Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

Deputy Commissioner of Income Tax Versus M/s. Techno Electric & Engineering Co. Ltd

Disallowance on account of retention money - money retained by the various Government contractees out of the contract value till the establishment of specific performances as specified and issuance of taking over certificate - CIT(A) deleted the addition - Held that:- The issue involved is duly covered by the decision CIT -vs.- Simplex Concrete piles (India) Pvt. Ltd. [1988 (12) TMI 52 - CALCUTTA High Court] wherein held that the payment of retention money is d eferred and is contingent on satis .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

uly covered by the decision of Canara Bank [1991 (7) TMI 38 - KARNATAKA High Court] in which it was held that the interest ac crues or arises only on the record date or on the maturity date for the purpose of taxability. In the case of the assessee the interest on Bonds were payable on 31s t day of December and 30th day of June and, therefore, the interest for the period ended on 31s t March has not accrued and due to the assessee. In view of this fact, we do not find any infirmity or illegality .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

pective. The impugned assessment is the assessment year 2007-08 while Rule 8D has been inserted w.e. f. 24th March, 2008. Therefore, the Assessing Officer, in our opinion, is not correct in law in allowing the disallowance by applying Rule 8D. We further noted that in the case of Sanjiv Jajodia -vs. - DCIT [2010 (9) TMI 1026 - ITAT KOLKATA] has taken the view that the disallowance under sec tion 14A out of the expenses should be rest ricted only to 1% of the dividend income. Ld. CIT(Appeals) res .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

upporting documents and came to the conclusion that in respect of three parties, namely Steel Products Limited, Rukmani Elect ricals, and Unique St ructure amounting to ₹ 43,202/-, ₹ 21/-, ₹ 54,771/- respectively, documents are unreconciled. He, therefore, sustained the addition to that extent.D.R. before us even though vehemently relied on the order of the Assessing officer but could not brought to our knowledge how there is a mistake in the reconciliation as has been examined .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

o prove the genuinity of the expenses. In view of this fact, we do not find any infirmity or illegality in the order of the ld. CIT(Appeals) sustaining the addition - Decided against assesse.

Disallowance of the commission payment - Held that:- Ld. A.R. even though vehemently contended that the commission paid by the assessee in the subsequent year has been allowed by the Assessing officer while determining the taxable income of the assessee, but he could not adduce any cogent materia .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the Respondent : Shri A.K. Tulsyan, FCA ORDER Per P.K. Bansal: The cross appeal s filed by the Revenue and assessee are out of the order of ld. Commissioner of Income Tax (Appeal s), C-III, Kolkata dated 22.12.2010 for the assessment year 2007-08. 2. Ground No. 1 in Revenue s appeal relates to the deletion of the disallowance of ₹ 18,50,91,037/- on account of retention money retained by the various Government contractees out of the contract value till the establishment of specific perform .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Assessing Officer, therefore, treated the same as income of the assessee and made the addition. When the matter went before the ld. CIT(Appeals), ld. CIT(Appeals) deleted the addition. 3. We have heard the rival submissions and carefully considered the same along with the order of the tax authorities below. We noted that the issue involved in this ground of appeal is duly covered by the decision of the Hon ble Jurisdictional High Court in the case of CIT -vs.- Simplex Concrete piles (India) Pvt. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ounts of bills. The right to receiv e payment of 5% accrues on completion of work and only remaining 5% is deferred for a further period. The payment of retention money is d eferred and is contingent on satisfactory completion of the work and removal of defects and payment of damages, if any. Till then, there is no admission of liability and right to receive any part of the retention money accrues to the assessee . 4. Similar view has been taken by the following Hon ble High Court s in the follo .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

(Allahabad)]; (viii) DIT -vs.- Ballast Nedam International (2013) 355 ITR 300 (Gujrat); (ix) Amarshiv Construction (Pvt.) Limited [102 DTR (Guj.) 33]. 5. Ld. D.R. even though before us vehemently relied on the order of the Assessing Officer but could not adduce any decision contrary to the one as has been taken by the Hon ble Jurisdictional High Court. In view of the aforesaid decision, we confi rm the order of the ld. CIT(Appeal s) and dismiss the Ground No. 1 taken by the Revenue. 6. Grounds N .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

