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Showing 21 to 40 of 1628 Records
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2022 (5) TMI 1608 - ITAT MUMBAI
Disallowance u/s.43B - leave encashment payable for non-retiring employees - HELD THAT:- Leave encashment payable for employees who had retired during the year alone would fall within the ambit of Section 43B(f) of the Act and if the same is not paid within the due date of filing of return of income u/s.139(1) of the Act, the said expenditure shall not be allowed as deduction. In respect of provision made as stated supra for leave encashment in respect of non-retiring employees, the same does not become payable at all to those employees. In other words, the provision is made for expenses accrued but not due for payment during the year. Hence, the provisions of Section 43B(f) of the Act could not be put into operation in respect of the said provision. In any case, we find that the issue in dispute is already addressed by the Co-ordinate Bench of the Tribunal [2017 (12) TMI 1134 - ITAT MUMBAI] and also by the decision of the Hon’ble Jurisdictional High Court in the case of CIT vs. Hindustan Construction Company Ltd.[2015 (4) TMI 881 - BOMBAY HIGH COURT] - Decided against revenue.
Disallowance of expenditure on account of contribution to local organisations - assessee had made contributions to various local organisations located in and around the areas where plant offices of the assessee company are situated - Addition made on the ground that the expenditure was not wholly and exclusively incurred for the purpose of business - HELD THAT:- We find that this issue is no longer res integra in view of the Co-ordinate Bench decision of this Tribunal in [2014 (10) TMI 994 - ITAT MUMBAI] - Decided against revenue.
Disallowance towards rural development activities by the assessee company - HELD THAT:- We find that this issue is no longer res integra in view of the issue in view of the Co-ordinate Bench decision of this Tribunal in [2014 (10) TMI 994 - ITAT MUMBAI]
Nature of expenses - treat the production cost of advertisement film as revenue expenditure - HELD THAT:- We find that assessee is not in the business of production of feature films rather the films have been used for advertisement. It was pleaded that the air time of T.V. or radio is allowed as expenditure in the year in which such advertisement is telecasted / broadcasted. The ld. AO observed that advertisement film produced could be used again and again and therefore, the assessee derives enduring benefit out of the same. We find that this issue is no longer res-integra in view of the decision of the Co-ordinate Bench of this Tribunal in assessee’s own case in [2014 (10) TMI 994 - ITAT MUMBAI] as held similar issue has been decided by the Hon’ble Supreme Court in the case of Empire Jute Co. Ltd [1980 (5) TMI 1 - SUPREME COURT] Accordingly, we do not find any infirmity in the order of the ld. CIT(A) deleting the disallowance by observing that advertisement film was made only for advertisement and its useful life is very short and such films do not add to the capital structure of the company.
Disallowance towards ESOP - HELD THAT:- We find that assessee had incurred an expenditure on account of employee compensation cost under Employee Stock Options Scheme (ESOS). The entire scheme together with the object and vesting period are addressed in detail by the ld. AO. The discount cost incurred on ESOP scheme was written off by the assessee over the vesting period. This issue is squarely covered by the decision of the Special Bench of Bangalore Tribunal in the case of Biocon Ltd., which has been subsequently approved by the Hon’ble Karnataka High Court in 430 ITR 151 [2020 (11) TMI 779 - KARNATAKA HIGH COURT].
Deduction u/s.80IA in respect of Rail systems - HELD THAT:- Even in the recent order passed by this Tribunal in the case of Ultratech Cement Ltd., vs. DCIT [2022 (1) TMI 923 - ITAT MUMBAI] this issue has been decided in favour of that assessee. In view of the aforesaid judicial precedents, we do not find any infirmity in the order of ld. CIT(A) granting deduction u/s.80IA of the Act in respect of Raipur and Hotgi Unit.
Deduction u/s.80IA of the Act towards apportionment of head office expenses - HELD THAT:- We find that this issue is no longer res integra in view of the decision of this Tribunal in assessee’s own case in [2014 (10) TMI 994 - ITAT MUMBAI] wherein this Tribunal had placed reliance on the order passed in assessee’s own case for A.Yrs.1994-95 to 1998-99, which decisions were accepted by the department by not preferring further appeal to High Court on this issue. Since, the issue is already settled by the order of this Tribunal, we do not find any infirmity in ld. CIT(A) granting relief to the assessee. Accordingly, ground raised by the Revenue is dismissed.
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2022 (5) TMI 1607 - MADHYA PRADESH HIGH COURT
Forgery of valuable security and will - making & possessing counterfeit seal intending to use it as genuine and by fraudulent cancellation & destruction of the Will and codicil of late Parmanand Bhai Patel - HELD THAT:- The Supreme Court in the case of Girish Kumar Suneja [2017 (7) TMI 1088 - SUPREME COURT] has observed that there are three categories of orders that a Court can pass – final, intermediate and interlocutory. There is no doubt that in respect of a final order, a court can exercise its revisional jurisdiction i.e. in respect of a final order of acquittal or conviction. There is equally no doubt that in respect of an interlocutory order, the Court cannot exercise its revisional jurisdiction. As far as an intermediate order is concerned, the court can exercise its revisional jurisdiction since it is not an interlocutory order.
