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Showing 141 to 160 of 1976 Records
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2018 (4) TMI 1840 - DELHI HIGH COURT
TP Adjustment - exclusion of a comparable i.e. Wipro Technology Services Limited in the Arm’s Length Price (ALP) determination - said entity reported abnormally high profits and had a large turnover and had the benefit of strong brand presence - also found that the entity (Wipro Technology) had undergone restructuring which had a significant impact upon its return and profitability - HELD THAT:- This Court is of the opinion that the ITAT conclusions were reasonable and justified. A strong brand presence and unusual events such as amalgamation, merger, etc. – which can have a miserable impact and are discerning from the record, are reasonable grounds for excluding a particular comparable; which was a case of Wipro Technology. The Tribunal also noted that in such cases the issue of comparable has to been seen from the robust market practice as well.No question of law arises.
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2018 (4) TMI 1839 - ITAT JAIPUR
Bogus LTCG - exemption u/s 10(38) - HELD THAT:- Shares were allotted in a private placement by the company at par which were dematerialized and thereafter sold by the assessee.
The finding of the AO in the case of the assessee is based merely on suspicion and surmises without bringing any cogent material to establish that the assessee has introduced his unaccounted income in the shape of long term capital gain. Transaction in the case is not a trading of the shares through brokers but it was an allotment by the company in a private placement and thereafter the shares were dematerialized and duly reflected in the demat account of the assessee, therefore, the holding of the shares in the demat account and subsequently transfer of the same from the demat account cannot be doubted and consequently the transaction of sale cannot be held as bogus.
In the absence of any material to show that the assessee has paid the amount of capital gain as his unaccounted income to convert the same to the exempt income, the entire transaction of sale of shares cannot be held as bogus. This issue in favour of the assessee and allow the claim of the assessee. The orders of the authorities below qua this issue are set aside. - Decided in favour of assessee.
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2018 (4) TMI 1838 - KARNATAKA HIGH COURT
Grant of Redemption of advance authorization - non-fulfilment of export obligation - It is submitted that the fact of use of inputs imported against the advance authorization for use in the manufacture and supply of finished goods to the SEZ unit is not disputed and stands proved by the alternative documents submitted by the petitioner thus meriting redemption of advance authorization - HELD THAT:- The consumption certificate placed on record by the petitioner before the RA as well as the Policy Relaxation Committee has not been properly appreciated. The said consumption certificate indicates the details of consumption namely, the supplier name, consignee name, customer LOA No./PO No., SEZ notification number and date, corelates with the SEZ notification number and the advance license number and date. In the backdrop of these documents, RA as well as the Policy Relaxation Committee would have examined the consumption certificate/‘Certificate of Receipt of Supply’ to ascertain the genuineness of the discharge of the export obligation more particularly, the statutory authorities namely, the Range Superintendent of Central Excise and the Development Commissioner, SEZ have appended their signature on these certificates. These Statutory Authorities would not have appended their signature and allowed the endorsement or the affixation of a stamp, unless they were satisfied that these are the very ARE-1 forms issued at the relevant point of time which co-related with advance authorization and its number and date.
On examining these consumption certificates, the Authorities could have condoned requirements of generating the bill of export and raising an objection that ARE-1 forms submitted without the number and date, would be hyper-technical. In the circumstances of the case where substantial material was placed on record to establish the factum of the export as contemplated under the Act and Rules or in other words, complying with the requirement contemplated under the Act and Rules, supplying the goods from the domestic tariff area to SEZ, considered to be equivalent to an export of goods physically from this country to abroad requires consideration.
The ‘Certificate of Receipt of Supply’ duly certified and stamped/ endorsed by the Statutory Authorities would have been appreciated by the Policy Relaxation Committee - respondent No. 4 to grant the necessary relaxation - the impugned orders of the Policy Relaxation Committee cannot be held to be sustainable - Petition allowed.
