|
Advanced Search Options
Case Laws
Showing 41 to 60 of 1473 Records
-
2022 (11) TMI 1433 - SUPREME COURT
Dismissal of application filed under Section 7 of IBC - guarantee given to the Financial Creditor or not - whether only the securities were pledged by the Pledge Agreement dated 27.02.2015? - it was held by NCLAT that It is apparent from the facts of the case that when it was decided by the Financial Creditor to extend loan to the Borrower a Facility Agreement was executed in which security package was given as contained in the terms and conditions - HELD THAT:- There are no reason to interfere with the orders impugned.
Appeal disposed off.
-
2022 (11) TMI 1432 - CALCUTTA HIGH COURT
Revision u/s 263 - Tribunal setting aside an order passed by the Commissioner u/s 263 which is a second proceedings initiated under the said provision - addition u/s 68 - HELD THAT:- After the first order was passed u/s 263 of the Act, AO has conducted a de novo reassessment proceedings, issued summons to the directors and the shareholders as well as the assessee and examined the books of accounts, bank statement and the other documents produced by them to discharge the onus on them about the identity, creditworthiness and genuineness of the transaction and the assessing officer has recorded their statement during the reassessment proceedings where he has questioned an elucidated answer about all these factors.
Tribunal has elaborately discussed the factual position and noted as to how the enquiry was conducted by the assessing officer after the first order was passed under Section 263. The learned Tribunal, after noting various decisions of the tribunal, also noted the decisions of this Court in the case of Dataware Pvt. Ltd. [2011 (9) TMI 175 - CALCUTTA HIGH COURT], Roseberry Mercantile (P) Ltd. [2011 (1) TMI 190 - CALCUTTA HIGH COURT], M/s. Nishan Indo Commerce Ltd. [2014 (3) TMI 895 - CALCUTTA HIGH COURT] and Leonard Commercial (P) Ltd. [2011 (6) TMI 955 - CALCUTTA HIGH COURT] In all those decisions, this Court considered the similar factual issue and decided in favour of the assessee - No substantial question of law.
-
2022 (11) TMI 1431 - ITAT CHENNAI
Addition u/s 68 - addition of investment made in share capital of SBQ Steels Ltd - CIT(A) also confirmed the action of the AO - HELD THAT:- Nothing was produced to prove that the investments in shares of SBQ Steels Ltd., by the assessees are out of the explained investment. Since the assessees could not produce anything before us, we dismiss this issue of the assessees and the orders of the lower authorities are confirmed.
-
2022 (11) TMI 1430 - SECURITIES APPELLATE TRIBUNAL MUMBAI
Power of SEBI to initiation action against Chartered Accountant (CA) / Auditor of the company - Default by Auditor - negligence in certification of accounts of listed companies and lack of professionalism - Criminal case against the Company for cheating banks on the basis of manipulated financial credentials - auditor of company restrained directly or indirectly from issuing any certificate related to audit of listed companies, compliance obligations of listed companies and intermediaries registered with SEBI - charge against company as executive directors have colluded in ensuring that the Company’s financials were misstated thereby defrauding investors and that the directors were responsible for the affairs of the Company - allegation against the auditor / appellant was that the said noticee was responsible for negligence in certification of accounts of listed companies and lack of professionalism skepticism in audit and therefore alleged that all the noticees including the appellant were engaged in dubious accounting practices to defraud the investors by manipulating the financial statements thereby violating the provisions of Section 12A(a), (b) & (c) of the SEBI Act read with Regulation 3 and 4 of the SEBI - PFUTP Regulations - allegation against the appellant was that it colluded with noticee nos. 2 and 8 being CMD and Director (Finance) (ED) respectively
HELD THAT:- As finding of the WTM that the appellant had colluded with noticee nos. 2 and 8 in the fraud perpetuated by the Company and manipulated financial statements of the Company is patently erroneous based on surmises and conjectures and is also perverse.
The charge is, that directors have colluded in ensuring that Company’s financials are misstated. The charge against the appellant that it was not only negligent in the certification of accounts but was also engaged in dubious accounting practices to defraud the investors by manipulating the financial statements. This charge of manipulating the financial statements by colluding noticee nos. 2 and 8 was required to be proved by the respondent SEBI. Merely by holding that the appellant did not raise any query with regard to the transfer of funds and failure on the part of the appellant to raise red flags with respect to instances of fake transactions may show negligence on the part of the appellant but cannot amount to collusion between the Company and the appellant or between the appellant and noticee nos. 2 and 8 nor can it lead to a conclusion that the appellant was involved in the manipulation of the accounts of the Company.
The charge in the show cause notice is, that the appellant has colluded with the directors, namely, noticee nos. 2 to 9 and not with the Company. There is no finding given in the impugned order of any collusion between the appellant with noticee nos. 2 and 8 or between noticee nos. 2 to 9.
The finding that the appellant had colluded with noticee nos. 2 and 8 to commit fraud is patently erroneous and is based on surmises and conjectures.
Penalizing the appellant on the charge that the appellant was colluding with noticee nos. 2 and 8 is patently erroneous and cannot be sustained. However, we find that the Disciplinary Committee of the Institute of Chartered Accountants of India (ICAI) found that appellant guilty of issuing an incorrect certificate dated June 4, 2009 certifying that BBIL had incurred capital expenditure for a sum of Rs. 90.49 crore as on March 31, 2009 which was variance to the figures shown in Schedule (V) of the balance sheet. The Disciplinary Committee observed that the appellant did not exercise due diligence while certifying the certificate in respect of capital expenditure and observed that the appellant was guilty of professional misconduct within the meaning of Clause (7) and (8) of Part I of Second Schedule to the Chartered Accountants Act, 1949 and consequently reprimanded the appellant.
