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Showing 61 to 80 of 2148 Records
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2018 (8) TMI 2094 - KARNATAKA HIGH COURT
TP Adjustment - substantial questions of law raised before the High Court u/s 260-A - substantial quantum of international trade and transactions depends upon the fair and quick judicial dispensation in such cases - extra credit allowed can be considered as an independent international transaction and the same be compared with the internal CUP being average cost of the total funds available to the assessee, directed the TPO to find out the cost of the total funds available to the assessee and same should be adopted as internal CUP for benchmarking of this independent international transaction i.e. allowing extra credit in addition the agreed credit period of 30 days - HELD THAT:- This Court in a recent judgment in cit Vs. M/s. Softbrands India Pvt. Ltd.[2018 (6) TMI 1327 - KARNATAKA HIGH COURT] has held that in these type of cases, unless an ex-facie perversity in the findings of the learned Income Tax Appellate Tribunal is established by the appellants, the appeal at the instance of an assessee or the Revenue u/s 260-A of the Act is not maintainable.
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2018 (8) TMI 2093 - SC ORDER
Allowability of expenditure - business expenditure of payment of commission to its agents of marketing and related services - assessee had adduced such proof as it was in its power to prove - HELD THAT:- Heard the learned counsel appearing for the parties. Leave granted. Hearing of the appeal is expedited.
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2018 (8) TMI 2092 - SC ORDER
G.P. addition - trading addition - admitted facts in the statement of Director u/s 132(4) - average GP rate which will be applied in the present case will be 12 per cent. - HELD THAT:- Delay condoned.
Leave granted.
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2018 (8) TMI 2091 - ITAT BANGALORE
TPS u/s 195 - Disallowance u/s 40(a)(i) - non-deduction of TDS in relation to payments made for professional services obtained from non-resident - scope of India-Philippines Double Taxation Avoidance Agreement - whether CIT (Appeals) has erred in upholding a disallowance for non-deduction of TDS on payment for gaming moderation services, to Stratpoint Technologies Inc. ["Stratpoint"/ "Service provider"]? - HELD THAT:- CIT(Appeals) has not spelt out as to which category the payment by the assessee to Startpoint would fall. In our view, it cannot be for the use of or right to use any copyright of literary, artistic or scientific work, etc. It cannot also be for the use of any patent, trademark, etc. It cannot also be for the use of or right to use, industrial, commercial or scientific equipment. If at all, it can be analysed as to whether it can be for the use of or right to use information concerning industrial, commercial or scientific expertise. We have already seen the nature of services rendered by Startpoint. The services rendered by Startpoint was in the nature of moderator for an online game developed by the assessee. As a moderator, certain services are expected to be performed by Startpoint.
The results of moderation are given in the form of a report. By giving the results of moderation in the form of a report, assessee does not make payment to Startpoint by the Assessee as a payment for use of or right to use information concerning industrial, commercial or scientific expertise. Therefore, even under this clause of the definition of ‘royalty’, the payment in question cannot be said to be royalty and chargeable to tax under Article 13 of the DTAA.
Thus we hold that the payment in question cannot constitute ‘royalty’ under Article 13 of the DTAA. Consequently, the payment in question cannot be brought to tax. Since the sum in question is not taxable in India, the provisions of section 40(a)(ia) of the Act are not applicable and therefore disallowance made by the revenue authorities cannot be sustained. The same is directed to be deleted. Ground No.1 is allowed.
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2018 (8) TMI 2090 - ITAT PUNE
Disallowance of relocation expenses - addition made by the AO considering the same to be personal expenses - CIT-A deleted addition - HELD THAT:- Revenue has not brought anything on record to demonstrate the facts of the issue for the year under consideration are anyway different as compared to earlier AY wherein held that no enduring benefit had accrued to the assessee either in the capital field and there was no creation of any capital asset nor it affected the fixed capital of the assessee. The experts who came for the period of 2 to 3 years returned after the contract period was over. Therefore, it is not correct to say that any enduring benefit accrued to the assessee which could be held as disallowable as capital expenditure. The services of such experts were undertaken only for the contact and improvement of the business. we are of the opinion that the order of CIT(A) is fair and reasonable and it does not call for any interference. Accordingly, Ground No.1 raised by the Revenue is dismissed.
