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Showing 61 to 80 of 1473 Records
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2022 (11) TMI 1413 - CALCUTTA HIGH COURT
Condonation of delay in filing the appeal - delay in preferring the appeal is 2428 days - delay condoned subject to payment of costs
HELD THAT:- If we peruse the order in this appeal, a decision can be taken wherein held that order allowing the prayer for condonation is subject to payment of costs assessed at Rs. 50,000/- to be paid by the appellant to the respondent. This cost shall initially be paid by the Government, thereafter the department concerned shall make an enquiry as to who are at fault for not taking care for preservation of the records and papers. If any of the officers and/or staff are found to be negligent, costs awarded by us shall be recovered from their salaries in proportionate to their lapses, of course after giving a chance of hearing to the concerned officer and staffs.
The cost has to be paid within a period of three weeks from date as prayed for the learned Counsel for the appellant. In default of payment of costs this order will stand recalled and subsequent order, if any passed in favour of revenue will also stand recalled.
As respondent submits that till date the costs has not been remitted. In such circumstances, the order dated 21st November, 2011 itself provides for the contingency. It has been ordered that in default of payment of costs, the order condoning the delay will stand recalled. Thus, in absence of compliance of the direction issued by the Hon’ble Division Bench in its order and the costs having not been paid to the assessee, the order is required to be recalled and is accordingly recalled.
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2022 (11) TMI 1412 - DELHI HIGH COURT
Validity of reopening of assessment - determine the date of issuance of the notice issued u/s 148 -Assessment order relies upon a Suspicious Transaction Report (‘STR’) regarding a credit - HELD THAT:- There is no dispute that the assessment order dated 26th March, 2022, was passed in contravention of the interim order dated 24th March, 2022. Further, the said order has been passed without providing any opportunity to the petitioner to respond to the alleged information against it, in accordance with the judgment of GKN Driveshafts (2002 (11) TMI 7 - SUPREME COURT] - Therefore, the said assessment order is null and void and is hereby set aside.
AO is directed to provide a copy of the STR relied upon in its order within two (02) weeks. The Assessee shall furnish its reply and explanation to the transactions reported in the STR within a period of two (02) weeks thereafter. The AO shall also adjudicate on the plea of the Assessee that the tracking report available on the official website of the postal department records the date of issuance as 02nd April, 2022, while determining the date of issuance of notice. The AO shall after determining the date of issuance of notice proceed with the matter in accordance with the directions issued by this Court and in accordance with law.
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2022 (11) TMI 1411 - KARNATAKA HIGH COURT
Recovery proceedings - addition u/s 68 - whether petitioner was duly intimated about the proceedings and show-cause notices received? - HELD THAT:- As the respondents have proceeded to pass the impugned order on the premise that the petitioner has not submitted his response/reply or documents to the show-cause notices. In this regard, in the light of the specific assertion on the part of the petitioner that the said notices were not received by him, though the said contention is opposed by the respondents, by adopting a justice oriented approach and to provide one more opportunity to the petitioner to submit his reply to the show-cause notices along with the documents in support of his claim we deem it just and appropriate to set aside the impugned order and remit the matter back to the respondent for reconsideration afresh in accordance with law.
Applicability of E-Assessment Scheme, 2019 - As in view of findings above that the impugned assessment order deserves to be set aside and the matter be remitted back to the respondents for reconsideration afresh, the issue / question regarding the requirement of following the scheme in respect of the proceedings, which were initiated after to coming into force of the said Scheme of 2019 may not be relevant for adjudication of present petition.
In so far as the contention urged by the petitioner, the judgment of the Apex Court in the case of the Orissa Corporation [1986 (3) TMI 3 - SUPREME COURT] it is needless to state that after providing an opportunity to the petitioner to submit its reply and documents to the aforesaid show-cause notices, the respondents would necessarily have to follow the procedure prescribed in law bearing in mind the judgment and other judgments of the Apex Court rendered in relation to Section 68 of the Income Tax Act, 1961.
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2022 (11) TMI 1410 - ITAT PUNE
Bogus purchases - Estimation of income - CIT(Appeals) erred in restricting the disallowance to 17.96% of the alleged hawala purchases over & above the profit shown by the assessee even through the assessee could not produce primary evidences like octroi receipt, lorry receipt, delivery challans, stock register, weighing slips etc., to prove the genuineness of purchases - HELD THAT:- When it has been categorically established that, the amount of bogus purchases is debited to P&L by fictitious tax invoices and the respondent assessee failed to establish the consumption of such goods in the execution of civil contract by adducing such stock movement records to the satisfaction of AO., then taxing such bogus purchases GP rate of goes against the principles of taxation embedded in chapter VI of the Act and against the ratio laid down in“N K Proteins Ltd” [2017 (1) TMI 1090 - SC ORDER] and “PCIT Vs Pinaki D Pinani” [2020 (1) TMI 700 - BOMBAY HIGH COURT] for the reason, we are of the considered view that, the Ld. AO was right in making 100% disallowance towards bogus / hawala purchases, and thus we are inclined to uphold the order of assessment and reverse the order the Ld. FAA. Appeal of the appellant revenue is allowed.
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2022 (11) TMI 1409 - ITAT MUMBAI
Disallowance u/s. 14A r.w.r. 8D - suo moto made disallowance - scope of amendment - HELD THAT:- Whether the aforesaid amendment by the Finance Act, 2022 is prospective or retrospective in operation, in PCIT vs M/s Era infrastructure (India) Ltd,[2022 (7) TMI 1093 - DELHI HIGH COURT] held that the amendment by Finance Act, 2022 in section 14A is prospective and will apply in relation to the assessment year 2022–23 and subsequent assessment years. Thus, in view of the aforesaid decision of Hon’ble Delhi High Court, we find no merits in the submission of learned DR.