According to Section 397(2) CrPC, revision against an interlocutory order is not maintainable. It is well settled that in deciding whether an order challenged is interlocutory or not as far as Section 397(2) CrPC is concerned, the sole test is not whether such order was passed during the interim stage - The feasible test is whether by upholding the objections raised by a party, it would result in culminating the proceedings, if so any order passed on such objections would not be merely interlocutory in nature as envisaged in Section 397(2) CrPC.
In the case at hand, the applicant is calling in question an order of dismissal of an application filed by respondent No. 1/State under Section 311 of Cr.P.C. seeking recall of respondent No. 6 for further examination in order to place on record certified copies of papers and proceedings with regard to the judicial proceedings in relation to the alleged forged Will as well as estate/assets of late Parmanand Bhai Patel. It is apparent that the order under challenge in this revision does not culminate the criminal proceedings as a whole or finally decides the rights and liabilities of the parties, therefore, it cannot be said to be a final order or an intermediate order. The impugned order is purely interlocutory in nature.
It is apparent that the impugned order passed while dismissing application filed by respondent No.1/State under Section 311 Cr.P.C. for recalling the witness is an interlocutory order and in the considered opinion of this Court no revision petition against such an order is maintainable in view of the provision of Section 397 (2) of Cr.P.C.
The revision is hereby dismissed as not maintainable.
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2022 (5) TMI 1606 - SC ORDER
Valuation of shares of the company - HELD THAT:- It is agreed upon by both the parties that the value of the Company may be jointly assessed by two Auditors. Both parties shall furnish separate list of three Auditors proposed by them for this Court to select one name from each list - As regards, the cutoff date for conducting the valuation, it is agreed by both parties that the date should be taken as 31.03.2021.
In compliance to the orders passed by this Court from time to time, both the parties have placed the material on record relating to the contributions stated to have been made by them towards the growth of the company - it is directed that both parties to place copies of the said material before the Auditors to enable them to expedite the process of valuation.
The Auditors are directed to provide an opportunity to both the parties to present their case and also take into consideration the material placed before them before assessing the value of the company and thereafter submit a joint report to this Court within a period of six weeks from this date.
List these matters after six weeks.
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2022 (5) TMI 1605 - ALLAHABAD HIGH COURT
Validity of summon order - summoning order has been passed on a printed proforma without application of judicious mind - principles of natural justice - HELD THAT:- On going through the record, the statutory provisions and as per the law settled, the position which emerges out is that a Court can take cognizance of an offence only when condition requisite for initiation of proceedings before it as set out in Chapter XIV of the Code are fulfilled.
In the case of BHUSHAN KUMAR & ANR. VERSUS STATE (NCT OF DELHI) & ANR. [2012 (4) TMI 746 - SUPREME COURT], the Hon'ble Apex Court was pleased to observe that section 204 of the Code does not mandate the Magistrate to explicitly state the reasons for issuance of summons. It clearly states that if in the opinion of a Magistrate taking cognizance of an offence, there is sufficient ground for proceeding, then the summons may be issued. This section mandates the Magistrate to form an opinion as to whether there exists a sufficient ground for summons to be issued but it is nowhere mentioned in the section that the explicit narration of the same is mandatory, meaning thereby that it is not a pre-requisite for deciding the validity of the summons issued.
It is clear that the order dated 01.12.2020 passed by learned Chief Judicial Magistrate, Shamli is without application of judicious mind on a printed proforma in mechanical manner and the cognizance and summoning order dated 01.12.2020 cannot be legally sustained as the Magistrate failed to exercise the jurisdiction vested in him.
The matter is remitted back to learned Chief Judicial Magistrate, Shamli with a direction to decide afresh - the application/petition is partly allowed.
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2022 (5) TMI 1604 - RAJASTHAN HIGH COURT
Revision dismissed for want of prosecution - despite pendency of the revision for more than five years, no steps had been taken to move the application for condonation of delay - HELD THAT:- It is observed that the averments made in this application that Registry did not permit removal of defects on account of change of Officer Incharge is absolutely unacceptable on the aspect of submission of the application under Section 5 of the Limitation Act. It may be stated that there might have been some difficulty for removing the defects in the existing revision petition owing to change of Officer Incharge and difference in signature. However, nothing prevented the Department from filing the application under Section 5 of the Limitation Act because the affidavit in support thereof could have be sworn by the Officer-Incharge appointed at any point of time. There was no requirement of the same Officer Incharge who affirmed the affidavit in support of the revision petition to file the application under Section 5 of the Limitation Act.
The averments made in the application for justifying the non-filing of the application under Section 5 of the Limitation Act are flimsy and farfetched and totally unacceptable - the misc. application is rejected as being devoid of merit.
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2022 (5) TMI 1603 - ITAT BANGALORE
Income taxable in India - royalty receipts as assessee has used the ‘process’ - existence of PE - HELD THAT:- In the present facts of the case the agreement between assessee and J&P Coats is clear of the fact that there is no transfer of any intellectual property, or any exclusive right has been granted to the assessee for using such intellectual property. Rather, the payment is made by the assessee to J&P Coats, based on the agreement between BT to J&P Coats. The assessee has made the payment based on coast allocation towards the band width services provided by J&P Coats as per agreement between BT to J&P Coats.
Therefore in our opinion, the payment made by assessee to J&P Coats cannot fall within the ambit of ‘Royalty’ under section 9(1)(vi) by virtue of Explanation 2.
