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Showing 41 to 60 of 1430 Records
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2022 (1) TMI 1393 - MADRAS HIGH COURT
Revocation of Suspension order - allegation against the delinquent was of demand and acceptance of bribe - HELD THAT:- In the case on hand, the writ petitioner/non-appellant is facing a criminal case for the offence under the provisions of the Prevention of Corruption Act, 1988. He was caught red-handed accepting the bribe. The learned Single Judge passed the judgment under appeal without referring to the Regulations applicable to the case and without realizing the seriousness of the offence.
In the case of STATE OF ORISSA VERSUS BIMAL KUMAR MOHANTY [1994 (2) TMI 307 - SUPREME COURT], the Apex Court caused interference with the interim order passed by the State Administrative Tribunal against the order of suspension despite registration of the criminal case in reference to allegation of acquisition of property disproportionate to the sources. The Supreme Court held that exercise of judicial review to interfere with a suspension order which has been passed despite a vigilance investigation which led to registration of a criminal case against the delinquent, is thus uncalled for.
The judgment of the learned Single Judge is set aside - it is directed to expedite the criminal proceedings against the delinquent and if it is not concluded within a reasonable time, then it would be open to the delinquent employee to make a representation to recall the suspension order which otherwise cannot be continued beyond a reasonable period, as it is pending for last two years - appeal allowed.
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2022 (1) TMI 1392 - BOMBAY HIGH COURT
Reopening of assessment u/s 147 - notice issued after more than four years of the expiry of the relevant assessment year - onus is on respondent to show that there was failure on the part of petitioner to fully and truly disclose all material facts that was required for assessment - HELD THAT:- When the primary facts necessary for assessment are fully and truly disclosed, AO is not entitled on change of opinion to commence proceedings for reassessment. Even if the AO, who passed the assessment order, may have raised too many legal inferences from the facts disclosed, on that account the AO who has decided to reopen assessment, is not competent to reopen assessment proceedings.
Where on consideration of material on record, one view is conclusively taken by the AO, it would not be open to reopen the assessment based on the very same material with a view to take another view.
We also find from the records filed with the petition that a specific query had been raised by the AO and he had sought from petitioner pending details of reconciliation of ITS Information and petitioner had also replied to the same.
It is settled law that once a query is raised during the assessment proceedings and the assessee has replied to it, it follows that the query raised was a subject of consideration of the AO while completing the assessment. It is not even necessary that an assessment order should contain reference and/or discussion to disclose its satisfaction in respect of the query raised. Change of opinion does not constitute justification and/or reasons to believe that income chargeable to tax has escaped assessment. [Aroni Commercials Ltd. [2014 (2) TMI 659 - BOMBAY HIGH COURT]]. Notice set aside - Decided in favour of assessee.
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2022 (1) TMI 1391 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI.
Seeking acceptance of claim - already an ‘Arbitration Proceedings’ going on with regard to claim of the Appellant qua the ‘Corporate Debtor’ - HELD THAT:- There is no ground to entertain this appeal challenging the order of the ‘Adjudicating Authority’.
It is observed that if the arbitration proceedings result in any award in favour of the Appellant, it shall be open to the Appellant to take such remedy as permissible under the law and impugned order shall not be come in his way in execution of the Arbitral Award.
The appeal is dismissed.
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2022 (1) TMI 1390 - ITAT MUMBAI
Rectification application - comparable selection for TP Adjustment - HELD THAT:- Exclusion of Allsec technologies the revenue ground is misplaced as TPO has himself excluded it from final comparable.
The other submission that the order should be modified to confirm exclusion of Axis Integrated Systems is not sustainable. The reading of the above order shows that the ITAT has not specifically dealt with the revenue ground relating to Axis Integrated Systems Ltd, raised by revenue in ground no 36. Hence, the Ld. Counsel of the assessee submission that exclusion of Axis Integrated Systems Ltd. is also adjudicated by the Tribunal is not correct. Since, this ground raised by the revenue has not been adjudicated, we recall ground No. 36 of revenue appeal for fresh adjudication. This miscellaneous application is partly allowed.
