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Showing 101 to 120 of 2114 Records
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2018 (2) TMI 2015 - ITAT MUMBAI
Disallowance u/s 14A r.w.r 8D(2)(iii) - HELD THAT:- Disallowance u/s 14A r.w.r8D(2)(iii) should be in relation to funds generating exempt income only. In respect of provisions of Rule 8D(2)(iii), which is the subject matter of the appeal in the assessee‟s case under consideration, a perusal of the said provision shows that what is disallowable under Rule 8D(2)(iii) is the amount equal to ½% of the average value of investment, the income from which does not and shall not form part of the total income - under Rule 8D(2)(iii) what is disallowable is ½% of the dividend bearing securities or funds generating exempt income. Therefore, not all investments become the subject matter of consideration while computing disallowance u/s 14A r.w Rule 8D(2)(iii). The disallowance u/s 14A r.w.Rule 8D(2)(iii) is to be in relation to the income which does not form part of the total income and this can be done only by taking into consideration the investments which has given rise to this income which does not form part of the total income.
We note that as far as Rule 8D(2)(iii) of the Rules is concerned, it has been held in the case of DCIT vs REI Agro Ltd. [2013 (5) TMI 582 - ITAT KOLKATA] that it is only the investment which yielded tax free income that should be considered for working out the average value of investment while applying the Rule 8D(2)(iii) of the Rules. This order of the tribunal has been confirmed by the decision of Hon‟ble Calcutta High Court i. [2013 (12) TMI 1517 - CALCUTTA HIGH COURT] - In view of the aforesaid legal position we are of the view that the order of the CIT(A) on this issue cannot be sustained.
Plea of the assessee to exclude funds which are not generating exempt income, that is, which had not yielded any exempt dividend income during the previous year while working out the average value of investments for the purpose of applying Rule 8D(2)(iii) of the Rules, should be accepted.
We do not accept the plea of the assessee that commission of financial advisor was paid by the Mutual Fund directly therefore no any expenses have been incurred by the company to maintain the investment portfolio. Ultimately, the directors of the company or top management instructs the financial advisor, about how much investment is to be done, how much is to be sold or retained.
We restore the present issue to the file of the assessing officer for computation of disallowance u/s 14A r.w. Rule 8D(2)(iii) and we direct the assessing officer to consider only funds generating exempt income to compute the disallowance under Rule 8D(2)(iii) of the I.T.Rules.
Addition of income under the head of “profit and gains of business or profession”, while computing the tax liability - HELD THAT:- AO while going through the income-tax computation form, has taken the amount of ₹ 7,15,07,112/- as “profit and gains of business or profession”. However, in the assessment order, the AO after making disallowance u/s 14A has correctly computed income under the head “profit and gains of business or profession” at ₹ 7,08,45,144/- - we note that anarithmetic error committed by the assessing officer to the tune of ₹ 25,008/- needs to be rectified. Therefore, we direct the AO to examine the figures and facts referred above and rectify the mistake as per provisions of law.
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2018 (2) TMI 2014 - AJUDICATING AUTHORITY (NATIONAL COMPANY LAW TRIBUNAL) AHMEDABAD
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - whether dispute mentioned in the reply notice given by the corporate debtor to the operational creditor was there in existence even before the date of issuance of demand notice under Section 8 Of the Code? - HELD THAT:- Dispute mentioned in the reply notice is operational creditor failed to supply the finished goods as per MOU dated 31.10.2013. Operational creditor also retained the raw material that supplied to the operational creditor from and on behalf of the corporate debtor. The fact that raw material belonging to the corporate debtor has been retained by the operational creditor is an admission by the operational creditor. To appreciate this fact, it is necessary to examine the dates of events. MOU was entered into on 31.10.2013. Amount claimed in the invoices is from 16.11.2013 to 01.01.2014. The supply of various chemical materials by the petitioner to the respondent from 10.06.2013 to 17.10.2013. According to the petitioner payments were made from 01.12.2013 to 04.09.2014.
In the absence of any material to show that the cheques were issued on 31.10.2013 it shall be presumed that the cheques were issued on the date that was appearing on the cheques. Therefore, the issuance of cheques in the year 2014 and 2015 Clearly goes to show that there was no existence of dispute between the petitioner and respondent before issuance of demand notice. Therefore, it is a clear a case where a dispute has been raised for the first time in the reply notice. It is not a case where existing dispute has been brought to the notice of the petitioner by the respondent.
The petition is complete in all respects it deserves to be admitted.
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2018 (2) TMI 2013 - ITAT CHANDIGARH
Rejection of books of accounts and method of accounting followed by the assessee - AO while framing the assessment rejected the assessee's method of accounting holding it to be defective and not reflecting correct profits of the year - estimation of the profits by rejecting the books of accounts has been upheld by the Ld. CIT(A) - HELD THAT:- The matter has been examined by the Coordinate Bench in own case upholding the action of the Assessing Officer rejecting the books of accounts which also finds place in the order of the CIT(A) while adjudicating the issue mentioned above. Hence following the order of the coordinate Bench of ITAT Chandigarh on the similar issue in assessee’s own case, we decline to interfere in the order of the Ld.CIT(A). - Decided against assessee.
