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Showing 61 to 80 of 1628 Records
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2022 (5) TMI 1568 - DELHI HIGH COURT
Exemption u/s 11 - Claim denied as activities are commercial in nature and cannot be held to be charitable in view of the proviso (ii) to section 2(15) - ITAT allowed deduction - ITAT allowing the claim of accumulated funds u/s 11 (2) in absence of benefit of exemption u/s 11 and 10(23) - HELD THAT:- Appellant fairly admits that the first question of law is covered by the decision of this Court [2018 (3) TMI 1601 - DELHI HIGH COURT] in favour of the assessee. Also admits that the second question of law is a consequential question of law and accordingly, the same stands covered by the aforesaid judgment.
Application of income on the account of depreciation - The third proposed question of law is also covered by the decision passed in Rajasthan & Gujarati Charitable Foundation Poona [2017 (12) TMI 1067 - SUPREME COURT].
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2022 (5) TMI 1567 - ITAT DELHI
TP Adjustment - interest on outstanding inter-company receivables - TPO estimated the delay on estimated average of outstanding receivables of 6 months and calculated interest for 182 days @ 4.31% (LIBOR + 400 basic points) - HELD THAT:- The decision of Hon’ble Delhi High Court in the case of Kusum Healthcare [2017 (4) TMI 1254 - DELHI HIGH COURT] is still the binding precedent on the issue of interest on outstanding receivables as held with the Assessee having already factored in the impact of the receivables on the working capital and thereby on its pricing/profitability vis-a-vis that of its comparables, any further adjustment only on the basis of the outstanding receivables would have distorted the picture and re-characterized the transaction.
Needless to mention that the law laid down by the Hon’ble High Court in the case of Kusum Healthcare was followed by the Co-ordinate Benches of the ITAT.
There is complete uniformity in the act of the assessee in not charging interest from both the AE and Non AE debtors and the delay in realization of the export proceeds in both the cases is same. Reliance is being placed on the decision of case of Indo American Jewellery Ltd. [2013 (1) TMI 804 - BOMBAY HIGH COURT]. Thus neither interest has been charged nor paid, we hereby allow the appeal of the assessee on this ground.
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2022 (5) TMI 1566 - ITAT DELHI
Delayed deposit of employee’s contribution towards provident fund and ESI fund - intimation issued by CPC as contribution received towards PF/ESIC by the assessee from its employees was not deposited before the due date - as submitted that since the amounts have been deposited before the filing of return of income, no disallowance is called for - HELD THAT:- The issue is no more res-integra. The issue has already been settled in favour of the assessee by various judicial pronouncements by the Tribunal. As in the case of PCIT vs Pro Interactive Service (India) Pvt. Ltd. [2018 (9) TMI 2009 - DELHI HIGH COURT] held amount paid is allowed as an expenditure only when payment is actually made. We do not think that the legislative intent and objective is to treat belated payment of Employee’s Provident Fund (EPD) and Employee’s State Insurance Scheme (ESI) as deemed income of the employer under section 2(23)(x).
AO was not justified in denying the deduction claimed by the assessee on account of late deposit of PF/ESI/EPF, albeit before filing the return of income.
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2022 (5) TMI 1565 - ITAT MUMBAI
Delayed Employees contribution to Provident Fund and ESI - due date determination - amounts were not remitted within the due date prescribed u/s. 36(1)(va) but were remitted before the due date of filing of income tax returns u/s. 139(1) - intimation u/s 143(1) - HELD THAT:- It is not in dispute that assessee had remitted the employees’ contribution of PF & ESI with much before the due date of filing of return u/s. 139(1) of the Act, though the same has been remitted belatedly beyond the due dates specified under the respective PF & ESI Acts. We find that this issue is no longer res integra in view of the recent decision in the case of Kalpesh Synthetics Pvt. Ltd[2022 (5) TMI 461 - ITAT MUMBAI] “For the purposes of this clause, ‘due date’ means the date by which the assessee is required as an employer to credit an employee's contribution to the employee's account in the relevant fund under any Act, rule, order or notification issued thereunder or under any standing order, award, contract of service or otherwise”, one cannot find fault in what has been reported in the tax audit report. It is not even an expression of opinion about the allowability of deduction or otherwise; it is just a factual report about the fact of payments and the fact of the due date as per the Explanation to Section 36(1)(va).
This due date, however, has not been found to be decisive in the light of the law laid down by Hon'ble Courts above, and it cannot, therefore, be said that the reporting of payment beyond this due date in the tax audit report constituted “disallowance of expenditure indicated in the audit report but not taking into account in the computation of total income in the return” as is sine qua non for disallowance of Section 143(1)(a)(iv).
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.
The impugned adjustment in the course of processing of return under section 143(1) is vitiated in law, and we delete the same.