Apparent mistake rectifiable u/s. 254(2) - non adjudication of additional ground - HELD THAT:- As we note that the mistake apparent from the record has crept in the order of this Tribunal inasmuch as the aforesaid additional ground was not adjudicated by the Tribunal. Hence, there is a mistake apparent from the record. However in an MA, the ground on merits cannot be adjudicated
Hence, the order can only be recalled for the limited purpose of adjudicating this additional ground which had remained unadjudicated. Ld. DR has no objection with regard to this miscellaneous application inasmuch as, the recall will be only to adjudicate the issue which had by mistake remained unadjudciated. Accordingly, we recall the aforesaid order for limited purpose of adjudication of the aforesaid additional ground, which has remained to be adjudicated.
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2022 (1) TMI 1389 - SECURITIES APPELLATE TRIBUNAL, MUMBAI
Delay in the initiation of the proceedings by SEBI - AO has skirted the issue on the ground that since the appellant did not act with skill, care and diligence, it proceeded to hold that the appellant cannot be absolved for the lapses incurred by him and accordingly imposed a penalty - HELD THAT:- Admittedly, the inspection was conducted in January / February 2012. Inspection was submitted on May 07, 2012 and a reply was given on June 14, 2012. Thereafter, nothing was done and the show cause notice was eventually issued on December 12, 2019 after 7 ½ years. There has been an inordinate delay in the issuance of the show cause notice.
The view taken by the AO is patently erroneous and cannot be allowed to stand. We are of the view, that when a defense is raised by the appellant it is the onerous duty of the AO, as a quasi judicial authority, to deal with the matter instead of skirting the issue and pushing it under the carpet without dealing with it. The ground raised and not dealt with amounts to judicial indiscipline. We are of the view, when a question of delay has been raised, it is imperative for the AO to deal with the issue.
In the instant case, we find that there is an inordinate delay in the issuance of the show cause notice. No explanation whatsoever has been given by the respondent as to why the show cause notice could not be issued earlier. In the absence of any justification, we are of the view that the show cause notice was not issued within a reasonable time and, in fact there has been an inordinate delay in the issuance of the show cause notice. We are further of the opinion, that old and stale disputes should not be raised.
Thus the impugned order cannot be sustained and is quashed. The appeal is allowed with costs.
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2022 (1) TMI 1388 - SC ORDER
TDS u/s 195 - Royalty - amounts paid by the concerned persons resident in India to non-resident, foreign software suppliers - Whether constitutes as taxable income deemed to accrue in India u/s 9(1)(vi) or not? - income deemed to accrue or arise in India - As decided by SC [2021 (3) TMI 138 - SUPREME COURT] given the definition of royalties contained in Article 12 of the DTAAs it is clear that there is no obligation on the persons mentioned in section 195 of the Income Tax Act to deduct tax at source, as the distribution agreements/EULAs in the facts of these cases do not create any interest or right in such distributors/end-users, which would amount to the use of or right to use any copyright - HELD THAT:- List these matters for hearing before the Court after the resumption of physical hearing.
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2022 (1) TMI 1387 - ITAT BANGALORE
Business Expenditrue - Deduction u/s 37(1) - assessee advanced money for the purpose of purchase of material to construct the hotel building - HELD THAT:- As it is clear that the amount paid to various vendors for supply of construction material for construction of hotel building was not in the normal course of business of assessee. Since the amount was given for the purpose of creation of capital asset, the same cannot be treated as a revenue loss, but a capital loss. Accordingly, the debt arisen in the normal course of business is revenue in nature, but in the present case, the debt arose in the field of capital investment and writing off the same was in the nature of capital loss and cannot be allowed as a deduction. This ground of the assessee is dismissed.
Accrual of income - incentive deposit received for rebranding of the hotel - AO observed that the 'incentive' has been received during the year under consideration for rebranding of the hotel and corresponding expenditure has been debited in the instant year itself, the amount received is an revenue receipt - HELD THAT:- The argument of the assessee is that income not at all accrued to the assessee, as such, incentive cannot be taxed in the hands of the assessee in the year under consideration. In our opinion, the assessee is following mercantile system of accounting.