By insertion of Explanation 5 & 6, meaning of word 'Process' has been widened. As per these explanations, the word 'Process' need not be ‘secret’, and situs of control & possession of right, property or information has been rendered to be irrelevant. However, in our opinion, all these changes in the Act, do not affect the definition of ‘Royalty’ as per DTAA.
As per Explanation 5 & 6, the word 'process' includes and shall be deemed to included, transmission by satellite (including uplinking, amplification, conversion for down-linking of any signal), cable, optic fibre or by any other similar technology, whether or not such process is secret. However, the Explanation does not do away with the requirement of successful exclusivity of the right in respect of such process being with the person claiming 'royalty' for granting its usage to a third party.
In present facts of the case, the J&P Coats has neither leased nor has given on hire any network to the assessee. Instead the assessee reimbursed the cost incurred by J&P Coats towards the bandwidth charges provided by BT to all the Coats group companies world wide.Therefore it cannot be said that the assessee has 'used' the network belonging to J&P coats.
On perusal of the agreement, between assessee and J&P Coats we note that, the assessee do not have any ownership or rights in respect of such ‘process’, and hence in our view the payment in question cannot be considered as ‘royalty’. J&P Coats is rendering telecommunications services to all its Group concerns, with the aid of BT.
Similar issue came up before Hon’ble Delhi Tribunal in case of Bharti Airtel vs.ITO (TDS) [2016 (3) TMI 680 - ITAT DELHI] The issue considered therein was in respect of payment towards call interconnectivity charged for call transmission on foreign network. The Tribunal therein, on applying ratios pronounced in the above referred decisions, held it not as ‘Royalty’.
Therefore in our opinion, the Payments made by the assessee in lieu of services provides by J&P Coats cannot fall within the ambit of ‘Royalty’ under section 9(1)(vi) Explanation 5 &6.
Whether the services rendered could be treated as Royalty under Article 13(2) of the DTAA between India and UK? -We note that, it is the same transaction that, was analysed by this Tribunal in case of the Payee(J&P Coats) [2022 (2) TMI 313 - ITAT BANGALORE] wherein it has been held that, it would not amount to be ‘Royalty’ as per Article 13 of India UK DTAA.
We are therefore respectfully following the above view, hold that the payment made by the assessee to the J&P Coats(Payee), cannot be held to be as Royalty under Article 13 of India UK DTAA.
Whether payment made could be FTS? - We note that the revenue is doubting, if the payment made could be FTS, however took the view of the payments to be FTS by relying on various decisions which are a subject matter of royalty. Thus the revenue has actually not made out a case for taxing the payments by the assessee as FTS.
The plea of the Assessee was in terms of paragraph 4(c) of Article 13 of DTAA, that payments of any kind in consideration for rendering of any technical or consultancy services (including the provision of services of a technical or other personnel) would be regarded as fees for technical services' if it 'makes available' technical knowledge, experience, skill knowhow or processes, or consist of the development and transfer of a technical plan or technical design.
In the present facts there is no such technical information, knowledge or skill, knowhow or process that is available to the assessee in order to independently use it.
CIT(A) proceeded then on attribution of income without establishing a PE J&P Coats in India. In this regard we refer to relevant observation of Coordinate Bench of this Tribunal reproduced hereinabove to hold that J&P Coats do not have a PE in India.
Accordingly, we are of the view that the payments made by assessee to J&P Coats cannot be held to be taxable in India as it does not amount to income as per DTAA as well as Income tax Act.
“Assessee in default” u/s. 201(1) - Since it is held that the assessee was not liable to deduct TDS on the payments made to J&P Coats for A.Ys. 2016-17 & 2017-18, the assessee cannot be held to be an “assessee in default”, u/s. 201(1) of the Act. We accordingly, delete the disallowance and the interest computed u/s. 201(1A) of the Act on the payments made by assessee to J&P Coats for both years under consideration.
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2022 (5) TMI 1602 - ITAT CHENNAI
Levy of fees u/s. 234E - intimation u/s 200A - Fee for default in furnishing statements - AR submitted that fees have been levied for the period prior to 01.06.2015 - HELD THAT:- We find that a view favorable to the assessee has been taken by in recent decision titled as United Metals V/s ITO [2021 (12) TMI 1349 - KERALA HIGH COURT] following its earlier decision in Sarala Memorial Hospital V/s UOI [2018 (12) TMI 1818 - KERALA HIGH COURT] which is stated to have attained finality.
Similar view favorable to assessee has been taken in its recent decision titled as M/s. DRG Rexine Inc. V/s ACIT [2022 (2) TMI 1404 - ITAT CHENNAI] following the case law of Fatehraj Singhvi V/s UOI [2016 (9) TMI 964 - KARNATAKA HIGH COURT].
Admittedly, there is no decision by Hon'ble High Court of Madras. In such a case, an analogy could be drawn from the decision of Hon'ble Supreme Court in CIT V/s Vegetable products Ltd. [1973 (1) TMI 1 - SUPREME COURT] for the conclusion that in case of two reasonable constructions of taxing statutes, the one that favors the assessee must be adopted.
Respectfully following the same, we would hold that a view favorable to the assessee was to be adopted and therefore, the levy of fees u/s. 234E for any period prior to 01/06/2015 would not be sustainable in the eyes of law. We order so. In the result, the fees levied by TDS officer u/s. 234E for Financial Years 2013-14 & 2014-15 could not be sustained - Assessee appeal allowed.