We further find that in Cheminvest Ltd [2015 (9) TMI 238 - DELHI HIGH COURT] held that section 14A will not apply if no exempt income is received or receivable during the relevant previous year. Respectfully following the aforesaid decision, the AO is directed to delete the disallowance made u/s 14A read with Rule 8D. As a result, ground No. 1 raised in assessee’s appeal is allowed.
Disallowance of interest expenses - AO disallowed the expenditure on the basis that interest expenditure has a direct nexus with the project undertaken and therefore same is to be allowed as business expenditure in the ratio of revenue offered from the project - HELD THAT:- Lokhandwala Constructions Inds. Ltd [2003 (1) TMI 93 - BOMBAY HIGH COURT] in case of a builder held that where the loan was obtained for the project of construction of flats, which is stock in trade, the assessee is entitled to deduction u/s 36(1)(iii) of the Act in respect of interest expenditure on such loans.
In the present case, undisputedly funds were borrowed for the purpose of the projects undertaken by the assessee, and only based on accounting treatment, the claim of the assessee was denied. It is pertinent to note that the allowability of any deduction is to be decided based on the provisions of the Act. In the present case, since the funds were borrowed for the purpose of projects undertaken by the assessee, therefore, the interest paid on such borrowing is allowable u/s 36(1)(iii) in view of the aforesaid decision of Hon’ble jurisdictional High Court. Accordingly, the AO is directed to grant the deduction under section 36(1)(iii) of the Act in respect of the interest expenditure claimed by the assessee. As a result, ground No. 2 raised in assessee’s appeal is allowed.
Disallowance of commission expenses - assessee claims that the commission expenses incurred by the assessee are not in respect of any particular project and these expenses are required to be incurred under all circumstances while carrying on the business - as per AS 7 para 19 selling costs cannot be attributed to contract activity and the same cannot be allocated to the contract and therefore are to be excluded from the cost of the construction contract - HELD THAT:- As evident that in the present case the commission expense has been identified by the assessee not only in respect of each project undertaken by it but also in respect of each flat for which such commission expenses were incurred. Insofar as the decision in Rustomjee Evershine Joint-Venture Private Ltd [2017 (12) TMI 579 - ITAT MUMBAI] we find that in para 7 the coordinate bench after perusal of AS-7 noted that general administrative costs and selling costs are not considered as part of the contract cost unless they are contract specific. C. Thus we find no infirmity in the impugned order passed on this issue. As a result, ground No. 3 raised in assessee’s appeal is dismissed.
Disallowance of interest - HELD THAT:- We find that even now no details regarding the expenditure incurred under the head Interest - Others have been filed by the assessee. Therefore, we find no infirmity in the impugned order passed upholding the disallowance - As a result, ground raised in assessee’s appeal is dismissed.
Disallowance of interest on late payment of TDS - In its appeal before the CIT(A) the assessee raised no ground challenging the disallowance of interest on late payment of TDS. Thus, when the assessee has agreed to disallowance of interest on late payment of TDS, we find no infirmity in the order passed by the AO on this issue.
In any case, nothing has been brought on record to show that the said expenditure was incurred wholly and exclusively for the purpose of the business for being allowed u/s 37 of the Act. Therefore, in view of the above, additional ground No. 1 raised by the assessee is dismissed.
Disallowance u/s 14 A r/w Rule 8D - HELD THAT:- We find that Hon’ble jurisdictional High Court in Nirved Traders (P.) Ltd. [2019 (4) TMI 1738 - BOMBAY HIGH COURT] has held that disallowance under section 14A of the Act cannot be more than exempt income. Thus, respectfully following the aforesaid decision of the Hon’ble jurisdictional High Court, we direct the AO to restrict the disallowance made under section 14A of the Act to the extent of exempt income earned by the assessee, during the year under consideration. As in assessee’s appeal is partly allowed, while additional ground No. 1 is allowed.
Scope of assessment proceedings in case of limited scrutiny - AR submitted that it was a limited scrutiny case and no approval was taken by the AO from CIT for expanding the scope of its jurisdiction - HELD THAT:- From the perusal of the record, it is evident that the AO vide assessment order passed under section 143(3) of the Act disallowed the interest expenditure and commission expenditure debited by the assessee in its profit and loss account. AO also made disallowance under section 14 A r/w Rule 8D after considering the interest expenditure debited to the profit and loss account.
Thus, in view of the above, we are of the considered opinion that the additions made by the AO are covered under aforesaid point (iii) and (iv) of the CASS reasons and the scope of enquiry by the AO was also limited to the verification of the aforesaid aspects. Therefore, we find no infirmity in the impugned order passed on this issue. As a result, grounds No. 1 and 2 raised in assessee’s appeal are dismissed.
Validity of assessment proceedings in the name of the erstwhile entity - At no stage the AO was informed about the order approving the scheme of amalgamation passed by NCLT - HELD THAT:- We are of the considered view that merely issuing notice to the income tax authorities in compliance provision of section 230(5) of the Companies Act 2013 as per directions of the Hon’ble NCLT intimating the continuation of merger proceedings cannot be treated as intimation regarding the merger of M/s Rustomjee Constructions Private Limited with Keystone Realtors Private Ltd., as it is only upon the passing of final order approving the scheme of the merger the entity can be said to have been merged and lost its legal existence, even though the merger took effect from the retrospective date.
