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2020 (3) TMI 1448 - PUNJAB AND HARYANA HIGH COURT
Condonation of delay of 469 days in filing the appeal - sufficient explanation for delay was given or not - HELD THAT:- The Supreme Court has in STATE OF UP. VERSUS AMAR NATH YADAV [2014 (5) TMI 823 - SUPREME COURT] followed its earlier decision in OFFICE OF THE CHIEF POST MASTER GENERAL VERSUS LIVING MEDIA INDIA LTD. [2012 (4) TMI 341 - SUPREME COURT] where it was observed Condonation of delay is an exception and should not be used as an anticipated benefit for the Government Departments. The law shelters everyone under the same light and should not be swirled for the benefit of a few.
More recently, the Supreme Court in THE STATE OF BIHAR & ORS. VERSUS DEO KUMAR SINGH & ORS. [2019 (5) TMI 1660 - SC ORDER] has reiterated the position in Chief Post Master General holding that The law of limitation apparently does not apply to the State Government according to its conduct. That such condonation of delay is no more admissible on the pretext of Government working lethargy is clear from the judgment of this court in The Chief Post Master General v. Living Media India Ltd.
The Court does not find a satisfactory explanation for a delay of 469 days in filing the appeal to have been offered by the Applicant/Appellant. The application is accordingly dismissed.
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2020 (3) TMI 1447 - SUPREME COURT
Interpretation of statute - use of the title "Architect" under Section 37 of the Architects Act 1972 - Section 37 of the Architects Act 1972 merely prohibits the use of the title "Architect" by individuals not registered with the Council of Architecture "Council" under Chapter 3 of the enactment or prohibits unregistered individuals from carrying out the practice of architecture and its cognate activities.
Does Section 37 of the Architects Act prohibit individuals not registered as architects under the Architects Act from practicing the activities undertaken by architects, including the design, supervision and construction of buildings? - HELD THAT:- On a plain reading of section 37, the legal prohibition created is on the use of the "title and style of architect". Title and style are distinct from practice. While a prohibition on the use of a title merely restricts an individual from attaching the said title to their name in referring to or representing themselves to others, a prohibition on practice creates a bar on the actual undertaking of specific actions. The most compelling evidence that the two concepts are materially distinct is the varied usage of the two phrases by the legislature.
It is well settled that the first and best method of determining the intention of the legislature is the very words chosen by the legislature to have the force of law. In other words, the intention of the legislature is best evidenced by the text of the statute itself. However, where a plain reading of the text of the statute leads to an absurd or unreasonable meaning, the text of the statute must be construed in light of the object and purpose with which the legislature enacted the statute as a whole. Where it is contended that a particular interpretation would lead to defeating the very object of a legislation, such an interpretative outcome would clearly be absurd or unreasonable. To determine whether the interpretation arrived at on a plain reading of the provision truly defeats the object of the statute as a whole, we may briefly delve into the legislative history of the Architects Act. To answer the question whether reading Section 37 as a prohibition merely on the use of the title and style of "Architect" by unregistered individuals would in truth defeat the object and purpose of the Architects Act this Court may examine the reasons behind the enactment as a whole.
It is evident that the legislature did not intend to create a prohibition on the practice of architecture and associated activities by unregistered individuals. As opposed to the case of physicians or surgeons under the Indian Medical Council Act or advocates under the Advocates Act, the legislature consciously chose to employ a less stringent measure in the case of architects, merely prohibiting unregistered individuals from using the "title and style" of architect. It is not for this Court to delve into why the legislature made this choice. However, during the course of these proceedings a cogent and pragmatic reason for this choice has been placed before this Court, by the learned Attorney General of India and by way of the erudite opinion of Chief Justice Raveendran in the decision in Mukesh Kumar Manhar to which we may briefly advert.
Architecture undoubtedly constitutes a highly specialised profession requiring the possession of minimum educational qualifications. However, architects are by and large engaged by means of a contract for services. In other words, architects provide a set of specialised services towards the larger goal of construction. Architects are not embarking on construction independently of other actors. By virtue of the Architects Act, anybody engaging the services of an individual calling themselves an "Architect" is assured that such an individual possesses statutorily recognised educational qualifications and is competent to complete the task at hand. It is in this manner that the legislature protects the common person from untrained individuals.
The decision of the High Court of Allahabad affirmed and it is held that Section 37 of the Architects Act does not prohibit individuals not registered under the Architects Act from undertaking the practice of architecture and its cognate activities.