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2022 (5) TMI 1601 - ITAT CHENNAI
Rectification of mistake - validity of Revision u/s 263 as barred by limitation u/s.153(5) - order of fresh assessment in pursuance of an order u/s 263 setting aside or cancelling an assessment, may be made at any time before the expiry of 9 months from the end of the financial year - DR submitted that the Tribunal has erred in considering the amended provisions of Sec.153(3) since the new time-line has come into force only w.e.f. 01.06.2016 by Finance Act, 2016. It has been submitted that the order u/s 263 was passed on 19.12.2014.
HELD THAT:- We are of the prima-facie opinion that it appears to be a case of wrong application of law which would require our interference u/s 254(2). Accordingly, the order stand recalled. The registry is directed to fix the appeal for fresh hearing before regular bench after intimating both the sides.
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2022 (5) TMI 1600 - SUPREME COURT
Seeking further time to file counter affidavit - HELD THAT:- Records reveal that vide order dt. 17.1.2020, Hon'ble Court had been pleased to grant time to the sole respondent for filing counter affidavit, which they failed to do; as such, prayer for further time stands refused.
Appellant has filed affidavit of valuation as well as ad valorem court fee - Registry to process the matter for listing before the Hon'ble Court as per rules.
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2022 (5) TMI 1599 - ITAT CUTTACK
Depreciation on commercial vehicle - @30% or 15% - AO observed that since the assessee’s own business is transportation and the commercial vehicles as per the fixed assets/depreciation schedule are used in the assessee’s business, therefore, depreciation @ 15% is required to be allowed as against 30% claimed by the assessee - CIT(A) allowed depreciation @ 30% - HELD THAT:- DR could not controvert the findings of fact that as per circular No.652 dated 14.6.1993, the motor lorries used in assessee’s business of transportation of goods on hire is eligible for higher depreciation @ 30%.
No reason to interfere with the order of the ld CIT(A), which is hereby confirmed and the ground of appeal of revenue is rejected.
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2022 (5) TMI 1598 - ITAT CHANDIGARH
Rectification of mistake - maintainability of appeal before ITAT on low tax effect - as per DR appeal of the Department was dismissed by considering the low tax effect while the tax effect in this case was above the monetary limit as prescribed - HELD THAT:- After considering the submissions of both the parties and the material available on the record it is noticed that inadvertently and due to oversight the tax effect in the aforesaid referred to departmental appeal was wrongly considered as less than Rs. 50,00,000/- and the appeal of the Department was dismissed by keeping in view the CBDT Circular No. 17/2019 dt. 08/08/2019. As the mistake is apparent from the record, therefore, we recall the order [2019 (8) TMI 1885 - ITAT CHANDIGARH] and direct the Registry to fix the said appeal on 27/07/2022 before the regular Bench.
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2022 (5) TMI 1597 - CUSTOMS AUTHORITY FOR ADVANCE RULINGS, MUMBAI
Classification of import goods - clear float glass having absorbent layer - Eligibility of exemption notification no. 46/2011-Cus. : dated 01.06.2011 - wrong mention of HS code in the COO - HELD THAT:- The subject goods are clear float glass, with an absorbent layer, which is fluorescent under UV illumination. The subject goods are not wired, tinted or green in colour. The heading 7005 10 covers non-wired glasses having an absorbent, reflecting or non-reflecting layer and the headings 7005 21 to 7005 29 deal with non-wired glasses which are tinted having absorbent layer, pacified, flashed etc. Therefore, the subject goods are appropriately covered under sub-heading 7005 1090. Based on the applicant's submission about the country of origin and the manufacturer of the subject goods, benefits under sr. no. 934 of the table annexed to the exemption notification no. 46/2011-Cus. : dated 01.06.2011, would be available, subject to the condition that in respect of each case of import, the applicant would have to produce evidence before the Deputy/Assistant Commissioner of Customs as to the origin of subject goods.
While the reasons for adopting the HS code 7005 2990 in the export documents is not clear, the communication from MITI makes it clear that as the organisation responsible for issuing COO certificates, their expertise is not in classification and they would abide by any decision in this regard by Indian or Royal Malaysian Customs.
Whether the benefits of the relevant notification would be allowed to the applicant if the COO certificate do not mention the HS code as 7005 1090? - HELD THAT:- There is no dispute that when goods are being imported into India the classification would have to comply with Indian laws. If the classification of the subject goods under sub-heading 7005 1090 is correct, as suggested by the applicant and concurred by the Jurisdictional Commissioner of Customs, it would be a travesty of justice to deny the benefit of an exemption available to that sub-heading - if the subject goods are classifiable under the sub-heading 7005 1090 based on their nature, characteristics & properties, then they would remain eligible for the afore mentioned exemption irrespective of the HS code mentioned in the COOs.
Thus, the subject goods 'Clear Float Glass' with absorbent layer on only one side would merit classification under heading 70.05 and more specifically, under subheading 70051090 of the first schedule to the Customs Tariff Act, 1975. The said imports shall also be governed by the provisions of Notification No. 37/2020-Customs (ADD) : dated 11.11.2020, that seeks to impose definitive anti-dumping duty on Clear Float Glass, originating in or exported from Malaysia and imported into India. Further, the benefit of Sr. No. 934 of the table appended to the notification no. 46/2011-Cus. : , dated 01.06.2011, shall be extended to the subject goods in terms of the said notification, provided the applicant in each case of import shall produce evidence as to the origin of subject goods before the Deputy/Assistant Commissioner of Customs.
