Advanced Search Options
Case Laws
Showing 21 to 40 of 1239 Records
-
2022 (10) TMI 1220
Assessment of trust - Unverifiable donation - unverifiable/ bogus contribution to corpus fund - addition made by AO by invoking the provisions of section 68 and section 115 BBC - CIT(A) deleted addition accepting genuineness and creditworthiness of the of the donors - HELD THAT:- CIT(A) while deleting the addition has noted that if a person receives donation and maintains the record of identity and address of the donors and then such donation cannot be considered to be anonymous donation as defined in subsection (3) of Section 115BBC of the I.T. Act, 1961. He further held that requirement of Section 115BBC is not at par with onus on the assessee-trust casted under section 68 i.e., to prove creditworthiness of the donors. He has given a finding that since the assessee-trust has maintained and disclosed name and address of the donors during the assessment proceedings and which were accepted by the A.O. in the original assessment order, therefore, the provisions of Section 115BBC would not be applicable to the facts of the case.
CIT(A) further noted that details of the names and addresses of the donors has not been proved to be wrong or those persons have not donated to the assessee-trust. He, therefore, held that for these reasons also the donation received by the assessee-trust cannot be considered to be anonymous donation by virtue of sub-section (3) of Section 115BBC of the I.T. Act, 1961. Before us, no fallacy in the findings of the CIT(A) has been pointed out by the Revenue. In such a situation, we find no reason to interfere with the order of the Ld. CIT(A) and thus, the grounds raised by the Revenue are dismissed.
-
2022 (10) TMI 1219
Violation of principles of natural justice - petitioner claim nor dealt in proper manner - rejection of request for refund - HELD THAT:- The petitioner's claim has not been dealt with in a proper manner. The detailed contentions raised by the petitioner in the refund claim have not been specifically adverted to or discussed in light of either the CC Rules or Section 172(7)(b), specifically referred to in the refund application.
Moreover, the petitioner ought to have heard in person prior to the impugned order having been passed, which has not been done despite the petitioner having, at para 13 of the refund claim, specifically sought an opportunity of personal hearing prior to disposal of the application. The impugned order is thus set aside and remanded for de novo hearing and disposal, in accordance with law.
The officer in the remand proceedings shall test the eligibility of the petitioner to the credit at the outset and render a categoric finding in this regard. The provisions of Section 142 shall thereafter be applied to determine the refund sought. Such exercise shall be completed within a period of eight weeks from date of receipt of this order.
Petition disposed off.
-
2022 (10) TMI 1218
Estimation of income - bogus purchases - HELD THAT:- As in respect of bogus purchases the assessee had not produced an supporting documents in the form of delivery challan, lorry receipt stock register in support of such purchases, therefore we don’t find any reason to interfere in the decision of ld. CIT(A) in restricting such purchases to the extent of 12.5% of the purchase amount.
We restrict the addition in respect of purchases made from Abishek Enterprises also to the extent of 12.5% of such purchases.
Sundry creditors even during remand report proceedings the assessee has failed to make any compliance in spite of opportunity provided by the ld. CIT(A). The assessee had failed to furnish the confirmation from the sundry creditors. These facts demonstrate that the assessee had failed to furnish even basic document like confirmation from the creditors before the lower authorities, therefore, we don’t find any reason to interfere in the decision of ld. CIT(A).
Disallowance out of household expenses and other miscellaneous expenses we find that the A.O has not substantiate the reason for such disallowance with relevant break up and defect in the nature of detail submitted by the assessee during the course of assessment proceedings, therefore, we consider that decision of ld. CIT(A) in sustaining these addition is not justified. Accordingly, we direct the A.O to delete the addition on account of low household withdrawal and on account of discrepancy in expenses.
Appeal of the assessee is partly allowed.
-
2022 (10) TMI 1217
Levy of GST - prepayment premium to be charged by PFC, New Delhi for prepayment of loans - HELD THAT:- The Central Board of Indirect Taxes and Customs (CBIC) has issued two Circulars - one Circular No. 102/21/2019-GST dated 28.06.2019 clarifying the “issue of applicability of additional/penal interest” and other Circular No. 178/10/2022-GST dated 03.08.2022 regarding 'GST applicability of liquidation damages, compensation and penalty arising out of breach of contract or other provisions of law”.