Addition on account of In-direct Charges of the Residential Sectors and Commercial Sectors - Addition made by the AO for the first time in AY 2007-08 by estimating the 60% of the total recoveries as income. After rejecting the books of account and method of accounting followed by the appellant, the AO proceeded to compute appellant's income keeping in view the past history of the case as well as by adjudicating the new issues which arose during the year - HELD THAT:- Both the parties regarding the commercial sector the main contention and ratio resorted by the Ld. CIT(A) to reduce the profits from 50% to 45% are that all the areas are commercial sectors are not equally developed so as to determine average higher profits. Similarly the compensation paid and the expenses incurred for development of commercial sectors and the extent of land utilized and salability thereof have been duly considered. Hence we decline to interfere with the order of the CIT(A) on this aspect.
Regarding the sale of residential sectors the remission given by the Ld. CIT(A) has already considered the submission of the assessee that license fee, conversion charges ,scrutiny fee and service charge and reduced the profit by more than 7.68% which has been claimed by the assessee to be payable to the State Government by statute and reduced profit percentage from 30% to 20% hence, the 2.04% variation on account of unforeseen circumstances claimed at this juncture cannot be accepted to. The accounting standards resorted by the assessee or not truly reflecting the profits derived and the reason given by the CIT(A) is found to be cogent hence we decline to interfere with the order of the CIT(A) on this aspect. The profits computed pertains to the profits that are ought to have derived by the assessee on claiming all the eligible expenditure and accounting all other income. Hence, any expense disallowed or addition made would be treated as income in addition to the profits estimated.
Exclusion of profit already declared - During the hearing before us the assessee argued that the profits already declared needs to be excluded while computing the profits estimated on rejection of books of accounts - HELD THAT:- The ground of the assessee is technical in nature and the Assessing Officer is directed to exclude the profit already declared by the assessee from the profits computed by rejecting the books of accounts.
Disallowance of external development charges - assessee has claimed liability in the Balance Sheet under the head "Other Liabilities' on account of External Development Charges - AO has estimated that 30% of the EDC as income of the assessee on the grounds that the amounts have never been spent by the assessee for the purpose for which EDC has been collected - CIT(A) held that the EDC charges constitute revenue receipts treating them at par with indirect charges recovered which have been taxed at 20% and restricted the addition also to 20% on the lines of the EDC Charges - HELD THAT:- Addition made by the Assessing Officer @ 30% of the charges received and restriction of the addition to 20% by the Ld. CIT (A) have to be revisited in totality as the addition was based on the finding that the EDC Charges have been collected progressively and not much work has been done by the HUDA in meeting the obligation of work to be executed after collection of EDC. The points needs to be examined are the relevant provisions of the HUDA Act empowering the collection of EDC, the obligations of the HUDA to utilize the funds, the statutory power given by the State Government to levy surcharges, whether HUDA is acting as only as a collection agency or whether it has be invested with the full power and control to spend the amounts, the modus and guidelines made for utilization of the amounts in a particular geographical area, utilization of funds pending execution of the work , the intention of the HUDA to utilize and the tangible examination and visible implementation of the intention on the ground over a period of ten years or so needs to be examined to treat the EDC as income or not. In this connection the additional evidences held by the Ld. DR are needed to arrive at a correct decision.
Annual Maintenance Charge - addition on account of Annual Maintenance Charges was made for the first time in the AY 2003-04 by disallowing the 50% of the expenses claimed and thereafter the disallowance was made in all the years - For the first ten years of development of sectors the maintenance & development charges are capitalized as work in progress. For subsequent 10 years, the entire amount of maintenance is charged to P & L Account & claimed as expenditure - HELD THAT:- As decided in own case [2008 (12) TMI 331 - PUNJAB & HARYANA HIGH COURT] The plots for which the securities were forfeited were not shown at lesser value by adjusting the forfeited amount in the closing stock. Therefore it cannot be said that there was any link of the security forfeited with the plots shown in the closing stock so the contention of the Ld. Counsel for the assessee that the amount of security had been reduced from the value of the closing stock and had been duly accounted for in the profits in the following years which accrued to the assessee at the time of sale of those plots is not acceptable because the amount was not reduced by the assessee in the value of the closing stock rather it was shown as income in the P&L Account however while filing the return of income the amount was reduced from the income in the computation of income. We are therefore of the view that the Assessing Officer rightly made the addition and the Ld. CIT(A) was fully justified in confirming the addition - Decided against assessee.
Disallowance on account of sale of plants - while framing the assessment noted that the assessee has shown income from sale of plants grass and trees and claimed it as agriculture income - assessee contended that the receipt would be shown when the land from which the income has been derived is sold - CIT(A) also rejected the assessees contention that the income is to be taxable during the year in which the receipt from sale of grass and plants has been received.- HELD THAT:- As decided in own case [2008 (12) TMI 331 - PUNJAB & HARYANA HIGH COURT] upheld the disallowance so made observing that the assessee is not engaged in any agricultural activity and there was no basis or any cogent reason to consider the current income in future.
