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2016 (10) TMI 175 - ITAT DELHI

2016 (10) TMI 175 - ITAT DELHI - TM - TDS u/s 195 - Non-deduction of TDS on AMC contract - existence of PE in India - CIT(A) held that the same was not taxable in the hands of non-resident payee, because that was business income of the non-residents and since they had no PE in India - DTAA - Held that:- CIT(DR) has referred to the various services, covenants and pointed out that services had been rendered by communication only in India. Ld. CIT(DR)s contention cannot be accepted in view of spec .....

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e non-resident payee had any PE in India and, therefore, the business income in the hands of non-resident payee could not be taxed in India. Further, we are in agreement with the detailed analysis carried out by ld. CIT(A) in holding that no technical services were provided to the assessee and the services were in the nature of normal maintenance/ repairs/ replacement etc., performed outside India. Therefore, such payments did not fall within the purview of Explanation 2 to section 9(1)(vii) of .....

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as per the books of a/c - Held that:- It cannot be said that by adopting an ad hoc method of arriving at net realizable value by impairing the value of service stock by 25%, in the absence of any detailed technical estimate, the assessee had resorted to correct method of valuation. Under such circumstances, the assessment order was prejudicial to the interests of revenue. - Ld. CIT(A) completely overlooked the fact that true profits of an year could not be deduced without resorting to prope .....

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- Writing down of inventories - Held that:- We have discussed in detail the decisions relied upon by ld. counsel for the assessee, from which it is evident that the claim was advanced in both th cases on the basis of proper estimation on technical basis resorted by assessee and not on ad hoc basis as has been done in the present case. We are in agreement with the contention of ld. counsel for the assessee that the AOs conclusion that there was no fall at all in the value of spares also is .....

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efore, we restore the matter to the file of AO for providing the assessee an opportunity to furnish the details of net realizable value of spares backed with proper evidence in order to substantiate its claim. - Disallowance made u/s 14A - whether no investment was made out of interest bearing funds? - Held that:- As observed that the interest of ₹ 274.68 lakhs was paid for the loans taken from Cisco Systems and HSBC for utilization of the same for NSE project and for business purposes .....

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xempt income. This specific finding of ld. CIT(A) has not at all been controverted by the department by bringing any evidence on record and, therefore, we confirm the findings of ld. CIT(A) in deleting the disallowance of ₹ 79,18,827/- made on account of interest expenditure relatable to earning of exempt income by AO. In the result this ground is dismissed. - ITA nos. 321/Del/2012, 5651/Del/2012, 6142/Del/2012, ITA nos. 5907/Del/2010, 5898/Del/2012 - Dated:- 19-8-2016 - SHRI S.V. MEHROTRA .....

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ted 31.10.2011 in appeal no. 180/09-10 relating to AY 2004-05. 4. Brief facts of the case are that the assessee company was engaged in the business of designing, delivering, installation and commissioning of net working solution and providing professional services for management and maintenance of net working solution. 4.1. The assessee had filed return of income declaring income of ₹ 15,28,572/-. The assessment was completed u/s 143(3) at an assessed income of ₹ 75,43,775/-. Thereaf .....

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allowed expenditure of ₹ 1,54,02,000/- towards provision for warranty. Since this was an unascertained liability it should have been disallowed and added to the income of the assessee. 4.2. The AO, after considering the assesse s submissions, made following disallowances: a. Disallowance on account of non-deduction of TDS on AMC contract ₹ 2,55,57,990/- b. Addition on account of provision for warrantee ₹ 1,54,02,000/-. 4.3. Apropos non-deduction of TDS in respect of AMC payment .....

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ere not attracted in respect of AMC payments and consequently there was no question of disallowance u/s 40(a)(i). He, therefore, deleted the addition of ₹ 2,55,57,990/-,. 4.4. As regards disallowance of provision for warranty amounting to ₹ 1,54,02,000/-, ld. CIT(A) referred to the decision of the ITAT in ITA no. 2195/Del/2008 wherein vide order dated 8.10.2010, the Tribunal had set aside the order of CIT passed u/s 263 in respect of provision for warranty after following the decisio .....

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d 18.3.2009 contained at page 131 onwards of the paper book, noted from the Notes to Account that assessee had made payment of AMC of ₹ 255.58 lakhs on which no tax was deducted. This payment was made to following persons: Particulars Country Amount paid (Rs) Gilat Satellite Networks Limited Israel 17,700,589 Telesystems International Corporation USA 2,769,374 Agilis Communication Technologies Pte Ltd. Singapore 4,673,272 Gilat Satellite Networks Limited Holland 113,150 Miscellaneous 301,5 .....