Adhoc disallowance on account of Travel expenses - HELD THAT:- After hearing both the sides and on perusal of the order of Tribunal in assessee’s own case for the A.Y. 2009-10we find the Tribunal has not approved the system of making adhoc disallowance adopting the flat rate of 10%.Revenue has not brought anything on record to demonstrate the facts of the issue for the year under consideration are anyway different. Considering the above, we are of the opinion that the assessee’s claim for allowing the travelling and conveyance expenses is allowed in favour of the assessee
Adhoc disallowance on account of telephone expenses - Considering the above of the Tribunal against the adhoc disallowance in assessee’s own case and the decision of CIT(A) on this issue, we are of the opinion that the disallowance made by the AO on this telephone expenses cannot be sustained. Accordingly, Ground raised by the Revenue is dismissed.
Denial of Claim of deduction u/s.35AB - scope of expression “paid” used in the sub-section (1) of section 35AB - HELD THAT:- We proceed to explain if the expression “paid” used in the sub-section (1) of section 35AB covers this arrangement of assessee in not paying the money at all to the supplier MBAG and allotting of shares equivalent of Rs.100.32 crores to the DBAG, the flagship company of the assessee.
Meaning ‘Paid’, ‘Actually paid’ Etc. - Expressions used in section 35AB and the expression ‘actually paid’ in section 35ABA has to be interpreted after considering the definition specifying the said expression ‘paid’ in section 43(2) of the Act. If the same is considered, in our view, the shares so allotted by the assessee cannot be considered as allotted towards the liability to the MBAG, the supplier of the company. Ld. Counsel for the assessee could not demonstrate as to why the shares were allotted to the DBAG and if the said allotment was done for squaring up of any liabilities between MBAG to DBAG. On this issue, it is a failure to discharge the onus from the assessee’s side. Notwithstanding the same, we also find if the allotment of shares constitute exchange of shares against acquisition of know-how. Normally, the exchange occurs between the parties with reference to the goods. It may involve money worth and certainly not the money alone. In effect, the payment becomes relevant issue only with reference to the money wherever the squaring up of the entries are involved on accrual basis, the expression ‘incurred’ was used in the provisions of section 43(2) relating to definition ‘paid’. In the instant case, the assessee has neither paid nor allotted shares to the supplier of the know-how. Therefore, we are of the opinion that the arguments raised by the Ld. Counsel for the assessee are not legally sustainable on this issue. Accordingly, the same are dismissed.
Any Lump sum consideration - Coming to the meaning of the expression ‘any lump sum consideration” used in the provisions of section 35AB of the Act, the assessee relies on the provisions of section 269A relating to the definition of ‘apparent consideration’ - Counsel referred to the definition ‘consideration vide the Contract Act, (supra) and we find the same is different qua the expression ‘expenditure’ within the meaning of ‘any lump sum consideration’ if it covers the impugned transaction of allotment of shares to the DBAG, who is the sister concern. It is a case where assessee never paid money directly to the supplier of the technical know-how or allotted equivalent value of shares to the supplier. In our view, it is not a straight case of making payment/allotting shares to the supplier of the technical know-how. The expression ‘consideration’ is not synonymous with the word expression ‘expenditure’ used in section 37(1) of the Act despite the fact the title of section 35AB refers to the word expression ‘expenditure’.
Liberal Interpretation - The onus is on the assessee to demonstrate the facts leading to the applicability of the said section. As detailed in the preceding paragraphs of this order the information relating to the relationship between the DBAG and MBAG are not coming forth from across the borders. It is an admitted fact that the reasons are absent as to why the shares were allotted to the non supplier of the technical know-how. We understand had the assessee eventually allotted the shares directly to the supplier, our inference could have been different. The payment by way of allotment of shares is never to the supplier of the technical know-how in this case which makes inapplicability of the principle of liberal interpretation to the facts of the present case. The transactions between the assessee on one side and the MBAG and DBAG on other side are not transparent so far as the transactions between the MBAG and DBAG are concerned.
Judgment in the case of EIMCO K.C.P. Ltd. [2000 (2) TMI 7 - SUPREME COURT] - The facts of this case are not applicable to the case on hand where the distinguishable facts include (1) the applicability of provisions of section 35AB of the Act; (2) the shares were allotted to the other group concern (DBAG) of the supplier (MBAG) and not to the supplier of the technical know-how; (3) absence of facts/information leading the supplier of the know-how to allot the shares by the assessee company to the DBAG etc. In any case, this decision was relied upon by the AO out of context. Therefore, it is our categorical finding that the AO and the CIT(A) erred in relying on this judgment which is delivered in connection with the ‘expenditure’ or otherwise and the ‘Revenue expenditure’ or otherwise.
