopted Transactional Net Margin Method (TNMM) to arrive at the Arm's Length Price with 14 comparables - Held that:- Assessee is into providing software development services to its AEs thus companies functionally dissimilar with that of assessee need to be deselected from final list.
Idle costs incurred by the assessee on account of excess capacity considered by the TPO as operating costs for arriving the ALP - Held that:- Adjustments have been made for the expenses on idle infrastructure and manpower incurred by the assessee which was not the case with the companies adopted as comparables by the assessee. Hence, margins of transactions with AEs excluding idle costs have been considered. The margin on cost calculated by the TPO after apportionment of idle cost was - 8.95% as against the margin of 27.11% computed by the appellant. In view of that the assessee sought suitable adjustment for idle costs for excess capacity - this issue is a purely factual one and minute details are required to be verified and examined. Therefore, this issue requires proper verification and examination. Accordingly, we set aside this issue to the record of the TPO/AO to verify all the facts and then decide this issue as per law.
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2017 (3) TMI 1733 - ITAT CHENNAI
Payment of lease rental - revenue expenditure - assessee has taken containers on lease - in the books of account, the containers were taken as assets - Held that:- The assessee claims that the containers were taken as lease. A copy of the agreement available at paper-book shows that it is a lease-cum-purchase of containers. It is not clear from the agreement whether it is a finance lease or operating lease. The fact remains that the assessee treated the containers as capital asset and alternatively claimed depreciation also. The alternative claim of depreciation was allowed by the Assessing Officer. Therefore, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed. - Decided against assessee.
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2017 (3) TMI 1732 - ITAT KOLKATA
Addition on account of delayed deposited of Employees contribution in PF - CIT(A) granted relief to assessee by observing that the amount of PF and ESI was deposited before due date as prescribed u/s. 139(1) - Held that:- Admittedly, the amount of PF and ESI was not deposited within due date as specified under the respective Act. There is no dispute that the amount of PF and ESI were paid within due dates of filing of IT return in the year under consideration. We find that issue is squarely covered in favour of assessee and against the Revenue as contribution were made within due date of filing IT return as observed by Ld. CIT(A) in his order. While doing so, we find support and guidance from the decision of Co-ordinate Bench of this Tribunal in the case of ACIT v. M/s Vijay Shree Ltd.[2011 (4) TMI 63 - ITAT KOLKATA] for AY 2006-07, wherein it was held that the “employees’ contribution” made towards PF before the due date of filing of return is allowable business expenditure. - Decided in favour of assessee.
Addition invoking the provision of Rule 8D(2)(iii) r.w.s. u/s 14A - no exempt income earned by assessee - Held that:- Admittedly, there was no income earned during the year under consideration from the aforesaid investment. It is a settled law that no disallowance shall be warranted under the provision of Sec. 14A r.w. Rule 8D if there is under the year consideration. See CHEMINVEST LIMITED VERSUS COMMISSIONER OF INCOME TAX-VI [2015 (9) TMI 238 - DELHI HIGH COURT]- There is no dispute with regard to the fact that the assessee in the year under consideration has not earned any exempted income. - Decided in favour of assessee.
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2017 (3) TMI 1731 - ITAT MUMBAI
Reopening of assessment - unexplained purchases - Held that:- AO was not having information about the statements of RKG. After receiving the information about the survey action carried out at the business premises of RKG concerns he came to know about the new facts. Therefore, in our opinion, he was justified in issuing the notice under section 148 of the Act. Confirming the order of the FAA, in that regard, we decide the 1st ground of appeal against the assessee.
Addition with regard to non-genuine purchase - FAA has held that there was no doubt about the sales made by the assessee, that the assessee was not given a chance to cross-examine RKG, that the quantity details of the sales and closing stock of not challenged, that no meaningful investigation was done after the survey proceedings at the business premises of RKG, that 10% of the total purchases should be added to the income of the assessee. In our opinion, there was no justification for upholding the addition of 10% of the purchases also. Once the sales and closing stock details were found to be genuine, then without bringing some positive material on record to prove the unaccounted purchases, no addition should have been made - the supplier i.e. RKG has retracted his statements. Considering the peculiar facts and circumstances of the case, we are of the opinion that the order of the FAA cannot be endorsed. So, reversing the same, we decided second ground of appeal in favour of the assessee.