The Circular No. 102/21/2019-GST dated 28.06.2019 clarifies doubts regarding admissibility of GST on additional/penal interest on the overdue loan i.e. whether it would be exempt from GST in terms of SI. No. 27 of notification No. 12/2017-Ccntral Tax (Rate) dated 28th June 2017 or such penal interest would be treated as consideration for liquidated damages [amounting to a separate taxable supply of services under GST covered under entry 5(e) of Schedule II of the Central Goods and Services Tax Act, 2017.
On the other hand, the Circular No. 102/21/2019-GST dated 28.06.2019 in para 7.1.6. has analysed the situation where some banks charge pre-payment penalty if the borrower wishes to repay the loan before the maturity of the loan period and clarified that, such amounts paid for acceptance of late payment, early termination of lease or for pre-payment of loan or the amounts forfeited on cancellation of service by the customer as contemplated by the contract as part of commercial terms agreed to by the parties, constitute consideration for the supply of a facility, namely, of acceptance of late payment, early termination of a lease agreement, of prepayment of loan. Therefore, such payments, even though they may be referred to as fine or penalty, are actually payments that amount to consideration for supply, and are subject to GST, in cases where such supply is taxable.
In the present case of the applicant the applicant has simply stated that the PFC has raised the demand of prepayment premium of Rs. 16,85,71,429/-. It is not clear as to whether the prepayment premium includes “additional/penal interest” or “pre-payment penalty”. As the “additional/penal interest” is in the nature of Interest whereas the “prepayment penalty” is in the nature of fine/penalty - in case the consideration is represented by penal interest for prepayment of loan amount the same shall be exempted from payment of GST in terms of SI. No. 27 of notification No. 12/2017-Central Tax (Rate) dated the 28.06.2017.
Hence, it can be seen that, in both the conditions i.e. whether the prepayment premium includes “additional/penal interest or pre payment penalty”, there shall not be any GST on the prepayment premium to charged by PFC, New Delhi for pre-payment of loan under CGST Act, 2017.
-
2022 (10) TMI 1216
Power of SEBI to initiation action against Chartered Accountant (CA) / Auditor of the company - Professional negligence by Auditor/CA - IPO proceeds were utilized for the objects other than those mentioned in the prospectus - Sebi alleged actual utilization of IPO proceeds was significantly different from the certificate issued by the appellants and the utilization certificate did not carry any qualification even though the appellants had access to bank statements and books of accounts of the Company - Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market - HELD THAT:- AO has only established that the appellants have falsely certified the Unqualified Utilization Certificate. There is no finding that the appellants were party to preparation of false and fabricated accounts. There is no finding that the appellants had manipulated the books of accounts with knowledge and intention in the absence of which the appellants cannot be accused of fraud.
There is also no finding by the AO on collusion with the Company in the absence of which the charge of aiding and abetting the Company cannot be sustained. It is an admitted fact that the appellants had qualified the annual accounts on the matter of utilization of funds of the IPO and such a qualification is mentioned in the Annual Report which is in the public domain. In absence of a finding that there was deceit or inducement, the appellants can only be held guilty for professional lapse or negligence for which the appropriate authority to take action is ICAI. SEBI has already made a complaint to the ICAI in the instant case and ICAI is holding an inquiry against the appellants.
Section 12(A)(a) & (b) of SEBI Act is not applicable to the appellants as they are not dealing in securities. Further, in absence of proof of fraud, connivance, deceit or manipulation Section 12(c) of SEBI Act and Regulation (3) and (4) of PFUTP Regulations are not applicable.Thus, for the reasons stated aforesaid, the impugned order cannot be sustained and is set aside.
-
2022 (10) TMI 1215
Revision u/s 263 - Validity of reopening of assessment u/s 147 - notice issued beyond period of four years - as per CIT transactions of receipt of share capital and share premium not enquired by AO - HELD THAT:- Concluded assessment of the assessee for AY 2011-12 that was earlier framed u/s 143(3), as observed by us hereinabove could not have been reopened by the AO vide Notice u/s 148 i.e, after expiry of four years from the end of the relevant assessment year.