Further, on the application of ratio of Judgment of Hon’ble Karnataka High Court in the case of Amco Power Systems Ltd. [2015 (10) TMI 2385 - KARNATAKA HIGH COURT], Judgment of Hon’ble Bombay High Court in the case of Raymond Ltd. [2012 (4) TMI 129 - BOMBAY HIGH COURT] and the order of the Tribunal in the case of Kalyani Steels Ltd. [1997 (3) TMI 611 - ITAT PUNE] we find these decisions were delivered in the context of payments to the supplier of the technical know-how whereas the facts of the present case differ in principle as the shares were allotted not to the supplier of the company but to group concern of the supplier. Further, there is no information on the reasons which led the assessee to make allotment of shares to DBAG and not to the supplier MBAG.
From the above analysis from various angles, i.e. (a) the provisions of section 35AB of the Act; (b) the meaning ‘paid’ and ‘actually paid’; (c) any lump sum consideration; (d) liberal interpretation; (e) judgment in the case of EIMCO K.C.P. Ltd.; and (f) linking the issue to the Tribunal orders for A.Y. 1996-97 and others, we find the facts relating to not squaring up the liability directly with the supplier-MBAG and allotment of shares to the DBAG are peculiar to the factual matrix of this case. In effect, the supplier did not receive any payment literally to its account either in the form of cash or in the form of kind from the assessee. As such, it is the admitted position that there is no direct case law on any one of the issues discussed in (a) to (f) above. Therefore, we are of the opinion that despite the laborious arguments made by the Ld. Counsel for the assessee, the ground No.1 raised by the assessee need to be dismissed. Accordingly, the Ground No.1 of the assessee’s appeal is dismissed.
Write off of the Capital Work-in-progress - HELD THAT:- We find the decision of CIT(A) given is not complete in all respect which includes that the CIT(A)/AO never discussed the details of the said expenditure on one side and applicability of the relevant legal propositions on the other while deciding the issue by the CIT(A). It is understood that every case has its peculiar facts but the philosophy relating to the decision to describe particular expenditure as capital or revenue is already discussed by the Hon’ble jurisdictional High Court as well as Hon’ble Apex Court.
The legal propositions described by other High Courts also contribute to the evolution of thought on this issue. Therefore, in our view, there is requirement of remanding this issue to the file of AO for want of a decision on facts as well as application of legal propositions. As such, we never had the benefit of knowing the details of expenditure amounting to Rs.9,79,25,979/- aggregated under the head “capital work in progress”. It is relevant to know what are the details of break-up of the expenditure on one side and the genuineness of the same on the other. Neither the AO nor the CIT(A) has examined this angle of the claim of the assessee. Therefore, in the set-aside proceedings, AO is directed to examine the same and decide the issue afresh after giving reasonable opportunity of being heard to the assessee. Accordingly, relevant ground raised by the assessee is allowed for statistical purposes.
Allowability of Club Expenditure - membership fee for Poona Golf Club and Hyatt Regency New Delhi, for the Managing Director, AO disallowed the same as non-business expenses and made addition - HELD THAT:- On perusal of the note given by the Ld. Counsel for the assessee which is extracted above, we find the facts of the decisions cited by the Ld. Counsel for the assessee are distinguishable. It is not the case of the assessee that the employees were not benefitted and the expenditure is wholly and exclusively for the business purposes of the assessee - we find the order of the CIT(A) is fair and reasonable. Accordingly, this part of ground raised by the assessee is dismissed
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2018 (8) TMI 2089 - ITAT KOLKATA
Disallowance of transport expenditure - AO disallowed assessee’s expenditure claim and Applied section 40(a)(ia) - HELD THAT:- We find no merit in either of these submissions. The fact remains that the Assessing Officer had himself accepted and assessed assessee’s total turnover to have been derived from transport business. He thereafter disallowed its corresponding transport expenditure to be not proved as genuine.
DR fails to dispute the clinching fact that this assessee is in transport commission agent business rather than owning vehicles of its own. That being the case, it was very much necessary for the tax payer to engage other lorries for transportation of goods. This is therefore a case of accepting correctness of the entire receipts as income and disallowing the entire expenditure claim which is not permissible in our considered opinion.