The assessee treated the expenditure as an asset and claimed depreciation on it and charged it to P&L account. However, corresponding incentive received by the assessee towards brand building has been shown as liability which is against the provisions of Section 5 of the Act. Accordingly, AO rightly brought it to tax. The assessee cannot postpone it on the reason that it is liability and there is likelihood of repaying the amount in a phased manner after 5th of every year in case agreement is prematurely terminated. If the assessee refunds back to the payer, then it could be claimed as deduction in the year in which was paid back by the assessee. Decided against assessee.
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2022 (1) TMI 1386 - ITAT DELHI
TP adjustment - Intra Group Services paid to AE for failing transfer support services - HELD THAT:- As undisputed fact that all the issues involved are covered by the decision of the Tribunal in assessee's own case[2020 (2) TMI 156 - ITAT DELHI].
In fact the ld. DRP has categorically directed the AO to verify from the record if no appeal has been preferred by the Department before the Hon'ble High Court against the order of the Tribunal for assessment year 2015-16, then no addition should be made and it was only subject to the fact that if any appeal has been filed before the Hon'ble High Court then only addition should be sustained. Now it has been brought on record that no appeal has been preferred by the Department before the Hon'ble High Court and, therefore, the order of the direction of the DRP to delete the addition as the decision of the Tribunal is upheld - Appeal of assessee allowed.
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2022 (1) TMI 1385 - ITAT INDORE
Unexplained investment u/s 69 - ‘on money’ paid for purchase of the said land through its partner and the payment of ‘on money’ in cash is not recorded in the books of account - HELD THAT:- We find that DR failed to controvert the facts that firstly the additions were made simply on the basis of statement of power of attorney holders, secondly the addition was made without providing any opportunity of cross examination to the assessee with the 3rd party on whose statement addition has been made, thirdly, the additions are made merely on the basis of oral evidences and there is no evidence on record which could prove that the seller has received ‘on money’ and offered the same before the revenue authorities and lastly the addition seems to be made on assumption and presumption as except the registered sale deed no other incriminating material was found during search proceedings which could indicate that the alleged ‘on money’ has been paid by the assessee.
As in the finding of ld. CIT(A) are inclined to hold that no addition u/s 69 was called for in the hands of assessee. No infirmity in the finding of ld. CIT(A) and the same is confirmed. Decided against revenue.
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2022 (1) TMI 1384 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL NEW DELHI
Application filed u/s 9 of IBC, rejected on the ground of pre-existing dispute - police complaint evidences the dispute between the parties or not - HELD THAT:- The Adjudicating Authority has observed the fact that the police complaints were registered by the Appellant and cross-complaints were also registered by the ‘Corporate Debtor’ is evidence of facts, that dispute has arisen between the parties which was pending investigation by the police.
When the allegations against each other are serious allegations including allegations of offence against each other, we are not convinced by the Appellant that police complaint do not evidence any dispute between the parties. It is to be noted that all the aforesaid complaints are much before initiation of proceedings u/s 9 by the Appellant. The Adjudicating Authority has not committed any error in relying of the facts and materials on record to come to the conclusion that there was pre-existing dispute between the parties.
The IBC proceedings are not for the purposes of adjudicating such dispute between the parties and are not the recovery proceedings to recover the unpaid amount by the official creditor whose claim is disputed by the ‘Corporate Debtor’ - appeal dismissed.
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2022 (1) TMI 1383 - MADRAS HIGH COURT
Oppression and Mismanagement - Fraudulent allotment of bonus shares - issuance of bonus to the shareholders who are nonresidents of India and not to all the shareholders, without the approval of the Reserve Bank of India - HELD THAT:- It is relevant to note that even in mismanagement, oppression, complaint by any of the minority shareholders, the remedy lies under section 241 of the Companies Act for oppression or mismanagement. Only if the Tribunal gives any finding that there are fraudulent activities and fraud has been committed by any person, give cause of action to proceed under section 447 of the Companies Act. Chapter XIV and XVI of the Companies Act are fact finding procedures. If any irregularities which lead to the fraudulent activities of the company found during the inspection as per the procedure, certainly there cannot be any difficulty in lodging any complaint under section 447 of the Companies Act.
