Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Forum Articles Highlights TMI Notes SMS News What's New Calendar Imp. Links Database More...
Extracts
Home List
← Previous Next →

ACIT-13 (2) , Mumbai Versus M/s. S.V. Crane Services and Vica-Versa

Sale of scrap - CIT(A) valuing the scrap at estimated market rate and confirming the addition of notional imaginary income - Held that:- With regard to valuation made by the chartered engineer,we are of the opinion that the FAA had correctly held that the certificate of the engineer was of no help as it was prepared after a long time of generation of scrap - FAA had correctly held that the certificate of the engineer was of no help as it was prepared after a long time of generation of scrap.We f .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

cts and circumstances of the case,we are of the opinion that to meet the end of justice the estimated addition should be restricted to ₹ 50,00,000/in place of ₹ 83,15,244/. - Decided partly in favour of assessee. - ITA No.2924/Mum/2013 - Dated:- 31-8-2015 - Sh. A.D. Jain and Rajendra, JJ. For The Assessee : Shri Satish R. Mody For The Revenue : Shri S.S. Rana-DR ORDER PER RAJENDRA, AM Challengingthe order dated 09.01.2012of the CIT(A)24, Mumbai,the Assessing Officer(AO) and the asses .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

availibity of transports , excise issues and other environmental factors. 2 The Learned CIT(A) erred in taxing the estimated income of scrap which had not accrued to the appellant and thereby brushing aside the concept of real income. 3 The learned CIT(A) erred in brushing aside the prudent businessman methodology of bearing the brunt of excessive repairs of 30 years old model cranes and when the appellant considered all these hidden costs in quoting the hire charges of cranes and maintain the p .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of the expenditure with concrete evidence. The conclusion of the AO gets credence from the fact that one of the major suppliers of the assessee viz. M/s. C. J. Steel Corporation had been listed as 'bogus supplier' by the Sales Tax Department. (2) The appellant prays that the order of CIT (A) on the above ground(s) be set aside and that of the Assessment Officer be restored. (3)The appellant craves leave to amend or alter any ground or add any new ground, if necessary. Assesseefirm, engag .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

crores under the head repairs to machinery, that it had purchased 1225 tons of steel parts and 2 tons of bronze parts for undertaking the repairs to the cranes.He observed that the material purchased had not been increasing tonnage capacity and boom length capacity,that the expenses were incurred for only to make the cranes fit for use,that the expenditure incurred had been on revenue account and not Capital account, that only replacement of old parts had taken place,that it esulted into genera .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

that the purchase of material (1225 tons of steel) for repairs was not be acceptable, that the debit of amount under repairs to machinery was not reasonable and excessive. Accordin gly, the accounts of the assessee,to that limited extent,were rejected.But,no specific addition was made towards the scrap generation.The AO also held that expenditure worked out to 51.85% of the revenue generated,that it was is not in tune with the standards of other persons engaged in similar business activity,that .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ere was not sufficient generation of scrap so as to warrant consumption of 1250 tons of material during the year,that 1250 tons of material would generate around 750 tons of disposable scrap. In that regard,a copy of certificate from Chartered Engineer was submitted before the FAA and it was stated that the certificate explained the quality, quantity and the realizable value of the scrap generated by the assessee,that the net realizable value of the scrap was ₹ 15,81,420/, that out of the .....

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 AO had failed to consider the above factors which explained as to why the realisation value was ₹ 6,88,756/only, that he had also considered the steel scrap realization value @ ₹ 18,000 to ₹ 20,000 per ton without appreciating the quality of scrap due to environmental and operational usage,that he had not considered the important factor being huge transport costs for loading and unloading of scrap and bring it to nearby cities for disposal,that the scrap generated was duly ex .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

gave information about brief description quantity rate etc,that the assessee had been dealing with the above parties since last 10 years,that because of long association the quality style, grade and specifications of materials required by the assessee were well known to them,that the assessee would place verbal orders as per their requirements,that the owners were themselves operating the cranes at various sites across the country,that preparing and submitting a physical purchase order for ever .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of accounts.With regard to the weigh bridge slips it was stated that there was no reliable weight bridge in Kalamboli area,that the weighment shown in the purchases of KB was taken to be correct since it was made at the manufacturing unit of M/s. Uttam Galva or M/s.Jindal Steel or their distributors,that similar was the case CJSC,that a statement on oath of one of the partners confirming the above was recorded by the AO on 16/ 12/2011.Sample copies of invoices of both the suppliers were produced .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

and tear,that plying of cranes on roads was not permissible in India,that the cranes had to be frequently assembled and dismantled to move them from one site to another site,that all those factors resulted in heavy expenditure on repairs and maintenance of cranes,that the AO had disallowed 35% of the expenditure on ad hoc basis without assigning any valid reason. After considering the submissions made by the assessee and the assessment order,the FAA held that the assessee had been purchasing old .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

cranes,he laid emphasis on delivery challans and weigh bridge slips,that he had not gone in to the details of analysis of stock,receipt of material,mode of payment etc.,that the assessee had submitted supporting evidence by giving copy of the returns of the suppliers, that affidavits of KB and CJSC and sworn statement by the partners were not considered,that AO s observation in that regard was not correct,that the generation of scrap of ₹ 6.88 lakhs from the expenditure of ₹ 7.36 cr .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

servation of the AO with respect to low generation of scrap was appeared to be correct. However,the FAA was of the opinion that the conclusion drawn by the AO in estimating 35% of the revenue generated as expenditure incurred for repairs to machinery was not acceptable.He held that the conclusion of the AO was not supported by any corroborative evidence nor was supported by any comparable cases in similar business activity, that the correct method of arriving at the probable income on account of .....