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2018 (4) TMI 1837 - ITAT MUMBAI
TP Adjustment - arm’s length price in respect of international transactions of Intra group services relating to external commercial borrowings - action of the DVO in upholding the 20% of agency fee and interest income earned by the overseas branch - receipt of sales credited relating to derivatives on cost plus margins of 72.94% earned by assessee, which was more than 25% earned by comparable price - HELD THAT:- As decided in own case the Appellant has made a proper transfer pricing study and has applied TNM method. As could not find any grounds to reject the Transfer Pricing Study made by the Appellant. It is also to be appreciated that the prices are fixed on the basis of the Global Transfer Policy - cost plus mark for the services rendered is far higher than the comparable transactions. My predecessor has considered the issue in assessment year 2004-05, 2005-06 and 2006-07 and has deleted the addition recommended by the TPO. The same ground has also been upheld by my order for AY 2007-08 - price charged by the Appellant's branch in India is at arm's length price. No reason to deviate from my earlier order and hence, the TP adjustments made by the AO with regard to the derivative products are deleted. The AO is directed to delete the addition made in this regard. - Decided in favour of assessee.
Transaction relating to money deposits by placing reliance on I.T. Rules 10A(d) - while applying CUP method of ALP determination each such transaction could be evaluated/ benchmarked separately - HELD THAT:- As decided in Audco India [2010 (11) TMI 769 - ITAT MUMBAI] keeping in view that the difference between the sale of L&T LLC and Arm's Length Price is only 3.35% which is well within the limit of 5%, we are inclined to uphold the finding of the ld. CIT(A) in deleting the addition made by the Assessing Officer. The ground taken by the revenue is, therefore, rejected
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2018 (4) TMI 1836 - KERALA HIGH COURT
Freezing of Bank Accounts of the Municipality - HELD THAT:- There are considerable force in the submissions of the Learned Counsel for the petitioner and therefore, even though the Learned Standing Counsel for the respondents vehemently objects to this prayer, I am of the firm view that it is not proper to allow the respondents to freeze the accounts of the Municipality specially when the Municipality is engaged in several activities that involve the general public.
Ext. P9 is stayed to the extent to which the Deputy Commissioner has ordered that the accounts of the Municipality, with the fourth respondent bank, be frozen - the fourth respondent will permit the operation of the accounts by the Municipality as is routinely done without in any manner being governed by Ext. P9 order.
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2018 (4) TMI 1835 - ITAT DELHI
TPA Computation - comparable selection - rejection of the comparable Continental Valves Ltd., on account of failing low turnover filter of ₹ 5 crore applied by Ld. TPO - HELD THAT:- On verification of profit and loss account of this comparable it is observed that purchase of raw materials constitute materials consumed in production process and not for trading process which establishes this comparable to be engaged in carrying out manufacturing activity only. Further from TPO order passed by Ld.TPO for assessment year 2011-12, as well as DRP for assessment year 2012-13 it is observed that this comparable has been accepted during these assessment years.
On perusal of the order by Ld.TPO for the year under consideration it is observed that he has nowhere disputed functional dissimilarity of this comparable with that of assessee. Even for the year under consideration this company is carrying on with similar manufacturing activity.
No reason to reject this comparable from the final list more so when it has already been accepted by the authorities below in the immediately preceding assessment years which has not been disputed by the revenue authorities before this Tribunal - we direct Ld.TPO to consider this comparable in the final list.
Yuken India Ltd - This company is engaged in manufacture of oil hydraulic equipment and the product range of this company includes power units- Parison controller, cylinders and Piston accumulators. Thus broadly it is into manufacturing activity and with TNMM as MAM to determine ALP, broad functional dissimilarities get automatically adjusted. Accordingly this comparable is directed to be included in final list of comparables. Appropriate working capital adjustment may be granted to assessee.
WIPL Ltd - Merely because this company is having a huge turnover and is submitted to be having its own R& D wing, cannot make it functionally dissimilar, more so when TNMM is used as the most appropriate method. This was what Ld.AR submitted while arguing comparability in case of Continental Valves Ltd. We are inclined to set aside this comparable back to Ld.TPO for due verification of functional similarities/dissimilarity of this company with that of assessee. Assessee is directed to provide entire company profile along with its full financials to Ld. TPO for the year under consideration.
Dynamatic Technologies Ltd. - We are unable to verify the functional comparability of this company with assessee due to insufficient materials regarding this comparable. However from observations of Ld. TPO we observe that this company is into manufacturing activity of engineering products with huge turnover - set aside this comparable back to Ld.TPO for due verification.