Though the WTM observed that the disciplinary proceedings has no bearing to the outcome of the proceedings involved, we are of the opinion, that these proceedings have a material bearing which has to be taken into consideration.
The finding given by the Disciplinary Committee is, that the appellant was guilty of professional misconduct and that it did not exercise due diligence while certifying the certificate in respect of capital expenditure. For such incorrect issuance of certificate the investors could be misled and SEBI was well within its right to penalize the appellant.
Consequently, even though falsification of the certificate has not been taken into consideration, we are of the opinion that in the given facts and circumstances, the appellant is liable to be penalized for certifying an incorrect statement of the capital expenditure.
Direction of the WTM restraining the appellant from issuing any certificate related to audit of listed companies etc. is reduced from one (1) year to three (3) months. The appeal is partly allowed.
-
2022 (11) TMI 1429 - ITAT DELHI
Accrual of income - Addition on account of receipt under MAP[Marketing Assistance Programmed] agreement - basis of assessment was that the agreement are silent in what manner the assessee is legally obliged to utilize these funds - CIT(A) deleted addition - HELD THAT:- Regarding profit from the Marketing Assistance Programme (MAP) is squarely covered in favour of the assessee and against Revenue by the aforesaid orders [2021 (4) TMI 734 - ITAT DELHI] and [2018 (10) TMI 1888 - ITAT DELHI] on identical issue, and on identical facts and circumstances, for AY 2011-12 and 2012-13 respectively.
Neither side has brought any distinguishing facts and circumstances, or decided precedents, or any legal submissions to our consideration to persuade us to take a view different from the view taken above. Neither side has brought any materials for our consideration to persuade us to interfere with the impugned order of Ld. CIT(A).
We decided the issue in dispute in the present appeal before us, in favour of the assessee
-
2022 (11) TMI 1428 - ITAT CUTTACK
Delayed Employees contribution to PF and ESI - payment beyond the time prescribed under the relevant PF Act - HELD THAT:- Admittedly, the Hon’ble Supreme Court in the case of Checkmate Services Pvt Ltd (2022 (10) TMI 617 - SUPREME COURT) has categorically held that the employees contribution to PF and ESI to the extent it is not paid within due date prescribed under the PF Act, is not allowable u/s. 36(1)(va) of the Act.
The Hon’ble Supreme Court has also admittedly held that the provisions of section 43B would not apply to the provisions of section 36(1)(va) of the Act in respect of employees contribution. Respectfully following the decision of Hon’ble Supreme Court in the case of Checkmate Services Pvt Ltd(supra), we are of the view that the delayed payment in respect of employees contribution to PF and ESI is not allowable.
In the case of Nirakar Security & Consultancy Services Pvt Ltd [2022 (11) TMI 69 - ITAT CUTTACK] Liberty is granted to the Id AR to make all submissions in respect of allowability of disallowed contribution of the employees to PF and ESI under other relevant provisions in the interest of justice. This direction is being given because Id AR has submitted that as the amount is not allowable under section 36(1)(va) of the Act and same is also not covered under section 43B of the Act, the amount of delayed contribution to PF and ESI in respect of employees contribution would be treated as income in the hands of the assessee u/.s. 2(24)(x) and on subsequent payment of the same, it would be a business expenditure, which can be claimed u/s.37(1). Liberty is also granted to the assessee to raise all arguments as are found necessary by him before the lower authorities
As the issue in the present appeal is also identical to the issue in the case of Nirakar Security & Consultancy Services Pvt Ltd.,(supra), on identical findings the issue in this appeal is restored to the file of the AO for re-adjudication after granting the assessee adequate opportunity of being heard.
-
2022 (11) TMI 1427 - ITAT DELHI
Revision u/s 263 - Addition u/s 68 on amount surrendered during the survey operation - tax rate should have been 60% instead of 30% - As per CIT as amount shown in the return of income as ‘income’ from other sources’ be taxed as per provisions of section 115BBE, the order of the AO is erroneous and prejudicial to the interest of the Revenue - whether the amendment is prospective or retrospective as on the date of survey he amended provisions were not there in the statute? - HELD THAT:- This is clearly a debatable issue which cannot be subject matter of assumption of jurisdiction u/s 263 of the Act.
A perusal of section 115BBE of the Act shows that where the total income of the assessee includes any income referred to in sections 68, 69, 69A, 69B, 69C or 69D, the income tax payable shall be @ 30% on income so referred to in the said sections. In terms of amended provisions of section 115BBE of the Act by Taxation Laws, Second Amendment Act 2016, it provides that where the total income of the assessee includes any income referred to in sections 68, 69, 69A, 69B, 69C, and 69D and reflected in the return of income furnished under section 139 or total income of the assessee determined by the assessing officer, any income referred to in sections 68, 69, 69A, 69B, 69C, or 69D if such income is not reflected in the return of income furnished under section 139 of the Act, income tax payable shall be @ 60% on income so referred in the said section.
Change which has been brought about in the provisions relates to income so referred to in the afore-stated sections so defined which is either not reflected in the return of income or determined by the assessing officer and in both the cases it will be covered by the provisions of section 115BBE of the Act and the rate of taxation has been increased from 30% to 60% on such specified income.