Admittedly, as the AO vide his order passed under Sec. 143(3) r.w.s 147, had accepted the assessee’s returned income, therefore, as stated by the ld. AR and, rightly so, there was no occasion much the less any justification for the assessee to have carried the order of reassessment any further in appeal.
Thus when the impugned order of reassessment under Sec. 143(3) r.w.s 147, in itself had been passed on the basis of invalid assumption of jurisdiction by the AO, and thus, is invalid and bereft of any force of law, therefore, the same could not have been revised by the Pr. CIT under Sec.263 of the Act.
Admittedly, we have accepted the aforesaid claim of the assessee that the AO as per the mandate of the “1st proviso” to Sec. 147 the Act had invalidly assumed jurisdiction and reopened the concluded assessment of the assessee beyond the prescribed time period available for doing so i.e upto 31.03.2016.
Whether or not the validity of the order passed by the AO under Sec. 143(3) r.w.s 147,could for the very first time in the course of the present appellate proceedings before us be taken as a basis by the assessee for assailing the sustainability of the order passed by the Pr. CIT under Sec. 263? - There is substance in the claim of the ld. AR that as the proceedings before the Pr. CIT u/s 263 of the Act, dated 27.03.2021 are in the nature of collateral proceedings, therefore, the assessee could in the course of appellate proceedings which in turn originates from the order passed u/s 263 of the Act, dated 27.03,2021 challenge the validity of the impugned assessment order passed by the A.O u/s. 143(3) r.w.s.147, dated 30.12.2018. The aforesaid contention of the ld. A.R that the illegality/invalidity of an order passed in the primary proceedings can be challenged in the course of the collateral proceedings finds support from the order of a coordinate bench of the Tribunal i.e ITAT, Mumbai in the case of Westlife Development Ltd. [2016 (6) TMI 1208 - ITAT MUMBAI]. It was, inter alia, observed by the tribunal that an assessee can challenge the validity of an order passed u/s.263 of the Act on the ground that the impugned assessment order was non-est. Indulgence of the tribunal in the said case was sought by the assessee for adjudicating the following issues (as culled out from the order).
Thus as the order of reassessment under Sec.143(3) r.w.s 147 in itself had been passed on the basis of invalid assumption of jurisdiction by the AO, therefore, as claimed by the assessee and, rightly so, the same could not have been revised by the Pr. CIT under Sec. 263 of the Act. Accordingly, we herein quash the order passed by the Pr. CIT under Sec. 263 for want of valid assumption of jurisdiction. Decided in favour of assessee.
-
2022 (10) TMI 1214
Levy of fees u/s 234E - late filing of quarterly TDS returns for Quarter-2 to Quarter-4 - intimation u/s 200A - levy of fees u/s 234E for any period prior to 01/06/2015 - HELD THAT:- We find that a view favorable to the assessee has been taken by Hon’ble High Court of Kerala in recent decision titled as United Metals [2021 (12) TMI 1349 - KERALA HIGH COURT] following its earlier decision in Sarala Memorial Hospital V/s UOI [2018 (12) TMI 1818 - KERALA HIGH COURT] which is stated to have attained finality.
Similar view favorable to assessee has been taken by Chennai Tribunal in its recent decision titled as M/s DRG Rexine Inc. V/s ACIT [2022 (2) TMI 1404 - ITAT CHENNAI] following the case law of Fatehraj Singhvi V/s UOI [2016 (9) TMI 964 - KARNATAKA HIGH COURT] Admittedly, there is no decision by Hon’ble High Court of Madras. In such a case, an analogy could be drawn from the decision of Hon’ble Supreme Court in CIT V/s Vegetable products Ltd. [1973 (1) TMI 1 - SUPREME COURT] for the conclusion that in case of two reasonable constructions of taxing statutes, the one that favors the assessee must be adopted.
Respectfully following the same, we would hold that a view favorable to the assessee was to be adopted and therefore, the levy of fees u/s 234E for any period prior to 01/06/2015 would not be sustainable in the eyes of law. We order so. In the result, the fees levied by TDS officer u/s 234E for Financial Years 2013-14 & 2014-15 could not be sustained.
Thus we direct CPC / Ld. AO to delete the impugned fees levied u/s 234E for various quarters and re-compute the outstanding demand against the assessee. Decided in favour of assessee.