Whether a post titled "Architect", "Associate architect" or any other similar title using the term or style of "Architect" can be held by a person not registered as an architect under the Architects Act? - HELD THAT:- Section 37 does not prohibit the practice of architecture by unregistered individuals, it certainly does prohibit unregistered individuals from using the "title and style" of architect. Under the scheme of the Architects Act, only individuals possessing the statutorily recognised minimum educational qualifications can apply for registration as an "Architect" under the Act. Registration as an architect under the statute is thus a guarantee of possessing certain minimum educational qualifications. Section 37 prohibits unregistered individuals from designating themselves or referring to themselves as "architects". The consequence of this regulatory regime is that when an individual is called an "Architect" a reasonable person would assume that they are a registered architect under the Architects Act and as a consequence possess the requisite educational qualifications and specialised knowledge associated with architects.
If an individual is appointed to a post titled "Associate Architect", "Architect" or "Senior Architect", they undoubtedly refer to themselves and are referred to by others as "Architects". Holding a post using the term "Architect" has the real-world consequence of being referred to as an architect. This is not a matter of mere nomenclature - If a government post is titled "Architect" or "Associate Architect", such a person certainly uses the title and style of "architect" and consequently there is a reasonable assumption that such a person is registered under the Architects Act and holds a degree in architecture recognised by the Act. This assumption finds statutory backing in Section 35 of the Architects Act which provides that any reference to an architect in any other law shall be deemed to mean an architect registered under the Architects Act. To promote an individual who does not possess a degree in architecture recognised by the Act to a post titled "Architect", "Associate Architect" or of a similar style using the title or style of "architect" would effectively violate the prohibition on the use of title contained in Section 37 of the Architects Act.
The distinction made by the Allahabad High Court, that the Promotion Policy 2005 was passed under a state legislation, namely the U.P. Industrial Area Development Act, and thus did not need to comport with the terms of the Architects Act as a central legislation is incorrect.
Section 37 of the Architects Act does not prohibit individuals not registered under the Architects Act from undertaking the practice of architecture and its cognate activities - the decision of High Court of Allahabad disapproved and it is held that NOIDA cannot promote or recruit individuals who do not hold a degree in architecture recognised by the Architects Act to a post that uses the title or style of "architect". However, the authority is free to change the nomenclature of the post to any alternative as long as it does not violate the provisions of the Architects Act by using the style and title of "architect" in its name.
Appeal allowed in part.
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2020 (3) TMI 1446 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Non-notification of acquisition of Novartis Animal Health in India (NAH India), a business with sales of only INR 93.0 crores and assets of only INR 36.2 crores - Section 53B (1) and (2) of the Competition Act, 2002 - HELD THAT:- The Commission has failed to appreciate that the Notification dated 04.03.2011 was squarely applicable to the present transaction on the basis of an erroneous interpretation which is contrary to the intention of the exemption as expressed by the Government itself vide a notification dated 27.03.2017 (Subsequent Notification) and Press Release dated 30.03.2017 - The intention behind the Notification dated 04.03.2011 issued by the Central Government under Section 54 of the Act was to exempt certain transactions due to their small size. The intention of the Government is made clear by the Press Release dated 30.03.2017 where it is stated that "combinations falling within the threshold limits would not require to be filed before the Competition Commission of India. The reform is in pursuance of the Government's objective of promoting Ease of Doing Business in the country and is expected to make India a more attractive destination for Foreign Direct Investment. The notification is expected to enable greater freedom to industry in taking legitimate business decisions towards further accelerating India's economic growth."
This makes it clear that the Central Government did not wish that the CCI interfere in acquisition of an enterprise that was de minimis or acquisition of assets that were de minimis.
For the purpose of the calculation of assets and turnover what is being acquired is relevant, as the assets/turnover of what is left over with the sellers after the acquisition will have no role to play in the context of the business conducted by the purchaser post-acquisition - In the present case, the 'Stock and Asset Purchase Agreement' covering the global portion of the transaction dated 22nd April, 2014 was publicly announced and notified under the merger control laws in several jurisdictions around the world, including the United States and the European Union. The transaction was cleared in each jurisdiction and closed on 1st January, 2015.
Since the turn over attributed to the business acquired was Rs. 93.9 Crores and the value of the assets being acquired was Rs. 36.2 Crores, the 'enterprise's' acquired assets of the value being more than Rs. 250 Crores or turn over not more than Rs. 750 crores, the Appellant is exempted from the provision of Section 5 of the Act and was not required to notify in terms of Section 6(2) of the Act - The delegated legislation, namely The Competition Commission of India (Procedure in Regard to the Transaction of Business Relating to Combinations) Regulations, 2011 which states that in case of an acquisition, the obligation to file the notice is with the acquirer is contrary to the express statutory provision and the intent thereof.
The Commission having failed to appreciate the aforesaid position and in view of finding as recorded, the impugned order is set aside - appeal is allowed.