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 quantity of scrap generated and the net realizable value of the scrap could be worked out by taking a reason able percentage of average purchase price of the material,that in the manufacturing and production activities certain account of scrap was generated,that same is used in recycling,that Steel and Iron scrap were having high demand and fast moving material,that no prudent business man would abandon the scrap when it fetched considerable amount in the market,that it was proper and just .....

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 assessee must have realised ₹ 90,04,000/from sale of scrap. He further mentioned that if the total expenditure incurred by the assesseei.e.7.39 crores,was compared with the estimated scarp the income from scrap sale of ₹ 90,04,000/it worked out to 12.2%of expenditure in question.He directed the AO to add ₹ 83,15,244/on account of income from Sale of scrap instead of ₹ 2,39,29,400/. 4.Before us,the Authorised Representative (AR)stated that there was no evidence that the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tout from salestaxwebsite in case of CJSC and KB were filed before the AO.He referred to page No.41,42,37,35 of the PB and stated that while completing the assessment for the AY.200405 the AO had made no addition in that regard.Alternatively it was argued that the addition confirmed by the FAA was on the higher side.Departmental Representative supported the order of the AO.He contended that the assessee had claimed 51% of the gross receipts towards repairing expenses,that one of the bills produc .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

  ↓     Latest Happening     ↓  

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)

Forum: Input tax credit

Forum: GST on Notional rent

Forum: GST ON SALES PROMOTION

Forum: 3B mistake

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

Forum: PROCEDURE FOR SHIFTED OF FINISHED GOODS FROM AP KARNATAKA TO UP

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

Forum: Input credit of gst paid on urd

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

Highlight: Exemption u/s 11 - education activities - transport and hostel facilities surplus cannot be considered as business income of the assessee society

News: Draft Notification for insertion of new rule 39A in the Income-tax Rules, 1962 comments and suggestions-reg.

Highlight: Genuineness of labour wages expenses, embroidery charges, fabrication expenses etc. - getting work done through small workmen who do not have any permanent place of residence - disallowance of ad hoc expenditure deleted.

Highlight: Project import - Since the goods were never used for the purpose for which it was imported, the actual user condition has been violated - Redemption fine and penalty imposed.

Highlight: Penalty u/s 112 (a) - CHA - Lack of due diligence and failure to take more precautions can not, by itself, bring in penal consequences

Highlight: Import of services - GST - The fact that those services were received outside India will not change the fact that the services have been paid for by the beneficiary appellant, who is located in India. - Demand confirmed.

Notification: SEZ for IT/ITES at Madhurwada Village, Visakhapatnam District in the State of Andhra Pradesh - denotified.

Highlight: Merely because payment is received in Indian rupee, it cannot be said that payment against export has not been received in convertible foreign exchange.

Highlight: Merely vehicle numbers was not mentioned on the invoices cannot be the reason to deny Cenvat Credit

Highlight: Extension of time limit for submitting the declaration in FORM GST TRAN-1 under rule 120A of the Central Goods and Service Tax Rules, 2017 - Circular

Circular: Extension of time limit for submitting the declaration in FORM GST TRAN-1 under rule 120A of the Central Goods and Service Tax Rules, 2017

News: Auction for Sale (Re-issue) of Government Stocks

Article: TDS APPLICABILITY ON GOVERNMENT CONTRACTS UNDER GST (Under Section 51 of the CGST Act, 2017)

News: Manmohan takes potshots at note ban, 'hasty' rollout of GST

News: GST on petrol, diesel requires wider discussion: Nitish

Article: WHEN CAN ONE TAKE ITC FOR RCM CASES?

Notification: TDS liability under Section 51 of CGST, 2017 come into force w.e.f. 18-9-2017 - Persons liable to deduct TDS from payment made or credited to the supplier of taxable goods or services specified

Notification: Central Goods and Services Tax (Seventh Amendment) Rules, 2017

Notification: Seeks to extend the last date for filing the return in FORM GSTR-3B for the months of August to December, 2017

Circular: Filing of Special Leave Petition against Orders of Hon'ble High Courts staying Collection of Tax under GST- reg.

Highlight: Exemption u/s 54F - LTCCG - once entire net consideration is invested, the absence of completion certificate cannot be a ground to deny the benefit of deduction.



|| 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