Disallowance of contribution to IAG - amount has been claimed as contribution given to Industrial Assistance Group (IAG) set up by the Govt. of Haryana for improving the industrial environment in the State by providing expeditious and single window service to the entrepreneur desirous of setting up industry in the state - HELD THAT:- As decided in own case [2008 (12) TMI 331 - PUNJAB & HARYANA HIGH COURT] upheld the disallowance so made observing that the assessee is not getting any direct benefit from the IAG and the payment has been made voluntarily.
Disallowance of interest paid to NCR Planning Board - HELD THAT:- As loan has been received from NCR Planning Board which is meant for acquisition and development of land and as per section 36(1)(iii) the interest on capital borrowed for the purpose of the business has to be allowed. In the absence of any contrary finding by the Revenue that the funds have not been used for the business purpose, the disallowance made is liable to be deleted.
Disallowance of demarcation / survey expenses - revenue or capital expenditure - HELD THAT:- The survey and demarcation is an ongoing, continuous exercise being undertaken by the assessee. The plots have to be physically marked before handing over to the allottees which requires proper survey and lining of contours. Since the allotment of plots is a regular and recurring activity so as the expenses incurred hence the expenses are to be allowed as revenue expenditure. Ground of assessee is allowed.
Contribution to Delhi Metro - expenditure claimed on account of contribution was disallowed treating the same as not for their business in all the years from AY 2006-07 onwards - CIT(A) held that the provision of Metro or other transport services in Gurgaon is neither the responsibility of the appellant nor one of the objects for which it has been constituted - Revenue or capital expenditure - HELD THAT:- The contribution to Delhi Metro can be treated as step in furtherance of the business of the assessee as it improves the accessibility and facilities for the public at large and increases the demand of the land and plots of the assessee. Certainly the connectivity by the metro line will certainly enhanced the business of the assessee and increases the marketability of the plots. The contribution to the metro is akin to construction of the road which will be used by the residents approaching through the road hence the expenditure can be treated as an allowable expenditure laid down for wholly and exclusively for the business purpose.
Disallowance of advertisement on buses - HELD THAT:- In the instant case whether funding the purchase of busses so that advertisement can be had on this buses purchased doesn’t fit on the lines of expenditure incurred fully and exclusively for the purpose of the business. After paying the amounts the assessee has not even got the ownership of the buses which have been purchased totally from the funds provided by the assessee. Hence the expenditure cannot be allowed - As in the case of L.H. Sugar Factory and Oil Mills Pvt. Vs. CIT[1980 (8) TMI 1 - SUPREME COURT] held that the expenditure incurred which has been not shown to be wholly and exclusively laid out for the purpose of assessee’s business cannot be held to be an allowable expenditure.
Value of Closing Stock - CIT(A) confirmed the addition by holding that perusal of the details filed reveal that net of income over expenditure in each completed project is taken to the P&L account as income - HELD THAT:- We find that there has been error in computation of closing stock which needs to be corrected in the instant year. At the same time the assessee will get the benefit of increased opening balance in the subsequent years - Decided against assessee.
Salary of Employees of Department of Urban States - CIT(A) has restricted the amount to 20% on the grounds that the disallowances of various charges have been restricted at 20% of expenses pertaining to recoveries from allotees hence the salary expenses reimbursed are also restricted at 20% - HELD THAT:- The employees of the Department of Estates have been working owing to the reasons of transfer of functions overtaken by the HUDA. Since these employees are certainly working for HUDA fully and wholly it cannot be said that the salaries paid to the employees is not for business purpose. In the absence of diversion of employees from Department of Estates, HUDA would have to hire outside manpower and also require to pay them accordingly. Keeping in view the functions performed by the employees for HUDA the expenses out of salary cannot be treated as non business expenditure. The principle whether to allow these expenditure are not when the profits are estimated and the arguments taken by both the parties on this aspect are found to be not applicable in the peculiarities of the facts emerging out of the issue of drafting of employees of Department of Estates to work for HUDA. The addition confirmed by the Ld. CIT(A) is hereby directed to be deleted.
Disallowance of Town Planning Expenses - AO treating the expenditure as capital in nature - HELD THAT:- This issue has been dealt while dealing with Office maintenance and office expenses. Hence the entire issue relating is remanded back to the file of Assessing Officer for the limited purpose of verification of type of expenses. It is hereby directed that the Assessing Officer would allow as Revenue expenses on the amount is spent for software purchases and due depreciation would be allowed in the case of hardware purchases.
Disallowance under section 40(a)(ia) - interest payment made to different people as per the Court order - HELD THAT:- Regarding the deductability of the TDS on the amounts paid to various allottees, we find that the interest has been paid by the assessee to allottees for payment of compensation due to delaying offer of the possession after allotment has been squarely covered by judgment in case of Ghaziabad Development Authority vs. Dr. NK. Gupta ( NCDRC) [2002 (9) TMI 292 - NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION] and Delhi Development Authority vs Income-Tax Officer [1995 (1) TMI 126 - ITAT DELHI] the amount of compensation do not fall under the meaning of 2(24) of Income Tax Act. Hence assessee is not liable to the provisions of TDS on these payments. Since assessee has not borrowed any funds and no interest has been paid the Assessing Officer’s alternate observation also stands dismissed.