There is, therefore nothing stated in the pre-amended or post amended provisions of section 115BBE of the Act that where the assessee surrenders undisclosed income during search action for the relevant year, the tax rate has to be charged as per provisions of section 115BBE of the Act. Therefore, the applicability of the amended provisions which prompted the PCIT to assume jurisdiction under section 263 of the Act is highly debatable issue, and therefore, in our understanding of the law, the PCIT has wrongly assumed jurisdiction.
The assessee is surrendering the income in addition to his regular income, which is business income and, therefore, the income surrendered by the assessee is also part of business income.
Merely because in the return of income inadvertently an amount has been shown under the head “Income from other sources”, would not change the colour of income surrendered.
Where there are two possible views and the Assessing Officer has taken one of the possible views, no action to exercise powers of revision can arise, nor can revisional power be exercised for directing a fuller enquiry to find out if the view taken is erroneous. This power of revision can be exercised only where no enquiry, as required under the law, is done. It is not open to enquire in case of inadequate inquiry. See SHRI NIRAV MODI [2016 (6) TMI 1004 - BOMBAY HIGH COURT]
Thus we set aside the order of the PCIT and restore that of the Assessing Officer dated 23.12.2019 framed under section 143(3) - Decided in favour of assessee.
-
2022 (11) TMI 1426 - ITAT RAIPUR
Inordinate delay of 339 days in filing appeal before ITAT - appeal as barred by limitation - HELD THAT:- Law of limitation has to be construed strictly as it has an effect of vesting on one and taking away the right from the other party. The delay in filing the appeal cannot be condoned in a mechanical or a routine manner, since that would undoubtedly jeopardize the legislative intent behind Section 5 of the Limitation Act.
As the assessee appellant in the present case is habitually acting in defiance of law, therefore, there can be no reason to allow his application and condone the substantial delay of 339 days involved in preferring of the present appeal.
In the present case, the delay of 339 days cannot be simply condoned for the reason that the regular counsel of the assessee lacked proper knowledge about the appellate proceedings, specifically when the conduct of the assessee before the lower appellate authority clearly evidences his disregard for the process of law, which, I find, he had carried forward before me by preferring the appeal beyond a period of 339 days after the lapse of the stipulated time period.
Also, as observed in the case of Ramlal, Motilal and Chotelal Vs. Rewa Coalfields Ltd.[1961 (5) TMI 54 - SUPREME COURT] that seeker of justice must come with clean hands, therefore, now when in the present case the reasons advanced by the assessee do not reveal any good and sufficient reason justifying condonation of the substantial delay involved in preferring of the present appeal, therefore,decline to condone the delay of 339 days and, thus dismiss the appeal of the assessee as barred by limitation.
-
2022 (11) TMI 1425 - CALCUTTA HIGH COURT
Dismissal of appeal - HELD THAT:- On going through the order and finding no infirmity and the reasoning given there for dismissal of the appeal of the petitioner and as such, the same need not be interfered and accordingly this writ petition being WPA 22764 of 2022 is dismissed.
-
2022 (11) TMI 1424 - AUTHORITY FOR ADVANCE RULINGS CUSTOMS, DELHI
Classification of goods sought to be imported - specially designed, cut-to-shape & size goods said to be mould bases - classifiable under CTH 8480 20 00 as per Customs Tariff Act, 1975 or not - HELD THAT:- It is felt that guidance of the Harmonized Commodity Description and Coding System of the World Customs Organization, to which India is a signatory, would be useful. It is seen that Explanatory Notes of heading 8480 prescribe that Mould Bases are plates placed in the bottom of the moulds. As per submissions of the applicant in the application for advance rulings, goods in question do not appear to be ready-to-use goods, rather these appear to be incomplete, specially designed, cut-to-shape and size parts which are required to be further worked upon to become ready-to-use parts of the moulds.
Since the applicant has stated categorically that these are cut-to-shape and size, as such these goods can not be termed as parts of general use. Moreover, Section Note 2(b) of Section XVI provides inter alia that other parts, if suitable for use solely or principally with a particular kind of machine are to be classified with the machines of that kind. Accordingly, the goods in question are not mould bases. These goods are parts of moulds which needs to be worked upon to make it suitable for the designated function to be performed - Thus, in light of the Section Note 2(b) of section XVI, the goods in question, merit classification under Sub-heading 8480 79 00.
-
2022 (11) TMI 1423 - SC ORDER
Money Laundering - predicate Offence - Sections 406, 420, 468 471 and 506 of IPC - HELD THAT:- In the given circumstances, at least there cannot be any prosecution against the present petitioner under Sections 3 and 4 of PMLA Act.
Issue notice, returnable on 9th January, 2023.
-
2022 (11) TMI 1422 - ITAT MUMBAI
Validity of assessment framed u/s 153C - differential treatments for abated assessments and unabated assessments - Allowability of disallowances and additions without the existence of incriminating material for the year under consideration received from the AO of the searched person - Whether the addition could be framed u/s 153A of the Act in respect of a concluded proceeding without the existence of any incriminating materials found in the course of search is permissible?
HELD THAT:- The provisions of section 132 relied upon by the revenue would be relevant only for the purpose of conducting the search action and initiating proceedings u/s 153A - Once the proceedings u/s 153A are initiated, which are special proceedings, the legislature in its wisdom bifurcates differential treatments for abated assessments and unabated assessments.
