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 →

Swastik Textile Engineers Pvt. Ltd. Versus The Asst. CIT (OSD) , The ITO Ward-8 (2) , Ahmedabad

Disallowance u/s 14A - Held that:- The disallowance u/s.14A of the Act can be made only, if the expenditure is related to investment wherefrom the exempt income is earned. In the present case, the ld.CIT(A) has not considered the submissions of the assessee that investments have been out of interest-free fund, for commercial expediency and the dividend income has been offered for tax. Therefore, we are unable to confirm the finding of ld.CIT(A). In the light of above discussion, we hereby direct .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

efore the ld.CIT(A). Therefore, in our considered view, the contention of the ld.counsel for the assessee that had it sufficient interest-free funds and the advance was given out of interest-free funds requires verification at the end of the AO and, accordingly, we hereby set aside the order of the authorities below and restore this issue to the file of AO to verify whether the advance was out of interest-free funds available with the assessee or not. In case, the AO finds that the assessee was .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Assessee are directed against the separate orders of the Ld.Commissioner of Income Tax(Appeals)-XIV, Ahmedabad [ CIT(A) in short] dated 14/07/2011 & 25/03/2013 pertaining to Assessment Years (AYs) 2008-09 & 2009-10 respectively. Since identical grounds are involved in both the appeals, these were heard together and are being disposed of by this consolidated order for the sake of convenience. 2. First, we take up the Assessee s appeal in ITA No.2358/Ahd/2011 for AY 2008-09. The Assessee .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rovisions of law and facts and therefore requires to be suitably modified. It is submitted that it be so done now. 2. The learned CIT(A) erred in law and in facts in confirming the disallowance of ₹ 87,304/- by invoking the provisions of section 14 A r.w.r. 8 D. It is submitted that investment made by the appellant was not for the purpose of earning exempt income but with the purpose of commercial expediency. It is submitted that it be so held now. In any event it is submitted that since a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

It is submitted that advance given was for the purpose of business and in any case no interest-bearing funds have been utilized for such advances made. It is submitted that it be so held now and disallowance made be deleted. Your appellant prays for leave to add, to alter and / or to amend all or any of the grounds before the final hearing of appeal. 2.1. First ground is general in nature which requires no independent adjudication. 2.2. Apropos to Ground Nos.2 & 3, the briefly stated facts .....

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 GP rate of ₹ 24,92,246/-. The assessee being aggrieved by the assessment order, preferred an appeal before the ld.CIT(A), who after considering the submissions of the assessee partly allowed the appeal; thereby the ld.CIT(A) deleted the addition of ₹ 24,92,246/-, confirmed the disallowance of ₹ 87,304/- which was made by invoking the provision of section 14A of the Act, restricted the disallowance to the extent of ₹ 7,50,000/- made in respect of interest expenditure an .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

submitted that in the earlier years, the assessee had invested ₹ 27,62,500/- in shares of Fortune Plastomac P.Ltd. It is a subsidiary company of the assessee. The assessee is having 83.33% shareholding in Fortune Plastomac Pvt.Ltd. He submitted that the purpose behind making investment is not earning dividend or capital gain, but on the grounds of commercial expediency. The ld.counsel for the assessee submitted that the subsidiary company is manufacturing plastic Trolleys, Doffing Boxes, 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

gard to fact that the assessee has earned exempt income. Therefore, the expenditure related to such exempt income deserves to be diallowed on the basis of provisions of section 14A of the Act read with Rule 8D of the Income Tax Rules, 1962. 4. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below. The argument of the assessee is that the authorities below were not justified in invoking the provisions of section 14A of t .....

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 determine the amount of expenditure incurred in relation to such income which does not form part of the total income under the Act in accordance with such method prescribed under Rule 8D, if the AO having regard to the accounts of the assessee, is not satisfied with the correctness of the claim of the assessee in respect of such expenditure in relation to income which do not form part of the total income. One of the contentions of the assessee is that the assessee had received dividend income .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

is related to investment wherefrom the exempt income is earned. In the present case, the ld.CIT(A) has not considered the submissions of the assessee that investments have been out of interestfree fund, for commercial expediency and the dividend income has been offered for tax. Therefore, we are unable to confirm the finding of ld.CIT(A). In the light of above discussion, we hereby direct the AO to delete the addition of ₹ 84,304/-. Accordingly, this ground assessee s appeal is allowed. 5 .....

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 authorities below and opposed the submission made by the ld.counsel for the assessee. 6. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below. The AO observed that the assessee had taken a loans of ₹ 2,11,05,468/- on which he had paid interest to the extent of ₹ 18,42,189/-. The AO observed that there is an increase into the interest expenditure from ₹ 5,40,119/- to ₹ 18,42,189/-. The AO ob .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nd also in the case of National Textile Corporation. The ld.CIT(A) has observed that the amount was given as earnest money deposit and purchase price of tender document and, accordingly, deleted the disallowance. However, ld.CIT(A) confirmed the disallowance made in respect of advance given to Shreenidhi Textiles. The contention of the assessee is that the advance was given out of interest-free funds. It is also contended that similar advances were made during the AY 2007-08, in that year no suc .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ee or not. In case, the AO finds that the assessee was having sufficient interest-free funds, he should also delete the disallowance made. In respect of advances given to Shree Nidhi Textiles. Thus, this ground of assessee s appeal is allowed for statistical purposes. 6.1. As a result, the appeal of the Assessee in ITA No.2358/Ahd/2011 for AY 2008-09 is partly allowed for statistical purposes. 7. Now, we take up the assessee s appeal in ITA No.1322/Ahd/2013 for AY 2009-10, wherein following grou .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d facts and therefore requires to be suitably modified. It is submitted that it be so done now. 2. The learned CIT(A) erred in law and facts in confirming the disallowance of ₹ 78,715/- by invoking the provisions of section 14A r.w.r. 8 D. It is submitted that investment made by the appellant was not for the purpose of earning the exempt income but with the purpose of commercial expediency. It is submitted that it be so held now. In any event it is submitted that since appellant was having .....

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     ↓  

Forum: 3B mistake

Forum: Input credit of gst paid on urd

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.

Forum: transfer of shares

Forum: Input tax credit

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

Forum: GST return filing software online | Easy GST compliance management

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

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

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



|| 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