Disallowance u/s 14A - HELD THAT:- Where no exempt income is received or receivable during the relevant previous year, provisions of Section 14A shall not apply.
Further it is also well settled that the disallowance cannot exceed the exempt income. The window for disallowance is indicated in Section 14A of the Act, and is only to the extent of disallowance of expenditure 'incurred by the assessee in relation to tax exempt income'. Accordingly, the tax exempt income cannot be disallowed entirely. Thus following this logic also, where the exempt income is zero, the disallowance cannot exceed the exempt income which is zero - See M/S LAKHANI MARKETING INCL [2014 (7) TMI 44 - PUNJAB AND HARYANA HIGH COURT] - Decided in favour of assessee.
Correct head of income - rental income earned by the assessee - Income from house property v/s business income - HELD THAT:- As decided in HARYANA URBAN DEVELOPMENT AUTHORITY [2008 (12) TMI 331 - PUNJAB & HARYANA HIGH COURT] main business of the assessee is not renting of property, but of development and sale of the property. In such a situation, no fault can be found with the view of the Tribunal that the assessee could claim the head to be income from property instead of income from business.
Dividend income - whether dividend received by the assessee is not dividend and thus not exempt from tax - HELD THAT:- Investments made for earning dividend and which has been duly shown as income from other sources is eligible for exemption under section 10(34), facts of which are squarely applicable to the instant case. Hence we decline to interfere in the order of the Ld. CIT(A). Regarding the disallowances under section 14A the issue is being remanded back to the file of Assessing Officer for the limited purpose of determining the disallowances, keeping in view the expenses incurred by the assessee to earn the dividend income. As a result the grounds of the Revenue may be treated as partly allowed.
Office maintenance and office expenses - HELD THAT:- From the records it is not clear that the computation expenses involved are for software up gradation or for up gradation of hardware and purchase of new computers or augmenting the capability of the existing computers. Hence this issues is remanded back to the file of Assessing Officer for the limited purpose of verification of type of expenses. It is hereby directed that the Assessing Officer would allow as Revenue expenses on the amount is spent for software purchases and due depreciation would be allowed in the case of hardware purchases.
Disallowance of Sales Tax paid - Nature of expenses - HELD THAT:- Irrespective of the reasons the amount paid as taxes (in this particular instance sales tax) is undisputedly eligible for deduction. There is neither any factual nor legal in congruency. By no stretch of imagination the sales tax paid can be treated as capital expenditure in the facts of this case. Hence we decline to interfere in the well reasoned order of the Ld. CIT(A) in deleting the addition.
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2018 (2) TMI 2012 - DELHI HIGH COURT
TP Adjustment - Comparable selection - order of ITAT with the inclusion of three comparables i.e TCS E-serve Ltd., Infosys BPO Ltd. and Excel Infoways Ltd. for the purpose of carrying out the Arms Length Price (ALP determination) mandated by Section 92CA of the Income Tax Act - assessee is engaged in information technology enabling services - HELD THAT:- So far as the exclusion of Infosys and inclusion of R Systems is concerned, this Court is of the opinion that no question of law arises. With respect to Infosys BPO, the rationale for exclusion by the ITAT is that the profitability of the concern is attributed to its brand value.
Relevance of brand value was recognised by this Court in several orders.
The Court is of the opinion that no question of law arises on this aspect; the ITAT also returned its finding that functionality of the assessee is similar to Infosys BPO. Likewise with respect to inclusion of R Systems the Court finds no infirmity in the approach and finding of the ITAT. The ground urged by the Revenue is that the data relating to the concern was not in respect of the relevant financial year as it followed the calendar year for reporting its profits and all other finances. This Court had in a like situation (Commissioner of Income Tax-II vs. Mckinsey Knowledge Centre Pvt. Ltd. [2015 (3) TMI 1226 - DELHI HIGH COURT] held that if from the available data on record, the results for financial year can reasonably be extrapolated then the comparable cannot be excluded. Following that logic, it is held that the reasonableness of inclusion of R Systems cannot be questioned.
This Court is of the opinion that the following two questions of law arise:
(i) Did the Income Tax Appellate Tribunal (ITAT) fall into error in its findings with respect to inclusion of M/s. Surya Pharmaceutical Ltd., given the assessee’s contention with respect to unavailability of segmented data for the purpose of transfer pricing analysis, in the circumstances of the case?