As in respect of abated assessments (i.e pending proceedings on the date of search) , fresh assessments are to be framed by the ld AO u/s 153A of the Act which would have a bearing on the determination of total income by considering all the aspects, wherein the existence of incriminating materials does not have any relevance.
In respect of unabated assessments, the legislature had conferred powers on the ld AO to just follow the assessments already concluded unless there is an incriminating material found in the search to disturb the said concluded assessment.
In our considered opinion, this would be the correct understanding of the provisions of section 153A of the Act , as otherwise, the necessity of bifurcation of abated and unabated assessments in section 153A of the Act would become redundant and would lose its relevance.The arguments of the ld. DR deserves to be rejected herein.
Thus none of the additions that were made by the ld. AO were based on reliance placed on search materials received from the AO of the searched person. We hold that assessment for A.Y.2009-10 had originally been completed u/s.143(3) of the Act dated 30/12/2011. Notice u/s.153C of the Act was issued to the assessee only on 26/11/2014. Hence, on the said date i.e. 26/11/2014, no proceedings of the assessee were pending. Hence, we hold that A.Y.2009-10 becomes an unabated / concluded assessment on the date of assumption of jurisdiction u/s.153C.
The law is very well settled that in respect of concluded assessments, the earlier assessment completed should not be disturbed in the search assessments without existence of any incriminating material relatable to such assessment year.
Thus we direct the ld. AO to re-compute the total income of the assessee by accepting the income declared in the return filed in response to notice u/s.153C of the Act without making any additions or disallowances thereon, both under normal provisions of the Act as well as in the computation of book profits u/s 115JB of the Act. Decided in favour of assessee.
-
2022 (11) TMI 1421 - AUTHORITY FOR ADVANCE RULING CUSTOMS, NEW DELHI
Classification of goods proposed to be imported - hree different models of Laser jet printer i.e., HP Laser jet 108a (HP 108), HP Laser jet MFP 136a (HP 136) and HP Laser jet MFP 438nda (HP 438) - to be classified under Sub-heading 8443 32 40 and 8443 31 00 of the Customs Tariff Act, 1975 or not - eligibility to claim benefit of exemption under SI. No. 2 of Notification No. 24/2005-Cus dated 1-3-2005.
Whether or not, the items, i.e printers in question, in absence of formatter board and firmware have the essential character of a printer?
HELD THAT:- In the case of JAYPEE FORGES VERSUS COLLECTOR OF CENTRAL EXCISE, BOMBAY [1995 (9) TMI 180 - CEGAT, NEW DELHI] it is observed that the factors, which determine the essential character will vary as between different kinds of goods and may be determined not only by the nature of the material used but as well by the use to which the goods are intended. Further, the Hon'ble Orissa High Court held in State of Orissa v. Gestetnet Duplicators (P.) Ltd. [1974 (1) TMI 87 - ORISSA HIGH COURT] that it is a matter of common experience that the identity of an article is associated with its primary function; it is only logical that it should be so; when a consumer buys an article, he buys it because it performs a specific function for him; there is a mental association in the mind of the consumer between the article and the need it supplies in his life; it is the functional character of the article which identifies it in his mind.
The printers proposed to be imported without the formatter boards and firmware possess the essential character of a complete printer though they may not be functional at the time of import.
Item, HP 136 and HP 438 are correctly classifiable under Sub-heading 8443 31 00 of the Customs Tariff - Item, HP 108 is rightly classifiable under CTI 8443 32 40 of the Customs Tariff - Item, HP 136 and HP 438 are eligible for exemption under SI. No. 2 of Notification No. 24/2005-Cus.
-
2022 (11) TMI 1420 - ITAT MUMBAI
Addition u/s 14A r.w.r. 8D - MAT computation - HELD THAT:- So far as this assessment year is concerned, it is the first assessment year post insertion of rule 8D and as is the settled legal position in this regard, rule 8 D is to be applied for computing the disallowance. To that extent, our decisions for the preceding assessment years will not hold good. However, since the assessee has not used any borrowed funds, no amount shall be disallowed under rule 8 D in respect of the interest.
Accordingly, while disallowance of the assessee is upheld in principle, the quantum shall stand reduced, upon verification of necessary facts, in the light of the above legal position. To this extent, this ground of appeal is allowed for statistical purposes.
Adjustment of book profits u/s 15JB for the 14A disallowance - We find that this aspect of the matter stands concluded, in favour of the assessee, by a special bench decision in the case of ACIT Vs Vireet Investments Pvt Ltd [2017 (6) TMI 1124 - ITAT DELHI] The assessee gets relief on this point as well.
Allowance of leave encashment claimed on provision - HELD THAT:- Deduction can only be allowed when it is otherwise admissible, and that aspect of the matter will have to be examined by the Assessing Officer. That is indeed the correct approach. While we dismiss the grievance of the asseseee, we make it clear that the Assessing Officer will take a call, as and when the payment is actually made, on the admissibility of deduction in accordance with the law.
Computation of total income - Excluding sales tax incentive availed under various schemes of different states in computing its total income holding the incentives to be capital in nature - HELD THAT:- Approach of discerning the purpose of the subsidy, solely from the specific words used in the preamble of the scheme and without examining the overall scheme of the Act- which is admittedly to promote the growth of industry, is incorrect and superficial. The subsidies so received can be said to be revenue in nature unless these subsidies are for augmenting the profits of the assessee, and that is not even the case of the revenue.