We find that the law prevailing prior to A.Y.2021-22 would rule the field and the case laws rendered by various High Courts would rule the field. Prior to the amendment, the Hon’ble Jurisdictional High Court in the case of CIT vs. Ghatge Patil Transport Ltd. [2014 (10) TMI 402 - BOMBAY HIGH COURT] had held that employees contribution to PF & ESI if remitted within the due date prescribed u/s. 139(1) of the Act for filing the income tax returns, would be allowed as deduction u/s. 43B of the Act.
This issue has been decided in favour of the assessee after considering various decisions of Hon’ble Supreme Court, High Court and this Tribunal in the case of Force Point Software Consulting India P. Ltd., [2022 (6) TMI 95 - ITAT MUMBAI] Decided in favour of assessee.
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2022 (5) TMI 1564 - ITAT DELHI
Deduction u/s 80P (2) (d) - receipt of dividend income from other cooperative societies - HELD THAT:- As case of the assessee that the assessee society has received dividend from other cooperative societies such as IFFCO and UP State Cooperative Bank, that being so, the dividend received from cooperative societies are expressly exempt u/s. 80P(2) (d). See assessee own case [2018 (7) TMI 2314 - ITAT DELHI] and [2018 (9) TMI 1172 - ITAT DELHI] - Decided in favour of assessee.
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2022 (5) TMI 1563 - ITAT BANGALORE
Delay in filing the appeal against the order levying interest u/s 234E - delay of 255 days - Covid -19 pandemic Lockdown situation - HELD THAT:- In Re: Cognizance for Extension of Limitation the Hon’ble Supreme Court [2021 (5) TMI 564 - SC ORDER] decided to extend the period of limitation of filing cases in various legal fora with effect from 14.03.2021 until further orders in view of hardships faced by litigants due to the alarming Covid-19 situation. It was directed vide order dated 23rd March, 2020 that the period of limitation in filing petitions/ applications/ suits/ appeals/ all other proceedings, irrespective of the period of limitation prescribed under the general or special laws, shall stand extended with effect from 15th March, 2020 till further orders
Apex Court on 23 September 2021 recalled the limitation extension w.e.f. 2 October 2021. However, the Apex Court was mindful in stating that the recall order was subject to the uncertainties pertaining to the third wave of Covid-19 pandemic. As India witnessed a sharp rise in the Covid-19 cases in January 2022, the Hon'ble Supreme Court decided to restore the limitation extension. As per the order of the Apex Court dated 10 January 2022, the period from 15 March 2020 to 28 February 2022 would stand excluded for the purpose of limitation.
It is therefore clear that even the Hon’ble Supreme Court has taken cognisance of the pandemic situation and extended the period of limitation. It is clear from the order of the CIT(A) that the notices in question were issued during the covid period and the Assessee’s contention that it could not respond to the notices in view of the pandemic situation has to be accepted as a reasonable cause. Appeals of the Assessee are allowed for statistical purposes.
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2022 (5) TMI 1562 - ITAT PUNE
Benefit of exemption u/s. 11 - receipts in the nature of Membership Fees, Program Fees, Publication Revenue, Certificate of Origin, Other activities, Activities and Prize Fund, Entrance Fees, Life Membership Fees and Use of facilities etc. - HELD THAT:- It is found that the CIT(A) has followed his orders for earlier years in order to allow the benefit to the assessee. Earlier years’ orders passed by the ld. first appellate authority came up for consideration before the Tribunal.
Vide order [2017 (9) TMI 1892 - ITAT PUNE]Tribunal for the assessment years 2010-11 and 2011-12 has countenanced the action of the CIT(A) in restoring the benefit of exemption as claimed in the returns. Once again, similar issue travelled to the Tribunal for the assessment years 2009-10 and 2012-13.
Vide order .[2018 (7) TMI 2313 - ITAT PUNE] Tribunal has re-affirmed such decision and dismissed the appeals filed by the Revenue. In view of the fact that the issue raised in this appeal is squarely covered in favour of the assessee by the orders passed in the assessee’s own case for earlier years, respectfully following the precedents, we uphold the impugned order.
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2022 (5) TMI 1561 - ITAT PUNE
Excess sugarcane price paid to the members & non-members - HELD THAT:- We find that the same issues have been adjudicated in the case of Karmaveer Shankarrao Kale Sahakari Sakhar Karkhana Ltd.[2020 (12) TMI 1330 - ITAT PUNE] wherein excess sugar cane price paid to Members and Non-members and the issue of sale of sugar at concessional rate to Members are remanded to the file of the ld. A.O for fresh adjudication for the purpose of giving effect to the directions of the Hon’ble Apex Court KRISHNA SAHAKARI SAKHAR KARKHANA LTD. [2012 (11) TMI 669 - SUPREME COURT] in its proper perspective. The ld. A.O shall comply with the principles of natural justice and adjudicate the issues as per law.