(ii) Did the ITAT fell into error in directing the exclusion of M/s. Excel Infosys, having regard to the judgment of this Court in Chryscapital Investment Advisors (India) Pvt.Ltd vs. Deputy Commissioner of Income Tax, [2015 (4) TMI 949 - DELHI HIGH COURT]
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2018 (2) TMI 2011 - GUJARAT HIGH COURT
Disallowance of marked to market loss - Whether such losses are notional loss of contingent nature and hence not allowable as per the provisions of Section 37 [1] - expenditure on account of Foreign Exchange fluctuation - ITAT deleted disallowance - HELD THAT:- Assessing Officer as well as CIT [A] were of the opinion that though such expenditure was allowable, the same could be booked only on the basis of actual and not notional basis. The Tribunal by impugned judgment reversed decisions, relying on judgment of Woodward Governor India Private Limited, [2009 (4) TMI 4 - SUPREME COURT]. The Tribunal, in particular, noted that the Assessing Officer had taxed the gains arising out of foreign exchange fluctuations on similar basis, however, when it came to the loss and adopted a different standard. - Decided against revenue.
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2018 (2) TMI 2010 - ITAT PUNE
TDS u/s 194C - disallowance u/s.40(a)(ia) - payments made by assessee joint venture to its members - HELD THAT:- As decided in assessee's own case assignments of the work to the members as per the Memorandum of Understanding agreed upon is not equivalent to sub- contract per se and thus the assessee AOP was not liable to deduct tax at source out of the amount distributed amongst the members of the AOP in the agreed ratio of respective share. - Decided in favour of assessee.
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2018 (2) TMI 2009 - NATIONAL COMPANY LAW TRIBUNAL, CHENNAI
Waiver of the requirement of section 244(1)(a) of Companies Act - applicant along with his wife is holding 8.84 per cent, of the total paid-up capital of the first respondent-company, therefore is not fulfilling the requirement under section 244(1)(a) of the Companies Act, 2013, for filing petition under section 241 - HELD THAT:- The respondents in their reply has not established the fact that the application/proposed company petition is an act of malice and/or intended to achieve an oblique purpose or the applicant is ex facie estopped from complaining of the matter on account of acquiescence. Moreover, it is worthwhile to mention that the hon'ble National Company Law Appellate Tribunal in the above referred case has laid down under paragraph 145 of its order that the Tribunal cannot deliberate on the merits of proposed petition under section 241, while deciding an application for "waiver" under the proviso to sub-section (1) of section 244.
This Tribunal is not supposed to discuss the merits of the proposed petition. However, on perusal of the contents of the application and the proposed petition, the applicant has made out a case for grant of the waiver of the requirement under section 244(1)(a) of the Companies Act, 2013.
Appeal allowed in exercise of the powers conferred under the proviso to sub-section (1) of section 244 of the Companies Act, 2013, by granting the waiver of the requirement under section 244(1)(a) of the Companies Act, 2013, in favour of the applicant.
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2018 (2) TMI 2008 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Whether a non-member can seek waiver under Section 244 of the Companies Act, 2013?
HELD THAT:- In spite of adding words relating to “public interest” on 01.01.1964 in the old Act, even when Act of 2013 was enforced Section 241, 242 and 244 continue to refer to Members of the Company to deal with question of oppression and mismanagement. Thus there is no scope to make alleged purposive interpretation as claimed. We have perused Section 241 and read it with Section 244, and kept in view the old provisions of Section 398 and 399. We find that not much is required to be stated as Section 244 of the Act, to us, appears to be quite clear. A mere glance at the Section shows that the Proviso which has been added below Clauses (a) and (b) gives power to waive all or any of the requirements specified in Clauses (a) or (b) so as to “enable the members to apply”.
There are no substance in the arguments which are being raised by the learned counsel for the Appellant. The learned counsel for the Respondents submitted that busy bodies in the name of public interest cannot be allowed to resort to Section 241 and 244 otherwise the companies would not be able to function. There is substance in the submission. There are remedies available to the non-members or public, in case the company was functioning against public interest for which there are provisions in Chapter XIV of the Act, and Section 242(2) of the Act is also there.
The appeal is dismissed with costs quantified at ₹ 2 lakhs to be paid by the Appellant to the Respondent No.1.
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2018 (2) TMI 2007 - CHHATTISGARH HIGH COURT
CENVAT Credit - capital goods - Railway Track Materials - Lighting Equipments - Fittings and Fixtures - Refractory Cement Blocks - Plates - Welding Electrodes under Chapter 8311 - Steel Items-Beams falling under Chapter 72 - HELD THAT:- We are not able to persuade ourselves to take any different view of the matter than the one which has been taken by this Court in the matter of AMBUJA CEMENTS EASTERN LTD. VERSUS COMMISSIONER OF C. EX., RAIPUR [2010 (4) TMI 429 - CHHAITISGARH HIGH COURT] where Welding Electrode has already been considered to be input for allowing CENVAT Credit.
This appeal deserves to be and is hereby dismissed.
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2018 (2) TMI 2006 - BOMBAY HIGH COURT
Production of certified copy of the order - applicant has expressed an apprehension that the order of this Court dated 20.12.2017 as well as this order, would be available on the official website of the Bombay High Court and there is a possibility that since it would not be a certified copy of the order, the trial Court may insist upon producing a certified copy - HELD THAT:- This apprehension is misplaced since the print out of the orders of this Court from the official website has sanctity and the trial Courts are expected to consider the said orders, if they are cited after taking a print out from the official website. The said orders are also available before the trial Court from the official website and there can be a counter verification to find out whether such an order is actually uploaded to the official website or not. In this backdrop, there is no harm if such a print out from the official website is placed before this Court.