Comparability based upon turnover being a relevant factor - WIPL Ltd., & Dynamatic Technologies argued for exclusion due to high turnover - We do not have before us financials and complete functional profile of these comparables in the paper book and are unable to ascertain authenticity of arguments advanced by Ld.AR. - unable to ascertain whether there are any segmental information in respect of manufacturing segment undertaken by these comparables and the risk assumed by these comparables to be compared with that of assessee, which is an important factor that could affect the turnover of companies. TPO shall verify from the records placed by assessee as directed hereinabove - direct Ld.TPO to decide comparability of these companies, with that of assessee by taking into consideration observations made in the case of CIT vs. Agnity India Technologies Pvt. Ltd.. [2013 (7) TMI 696 - DELHI HIGH COURT].
PLI computation - considering foreign exchange gain/loss, as operating item and provision for bad debts and bank charges/fixed interest as non-operating expenses for the purpose of computing PLI of assessee as well as that of comparables - HELD THAT:- It is observed that Ld. AO has failed to follow directions of DRP and has computed incorrect PLI of comparables. This is evident from order passed by Ld. TPO under section 154. We also direct Ld. TPO to provide the computation of PLI in respect of the comparables to assessee in the interest of principle of natural justice. This ground raised by assessee stands allowed for statistical purposes.
Incorrect calculation of operating cost and operating revenue of assessee - HELD THAT:- TPO is directed to look into the computation and adopt correct figures as per law. Assessee is thus directed to provide all necessary details for purposes of computing the value of international transaction as per law.
Considering the proportionate transfer pricing adjustment made by assessee suo moto in the return of income - HELD THAT:- We agree with the proposition made by Ld.AR regarding restricting adjustment to ₹ 56,10,222/- suo moto offered by assessee, in the event adjustment to be recomputed by Ld. TPO/AO (as per the directions hereinabove) is less than ₹ 56,10,222/-. - Decided in favour of assessee.
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2018 (4) TMI 1834 - CESTAT MUMBAI
Rejection of declaration made under the Voluntary Compliance Encouragement Scheme, 2013 - dispute in declaration of tax dues - application was rejected on the ground that, as on the date of declaration for the period from October 2007 to December 2012, in relation to ‘construction of residential complex’ proceedings had been initiated on 1st March 2013 against them - HELD THAT:- It is seen that Circular No. 170/5/2013-S.T., dated 8th August, 2013 clarified that there was no bar on filing of declaration by an assessee against whom an inquiry, investigation or audit has been initiated after 1st March 2013.
It is seen from the records that the show cause notice was issued only on the 18th of August 2015 and that notice proposing rejection should have been issued within 30 days of the filing of the declaration. As the competent authority itself had not complied with the conditions prescribed in the scheme, the rejection of the declaration made is erroneous.
Appeal allowed - decided in favor of appellant.
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2018 (4) TMI 1833 - ITAT BANGALORE
Deduction u/s 80P(2)(a)(i) - HELD THAT:- Hon’ble Supreme Court in the case of The Citizens Cooperative Society Ltd. [2017 (8) TMI 536 - SUPREME COURT] held that in order to do the business of a cooperative bank, it is imperative to have a licence from the Reserve Bank of India. It can therefore be said that a co-operative society which does not possess a license from RBI cannot be equated to a co-operative Bank, even though it might indulge in the business of banking.
We find force in the submissions of ld. AR of assessee because we find that the facts of the present case and the facts of that case i.e. The Citizen Co-operative Society Ltd. Vs. ACIT(supra) are not discussed we set aside the order of CIT (A) and restore the matter back to his file for fresh decision by way of a speaking and reasoned order - Appeal of the revenue is allowed for statistical purposes.
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2018 (4) TMI 1832 - ITAT BANGALORE
Deduction u/s. 80P(2)(a)(i) - HELD THAT:- Hon’ble Supreme Court in the case of The Citizens Cooperative Society Ltd. [2017 (8) TMI 536 - SUPREME COURT] held that in order to do the business of a cooperative bank, it is imperative to have a licence from the Reserve Bank of India. It can therefore be said that a co-operative society which does not possess a license from RBI cannot be equated to a co-operative Bank, even though it might indulge in the business of banking.
We find force in the submissions of ld. AR of assessee because we find that the facts of the present case and the facts of that case i.e. The Citizen Co-operative Society Ltd. Vs. ACIT(supra) are not discussed and compared by ld. CIT(A) in the impugned order. Before following any judgment, the facts of the case on hand and facts of that case should be discussed and compared and since this was not done by CIT(A), we set aside the order of CIT (A) and restore the matter back to his file for fresh decision by way of a speaking and reasoned order - Appeal of the revenue is allowed for statistical purposes.