As further pertinent to note that the date of effect of the merger also came into existence only on 14/09/2017. Therefore, in light of the decision of Mahagun Realtors (P.) Ltd, [2022 (4) TMI 347 - SUPREME COURT] we find no infirmity in the impugned order passed by the learned CIT(A) on this issue. As a result, ground No. 1 raised in assessee’s appeal is dismissed.
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2022 (11) TMI 1408 - SUPREME COURT
Possession of subject property - Jurisdiction of High Court ought for quashing the entire criminal proceedings - HELD THAT:- A bare perusal of the complaint on the basis of which FIR came to be registered at the instance of the de-facto complainant/second respondent does not disclose any act of the present appellants or their participation in the commission of crime. They are neither concerned with the registered sale deed dated 4th May, 1977 nor the later sale deed executed in favour of the de-facto complainant by Shravan Kumar Gupta dated 22nd December, 2018, nor in possession of the subject property nor are parties to the civil proceedings and it is not the case of the complainant that either the appellants have played any active/passive role either in scribing the document or are facilitators or witness to the document in reference to which the complaint has been made for cheating and committing forgery or have played any role in delivery of possession of the subject property in question.
What it appears is that the de-facto complainant has implicated the present appellants being members of the family to put pressure for obtaining possession of the subject property and to settle the civil dispute which is pending between Vinod Kumar Gupta, Shravan Kumar Gupta and the de-facto complainant in Original Suit No.91 of 2015.
The High Court ought to have exercised its power under Section 482 CrPC for quashing of the criminal complaint and proceedings in consequence thereof qua the present appellants - Appeal allowed.
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2022 (11) TMI 1407 - CALCUTTA HIGH COURT
Reopening Order u/s 148A(d) passed in different PAN number as already been surrendered by the petitioners and proper intimation was give to the respondent Department in this regard - Income Tax Authority submits that the petitioners had obtained two PAN numbers and the proceedings has been initiated relating to the PAN number which was very much valid during the transactions - HELD THAT:- As Petitioners are given liberty to make an appropriate representation before the respondent, Income Tax Authority concerned for redressal of its grievances by urging the points raised in this writ petition.
Such representation shall be filed by the petitioners within two weeks from date and if such representation is made by the petitioners within the time stipulated herein, the same shall be considered and disposed of in accordance with law by passing a reasoned and speaking order and after giving an opportunity of hearing to the petitioners or its authorised representative within four weeks from the date of receipt of such representation.
Till the disposal of such representation to be made by the petitioner, there shall be an order of status quo with regard to the impugned order under Section 148A(d) of the Act dated 30th April, 2022 for a period of eight weeks from date.
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2022 (11) TMI 1406 - ITAT MUMBAI
Change in head of income in Assessment u/s 153A - making a new claim which is not a consequence of the search action in case of unabated assessment - eligibility to make a fresh claim which was not declared in the original return of income furnished u/s.139(1) - assessee claims to change his stand of the impugned deduction from the head ‘income from house property’ to ‘income from profit and gain of business' - whether the assessee is eligible to change his stand of the heads of income at the stage of section 153A proceeding, pertaining to unabated assessment year.? - HELD THAT:- As in the case of All Cargo Logistics Ltd [2012 (7) TMI 222 - ITAT MUMBAI(SB)] wherein it was held that in case of unabated assessment, the assessment u/s.153A can be made only on the basis of incriminating material, thereby restricting the scope of assessment or reassessment of total income u/s.153A to only the incriminating material seized during the search.
This interpretation categorically restricts the A.O. in altering the original assessment passed u/s.143(3) only when there are new materials found during search and which was not disclosed during the original assessment. This interpretation according to us holds good even in assessee’s case.
The assessee as per the decisions cited by the Revenue in case of Continental Warehousing Corporation (Nhava Sheva) Ltd [2015 (5) TMI 656 - BOMBAY HIGH COURT] , CIT Vs. Gurinder Singh Bawa [2015 (10) TMI 1761 - BOMBAY HIGH COURT] and All Cargo Logistics Ltd [2012 (7) TMI 222 - ITAT MUMBAI(SB)] restricts the fact that the assessment u/s. 153A is restricted only to incriminating material in case of unabated assessment. Also in case of Jai Steel (India) [2013 (6) TMI 161 - RAJASTHAN HIGH COURT] which held that both the assessee as well as the A.O. cannot make any claim which is not a consequence of the search action in case of unabated assessment.
Provisions of section 153A cannot be interpreted as enabling the A.O./assessee to make a fresh or additional claim, which was not raised during the original assessment in absence of incriminating material found during the search - Decided against assessee.
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2022 (11) TMI 1405 - KERALA HIGH COURT
Deduction u/s 80P (ii) (d) - interest income receipts - HELD THAT:- Since it is admitted that the judgment of Mavilayi Service Co-operative Bank Ltd. and others [2021 (1) TMI 488 - SUPREME COURT] was not considered while finalizing the assessment which was subject matter of challenge and since the decision in Peroorkada [2021 (12) TMI 1084 - KERALA HIGH COURT] was not considered while denying the benefit of deduction under Section 80P (ii) (d), the assessment orders which are impugned are liable to be set aside and the matter remanded to the respective assessing authorities for reconsideration after taking into consideration of the judgments referred to above.
Accordingly orders of assessment produced in all these writ petitions are quashed and the assessments are remanded to the National Faceless Assessment Centre for fresh consideration.