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2022 (5) TMI 1596 - ITAT MUMBAI
Nature of expenses - Club Entrance/Subscription fees as made to promote business interest is an allowable expenditure - See assessee own case by following the decision of Otis Elevator Co (I) Ltd. v. CIT [1991 (4) TMI 53 - BOMBAY HIGH COURT].
Capital gain tax liability - Amount received on surrender of transferable Development Right - Determination of value as determined by valuer - HELD THAT:- The opinion expressed by the valuer in the valuation report submitted by the Assessee has its basis in the practical difficulties faced while valuing the capital assets acquired before 1981 on the basis of instances of sale. This was also recognized by the legislature. In order to remove the genuine difficulties in computing the capital gains in respect of transfer immovable property including property acquired before 01.04.1981 due to non-availability of relevant information for computation of fair market value of such asset as on 01.04.1981, Section 55 of the Act was amended by the Finance Act, 2017 shifting the base year from 1981 to 2001 with effect from Assessment Year 2018-19.
In our view, AO erred in simply rejecting the valuation report without point out any flaw in the methods adopted by the valuer to estimate the fair market value and/or bringing on record any material to support that value of INR 260 per Sq Mrts adopted by the AO represents the fair estimation of market value.
We hold that the AO was not justified in rejecting the valuation report submitted by the Assessee. Accordingly, we direct the AO to determine the capital gains tax liability of the Assessee by taking the value of INR 2,29,81,000/- Per Sq. Mtrs determined by the valuer in the valuation report dated 08.07.2006 submitted by the Assessee as the cost of acquisition of TDRs.
Nature of receipts - Sales tax subsidy taxability in computing the total income under normal provisions - Relevance of judicial precedents - HELD THAT:- Judicial precedents rendered in the context of an assessee enjoying incentives under scheme offered by one state cannot be applied in case of another assessee availing benefit of scheme of another state unless the purpose and provisions of scheme are similar which can be determined on examination of the schemes.
In identical facts and circumstances, the Tribunal has, for the Assessment Year 2002-03 held that the CIT(A) fell in error in adjudicating the issue without first examining/analyzing the nature of incentive scheme which pertain to different states and has set aside the issue to the file of AO. We are agreement with the aforesaid decision of the Tribunal. Accordingly, we set aside the issue to the file of CIT(A) for fresh adjudication after calling remand report from the AO and giving reasonable opportunity of being heard to the Assessee.
MAT computation - inclusion/exclusion of Sales Tax Subsidy while computing book profit u/s 115JB - HELD THAT:- We have remanded the issue to the file of CIT(A) for determination of the nature of Sales Tax Subsidy being capital or revenue in nature for the purpose of computing income under the normal provision of the Act. The determination of this issue would be relevant for adjudication of Additional Ground No. 2. Accordingly, this issue is also remanded to the file of CIT(A) for adjudication.
Nature of expenses - expenditure on Jukehi Raod at Kymore - HELD THAT:- As the impugned expenditure did not result in creation of any asset of enduring nature to the appellant since the ownership vests with the Government of Madhya Pradesh. Therefore, respectfully following the decision of Hon‟ble Apex Court in the case of Associated Cement Companies Ltd [1988 (5) TMI 2 - SUPREME COURT] and the orders of my predecessor from A.Y. 1994-95 to AY 1998-99 as well as my own order for A.Y. 2001-02, the addition made by Assessing Officer is deleted and Assessing Officer is directed to withdraw depreciation allowed @ 5% in the assessment order. Hence this ground of appeal is allowed.
Nature of expenses - Expenditure of Dry Fly Ash Handing System at Madukkarai - HELD THAT:- Admittedly the Assessee is not the owner of the Dry Flash Ash Handling System. The expenditure did not result in creation of any asset of enduring nature and was incurred for smooth running of the business. Accordingly, applying the principles laid down in the CIT Vs. Associated Cement Companies Ltd [1988 (5) TMI 2 - SUPREME COURT], and CIT v. Madras Auto Services (P) Ltd [1998 (8) TMI 1 - SUPREME COURT], we confirm the order of CIT(A) of allowing deduction holding the same to be revenue in nature.
Provision for Director's Retirement Benefit - We confirm the order of CIT(A) of allowing deduction holding the same to be a liability in praesenti to be discharged at future, capable of being estimated with reasonable certainty.
Addition made in respect of provision for bad and doubtful debts in computation of "book profit u/s 115JB - HELD THAT:- We remand this issue to the file of Assessing Officer for fresh determination, keeping in view, the provisions of clause (i) to Explanation 1 to Section 115JB(2) inserted by the Finance Act, 2009, with retrospective effect from 01.04.2001, and the principles enunciated in the case of CIT v. Vodafone Essar Gujarat Ltd. [2017 (8) TMI 451 - GUJARAT HIGH COURT] In view of the aforesaid directions, Ground stands disposed off.
Addition of Wealth-Tax in computation of Book Profit u/s 115JB is to be deleted.
Claim of provision for normal & additional gratuity in computation of book profit u/s 115JB - Provision for Normal/Additional Gratuity is in the nature of provision for an ascertained liability and is, therefore, not required to be added back while computing Book Profits in terms of Clause (c) of Explanation 1 to Section 115JB(2).