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AMC contract comprised payment for warranty charges and extended warranty charges, which are in the nature of repair/ replacement of equipments. Under the contract, equipments are sent outside India for any repair/ replacement and are reimported in India. 5.4. After considering the aforementioned submissions of assessee, the AO observed that in view of specific provisions laid down u/s 40(a)(i) of the I.T. Act, 1961, deduction could not be allowed as the payment had been made without TDS. He, a .....

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at source on the same. (b) The assessee referred to the agreement with Gillette Israel . Ld. CIT(A) in para 9 has noted the various services provided to assessee and has pointed out in para 10 that the extended maintenance agreement entered into with Gillette Israel covers services relating to routine maintenance of the equipments including product repairs and replacements. Thus, there was no technical service provided to the assessee. The services were provided outside India. (c) The assessee .....

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e applicable section for payments made by an assessee to a non-resident outside India. Therefore, in order to examine whether payments made by assessee required deduction of tax at source, in terms of section 195 it has to be examined whether the sum paid to the non-resident payee is chargeable to tax in India in the hands of non-resident payee or not. The applicability of section 195 will be decided accordingly. Reliance was placed on the decision of Hon ble Supreme Court in the case of Gee Ind .....

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in the case of Hindustan of India and another vs. Azadi Bachao Andolan & another 263 ITR 706. The assessee submitted that the said services being in the nature of routine repairs/ replacement and maintenance, were not in the nature of FTS since there was no technical, managerial or consultancy services, which was being provided by Gillette Israel to the assessee. Therefore the payment did not fall within the provisions of Explanation to section 9(1)(vii) . 5.8. In this regard reliance was pl .....

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these services were in the nature of routine repairs and maintenance and did not make available any technical knowledge, skill, experience, know how etc. to the assessee or its employees, therefore, the services did not come within the purview of the technical services envisaged under Article 13 of the DTAA read with protocol thereof, meaning thereby that the payments towards any such services in the form of AMC were not taxable as FTS as defined under paragraph 3 of Article 13 of the DTAA betwe .....

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ervices have been rendered through communication in India, therefore, ld. CIT(A) was not right in holding that services were rendered outside India. He referred to page 28 of the PB, wherein the extended maintenance agreement is contained and referred to the recital relating to maintenance support service for all the Gillette hub station equipment. He referred to the second covenant wherein the nature of services to be rendered by Gillette Israel are contained and referred to following clauses: .....

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oughout the tern of this agreement, Gilat shall repair or replace any failed or defective part or parts of the Hub Station Equipment in accordance with the provisions of Sub-Paragraphs 2.6.1 through 2.6.4. 2.6.2 The time within which the 'Buyer must send to Gilat Hub Station Equipment in accordance with Sub Paragraph 2.6.1 is the earlier of (i) the Buyer accumulating defective parts consisting of twenty five percent (25%) of the Buyer's stock of spare parts, and (ii) sixty (60) days of t .....

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ar the cost of returning to the Buyer of Mumbai, India the repaired or replacement Hub Station Equipment within thirty (30) days of Buyer delivering such equipment to Gilat (CIF Tel Aviv), provided that if Gilat determines that such equipment is not defective, Buyer shall pay Gilat all costs of handling, transportation and labor at Gilat s then prevailing rates. 6.1. By referring to these covenants ld. CIT(DR) submitted that delivery is at CIF Mumbai. He, therefore, submitted that the amounts we .....

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ite Networks Ltd. The second recital of the agreement reads as under: Whereas, according to the terms and conditions of purchase thereof, the warrantee granted to buyer (assessee) for such equipment expired and buyer (assessee) has the right to purchase annual maintenance support services on the expiration thereof . 8.1. Thus, it is evident that primarily this agreement had been entered into for annual maintenance support services. 8.2. Ld. CIT(DR) has referred to the various services, covenants .....

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re services were rendered in India. As a matter of fact the replacement could be effected only by Gillette. It is not the case of AO that the non-resident payee had any PE in India and, therefore, the business income in the hands of non-resident payee could not be taxed in India. Further, we are in agreement with the detailed analysis carried out by ld. CIT(A) in holding that no technical services were provided to the assessee and the services were in the nature of normal maintenance/ repairs/ r .....