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2022 (11) TMI 1404 - ITAT DELHI
Addition on account of shipping business - benefits of the provisions of section 115VO under the Tonnage Tax Scheme denied - AO has made this addition stating that the drilling of Oil is the main operation and it is not provided in the Act that drilling and exploration of Oil will be the shipping income, to be included in computation of income under Tonnage Tax Scheme - HELD THAT:- As decided in assessee own case A.Y. 2014-15 held that revenue's contention that the vessel is nothing but 'off shore' installations had no merit. Since the Hon'ble High Court has rendered the findings in the appellant's own case for the A.Y. 2006-07 & 2007-08, that the appellant is taxable under the provisions of Chapter XIIG, no change in the facts and circumstances are brought out by the AO in the assessment order vis-a-vis those years, it is held that the benefit of the said Chapter is to be allowed to the appellant.
It may be mentioned here that on specific requisition by the undersigned the AR has filed an additional paper book enclosing herewith the computation of total income filed with the return of income and the computation of such income separately in respect of shipping unit and port infrastructure unit. The relevant certificates of registration, tonnage certificate, mobile offshore drilling unit (MODU) safety certificate, and all other such certificates in respect of the three vessels namely Deepsea Matdrill, Deepsea Fossil and Deepsea Fortune have also been filed. Although not discussed by the AO in the Assessment Order perusal of these certificates show that the three vessels owned by the appellant are of the same nature as that of the Deepsea Matdrill on which the Hon'ble High Court rendered its decision, Accordingly, ground is allowed.
Applicability of MAT provisions - HELD THAT:- CIT(A) held that income of assessee is taxable under provisions of section of Chapter XIIG of the Act, and since income of shipping unit is exempt u/s 115V-I of the Act, in view of section 115VO of the Act, same is liable to be excluded from the computation of book profit under section 115JB of the Act. Since, the decision of the ld. CIT(A) is in-consonance with the provisions of the Act, we decline to interfere with the order of the ld. CIT(A).
Disallowance of interest - assessee has given interest free loans to its subsidiary company without substantiating commercial expediency - HELD THAT:- Hon'ble Supreme Court [2015 (11) TMI 1314 - SUPREME COURT] approved of the view taken by Delhi High Court in Dalmia Cement Pvt. Ltd.[2001 (9) TMI 48 - DELHI HIGH COURT].and disapproved of the Punjab & Haryana High Court decision in the case of Abhishek Industries [2006 (8) TMI 123 - PUNJAB AND HARYANA HIGH COURT] Incidentally in the case of Hero Cycles, it was found that the interest liability of the assessee towards the bank on borrowings made had no bearings on the issue as otherwise, the assessee had sufficient funds of its own to advance the funds to the sister concern.
Under such circumstances it was for the AO to establish such nexus between the borrowings and advances to prove that the expenditure was for non-business purposes, which the AO failed to do. In the present case also, it is found that the appellant has sufficient funds of its own which he could have advanced and therefore the interest liability on the borrowings made could not be disallowed, particularly when the AO failed to prove that the expenditure was for non-business purposes.
Accordingly, it is held that no notional interest can be attributed towards the interest free advances made during the impugned year. The decision of the ld. CIT(A) is affirmed.
Disallowance on account of late deposit of PF& ESI - HELD THAT:- As the issue of payment of employees contribution towards the PF has been ruled against the assessee by the Hon’ble Supreme Court in the case of Checkmate Services P. Ltd.[2022 (10) TMI 617 - SUPREME COURT] Hence, the appeal of the revenue on this ground is allowed.
Disallowance u/s 14A - CIT(A) held that no exempt income has been earned by the assessee, hence, in view of the judgment of the Hon’ble Jurisdictional High Court in the case of Cheminvest Ltd [2015 (9) TMI 238 - DELHI HIGH COURT] no disallowance is called for. Hence, we decline to interfere with the order of the ld. CIT(A).
Disallowance u/s 40(a)(ia) – TDS u/s 195 - HELD THAT:- As services rendered by the foreign consultants cannot be said to amount to a permanent establishment or a fixed place for a business through which the foreign enterprise carries out its business in India, wholly and partly. It is also seen that during the appellate proceedings relating to A.Y. 2011-12 my Ld. Predecessor considered the letter issued by Nobel Denton Middle East Ltd. clarifying that they did not have a permanent establishment in India as per Article 5 of the DTAA and were assessed to tax in the UAE. Also find from the tax audit report for the impugned years placed at pages 28 & 69 of the paper book that the auditors have clarified that no amount is inadmissible u/s 40(a). Keeping in view the above facts it is held that neither the provisions of section 40(a)(ia) nor 40(a)(i) are applicable. Ground are allowed.
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2022 (11) TMI 1403 - ITAT MUMBAI
Disallowances u/s 14A r.w.r. 8D - Expenditure incurred on earning exempt income - HELD THAT:- This is a settled principle of law that where there is no exempt income no disallowance under section 14A of the Act is permissible. This issue has been decided in favour of the assessee by ERA Infrastructure (India) Ltd. [2022 (7) TMI 1093 - DELHI HIGH COURT]
We are of the considered view that disallowance made by the AO and confirmed by the Ld. CIT(A) over and above the suo-moto disallowance made by the assessee is not sustainable in the eyes of law in all the aforesaid appeals and as such ordered to be deleted.
MAT computation for disallowance u/s 14A - HELD THAT:- AO while computing the book profit under section 115JB of the Act has also considered disallowance of expenses made under section 14A of the Act which is not in consonance with the order passed by Special Bench of Delhi Tribunal in case of Vireet Investment [2017 (6) TMI 1124 - ITAT DELHI] AO can only consider the amount of disallowance made by the assessee under section 14A qua the exempt income earned during the years under consideration under section 115JB of the Act. In other words disallowance made under section 14A under the normal provisions of the Act can only be considered for computing book profit under section 115JB of the Act.