-
2022 (10) TMI 1213
Recovery of CENVAT Credit alongwith interest and penalty - input services - outward freight charges in case where the goods are removed from the factory for delivery on for destination basis - place of removal - failure to discharge burden of proof on the part of assessee - HELD THAT:- In terms of the decision in COMMISSIONER, CUSTOMS AND CENTRAL EXCISE, AURANGABAD VERSUS M/S ROOFIT INDUSTRIES LTD. [2015 (4) TMI 857 - SUPREME COURT] the point where transfer of ownership in goods from seller to buyer occurs is the place of removal for the purpose of Section 4 of the Central Excise Act, 1944 and all the expenses incurred upto that point become the part of the transaction/ assessable value for the purpose of levy of cenvat duty. In case of the FOR destination sale admittedly the transfer in property in the goods would happen at the point of the delivery of the goods and all expenses till that point would be includible in the transaction value, i.e. freight charges upto that point are includible in the assessable value determined under Section 4 - Admittedly appellant had paid duty including the freight charges upto the point of delivery at the destination. That being so the point of delivery is the place of removal for the purpose of determination of eligibility to CENVAT Credit in respect of the GTA Services received by the appellant.
From the question framed itself it is quite evident that bench has referred the matter without considering the clarification issued by the Board in 2018. Since the clarification issued by the Board goes to the root of the matter and clarifies the conditions wherein the benefit of credit needs to be allowed following the decision of the Apex Court in the case of Roofit Cement, the decision is sub-silentio and cannot be treated as binding precedent.
Appeal allowed.
-
2022 (10) TMI 1212
Principles of natural justice - writ petitioner has not availed the opportunity given by 1st respondent and the impugned revision is well within the purview of the relevant laws - HELD THAT:- Having regard to the contention of the petitioner that he has additional material to be submitted and also having regard to the legal and factual objections against the suo moto revision undertaken by 1st respondent raised in this writ petition, in the interests of justice, it is deemed apposite that an opportunity should be given to the petitioner for making submissions as against the impugned revision sought to be made by 1st respondent.
The matter is remitted back to 1st respondent with a direction to issue a notice to the petitioner fixing the date for hearing well in advance, in which case, the petitioner shall appear with his documents, if any.
-
2022 (10) TMI 1211
Revision u/s 263 - CIT has gone through the record and formed an opinion that during demonetisation period, there was abnormal increase in cash deposit as compared to average rate of cash deposit during pre-demonetisation period - HELD THAT:- The case of the assessee is that it has made sufficient withdrawals starting from 19.10.2016 out of its C.C. facility. The withdrawal before the demonetisation was declared was about Rs.1,35,00,000/-. If it was not used in purchases, then it has to be re-deposited. The abnormal circumstance of high deposit is the reason that such currency could not be retained at home, it has to be sent to the Bank during the given period of time.
This fact has not been properly taken note by the ld. CIT while exercising the power u/s 263 - AO has made a due enquiry on this issue during the assessment proceedings.
Commissioner failed to give any plausible reason as to why he did not agree with the opinion of AO and as to how the assessment order is erroneous by simply observing that the assessment order is erroneous is not justifiable action. It has to be demonstrated as how it is erroneous, which has caused a prejudice to the revenue CIT totally failed in this area. No hesitation to quash the impugned order. We allow the appeal of the assessee.
-
2022 (10) TMI 1210
Grant of extension of interim bail - HELD THAT:- A bare perusal of order in RAJ SINGH GEHLOT VERSUS DIRECTORATE OF ENFORCEMENT [2022 (9) TMI 1522 - SC ORDER] passed by the Hon’ble Supreme Court of India reflects that interim protection granted by the High Court has been directed to continue and there does not appear to be any ambiguity in this regard.
Thus, no further clarification in this regard is required from this Court as no observations appear to have been expressed by the Hon’ble Supreme Court of India in respect of order dated 28.09.2022 regarding evaluation of the medical condition of the respondent by the Medical Board of Dr.RML Hospital. The same was made to ensure that the protection on medical grounds is not misused in any manner.
The petitioner shall be at liberty to get the respondent examined from the Medical Board, Dr.RML Hospital at Max Hospital, wherein respondent is admitted, subject to orders of the Hon’ble Supreme Court of India - petition disposed off.