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2020 (3) TMI 1445 - KERALA HIGH COURT
Jurisdiction - respondent has power to pass orders on Exhibit P5 application filed under Section 6A of the Kerala Land Tax Act or not - liability to pay an amount as fees as per the provisions of Section 27A of the Kerala Conservation of Paddy Land and Wet Land Act, 2008, brought in by the Amendment Act 29 of 2018 - HELD THAT:- The matter in issue is fully covered in favour of the petitioner and against the respondents as per the dictum laid down by this Court, more particularly, by the Division Bench of this Court in cases as in THE LOCAL LEVEL MONITORING COMMITTEE AND ORS. VERSUS MARIUMMA AND ORS. [2015 (4) TMI 1353 - KERALA HIGH COURT] as well as THE TAHSILDAR, THODUPUZHA AND ORS. VERSUS RENJITH GEORGE [2020 (1) TMI 1630 - KERALA HIGH COURT] that in a case where favourable orders are obtained by the property holder in terms of the 6(2) of the Kerala Land Utilisation Order, 1967, for converting the said land as garden land or purayidam, etc., then the property holder is legally entitled to maintain an application under Sec. 6A of the Kerala Land Tax Act, 1961 before the competent revenue officials like the Tahsildar, seeking for re-assessment of the subject property in terms of the said provision, so as to make additional entries in the BTR to rightly and properly show the land as garden land or purayidam instead of the previous BTR entries as Nilam or paddy land, etc.
It is only to be held that the impugned decision at Ext. P-8 is vitiated both on the ground of lack of jurisdiction but also on the ground of illegality and unreasonableness. Accordingly, Ext. P-8 proceedings issued by the 2nd respondent-District Collector will stand quashed and rescinded. Further it is ordered that the competent authority among respondents 2 & 3 will ensure that Ext. P-5 application is forwarded to the 4th respondent-Tahsildar for appropriate action as aforestated and this shall be done by respondents 2 & 3, within two weeks from the date of production of a certified copy of this judgment.
Petition disposed off.
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2020 (3) TMI 1444 - ITAT BANGALORE
TP Adjustment - comparable selection - HELD THAT:- We considering the functional dissimilarities and failure of upper turnover filters, judicial decision of the co-ordinate bench of the Tribunal for the assessment year 2006-2007, direct the TPO to exclude a) Infosys Limited b) Tata Elxsi Limited c) Kals Information Systems Limited d) Persistent Systems Limited e) Aztec Soft Limited from the final list of comparables for determination of ALP.
The comparable(f) Bodhtree Consulting Limited, whose the turnover is Rs.5.31 Crores and functionally dissimilar and is also engaged in product sales., directed to be excluded from the final list of comparables for determination of ALP.
Disallowance of software expenditure under Section 37 - AO has treated as capital expenditure and no depreciation was allowed - HELD THAT:- We on perusal of the draft assessment order passed by the Assessing Officer found that the assessee has filed the details of software expenses but the A.O’s observations that the assessee is not in a position to show that it was put to use during the year and no documentary proof was submitted to substantiate the usage of software.
DRP observed that the assessee has failed to prove the corresponding assets were put to use by the end of the financial year and therefore depreciation was not allowed. Even before us, the assessee could not file the details of usage of corresponding assets for the purpose of business during the financial year and no documentary proof was filed. Assessee was provided an opportunity by the ITAT in remanding the disputed issue to the Assessing Officer, but he could not substantiate with proof on usage of assets in the previous year. Accordingly, we do not find any merit in the submissions and alternative pleas and confirm the action of the Assessing Officer and dismiss the ground of appeal of the assessee.
Credit for taxes paid in protest - AR contentions are that in the final assessment order, the Assessing Officer has not granted the credit for taxes paid - HELD THAT:- We considering the facts and submissions direct the Assessing Officer to grant credit of taxes paid after due verification and allow the ground of appeal for statistical purposes.
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2020 (3) TMI 1443 - CESTAT NEW DELHI
Recovery of redemption fine and penalty, from the sale proceeds, if the confiscated goods are sold/disposed of by auction during the pendency of appeal - HELD THAT:- Once confiscation of the goods is held to be valid in any proceedings, the property in the goods is vested in the Government and the sale proceeds being the total consideration of such property, as a natural corollary such sale proceeds will represent the confiscated goods. Once the confiscated goods allowed to the redeemed on a redemption fine, the sale proceeds which represent the goods, will be paid to the importer only after deduction of such fine. Thus, the redemption fine is to be charged from the importer while releasing the goods, the same also needs to be recovered from the sale proceeds which represent the consideration of the property.