This matter shall stand over to 26.2.2018 and the interim relief granted earlier to continue.
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2018 (2) TMI 2005 - ITAT CHENNAI
Re-opening of assessment u/s 147 - land sold was not agricultural land - HELD THAT:- A perusal of the letter of the assessee filed during the course of the original assessment dated 23.12.2011 shows that the assessee has claimed the land is purely agricultural in nature. The proceedings of the Commissioner, Kundrathur, dated 27.03.2007 shows otherwise. In fact, this is an order issued by the Commissioner, to the assessee himself.
The assessee has also paid the development charges in respect of the said development. This being so, we are of the view that this is a fresh evidence available to the AO which clearly shows that the re-opening is not on the basis of a change of opinion. This being so, we are of the view that re-opening is valid and uphold the same. It would also be worthwhile to mention that the assessee has not challenged the additions on merits neither before the CIT(A) nor before us. The assessee has only challenged the issue of re-opening as also the levy of interest u/s.234B - In respect of the issue of the levy of interest u/s.234B, it is found that the levy is compensatory in nature, the same is mandatory and we find no error in the levy. - Decided against assessee.
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2018 (2) TMI 2004 - ITAT CHENNAI
Penalty levied u/s.271(1)(c) - trust deed does not have the name of the investors and does not specified the beneficial interest income Sec.164 would come into play AND consequential taxation of the interest income from the Fixed Deposits - HELD THAT:- A perusal of the order of the Tribunal in own case clearly shows that in the case of the assessee, the Tribunal has given a categorical finding that the assessee is a determinate trust - Tribunal has restored the issue in respect of the correct income that is liable to be taxed to the file of the AO. This being so, it is noticed that the issues on which the penalty has been levied, no more survive. Consequently, we find no error in the order of the Ld.CIT(A) which calls for any interference. Consequently, the appeals filed by the Revenue are dismissed.
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2018 (2) TMI 2003 - ITAT MUMBAI
Disallowance u/s 14A r.w.r. 8D - Addition while arriving at book profit u/s 115JB - HELD THAT:- In Vireet Investment (P.) Ltd. [2017 (6) TMI 1124 - ITAT DELHI] the Special Bench of the ITAT, Delhi has held that computation under clause (f) of Explanation 1 to section 115JB(2) is to be made without resorting to computation as contemplated u/s 14A r.w. Rule 8D and only those investments are to be considered for computing average value of investments which yielded exempt income during the year.
Facts being identical, we follow the above decision and direct the AO to delete the addition made by him u/s 14A while calculating book profit u/s 115JB.
Disallowance u/s 14A in the normal computation of income - On a perusal of the balance sheet of the appellant as at 31st March 2011, we find that it had its own funds of ₹ 1,63,968.62 lacs which exceed total investment of ₹ 1,29,088.44 lacs.
Relying on HDFC Bank Ltd. [2014 (8) TMI 119 - BOMBAY HIGH COURT] the Hon'ble Bombay High Court referring to the decision in CIT vs. HDFC Bank Ltd. [2014 (8) TMI 119 - BOMBAY HIGH COURT] 366 ITR 505 (Bom) and CIT v. Reliance Utilities & Power Ltd [2009 (1) TMI 4 - BOMBAY HIGH COURT] we direct the AO to delete the disallowance made by him under Rule 8D(2)(ii).
Disallowance u/s 8D(2)(iii) in the normal computation of income - In Godrej & Boyce Manufacturing Company Ltd. v. DCIT [2017 (5) TMI 403 - SUPREME COURT], it is held that the literal meaning of Section 14A, far from giving rise to any absurdity, appears to be wholly consistent with the scheme of the Act and the object/purpose of levy of tax on income.
We confirm the disallowance of ₹ 490.91 lacs made by the AO under Rule 8D(2)(iii) in normal computation of income.
To sum up Disallowance made by the AO while arriving at book profit u/s 115JB is deleted, disallowance made by the AO in normal computation u/s 8D(2)(ii) is deleted and disallowance made by the AO in normal computation under Rule 8D(2)(iii) is confirmed. Assessee appeal is partly allowed.
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2018 (2) TMI 2002 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT:- The Adjudicating Authority rightly dealt with the matter of Form “C” - In view of the fact that there is an existence of dispute relating to quality of goods supplied by the Appellant, the Adjudicating Authority rightly refused to entertain the application under Section 9 of the ‘I&B Code’.
Appeal dismissed.