Leave Encashment in computation of book profit u/s 115JB - CIT(A) has granted relief to the Assessee by following the judgment of the Hon‟ble Supreme Court in the case of Bharat Earth Movers [2000 (8) TMI 4 - SUPREME COURT] and Echjay Forgins (P) Ltd. [2001 (2) TMI 56 - BOMBAY HIGH COURT] No infirmity in the order passed by the CIT(A) to the extent it holds that provision for Leave Encashment is in the nature of provision for ascertained liability created on the basis of actuarial valuation and is, therefore, not required to be added back while computing Book Profits in terms of Clause (c) of Explanation 1 to Section 115JB(2).
Provision for Director's Retirement Benefit in computation of book profit u/s 115JB - HELD THAT:- As provision for director‟s retirement benefit cannot be considered as unascertained liability since the same has been calculated on the basis of actuarial valuation and is squarely covered by the decision of Bharat Earth Movers [2000 (8) TMI 4 - SUPREME COURT]. Therefore, provision for director‟s retirement is an allowable deduction in computing profits and gains of business or profession. Further, additions made in computing book profit u/s 115JB on the ground that the same has been added back in the computing total income under normal provisions of the Act is not tenable. Thus addition made by the Assessing Officer is deleted
Provision for Contingencies in computation of book profit u/s 115JB - We remand the issue back to the file of the AO for fresh adjudication keeping in view the provisions of Clause (i) to Explanation 1 to Section 115JB(2) of the Act and after giving Assessee an opportunity of being heard.
Provision for Technical Fees, Royalty and Interest is not required to be added back while computing Book Profit under Section 115JB - In the present case the books of accounts have been accepted by the Assessing Officer and therefore, the AO only has limited power to increase/decrease of book profits in terms of Explanation to Section 115JB of the Act. Provision for Technical Fees, Royalty and Interest is not a provision made for unascertained liability and does not fall within the ambit of any of the clauses of Explanation to Section 115JB of the Act.
Addition made in respect of revenue generated from trial run production in computation of book profit u/s 115JB is to be deleted as Expenditure incurred during the construction period” which is issued by the Institute of Chartered Accountant of India, which is an authoritative body in the matter of laying down the accounting standard. That being so addition made by the Assessing Officer on the ground that the same has been added back in computing income under normal provisions of the Act and the said amount should have been credited in the profit and loss account is neither justified nor tenable.
Expenses on VRS pertaining to earlier years in computation of book profit u/s 115JB is to be allowed as applying the principles laid down in the case of Apollo Tyres Ltd. [2002 (5) TMI 5 - SUPREME COURT] he accounts of the Assessee have been prepared in accordance with Parts II and III of Schedule VI to the Companies Act and the same has been duly certified by the statutory auditors, and therefore, in absence of any specific clause in Section 115JB(2) of the Act providing for increase of Book Profits by the amount of VRS expenses, no further adjustment is called for on this account. In the immediately preceding assessment year (AY 2003-04)[2019 (3) TMI 2041 - ITAT MUMBAI] identical issue has been decided in favour of the Assessee
Capital expenditure debited to Profit & Loss Account is not required to be added back while computing book profits u/s 115JB.
Deferred revenue expenditure debited to Profit & Loss Account is not required to be added back while computing book profits u/s 115JB.
Profit on sale of fixed assets in computation of book profit u/s 115JB - HELD THAT:- Since this issue has been decided against the Assessee in the assessee‟s own case [2019 (3) TMI 2041 - ITAT MUMBAI] therefore, the finding of the CIT(A) on this issue is hereby ordered to be set aside and we allow the claim of the revenue for the addition of said amount while computing the book profit u/s 115JB.
Expenditure on Jukehi Road, at Kymore and Dry Fly Ash Handing System at Madukkarai in computation of book profit u/s 115JB - While disposing of Ground No. 4 and 5, we have confirmed the order of CIT(A) holding that the aforesaid expenditure are not capital in nature and therefore, deduction for the same is allowed while computing income under normal provisions of the Act. The very basis on which the Assessing Officer had added the aforesaid expenditures while computing book profits under Section 115JB of the Act does not hold good. In view of the aforesaid, we confirm the order passed by CIT(A) on this issue.
Amount transferred from Share Premium Account to the profit & loss account was correctly reduced from Book Profits by the Assessee while computing book profit as per the provisions of Clause (i) of Explanation to Section 115JB(2).
Provision for additional gratuity is a provision for ascertained liability. CIT(A) has not erred in allowing the assessee's claim of additional gratuity
Disallowance u/s 14A - HELD THAT:- We note that the CIT(A) has, while granted relief to the Assessee has, after taking into account details of investments, own funds and borrowed funds furnished by the Assessee, returned a factual finding that the dividend income received during the year pertained to investments made by the Assessee in the earlier years out of its own funds and therefore the question of assuming that the such dividend income pertained to investments made from borrowed funds does not arise. In the appellate proceedings before us, nothing has been placed before us to establish that the aforesaid finding returned by CIT(A) is incorrect/perverse. Accordingly, we confirmed the order of CIT(A) on this issue.
Setting off of unabsorbed depreciation of the current previous year with long term capital gain of the current previous year instead of setting it off with long term capital loss brought forward from earlier years - HELD THAT:- The assessee wanted to set off in future but the Assessing Officer declined the claim of the assessee on account of this fact that the claim is against provision of income tax. The CIT(A) has also declined the claim of the assessee on the basis of this fact that Section 71 deals with inter head adjustment and have precedence over section 74 of the Act. Nothing seems to contrary to the law. No law in support of the claim of assessee has been produced before us, therefore, taking into account, all the facts and circumstances, we are of the view that the CIT(A) has decided the matter of controversy judiciously and correctly which is not liable to be interfere with at this appellate stage.