CIT(A) has estimated assessee’s profit @12% these peculiar circumstances only by exercising his co-terminus powers as well as to that of the AO the first appellate jurisdiction as well. Needless to say, the assessee’s books admittedly stood rejected. The CIT(A) has correctly appreciated the entire facts thereafter in holding that section 40(a)(ia) pre-supposes genuine business expenditure which cannot go side by side to an instance involving rejection of books. We thus affirm CIT(A)’s well reasoned findings. The Revenue fails in all of its three folded grounds.
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2018 (8) TMI 2088 - ITAT CHENNAI
Reopening of assessment u/s 147 - denial of deduction u/s 80IA - scope of original order of assessment as merged with the judgment of Madras High Court - Tribunal and Madras High Court allowed the claim of the assessee u/s 80-IA on the very same windmill but AO by referring the amendment made by Finance Act, 1998, claims that windmill cannot be equated with power generating unit and he withdrew the deduction granted when the original order of assessment is merged with the judgment of Madras High Court, can the Assessing Officer reopen the assessment and withdraw the claim of deduction granted under Section 80-IA of the Act? - HELD THAT:- This Tribunal is of the considered opinion that the Assessing Officer has no jurisdiction to overturn the judgment of Madras High Court. The judgment of Madras High Court is binding on all the authorities in the State. Whatever may be the reason, the Assessing Officer has to follow the judgment of Madras High Court. Now the Revenue claims that an SLP was filed before the Apex Court. It is open to the Revenue to pursue remedy before the Apex Court in a manner known to law. However, the Assessing Officer cannot reopen the assessment and withdraw the claim of deduction under Section 80-IA of the Act which was already allowed by the Madras High Court.
This Tribunal cannot permit the Assessing Officer to overturn the judgment of Madras High Court merely because an SLP is pending before the Apex Court.
After the judgment of Madras High Court confirming the order of this Tribunal, the Assessing Officer cannot reopen the assessment on the ground that windmill cannot be equated to power generating unit. The Assessing Officer ought to have raised this issue before this Tribunal or High Court. Having failed to raise the issue before the Tribunal or before the High Court, the Assessing Officer cannot reopen the assessment. The High Court, being constitutional High Court, its judgment has to be followed by all the authorities in this State. Therefore, reopening of the issue of deduction under Section 80-IA of the Act after the order of this Tribunal and the judgment of the Madras High Court is not justified. Hence, the CIT(Appeals) has rightly allowed the appeal of the assessee. - Decided against revenue.
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2018 (8) TMI 2087 - ITAT AMRITSAR
Best judgment Assessment u/s. 144 - assessee could not comply with the requisitions specified in the notices u/s. 142(1) issued from time to time - HELD THAT:- The burden to prove its’ return, and the claims preferred thereby, is on the assessee. The assessee’s insistence, therefore, on the Revenue to provide him with the copies of the documents he required for making compliance, is thus wholly inappropriate, particularly considering that it is not the Revenue (Income-tax) but the Customs Department that had seized the documents. Equally invalid is the plea of an inability to provide the documents/information in view of the books of account having been seized or taken away by the Customs Department, which continued to be made by the assessee before the AO even as late as 14/12/201. It was incumbent on the assessee to have moved the Customs Department for the said documents, which has not been shown.
AO provided the same to the assessee on 19/12/2011, i.e., after obtaining the same from the Customs Department. While the AO indeed acted proactively in doing so, he ought to have, in the interest of the assessment, or should we say proper assessment, acted earlier in requisitioning the same from the Customs Department. The idea or the purpose of the foregoing is not to apportion the blame, which no doubt lies substantially at the door of the assessee inasmuch as it is he who has to make the compliances in discharge of his statutory duties, but, rather, to emphasize that the same is both futile as well as facile inasmuch as the assessment, as made, cannot be approved of.
Under the circumstances, we only consider it proper that the matter, setting aside the impugned order, is restored back to the file of the AO for adjudication afresh in accordance with law after allowing the assessee a reasonable opportunity to state his case with reference to the various queries raised or that maybe raised in the said set aside proceedings.