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2022 (5) TMI 1560 - ITAT BANGALORE
Two different and contradictory computation sheets computing total income - HELD THAT:- As any one of them will only survive it is a matter requiring verification, we restore this matter to the file of AO for verifying the claim of the assessee. Since the assessing officer is required to give effect to the order passed by this Tribunal, the grievance of the assessee may get redressed at that stage.
Nature of expenses - Capitalisation of Salaries and Wages - assessee herein has developed certain technologies and software platforms based on AI, IOT and Machine learning - AO noticed that the assessee has claimed all expenses incurred in development of these software products as revenue expenditure - HELD THAT:- The common practice followed by information technology companies is to expense all the expenses incurred on development of a software mean for sale/license/rent. We noticed earlier that, in the instant case, the applications developed under CTO projects are the products developed by the assessee for sale/license. These products are revenue assets. The development was complete in respect of first four products and the development work was continuing for the remaining two products. We noticed that the business of the assessee itself is development of software products or providing of software services and hence the revenue generated on their sales or providing of services is its income, in which case, the expenditure incurred on development of those applications shall constitute related expenditure.
Even if the expenditure does not result in creation of any successful software product/application/tool etc., considering the business nature of the assessee, those expenses shall constitute revenue expenditure in the hands of the assessee, as it is necessary for the assessee to keep updating itself and keep trying new products to be afloat in the competitive market - Thus we hold that the impugned expenses incurred by the assessee are allowable as revenue expenditure and accordingly, the disallowance made by the assessing officer could not be sustained.
TP Adjustment - Adjustment for interest on advances given to Overseas subsidiaries - HELD THAT:- We direct AO/TPO to adopt ALP rate of interest at Libor rate of relevant outstanding period of loan + 150 basis point. In the grounds of appeal, the assessee has pointed out that the TPO has computed annual interest on month end balances. As submitted that the month end balance of a particular month may include opening balance and it has resulted in duplication/multiplication. We have directed AO/TPO to compute interest for “the outstanding period of loan” only. Accordingly, the assessee is directed to furnish the outstanding period of each advances in order to enable AO/TPO to compute correct amount of interest.
TP Adjustment made in respect of corporate guarantee given by the assessee to its Associated Enterprises - HELD THAT:- As relying on in the assessee’s own case in AY 2011-12 to 2014-15 [2020 (10) TMI 605 - ITAT BANGALORE] we direct the AO/TPO to adopt the rate of guarantee commission @ 0.50% and accordingly delete the addition made by estimating the commission in excess of 0.50%.
TP adjustment - Specified Domestic Transaction (SDT) - HELD THAT:- This issue requires fresh examination at the end of TPO/AO by duly considering various other contentions of the assessee and also by considering the discussions.
Disallowance of expenses u/s 14A against exempt income - HELD THAT:- This issue has been restored by ITAT in assessment year 2008-09 to the file of the A.O. A perusal of the assessment order passed by A.O. would show that the A.O. has observed that he was not satisfied with the working furnished by the assessee. However, the A.O. has not examined the basis of the allocation and apportionment of expenses towards the exempt income. Hence, the coordinate bench has restored this issue to the file of the A.O. for examining it afresh. Accordingly, following the decision rendered by the coordinate bench, we restore this issue to the file of the A.O.
Taxability of Marked to Market income on reinstatement of forward contracts - HELD THAT:- An identical issue has been examined by the co-ordinate bench in the assessee’s own case in AY 2009-10 to 2014-15 [2020 (10) TMI 605 - ITAT BANGALORE] as noticed that the details of underlying assets in respect of outstanding forward contracts are not available on record. There should not be any doubt that the value of underlying assets (in the form of debtors, creditors and other monetary assets) as on the balance sheet date, against which the outstanding forward contracts have been taken, should be more than the value of outstanding forward contracts. In that case, the loss arising on restatement of forward contract is fully allowable as deduction. Since the AO has not examined this aspect, we are of the view that this issue needs to be restored to the file of the AO for the limited purpose of examining as to whether the value of underlying assets is more than the value of the forward contracts.
Setting off the loss arising from SEZ units against income earned by non-tax holiday units - HELD THAT:- An identical issue has been examined by the co-ordinate bench in the assessee’s own case in AY 2009-10 to 2014-15 [2020 (10) TMI 605 - ITAT BANGALORE] held that the loss arising in eligible SEZ/STPI undertakings are not required to be adjusted against the profits arising from other SEZ/STPI undertakings and the said loss can be adjusted against profits arising from non-SEZ/non-STPI units.
Taxability of profits from development centers located outside India - AO took the view that these development centres are independent units and accordingly estimated income from these centres and correspondingly reduced the said profit from the units eligible for deduction u/s 10A/10AA/10B - HELD THAT:- Remit this issue to the file of the A.O. for examining it afresh.