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2022 (5) TMI 1595 - NATIONAL ANTI-PROFITEERING AUTHORITY
Profiteering - supply of goods - benefit of GST rate reduction had been passed on to the recipients by way of commensurate reduction in the prices of the subject goods or not - HELD THAT:- The Report of the DGAP stating that the Respondent has not violated the provisions of Section 171 of the CGST Act cannot be accepted and accordingly, the same is rejected and the DGAP is directed to reinvestigate the case as per the provisions of rule 133 (4) of the CGST Rules, 2017 on the following issues and submit a fresh Report as per the provisions of Rule 129:
(i) Whether the Respondent has reduced, refixed and displayed the MRPs of the impacted SKUs commensurately w.e.f. 15-11-2017, after the rate of tax was reduced on them and conveyed the same to his Dealers i.e. Distributors/Wholesalers/Retailers by whatever name known?
(ii) Whether the Respondent has affixed stickers or stamped or online printed the reduced MRPs on the stock lying with him or his Dealers as on 15-11-2017 and thus passed on the benefit of tax reduction on it?
(iii) Whether the Respondent has charged 18% GST after rate reduction on the impacted SKUs after rate reduction?
(iv) On which grounds the Respondent has increased the base prices of his products in the month of November, 2017 immediately after the tax reduction on 15-11-2017?
(v) What evidence regarding increase in the prices of Crude Oil is available on the basis of which it has been claimed that the Respondent has increased his prices due to the increase in the prices of the Crude Oil?
(iv) Whether the Respondent has violated the provisions of section 171 of the Act and if so what is the quantum of profiteering?
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2022 (5) TMI 1594 - NATIONAL ANTI-PROFITEERING AUTHORITY
Profiteering - purchase of a flat in the Respondent's project "Samyama City Tower 1-D" - Respondent had not passed on the benefit of Input Tax Credit (ITC) by way of commensurate reduction in the prices - contravention of section 171 of the CGST Act, 2017 - HELD THAT:- RERA approval of the project Samyama City Tower 1-D was given for the period 8-1-2018 to 31-3-2023, that all bookings and fixation of price have been made after GST was introduced and that all payments have been received after 1-7-2017; as such in the given facts and circumstances, the Authority finds that no case of profiteering under section 171(1) of the CGST Act, 2017 can be made out against the Respondent in respect of "Samyama City Tower 1-D".
However, the Authority finds that the Respondent is also executing other nine projects and the issue of profiteering has not been examined by the DGAP in respect of them. In view of the observation made in the earlier paragraph, the Authority finds that there exists reason to investigate other nine projects for the purpose of determination of profiteering. Accordingly, this Authority as per the provisions of Section 171(2) of the above Act take suo motu cognizance of the same and in terms of Rule 133(5) of the said Rules, directs the DGAP to conduct investigation in respect of the other nine projects and submit Report to this Authority for determination whether the Respondent is liable to pass on the benefit of ITC in respect of the other 9 projects/towers as mentioned in Table-B' of the DGAP's Report to the buyers or not as per the provisions of Section 171 (1) of the above Act.
This Order having been passed today falls within the limitation prescribed under Rule 133(1) of the CGST Rules, 2017.
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2022 (5) TMI 1593 - SUPREME COURT
Murder - case of the prosecution herein has remained that the Trial Court and the High Court have rightly convicted A2 since the prosecution could successfully establish that there was a motive for the murder - HELD THAT:- The conviction of A2 is based only upon circumstantial evidence. Hence, in order to sustain a conviction, it is imperative that the chain of circumstances is complete, cogent and coherent. This court has consistently held in a long line of cases that where a case rests squarely on circumstantial evidence, the inference of guilt can be justified only when all the incriminating facts and circumstances are found to be incompatible with the innocence of the accused. The circumstances from which an inference as to the guilt of the accused is drawn have to be proved beyond reasonable doubt and have to be shown to be closely connected with the principal fact sought to be inferred from those circumstances.
In Bhagat Ram v. State of Punjab [1954 (2) TMI 24 - SUPREME COURT], it was laid down that where the case depends upon the conclusion drawn from circumstances, the cumulative effect of the circumstances must be such as to negate the innocence of the accused and bring the offence home beyond any reasonable doubt.
Upon thorough application of the above settled law on the facts of the present case, it is held that the circumstantial evidence against the present appellant i.e. A2 does not conclusively establish the guilt of A2 in committing the murder of the deceased children. The last seen theory, the arrest of the accused, the recovery of material objects and the call details produced, do not conclusively complete the chain of evidence and do not establish the fact that A2 committed the murder of the children of PW5 - The High Court fell in grave error when it fallaciously drew dubious inferences from the details of the call records of A1 and A2 that were produced before them. The High Court inferred from the call details of A2 and A1 that they shared an abnormally close intimate relation. The court further inferred from this, that unless they had been madly in love with each other, such chatting for hours would not have taken place.
The electronic evidence produced before the High Court should have been in accordance with the statute and should have complied with the certification requirement, for it to be admissible in the court of law. As rightly stated above, Oral evidence in the place of such certificate, as is the case in the present matter, cannot possibly suffice as Section 65B(4) is a mandatory requirement of the law.