In view of the contradicting decisions on the matter at hand by the benches of the Tribunal, the matter referred to Larger Bench on the following issue:- “whether the redemption fine and penalty, if any, imposed in the adjudication order needs to be recovered from the sale proceeds, if the confiscated goods are sold/disposed of by auction during the pendency of appeal”.
The main appeal is referred to the Larger Bench for consideration.
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2020 (3) TMI 1442 - ITAT BANGALORE
Transfer Pricing adjustment made in respect of Software Development section - Comparable selection - HELD THAT:- ICRA Techno Analytics Ltd - We notice that the TPO has applied RPT filter of 25%. According to the assessee, the RPT works out to 29.36%, while the TPO has worked out the same at 23.15%. We notice that the Ld DRP has not addressed this issue. TPO has also taken the view that the services rendered by this company are not different, while the contention of the assessee is that this company is engaged in providing different kinds of services which are not akin to that of the assessee. Hence we are of the view that this company requires examination afresh at the end of AO/TPO. Accordingly, we restore this company to the file of AO/TPO for examining it afresh.
M/s Spry Resources P Ltd. - We notice that the TPO has not examined the aspects relating to software products. We notice that in the case of CGI information systems & Management Consultants (P) Ltd (supra), M/s Spry Resources India P Ltd has been taken as a comparable company. All these aspects show that there is no clarity on the factual aspects relating to this company. Accordingly, we are of the view that this company also requires fresh examination at the end of AO/TPO. Accordingly we restore this company to the file of the AO/TPO for examining it afresh.
TP made in respect of I.T. enabled services - M/s Universal Print Systems Ltd (seg.)(BPO) was restored back to the file of AO/TPO in the case of CGI Information Systems & Management Consultants P Ltd [2018 (4) TMI 1755 - ITAT BANGALORE]
M/s Infosys BPO Ltd, TCS E-serve Ltd and M/s Excel Infoway Ltd. be excluded.from the final list of comparable companies for the purpose of arriving at the arithmetic mean of comparable companies for the purpose of comparison with the profit margins.
Exclusion of M/s BNR Udyog Ltd from the list of comparable companies.
Inclusion of M/s Informed Technologies India Ltd as a comparable company.
Disallowance u/s 14A - submission of the assessee that it did not earn any exempt income during the year under consideration - HELD THAT:- We agree with the contentions of Ld A.R, as the claim of the assessee finds support from the decision rendered in the case of Cheminvest Ltd [2015 (9) TMI 238 - DELHI HIGH COURT]. Accordingly we direct the AO to delete this disallowance after satisfying himself that the assessee did not earn any exempt income.
Non set-off of the entire brought forward losses, non-grant of MAT credit and short grant of TDS - HELD THAT:- All these issues require verification at the end of the AO. Accordingly we restore all these issues to the file of the assessing officer.
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2020 (3) TMI 1441 - DELH HIGH COURT
Cheating - siphoning off of funds - Seeking attachment of assets of the group companies and personal properties of respondent nos.1 to 10, till the investigation is completed by respondent nos.13 to 17 (police and income tax authorities) - it is alleged that the directors of the Development have siphoned off the monies collected from the petitioners and in doing so, have cheated them - approaching multiple forums seeking same relief - HELD THAT:- It is apparent from the averments made in the present petition that there are serious allegations regarding siphoning of funds. In view of the above, SFIO is required to examine whether a forensic audit is required to be conducted into the affairs of the Ireo Group of Companies. If the concerned officer is of the view that such an audit is required to be conducted SFIO shall forthwith take steps, if not already done, for conducting a forensic audit of the companies. However, in the event the officer is of the view that no such forensic audit is necessary, he shall record his reasons for taking such a view - This Court does not consider it apposite to issue any directions in this regard as it is expected that SFIO shall conduct the enquiries/investigation and take all such necessary steps that it is required to take for the effective investigation in the matter.
In so far as the petitioner’s prayer that the properties of the Ireo Group of Companies be attached is concerned, this Court does not consider it apposite to pass any such orders for two reasons. First, the petitioner is unable to point out the legal framework within which such orders are required to be passed. And, second, that a Coordinate Bench of this Court has passed an interim order, restraining certain companies from creating interests in any third parties or parting with possession of their immovable properties. It is relevant to note that petitioners in the present petition are also the petitioners in that petition. Clearly, the petitioners cannot approach multiple forums seeking the same relief.
Petition disposed off.
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2020 (3) TMI 1440 - SUPREME COURT
Right of a third party to apply for certified copies to be obtained from the High Court by invoking the provisions of Right to Information Act without resorting to Gujarat High Court Rules prescribed by the High Court - requirement to file an affidavit stating the reasons for seeking certified copies, suffers from any inconsistency with the provisions of RTI Act - When there are two machineries to provide information/certified copies - one under the High Court Rules and Anr. under the RTI Act, in the absence of any inconsistency in the High Court Rules, whether the provisions of RTI Act can be resorted to for obtaining certified copy/information?