This issue was also decided in favour of the assessee in its own case in A.Y. 2012-13, 2013-14 & 2014-15 by the Tribunal. So the AO is to verify the facts if the disallowance made by the assessee under section 14A under the normal provisions of the Act is considered while computing the book profit under section 115JB of the Act. However, the disallowance made by the AO by invoking the provisions contained under section 14A read with rule 8D while computing the book profit under section 115JB of the Act is not sustainable in the eyes of law, hence ordered to be deleted.
Short TDS credit - case of the assessee that because of delay in deposit/non deposit of the TDS by the deductor the assessee failed to take the benefit of TDS as the same is not reflected in 26AS AND and relied upon the memo dated 11.03.2016 issued by the CBDT which says that, “in case the deductor fails to deposit TDS amount to the government account the deductee shall not be called upon to pay the payment to the extent tax has been deducted from his account.” - HELD THAT:- The assessee cannot be deprived of taking credit of TDS already deducted. So this issue is remanded back to the AO for the purpose of verification of the TDS amount that has been deducted but not reflected in 26AS statement of the assessee and give the credit to the assessee accordingly.
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2022 (11) TMI 1402 - ITAT BANGALORE
Depreciation on Goodwill - Assessee claimed depreciation at the rate of 25% on the opening WDV of goodwill - assessee had acquired a brewery, namely, ‘Karnataka Breweries and Distilleries Limited’ through a process of demerger - HELD THAT:- As Tribunal has decided the issue against the assessee in the cases for AY 2007-08 to 2009-10 [2016 (9) TMI 1527 - ITAT BANGALORE] and the decision will apply to the present AY also. The learned AR submits that the assessee has preferred appeal on the allowability of claim of depreciation before the Hon’ble High Court of Karnataka in ITA No.61/2017 and the same is pending adjudication. The learned DR was duly heard.
Disallowance u/s 14A r.w.r. 8D - HELD THAT:- The disallowance should be restricted to the amount of exempt income earned by the assessee. The amendment to section 14A of the I.T. Act, which states that disallowance u/s 14A of the I.T. Act is to be resorted, whether the assessee earns exempt income or not is only prospective and does apply to the relevant assessment year. In this context, we rely on the order of Bajaj Capital Ventures (P) Ltd. [2022 (7) TMI 23 - ITAT MUMBAI]. It is ordered accordingly.
Addition u/s 40(a)(ia) which were year-end provisions reported in the Form 3CD - HELD THAT:- We find on identical facts and circumstances, the co-ordinate Bench of the Tribunal in assessee’s own case for assessment years 2013-2014 [2022 (6) TMI 1433 - ITAT BANGALORE] has restored the issue to the A.O. with specific directions to verify the details of payments and tax deducted and allow the expenditure where the TDS is remitted to the Government account on or before the due date for filing the return of income.
Addition u/s 43B - Assessee did not remit statutory dues [CST, excise duty on closing stock] before the due date of filing of return of income - AO rejected the contention of the assessee and held that the CST, excise duty on closing stock collected and paid are included in the valuation of purchase, sale and inventory, then effect will be nil only if the said amounts are paid within the due date of filing return in terms of section 43B - CIT(A) held that the assessee has claimed an expenditure which is yet to be paid and is liable to section 43B disallowance - HELD THAT:- We find that on identical facts, the Tribunal in assessee’s own case for assessment year 2011- 2012 [2022 (10) TMI 1204 - ITAT BANGALORE] remitted the issue to the files of the A.O.with a direction to verify and allow the claim of the assessee taking into consideration the rectification order passed u/s.154.
Withholding tax amount on foreign royalty - AO during the course of hearing noticed that the assessee has disclosed only 90% of the Royalty amount for taxation on the ground that the balance 10% would represent tax withheld by the payer and the assessee had not received the said amount either in the form of TDS certificate or actual consideration basis till date - HELD THAT:- Tribunal in assessee’s own case for assessment year 2010- 2011 [2022 (10) TMI 1204 - ITAT BANGALORE] remitted the matter to the files of the A.O. with a direction to allow credit for the tax paid in foreign countries on the doubly taxed income in accordance with the provisions of section 90/91 r.w. Rule 128 based on the documents / evidences submitted by the assessee in this regard.
Addition on account of brand promotion expenses - AO held that ‘brand’ being an intangible asset, any expense incurred towards development of brand or brand promotion leads to an enduring benefit and should be capitalized - HELD THAT:- Following the above order of the Tribunal in the case of United Spirits Limited [2022 (4) TMI 1408 - ITAT BANGALORE] we allow deduction in respect of brand promotion expenses.
Capital gains and addition u/s 115JB - HELD THAT:- Assessee has rightly pointed out that if the shares were cancelled in the first instance, instead of creating the Trust to hold the same, the same would not have resulted in capital gains. Since under both the arrangements, i.e., cancellation of its beneficial holding or under the Trust, there is no resultant capital gains that will be liable to tax, there is no question of painting the arrangement as colourable device. When the subject income has already been offered to tax by the Trust whereby exemptions have been claimed, the lower authorities have failed to establish the reason why the very same income has to be once again considered in the hands of a different assessee. Even if, for academic reasons, it were to be held that the income of the Trust is the income of the Assessee, given the provisions of section 10(38) of the I.T. Act, there is no reason why the benefit of the exemption cannot be extended to the assessee as well.