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2018 (8) TMI 2086 - ITAT AHMEDABAD
Disallowance of expenditure claimed to be personal in nature - disallowing adhoc 7.5% of total travel and conveyance expenses incurred by the Appellant on grounds that these expenses are personal in nature - HELD THAT:- As noted that the disallowance has been made on the ground that the expenses are personal in nature. That is exactly what the Assessing Officer states in the impugned assessment order, and he also specifically follows the orders, on that issue, in the preceding assessment year. On this aspect, however, we have Hon’ble jurisdictional High Court’s judgement in the case of Sayaji Iron & Engineering Company Limited vs. CIT [2001 (7) TMI 70 - GUJARAT HIGH COURT] observed that it cannot be stated that when the vehicles are used by the directors, "even if they are personally used by the directors" the vehicles are personally used by the company, because a limited company by its very nature cannot have any “personal use”. The limited company is an inanimate person and there cannot be anything personal about such an entity. The view that we are adopting is supported by the provision of section 40(c) and section 40A(5) of the Act.
Addition of Income reflected in Form 26AS - CIT(A) held that amount incorrectly reflected in Form 26AS ought to be included in income even though it has not been received by the Appellant - HELD THAT:- CIT(A) has not even disputed the fact of lower actual receipt of interest and yet he has confirmed the interest as shown in 26AS because that is what is shown by the State Bank of India. That approach is certainly incorrect. Once the assessee produces reasonable evidence establishing a particular quantum of interest income in his hands and such evidence is not found fault with, he cannot be taxed on some other figure merely because a tax deductor states that figure. Obviously, the assessee has no control over such inputs which are clearly incorrect. In view of these discussions, in our considered view, the impugned addition must stand deleted. We order so.
TDS u/s 195 - Disallowance of payments made to non-residents under section 40(a)(i) - Indian taxability of payments to US residents - connotations of 'make available' clause - HELD THAT:- There is no dispute on the legal position that unless the technical services payment for which is sought to be taxed as fees for technical services (termed as fees for included services in the Indo US tax treaty) “make available” the technical skill, knowledge and know-how, the same cannot be brought to tax as such. It is also beyond dispute that the provisions of the Income Tax Act, 1961, in a case covered by a double taxation avoidance agreement entered into under section 90- as is admittedly the present case, apply only to the extent these provisions are more favourable to the assessee.
Once the assessee is out of the ambit of Indian taxability thus, there is no occasion to deal with the taxability requirements under the Income Tax Act.
The reasons for holding that these services satisfy “make available” clause have been specifically and unambiguously rejected by us, the authorities below have not made out any case for application of tax deduction requirements on these payments. In any case, we have carefully examined the material on record and nature of each payment and we donot find any situation in which services can be said to have made available technical skill, knowledge and know how in the legal sense of “make available” clause as discussed above.
As a matter of fact, we did ask the learned Departmental Representative to point out one case in which the “make available” clause can be said to be satisfied on merits, but there was no specific assistance beyond reliance on the orders of the authorities below. These orders and the reasoning contained therein, however, does not meet our approval. Once there is no material to hold the taxability of these amounts in India, there can be no tax withholding liability under section 195 either, and, as a corollary thereto, the very foundation of impugned disallowance under section 40(a)(i) ceases to hold good in law.
We uphold the plea of the assessee, and having noted that no case has been made out for satisfaction of make available clause- as is the sine qua non for Indian taxability of such payments to US residents, we direct the Assessing Officer to delete the impugned disallowance. - Decided in favour of assessee.
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2018 (8) TMI 2085 - ITAT DELHI
Bogus purchases - addition being 30% of purchases and allowing 70% of the purchase cost - HELD THAT:- As decided in own case a.y. 2008-09 wherein on the identical facts and circumstances the order passed by the learned CIT (Appeals) was upheld wherein the deletion of the disallowance to the extent of 70% and confirmation of the disallowance to the extent of 30% was upheld. The Co-ordinate Bench has considered the decision of the Hon’ble Bombay High Court also [2013 (1) TMI 88 - BOMBAY HIGH COURT] as pressed before us by the learned Departmental Representative and the decision of the Hon’ble Delhi High Court [2001 (3) TMI 68 - DELHI HIGH COURT] as pressed by the learned DR. In that year the purchases from this party was also involved. In view of this, we do not find any reason to interfere with the order of the learned CIT (Appeals). Accordingly ground No. 1 of the appeal of the assessee and ground No. 2 of the appeal of the Revenue are dismissed.