CIT(A) is simply swayed by the wording of the preamble of the scheme- something clearly impermissible. These subsidy schemes are materially similar in nature, and there are, by now, a number of decisions of the coordinate benches, as also Hon‟ble Courts above, dealing with these schemes. It is also important to bear in mind the fact that the subsidies received by the assessee are in the nature of sales tax subsidies, and dealing with sales tax subsidies, Hon‟ble Gujarat High Court, in the case of CIT Vs Nirma Ltd [2016 (6) TMI 1023 - GUJARAT HIGH COURT] that where the object of respective subsidy schemes of State Governments was to encourage the development of Multiple Theatre Complexes, incentives would be held to be capital in nature and not revenue receipts, and, following the same logic, the sales tax subsidy schemes, which are admittedly to encourage industrial growth in the specific areas and the overall scheme in all the sales tax subsidy and exemption schemes unambiguously indicate so, are capital receipts in nature.
Addition u/s 41(1) - Difference of the N. P. V. of the sales tax liability and the liability as not assessable to tax - HELD THAT:- As even going by the stand of the Assessing Officer, the issue is covered in favour of the assessee, by case of CIT Vs Sulzer India Ltd [2014 (12) TMI 267 - BOMBAY HIGH COURT] but yet the appeal has been filed because the revenue has challenged the correctness of the said judgment. That very approach is simply erroneous because it is only elementary in law that the mere pendency of the appeal, against a binding judicial precedent, in a higher judicial forum does not dilute, curtail or otherwise narrow down its binding nature. As long as the binding judicial precedent holds good in law, as it does unless it is upturned or reversed by a higher judicial forum, it binds the lower judicial forums.
That apart, even otherwise, the view taken by the Hon’ble Bombay High Court in Sulzer’s case 2014 (12) TMI 267 - BOMBAY HIGH COURT] now stands approved and confirmed by the Hon’ble Supreme Court in the case of CIT Vs Balakrishna Industries Limited [2017 (11) TMI 1626 - SUPREME COURT] wherein held what the Assessee was required to pay after 12 years in 6 equal installments was paid by the Assessee prematurely in terms of the NPV of the same. That the State may have received a higher sum after the period of 12 years and in installments. However, the statutory arrangement and vide section 38, 4th proviso does not amount to remission or cessation of the Assessee's liability assuming the same to be a trading one. Rather that obtains a payment to the State prematurely and in terms of the correct value of the debt due to it. There is no evidence to show that there has been any remission or cessation of the liability by the State Government. We agree with the Tribunal that one of the requirement of section 41(1)(a) has not been fulfilled in the facts of the present case
Nature of receipt - exclusion of excise duty incentive availed by the assessee, aggregatingin computing its total income by treating it as capital - HELD THAT:- The subsidy was granted under schemes framed by the State and the Central Government, to be given to the assesses who set up new industry in Kutch District. The scheme was envisaged to encourage investment which would in turn, provide fresh employment opportunity in the district which had suffered due to devastating earthquake. The computation of subsidy may be on the basis of sales tax or excise duty. Nevertheless, the purpose test would ensure that, the subsidy was capital in nature.
As decided in P. J. Chemicals Ltd., [1994 (9) TMI 1 - SUPREME COURT] Where Government subsidy is intended as an incentive to encourage entrepreneurs to move to backward areas and establish industries, the specified percentage of the fixed capital cost, which is the basis for determining the subsidy, being only a measure adopted under the scheme to quantify the financial aid, is not a payment, directly or indirectly, to meet any portion of the 'actual cost The expression 'actual cost' in section 43(1) needs to be interpreted liberally. Such a subsidy does not partake of the incidents which attract the conditions for its deductibility from 'actual cost'. The amount of subsidy is not to be deducted from the 'actual cost' under section 43(1) for the purpose of calculation of depreciation etc.
Pooja expenses, Temple expenses, Community Welfare Expenses need to be allowed as expenditure is incurred for the smooth functioning of the business
Mines Prospecting Expenses - HELD THAT:- As expenditure in question is incurred on identifying the nature of deposits of limestone at various sites to plan mining operations, that the AO has made the addition even as he took note of the Tribunal decisions on the said issue, in favour of the assessee in its own cases, but added that the views of the Tribunal has not attained finality, and that the CIT(A) gave relief on the ground that as the Assessing Officer has not challenged the relief granted by the Tribunal, the matter has attained finality. No material has been brought before us to dislodge the findings of the learned CIT(A). In any event, even going by the observations of the Assessing Officer, the matter is squarely covered, in favour of the assessee
Disallowance u/s 14A r.w.r. 8D - HELD THAT:- So far as this assessment year is concerned, it is an assessment year post insertion of rule 8D and as is the settled legal position in this regard, rule 8 D is to be applied for computing the disallowance. To that extent, our decisions for the preceding assessment years will not hold good. However, since the assessee has not used any borrowed funds, no amount shall be disallowed under rule 8 D in respect of the interest. Accordingly, while disallowance of the assessee is upheld in principle, the quantum shall stand reduced, upon verification of necessary facts, in the light of the above legal position. To this extent, this ground of appeal is allowed for statistical purposes.
Nature of expenses - Expenditure incurred on capital jobs abandoned & written off - HELD THAT:- The views expressed by the tax auditor on what constitutes capital expenditure cannot dilute, curtail or override the views expressed by the Hon’ble Courts above. What an auditor holds is his accounting perspective, and it has no effect on the legal position. Similarly, just because a claim is made in the revised return, the admissibility of the claim cannot be declined for that reason alone. Nothing turns on these factors, and the Assessing Officer was thus clearly in error, as was the CIT(A) -we uphold the plea of the assessee and direct the Assessing Officer to delete the expenses incurred on these abandoned projects
Excise duty exemption availed by the assessee as capital receipt allowed.