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2018 (4) TMI 1831 - ITAT CHENNAI
Assessment of trust - Assessment in hands of the beneficiaries - Whether income from deposit was not correctly admitted in the hands of the beneficiaries or not admitted, it has to be assessed in the hands of the assessee trust? - HELD THAT:- Observation of the AO in the show cause notice that the intention of the ITAT is to grant relief only in respect of interest income which is offered for taxation by the beneficiaries is not correct. This Tribunal is of the considered opinion that the intention of the ITAT in the order [2017 (6) TMI 1331 - ITAT CHENNAI] is in respect of the entire income received from various sources and distributed to investors has to be taxed as such in the hands of the beneficiaries, therefore, there is no need for any exclusion in respect of the income admitted by the beneficiaries or not admitted by the beneficiaries.
Since the details of the income and expenditure is not available in the Profit & Loss account or in the document filed before this Tribunal, this Tribunal remitted back the matter to the file of the Assessing Officer for a limited verification to collect information from beneficiaries and allow pass through status in the hands of the assessee.
AO misunderstood the direction of the Tribunal by picking up same words here and there. Hence, this Tribunal is of the considered opinion that the Assessing Officer is not correct in saying that in case the income is not admitted / incorrectly admitted, it has to be assessed in the hands of the assessee. This Tribunal is of the considered opinion that whether the income is admitted by the respective beneficiaries or not, since pass through status was given to the assessee-Fund, the entire income has to be assessed only in the hands of the beneficiaries and not in the hands of the trust / Fund. The order of this Tribunal is modified / clarified accordingly.
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2018 (4) TMI 1830 - SUPREME COURT
Interpretation of Section 65B(4) of the Evidence Act - admissibility of the electronic evidence - HELD THAT:- We are in agreement with the Report of the Committee of Experts that videography of crime scene during investigation is of immense value in improving administration of criminal justice.
Notwithstanding the fact that as of now investigating agencies in India are not fully equipped and prepared for the use of videography, the time is ripe that steps are taken to introduce videography in investigation, particularly for crime scene as desirable and acceptable best practice as suggested by the Committee of the MHA to strengthen the Rule of Law.
The Plan of Action prepared by the Committee, a Central Oversight Body (COB) be set up by the MHA forthwith, to be implemented. The COB may issue directions from time to time. Suggestions of the Committee in its report may also be kept in mind. The COB will be responsible for further planning and implementation of use of videography. We direct the Central Government to give full support to the COB and place necessary funds at its disposal. We also direct that the COB may issue appropriate directions so as to ensure that use of videography becomes a reality in a phased manner and in first phase of implementation by 15th July, 2018 crime scene videography must be introduced at least at some places as per viability and priority determined by the COB.
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2018 (4) TMI 1829 - ITAT CUTTACK
Disallowance under "Peripheral Development Expenses" - Allowable business expenses or not? - CIT(Appeals) in partly sustaining the Expenditure incurred through Corporate Office of the assessee - HELD THAT:- As decided in own case [2018 (4) TMI 1754 - ITAT CUTTACK ] AR referred to the nature of the expenditure incurred through the corporate office at Bhubaneswar and further substantiated that the assessee has evidence to prove the claim - claim of the assessee in respect of incurring of expenditure at peripheral areas as per the order of the Govt. is not disputed and the reasons recorded by the lower authorities in respect of sustenance of the addition to the cannot be overlooked - we remit this issue to the file of AO to verify the nature of expenditure incurred on the peripheral areas and decide the same on merits. This ground of appeal is allowed for statistical purposes.
Disallowance of Interest on disputed Govt. duty (Electricity Duty and water charges) - HELD THAT:- We find that the issue under consideration is covered by the order of the Tribunal in assessee’s own case for the assessment year 2006-07 & 2007-08 [2012 (12) TMI 632 - ITAT CUTTACK] issue decided in favour of the assessee - we allow the claim of the assessee on account of interest on disputed Govt. duty (Electricity duty and water charges) and this ground of assessee is allowed.