Interest expenditure - assessee submitted that the funds were utilized out of the recoveries made by the assessee from its business and, therefore, the borrowed funds were not used - main contention of the assessee is that assessee has accruals before investment made in the land - HELD THAT:- The argument of the assessee is not accepted, because the profit accrues to the assessee at the end of the accounting year when the final accounts are made. It does not accrue on day-to-day basis. Further the assessee could not show the interest free funds available with him at the time of purchase of land and, therefore, we do not find any infirmity in the order of the learned CIT (Appeals) in confirming the addition of Rs.1,94,888/- on account of interest expenditure. Accordingly, ground No. 2 of the appeal of assessee is dismissed.
Disallowance u/s14A read with Rule 8D(2)(3) - HELD THAT:- As for assessment year 2008-09 the Co-ordinate Bench has deleted the disallowance on account of interest, but there is no reference of the disallowance with respect to the expenditure. As there is no claim by the assessee that no such expenditure has been incurred by the assessee, we do not find any merit in the appeal of the assessee with respect to the disallowance confirmed by the learned CIT (Appeals) of Rs.7,500/-. The disallowance is in accordance with the provisions of section 14A of the Act. Accordingly ground No. 3 of the appeal of the assessee is dismissed.
Loss due to foreign exchange fluctuation - claim of the AO is that such loss is on account of contingent liability and is not allowable under section 37(1) - HELD THAT:- As at the end of the year the assessee restated the advances received for foreign exchange for supply of goods from one party. The assessee maintains its books of account on mercantile basis. As on the last day of the account, such advances are required to be restated in terms of the accounting standard 11 issued by the ICAI and further compulsorily to be followed by the company, the assessee recorded the foreign exchange fluctuation, which resulted into loss. The loss was debited to the profit and loss account and claimed as deduction. The foreign exchange fluctuation is on account of advance received for supply of goods, which is revenue in nature and as it is a trade advance, therefore, according to us, no error can be found in the order of the learned CIT (Appeals) in allowing the claim of the assessee based on the decision of the Hon’ble Supreme Court [2009 (4) TMI 4 - SUPREME COURT]
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2018 (8) TMI 2084 - ITAT MUMBAI
Disallowance of interest u/s 36(1)(iii) - disallowance for the reason that no cogent evidence in support of appellant's claim of funds being acquired for business purpose were produced - assessee stated that as and when the assessee realized that nothing is being materialized on account of purchase of suitable land, he advanced this amount on interest to group concerns at the rate of 12% - HELD THAT:- As AO has not disputed the genuineness of payment of interest receipt, interest on the loan borrowed and amount advanced. The only issue raised by the lower authorities is that the assessee has not taken these advances for business purposes. We find that once the AO has allowed part of interest for particular year, the genuineness is established. Secondly, even the purpose is also established. For this, the assessee has produced the resolution passed by Board of Directors of assessee company dated 26.092.2010, which clearly states that these loans secured or unsecured are for the purpose of the business.
The copy of resolution was placed on record. Hence, the purpose is established. Even otherwise, we are of the view that the AO did not even dispute the upfront payment interest in the part of the year and once this is the position, the interest cannot be disallowed. We allow the claim of the assessee and this issue is accordingly allowed.
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2018 (8) TMI 2083 - SUPREME COURT
Seeking exemption from filing certified copy of the impugned order - HELD THAT:- Application seeking exemption from filing certified copy of the impugned order is allowed.
Issue notice.
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2018 (8) TMI 2082 - ITAT DELHI
Disallowance being the amount paid by the assessee-firm to Resident partner as reimbursement towards running and maintenance of motor car, maintenance of consultation room at his residence and entertainment expenses for clients at the consultation room - assessee is a partnership firm of advocates practising at the Hon’ble Supreme Court of India - AO opined that the partnership firm can legitimately claim deduction on account of interest and salary to partners subject to the limits u/s 40(b) of the Act and, hence, such expenses incurred were not deductible - HELD THAT:- Similar disallowance of Rs.6 lac was made by the Assessing Officer in the assessment for the immediately preceding assessment year, namely, 2010-11, which stood affirmed in the first appeal. The matter came up for consideration before the Tribunal. Vide order dated 08.03.2016, the Tribunal, [2016 (3) TMI 814 - ITAT DELHI] has restored the matter to the file of Assessing Officer for deciding it afresh after giving certain directions. Since the facts and circumstances of the instant year are mutatis mutandis similar to those of the immediately preceding year, respectfully following the precedent, we set aside the impugned order to this extent and remit the matter to the file of the Assessing Officer for deciding this issue afresh in the hue of the observations made by the Tribunal for the preceding year. Assessee appeal is allowed for statistical purposes.