7; 9,50,000/- claimed as exempt under section 10(15) of the Act. Out of the sum of ₹ 1,96,10,750/- (difference), a sum of ₹ 88,69,516/- was shown as capital gain on sale and purchase of Bonds. There remains a difference of ₹ 1,07,41,234/-. The Assessing Officer treated the same as income of the assessee ignoring the contention of the assessee that though the interest has become due but has not accrued as the interest was payable on 30th June and 31s t December only and interest .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

from record date to record date and on the record date TDS has also been deducted on the whole of the interest between two record dates. This fact further supports the claim of the assessee that interest income on Bond accrues only on the record date. Further, the accrued interest has been offered for taxation in the next year and same accounting system is followed by the assesese in next year as evident from the copy of Income tax return for the assessment year 2008-09 along with details of in .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e Kerala High Court in the case of CIT -vs.- Canara Bank referred to supra. We noted that the issue in this appeal is duly covered by the decision of the Hon ble Kerala High Court in the case of Canara Bank, in which it was held that the interest ac crues or arises only on the record date or on the maturity date for the purpose of taxability. In the case of the assessee the interest on Bonds were payable on 31s t day of December and 30th day of June and, therefore, the interest for the period en .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sallowance to 1% of ₹ 1,36,79,371/- in view of the decision of the Hon ble Calcutta High Court in the case of Sanjiv Jajodia - vs.- DCIT, CC-XIII, Kolkata in ITA No. 1509/Kol/2010. 13. We have heard the rival submissions and carefully considered the same. We noted that the Assessing Officer had disallowed the expenditure by invoking Rule 8D read with section 14A of the Income Tax Act. We noted that Rule 8D has been inserted by the Income Tax (5t h Amendment ) Rules, 2008 w.e.f. 24th March, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Jajodia -vs. - DCIT in ITA No. 1509/Kol/2010 has taken the view that the disallowance under sec tion 14A out of the expenses should be rest ricted only to 1% of the dividend income. Ld. CIT(Appeals) respec tfully following the said decision has rest ricted the disallowance to ₹ 1,36,794/-. In view of this fact, in our opinion, no interference is called for in the order of the ld. CIT(Appeals) in rest ricting the disallowance to 1% of the dividend income. We accordingly confi rm the order o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

conciliation made by the assessee could not satisfy the Assessing Officer, and, therefore, he made the addition. The assessee went in appeal before the ld. CIT(Appeals) and again submitted the reconciliation in respect of all the four parties. Ld. CIT(Appeals) has duly examined the reconciliation made by the assessee along wi th the supporting documents and came to the conclusion that in respect of three parties, namely Steel Products Limited, Rukmani Elect ricals, and Unique St ructure amountin .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ng the addition as made by the Assessing Officer. We accordingly dismiss the ground taken by the Revenue. 17. ITA No. 287/Kol/2011 (Assessee s appeal) The fi rst ground of assessee s appeal relates to the sustenance of the disallowance on account of the insurance expenses amounting to ₹ 7,85,266/-. 18. Ld. A.R. before us even though contended that the amounts represent the various deductions made towards the insurance by the contractors, namely DVC, BHEL, ALSTOM totalling to ₹ 7,85,2 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

cordingly dismiss the Ground No. 1 taken by the assessee. 19. Ground No. 2 in assessee s appeal relates to the disallowance amounting to ₹ 11,00,000/- on account of the commission payment. 20. The Assessing Officer noted that the assessee has paid commission of ₹ 11,00,000/- to M/s. Kidar Sons Industries (P) Ltd. The Assessing Officer asked the assesee to prove the genuinity of the commission as well as to prove the services rendered by the assessee. The assessee stated that the amou .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     Latest Happenings     ↓  

Forum: Excise duty credit on finished stock at additional place of business.

Forum: Manpower Service provider

News: Jaitley asks biz not to wait till last day to file GST returns

Circular: Implementing Electronic Sealing for containers by exporters under self-sealing procedure prescribed by Circular 26/2017-Cus dated 1st July, 2017 and Circular 36/2017 dated 28 th August, 2017. — reg.

Forum: Construction of single unit bungalow

Forum: Input credit of gst paid on urd

Article: 20 Things You must know about E Way Bills in GST Law

Article: ‘DUTY DRAWBACK’ CANNOT BE EQUATED WITH ‘REBATE OF DUTY’

Highlight: Notification regarding GST rate for branded cereal, pulses and flour

News: Notification regarding GST rate for branded cereal, pulses and flour

Highlight: Anti-dumping duty on import of bus/truck tyres from China

Highlight: Cabinet approves Extension of time period of the Scheme "Special Industry Initiative for J&K" (Sll J&K) - Udaan

Highlight: Non-payment of service tax - maintenance and repair charges - appellants had knowingly and deliberately shown the repair charges as job work charges to mislead about their taxability - demand confirmed.

Highlight: BAS - execution of the project of smart card for vehicle registration – implementing the SOC-VRC project - The fact that the Government has outsourced some part of the work and paid certain consideration for such outsourced work, does not make the activity subject to service tax.

Circular: Amendments in Hand Book of Procedures 2015-20 –reg.