Disallowance of Community Welfare Expenses - principle of consistency - HELD THAT:- This is a legacy issue and pertains to the expenditure incurred for community welfare as the factories of the assessee are concerned in backward areas and the expenditure is incurred for the smooth functioning of the business. Right from the assessment years 1988-89 to 1994-95, the coordinate benches have allowed the appeal of the assessee on this point, and from the assessment years 1995-96 to 2004-05, in which the first appellate authority has deleted similar disallowance, the coordinate benches have rejected the grievances of the Assessing Officer, against the reliefs so granted by the CIT(A). Learned Departmental Representative does not dispute this position but relies upon the stand of the Assessing Officer nevertheless.
Additional depreciation on all the eligible assets acquired before 01.04.2008 - only objection of the AO is that the provisions refer to "new machinery or plant" and therefore the machinery will cease to be a new machinery after the end of the first year in which it is installed or put to use - HELD THAT:- In our view this stand taken by the revenue is not supported by the language of statutory provision. The condition imposed by the relevant provisions is that Plant and Machinery must be new at the time of installation to be eligible for additional depreciation u/ s 32(1)(iia) and not new in subsequent years. The expression "new machinery" is therefore to be construed as referring to the condition that at the time of acquisition or installation the machinery or plant should be new. Going by the legislative history of the relevant provision, we are of the view that the condition for allowing additional depreciation only in the initial assessment year ceased to exist as and from 01-04-2006. The plain language of the section warrants such an interpretation.
Unutilized CENVAT credit - CIT(A) correctly deleted the addition.
Nature of expenses - pre-operative expenses - assessee itself claimed these expenses as capital expenses in the books of accounts adding it to capital work in progress/fixed assets - HELD THAT:- CIT(A) correctly after taking note of the detailed submissions, held that the expenses, being in the nature of expenses incurred for the expansion of existing business, cannot be disallowed. Short grievance raised before us by the Assessing Officer is whether, even when the expenditure is shown in the books of accounts, it can be treated as revenue in nature, in our considered view, stands concluded in favour of the assessee
MAT computation u/s 115JB - Exclude the sales tax incentive subsidy for computing book profit under section 115 JB
-
2022 (11) TMI 1419 - ITAT MUMBAI
Nature of receipt - revenue or capital receipt - payment of Net Present Value of deferred sales tax liability, granted under the incentive scheme of State Government of Himachal Pradesh AND pre-payment of deferred sales tax liability - HELD THAT:- As the material facts of the case are admittedly identical with the facts of the assessment year 2006-07, and the learned CIT(A) has categorically observed so, we have no reasons to take any other view of the matter than the view taken by the Tribunal for the assessment year 2006-07. Respectfully following the same, we hold that the impugned receipts as capital receipts.
Special Capital Incentive availed in respect of unit situated in the state of Maharashtra and Excise Duty Incentive is required to be treated as capital receipt and to be excluded from the total income of the assessee
Disallowance of Employees Stock Option Expenses should be deleted as relying on Kotak Mahindra Bank Ltd [2018 (1) TMI 320 - ITAT MUMBAI] and taking note of the special bench decision in the case of Biocon Ltd. v. Dy. CIT [2013 (8) TMI 629 - ITAT BANGALORE]
Disallowance u/s 14A r.w.r. 8D - HELD THAT:- We restrict the disallowance under section 14A to 1% of tax-exempt income. Ordered, accordingly.
Adjustment of book profits under section 15JB for the 14A disallowance - we find that this aspect of the matter stands concluded, in favour of the assessee, by a special bench decision in the case of ACIT Vs Vireet Investments Pvt Ltd [2017 (6) TMI 1124 - ITAT DELHI]
Additional depreciation u/s 32 (1)(iia) - eligible assets acquired during the Previous Year - Ceasure of asset after first year use - only objection of the AO is that the provisions refer to "new machinery or plant" and therefore the machinery will cease to be a new machinery after the end of the first year in which it is installed or put to use - HELD THAT:- As decided in M/S. GLOSTER JUTE MILLS LTD. [2017 (3) TMI 1807 - ITAT KOLKATA] stand taken by the revenue is not supported by the language of statutory provision. The condition imposed by the relevant provisions is that Plant and Machinery must be new at the time of installation to be eligible for additional depreciation u/ s 32(1)(iia) and not new in subsequent years.
The expression "new machinery" is therefore to be construed as referring to the condition that at the time of acquisition or installation the machinery or plant should be new. Going by the legislative history of the relevant provision, we are of the view that the condition for allowing additional depreciation only in the initial assessment year ceased to exist as and from 01-04-2006. The plain language of the section warrants such an interpretation. Decided in favour of assessee.
Addition of unutilized CENVAT credit as on last day of accounting year is to be deleted as appellant himself has already carried out necessary adjustment u/s 145A which was duly certified by Tax Auditors and hence any further adjustment was not warranted.