HELD THAT:- In the present case, we are concerned with Gujarat High Court Rules. Grant of certified copies to parties to the litigation and third parties are governed by Rules 149 to 154 of Gujarat High Court Rules. As per the Rules, on filing of application with prescribed court fees stamp, litigants/parties to the proceedings are entitled to receive the copies of documents/orders/judgments etc. The third parties who are not parties in any of the proceedings, shall not be given the copies of judgments and other documents without the order of the Assistant Registrar. As per Rule 151 of the Gujarat High Court Rules, the applications requesting for copies of documents/judgments made by third parties, shall be accompanied by an affidavit stating the grounds for which they are required.
The object of the RTI Act itself recognizes the need to protect the institutional interest and also to make optimum use of limited fiscal resources and preservation of confidentiality of sensitive information. The procedure to obtain certified copies under the High Court Rules is not cumbersome and the procedure is very simple - filing of an application/affidavit along with the requisite court fee stating the reasons for seeking the information. The information held by the High Court on the judicial side are the "personal information" of the litigants like title cases and family court matters, etc. Under the guise of seeking information under the RTI Act, the process of the court is not to be abused and information not to be misused.
The information held by the High Court on the judicial side are the personal information of the parties to the litigation or information furnished by the Government in relation to a particular case. There may be information held by the High Court relating to the cases which have been obtained from the various tribunals in exercise of the supervisory jurisdiction of the High Court Under Article 227 of the Constitution of India. For instance, the matters arising out of the orders by the Income Tax Appellate Tribunal, Customs Excise and Service Tax Appellate Tribunal and other tribunals over which the High Court exercises the supervisory jurisdiction - Order XIII Rule 3 of the Supreme Court Rules also stipulate the same procedure insofar as the third party seeking certified copy of the documents/records.
There are no merit in the submission and that such cumbersome procedure has to be adopted for furnishing the information/certified copies of the documents. When there is an effective machinery for having access to the information or obtaining certified copies which, in our view, is a very simple procedure i.e. filing of an application/affidavit with requisite court fee and stating the reasons for which the certified copies are required, we do not find any justification for invoking Section 11 of the RTI Act and adopt a cumbersome procedure. This would involve wastage of both time and fiscal resources which the preamble of the RTI Act itself intends to avoid.
Thus, the conclusion is summarised as below:
(i) Rule 151 of the Gujarat High Court Rules stipulating a third party to have access to the information/obtaining the certified copies of the documents or orders requires to file an application/affidavit stating the reasons for seeking the information, is not inconsistent with the provisions of the RTI Act; but merely lays down a different procedure as the practice or payment of fees, etc. for obtaining information. In the absence of inherent inconsistency between the provisions of the RTI Act and other law, overriding effect of RTI Act would not apply.
(ii) The information to be accessed/certified copies on the judicial side to be obtained through the mechanism provided under the High Court Rules, the provisions of the RTI Act shall not be resorted to.
Appeal dismissed.
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2020 (3) TMI 1439 - ITAT RANCHI
Addition of sundry credits - reliance on amount reflected in the balance-sheet - as per Revenue’s case that since the assessee had sought umpteen opportunities before AO and also did not appear before the CIT(A), the impugned addition has rightly been made going by the original balance-sheet reflecting the amount in the balance-sheet - As argued assessee’s corrected balance-sheet filed before the Assessing Officer has not even been considered in either of the lower proceedings - HELD THAT:- We deem it appropriate that larger interest of justice would be met in case the Assessing Officer re-examines the entire issue afresh going by the corresponding details in both of the above stated balance-sheets.
Assessee has undertaken to place on record all necessary details in the consequential proceedings at assessee’s own risk and responsibility. The assessee is therefore directed to appear before the Assessing Officer alongwith a copy of the instant order - Decided in favour of assessee for statistical purposes therefore. Assessee’s appeal is allowed for statistical purposes.
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2020 (3) TMI 1438 - ITAT BANGALORE
TDS u/s 195 - payments made by the Appellant to its subsidiary (AMSI) - Treatment of Payment as Royalty (Composite Payment) - fees for included services - HELD THAT:- As per the above details about the nature of services received by the assessee from its US-AE, it comes out that the US-AE provides services regarding finding of customers for the assessee company to whom the assessee can render various services.
It is seen that in the present case, no information as such is provided by US-AE of the assessee company and such technical data or other data are used by the AE of the assessee company itself to generate customer leads and after having negotiations with such potential customers, US-AE of the assesssee helped the assessee company in getting orders from various customers abroad. In our considered opinion, in the facts of the present case, this Tribunal order relied upon by the ld. DR in TNT Express Worldwide (UK) [2016 (6) TMI 547 - ITAT BANGALORE] is not applicable to the present case. No other argument was advanced by the ld. DR of the revenue in this regard as to how the payment in question is a payment for royalty.