-
2022 (10) TMI 1209
Short TDS credit granted - tax had not been deducted by the deductor in the relevant year, therefore, the claim of the assessee for TDS was not acceptable - difference in the amount of TDS credit as per Form 26AS and amount claimed by the assessee in its return of income - CIT(A) had dismissed the appeal of the asssesse stating difference is due to the fact that the assessee’s client had booked the expenses in the same financial year in which the assessee had recognized the income, however assessee’s client had deducted tax while making payment in the subsequent financial year as a result of which the said tax was included in the TDS return of the subsequent financial year - HELD THAT:- CIT(A) has not adjudicated the claim of the assessee in accordance with the provisions of Sec. 199 r.w.rule 37BA(3) of the I.T. Rules, 1962 and also not taken into consideration the decision of ITAT in the case of the asessee itself.
As gone through the decision of the ITAT, in the case of the assessee itself [2020 (2) TMI 21 - ITAT MUMBAI], it is observed that the ITAT has decided the issue in fovour of the assessee in accordance with the provisions of Sec. 199 r.w.rule 37BA(3) of the Act.
The point of time at which the benefit of TDS is to be given, is governed by sub-rule (3) of Rule 37BA, which unequivocally provides through clause (i) that the ‘credit for tax deducted at source and paid to the Central Government, shall be given for the assessment year for which such income is assessable‟. It is, ergo, abundantly clear from the mandate of Rule 37BA(3)(i) that the benefit of TDS is to be given for the assessment year for which the corresponding income is assessable. As income on which tax was deducted at source, is patently assessable in the year under consideration, we hold that the benefit of the TDS should also be allowed in the same year, namely, the year under consideration. Appeal of assessee allowed.
-
2022 (10) TMI 1208
Beneficial provisions of the India - Mauritius DTAA in respect of STCG - setting off the brought forward Short/Long Term Capital Losses with the current year Short/Long Term Capital Gains as exempted as per India Mauritius DTAA - whether relevant Articles of the DTAA has to be taken on the net taxable income calculated after giving effect to all the provisions of the IT Act including Section 74 as argued by revenue? - HELD THAT:- Tribunal in the case of Goldman Sachs Investments (Mauritius) Ltd. [2020 (9) TMI 1049 - ITAT MUMBAI] rejected the aforesaid contention of the Revenue holding that the Assessee was entitled to claim benefit of Article 13(4) of DTAA in respect of the entire current year Short/Long Term Capital Gains (without setting of the Brought Forward Short/Long Term Capital Gains).
The Tribunal also permitted carry forward of the Brought Forward Short/Long Term Capital Gains to the subsequent assessment years holding that the Short/Long Term Capital Loss permitted to be carried forward in a previous assessment could not be reviewed in the assessment proceedings of a subsequent assessment year.
Thus we find merit in the contention of Assessee that all the issues raised by the Revenue in the present appeal stand decided in favour of the Assessee.
-
2022 (10) TMI 1207
Revision u/s 263 - Bogus purchases and commission payment - notice u/s 133(6) was issued for confirmation of the parties and that no confirmation, bank account and income tax return from all parties were furnished - HELD THAT:- We find that during the assessment, AO vide his specific notice dated 24.06.2016, called the record of purchases as well as commission expenses. The assessee vide its reply dated 08.07.2016, furnished complete details about the purchases as well as commission payment. We find that the reply of assessee in response to show cause notices of purchases and commission payment is duly acknowledged by AO. As recorded above, the AO has not made any reference about such enquiries or reply received by him on both the issues.
We find that in reply to show cause notice, the assessee filed details reply, inter alia contending therein that the purchases from the parties are genuine. Assessee furnished bank statement, tax invoices and leger account of the parties. Similarly, for the commission expenses, the assessee furnished the details of both the parties. We find that out of four parties, three parties are located at distant places. CIT has not disputed the existence of the parties, nor the payment against the purchases or the commissions paid or the evidences filed by the assessee to substantiate the purchases or commissions paid is bogus.
When commission was paid through account payee cheques on account of sales canvassed by the parties, was not bogus payment.