hether or not there is mismanagement or oppression, the same cannot be gone into by the Special Court. The Special Court can try the offence on the specific charges. Situation is not ripen for that stage. Only on recording a finding about the fraud committed by the petitioners, the Court can try the offence for specific charges. The criminal Court cannot assume the role of Company Court and investigate the matter. Though much reliance has been placed on the judgment of the Apex Court in the judgment in NATIONAL BANK OF OMAN VERSUS BARAKARA ABDUL AZIZ & ANR. [2012 (12) TMI 965 - SUPREME COURT] to contend that the Magistrate has considered the sworn statement. In the above case, the Apex Court has held that the High Court instead of quashing the complaint should have directed the Magistrate to pass fresh Orders following the procedure under section 202 of Cr.P.C.
In MD. IBRAHIM & ORS VERSUS STATE OF BIHAR & ANR [2009 (9) TMI 922 - SUPREME COURT], the Apex Court has held that in order to attract an offence under section 464 of IPC, a person ought to have made or executed a document claiming to be someone else or authorised by someone else or he altered or tampered a document or he obtained a document by practicing deception, or from a person not in control of his senses. Except contending that resolution and PAS-3form have been manipulated, the nature of alleged manipulations is totally absent. Therefore, the offence under 464 of IPC is also not made out. In such view of the matter, the entire complaint is liable to be quashed. If at all the respondent is really interested to unearth the mismanagement, oppression or irregularities, he ought to have given a complaint before the authorities.
Therefore, it is for the respondent to make necessary complaint to the concerned authorities to conduct enquiry or investigation or inspection in the affairs of the company and take appropriate legal action. By holding, this Court is of the view that the present prosecution is nothing but abuse of process of law and not maintainable.
This Criminal Original Petition is allowed
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2022 (1) TMI 1382 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL NEW DELHI
Seeking direction for modification of the Approved Resolution Plan of Respondent No. 2 and 3, in compliance with Regulations 42 and 44 of the liquidation Process Regulation 2016 - Non-deduction of ₹ 34 crores from the final payment to be made to the Applicant/Appellant as per the scheme of distribution from out of the amount under the Resolution Plan - HELD THAT:- It is important to mention that the resolution professional admits in its Reply that it had suggested the COC two options to either treat the illegal recovery is made by the Appellant as interim finance under the IB Code or sent to deduction of the amount of illegally recovered amount by the Appellant, out of distribution amount payable to the Appellant under the Resolution Plan. Accordingly, the COC, upon deliberation, consented to deduction of the said amount from the distribution amount owed to the Appellant under the Resolution Plan submitted by Respondents No. 2 & 3 in the 30th and 31st Meeting of the COC held on 5 February 2020 on 7 February 2020 respectively.
It is further necessary to mention that the Resolution Professional has in its Reply admitted that in terms of duty cost upon him under Sections 20 and 25 of the Code to continue and maintain the business of the Corporate Debtor as a going concern, it had requested the Appellant to continue and sustain the Non-Fund-Based Facility NBF Facility limits at the existing level at being drawn by the Corporate Debtor prior to the insolvency commencement date. The said request was made on account of the business requirement of the Corporate Debtor - It is pertinent to mention that Section 25 of the Code provides the duties of the Resolution Professional. Under Section 25(2)(c), the RP must raise interim finance subject to the approval of the Committee of Creditors under Section 28 of the Code. Further, under Section 20 (2) (1) &(2)(c) of the Code, the IRP/RP is duty-bound to make every endeavour to protect and preserve the value of the property of the Corporate Debtor and manage the operations of the Corporate Debtor as a going concern. For this purpose, IRP/RP is entitled to raise interim finance.
In the instant case, Resolution Professional has admitted that it had suggested the COC two options, to either treat the recovery made by the Appellant as interim finance under IB code or deduct the amount illegally recovered by the Appellant, out of distribution amount payable to the Appellant under the Resolution Plan. Thus, it is clear that RP failed to exercise its jurisdiction to decide the issue of CIRP cost and left it to the CoC to decide whether the amount incurred in keeping the Corporate Debtor as a going concern, by the continuation of letter of credit bank guarantee facility during the CIRP would be treated as interim finance. However, it was the duty of IRP/RP itself to decide the CIRP cost. After that, instead of taking advice from the COC for treating the said expenses as interim finance, he should have obtained sanction from the CoC for making the payment of the expenses incurred during the CIRP.