Deduction u/s 80-IA on Infrastructure facility, being Rail Systems - Claim denied as prescribed certificates were not filed along with the return of income - HELD THAT:- As noted by the authorities below, the form 10CCB is not filed in this case, and that is a mandatory requirement under section 80IA(7) for making a claim under section 80IA. While it has been contended before us that the form 10CCB was filed alongwith the revised return of income, the material before us does not evidence so. In the orders of the AO as also the CIT(A), it is specifically submitted that the form 10CCB is not filed by the assessee. In this view of the matter, and the absence of clarity on this factual aspect, we deem it fit and proper to remit the matter to the file of the Assessing Office for fresh adjudication by way of a speaking order.
TP Adjustment - interest paid by the appellant under Bare Boat Charter cum Demise Arrangement entered with its Associated Enterprise - CIT(A) directing the TPO/AO to apply LIBOR Plus 350 point as a benchmark for determining the ALP regarding payment of interest for purchase of ships under BBCD arrangement - HELD THAT:- As decided in own case [2022 (12) TMI 740 - ITAT MUMBAI] 2005-06 CIT(A) has rightly noted, what needs to be benchmarked is the transaction between the assessee and its AE, and that transaction, in our considered view, is to be considered in a broader context- rather than as a simplistic borrowing transaction, which it is not. The assessee has taken the vessels under a BBCD arrangement and, while entering into this arrangement, the AE essentially has to factor in the financing arrangement. The consideration for the BBCD instalments is based on the cost of finance, as also the cost of vessels, to the AE, and, as such, there is no occasion for sharing the difference between the interest rate implicit in the BBCD arrangement and the cost of borrowing to the AE.
While examining the rate of interest under the BBCD also, one has to bear in mind the fact that it cannot be compared with a borrowing arrangement simpliciter as are the transactions on which LIBOR plus rates apply. Learned Departmental Representative has not been able to show any justification for LIBOR plus 300 bps either, and his challenge primarily is even to this approach of benchmarking.
No material before us to support the findings of the CIT(A) in any case, and the findings of the AO, as noted above and in our considered view, are unsustainable in law anyway. In any event, interest is only one part of the working in the computation of instalments, and one cannot consider the same on a standalone basis in the transaction. The benchmarking is to be done for the entire transaction and not a small and isolated transaction segment. The interest rate of 7.5% implicit in the BBCD arrangement is a part of the pricing and cannot be considered separately. We uphold the grievance of the assessee and delete the impugned ALP adjustment
MAT computation u/s 115JB - We direct the AO to exclude the sales tax incentive subsidy for computing book profit under section 115 JB.
Sales Tax incentives received under various schemes of different states is capital in nature as decided in own case of assessee 2006-07.
Nature of expenses - expenditure grouped under the nomenclature Community Welfare Expenses, temple expenses, consultancy charges, service charges, mine prospecting expenses AND Pooja/ function expenses - Principle on consistency - HELD THAT:- Right from the assessment years 1988-89 to 1994-95, the coordinate benches have allowed appeal of the assessee on this point, and from the assessment years 1995-96 to 2004-05, in which the first appellate authority has deleted similar disallowance, the coordinate benches have rejected the grievances of the Assessing Officer, against the reliefs so granted by the CIT(A). Learned Departmental Representative does not dispute this position but relies upon the stand of the Assessing Officer nevertheless.
Deduction u/s 35 D being 1/5th of the expenditure incurred on issue of FCCB - CIT(A) allowed deduction - HELD THAT:- On a perusal of the impugned order, we find that the CIT(A) has merely remitted the matter to the file of the AO with a direction “to verify the facts from records and allow consequential relief to the assessee as per law, if any”. The grievance of the Assessing Officer is thus misconceived and devoid of any legally sustainable merits. We reject the same.
-
2022 (11) TMI 1418 - AUTHORITY FOR ADVANCE RULING CUSTOMS, NEW DELHI
Classification of goods proposed to be imported - PV Modules, PV Cells, Inverter, Solar Cable, Power Cable, Transformers, Aluminium Frame, Solar Glass, Steel Structure, etc. for setting up of solar power plants - to be classified under Chapter Heading 9801 00 13 of First Schedule to Customs Tariff Act, 1975 or not - applicability for concessional rate of duty - HELD THAT:- The Notification No. 54/2022-Customs dated 19th October, 2022 is absolutely clear on the fact that the benefit of the PIR, 1986 cannot be extended to Solar Power Projects. The Central Board of Indirect Taxes and Customs issued Project Import (Amendment) Regulations, 2022 vide the aforesaid Notification, whereby, "In the Project Import Regulations, 1986, against Sr. No. 2, in column2, and in Sr. No. 3, in column 2, for the words 'All Power Plants and Transmission Projects', the words 'All Power Plants and Transmission Projects, other than solar power plants or solar power projects' shall be substituted".
Further, vide notification No. 2/2022- Customs, dated 1st February 2022, 'New power projects' registered after 30th September 2022 under project imports will attract 7.5% BCD rate. [S. No. 1(155 to 163) and IV (vii) of notification No. 2/2022-Customs, dated 1st February 2022 read with Clause 97(b) of the Finance Bill, 2022 refers]. However, there is no mention of whether any 'Power Project' would include 'Nuclear or Solar Power' as argued in the instant case.
As per the current case, the inclusion of 'Nuclear and Solar Power' do not find any mention under the term 'Power Projects' under the Notification issued in context to the Project Import Tariffs or under extant Project Import Regulations, 1986.
Thus, solar power plant & transmission projects have been excluded from the purview of PIR, 1986 thereby machinery, raw material, components etc. required for setting up of solar power plants are not covered under heading 9801 read with PIR, 1986.