Considering the legal view taken on commission payment and the expenses incurred on purchased and coupled with the facts that the assessing officer during the assessing made sufficient inquires and took a reasonable view on both the issue, so view taken/ adopted by the assessing officer cannot be considered as erroneous view.
Once the assessing officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the revenue unless the view taken by the assessing officer is unsustainable in law. Hence, the grounds of appeal raised by the assessee are allowed.
-
2022 (10) TMI 1206
Seeking permission to withdraw this Writ Petition with liberty to pursue the matter before the respondents - HELD THAT:- This Writ Petition is dismissed as withdrawn. Liberty is granted to the petitioner to purse the matter before the respondents.
-
2022 (10) TMI 1205
TP adjustment - Comparable selection - Application of turnover filter - assessee is seeking exclusion of Exilant Technologies Pvt. Ltd., Tech Mahindra Ltd., Larsen & Toubro Infotech Ltd., Mindtree Ltd., Nihilent Ltd., Persistent Systems Ltd., Wipro Ltd., Tata Elxsi Ltd., Thirdware Solutions Ltd., Infosys Ltd. and Cybage Software Pvt. Ltd. from the list of comparables on the basis that these companies fail the turnover filter - HELD THAT:- Considering the facts and respectfully following the decision of Autodesk India Pvt Ltd.[2018 (7) TMI 1862 - ITAT BANGALORE] we hold that the companies whose turnover in the current year is more than Rs.200 crores should be excluded from the list of comparable companies.
Inclusion of Isummations Technologies Ltd. company is functionally comparable to the assessee we hold that Isummations Technologies Ltd be included in the list of comparable companies.
Yudiz Solutions Pvt. Ltd rejected by the TPO on the ground that it fails export turnover filter - As noticed that the export turnover of the company is Rs.5,22,89,062 against the total turnover of Rs.5,55,40,238 which is around 94.15% that clearly indicates that the company would pass the export turnover filter of >75%. Further the company is functionally comparable to the assessee. The coordinate bench of the Tribunal in the case Prism Networks [2022 (2) TMI 1296 - ITAT BANGALORE] has considered the issue exclusion of a comparable company since the same is not featuring in the search matrix of the TPO - we remit the issue back to the TPO/AO for a fresh consideration of the comparability of the company after giving the assessee as reasonable opportunity of being heard.
Addition u/s 69 - difference between amount of time deposits reported in Form No. 26 and closing balance of time deposits as per balance sheet - HELD THAT:- On perusal of the statement of reconciliation submitted it is also noticed that the assessee is renewing the deposits on maturity either in the same bank or in another one of these three banks. The AO has taken the total SFT transactions as reflected in Form 26AS and has compared the same with the Balance Sheet figure of Deposits as of 31.03.2018 and has made the addition for the differential amount. This in our considered view is not correct comparison since the SFT transactions in Form 26AS reflect the transactions that happened during a period of time whereas the Balance Sheet reflect the status as on the last day of the financial year. Therefore, a direct comparison of these two will not be the right approach.
DRP has not analysed the submissions of the assessee that the deposits on maturity were redeposited and that Form 26AS reflects the entire movement. The ld AR submitted the additional evidence with the deposit confirmations from the bank and also submitted a reconciliation between the amount as per Form 26AS and the Balance Sheet. Considering that the lower authorities have not verified the details factually, we remit the issue back to AO for a proper verification of the bank confirmations.
Addition being 20% of the ‘Advertisement Payments’ and ‘Information Technology expense’ - AO while holding that the expenses cannot be denied for the business activity, disallowed 20% of the expenses on the ground that the assessee had not furnished certain details, which was affirmed by the DRP - HELD THAT:- During the course of hearing, AR submitted that the relevant details and that the same is not examined. In view of this we remit the issue back to the AO with a direction to verify the details and the evidences with regard to the expenses and decide the allowability in accordance with law. The assessee is directed to submit all the relevant details and cooperate with the proceedings. It is ordered accordingly.
Disallowance of employee’s contribution to provident fund remitted after the due date prescribed under the relevant statute, but before the due date for filing of return of income - HELD THAT:- As relying on CHECKMATE SERVICES P. LTD. [2022 (10) TMI 617 - SUPREME COURT] we hold that the employees contribution to PF and ESI should be remitted before the due date as per explanation to section 36(1)(va) i.e., on or before the due date under the relevant employee welfare legislation like PF Act, ESI Act etc., for the same to be otherwise allowable u/s.43B. We therefore see no reason to interfere with the order of the CIT(Appeals). The grounds taken by the assessee on this issue is dismissed.