It is clear that the Appellant never recovered any amount from the payment of ₹ 34 crores, as has been misrepresented by Respondent No. 1. The Adjudicating Authority vide its impugned Order observed that the Appellant has not objected to the said actions of Respondent No. 1 in the COC meetings is contrary to the materials placed before the Adjudicating Authority. Furthermore, the Appellant had refuted the actions of respondent No. 1 vide its Email dated 20 February 2020, which the Adjudicating Authority has overlooked - Appeal allowed in part.
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2022 (1) TMI 1381 - SC ORDER
Approval of Resolution Plan - adjudicating authority dismissed the application filed by the appellant which was upheld by the appellate tribunal - HELD THAT:- As per Section 31 of the IPC, the Resolution Plan becomes final only after it is approved by the adjudicating authority - reliance placed in the case of GHANASHYAM MISHRA AND SONS PRIVATE LIMITED THROUGH THE AUTHORIZED SIGNATORY VERSUS EDELWEISS ASSET RECONSTRUCTION COMPANY LIMITED THROUGH THE DIRECTOR & ORS. [2021 (4) TMI 613 - SUPREME COURT] where it was held that After CoC approves the plan, the Adjudicating Authority is required to arrive at a subjective satisfaction, that the plan conforms to the requirements as are provided in subsection (2) of Section 30 of the I&B Code. Only thereafter, the Adjudicating Authority can grant its approval to the plan.
Appeal dismissed.
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2022 (1) TMI 1380 - MADRAS HIGH COURT
Disallowance of bad debts as conditions laid down in Section 36(1)(vii) r.w.s. 36(2) not satisfied - debts have been taken over from the sister concerns - Tribunal allowed the claim - HELD THAT:- Substantial question of law involved in this appeal has already been considered and decided in favour of the assessee by judgment [2021 (12) TMI 1446 - MADRAS HIGH COURT] as held tribunal has taken note of the position that the Memorandum and Articles of Association permitted the assessee to carry on the business of money lending and the transactions in question have been held to be in the realm of business activity. Decided in favour of assessee.
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2022 (1) TMI 1379 - CALCUTTA HIGH COURT
Revision u/s 263 - cancellation of registration for the year when the cancellation order was not available to the AO while passing the order u/s 147/143(3) - HELD THAT:- Tribunal had allowed the assessee’s case following the decision in the case of Commissioner of Income Tax(exemption) Vs. Mukesh Bhansali Charities Trust [2019 (3) TMI 2027 - CALCUTTA HIGH COURT] allowed the assessee’s appeal wherein the Tribunal upheld circular No. 1 of 2011, dated 6th April, 2011 issued by the CBDT and held that Section 12AA(3) is applicable only from the assessment year 2011-12.
We find that the substantial questions of law raised in this appeal are covered against the revenue.
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2022 (1) TMI 1378 - ITAT SURAT
Addition u/s 68 - Identity, genuineness and creditworthiness in respect of money received in its books of accounts not proved - main plank on which the assessing officer made the addition was because the directors of the share subscribers did not turn up before him - CIT-A deleted the addition - HELD THAT:- There is no finding of involvement of any entry provider or hawala operator. M/s Anushka Soft-Tel Pvt. Limited is not found to be-part of any group of Companies floated by any entry provider.
A detailed interrogation was conducted by the assessing officer and the director of M/s Anushka Soft-Tel Pvt. Limited has answered all the questions, which show that the director is having full knowledge of operations of M/s Anushka Soft-Tel Pvt. Limited as well as the assessee-company.
The director is not a name lender as generally happens in the case of dummy companies and Shell Company. The statement of the director has not been rebutted or discredited by the assessing officer.
The assessing officer has not made reference to FT & TR nor has he made any investigation / inquiry, in this case. The documents filed reflect that SWEI Inc, is a Company having substantial operating revenues and it has enough shareholders equity to make investment in assessee-company.