Disallowance u/s. 14A r.w.r. 8D - As per AO Disallowance made suomoto by the assessee is very less compared to the administrative and employee cost devoted to earn the exempt income - HELD THAT:- AO while computing the disallowance under clause (iii) of Rule 8D has computed 0.5% of the average investments held by the assessee company in whole, which includes the investments in equity shares and long-term debt funds as well, income from which has not been claimed as exempt by the assessee
AO could not make distinction between the equity shares and debt funds and calculated the disallowance, we are of the opinion this disputed issue has to be re-examined and apply the provisions of Section 14A r.w.rule 8D. Accordingly relying on H.T. MEDIA LIMITED [2017 (8) TMI 962 - DELHI HIGH COURT] we restore this disputed issue to the file of the AO to re-examine and verify and apply the above provisions. This issue is allowed for statistical purposes.
Additions Under Trial Operation expenses - as per AO the said expenditure incurred by the assessee till commercial production starts, could not be claimed as revenue expenditure and has to be capitalized - CIT(A) sustained the disallowance made by the AO holding that since trial run expenditure is pre-commercial production expenditure, the AO was correct in not allowing the same as revenue expenditure - HELD THAT:- AO as well as the Ld. CIT(A) have not controverted the fact that the Captive Power Plant of the assessee company has been duly commissioned in the year under consideration for commencing commercial production and we support our view with the decision of Pr. CIT Vs. Larsen & Toubro Ltd. [2017 (11) TMI 1607 - BOMBAY HIGH COURT] wherein held once plant commences operation and even if product is substantial and not marketable, the business can said to have been set up. Mere breakdown of machinery or technical snags that may have developed after the trial run which had interrupted the continuation of further production for a period of time cannot be held ground to deprive the assessee of the benefit of depreciation claimed.
We find the trial operation expenses incurred in the same year of sale. We respectfully follow the judicial decisions and direct the AO to treat the expenditure incurred by the assessee company on such trial operation as revenue expenditure and allow the claim and this ground of appeal is allowed.
Disallowance under "Prior period adjustments" - addition made as said expenses are not related to the year under consideration - CIT(A) sustained the disallowance holding that no evidence was filed in order to prove that the prior period expenses have crystallized during the year under consideration - HELD THAT:- As decided in own case [2018 (4) TMI 1754 - ITAT CUTTACK] remit this disputed issue to the file of AO to examine the claims and grant the set off of prior period income against the prior period expenses and passed the order on merits and the ground of appeal is allowed for statistical purposes.
Disallowance of amounts written off in respect of Claims, receivables, advances, shortages etc - as per AO no supporting documents and evidences in this regard were filed by the assessee - CIT(A) has sustained the disallowance holding that the assessee could not claim the written off of the advances when they were not a part of income of earlier years - HELD THAT:- It is not in dispute that the amount of said advances has been given during the course of business and for business purpose only, which has become irrecoverable. Ld. AR drew our attention to paper book and submitted that the assessee has filed all the details before both the authorities below. Since the said amount has been utilized for business purpose and has to be allowed either as a business expenditure u/s 37(1) of the Act, or as a business loss while computing the profits and gains u/s 28 of the Act, considering the submissions of ld. AR of the assessee, we are of the opinion that the issue requires further examination by the AO - thus allow this ground of appeal for statistical purposes.
Disallowance of Provision for Leave Encashment' u/s.43B(f) - AO alleging that the same is allowable only if the said expenditure has actually been paid by the assessee - CIT(A) has sustained the disallowance made by the AO holding that the decision in the case of Excide Industries Ltd. v. Union of India [2007 (6) TMI 175 - CALCUTTA HIGH COURT] has been stayed by the Apex Court - HELD THAT:- As decided in own case [2018 (4) TMI 1754 - ITAT CUTTACK] we set aside the order of the CIT(A) and remit the matter to the file of the Assessing officer to re-adjudicate the issue in the light of the Hon‘ble Supreme Court decision. Hence, this ground is allowed for statistical purposes.