-
2022 (10) TMI 1204
Depreciation on goodwill - Goodwill arising on acquisition of Karnataka Breweries and Distilleries Limited and other subsidiaries - HELD THAT:- The coordinate Bench of this Tribunal in the assessee's own case for AY 2007-08 [2016 (9) TMI 1527 - ITAT BANGALORE] has held that depreciation on goodwill is not allowable based on the facts of the case of assessee. Respectfully following that decision, we hold that depreciation on goodwill is not allowable. Accordingly, these grounds are dismissed.
Withholding tax amount on foreign royalty - assessee made an alternative submission by stating that if gross receipts are to be taxed, then the assessee would be entitled to the provisions of Double Tax Avoidance Agreement [DTAA] thereby the assessee should be allowed credit against the tax paid in the foreign country - HELD THAT:- Under the mercantile system of accounting, the income is to be offered to tax on accrual basis and therefore it is the gross income that needs to offered to tax in assessee’s case here. However the assessee is entitled to claim credit for the tax paid on the doubly taxed income in accordance section 90/91 read with Rule 128 of the Income Tax Rules and in the given case, this fact is also held by the CIT(Appeals) that the assessee is entitled for credit for foreign tax paid. Though the assessee has not brought any new evidence on record before us to substantiate the tax deducted by the payer, in the interest of justice, we are of the view that the assessee should be given an opportunity to produce the evidence.
Therefore, we remit the issue back to the AO with a direction to allow credit for the tax paid in foreign countries on the doubly taxed income in accordance with provisions of section 90 /91 r.w. Rule 128 based on the documents / evidences submitted by the assessee in this regard. The assessee is directed to submit the relevant documents and cooperate with the proceedings before the AO. This ground is allowed for statistical purposes.
Disallowance of expenditure u/s 40(a)(ia) - TDS was not made on the year end provisions - HELD THAT:- We notice that in assessee’s own case [2022 (6) TMI 1433 - ITAT BANGALORE] has relied on the decision in the case of Biocon Ltd [2022 (4) TMI 795 - ITAT BANGALORE] and remanded the issue back to the AO to verify the details of payments and tax deducted and allow the expenditure where TDS is remitted to the Govt. account on or before the due date for filing the return of income u/s. 139(1).
For the year under consideration we notice that the AO in the order u/s. 201(1) has verified the year end provisions with regard to subsequent payment and tax deduction thereon. AO did not make any addition u/s. 201(1) with respect to year end provisions and has charged only interest u/s. 201(1A) - We therefore are of the considered view that the verification of the year end provision has already been by the AO and by not making any addition u/s. 201 the AO has confirmed that tax has been deducted subsequently and remitted to the Govt. account before the due date for filing the return of income.
Disallowance of depreciation by holding it as excess claim made by mistake - appellant has claimed additional depreciation on Plant & Machinery and Energy saving devices - HELD THAT:- CIT(Appeals) did not go into the details of the submissions, but has summarily rejected the claim of the assessee while confirming the disallowance. It is also noticed that the AO while disallowing the depreciation, did not call for any details in this regard from the assessee and has computed the disallowance by applying the depreciation percentages on the value of the assets. We therefore remit this issue back to the AO to verify the details of additional depreciation claimed by the assessee in the return of income and as declared in the tax audit report accordingly allow the depreciation. This ground is allowed for statistical purposes.
Disallowance of Business Promotion expenses u/s 40(a)(ia) - non deduction certificate was not available at the time of payment - HELD THAT:- From the above, it is clear that certificate is issued for payments pertaining to FY 2009-10 and the impugned payment is made on 14.4.2009 falls within the period for which the certificate is issued. Considering all we hold no disallowance u/s. 40(a)(ia) is warranted towards payments made to GMR Sports towards business promotion expenses.