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2017 (3) TMI 1730 - BOMBAY HIGH COURT
Claim of deduction u/s 80IB(9) - Held that:- Revenue, on instruction, states that the impugned order of the Tribunal allowed the Respondent-Assessee's appeal by following a decision of a Coordinate Bench of the Tribunal in the case of the same Respondent-Assessee, allowing a claim of deduction under Section 80IB(9) of the Act for the Assessment Years 2003-04, 2004-05, 2005-06 and 2006-07.
Revenue, on instructions, further states that Revenue has accepted the order of the Tribunal in the earlier Assessment Year on the same issue. Hence, he has been instructed not to press the present Appeal. In the above view, no occasion to examine the question raised for our consideration. Appeal dismissed, as not pressed.
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2017 (3) TMI 1729 - ITAT JAIPUR
Validity of notice issued u/s 148 - reasons to believe - Held that:- No plausible reason from ld. AR of the assessee that the Department has wrongly invoked the provisions of Section 148 of the Act on the assessee without disposing off the objections. It is noted that the after recording the reasons, the notice u/s 148 was issued on 26-03-2015 and copy of the reasons for reopening of the case was provided to the assessee on 15-04-2015 by the Department. In such a situation, no force in the arguments of the assessee and thus Ground No. 1 of the assessee is dismissed.
Suppression of income - assessee was indulged in transferring fictitious profits/loss to the other clients/ beneficiaries by misusing the client code modification facility to the F&O segment and thereby created a loss - Held that:- Circular No. 974 dated 10.09.2009 of the National Securities Clearing Corporation Limited for its Futures & Options Segment (PB 25-26). The stock exchange has also drawn a list of the common violations committed and the applicable penalties (PB 21-24) where it is stated that “if the transfer of trades / errors at the time of order entries are in excess of 2% of the number of orders executed, fine of 0.1% of value of trades transferred is applicable”.
It is also noted from the records that the during the year the broker had carried out the broker had carried out 2380 modifications by using CCM facility which is only 0.18% of the total trades carried out by the broker during the year. It is noted that the assessee’s client code was set as default in the system is for the convenience of the broker. The assessee has no control over the system. The client brings to the notice of the broker any mistake/ error in the client code.It may be noted that in the case of ACIT vs. Kunvarji Finance (P) Ltd. [2015 (4) TMI 539 - ITAT AHMEDABAD] had observed that the client code modification is permitted intra day i.e. on the same day. - Decided in favour of assessee.
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2017 (3) TMI 1728 - ITAT MUMBAI
Eligibility of deduction u/s 80P - claim denied on interest earned on deposits with a Co-operative bank - claim denied primarily on account of the fact that section 80P(2)(d) of the Act relates to the income earned from a Co-operative society - Held that:- The reliance placed by the CIT(A) on the judgment of STATE BANK OF INDIA EMPLOYEES CO-OP. CREDIT & SUPPLY SOCIETY LTD VERSUS THE CIT [2015 (4) TMI 94 - ITAT AHMEDABAD] is quite untenable, inasmuch as, in the said case the interest income in question was earned from deposits kept with State Bank of India. Obviously, State Bank of India is not a Co-operative society so as to justify the claim that such interest earnings fall within the scope of section 80P(2)(d) of the Act.
Further, the reliance placed by the CIT(A) on the decision of the SMC Bench of Mumbai Tribunal in the case of Shri Saidatta Cooperative Credit Society Ltd. [2016 (1) TMI 1262 - ITAT MUMBAI] is also of no avail, inasmuch as, the Bench merely set-aside the matter to the file of the Assessing Officer for examination afresh, whereas in the case of Lands End Co-operative Housing Society Ltd(supra), the claim of exemption under section 80P(2)(d) of the Act with respect to the interest earned from a Co-operative bank has been upheld. Therefore, in view of the said precedent, the claim of the assessee deserves to be allowed. Cae of LANDS END CO-OPERATIVE HOUSING SOCIETY LTD VERSUS I.T.O. WARD-16 (1) (3) , MUMBAI [2016 (2) TMI 620 - ITAT MUMBAI] to be followed.