Payment in question is payment for Commercial Experience provided by US AE of the assessee company to the assessee company - from various e-mails it cannot be said that any information was provided by Mr.Todd Brownrout or Mr.Colin Wheeler to the assessee company which can be said to be providing information about the commercial experience.
Fees for included services - Any services to be considered as included service, it is essential that the services provider makes available experience, skill, know-how or process or transfer of assets, transfer of development and technical design etc. In the present case, as per the scope of work noted above and as noted by the AO in para-17 of the assessment order, the marketing team of the service provider i.e. US-AE used to generate customer leads using/subscribing customer data base, market research and analysis and online research data and hence, it is seen that the service provider has not made available any technical knowledge, experience, know-how, process or develop and transfer technical plan on technical design. Hence, the impugned payment is not hit by Article-12(4) of the Indo-US DTAA i.e. fees for included services.
As per above discussion, we find that in the present case, the impugned payment cannot be said to be on account of ‘royalty’ or fees for included services. At this juncture, we feel it proper to discuss and examine the applicability of the judgments cited by ld. AR of the assessee as noted above.
We first discuss and examine the applicability of the Tribunal order rendered in the case of M/s Adidas Sourcing Ltd. vs Asst. DIT(2013 (1) TMI 106 - ITAT DELHI] In this case, it was held that to characterize a particular stream of income as fees for technical services, it is necessary that some sort of managerial, technical and consultancy services should have been rendered in consideration and the services rendered under the buying agencies we find the agreement are not technical services, but routine services offered in procurement of assistance. In the present case, the agreement in question is not procurement but for supply of services by the assessee company to an overseas customer but this tribunal order is applicable because the entire service rendered by the US AE is similar in connection with the sale of services of the assessee abroad and this Tribunal order supports the view taken by us in the above para.
As per the above discussion, we have seen that in the facts of the present case, the services received by the assessee company cannot be considered as ‘royalty’ or fees for included services and the assessee was not under obligation to deduct TDS on this payment and as a consequence, the demand raised by the AO u/s 201(1) & 201(1A) of the Act cannot survive and the same is deleted. Appeal of assessee allowed.
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2020 (3) TMI 1437 - ITAT BANGALORE
TP Adjustment - comparable selection - HELD THAT:- We consider it appropriate to restore the comparables (i) Acropetal Technologies Ltd(ii)E-Zest Solutions Ltd (iii)E-Infochips Ltd and (iv)ICRA Techno Analytics Ltd to the file of TPO to verify and examine on the functionalities and allow the grounds of appeal of the assessee for statistical purposes. AR has restricted his submissions to the extent of exclusion of comparables supported by chart and paper book. Hence other grounds of appeal are dismissed.
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2020 (3) TMI 1436 - ITAT MUMBAI
Rectification of mistake - TP Adjustment u/s 92CA - provision of consultancy & design services - Adjustment relating to payment of management charges - HELD THAT:- We are of the considered view that non-consideration of case laws cited during the course of hearing regarding granting of working capital adjustment ; selection of comparable companies and margin calculation of comparable companies as mentioned at para 2 hereinbefore are mistakes apparent from record in respect of the 1st ground of appeal. Similarly, in respect of the 2nd ground of appeal non-consideration of the relevant facts of the matter is a mistake apparent from record.
We recall the impugned order in respect of the 1st and 2nd ground of appeal and direct the Registry to fix the case for hearing before a regular Bench, after informing both the sides.
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2020 (3) TMI 1435 - ITAT MUMBAI
Income from house property - claim of interest u/s. 24(b) - property given on rent under family arrangement - assessee has claimed a loss qua the said property on account of interest (on borrowed capital) adjusting it against the rental income - said rent was, on the basis of a field enquiry by AO found to be from the assessee’s major son and major daughter residing thereat along with the assessee’s other family members - Whether house property is self-occupied property? - Nobody would, in the view of the AO, charge rent (for residence) from his own son and daughter, thus arrangement was therefore regarded merely as a tax-reducing device adopted by the assessee - HELD THAT:- Surely, the arrangement is highly unusual, particularly considering that the rent is in respect of a self-owned property (i.e., for which no rent is being paid), which constituted the family’s residence, with, further, the assessee’s son and daughter being unmarried. That, however, to our mind, may not be conclusive of the matter. Being a private arrangement, not involving any third party, not informing the cooperative housing society may also not be of much consequence. The Revenue has rested merely by doubting the genuineness of the arrangement, without probing the facts further. What is the total area, as well as its composition/ profile? How many family members, besides the assessee (the owner) and the two tenants, are residing thereat? - How has the rent been received, i.e., in cash or through bank and, further, been sourced, i.e., whether from the assessee (or any other family member), or from the capital/income of the tenants. Why, there was even no attempt to inquire if the arrangement was a subsisting/continuing one, or confined to a year or two, strongly suggestive of, in that case, a solely tax motivated exercise.