Disallowance of bad advances written off u/s 36(1)(vii) - AO disallowed the same by holding that bad advances written off cannot be allowed as a deduction u/s. 36/37 and cannot be equated with bad debts written off so as to claim deduction u/s. 36(1)(vii) - HELD THAT:- CIT(Appeals) while confirming the disallowance has not called for any details with regard to the break-up submitted. We further notice that he AO has also not called for any details from the assessee with regard to the bad advances written off. We therefore remit the issue back to the AO to verify the details of bad advances and decide in accordance with law. This ground is allowed for statistical purposes.
-
2022 (10) TMI 1203
Revision u/s 263 - Order erroneous and prejudicial or not? - as per CIT AO made no enquiry with regard to interest income received during the year and treatment same as income from other sources - HELD THAT:- The scheme of the IT Act is to levy and collect tax in accordance with the provisions of the Act and this task is entrusted to the Revenue. If due to erroneous order of the assessing officer, the Revenue is losing tax lawfully payable by a person, it will certainly be prejudicial to the interest of the revenue. As held in the case of Malabar Industries Co. Ltd. [2000 (2) TMI 10 - SUPREME COURT], the Commissioner can exercise revision jurisdictional u/s 263 if he is satisfied that the order of the assessing officer sought to be revised is (i)erroneous; and also (ii) prejudicial to the interests of the revenue.
AO is not expected to put blinkers on his eyes and mechanically accept what the assessee claims before him. It is his duty to ascertain the truth of the facts stated and the genuineness of the claims made in the return when the circumstances of the case are such as to provoke inquiry. Arbitrariness in either accepting or rejecting the claim has no place. The order passed by the AO becomes erroneous because an enquiry has not been made or genuineness of the claim has not been examined where the inquiries ought to have been made and the genuineness of the claim ought to have been examined and not because there is anything wrong with his order if all the facts stated or claim made therein are assumed to be correct.
In the present case, the AO must have made an enquiry with regard to interest income received during the year and treatment same as income from other sources as no business activity has been carried on by the assessee in this assessment year under consideration. Being so, we do not find any infirmity in the order of the Ld. PCIT in invoking the jurisdiction u/s 263 of the Act and in vacating the assessment order passed by the AO for denovo consideration. Decided against assessee.
-
2022 (10) TMI 1202
Foreign Exchange Fluctuation Loss on External Commercial Borrowings (ECB) loans taken by assessee mainly for purpose of purchasing capital goods - disallowing market to Marked Loss (MTM Loss) on foreign currency swaps while computing income u/s. 115JB - deduction claimed u/s. 10B of Income Tax Act, while computing income from eligible unit under Chapter IV of Income Tax Act - HELD THAT:- It is not disputed by the revenue that as against the order passed under Section 263, the revenue was in appeal before this Court in the case of Principal Commissioner of Income Tax, Central-1, Kolkata vs. Himadri Chemicals and Industries Ltd. [2022 (7) TMI 1463 - CALCUTTA HIGH COURT] and the same was dismissed by judgment dated 20th July, 2022. If that be the position, the present appeal cannot be independently pursued by the revenue. Furthermore, we note that substantial question of law No.(c) as raised in the appeal was not raised by the revenue in their appeal [Supra]
The revenue cannot pursue this appeal and no interference is called for against the order passed by the learned Tribunal. Appeal dismissed.
-
2022 (10) TMI 1201
Income deemed to accrue or arise in India - Royalty receipt - amount received by the Appellant from Indian Customers on account of sale of software/license charges India – Israel DTAA - Distinction between royalty paid on transfer of 'copyright' and consideration for transfer of 'copyrighted article' - HELD THAT:- We find force in the contention of the ld. counsel for the assessee. The issue raised in the present appeals was also there in VERINT SYSTEM LIMITED [2023 (1) TMI 464 - ITAT DELHI] as held this issue is covered in this issue is squarely covered in favour of the assessee and against the Revenue as relying on decision of Engineering Analysis Centre of Excellence Private Limited [2021 (3) TMI 138 - SUPREME COURT] and also Intrasoft Ltd. [2013 (11) TMI 1382 - DELHI HIGH COURT]
Grant of tax credit without considering the provisions of section 240 - HELD THAT:- We find that while giving appeal effect, the AO should have considered the provisions of section 240 - We, therefore, direct the AO to consider the provisions of section 240 of the Act while giving appeal effect to our order.
........
|