Exclusion of “other income” for the purpose of computing deduction u/s 10AA - HELD THAT:- We hold that the income generated on sale of scrap/newspaper should be included in the profits of the undertaking eligible for deduction u/s 10AA. In this year also, the break-up details of “Other income” are not available. Accordingly, we restore this issue to the file of AO with the direction to examine the break-up details of other income and decide the issue accordingly.
Deduction u/s 10A/10AA/10B of the Act in respect of interest income earned by the assessee - HELD THAT:- The assessee may be given an opportunity to show that the nexus between SEZ/STPI divisions and the fixed deposits from which interest income was earned. If the assessee is able to show the nexus to the satisfaction of the AO, then the interest income to that extent should be eligible for deduction u/s 10A/10AA/10B of the Act. With these observations, we restore this issue to the file of the AO for examining it afresh in the light of discussions made supra.
Eligibility of the assessee to claim deduction u/s 10AA of the Act for deemed exports, i.e., sales made to own units located in SEZs - HELD THAT:- As in the assessee’s own case in AY 2009-10 to 2014-15 we direct the A.O. to include deemed exports as part of turnover while computing deduction u/s 10A/10AA/10B.
Reimbursements received to be excluded from the export turnover for the purpose of computing deduction u/s 10A/10AA/10B - HELD THAT:- We noticed that during the year, the break-up details of reimbursements are not given in the assessment order. In the above said decision, detailed discussions have been made with regard to this issue. Accordingly, we restore this issue to the file of AO with the direction to obtain break-up details of reimbursements and follow the directions given in AY 2009-10 to 2014-15 for computing deduction u/s 10A/10AA/10B of the Act.
Expenditure incurred in foreign currency as deducted from the export turnover while computing deduction u/s 10A/10AA/10B - HELD THAT:- As expenditure incurred in development of software and which forms part of “direct cost of development of software” would not fall under the category of “technical services” or “services” rendered outside India, as contemplated in the definition of Export turnover. Hence the same is not required to be excluded from export turnover. Accordingly, what is required to be excluded is the expenses specifically mentioned in the definition of “export turnover”, viz., the expenditure incurred on freight, telecommunication charges or insurance attributable to the delivery of the computer software outside India or expenses, if any incurred in foreign exchange in providing technical services outside India alone are required to be excluded from the export turnover.
If any amount is excluded from “export turnover”, the same is required to be excluded from “total turnover” also, as held in the case of Tata Elixi Ltd [2011 (8) TMI 782 - KARNATAKA HIGH COURT] and HCL Technologies Ltd. [2018 (5) TMI 357 - SUPREME COURT] - we set aside the order passed by AO on this issue and direct him to compute deduction u/s 10A/10AA/10B of the Act following the discussions made supra.
Eligibility of the assessee to claim deduction u/s 10A of the Act in case of Delayed collections of export proceeds - HELD THAT:- We direct the AO to include sale amount in the Export turnover while computing deduction u/s 10A/10AA/10B of the Act, wherever the applications have been filed by the assessee to RBI through its bankers seeking permission to receive the export proceeds beyond the prescribed period.
Foreign tax credit - allowability of quantum of foreign tax credit - HELD THAT:- We set aside the order passed by AO on this issue and direct him to allow foreign tax credit claimed by the assessee in terms of the decision rendered by Hon’ble High Court of Karnataka [2015 (10) TMI 826 - KARNATAKA HIGH COURT]
FTC to be allowed as Business expenses - We direct the AO to allow the foreign tax paid by the assessee, to the extent not allowed as tax credit u/s 90 & 91 of the Act, as deduction from the business income of the assessee.
TDS u/s 195 - Disallowance of payment made u/s 40(a)(ia) for non-deduction of tax at source - HELD THAT:- We are of the view that this issue requires fresh examination at the end of AO. Accordingly we restore this issue to the file of the AO with the direction to examine this issue afresh applying the principles laid down in the case Engineering Analysis Centre of Excellence P Ltd. [2021 (3) TMI 138 - SUPREME COURT]. If the AO comes to the conclusion that the decision rendered by Hon’ble Supreme Court [supra] is applicable to the payments made to Gartner group and there is no requirement to deduct tax at source, then there is no requirement of making any disallowance u/s 40(a)(i) - if the AO comes to the conclusion that the above said decision of Hon’ble Supreme Court is not applicable and the assessee is liable to deduct tax at source, then the AO shall grant enhanced deduction u/s 10A/10AA/10B of the Act by increasing the profits of undertaking by the amount of disallowance so made.
Disallowance of interest expenditure incurred on investment in Foreign Subsidiary u/s 115BBD - HELD THAT:- We direct the AO to delete the disallowance u/s 115BD of the Act, if the assessee has not received any dividend during the year under consideration.