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terms of the provisions of the Act or DTAA. 8.3. In view of above discussion, the revenue s appeal is dismissed. ITA 5907/Del/2010 (Assessee s appeal for AY 2006-07 u/s 263): 9. This appeal, preferred by the assessee, arises out of CIT, Delhi-IV s order dated 30.09.2010 passed u/s 263 of the Income-tax Act, 1961, relating to AY 2006- 07. 10. The assessee continued to carry on the same business as in AY 2004-05. The assessee had filed return of income declaring income of ₹ 22,83,76,292/- wh .....

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g nil market value at the end of that period. 10.2. Ld. CIT observed that since the loss claimed was only notional loss, not based on any actual valuation, therefore, should have been disallowed and added back to the income of the assessee. This mistake resulted in under-assessment of ₹ 458.13 lacs involving tax effect of ₹ 205.09 lacs including interest. Ld. CIT observed that these aspects were never considered by the AO while framing the assessment order. He further observed that n .....

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y to assessee to explain its position. However, none appeared and, therefore, ld. CIT proceeded to pass the revisional order u/s 263. Ld. CIT has reproduced the written submissions filed by assessee, in which primarily assessee demonstrated how the sum of ₹ 458.14 lacs was written down under the head purchases in the P&L a/c as per Schedule 16 and also referred to the queries raised by AO and assessee s reply in this regard. Assessee pointed out that it was explained to the AO that the .....

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t of goods and services ), represented only 25% of the cost of spares and accessories, which was written off during the financial year under consideration. Further an amount of ₹ 103.78 lakhs (which had been written off in the earlier year), was written back (i.e. it was offered as income), during the financial year and, hence, it was only the net amount of ₹ 458.13 Lakhs, which was ultimately charged to the P&L A/c. The assessee further explained as under: The Customer Care Orga .....

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has a useful life of 4/5 years. 11. The assessee s main plank of argument was that accounting policy had been consistently followed by the assessee company and the choice of the method of valuation of inventories rested with the assessee. Further, it was submitted that even if two views were possible about the tax deductibility of the written down of the value of the spares and accessories @ 25% only reduced from carrying value to the realizable value, the view taken by the AO was possible view .....

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e same with reference to the appropriate legal provision and, therefore, the assessment order was erroneous in the eyes of law. (b) As regards the assessee s claim that AO had taken one possible view, ld. CIT pointed out that since the issues were never considered by the AO during the course of assessment proceedings, there was no question of AO s taking any view on that issue. (c) It is essential for the parties to know the reasons that had weighed with the adjudicating authorities in coming to .....

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file for reconsideration of the same on the disputed issue alleged in the notice. 11.1. Ld. counsel for the assessee pointed out that it is well settled law that the way the assessment order is drafted is not within the assessee s control. He relied on the decision of Hon ble Punjab & Haryana High Court in the case of Hari Iron Trading Co. Vs. CIT 263 ITR 437 (P&H). He further relied on the decision in the case of CIT Vs. Eicher Ltd. 294 ITR 310 (Del.), wherein it was held that when all .....

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s. The breakup of the write off as indicated under schedule 16 to the financials is follows Break up of write down Amount Description Depreciation of spares 56,191,665.00 Note 1 below Provision of inventory pertaining to more than 365 days -10,378,048.00 Note 2 below Note 1: An amount of R.s 5.61 crores, represent the write off of spares and accessories required to service the main equipment that has been installed at Customer sites across India .These stores and spares are purchased in bulk and .....

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ftware and other components unsold for more than 365 days are subject to write off's on account of their being rendered obsolete due to technology and market change and on account of their having nil market value at the end of that period. This policy of write off's has been followed year after year by the company and has been accepted by the A.O in the assessment of the earlier years. The breakup of the region wise write off's is as per Annexure No 8 to this note . 11.2. Ld. counsel .....

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. 4611 and 4595/Del/2010 dated 26.12.2011, contained at pages 105 to 127 of PB. Ld. counsel pointed out that Hughes Network Systems India Ltd. was engaged in the business of market VSAT equipment and providing telecom related services in India, as assessee. He pointed out that in this case also ground raised before the Tribunal was regarding sustenance of part disallowance to the extent of 25% of total disallowance made by the AO on account of provision for impairment of stock. Ld. counsel refer .....