We are conscious, well be that the assessee’s major son and daughter are financially independent (or substantially so), with independent incomes, sharing the interest burden of their common residence with their father. And, as such, instead of transfer of funds to him per se, have regarded, by mutual agreements, the same as rent, as that would, apart from meeting the interest burden to that extent, also allow tax saving to the assessee-father. A genuine arrangement cannot be disregarded as the same results or operates to minimize the assessee’s tax liability.
We are, accordingly, in principle, in agreement with the assessee’s claim inasmuch as, as afore-noted, there is nothing on record to further the Revenue’s case of the arrangement being not a genuine arrangement, i.e., apart from being unusual.
The interest claimed is qua the entire property, which therefore cannot be allowed in full against the rental income, which is qua a part of the house property. The assessee’s interest claim therefore cannot be allowed in full and shall have to be suitable proportioned, even as agreed to by Sh. Mehta, restricting the interest claim relatable to the self occupied part thereof to, as allowed, Rs. 1.50 lakhs. The assessee shall provide a reasonable basis for such allocation as well as the working of the area let.
We say so as it may well, in view of the joint residence, be that no area (portion) is specified in the rent agreements. The number of family members living jointly; their living requirements – which may not be uniform; fair rental value of the property, etc., are some of the parameters which could be considered for the purpose. The AO shall adjudicate thereon per a speaking order, giving definite reasons for being in disagreement, where so, in whole or in part, with the assessee’s working, within a reasonable time. Assessee’s appeal is partly allowed.
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2020 (3) TMI 1434 - CESTAT MUMBAI
Denial of benefit available under Advance Licence Scheme by N/N 203/92-Cus., dated 19-5-1992 - Benefit denied on the ground that the appellant had availed the input stage Modvat credit, which was in violation of provisions of Para 126 of the Handbook of Procedures laid down in the EXIM Policy, 1992-97 read with the Notification dated 19-5-1992 - HELD THAT:- It is an admitted fact on record that the Advance Licence was issued by the office of DGFT in favour of M/s. Hap International, which was transferred in favour of the appellant for procurement of the duty free imported goods. On perusal of the case records, it transpires that the appellant had not availed any Modvat credit in respect of the goods imported by it. It is also not the case of Revenue that the Advance Licence was fraudulently obtained by the appellant. Since the said licence was transferred by the original licencee to the appellant under the confirmation of the office of DGFT, availment of Modvat credit by the transferor cannot be questioned subsequently by the Customs Authorities for denying the benefit of the duty exemption to the appellant.
The identical issue had been considered by the Larger Bench of this Tribunal in the case HICO ENTERPRISES VERSUS COMMISSIONER OF CUSTOMS, MUMBAI [2005 (9) TMI 625 - CESTAT MUMBAI], holding that endorsement of valid licence by the competent authority i.e. DGFT cannot be questioned by the Customs Authorities, in absence of any provisions contained in the exemption notification - the Civil Appeal filed by Revenue against the said Larger Bench decision was dismissed by the Hon’ble Supreme Court in COMMISSIONER OF CUSTOMS (IMPORTS), BOMBAY VERSUS HICO ENTERPRISES [2008 (4) TMI 117 - SUPREME COURT].
There are no merits in the impugned order - appeal allowed.
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2020 (3) TMI 1433 - NATIONAL COMPANY LAW TRIBUNAL NEW DELHI
Liquidation of the corporate debtor - Section 33(2) of I&B Code - HELD THAT:- Though this company petition has been admitted on 07.08.2017, till date neither resolution plan has come for approval before this Bench, nor has this bench decided the liquidation application pending before this Bench despite soon after two and half years passed by now. This objector has come before this Bench asking for another round of invitation of EOI is not acceptable because the CIRP period has already been over on 03.06.2019, therefore, this company petition is fit for passing the liquidation order because it is the CoC that has taken a decision that the liquidation is the only course left to it to proceed, whereby, it is ordered for liquidation of the company with the directions imposed.
Application allowed.
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2020 (3) TMI 1432 - ITAT RANCHI
Additional depreciation deduction qua the fixed assets not put to use in the relevant previous year but in earlier assessment years only - HELD THAT:- We find no merit in Revenue’s foregoing argument in light of hon’ble Madras high court’s decision in M/s Brakes India Limited [2017 (4) TMI 511 - MADRAS HIGH COURT] has already reversed tribunal’s coordinate bench’s order [2016 (8) TMI 745 - ITAT CHENNAI] accepting the Revenue’s stand.