Disallowance u/s.43B Under 'Electricity Duty' & water Charges - HELD THAT:- As decided in own case [2018 (4) TMI 1754 - ITAT CUTTACK] disallowance u/s.43B has to be primarily when such electricity duty has been claimed as expenditure in the impugned assessment year. The assessee could not override the Hon‘ble High Court directions. The expenditure remained unpaid for both the years in spite of these directions, therefore, was rightly brought to tax by the ld AO u/s.43B, we uphold the confirmation thereof by the ld CIT(A). This ground for both years stands dismissed
Treatment of capital gain income as business income - CIT(A) has affirmed the action of the AO by stating that frequent transactions entered into in stocks / shares / mutual funds by the assessee as well as the substantial amount involved in these transactions, reflects that the income earned from these transactions should be taxed as business income of the assessee - HELD THAT:- Object of the assessee is manufacturing and assessee being a public sector company has enough funds and made investment in the mutual funds and on redemption the income is offered under the capital gain and the main object being the business and the maximum income is established through the direct business operations and not from the financial transaction. The investment has been made with the mutual funds/liquid funds/ closed ended funds and encashment on redemption/maturity. Further, the total profit earned by the assessee company by way of capital gains is only about 4% of the total income of the assessee company, which clearly shows that the assessee company is engaged in the business of mining, manufacturing, generation and production of aluminium and not dealing in mutual funds / liquid funds.
As relying on Ramniwas Ramjivan Kasat [2017 (6) TMI 351 - GUJARAT HIGH COURT]we direct the AO to treat the income as capital gains and not as business income and this ground of appeal of assessee is allowed.
Disallowance of loss on valuation of non-moving store and spares - AO has made the disallowance stating that the loss claimed on account of diminution in the value of non-moving stores and spares should be restricted to 25% of the original cost, instead of 95% as claimed by the assessee - HELD THAT:- As decided in own case [2005 (11) TMI 483 - ITAT CUTTACK] we set aside the order of the CIT(A) on this ground and direct the AO to allow the claim of loss on account of value of non-moving stores and spares.
TDS u/s 195 - Payment to non residents - HELD THAT:- Amounts have been paid towards purchase of raw material, etc. on principal to principal basis and the assessee has procured the goods from the non-resident seller at its own cost after making payments on CIF basis. The raw material is sold by the non-resident seller in foreign soil, hence, no income accrues to the non-resident seller in the Indian territory. The Revenue has not controverted this finding of CIT(A) by bring any material on record nor it is apparent that income in respect of transactions arises in favour of the non-resident sellers in the Indian territory or that the income of such nonresidents in respect of transactions is assessable under Indian Income tax Law. The CIT(A) while considering the disputed issue has relied on the decision of GE India Technology Cen (P) Ltd. [2010 (9) TMI 7 - SUPREME COURT]and observed that if the payment is made to a non-resident, which is not a taxable income in India, then no tax is required to be deducted u/s.195 of the Act and deleted the addition. In view of the above, we do not see any reason to interfere in the order of CIT(A), who has passed a reasoned order .
Addition made on account of provision for provisional salary claimed by the assessee u/s.37 - AO stated that in case of the assessee the liability has not been actually arisen and it is merely anticipated and disallowed the same - HELD THAT:- We found that the ld. DR could not controvert with any new findings of the CIT(A) except relying on the order of AO and on perusal of the CIT(A)’s order we found that the assessee has produced the bills and supporting documents. The CIT(A) having considered these facts and also claim made by the assessee has passed a reasoned decision treating as ascertained liabilities and directed the AO to delete the addition.
TDS u/s 194J - training expenses - Addition u/s 40(a)(ia) - CIT(A) while considering the disputed issue he has observed that there is ambiguity on applicability of provisions of the TDS. AND the entire training expenses cannot be for technical services and therefore cannot be construed that TDS should be done as per the Section 194J - HELD THAT:- AO had not segregated exactly which amount requires TDS. There is also ambiguity regarding under what provisions of the section the TDS are to be done. The entire training expenses cannot be for technical services and therefore cannot be construed that TDS should be done as per the Section 194J -the expenses claimed by the appellant should not be disallowed and provisions of section 40(a)(ia) should not be attracted. The AO is directed to delete the same correctly.
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2018 (4) TMI 1828 - ITAT DELHI
Effective date of settlement agreement - determination of what is the taxable "previous year" - HELD THAT:- We are unable to concur with Commissioner of Income-tax (DR) objection that the effective date of settlement agreement is not January 1, 1984.
As in the case of CIT v. Patiala Sales Corporation Pvt. Ltd.[1970 (1) TMI 9 - PUNJAB AND HARYANA HIGH COURT] has held that the option given by the statutory provisions of section 3(1)(b) is to the assessee and not to the Department and once such an option is exercised the Department has no alternative but to assess the income in accordance with the option so exercised.