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2018 (8) TMI 2081 - ITAT PUNE
Maintainability of appeal - Low tax effect - HELD THAT:- Departmental Representative for the Revenue was required to state his position; he has not referred to any material which would show that the captioned appeal is protected by any of the exceptions provided in para 10 of the Circular (supra).
Without going into the merit of the issues raised in the captioned appeal, this appeal is deemed to be withdrawn/not pressed as its filing is in contravention of the CBDT Circular dated 11.07.2018 (supra). Before parting, we clarify here that the Revenue shall be at liberty to approach the Tribunal for re-institution of appeal, if the requisite material is brought to show that the appeal is protected by the exceptions prescribed in para 10 of the Circular (supra).
In conclusion, by applying the CBDT Circular dated 11.07.2018 (supra), the captioned appeal of the Revenue is dismissed as withdrawn/not pressed.
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2018 (8) TMI 2080 - SC ORDER
Offence under Prevention of Money-Laundering - question of determination of sex - it was held by Madras High Court that The appellant has not produced sufficient materials, even prima facie so as to enable us either to hold the existence to likelihood of bias or malice either in fact or law - HELD THAT:- Issue notice, returnable in four weeks.
Till the next date of hearing, the interim order that was passed by the High Court during the pendency of the appeals shall continue.
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2018 (8) TMI 2079 - ITAT MUMBAI
Addition u/s 68 - unexplained cash credit - whether CIT(A) has wrongly deleted the addition specifically in the circumstances when the identity and genuineness and creditworthiness of the transaction of the said three companies have not been proved on record? - HELD THAT:- CIT(A) was of the view that the assessee as well as the three companies whose shares have been purchased by the assessee have proved the identity, genuineness and creditworthiness of transaction. Assessee has produced the PAN number, Bank Account, Balance-Sheet, Copy of return & Statement of bank account of all parties confirmation letter etc.
Whether these documents are false and fabricated are not on record. A further enquiry is required to be done to falsify the claim of assessee in connection with the said three parties which the AO has not done. It is not necessary to going into the transaction of the source of the parties who sold their share to the assessee.
CIT(A) has relied upon the law discussed above to allow the claim of the assessee which is not required to repeat the same. Nothing came into noticed that the CIT(A) has wrongly allowed the claim of the assessee. The facts are not distinguishable at this stage also. Therefore, taking into account of all the facts and circumstances mentioned above, we are of the view that the finding of the CIT(A) is quite correct which is not liable to be disturbed at this appellate stage. Accordingly, we affirmed the finding of the CIT(A) on this issue and decide this issue in favour of the assessee against the revenue.
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2018 (8) TMI 2078 - NATIONAL COMPANY LAW TRIBUNAL CHANDIGARH BENCH
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditor - existence of debt and dispute or not - HELD THAT:- The petition under Section 9 of the Code can be filed after serving of the demand notice issued under Section 8 of the said Code. The application has to be filed in Form 5, as prescribed in Rule 6(1) of the Code in order to comply with the requirement of Section 9(2) of the Code.
As all the requirements of Section 9 of the Code have been fulfilled, we find that the application for initiation of Corporate Insolvency Resolution Process against the respondent-corporate debtor deserves to be admitted - keeping in view the fact that the ledger documents do not contain any entry of addition of interest having accrued over the amount in default the same cannot be accepted. However, being the default in respect of the commercial transaction, we allow the interest @ 9% per annum over the amount in default from the date of last payment made on 04.04.2018. In case the petitioner has to still claim higher rate of interest, it may avail remedy before the Civil Court.
The petition is admitted and moratorium is passed under sub-section (1) of Section 14 of the Code.