With respect to the provisions of section 115JB of the I.T. Act, the lower authorities have sought to include the subject amount as a part of 'book profits' though the same is added to the General Reserves and not in the profit and loss account. In the event of books of accounts being prepared in accordance with the provisions of the relevant Companies Act, it is well accepted that the AO has no jurisdiction to go behind net profit shown in the profit and loss account except to the extent provided therein. As it has been held above that the said amount is not the income of the Assessee but of the Trust, there is no question of considering it as a part of book profits. On going through the impugned orders there is no effort to establish the same. Given the same, the CIT(A)/AO have erred in disturbing the book profit as considered by the Assessee.
Short credit of taxes - We restore the issue raised in ground to the files of the A.O. The A.O. is directed to verify and grant TDS and TCS credit as per law.
Disallowance u/s 14A added to book profits - HELD THAT:- The Hon’ble jurisdictional High Court in the case of CIT v. Gokaldas Images [2020 (11) TMI 345 - KARNATAKA HIGH COURT] had held that disallowance u/s 14A cannot be added to the book profits for the purpose of section 115JB of the I.T. Act - we delete 14A disallowance added to the book profit.
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2022 (11) TMI 1401 - NATIONAL COMPANY LAW TRIBUNAL, MUMBAI BENCH
Maintainability of petition - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Corporate Debtor is a viable going concern - enough monthly revenues to make payment of dues - HELD THAT:- The Corporate Debtor has monthly revenues of INR 120 Crores (net of GST), which shows that the Corporate Debtor is a viable going concern. Further, the Corporate Debtor has repaid an amount of INR 16,915 Crores between 2011 to August, 2018, which clears that the position of the Corporate Debtor is reasonably healthy and is in a position to repay the sustainable debt. The Corporate Debtor has claims aggregating to INR 13,393.83 Crores against Aircel entities. Further, this Tribunal has directed to pay approx. INR 900 Crores to the Corporate Debtor, same has been pending on appeal. Moreover, the Corporate Debtor has to recover INR 49.84 Crores from Tata Teleservices Limited; INR 20.38 Crores from ATC and INR 351 from BSNL in pending arbitration proceeding. The amount received would be sufficient to pay the debt of the Petitioner.
The ratio of the Vidarbha Industries [2022 (7) TMI 581 - SUPREME COURT] is squarely applicable to the present case as the business of the Corporate Debtor is sustainable and it is a viable going concern under its current management and the overall financial health of the Corporate Debtor is not bad enough to be admitted under CIRP. Moreover, the adjudicated and un-adjudicated claims of the Corporate Debtor are far more than the debt claimed in the present petition. So, in view of Judgement of the Hon’ble Supreme Court in Vidarbha Industries Power Limited Vs. Axis Bank Limited, the present petition should be dismissed.
Petition dismissed.
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2022 (11) TMI 1400 - AUTHORITY FOR ADVANCE RULINGS CUSTOMS, MUMBAI
Project Import - registration of the project can be done or not - concessional duty benefit under Project Import Regulations under the CTH 9801 with recommendation/sponsoring letter issued by the PMRDA - HELD THAT:- The project of the applicant is the Pune Metro Line 3 (Pune - Hingewadi) and is carried out by Pune IT City Metro Rail under the aegis of PMRDA.
As per the official website of the PMRDA viz. http://www.pmrda.-gov.in, the area including the cities of Pune and Pimpri-Chinchwad, the tehsils of Maval, Mulshi, Haveli and some parts of the talukas of Bhor, Daund, Shirur, Khed, Purandar and Velhe are covered under the Pune Metropolitan Region, which is one of the largest Metropolitan Regions in the country. The Government of Maharashtra established PMRDA to carefully plan the Development of Pune, the Industrial City of Pimpri-Chinchwad and the surrounding area of 7,357 sq.km. - Some major objectives of PMRDA are long-term planning, enforcing the development plans, providing for roads, water supply, sanitation, Metro Railways, necessary infrastructure and also stimulating economic development in the region. PMRDA is a body with constitutional rights responsible for the planned development of the metropolitan region.
Therefore, the project viz. the Pune Metro Line 3 (Pune - Hingewadi) carried out under the aegis of PMRDA is definitely Metro Rail Project for urban public transport. The sponsoring authority in this case would be the concerned State Government in terms of 3F of the Table annexed to the Project Import Regulations and not PMRDA.
The applicant has received the recommendation/sponsoring letter from the Maharashtra State Government which is the sponsoring authority for the subject project in terms of 3F of the Table annexed to the Project Import Regulations - the applicant can now register the said project and avail the concessional duty benefit under Project Import Regulations under the CTH 9801 with the recommendation/sponsoring letter for import of goods under concessional duty benefit as applicable under CTH 98.01 of the Customs Tariff Act dated 15-9-2022 from the Additional Chief Secretary, Urban Development Department, Government of Maharashtra for the subject project.
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2022 (11) TMI 1399 - AUTHORITY FOR ADVANCE RULINGS CUSTOMS, MUMBAI
Classification of goods intended to be imported - semi-finished and finished casting parts for manufacturing of injection moulding machine - to be classified under Heading 7325 or under CTH 8477 90 00? - HELD THAT:- As per the submission of the applicant, the subject goods are rough/semi-finished casting parts for manufacturing of injection molding machine. Also, as per the drawings the subject goods are shown as parts of the machinery. Injection moulding machine and its parts are specifically covered under this heading as Tariff Items 8477 10 00 and 8477 90 00 respectively. In view of the provision regarding classification of parts, the subject goods also come under the purview of the Tariff Item 8477 90 00.