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2018 (2) TMI 2001 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Application for clarification preferred by the Resolution Professional - direction to Resolution Professional to complete the Corporate Insolvency Resolution Process within extended 90 days period from the 181st day of the resolution process - HELD THAT:- Similar issue fell for consideration before this Appellate Tribunal in QUANTUM LIMITED (CORPORATE DEBTOR) VERSUS INDUS FINANCE CORPORATION LIMITED [2018 (2) TMI 1721 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] where it was held that Adjudicating Authority has not hold that the subject matter of the case do not justify to extend the period. It has not been rejected on the ground that the committee of creditors or resolution professional has not justified their performance during the 180 days. In such circumstances, it was duty on the part of the Adjudicating Authority to extend the period to find out whether a suitable resolution plan is to be approved instead of going for liquidation, which is the last recourse on failure of resolution process.
It is declared that the 90 days of extended period be counted w.e.f. 16th January, 2018 i.e. the date on which the Adjudicating Authority passed order for extension of 90 days period. The period between 181st day and the date of passing of the order by the Adjudicating Authority i.e. 16th January, 2018 shall not be counted for any other purpose and is to be excluded for counting the extended period - appeal allowed.
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2018 (2) TMI 2000 - CESTAT KOLKATA
Second claim for Refund of service tax paid - service of Foreign Exchange Sales services provided by broker - rejection on the ground of time limitation - HELD THAT:- The Revenue had not disputed the submission of the first Refund claim which is within the period of limitation. The appellant modified the refund claim and filed on 27/01/2009 for ₹ 4,20,403/- which is in continuation of the earlier refund claim.
The Tribunal in various decisions held that re-submitted claim was in continuation to earlier claim and not hit by limitation and followed the decision of the Hon’ble Gujarat High Court in the case of UNITED PHOSPHORUS LTD. VERSUS UNION OF INDIA [2003 (5) TMI 76 - HIGH COURT OF GUJARAT AT AHMEDABAD]. Hence, there is no reason to interfere in the order of the Commissioner (Appeal).
Appeal dismissed - decided against Revenue.
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2018 (2) TMI 1999 - ITAT JAIPUR
Deduction u/s 54F - four plots purchased as one single unit - HELD THAT:- Assessee could not controvert the findings of the ld. CIT(A) as in this case it does not transpire that all the four plots purchased by the assessee constitute a single unit. All the plots are separate units and the assessee has constructed the house only at one Plot No. 4. In this view of the matter, we decline to interfere with the order of the ld. CIT(A). Thus Ground No. 1 and 2 of the assessee are dismissed.
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2018 (2) TMI 1998 - ITAT CHENNAI
Unabsorbed Depreciation u/s. 10B - assessee claimed deduction u/s 10B before setting off of brought forward unabsorbed depreciation allowances - HELD THAT:- This issue is squarely covered by the judgement of Supreme Court in the case of Yokogawa India Ltd. [2016 (12) TMI 881 - SUPREME COURT]
From a reading of the relevant provisions of Section 10A it is more than clear to us that the deductions contemplated therein is qua the eligible undertaking of an assessee standing on its own and without reference to the other eligible or non-eligible units or undertakings of the assessee. The benefit of deduction is given by the Act to the individual undertaking and resultantly flows to the assessee.
Though Section 10A, as amended, is a provision for deduction, the stage of deduction would be while computing the gross total income of the eligible undertaking under Chapter IV of the Act and not at the stage of computation of the total income under Chapter VI. - Decided in favour of assessee.
Deduction of gains arising out of foreign exchange fluctuations u/s. 10B - AO excluded foreign exchange fluctuations from the business profits holding that the gains on transfer of funds between two accounts ie EEFC & PCFC in India is not on account of export receivables and hence it is to be treated as income from other sources - HELD THAT:- Assessing Officer has to see whether there is any premature cancellation of forward contract of foreign exchange and that transaction should be taken out for the purpose of considering the business loss and only the transactions which are completed to be considered for the purpose of determining the business loss from this foreign exchange forward contract and remitted the matter to Assessing Officer for fresh consideration.
We are in agree with the proposition that the MTM loss on forward contracts is not contingent loss and it is a business loss to set off against the business income of assessee. However, the AO has to consider the transaction equivalent to the export turnover to determine the MTM loss and also if there is any premature cancellation of forward contract of foreign exchange, it shall be excluded to consider the business loss and these transactions are speculative transaction. With this observation, we remit the issue to the file of AO for fresh consideration.
Levy of interest u/s 234B is mandatory. See ANJUM MH GHASWALA AND OTHERS [2001 (10) TMI 4 - SUPREME COURT].
Disallowance u/s. 14A r.w.r. 8D - CIT(A) held that invoking of Rule 8D by the AO is in order and directed the AO to examine whether the interest payment is for the loan obtained for specific purpose and not for investments - HELD THAT:- CIT(A) has applied the ratio in the case of Godrej Boyce Manufacturing Co. Ltd. [2010 (8) TMI 77 - BOMBAY HIGH COURT]. Further, his direction to the AO to verify whether the interest expenditure is related to the impugned investments being a fact finding exercise for applying the correct law, we do not find any infirmity in his order, supra. Thus, the assessee’s appeal grounds are dismissed. So also the grounds of appeal filed by the Revenue.