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f ₹ 3,47,216/- on account of stock impaired during the year. In the line of the reasons given by the AO in the AY 2004-05, the assessee s claim on account of reduction in the value of inventories on account of impairment of stock to the extent of ₹ 3,47,216/- has been disallowed. On an appeal, the learned CIT(A) reduced the disallowance to ₹ 25% of total disallowance of ₹ 3,47,216/- made by the AO. 11.3. Ld. counsel referred to para 17 of the Tribunal s order wherein the .....

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TAT erred in deleting the addition of ₹ 90,35,298/- made by the AO on account of provisions for impairment of stock. Ld. counsel referred to para 7 of the decision, wherein the Hon ble High Court, inter alia, observed that on a question of valuation of the closing stock any alleged difference or discrepancy tends to balance itself out over a period of years if the same method is consistently followed. This is because the closing stock of one year becomes the opening stock of the succeeding .....

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be said to be erroneous since the same is in consonance with the judicial precedents. In this regard ld. counsel relied on the decision in the case of K.N. Agrawal Vs. CIT 189 ITR 769, wherein it was, inter alia, held that ITO is bound to follow the order of appellate authority and, therefore, the said order cannot be held to be erroneous empowering Commissioner to revise the same. He also relied on the decision of Hon ble Calcutta High Court in the case of Russel Properties Pvt. Ltd. Vs. A. Ch .....

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that this negates the assessee s contention regarding 25% fall in the value of inventory. ld. CIT(DR) further submitted that assessee had not given any supporting evidence regarding net realizable value of stock. 12.2. Ld. CIT(DR) referred to the decision of Hon ble Delhi High Court in the case of Hughes Communication India Ltd., contained at pages 150 to 156 of the PB, wherein in para 7 the Hon ble High Court, inter alia, has observed as under: 7. The findings recorded by the Tribunal are not c .....

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luation. These details have also been extracted by the Tribunal in para 11 of its order. We are, therefore, unable to accept the contention of the revenue that the claim of the assessee remains unsupported. 12.3. Referring to the aforementioned observations, ld. CIT(DR) submitted that in original assessment proceedings, AO should have discussed supporting evidence for valuation of stock. The valuation could not be made on ad hoc basis. Thus, assessment order has been passed without due applicati .....

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inder referred to page 80 of the PB, wherein significant accounting policies are contained in which, as regards inventory, it is stated as under: Inventories are valued at lower of cost and net realizable value. The cost is calculated on the basis of weighted average price method and includes share of allocable overheads. The net realizable value is determined with reference to selling prices of goods. The comparison of cost and net realizable value is made on an item by item basis. 13.1. He fur .....

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year. c) If answer to (b) above is in the affirmative, give details of such change and the effect thereof on the profit or loss. Not applicable d) Details of deviation, if any, in the method of accounting employed in the previous year from accounting standards prescribed under section 145 and the effect thereof on the profit or loss. There is no deviation in the method of accounting employed in the previous year from the accounting standards prescribed under section 145 of the Income-tax act, 1 .....

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ock was allowed by the department in the assessment year 1996-97 and 1997-98. However, during the year under consideration, by disturbing the method of valuation the AO made addition. Jurisdictional High Court in case of Commercial and industrial Ltd. (240 ITR 256) upheld the order of the Tribunal alone claiming the loss arising out of valuation .of slow moving raw material as estimated realizable value. Since the finding recorded by the CIT(A) has not been controverted by Ld. D.R. We, therefore .....

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isturbed only if it is found that the method of valuation is such that true profits and gains cannot be deduced there from. In this regard Hon ble Delhi High Court has referred to the decision in the case of CIT Vs. Bharat Commercial and Industrial Ltd. 240 ITR 256 wherein the loss arising out of the reduced valuation of slow moving raw material on the basis of estimated realizable value was held allowable. 13.4. Ld. counsel further referred to page 77 of PB, to point out that out of the total r .....

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n of mind makes the order erroneous. There is no gain saying that mere erroneous order does not empower ld. CIT to exercise his powers u/s 263 unless the order is also prejudicial to the interests of revenue. 14.1. In the present case the assessee s reply dated 3.12.2008 is contained at pages 28 to 30, the contents from which, in regard to justification for writing off of stock as per the books of a/c, have been reproduced earlier. From the said reply it is evident that assessee in its note had .....