Deduction of Education Cess as expenditure - This ground is liable to rejected in view of the amendment brought in by Finance Act 2022 inserting specific provision in the Income tax Act providing for disallowance of Education Cess. Accordingly, we reject this ground.
Claim for credit of TDS credit on the basis of additional TDS certificates - AO did not grant TDS credit on the reasoning that the said TDS amount were not reflected in Form 26AS - HELD THAT:- The assessee cannot be penalised for the fault of the TDS deductor in not filing statement of TDS. It is also possible that the deductor of TDS would have filed the statement of TDS belatedly. Accordingly, we are of the view that this issue requires verification at the end of AO. Accordingly, we restore this issue to the file of AO with the direction to examine the claim of the assessee and allow TDS credit in accordance with law.
Addition of amount disallowed u/s 14A of the Act under clause (f) of Explanation 1 to sec. 115JB of the Act to the net profit for the purpose of computing book profit - HELD THAT:- An identical issue was examined by the co-ordinate bench in the assessee’s own case in AY 2014-15 [2020 (10) TMI 605 - ITAT BANGALORE] special bench of ITAT in the case of Vireet Investments Pvt. Ltd [2017 (6) TMI 1124 - ITAT DELHI] has expressed the view that the amount disallowed u/s 14A of the Act cannot be adopted for the purpose of computation of book profit u/s 115JB of the Act and the disallowance to be made u/s clause (f) to explanation 1 has to be computed independently without having regard to the provisions of section 14A - we are unable to sustain the addition made by the A.O. Since the addition required to be made under clause (f) to explanation 1 is required to be computed independently, we restore this issue to the file of the A.O. for examining it afresh.
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2022 (5) TMI 1559 - BOMBAY HIGH COURT
Refund claim - effect of name change - in whose name the refund should be issued? - According to Respondents, after the change of name of Petitioner, Petitioner ought to have filed revised returns to be entitled to a refund ? - HELD THAT:- The name change has been reflected in the records of the Income Tax Department. Notwithstanding this, Petitioner has been issued a notice dated 9th February, 2019 stating that the name mentioned in the return of income does not match with the name as per the PAN database and Petitioner has been advised to correct the name in the return of income as per PAN allotted to Petitioner.
PAN database correction would certainly indicate what was the original name and therefore, Petitioner’s name when it filed the return of income tax was the correct name as it then existed. Therefore, there can never be a defect and notice issued u/s 139(9) was not a valid notice. If only Assessing Officer had bothered to check the data base, he would have found answer and would not have to issue a notice thereby wasting precious time of the assessee, his own department and more importantly judicial time.
In these circumstances, notice dated 9th February, 2019 is hereby quashed and set aside.
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2022 (5) TMI 1558 - ITAT PUNE
TP Adjustment - comparable selection - Cybercom Datamatics Information Solutions Ltd. rejected as it is super abnormal profit making company and also it is into the diversified activities, apart from the software development services such as an advisor and consultant on IT/IT space - HELD THAT:- A perusal of the annual report of the said company clearly shows that it was engaged in providing technical software services, contrary to the assessee company which is engaged purely in rendering software development services. The financial statements of the said company do not give any segmental information between the technical services and software services. Further, this company was chosen by the TPO in the list of the comparables, the onus of proving the comparability lies upon the TPO. We also find that this company had reported super profit of 83.99% which is abnormally high profits, the TPO should have caused enquiry to ascertain whether such abnormally profits reflected normal business conditions or arising from abnormal conditions.Thus we direct the Assessing Officer/TPO to exclude this company from the list of comparables.
Thirdware Solutions Ltd. is a product development company which is quite different from a software services provider - Revenue from sale of licence is only 7.98 crores which is very-very minimal compared to the total revenue of Rs. 20,675.00 crores. Further, the balance sheet does not indicate the presence of any intangible assets or closing stock. Therefore, it cannot be said that this company cannot be compared with software development provider. Therefore, we do not find any merit in the contentions raised on behalf of the assessee company. Hence, we uphold the action of the AO/TPO/DRP in inclusion of this company in the list of comparables.
Infobeans Systems India Ltd rejected on the ground of earning super normal profits - Merely because the company is earning super normal profits cannot be excluded without enquire into whether the profits are earned under normal business conditions or abnormal business conditions. Reliance can be placed on case of CIT vs. Quark Systems India (P.) Ltd. approved by the Hon’ble Punjab & Haryana High Court [2011 (5) TMI 508 - PUNJAB AND HARYANA HIGH COURT] - Thus, we uphold the action of the Assessing Officer/TPO/DRP in inclusion of this company in the final list of the comparables.