AR has highlighted the facts of the case from the computation of income filed by the assessee. In the computation/s for the assessment years 1981-82 to 1984-85, the assessee has categorically mentioned its accounting year/previous year as ending with the calendar year.
It is only with effect from the assessment year 1985-86 that the assessee has shifted to financial year being its previous year. Undisputedly, for the twelve month period relevant to assessment year 1984-85 the assessee has drawn up its accounts as year ending December 31, 1983
Assessee has validly, exercised its option as envisaged in section 3(1)(b) of the Act. We, therefore, find considerable merit in the additional ground of appeal and the same is, therefore, allowed. AO is accordingly directed to assess the taxable total income of the assessee for the assessment year 1984-85 with taking the "previous year" as on January 1, 1983 to December 31, 1983 and considering the effective date of settlement agreement as January 1, 1984.
Assessing Officer is given the liberty to take necessary remedial steps as per law for assessment of compensation flowing to the assessee under the settlement agreement in the appropriate assessment year - entire issues raised before us by both the parties will also have to be necessarily re- examined afresh by the Assessing Officer. Accordingly, all the issues raised by both the parties are also restored to the file of the Assessing Officer to be decided afresh in terms of our observations after giving due opportunity to the assessee.
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2018 (4) TMI 1827 - ITAT MUMBAI
Premium received on tenancy transfer - correct head of income - Capital gain or income from other sources - exemption u/s 54 EC - HELD THAT:- As decided in own case [2017 (2) TMI 1467 - ITAT MUMBAI] 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.
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2018 (4) TMI 1826 - ITAT DELHI
TP Adjustment - adjustment to the price of International transaction of provision of engineering and design services - cost incurred toward AE and non-AE transaction - amount received by the assessee corresponding to the man-hours utilised by the AE - cost allocated towards utilized man-hours of AE transactions according to the matching principle of revenue & expenses - HELD THAT:- We cannot take different yardsticks for measuring cost incurred toward AE and non-AE transaction by same set of manpower. Taking committed man-hours in the case of AE, which also included unutilized man-hours, would distort the allocation key. Thus, the basis of allocation of the cost towards the AE transaction should be on man-hours utilized only and not on man-hours which have been committed by the AE for payment.
TPO should have only computed the cost allocated towards utilized man-hours of AE transactions according to the matching principle of revenue & expenses - total cost incurred by the assessee is for total man-hours utilized, both for the AE as well as non-AE transactions, and thus, while allocating the cost to the AE transactions, non-utilized manhours cannot be included.
Since the man-hours utilized for the AE are 5695 and man-hours utilized for non-AE are 2,77,730, the total man-hours utilized would be (5695 + 2,77,730 =) 2,83,425 and the ratio of man-hours utilized by the AE to the total man-hours utilized would be (5695/283425)X 100 = 2%.
Since the amount received by the assessee corresponding to the man-hours utilised by the AE has been worked out by the Ld. TPO which being less than the arm’s length price computed no adjustment to the price of International transaction of provision of engineering and design services is required. - Decided in favour of assessee.
Depreciation on intangibles - HELD THAT:- As decided in assessee's own case [2015 (11) TMI 1218 - DELHI HIGH COURT] the issue has been decided in favour of the assessee following the judgment of Smifs Securities Limited reported in [2012 (8) TMI 713 - SUPREME COURT]
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2018 (4) TMI 1825 - CESTAT KOLKATA
Refund of Differential Amount - appellant’s claim is that the annual differential refund should be calculated taking all goods together irrespective of their value addition percentage - HELD THAT:- The Commissioner (Appeals) had given detailed reasons with the table of calculation in his order which was not refuted by the appellant - there are no reason to interfere with the order of the Commissioner (Appeals) - appeal dismissed - decided against appellant.
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2018 (4) TMI 1824 - NATIONAL COMPANY LAW TRIBUNAL, HYDERABAD
Extension of CIRP period - HELD THAT:- The fact that CIRP could not be taken up for nearly about 160 days because of various interim orders passed by this Authority and in view of the pendency of above said applications for adjudication, there is an urgent need to pass interim order to extend the CIRP period atleast till the next date of hearing. All the Counsels appearing for all the parties represented that it would be convenient for them to advance their arguments for final hearing of pending applications only on 15.05.2018 but not before that date. Hence, the CIRP period is extended till 15.05.2018.