Order of the CIT(A) is set-aside and the Assessing Officer is directed to allow deduction under section 80P(2)(d) of the Act with respect to the interest income earned from a Co-operative bank. - Decided in favour of assessee.
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2017 (3) TMI 1727 - ITAT AHMEDABAD
TPA - benchmarking approach of the Appellant of applying Transactional Net Margin Method ('TNMM') as the most appropriate method for determining the arm's length price of management services fees - Held that:- As perused the evidence of services rendered and the nature of services in question, on random sample basis. There is reasonable evidence of the rendition of service and it cannot be open to TPO to proceed on the basis that the services were not rendered. The method of ascertaining the arm’s length price, on the basis of TPO’s subjective perception about worth of services, is not sustainable in law either. In view of these discussions, as also bearing in mind entirety of the case, we deem it fit and proper to delete the impugned ALP adjustments. Ground nos 2 to 8 are, therefore, to be allowed.
Allowing deduction with respect to the additional duty of customs ('ADC') written off and the service tax credit ('STC') written off -Held that:- these credits were duly accounted for and that is how these were shown in the books of accounts as an asset. The present position is, and that appears to be undisputed, that the assessee is no longer eligible for these credits. Clearly the assessee has an incurred a business loss in respect of the credits so lost. The admissibility of deduction is thus beyond any dispute or controversy. There is also no dispute that the assessee has not claimed this deduction in any other year as the loss is written off in the current previous year and as such bonafides of this claim is also not in doubt. On these facts, in our considered view, the pedantic approach being adopted by the Assessing Officer, in demanding conclusive evidence of loss having crystallized in the current previous year, in wholly unjustified. As the assessee has recognized this loss in the present year, and as incurring of loss is beyond any doubt or controversy, we deem it fit and proper to direct the Assessing Officer to delete the impugned disallowances.
Determining the arm's length price for payment of management services fees under the provisions of section 92CA(4) - addition to be deleted
DRP proposing a cost plus mark-up of 3% instead of 10% in respect of fees of information technology services availed - Held that:- We did ask the learned Departmental Representative about the basis on which 3% margin was adopted and he justified the same on the ground that when software is being procured from outside and simply being distributed by the AE, such a margin is more than reasonable. No specific comparables were, however, pointed out. Such being the position, as learned counsel rightly points out, there is no basis for adoption of 3% as an acceptable mark up for the information management services. This variation in the mark up is based on the perceptions of the TPO and not any cogent material. There is, in any case, no reason for rejecting the comparables from IT sector only because the AE is not developing the software on its own and providing the software obtained from outside vendors. In view of these discussions, as also bearing in mind entirety of the case, we uphold the grievance of the assessee and direct the Assessing Officer to delete the related ALP adjustment.
Disallowing Additional Duty of Customs ('ADC') adjusted against provision for doubtful loans and advances as an expense u/s 37(1) - Held that:- The learned representatives fairly agree that whatever we decide on these issues for the assessment year 2009-10 will equally apply here as well. Vide our decision for the assessment year 2009-10 earlier in this order, we have deleted these additions. We see no reasons to take any other view of the matter in this year. We, therefore, uphold the grievances of the assessee on these points.
Disallowing advances as adjusted against provision for doubtful advances as an expense u/s 37(1) - Held that:- We find that the advances written off were in respect of advance payments for creditors for supplies in the course or normal business. The claim of the assessee was thus justified and it is upheld. The Assessing Officer is directed to delete this disallowance
Disallowing sales promotion expenses as an expense u/s 37(1) - Held that:- purpose of making the impugned payment is undisputedly increased sale of the assessee inasmuch as if at any point of time IJL is to procure its related raw material from any other supplier, the entire costs borne by the assessee are to be refunded to the assessee. The benefit derived from the expenses is thus directly relatable to the revenue field of sales. The costs incurred by the assessee for supply of moulds, developing engineering resins and development of thermoplastic head lamp reflector has a direct bearing with sale of the assessee and in that sense, even though it may result in enduring advantage, it must be treated as revenue expenditure, as dominant purpose of expenses was for increasing sales. In view of these discussions, in our considered view, the assessee deserves to succeed on this plea - decided in favour of assessee
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2017 (3) TMI 1725 - ITAT MUMBAI
TPA - disallowing Advertising, Marketing and Promotion (AMP) expenses - adjustment by applying the “Bright Line Test” on account of AMP expenses - Held that:- We have noticed that the TPO proposed the adjustment by applying the “Bright Line Test” on account of AMP expenses incurred by assessee. The “Bright Line Test” has been overruled by the decision of Sony Ericsson Mobile Communication [2015 (3) TMI 580 - DELHI HIGH COURT]. TPO and the DRP was not having the benefit of the decision as the same was delivered on 16.03.2015. We therefore, considering the fact and totality, the ratio laid down by Hon’ble Delhi High Court and the submission made before us by ld. representative of the parties, we deem it appropriate to set-aside the issue relating to the adjustment on account of AMP to the file of TPO/AO to decide the issue afresh relating to the adjustment on account of TPO to decide the issue afresh in accordance with law. - Decided in favour of assessee for statistical purpose.