Admission of additional ground - Exchange operations on account of foreign currency conversion - whether foreign exchange gain or loss should be considered as part of operating revenue while determining PLI of the assessee and the comparable companies? - HELD THAT:- Admittedly, the issue whether gain or loss arising out of foreign currency conversion is forming part of the income or loss is not subject-matter of proceedings before the lower authorities. Whether gain or loss arising out of conversion of foreign currency form part of the operating income or not is indicated question of fact and law as the gain or loss arising out on trading alone can form part of the operating income. Therefore, it requires examination and verification of the financial statements of the tested party as well as the comparable entities to form an opinion whether gain or loss arising out of foreign exchange fluctuation shall form part of the operating income or not?. Therefore, it cannot be said that it is a pure question of law as canvassed by the ld. AR for the appellant company.
Appellant contention is not based on the material on record in support of the additional ground of appeal. He could not establish that it is a pure question of law. Additional ground of appeal no.1 cannot be admitted for adjudication and hence, additional ground of appeal no.1 stands dismissed.
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2022 (5) TMI 1557 - SUPREME COURT
Constitutional validity of the provisions of Sections 130, 131, 134 and 140 of the Finance Act 2021 and certain provisions of the Life Insurance Corporation Act 1956 - process which led up to the enactment of the amendment to the Life Insurance Corporation Act through Parliament was on the basis that it was a Money Bill - existence of a prima facie case - balance of convenience - irreparable harm and injury.
HELD THAT:- On the construction of Section 28, the submission which has been made on behalf of the petitioners would warrant further deliberation. The Court has been apprised of the fact that as many as 73 lakh applicants, both from within India and beyond have subscribed to the IPO. The IPO has been over subscribed six times even in the category which has been specially reserved for policy holders.
It is necessary to note that (i) the dilution of the share holding of LIC as a result of the Offer for Sale is to the extent of 3.5%; (ii) 22.13 crore equity shares of a face value of Rs 10 each are being offered at a premium of INR 939; (iii) the expected receipts into the Consolidated Fund of India are estimated to be INR 20,500 crores; (iv) the IPO opened for anchor investors on 2 May 2022 and for members of the general public on 4 May 2022 and closed on 9 May 2022; and (v) the IPO has been over subscribed by 2.95 times by the general public, that is, net of anchor investors.
No case for the grant of interim relief has been made out - the interim relief is declined - petition dismissed.
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2022 (5) TMI 1556 - SC ORDER
Delay in payment to Income Declaration Scheme - Condonation of delay in making payment of first installment by the defaulters who have not paid any amount will now or further extending the date beyond the due date for regularising/ facilitating the payment of liabilities under IDS - power of the board u/s 119(2) - HELD THAT:- As petitioner submits that the case is actually covered as in terms of the Notification dated 13.12.2019 of the Ministry of Finance that all such people who defaulted in making payment were permitted to deposit the amount with 12 per cent interest. That amount with interest stands deposited in pursuance to order dated 22.04.2019 .[2019 (4) TMI 2108 - SC ORDER] albeit before this Court and has being kept in an interest bearing deposit.
Respondent seeks a short accommodation to obtain instructions in this behalf.
List on 18.05.2022.
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2022 (5) TMI 1555 - ITAT MUMBAI
Delayed employees contribution of PF and ESI - assessee deposited contribution with the state exchequer well before the filing of return of income as is evident from the tax audit report - HELD THAT:- As in case of CIT V. Ghatge Patil Transporters Ltd. [2014 (10) TMI 402 - BOMBAY HIGH COURT] by confirming the order passed by the Tribunal that deduction claimed by the assessee on account of employees contribution to PF & ESIC well before the due date of filing return of income is allowable deduction.
Since the amended provisions contained under section 43B read with section 36(1)(va) of the Act are not applicable for the year under consideration i.e. A.Y. 2018-19 as the amendment will be effective from A.Y. 2021-22 and the AO/ Ld. CIT(A) have erred in disallowing the same. Resultantly, impugned order passed by Ld. CIT(A) is not sustainable in the eyes of law hence set aside and AO is directed to allow the employees’ contribution deposited by the assessee well before filing the return of income - Appeal of assessee allowed.
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2022 (5) TMI 1554 - ITAT DELHI
Nature of expenses - License Fee - Revenue or capital expenditure - assessee company has paid an amount to the Government of India, Department of Telecommunication in consideration for grant of license to operate and provide the services - HELD THAT:- The issue has been consistently held as revenue expenditure by the ld. CITs(A) in earlier assessment years starting from 2006-07 to 2014-15. Further, this disallowance has been deleted by the Co-ordinate Bench of ITAT in the assessee’s case for A.Y. 2007-08 [2015 (1) TMI 924 - ITAT DELHI] wherein the ITAT held that license fee paid under the new revenue sharing regime effective from 01.08.1999 under the New Telecom Policy would be allowed as revenue expenditure.