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iation on these spares had been charged to COGS. This note should have prompted the AO to examine as to the basis on which net realizable value of the inventories had been arrived at because as rightly pointed out by ld. CIT(DR) there could not be 25% fall in the market value of inventories every year. Moreover, this policy had the effect of writing off entire value of spares in 4 years whereas it is evident from the assessee s own account that in next year assessee had realized the value of the .....

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ined @ 25%. Both these statements on same accounts cannot be reconciled. 14.2. Ld. counsel has relied on the decision in the case of M/s Hughes Network Systems (supra). In this case in para 18 the Tribunal has noted that the assessee had furnished the details of inventory with their respective net realizable value as at the end of the year. The AO had not pointed out any defect or irregularity in the details of rate adopted by the assessee for valuing the stock at net realizable value by making .....

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applicable to the facts of the case because in the present case the assessee has simply reduced 25% valuation considering the same as to reduce the value of inventory to net realizable value. No proper estimate was produced before AO so that he could arrive at proper conclusion regarding net realizable value of spare. Further, in the case of Hughes Communication India Ltd., Hon ble Delhi High Court in para 4 has, inter alia, noted that the claim was made on the footing that the net realizable va .....

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of arriving at net realizable value. 14.3. Now coming to the issue regarding assessment order being prejudicial to the interest of revenue or not. Assessee s plea is that the whole exercise is revenue neutral because the closing stock of one year will be the opening stock of subsequent year, therefore neutralizing the effect of addition in one year by increasing the cost in subsequent year. It is well settled law that the method of accounting employed by an assessee should be such from which tru .....

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the Income-tax Act, 1961, to consider whether the correct profits and gains could be deduced from the accounts so maintained. If he was of the opinion that the correct profits could not be deduced from the accounts, he was obliged to have recourse to the proviso to section 145 of the Income-tax Act, 1961. 14.4. Therefore, it cannot be said that by adopting an ad hoc method of arriving at net realizable value by impairing the value of service stock by 25%, in the absence of any detailed technical .....

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long run this exercise will be revenue neutral keeping in view the concept of going concern of an organization but the main object of employing correct method of accounting is to determine the true profits of an year. We, accordingly, uphold the order passed by ld. CIT u/s 263. 15. In the result, assessee s appeal is dismissed. ITA no. 5651/Del/2012 ( Revenue s appeal for AY 2006-07) : 16. This appeal, preferred by the revenue, arises out of CIT(A)-XVIII, New Delhi s order dated 24.08.2012 in a .....

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377; 458.14 lakhs by assessee, which was on the basis of impairment in the value of inventory by 25% of the cost of spares and accessories. The AO, after detailed discussion, disallowed the assessee s entire claim of ₹ 458.13 lakhs. In brief the reasons recorded by AO were as under: i. The assessee was not contesting the issue that the writting off had not been done on the basis of estimation and actually the goods were functional and operating. The assessee was also not disputing the fact .....

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tion 144 provided that the method of accounting regularly employed u/s 145 shall be allowed to the assessee continuously, therefore, the assessee s claim should have been accepted. iii. All the accounting standard and accounting policies never prescribed any presumptive loss when the goods were actually in use. iv. The assessee s case did not fall under any of the approved accounting standard of method of accounting. 17.3. After elaborately considering section 145, the AO further concluded as un .....

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that it is incorrect to say that the officer is bound to accept the assessment and accounting regularly employed by assessee, the correctness of which had not been questioned in the past. (b) Where accounts are prepared without disclosing the real written down value albeit notional loss on written down value, it is duty of AO to determine the taxable income by making such computation as he thinks fit. 17.4. The AO, after detailed discussion made the addition of ₹ 458.13 lakhs, inter alia, .....

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less every year in accordance with the accounting standard II, issued by the Institute of Chartered Accountants of India. (ii) The assessee estimated 4-5 years as usual academic life of these spare parts as per industry norms and, accordingly, every year 25% of the value of these spare parts was written down to the P&L A/c. (iii) As per AS-2, issued by the Institute of Chartered Accountants of India, net realizable value is the estimated selling price in the ordinary course of business less .....

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try to value the inventory of net realizable value. (vi) As per the proviso of section 145(3) as substituted by the Finance Act, 1995 w.e.f. 1.4.1997, there were two options available to the AO, either to accept the books of a/c maintained by the assessee or alternatively to reject the books of a/c maintained by assessee if the case of the assessee falls within the eventuality as envisaged in sub-section (3) of section 145 of the Act and do the best judgment assessment u/s 144. (vii) The AO coul .....