News: Cabinet approves Extension of time period of the Scheme "Special Industry Initiative for J&K" (Sll J&K) - Udaan

Highlight: Constitution of National Anti-profiteering Authority (NAA) under GST-reg. - Trade Notice

Highlight: Amendments in Hand Book of Procedures 2015-20 –reg. - Various amendments are made in Chapter-4 of Hand Book of Procedures 2015-2020.

Circular: Constitution of National Anti-profiteering Authority (NAA) under GST-reg.

Highlight: Sharing of expenses - BAS - promotion of business of group companies - sharing of expenditure for common facilities cannot be treated as service by one to another in such arrangement.

News: RBI Reference Rate for US $

Article: Credit of unsold stock [Section 140(3)] - Actual Credit as well as Notional Credit - Part-I - GST Transitional provisions

Circular: Certain Clarifications sought on Construction Services provided in the Real Estate Sector – reg.

News: Anti-dumping duty on import of bus/truck tyres from China

News: Fast-track GST refund, else ₹ 65K cr may be stuck: Exporters

Highlight: It is open to the Settlement Commission to use best judgment in arrival of the figure. Nonetheless it has to explain the manner in which the best judgment figure has been arrived at by the Settlement Commission - HC

Highlight: Deemed dividend u/s 2(22)(e) - advances given to societies - in the absence of legal right of the assessee in the said society the amount advanced cannot be treated as deemed income.

Highlight: When electrical installations are treated as plant and machinery the depreciation has to be allowed @ 25% as per provisions contained u/s 32

TMI Note: Capital Gain - transfer of right in the land or transfer of land itself - addition u/s 50C - Harassment to the honest tax payers

Highlight: Option to avail composition scheme under GST by electronically filing an intimation in FORM GST CMP-02 and FORM GST ITC-03 upto 30-9-2017 - See Rule 3(3A)

TMI Note: Does ICDS apply for the purposes of computing exemption u/s 11 to 13.

Highlight: Voluntary Reporting of Estimated Current Income and Advance Tax Liability - CBDT issues draft notification

TMI Note: Certain ICDS provisions are inconsistent with judicial precedents. Whether these judicial precedents would prevail over ICDS.

Highlight: Provisions of ICDS shall prevail w.e.f. AY 2017-18 to the transactional issues dealt therein over earlier judicial pronouncements.

Notification: Levy of anti dumping duty on New/unused pneumatic radial tyres with or without tubes and/or flap of rubber (including tubeless tyres) having normal rim dia code above 16 originating in, or exported from China PR

News: Voluntary Reporting of Estimated Current Income and Advance Tax Liability

TMI Note: In case of conflict between ICDS and other specific provisions of the Income-tax rules, 1962 governing taxation of income like rules 9A, 9B etc. of the Rules, which provisions shall prevail.

TMI Note: Does ICDS apply to computation of Minimum Alternate Tax (MAT) u/s 115JB of the Act or Alternate Minimum Tax (AMT) u/s 115JC of the Act.

TMI Note: Where a term has not been defined under ICDS, nor under the Act, but has different interpretations given to it by the courts in tax cases, and in ICAI Accounting Standards, which interpretation would prevail while interpreting ICDS.

TMI Note: Whether the provisions of ICDS apply to a non-resident who claims the benefit of a double taxation avoidance agreement (DTAA).

TMI Note: In case any of the ICDS provisions is contrary to a circular or press release issued by the CBDT, which would prevail over the other.

TMI Note: ICDS-I requires disclosure of significant accounting policies and other ICDS requires specific disclosures. Where is the taxpayer required to make such disclosures specified in ICDS.

Notification: Income Computation and Disclosure Standards (ICDS) - New ICDS to be effective from AY 2017-18

News: RBI Reference Rate for US $

Highlight: GST - Detention of goods under transport - discrepancy in documents - the statutory provisions provide a mechanism for adjudication following detention of goods including for the provisional release thereof pending adjudication - HC

Highlight: Reassessment - first few paragraphs of the assessment order dealt with objections and disposed of accordingly - Unfortunately, the manner in which the AO has decided the issue is wholly unsustainable in law - HC

Highlight: Business expenditure u/s 37 - liquidated damage - breach of contract terms - Expenditure was not incurred for any purpose which is an offence or which is prohibited by law - cannot be disallowed - HC

Highlight: Valuation - inclusion of reimbursement of expenses - managing participation of clients in certain mela, fairs, promotional activities etc. - They are liable to service tax on the gross amount received - They cannot restrict their tax liability to only agency commission

Highlight: TDS liability - ITAT confirmed the liability - We do not see how it is possible for us to uphold the order of the Tribunal and when it purports to decide two Appeals of the Revenue by single paragraph conclusion - HC

Highlight: Reopening of assessment - sufficiency of material available with the AO to form a belief that income chargeable to tax had escaped assessment - bogus purchases - seller refused to respond - notice would not be interfered with - HC



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version