Since, the decision of the ld. CIT(A) is based on the order of the Tribunal, we hereby decline to interfere with the order of the ld. CIT(A) on this issue. Decided against revenue.
TDS Credit on deferred revenue - AO disallowed TDS on deferred revenue by holding that if corresponding income is not taxable in a particular year, then corresponding credit for tax deducted may not be granted in view of section 199 in that year - AO held that merely because credit was claimed for tax deducted at source, it does not mean that the corresponding income is chargeable to tax - HELD THAT:- We find that this issue has been considered in assessee’s own for the A.Y. 2014-15 [2021 (8) TMI 1216 - ITAT DELHI] directing the revenue to allow the proportionate credit of TDS for the income declared during the year under consideration.
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2022 (5) TMI 1553 - ALLAHABAD HIGH COURT
Constitutional validity of Section 7 of the CGST Act/UPGST Act - declaration is that Section 7 read with Schedule II of the Central Goods and Service Tax Act, 2017 in so far as it includes the transaction of sale within the scope of supply and levy tax on such sales as ultra vires the Constitution, null and void - waiver of mandatory 10% deposit for filing an Appeal under Section 107 of U.P. GST Act, 2017 by the petitioner - Principles of Natural Justice.
HELD THAT:- By 101st Amendment in Constitution of India, a new Article 246-A was inserted with overriding effect to Articles 246 and 254 of the Constitution of India. By Clause (1) of Article 246-A, the Parliament, and, subject to clause (2), the Legislature of every State, have been empowered to make laws with respect to goods or services tax imposed by the Union or by such State. Clause (2) has given exclusive powers to the Parliament to make laws with respect to goods and services tax where the supply of goods, or of services, or both takes place in the course of inter-State trade or commerce - Prior to 101st Amendment to the Constitution of India, Entry 52 of List II - State List of the Seventh Schedule of the Constitution of India provided for "taxes on entry of goods into a local area for consumption, use or sale therein". Entry 54 of List II provided for "taxes on sale or purchase of goods other than newspaper, subject to the provisions of Entry 92-A of List I. Entry 55 of List II provided for "taxes on advertisements other than advertisements published in the newspapers and advertisements broadcast by radio or television". Entry 62 of List II provided for "taxes on luxuries including taxes on entertainment, amusements, betting and gambling".
Overall reading of 101st Amendment to the Constitution of India leaves no manner of doubt that Article 246-A and other relevant provisions were enacted by the Constitution (101st Amendment) Act, 2016 so as to bring the taxes on purchase and sale of goods, duties on excise and entertainment tax etc. under one umbrella by empowering the Parliament and the State Legislatures to enact laws with respect to taxes on supply of goods or services or both - Statement of Object and Reasons to the 101st Amendment to the Constitution of India and Statement of Object and Reasons of the Central Goods and Services Tax Act, 2017 and the U.P. Goods and Services Tax Act, 2017, leave no manner of doubt that these Acts were enacted as per powers conferred under Article 246-A of the Constitution of India so as to levy tax on all goods or services or both in place of multiplicity of taxes provided under the erstwhile Central Acts and State Acts levying taxes on purchase or sale of goods, entry tax, entertainment tax and duties on excise etc.
It is well settled that the court can look into the Statement of Objects and Reasons for the purposes of deciphering the object and purposes of the Act. Reference to background and circumstances in which the Act was passed is permissible for appreciating the mischief, the legislature had in mind and the remedy which it wanted to provide for preventing that mischief. Reference to object and reasons is permissible for understanding the background, the antecedent state of affairs, the surrounding circumstances in relation to the statute, and the evil which the statute sought to remedy - the Parliament does not lack legislative competence to enact Section 7 of the CGST Act levying tax on supply of goods or services or both. Likewise, in view of Article 246-A of the Constitution of India, State Legislature does not lack legislative competence to enact Section 7 of the UPGST Act.
In the case of PROMOTERS & BUILDERS ASSOCIATION OF PUNE VERSUS PUNE MUNICIPAL CORPORATION & ORS [2007 (5) TMI 601 - SUPREME COURT], Hon'ble Supreme Court has held that while exercising legislative function, unless unreasonableness and arbitrariness is pointed out it is not open for the Court to interfere.
While examining the challenge to the constitutionality of an enactment, the court is to start with the presumption of constitutionality and try to sustain its validity to the extent possible. The court cannot approach the enactment with a view to pick holes or to search for defects of drafting, much less inexactitude of language employed. An act made by the legislature represents the will of the people and that cannot be lightly interfered with. It is presumed that the legislature expresses wisdom of the community, does not intend to exceed its jurisdiction and correctly appreciates the need of its own people. In view of these settled principles and the discussions made above on legislative competence and presumption of constitutional validity, we hold that Section 7 of the CGST Act/UPGST Act does not suffer from lack of legislative competence. In other words, Section 7 of the CGST Act/UPGST Act is wholly valid - there are no merit in challenge to the constitutional validity of Section 7 of the CGST Act/UPGST Act. Therefore, the challenge to the constitutional validity of Section 7 of the CGST Act/UPGST Act is hereby rejected.