To conclude, the tripod stand of Motive, Last Seen Theory and Recovery, that supported the conviction of A2 according to the High Court, is found to be nonconclusive and the evidence supporting the conviction of A2 is marred with inconsistencies and contradictions, thereby making it impossible to sustain a conviction solely on such circumstantial evidence.
The impugned order of the High Court is set aside to the extent that it convicts A2 under section 302 and 364 of the Indian Penal Code - Appeal allowed.
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2022 (5) TMI 1592 - DELHI HIGH COURT
Grant of Anticipatory bail - parties have already arrived at a settlement and the respondent no.2 has already received the full and final settlement amount - HELD THAT:- It is noted that the co-ordinate Bench of this court in Noor Salim Rana & Ors. v. State (govt of NCT of Delhi) & Anr. [2016 (1) TMI 1503 - DELHI HIGH COURT] observed that pursuing of prosecution even after compromise between the parties would be contrary to securing the ends of justice; and exercised its power under Section 482 CrPC in FIR no.70/2009 under Sections 365/364A/328/344/120B/174A/34 IPC PS Nabi Karim and quashed the FIR and the proceedings emanating therefrom.
Considering the fact that disputes between the parties have already been settled and the respondent no.2 has already received an amount of Rs.2,25,000/-, in full and final, pursuant to settlement, it is opined that bringing these proceedings to an end would only further the ends of justice.
Petition disposed off.
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2022 (5) TMI 1591 - ITAT DELHI
Disallowance u/s 14A r.w.r. 8D - assessee company has made certain investments in shares/mutual funds/bonds etc. out of the funds either borrowed by the assessee or from company own sources - HELD THAT:- In the absence of any material change and legal proposition in assessee own case [2021 (9) TMI 168 - ITAT DELHI].for A.Y. 2014-15 we hereby direct that only the investments which yielded the exempt income be considered for disallowance u/s 14A.
Claim of Depreciation on software - @ 25% or 60% - HELD THAT:- This issue has been dealt by the Co-ordinate Bench of ITAT in assessee’s own case in. [2021 (9) TMI 168 - ITAT DELHI] for A.Y. 2014-15 wherein held since, the matter of software utilized in content production, the software embedded with hardware is an integral part of the computer equipment, the issue has been repetitively held in favour of the assessee - claim depreciation on software claimed @ 60% by the assessee allowed.
Interest on Late Deposit of FBT, penalty on service tax and interest on late deposit of service tax - HELD THAT:- Hon’ble Apex Court observations in this regard in the case of Lachmandas Mathura Vs. CIT [1997 (12) TMI 16 - SUPREME COURT] held that interest on arrears of tax is compensatory in nature and not penal.
Thus interest on late deposit of FBT, penalty on service tax and interest on late deposit of service tax is allowable Decided in favour of assessee.
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2022 (5) TMI 1590 - ITAT MUMBAI
Delay in deposit of PF and ESIC - ‘due date’ determination - employee contribution of provident fund(PF) and ESIC was disallowed u/s 36(1)(va) as delay in deposits - assessee has deposited the amount before filing of the return of income u/sec 139(1) - HELD THAT:- We considering the overall facts, circumstances and the submissions find on the similar issue, the Co- ordinate Bench of this Hon’ble Tribunal in M/s Kalpesh Synthetics Pvt Ltd [2022 (5) TMI 461 - ITAT MUMBAI] when the due date under Explanation to Section 36(1)(va) is judicially held to be not decisive for determining the disallowance in the computation of total income, there is no good reason to proceed on the basis that the payments having been made after this due date is “indicative” of the disallowance of expenditure in question. While preparing the tax audit report, the auditor is expected to report the information as per the provisions of the Act, and the tax auditor has done that, but that information ceases to be relevant because, in terms of the law laid down by Hon’ble Courts, which binds all of us as much as the enacted legislation does, the said disallowance does not come into play when the payment is made well before the due date of filing the income tax return under section 139(1). Viewed thus also, the impugned adjustment is vitiated in law, and we must delete the same for this short reason as well.
Also we are of the reasoned view that the amendment to section 36(1)(va) of the Act will not be applicable to assessment year 2018-19. The assessee has deposited the employee’s contribution of Provident fund & ESIC before the due date of return of income u/sec 139(1) of the Act. Accordingly, we set-aside the order of the CIT(A) and direct the assessing officer to delete the disallowance and allow the grounds of appeal in favour of the assessee.
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2022 (5) TMI 1589 - ITAT MUMBAI
Income taxable in India - royalty receipts - India-UK DTAA - HELD THAT:- Hon’ble Tribunal in assessee’s own case in [2020 (10) TMI 1188 - ITAT MUMBAI] Since the facts and circumstances in this year remain the same as in the past years, which has been considered by the Tribunal, we find no reason to distract from the earlier decision of the Tribunal. Pertinently, it is also not the case of the Revenue that there is any change in the nature of the income being earned by the assessee from TCL than that considered by the Tribunal in its order (supra). Therefore, following the precedent in assessee’s own case for Assessment Years 2000- 01 to 2005- 06, the stand of the assessee has to be approved as receipts from TCL are in the nature of “business profits” covered by Article 7 of the India-UK DTAA and, in the absence of any PE in India, the same are not taxable in India. Decided in favour of assessee.
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