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2017 (3) TMI 1724 - ITAT VISAKHAPATNAM
Non prosecuting of appeal - Held that:- The assessee is not interested in prosecuting his appeals. The Hon’ble Supreme Court in the case of B.N. Bhattachargee & Anr.[1979 (5) TMI 4 - SUPREME COURT] held that appeal does not mean only filing of Memo of Appeal but also pursuing it effectively.
In case where the assessee does not want to pursue the appeal, Court/Tribunal has inherent power to dismiss the appeal for non-prosecution, as held in the case of M/s. Chemipol Vs. Union of India [2009 (9) TMI 177 - BOMBAY HIGH COURT]. In view of the ratio laid down by the Hon’ble Courts and also following the decision of the Tribunal in the case of Multiplan (India) Ltd. [1991 (5) TMI 120 - ITAT DELHI-D] and case of Late Tukojirao Holkar [1996 (3) TMI 92 - MADHYA PRADESH HIGH COURT], we dismiss the appeals of the assessees for want of prosecution. - Decided against assessee
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2017 (3) TMI 1723 - ITAT MUMBAI
Disallowance in respect of provision under the head sales promotion,distribution and scheme cost and commitment charges - Held that:- FAA had upheld the disallowance made by the AO on account of sales promotion, distribution and scheme cost and commitment charges, that the assessee had claimed that it was following the same method for last so many years and had complied with the provisions of AS-29.In our opinion provisions can be allowed/disallowed depending upon the facts of the case.The Hon’ble Apex Court in the court of Rotork Controls India (2009 (5) TMI 16 - SUPREME COURT OF INDIA) has laid down the principles about provisions - the matter should be restored back to file of AO for fresh adjudication.He would afford a reasonable opportunity of hearing to the assessee and decide the matter in the light of above judgment of Hob’ble Apex Court. - Decided in favour of assessee for statistical purposes.
TP Adjustment - AMp expenses - Held that:- Setting aside the issue to the file of the AO for fresh adjudication.He would afford a reasonable opportunity of hearing to the assessee.Third Ground of appeal raised by the assessee is allowed in part
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2017 (3) TMI 1717 - ITAT MUMBAI
Computation of capital gains on two properties and allowability of deduction u/s 54/54F - whether the period for computing the capital gains and for allowing deduction u/s 54/54F should be the date of allotment letter or the date of registration of the property in the name of the Assessee is to be adopted - whether the holding period of the properties for the purpose of computing capital gains should be considered from the date of allotment of properties by the builder or from the date of purchase agreement entered into by the Assessee? - Period of holding - Held that:- We find that an identical issue has been considered by the Coordinate Bench of this Tribunal in the case of Anita D Kanjani Vs. ACIT [2017 (2) TMI 788 - ITAT MUMBAI] wherein the Coordinate Bench after analyzing various decisions of High Courts held that the holding period is to be determined in terms of section 2(42A) and therefore holding period should be computed from the date of allotment letter issued by the builder. It was also held that the issue of transfer of ownership is not the issue to be decided for computing the holding period but holding period is to be determined in terms of section 2(42A).