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ssee should have backed its claim by some evidence regarding net realizable value. Thus, he pointed out that the valuation is not based on any proper technical estimation. 19. Ld. counsel for the assessee reiterated the submissions advanced before ld. CIT(A) and submitted that assessee was following a practice which was prevalent in the industry and, therefore, assessee s claim should have been allowed. He relied on the decisions which have been referred in the appeal relating to challenge of th .....

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nclusion that there was no fall at all in the value of spares also is not correct because it cannot be held that there was no decline in the net realizable value of spares. However, estimation should have proper technical backing. 20.1. We are in agreement with the contention of ld. CIT(DR), in view of the decision of Hon ble Supreme Court in British Paints (supra), that if a method employed by assessee is not resulting into computation of true profits of business of an year then the same can be .....

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ares backed with proper evidence in order to substantiate its claim. 21. In the result, appeal is allowed for statistical purposes. ITA no. 5898 (Assessee s appeal for AY 2009-10): 22. This appeal, preferred by the assessee, arises out of CIT(A)-XIII, New Delhi s order dated 17.09.2012 in appeal no. 232/11-12, relating to AY 2009-10. 23. Brief facts of the case are that during the year the assessee company carried on the same business as was in earlier year. Assessee had filed return of income d .....

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sions, the AO computed the disallowance under Rule 8D at ₹ 1,06,61,713/-. Apart from this, the AO also disallowed the assessee s claim of loss of ₹ 4,72,76,410/- on account of writing off of inventory. 23.2. Ld. CIT(A) while partly allowing the assessee s appeal, deleted the disallowance on account of write down of inventories and partly allowing the assessee s claim regarding disallowance made u/s 14A. Being aggrieved, both the assessee and the department are in appeal before us. Fi .....

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me tax (Appeals) erred in law in confirming the disallowance under section 14A of the Act without appreciating the fact that no expense was incurred in connection with earning of tax free dividend income. 1.2 That in the facts & circumstances of the case the Ld. Commissioner of Income-tax (Appeals) erred in law in ignoring the fact that while making the disallowance under Sections 14A (2) and 14A (3) of the Act read with Rule 8D, the assessing officer has failed to discharge the statutory on .....

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ner of Income-tax (Appeals) erred in law, in the facts & circumstances of the case in sustaining the disallowance of ₹ 27,42,886/- by ignoring the fact that in no view of the matter, the maximum amount of disallowance by considering the average of the value of the relevant investments, should not exceed ₹ 7,50,000/- only. 24. Apropos ground no. 1, as against disallowance of ₹ 1,06,61,713/- made by AO u/s 14A ld. CIT(A) restricted the disallowance to ₹ 27,42,886/- bein .....

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e case of Joint Investments P. Ltd. Vs. CIT, rendered in ITA no. 117/2015 dated 25.2.2015, disallowance is to be restricted to ₹ 4,10,000/-. In the result, assessee s appeal is partly allowed. 6142/Del/2012 (Department s appeal for AY 2009-10): 27. The department has taken following grounds of appeal: 1. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of ₹ 4,n, 76,410/- made by the AO. in respect of loss claimed by the assessee .....

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unsold beyond a period of 365 days its actual cost is fully written off. 3. On the facts and circumstances of the case and in law, the Ld. CIT (A) has erred in holding that the action of the AO, rejecting the method of accounting was in clear violation of section 145(3) of the I. T. Act. 4. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in holding that no investment was made out of interest bearing funds, thereby deleting the disallowance of ₹ 79,18,827 /- .....

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assessee s own case for AY 2007-08 and 2008-09, contained at page 147 onwards of the PB and pointed out that in AY 2008-09 the ground raised by revenue was dismissed, inter alia, observing that revenue had not placed any material evidencing that borrowed funds had actually been utilized in making investment. He, therefore, submitted that as regards disallowance made on account of interest under Rule 8D was concerned, since the same investment continued in AY 2009-10, therefore, no disallowance .....

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ration (Rs./Lacs) Purpose for which loan was taken Supporting Documents 1 Loan taken from CISCO SYSTEMS (INDIA) PRIVATE LIMITED 841.93 4757.38 219.00 Loan was taken in connection with one of the projects of the appellant called NSE (National Stock Exchange) Project . Since the moneys so borrowed were utilized wholly and exclusively for the business purpose only, interest cost associate with these loans is not warranted to be considered for the purpose of making any disallowance u/s 14A of the Ac .....

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