Documents also show that the investment has been made through a proper channel of foreign remittances and by following due procedure under FCGPR. The same is also reflected in the balance sheet of M/s SWEI Inc. The assessing officer has not given any contrary finding on any of the documents / details filed. The assessing officer has made addition only in respect of two companies. The assessee has filed basic relevant documents at assessment stage and wherever the Assessing Officer has issued notices, they are complied with and investigations/ examination of director has not thrown up any contrary fact.
All the share applicants are (i) income tax assessee’s, (ii) they are filing their return of income, (iii) the share application form and allotment letter is available on record, (iv) the share application money was made by account payee cheques, (v) the details of the bank accounts belonging to the share applicants and their bank statements, (vi) in none of the transactions the assessing officer found deposit in cash before issuing cheques to the assessee company, (vii) the applicants are having substantial creditworthiness which is represented by a capital and reserve as noted above.
We are not inclined to accept the contention of the AO in any manner and hence the addition so made by assessing officer has been rightly deleted by ld CIT(A) by passing a reasoned and speaking order. That being so, we decline to interfere with the order of Id. CIT(A) in deleting the aforesaid additions. Decided in favour of assessee.
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2022 (1) TMI 1377 - CUSTOMS AUTHORITY FOR ADVANCE RULINGS, NEW DELHI
Classification of goods - E-cycle - applicable rate of customs duty on import of the said goods from China - classifiable under sub-heading 8712 00 10 of the Central Excise Tariff or under 8711? - HELD THAT:- Heading 8712 covers Bicycles and other cycles (including delivery tricycles), not motorized. Given that the good in question is admittedly e-cycle, albeit with power less than 250W, it does not prima facie meet the requirement of "not motorized" prescribed in the heading. The alternative heading 8711 covers Motorcycles (including mopeds) and cycles fitted with auxiliary motor, with or without side cars appears more appropriate, given that the e-cycle has a motor, albeit of power less than 250W - the application is more in the nature of a prayer for fiscal indulgence for an innovative and environment friendly mode of individual transport and not for a ruling on classification of the said mode of transport under the Customs Act, guided as it would be as per the laid down provisions of law and jurisprudence. The specific prayer for classification of e-cycle as a non-motorised cycle under heading 8712 and not 8711 is an effort to lend technical wherewithal to the said substantive prayer.
The prayer made in the application is not essentially covered by section 28-H 2 (a) of the Customs Act, 1962 and beyond the scope of powers vested with this Authority. Further, the application, including the revised application, are not in conformity with the procedure laid down in CAAR Regulations, 2021.
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2022 (1) TMI 1376 - GUJARAT HIGH COURT
Exemption u/s 11 - scope and amplitude of the definition “charitable purpose” - correct interpretation of the proviso to Section 2(15) “charitable purpose” - as per revenue assessee is involved in widespread commercial activities in nature of business and the activity of the assessee covered under the provisions of Section 2(15) of the Act and thus, exemption u/s.11 & 12 of the Act is not allowable to the assessee - HELD THAT:- The substantial questions of law raised are no longer res integra in view of the decision of this Court in the case of Ahmedabad Urban Development Authority Vs. ACIT (Exemption) [2017 (5) TMI 1468 - GUJARAT HIGH COURT] - Decided against revenue.
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2022 (1) TMI 1375 - BOMBAY HIGH COURT
Appointments to the Appellate Tribunal under the Prevention of Money Laundering Act - HELD THAT:- Consistent with the orders passed by other Courts, therefore, we will have to grant an order of status-quo in both these matters. There is a dispute between the two sides as to whether possession or has or has not been taken. There are no finding in that regard - It is directed that the present status-quo is to be maintained and no further coercive steps are to be taken against the Petitioners.
Liberty to the parties to apply once the appointments are made.