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2018 (8) TMI 2077 - DELHI HIGH COURT
Dishonor of Cheque - contention of the respondents is that no case was made out for they to be summoned only because they were alleged to be directors of the concerned company (first accused) - inherent power of this Court under Section 482 of the Code of Criminal Procedure, 1973 - HELD THAT:- The case involves the application of the penal clause contained in Section 138 of Negotiable Instruments Act, 1881, the liability of the respondents requiring to be examined also in light of the provision contained in Section 141 thereof - Mere allegations that these respondents were directors or "active participants" in the management or day to day affairs of the company are not sufficient. There is no averment, not even remotely made, that they were incharge of or responsible for affairs of the company "at the time of commission of the offence". The opinion leading to the revisional court's order, thus, cannot be faulted.
The petition and the pending application are dismissed.
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2018 (8) TMI 2076 - ITAT CUTTACK
Under-reporting of income from business - accounting for real estate transactions - assessee did not follow the percentage completion method while following mercantile system of accounting - HELD THAT:- Revenue could not point out any specific error in the order of the CIT(A). Ld D.R. could not controvert the findings of the CIT(A) that according to guidance note of accounting for real estate transactions (Revised 2012) issued by the ICAI, percentage completion method can be applied when the stage of completion of the project reaches a reasonable level of development.
A reasonable level of development is not achieved if the expenditure incurred on construction and development cost is less than 25% of the construction cost. In the instant case, except in three project out of seventeen running projects, construction cost is less than 25%of the project cost. Out of the closing work in progress of ₹ 2,73,68,844/-, ₹ 2,40,98,078/- belongs to 14 projects which have incurred marginal expenditure and even less than 25% of the projected cost of the concerned project. So, percentage completion method are not applicable to these projects. Out of rest amount of ₹ 32,70,766/- in three projects, it is noticed from the WIP-sheet already submitted, some flats are pending to be completed. If at all percentage completion method is applied on ₹ 32,70,766/- for three projects, namely, Jagannath Estate, Jagannath Prava and Jagannath Park Enclave, element of estimated profit in the project works out to ₹ 6,16,257/-. We find that the CIT(A) after considering the entire facts of the case, has allowed relief of ₹ 8,93,83,742/- and sustained the disallowance of ₹ 6,16,258/-. Therefore, we find no infirmity in the order of the CIT(A), which is hereby confirmed and ground of appeal of the revenue is dismissed.
Suppression of sale receipts on sale of land/plot, when the assessed has booked loss on it - HELD THAT:- The profit disclosed by the assessee on land sales comes to around 5.91% which appears to be reasonable. Further, the only reason given by the Assessing Officer in the assessment order to reject book results in respect of land sales was disclosure of loss from such transaction. Since the assessee has not disclosed any loss from land sale, the very reason given by the Assessing Officer to reject the book results does not exist. Hence, the profit disclosed by the assessee has to be accepted. We find that the CIT(A) after considering the entire facts of the case, has deleted the addition of ₹ 5,43,99,650/-. Therefore, we find no infirmity in the order of the CIT(A), which is hereby confirmed and ground of appeal of the revenue is dismissed.
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2018 (8) TMI 2075 - ITAT KOLKATA
Addition towards capital gains u/s 45(3) - profit accrued to assessee company on transfer/contribution of capital by way of contribution in the form of its share of ‘land asset’ to the ‘partnership firm’ - HELD THAT:- Notwithstanding such price rise, in accordance with accounting principles, the land held as inventory could only be shown at its cost. Hence there cannot be any undervaluation of land in the books of the assessee and other two partner companies of recording the value of land as alleged by the ld AO. We find that only after conversion of inventory into fixed assets that the said firm revalued the developed land including construction thereon in order to bring it in line with the current marked value and for justifying the bank finance of nearly ₹ 250 crores. Such revaluation was neither colourable nor a device. It is well settled that revaluation in the books of accounts of an asset which the assessee continues to own does not result in any profit or income. Revaluation at market value results in notional imaginary profit which cannot be taxed. Revaluation of an asset which an assessee continues to hold is not a taxable event and does not give rise to any taxable income. A person cannot make a profit from himself.
We hold that the assessee had not derived any tax advantage pursuant to the revaluation of land in the said firm in Asst Year 2008-09. In any case, the revaluation, even if held to be taxable, could be examined only in Asst Year 2008-09 and it has got absolutely no bearing in Asst Year 2006-07. The assessee cannot be expected to preempt in Asst Year 2006-07, that the partnership firm would reconvert the stock in trade into capital asset and then revalue the same . Hence in any event, there is absolutely no scope for bringing any capital gains to tax in the Asst Year 2006-07 in the hands of the assessee partner. - Decided in favour of assessee
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