The Delhi High Court in the case of Gulshan Malik Vs. CIT [2014 (3) TMI 474 - DELHI HIGH COURT] though held that in terms of section 2(42A), the period of 36 months in respect of booking rights of an apartment with a builder has to be counted from the execution of agreement to sale i.e. buyers agreement but not the provisional allotment letter issued by the seller/developer, we would prefer to follow the decisions of various other High Courts which are in favour of the Assessee since as rightly pointed out by the A.R the allotment letter issued in this case is a conditional one and whereas in the Assessee’s case it is a non conditional allotment letter issued by the builder. Further in view of the decision in the case of CIT Vs. Vegetable Products Ltd. [1973 (1) TMI 1 - SUPREME COURT] wherein it was held that when two constructions are possible the view in favour of the Assessee is to be adopted. Therefore, we hold that holding period of the properties should be computed from the date of issue of allotment letter and in this case, if the date of allotment letter is considered the holding period becomes more than 36 months and consequently the property sold by the Assessee would be the long term capital asset in the hands of the Assessee taxable under long term capital gain.
With regard to the contention of the AO that since the Assessee has claimed depreciation on one of the properties and therefore by virtue of the provisions of Section 50 gain arising from the transfer of such asset should be considered as short term capital gain, we find that this issue has been decided by the Jurisdictional High Court in the case of CIT Vs. Ace Builders Pvt. Ltd. [2005 (3) TMI 36 - BOMBAY HIGH COURT] wherein the Hon’ble High Court answered the following question in favour of the Assessee.
Income earned by the Assessee on sale of factory shed should be treated as long term capital gains and is eligible for deduction u/s 54EC of the Act. Respectfully following the decision of the Jurisdictional High Court, we hold that the Assessee is entitled for deduction u/s 54/54F in respect of both the properties. Thus the grounds 1 to 4 raised by the revenue are rejected.
Profit on sale of shares as short term capital gains and not as business income - Held that:- No valid reason to disturb the reasoning of the CIT (Appeals) in holding that the gain on sale of shares held for less than 30 days should be assessed as business income and more than 30 days as short term capital gains. In the circumstances, we uphold the order of the Ld. CIT (Appeals) and reject the grounds of revenue on this issue.
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2017 (3) TMI 1714 - MADHYA PRADESH HIGH COURT
Penalty u/s 271(1)(c) - Deduction u/s 80IB (10) denied - assessee does not satisfy the conditions to avail the benefit in the orders of assessment passed on 30.12.2008 and 17.12.2009 - Held that:- In the present case, AO found that the assessee has produced a invalid project approval certificates. The invalidity was in respect of automatic cancellation of the permission to raise construction of building. Another ground for imposition of penalty was that possession was given to the allottees before obtaining the a completion certificates which is said to be in gross violation of condition No.7 of the approval certificate.
Such facts have been taken into consideration by the Commissioner of Income Tax (Appeals), wherein the Commissioner has recorded the finding referred to above.
The fact is that the assessee claimed deduction u/s 80IB(10) for the reason that the a project approval certificates was filed and the possession delivered. May be the technical formality of obtaining completion certificate was not satisfied, but it will not mean that the assessee has claimed incorrect or false deduction. Mere non-satisfaction of a condition of deductions will not mean that the assessee has furnished incorrect return, which will make it liable for penalty. - decided in favour of assessee.
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2017 (3) TMI 1713 - ITAT MUMBAI
Disallowance of interest expenses in relation to funds borrowed for various purposes including loan/advances given incidentally from which the appellant is earning interest income - Held that:- CIT (A) has given a very categorical finding that this interest expenditure has no co-relation with the earning of ₹ 48 lakhs of interest income from ICD, because the funds advanced for ICD was out of the interest free fund of ₹ 11.25 crores received from the associate company.
Only contention as raised by that, this interest expenditure should be capitalized, because it pertains to the ongoing project. It is purely a new plea/ground, which has been taken for the first time at this stage, but at the same time it goes to the root of the issue involved because, whence, this interest expenditure is not attributable to ‘income from other sources’, then it indicates that the same may have been for the purpose of construction business/ongoing project. Being a core issue which goes to the determination of correct tax liability of the assessee, we therefore deem fit to admit the additional ground. Since this aspect has neither been contented by the assessee before the AO nor has been examined by the AO, therefore, in the interest of justice, we remit back the matter to the file of the AO, who shall examine the utilization of the borrowed fund for the purpose of business and the nexus of interest expenditure which has been incurred on such borrowed funds. - Appeal of the assessee is partly allowed for statistical purposes.
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