Expenditure incurred in foreign currency - deduction u/s. 10B - CIT-A directed the AO to exclude them from both the export turnover as well as from the total turnover for computing the deduction u/s. 10B - HELD THAT:- the decisions rendered by the CIT(A) are based on the decisions of M/S. GEM PLUS JEWELLERY INDIA LTD. [2010 (6) TMI 65 - BOMBAY HIGH COURT] and Sak Soft Ltd [2009 (3) TMI 243 - ITAT MADRAS-D] they do not require any interference, so we do not find merit in the Revenue’s grounds and dismiss them.
Disallowance of Mark-to-Market ‘MTM’ loss on forward contracts - AO held that the assessee failed to add back the provision for MTM losses on forward contracts which are contingent in nature and a provision created on such notional loss cannot be allowed and the profits of business should not include speculation loss - CIT(A) following his decision taken in order for AY 2009-10 [2016 (7) TMI 1051 - ITAT CHENNAI] remitted this issue to the AO holding that “MTM loss on forward contracts is not contingent loss and it is a business loss to set off against the business income of assessee - HELD THAT:- Since, the CIT(A) has applied the ratio laid by this tribunal in the assessee’s own case, we do not find any infirmity in the order of the CIT(A) and hence the corresponding grounds of the Revenue are dismissed.
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2018 (2) TMI 1997 - GUJARAT HIGH COURT
Direction to Official Liquidator to pay the amount of ₹ 17,04,09,403/- or as per ratio and as per the directions issued by this Hon’ble Court - payment to 2,806 workers of the Commercial Ahmedabad Mills Ltd. (In Liquidation) - HELD THAT:- The Court when issued direction for the payment to the workers and the secured creditors as per the ratio worked out between the workers and the secured creditors i.e. 55.97% and 44.03% respectively vide order dated 02.03.2005 passed in Company Application No.359 of 1998, also issued further direction to apply same ratio to any further distribution that may take place after realization of the sale proceeds of the land of the company. In respect of the ratio fixed between the workers and the secured creditors by the Chartered Accountant in the year 2004, no grievance has been made either by workers or secured creditors and such ratio was ordered to be applied for future distribution. The Court finds that since respondents no.3 and 5 have agreed for disbursement as per the same ratio and since other secured creditors have chosen not to appear, they could be taken to have no objection for disbursement of the amount as per the same ratio and since sufficient amount is available in company’s account with the Official Liquidator, the permission as sought for by the Official Liquidator for disbursement of the amount between workers and secured creditors could be granted.
The Official Liquidator is permitted to disburse the amounts to the eligible persons from the list of the workers submitted by the applicant to the Official Liquidator excluding respondents no.9 to 21 of Company Application No.99 of 2017 or any of their relative and to the secured creditors from the balance amount available in the account of the company in liquidation as on 29.01.2018 in proportion to the ratio of 55.97% and 44.03% fixed between the workers and secured creditors respectively. Such disbursement shall be after adjusting the past payment made to the workers and secured creditors - Application disposed off.
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2018 (2) TMI 1996 - ITAT MUMBAI
Reopening of assessment u/s 147 - different view with regard to the taxability of the management services fees received - HELD THAT:- We have noticed that the assessing officer has mentioned in the reasons for reopening that certain agreements have not been considered or not considered properly. But the Ld A.R has demonstrated that the agreement dated 01st April, 1998 (referred to in AY 2005-06) relates to the agreement under which the assessee has availed services from VOIPL and paid money to it. Hence the agreement dated 01st April, 1998 is not relevant for the issue under consideration, i.e., receipt of management service fee from VOIPL.
In AY 2007-08, the assessing officer has stated that the agreement was not been explored by the AO in the original assessment proceedings, which is nothing but taking a different view on the same matter. AO has attempted to give a reasoning to support his reasons for re-opening, we are of the view that the same would not be legally supporting the view of the AO. Hence, we are of the view that there is merit in the contentions of the assessee that the assessing officer has reopened the assessments of both the years only on account of change of opinion.
There is also merit in the contentions of the assessee that the assessing officer has changed his opinion on the basis of view taken by him while completing the assessment of the assessment year 2009-10.
Accordingly we set aside the order passed by Ld CIT(A) on this issue and hold that the reopening of assessments of both the years are not in accordance with the law and accordingly quash the assessment orders passed for both the years under consideration.
Since the assessing officer has not issued notices u/s 143(2) of the Act after filing of returns in both the assessment years, the assessment orders are liable to be quashed on this ground also.
Management service fees received by the assessee as “Royalty” in AY 2009-10 - AO has reopened the assessments of both the years under consideration after passing of order for AY 2009-10 and accordingly assessed the management service fee received in both the years under consideration as Royalty. The assessment order passed for AY 2009-10 has been challenged by the assessee and when it reached ITAT, the Tribunal, [2016 (11) TMI 1249 - ITAT MUMBAI] has held that the management service fees cannot be assessed as Royalty in terms of Article 12(4) of India Netherlands Treaty. Accordingly, on merits of the issue also, the addition made by the AO by assessing the management service fee as Royalty is liable to be deleted. Both the appeals of the assessee are allowed
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