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2022 (1) TMI 1374 - ITAT BANGALORE
Deduction u/s 10A - deduction u/s. 10A for Bangalore BPO Unit was restricted to total income (under the head business) after set off of losses from other units (10A and non-10A units) - While the DRP accepted the objection of the assessee, the AO in the final assessment order for the first time excluded the loss/profit of section 10A units eligible for deduction at the source level itself, while no such direction was given by the DRP. According to the ld. AR, the action of the AO in the final assessment order is against the mandate of the provisions of section 144C(10) r.w.s. 144C(13) - HELD THAT:- As submitted that the provisions of section 10A are deduction in nature and in the absence of provisions similar to section 80A(2), the entire deduction to be restricted to total income in all the loss/profit of 10A units to be excluded at source level. For this purpose, he relied on the order of Yokogawa India Ltd [2016 (12) TMI 881 - SUPREME COURT] wherein it was held that though section 10A, as amended, is a provision for deduction, the stage of deduction would be while computing the gross total income of the eligible undertaking under Chapter IV and not at the stage of computation of the total income under Chapter VI. Being so, the issue is remitted to the AO to pass consequential order in compliance of the decision above.
Disallowance of provision for litigation under normal provisions of the Act as well as upward adjustment to net profit while computing book profit u/s. 115JB - DR submitted that there is no basis for this provision towards legal fees or out of pocket expenses and the lump sum provision is made without specific production of details of litigation pending at various courts - HELD THAT:- As before us, the ld. AR could not establish that this provision has been made on a scientific basis relating to particular cases pending before various courts and due to particular counsel. As such, we decline to entertain this ground and the same is rejected.
MAT computation - AR submitted that as per Explanation 2(i) to section 115JB of the Act, any reversal out of provision created in earlier year, if the book profit of such year has been increased by those provisions, be reduced from net profit while computing book profit in the year of reversal, if such amount is credited to Profit & Loss account. - HELD THAT:- If the book profit is increased by provision created in that year and on reversal of that provision in the present assessment year, net profit of this assessment year to be reduced so as to compute the correct book profit. With these observations, we remit the issue to the AO for fresh consideration.
Addition u/s. 201(1) & 201(1A) for not withholding tax on payments towards bandwidth and leased line charges - The issue has been settled by the assessee by availing VSVS, 2020 scheme - HELD THAT:- At the time of passing the DRP order, the certificate under VSVS, 2020 was not made available before the lower authorities. Since the issue raised before us is directly related to the issue in the appeal in.[2020 (12) TMI 1375 - ITAT BANGALORE] if the issue was settled by the assessee by availing VSVS, 2020, the assessee is entitled for consequential relief. Accordingly this issue is set aside to the file of AO to consider the VSVS, 2020 scheme availed by the assessee and decide the issue accordingly.
Computing deduction u/s. 10A - HELD THAT:- We are of the opinion that this issue has been decided in favour of the assessee by the judgment of Tata Elxsi Ltd [2011 (8) TMI 782 - KARNATAKA HIGH COURT] holding that for the purpose of computing deduction u/s. 10A if the export turnover in the numerator is to be arrived at after excluding the communication expenses, the same should also be excluded in computing the export turnover as a component of total turnover in the denominator. This has been confirmed by the Hon’ble Supreme Court in the case of HCL Technologies Ltd. [2018 (5) TMI 357 - SUPREME COURT].
TP Adjustment - comparable selection - HELD THAT:- Remit this issue in respect of selected comparables to the file of DRP for adjudication of this issue after considering the submissions and case laws cited by the assessee.
Only companies functionally similar to the assessee need to be selected.
Corporate guarantee transaction treated as an international transaction and applying arbitrary rate of 3% as guarantee fee - HELD THAT:- We set aside this issue to the record of the A.O./TPO to recompute the ALP by considering the arm's length guarantee fees at 0.5% and further by providing appropriate adjustment for corporate guarantee received by the assessee from its arm's length.
Reimbursement transactions - TPO proposed to apply CUP method and treat the payment towards the Re-imbursement as NIL and made adjustment in the intragroup payment made by the assessee - HELD THAT:- Before the lower authorities, the assessee has not placed the necessary evidence, as such this issue was decided against the assessee. Before us, it was pleaded that the assessee is in a position to place the evidence to support its claim. Accordingly, the issue is remitted to the AO/TPO to consider the same and decide the issue afresh.
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