This Interim Order is passed extending the CIRP period till 15.05.2018, subject to the orders of the Hon 'ble NCLAT in the Appeal pending before it.
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2018 (4) TMI 1823 - CESTAT AHMEDABAD
Violation of principles of natural justice - appellant could not attend the personal hearing - power to remand the matter decided the appeal itself - HELD THAT:- The appellant have not submitted their reply to the SCN nor participated in the adjudication proceedings. In the interest of justice, we are of the view that a final opportunity may be allowed to the appellant to submits their reply to the SCN and appear for personal hearing before the Ld. Adjudicating Authority. Ld. Advocate undertakes that they will not seek unwarranted and unnecessary adjournments and will file reply to SCN within one month from the date of communication of the order.
Appeal allowed by way of remand.
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2018 (4) TMI 1822 - ITAT DELHI
Assessment u/s 153A - Treatment to sales tax subsidy - revenue or capital receipt - HELD THAT:- issue of sales tax subsidy is covered in favour of the assessee by order of ITAT in assessee’s own favour in earlier assessment years 2007 – 08 and 2008 – 09 [2016 (4) TMI 1320 - ITAT DELHI]. This issue also came up in assessment year 2009 – 10 and the same was decided in favour of the assessee - Also this addition has been made without there being any incriminating material found in respect of this addition during the course of search conducted on the premises of the assessee. Respectfully following the earlier orders of the Tribunal in the assessee’s own case as aforementioned we allow these grounds raised by the assessee.
Disallowance of professional charges paid for feasibility study - Tribunal had noted that no new asset had come into existence nor any benefit of enduring nature had resulted for the assessee company and, therefore, the expenditure incurred on feasibility study was to be allowed as revenue expenditure. As nothing new has been brought on record by the Department subsequent to the earlier order of the ITAT and nothing new or incriminating was found during the course of search, we hold that the expenditure incurred on feasibility study is to be allowed as revenue expenditure and accordingly we allow the grounds raised by the assessee in this regard.
Disallowance u/s 14A - Admittedly, the assessee had not earned any dividend income during the year under consideration and, therefore, no disallowance under section 14A could be made. It is seen that with respect to this disallowance also nothing incriminating was found during the course of search and, therefore, in absence of any evidence to the contrary being demonstrated by the Department, since the assessee has not earned any dividend income during the year under consideration, we find no reason to interfere with the findings of CIT (Appeals) in this regard and we deem it fit dismiss the grounds raised by the Department.
Ad hoc disallowance to the extent of 5% of the total foreign travelling expenses - as per AO disallowance should be restored to 10% of the total expenditure on foreign travelling - HELD THAT:- As no incriminating material has been brought on record in respect of this item of expenditure and this issue has already been settled in favour of the assessee by earlier orders of the ITAT [2016 (4) TMI 1320 - ITAT DELHI]. Consistent with the view taken in earlier orders of the ITAT, the ground raised by the assessee is allowed
Addition for scrap sales - addition for the first time in the order passed under section 153A - HELD THAT:- It is settled law that there is no scope for extrapolation in assessment framed under section 153A of the Act and the additions can be made only with reference to incriminating material found during the course of search. This view supported by another judgment in the case of Principal CIT versus Smt. Anita Rani [2017 (3) TMI 389 - DELHI HIGH COURT] - in view of the finding of fact by the Ld. CIT (Appeals) that incriminating material found in respect of the scrap sales amounted to ₹ 20,73,211/- - Decided against revenue.
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2018 (4) TMI 1821 - ITAT PUNE
Deduction u/s 80IA(4)(iii) - specific condition in the notification pertaining to the assessee regarding the number of units was not fulfilled - assessee contended that the Assessing Officer had ignored the Profit and Loss Account relating to software business filed vide letter dated 14.02.2014 - CIT-A allowed the claim - HELD THAT:- Where the learned Departmental Representative for the Revenue has failed to controvert the findings of CIT(A) and in view of evidences filed by the assessee in audit report in form No.10CCB, we hold that the assessee is entitled to claim the aforesaid deduction under section 80IA(4)(iii) - Decided against revenue.
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