Principles of Natural Justice - HELD THAT:- The copies of all relied upon documents have been given by the Assessing Authority to the petitioner and he has also been allowed to inspect the records. Opportunity of hearing is also reflected from the notices including the notice dated 05.01.2022 in which the date, place and time for appearance has been informed to the petitioner by the Deputy Commissioner, Commercial Tax, Division-17, Ghaziabad - there are no substance in challenge to the impugned assessment order on the ground of alleged breach of principles of natural justice or provisions of Section 75(4) of the CGST Act/UPGST Act.
The writ petition is dismissed, leaving it open for the petitioner to challenge the impugned Assessment Order in appeal before the appellate authority, if so advised.
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2022 (5) TMI 1552 - RAJASTHAN HIGH COURT
Rejection of third bail application - offence under Section 132(1)(i) of Central Goods & Services Tax Act, 2017 read with 132(5) of CGST Act - petitioner has remained in custody for a period of about one year & four months and matter is still at the stage of pre charge evidence - HELD THAT:- This Court vide order dated 28.10.2021 had rejected the third bail application of the present petitioner on merits and except for the period of custody, there is no change in circumstance necessitating entertaining the present fourth bail application.
Considering the above, no ground is made out for entertaining the present fourth bail application - Bail application dismissed.
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2022 (5) TMI 1551 - ITAT DELHI
Cessation of liability as mentioned u/s 41(1) - AO treating the impugned amount to the seized/non-existence, because of the fact that the liability was being shown outstanding for many preceding years and the assessee could not provide confirmations from the respective creditors and also failed to provide necessary details like PAN, address etc. of the creditors - CIT- A deleted the addition - HELD THAT:- Undisputedly the liabilities were outstanding since many previous year in the balance sheet of the assessee and the assessee has not written off the outstanding liabilities/creditors in its audited books of accounts and thus, it has to be presumed that the impugned outstanding liabilities/creditors were existing at the end of the Financial Year 2012-13 pertaining to Assessment Year 2013-14.
As per mandatory requirement of section 41(1) of the Act, the AO entitled to make additions in the hands of the assessee where the liabilities/creditors seized to exist but in the present case, neither the assessee company has written off the impugned amount as bad debts in its books of accounts nor there was any other positive material on the record and in the hands of the AO showing that the impugned amount of the liabilities/creditors seized to exist during the relevant Financial Year.
Therefore, we are unable to see any ambiguity, perversity or any valid reason to interfere with the findings recorded by CIT(A). Thus, we uphold the same. Grounds raised by the Revenue are dismissed.
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2022 (5) TMI 1550 - ORISSA HIGH COURT
Validity of Reopening of assessment - order passed u/s 148A(d) as it stood amended - Period of limitation to issue notice issued u/s 148A(b) - validity of notices issued by the Income Tax Department (Department) u/s 148 in light of the amendment by the Finance Act 2021, which introduced the new amended provisions i.e., Sections 147 to 151 with effect from 1st April, 2021 - HELD THAT:- Supreme Court of India in Union of India & others v. Ashish Agarwal [2022 (5) TMI 240 - SUPREME COURT] partly allowed the appeals of the Union of India and made a distinction between notices issued by the Department on or after 1st April, 2021 and those that have been issued prior thereto.
In the present case, the notice under Section 148 of the Act pertaining to the Assessment Year (AY) 2015-16 was issued on 30th March 2021, i.e., prior to 1st April 2021. Also, it was beyond the period of six years after the expiry of the AY in question. Consequently, both in light of the Judgment of the Supreme Court in Union of India & others v. Ashish Agarwal [2022 (5) TMI 240 - SUPREME COURT] and the Order of this Court [2022 (1) TMI 1291 - ORISSA HIGH COURT] dated 24th January 2022 in W.P.(C) No.20919 of 2021 and batch of writ petitions in M/s. Ambika Iron and Steel Pvt. Ltd. and others v. Principal Commissioner of Income Tax and others the impugned notice is hereby quashed and all the subsequent orders and proceedings are also hereby quashed.
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2022 (5) TMI 1549 - SC ORDER
MAT applicability u/s 115JB on banking companies - Whether bank would be treated as a company for purposes of Income-tax Act, and thus provisions of section 115JB would clearly apply to the assessee bank? - As per HC provisions of Section 115JB(2) of the Income Tax Act, 1961 do not apply to the Banking Companies - HELD THAT:- Issue notice.
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