As per the explanatory notes to Heading 73.25 which provides for exclusion of “castings which are products falling in other headings of the Nomenclature (e.g., recognizable parts of machinery or mechanical appliances) or unfinished castings which require further working but have attained the essential character of such finished products, the subject goods do not merit classification under Heading 7325. Further, the subject goods merit classification under Heading 8477 as parts of the machinery of the said heading.
The subject goods, e.g., rough/semi-finished castings merit classification under Heading 8477; more specifically under Tariff Item 8477 90 00 of the Schedule I to the Customs Tariff Act, 1975.
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2022 (11) TMI 1398 - SUPREME COURT
Extension of period to make the payment of balance amount under sanctioned OTS Scheme beyond the time granted under the sanctioned OTS Scheme - exercise of powers under Article 226 of the Constitution of India? - HELD THAT:- In the present case in the sanctioned letter dated 21.11.2017 it was specifically provided that the entire payment to be made by 21.05.2018. The schedule to make the payment under the instalments was also mentioned. It is an admitted position that the borrower did not make the payment due and payable under the sanctioned OTS Scheme on or before the date mentioned in the sanctioned letter. The prayer of the borrower for extension of nine months came to be rejected as far as back on 16.05.2018 and the borrower was directed to make the payment of Rs.2.52 crores by 21.05.2018, the borrower failed to make the payment. At this stage, it is required to be noted that during the pendency of the writ petition there were as many as three different OTS floated by the Bank and the Bank offered the respondent borrower to settle the outstanding payment under the OTS Scheme. However, the borrower did not opt for any of the scheme.
It is required to be noted that under the OTS Scheme which was originally sanctioned in the year 2017 the borrower was required to pay Rs.10,53,75,069.74 against the outstanding of Rs.13,99,89,273.99. Therefore, under the original sanctioned OTS Scheme the borrower was getting the substantial relief of approximately 3 crores. The Bank agreed and accepted the OTS offer on the terms and conditions mentioned in the letter dated 21.11.2017. In the sanctioned letter dated 21.11.2017 it was specifically mentioned in Clause (iv) that the entire payment under the OTS Scheme was to be made by 21.05.2018, otherwise OTS would be rendered infructuous. Therefore, borrowers were bound to make the payment as per the sanctioned OTS Scheme. Therefore, the High Court ought not to have granted further extension de hors the sanctioned OTS Scheme while exercising the powers under Article 226 of the Constitution of India.
The submissions on behalf of the borrower that in case of some other borrowers the time was extended is concerned, the same is neither here nor there. The Bank mutually can agree to extend the time which is permissible under Section 62 of the Indian Contract Act. The borrower as a matter of right cannot claim that though it has not made the payment as per the sanctioned OTS Scheme still it be granted further extension as a matter of right. There cannot be any negative discrimination claimed. The borrower has to establish any right in their favour to claim the extension as a matter of right.
The impugned judgment and order passed by the High Court granting further time to the respondent – borrower to make the balance payment under the OTS Scheme in exercise of powers under Article 226 of the Constitution of India is unsustainable and the same deserves to be quashed and set aside and is accordingly quashed.
Appeal allowed.
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2022 (11) TMI 1397 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH, NEW DELHI
Rejection of Section 7 petition filed by the Appellant for initiation of CIRP - arbitration proceedings initiated on personal guarantee - award in favour of the Appellant which award has already been put into execution by the Appellant - HELD THAT:- There is already an award to pay Cash Security of Rs. 3,64,58,785/- with interest, which award has already been put in execution by the Financial Creditor, this was reason good enough to refuse admission of Section 7 application. It has now been laid down by the Hon’ble Supreme Court in Vidarbha Industries Power Ltd. vs Axis Bank Limited [2022 (7) TMI 581 - SUPREME COURT] that admission of Section 7 application is not obligatory merely on proof of debt and default.
The facts as has been noticed by the Adjudicating Authority are sufficient to refuse admission of Section 7 application - Appeal dismissed.
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2022 (11) TMI 1396 - SC ORDER
Interpretation of the provisions in Section 3(1) of the Expenditure Tax Act, 1987 - whether room charges were less than ₹ 1,200/- per day per individual, no expenditure tax would be chargeable at all - As decided by HC [2019 (9) TMI 102 - BOMBAY HIGH COURT] assessee cannot claim benefit of the principle that such ambiguities in a fiscal statue deserve to be resolved in favour of the assessee. The principle that the ambiguities in a fiscal statute have to be resolved in favour of the assessee, applies in case of genuine ambiguities and not to ambiguities created by overemphasizing upon one of the expressions in a statute and ignoring or downplaying the other expression in the same statute. Substantial question of law relating to the interpretation of the provision in Section 3(1) of the said Act is required to be answered against the Appellants and in favour of the Revenue.
HELD THAT:- No good ground and reason to interfere with the impugned judgment and hence, the Special Leave Petitions are dismissed.
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2022 (11) TMI 1395 - SUPREME COURT
Termination of Power Purchase Agreement (PPA), which was entered into by the Appellant and the first Respondent - statutory contract or not - scope of judicial review of action by the State in a matter arising from a contract - concept of public law in judicial review in a contractual matter - arbitration Clause in regard to the subject matter - case of the first Respondent is on par with Renew Energy or not - non-compliance of Article 9.1 of the PPA, namely, the effect of Appellant not issuing notice contemplated therein before issuing the impugned termination dated 07.07.2018? - challenge to award of largesse by the State or is it applicable across the Board irrespective of the stage when the matter arises in relation to a contract?