Their lordships held that not only the impugned depreciation relief is admissible in case of fixed assets installed and put to use in the relevant previous year but also qua those which already form part of the corresponding block of assets and installed in earlier assessment years. We thus rely hon’ble high court’s reasoning mutatis mutandis and accept the assessee’s additional depreciation claim on merits. AO is directed to delete the impugned disallowance. - Decided in favour of assessee.
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2020 (3) TMI 1431 - CALCUTTA HIGH COURT
Nature of receipts - interest subsidy received as revenue receipt or capital receipt - HELD THAT:- As it was not admitted by this Court in another appeal concerning the same assessee, by the order in Principal Commissioner of Income Tax, Kolkata-2, Kolkata-Versus- Birla Corporation Limited [2019 (9) TMI 1688 - CALCUTTA HIGH COURT] So, we do not think it fit to admit this appeal on this question.
As the respondent is represented by learned counsel, issuance and service of notice of appeal are dispensed with.
Leave is granted to the respondent to file a cross objection by 31st March, 2020.
Let informal paper books be filed by the appellant’s advocate-onrecord by 17th April, 2020, serving a copy thereof on the advocate-on-record for the respondent at least seven days before the date of hearing of this appeal.
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2020 (3) TMI 1430 - CESTAT HYDERABAD
Valuation - inclusion in the assessable value, the cost of transportation from the sellers premises to the buyers premises in the assessable value of the goods, where the goods are sold on FOR destination basis - Place of removal - Section 4 of the Central Excise Act, 1944 - HELD THAT:- After examining several previous judgments, the Hon’ble Apex Court has in the case of COMMISSIONER OF CUSTOMS AND CENTRAL EXCISE, NAGPUR VERSUS M/S ISPAT INDUSTRIES LTD. [2015 (10) TMI 613 - SUPREME COURT] held very categorically that the place of removal has to be related to the seller of the goods such as factory or any other place or premises of production or warehouse or a place of consignment agent which is relatable to the seller and it cannot be the buyer’s premises. Once the goods reach the buyer’s premises, there is nothing to be removed or sold and the sale is already complete. Therefore place of removal has to be seller’s premises. For the purpose of valuation under Section 4, the value has to be the transaction value at which the goods are sold by the assessee for delivery at the time and place of removal. Therefore, there is no scope for charging excise duty on the cost of transportation from the seller’s premises to the buyers premises.
The demands are not sustainable and impugned orders need to be set aside - Appeal allowed.
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2020 (3) TMI 1429 - ITAT KOLKATA
Disallowance u/s 14A read with rule 8D - As submitted by assessee disallowance u/s 14A applying Rule 8D was made by the AO by taking into consideration the entire investment made by the assessee in shares instead of taking only that investment in shares which had actually earned dividend income during the year under consideration - HELD THAT:- Since this contention raised by the learned counsel for the assessee is duly supported by the decision of Hon’ble Kolkata High Court in the case of REI Agro Ltd. [2013 (12) TMI 1517 - CALCUTTA HIGH COURT] we direct the AO to re-compute the disallowance to be made by applying Rule 8D by taking into consideration only the investment made by the assessee in shares which actually fetched the exempt dividend income during the year under consideration. Ground No. 1 of the assessee’s appeal is accordingly is thus partly allowed.
Interest paid by the assessee on TDS - allowable deduction u/s 37(1) - HELD THAT:- Thus issue is squarely covered in favour of the assessee by the decision of Mukand Ltd. vs ITO [2019 (1) TMI 1348 - ITAT MUMBAI] wherein it was held that interest paid on delayed payment of TDS is allowable as deduction u/s 37(1) of the Act. Respectfully following the said decision of the coordinate bench of this Tribunal, we delete the disallowance made by the AO and confirmed by the Ld. CIT(A) on account of interest paid by the assessee on TDS and allow Ground No. 2 of assessee’s appeal.
Disallowance on account of entry tax liability - entry tax payable was not paid by the assessee before the date of filing of the return of income for the year under consideration. The same therefore was disallowed by him as per section 43B - HELD THAT:- The limited relief that is sought by the learned counsel for the assessee on this issue is that the AO may be directed to allow the deduction on account of the amount of entry tax in question in the subsequent years on payment basis. We are unable to give such direction for the subsequent years which are not in appeal before us. However the assessee is at liberty to claim such deduction on payment basis in the relevant years and the AO shall consider the same in accordance with law. Ground No. 3 is accordingly dismissed.
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