-
2022 (11) TMI 1417 - ITAT MUMBAI
TP Adjustment - determination of ALP of Management Fee - TPO made an adhoc unilateral estimation by assuming that around 750 hours would have been spent for providing the aforesaid services for which remuneration of INR 3,000/- per hour was appropriate - HELD THAT:- In the case before us pertaining to Assessment Year 2012-13 [2019 (12) TMI 1238 - ITAT MUMBAI] TPO has determined the ALP of the transaction without following any of the prescribed methods. The transfer pricing adjustment has been made by estimating the man hours (at 750 hours) and the cost of service per hour (at INR 3000/- per hour).
Tribunal deleted the addition holding that the TPO had resorted to an adhoc unilateral pricing of the Management Fee without applying any of the prescribed methods and disregarding the facts of the case by placing reliance upon the decision of the co-ordinate Bench of the Tribunal in the case of Kellogg India Pvt. Ltd. [2019 (8) TMI 698 - ITAT MUMBAI] M/s CLSA India Pvt. Ltd. v. DCIT [2019 (1) TMI 1351 - ITAT MUMBAI] Firmenich Aromatics India P. Ltd. v. DCIT [2018 (9) TMI 1007 - ITAT MUMBAI]
Identical approach adopted by the TPO stands rejected by the Tribunal in the above said decisions including in the case of the Appellant for the Assessment Year 2012-13. Thus, respectfully following the above decisions of the Tribunal, we delete the transfer pricing addition - Decided in favour of assessee.
-
2022 (11) TMI 1416 - ITAT MUMBAI
Deduction u/s 80IA - sale/supply of electricity to its own units adopting the rate at which SEB's supply electricity to other consumers - adopting the market price of power supplied to captive unit at the rate of which the State Electricity Board supplies electricity, with regard to deduction - HELD THAT:- We note that on this issue the Ld.CIT(A) has decided in favour of assessee by following the decision of the Tribunal in AY 2006-07 and deleted sum as disallowed by AO wherein as ITAT has adopted the selling rate of electricity to SEB's as the market rate rejecting the department's finding that the rate adopted by Power Distribution Agencies is the market rate to be adopted.
We note that the Tribunal in AY 2007-08 to AY 2009-10 has allowed assessee’s appeal regarding this issue. Since the Ld.DR could not point out any change in facts or law vis a vis that of the earlier years as decided by the Tribunal in assessee’s case as noted (supra), we are inclined to uphold the impugned action of CIT(A). Appeal of the Revenue stands dismissed.
-
2022 (11) TMI 1415 - BOMBAY HIGH COURT
Selective appeal/issues addressed by ITAT - Consolidation of revenue and assessee appeal denied - Tribunal passing order only in relation to the Respondent’s appeal even though the Appellant has also filed an appeal from the same order of the CIT(A) - charging interest u/s 234B - tax was deductible at source on assessee’s income u/s 195 - HELD THAT:- Right course for the Tribunal should have been that a comprehensive view be taken upon hearing of the appeal preferred by the assessee as well.
As decided in COMMISSIONER OF SALES TAX, UP., LUCKNOW VERSUS VIJAI INT. UDYOG [1984 (10) TMI 42 - SUPREME COURT] since both the parties were before the Tribunal, it was proper that when the assessee’s appeal was taken up first, the Tribunal’s attention should have been drawn to the fact that the Commissioner’s appeal against the same decision of the Assistant Commissioner was pending and both should have been clubbed together. If that had been done the unfortunate situation which has necessitated the present appeal to be carried to this Court would not have arisen.
Course of action adopted by the Tribunal in deciding only the appeal of the Revenue in fact results in a lot of prejudice to the case of the appellant, whose appeal is still pending before the Tribunal. In fact the Tribunal would not be able to take a contrary view if at all it were to take one in the appeal preferred by the appellant, having already expressed an opinion in the appeal preferred by the Revenue.
Situation could have well been avoided if both the appeals were taken for decision together. We also find in the order impugned that the Tribunal has not at all dealt with the request of the appellant herein, for purposes of a consolidation of the appeals preferred by the contesting parties, which prayer should have been dealt with appropriately in the order impugned.
-
2022 (11) TMI 1414 - DELHI HIGH COURT
TDS u/s 194H - amount retained by the banks/credit card agencies for rendering credit card processing service - ITAT held that assessee was not required to deduct TDS on charges retained by the Banks/credit card agencies out of sale consideration of tickets booked through credit /debit cards - HELD THAT:- ITAT in the present case has correctly held that the issues involved in the present appeals are covered by the judgment of JDS Apparels (P.) Ltd [2014 (11) TMI 732 - DELHI HIGH COURT] wherein held Section 194H would not be attracted. HDFC was not acting as an agent of the respondent-assessee. Once the payment was made by HDFC, it was received and credited to the account of the respondent-assessee. In the process, a small fee was deducted by the acquiring bank, i.e. the bank whose swiping machine was used.
On swiping the credit card on the swiping machine, the customer whose credit card was used, got access to the internet gateway of the acquiring bank resulting in the realisation of payment. Subsequently, the acquiring bank realised and recovered the payment from the bank which had issued the credit card. HDFC had not undertaken any act on "behalf" of the respondent-assessee.
The amount retained by the bank is a fee charged by them for having rendered the banking services and cannot be treated as a commission or brokerage paid in course of use of any services by a person acting on behalf of another for buying or selling of goods. Decided against revenue.
........
|