WHETHER THE PPA IS A STATUTORY CONTRACT? - HELD THAT:- The court must carefully attend to the facts and the circumstances of the case. It should find out whether the impugned decision is based on any principle. If not, it may unerringly point to arbitrariness. If the act betrays caprice or the mere exhibition of the whim of the authority it would sufficiently bear the insignia of arbitrariness. In this regard supporting an order with a rationale which in the circumstances is found to be reasonable will go a long way to repel a challenge to state action. No doubt the reasons need not in every case be part of the order as such. If there is absence of good faith and the action is actuated with an oblique motive, it could be characterised as being arbitrary. A total non-application of mind without due regard to the rights of the parties and public interest may be a clear indicator of arbitrary action. A wholly unreasonable decision which is little different from a perverse decision under the Wednesbury doctrine would qualify as an arbitrary decision Under Article 14. Ordinarily visiting a party with the consequences of its breach under a contract may not be an arbitrary decision.
WHETHER THERE IS AN ARBITRATION CLAUSE? - HELD THAT:- It may not be a case where the PPA provides for an arbitration Clause capable of determining the lis in question. The situation therefore contemplated in U.P. Roof [1996 (8) TMI 453 - SUPREME COURT] as laid down in ABL [2003 (12) TMI 584 - SUPREME COURT] does not exist.
THE IMPACT OF THE JUDGMENT IN THE FIRST WRIT PETITION - HELD THAT:- The fifth Respondent is to be operated by the State Transmission Utility, which is defined in Section 2(67) as the Board (defined as the State Electricity Board) or the Government company specified by the State Government Under Section 39(1), unless it is operated by a Government company or any authority or corporation established or constituted by or under and State Act. It would, therefore, appear to us that if the fourth Respondent is the State Transmission Utility, it would be the Body to operate the fifth Respondent. The attempted disassociating of the fifth Respondent from the fourth Respondent, appears to us to be without justification. However, we leave the matter there. We may conclude nearly that all the requirements were met. There remained the metering requests and the aspects about furnishing data. They clearly appear to be matters which could have been remedied at any rate if a default notice was given.
OVERWHELMING PUBLIC INTEREST - HELD THAT:- The concept of overwhelming public interest has essentially evolved in the context of cases relating to the award of contract by the State. It becomes an important consideration in the question as to whether then the State with whatever free play it has in its joints decides to award a contract, to hold up the matter or to interfere with the same should be accompanied by a careful consideration of the harm to public interest. We do not go on to say that consideration of public interest should not at all enter the mind of the court when it deals with a case involving repudiation of a claim under a contract or for that matter in the termination of the contract. However, there is a qualitative difference in the latter categories of cases. Once the State enters into the contract, rights are created - In this case, it is noteworthy that the rates were in fact settled on the basis of international competitive bidding and in which as many as 182 bidders participated and the rate offered by the first Respondent was undoubtedly the lowest. The fact that power has become cheaper in the market subsequently by itself should not result in non-suiting of the complaint of the first Respondent, if it is found that a case of clear arbitrariness has been established by the first Respondent.
An inspection by the CEIG would necessarily have to be carried out in which the Appellant would have to be involved to facilitate the exercise. In the facts of this case, on being satisfied, the CEIG would necessarily have to grant the re-validation of the earlier Report. It would also involve an opportunity to the CEIG to look into the aspects which have been projected by the fist Respondent itself in its letter dated 16.09.2020. The report would indeed indicate the state of affairs about all the facets. As already noticed, even under the impugned judgment dated 27.02.2020, the first Respondent would have to submit necessary applications.
We would think that essentially the Appellant's attempt was to secure a reduction in the rate. The rate of the first Respondent was found to be the lowest after a clearly keenly competitive international bidding, involving a large number of bidders.
The view taken by the High Court upheld - appeal dismissed.
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2022 (11) TMI 1394 - KARNATAKA HIGH COURT
Rejection of benefit under the SVLDR Scheme - respondents had quantified the tax payable by the petitioner prior to June 30, 2019, not withstanding pendency of an enquiry or an investigation or audit on or before June 30, 2019 - HELD THAT:- The material on record in the instant case discloses that on September 12, 2018 itself, the respondent had quantified the amount payable by the petitioner as Rs. 99,00,000 out of which the petitioner had already paid Rs. 57,02,485 much prior to June 30, 2019, which was the cut-off date under the SVLDR Scheme and clarified by the circulars dated August 27, 2019 and December 12, 2019 issued by the respondent.
This court has come to the conclusion that so long as the respondents had quantified the tax payable by the petitioner prior to June 30, 2019, not withstanding pendency of an enquiry or an investigation or audit on or before June 30, 2019, the petitioner-assessee would be entitled to the benefit of the SVLDR Scheme.
In Nikitha Build Tech's case [2022 (11) TMI 1148 - KARNATAKA HIGH COURT], this court held since the petitioner has already made payment of the amount in respect of which, he had claimed the benefit under the SVLDR Scheme much prior to submitting form SVLDRS-1, I am of the view that the petitioner would be entitled to avail the benefit under the SVLDR Scheme and rejection of the same by the respondents by issuing the impugned communication is clearly arbitrary, illegal and contrary to law as well as the provisions of the said Scheme and the same deserves to be quashed.
In the peculiar/special facts and circumstances obtaining in the instant case and in the light of the judgments of this court, the respondents committed an error in not only passing the impugned order rejecting the claim of the petitioner for benefit under the SVLDR Scheme, but also erred in passing the impugned order and consequently, the impugned orders deserve to be set aside and the matter be remitted back to the respondent for reconsideration afresh in accordance with law.
Petition allowed.
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