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 →

M/s. Glade Steel Private Limited Versus The Income Tax Officer

Valadity of Revision orders u/s 263 - Held that:- The revisional authority ought to have made proper investigation and recorded appropriate conclusion to buttress his view that the order passed by the Assessing Officer is erroneous and prejudicial to the interests of the Revenue; He ought to have pointed out what more investigation is warranted in the facts and circumstances of the case. It may not be out of place to mention that the Pr. CIT passed a lackluster order while holding that the order .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

are colourable the Ld. Commissioner, in our humble opinion, is not justified in holding that the order passed by the Assessing Officer is erroneous and prejudicial to the interests of the Revenue. - We hold that the order passed by the Commissioner is bad in law and therefore, we quash and set aside the order passed by the Commissioner and allow the appeal filed by the assessee company. - ITA. No. 723/Hyd/2015 - Dated:- 21-10-2016 - Shri D. Manmohan, Vice President And Shri B. Ramakotaiah, .....

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 MS Channels. For the year under consideration, it declared NIL income which was processed accordingly on 27.10.2011. Thereafter, the case was taken-up for scrutiny and a notice was issued under section 143(2) of the Act. A questionnaire was also issued to the assessee calling for various details. As noticed from the paper book, a notice under section 142(1) dated 27.12.2012 was issued calling-upon the assesseecompany to furnish complete details of the Directors along with their assessment par .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

usiness carried on during the previous year and all other financial statements along with annexures. In response thereto, the assessee furnished the following details : 1. Books of accounts of the company for the A.Y. 2010-2011 in printed format. 2. Confirmation of investment into the shareholding of the company by M/s. Starline Holdings Inc. and M/s. Sujana Metal Products Limited. 3. Ledger copy of share premium account. 4. Bank reconciliation statement along with bank statement. 5. Ledger copy .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

leased-out its factory premises to M/s. Sujana Metal Products. It was further noticed that the assessee availed term loan for setting-up of factory and claimed an amount of ₹ 49,50,000 towards interest paid to APSFC. Since the assessee received a meager amount of ₹ 9 lakhs in the form of lease rental, the Assessing Officer observed that the interest paid to APSFC is not commensurate with the investment and thus treated the same as not connected to the business. In otherwords, the amo .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Revenue. The errors pointed-out in the notice were reproduced for immediate reference : (i) No enquiries were conducted into the alleged trading activity, which would be in the nature of round tripping because the entities with whom the activities are conducted are of the same group companies; (ii) The investment of $ 32,49,877/- by M/s. Starline Holdings Inc, 60 Market Square, PO Box No.374, Belize City, Belize @ ₹ 250/- per share (at a premium of ₹ 250 per share) was not investigat .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

contention of the assessee-company he learned Representative adverted the attention of the Principal Commissioner to the questionnaire issued by the Assessing Officer wherein the assessee was called-upon to furnish gross profit/net profit margins shown with corresponding turnover for the current and past two years and the Assessing Officer had also directed the assessee to furnish the copies of the VAT returns and after considering all the details filed, the Assessing Officer had come to the co .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ged trading activity and in particular the nature of round-tripping, which is based on the assumption that the entities with whom the activities are conducted are of the same group companies. In the reply furnished before the Pr.CIT it was contended that except the assumption of the Pr.CIT he had not specifically found anything regarding nature of round-tripping of the trading activity; Therefore, the revisional proceedings are bad in law. At best it can be said that there are two views possible .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

her view on the matter the Commissioner should point-out as to what further investigation would have been made by the Assessing Officer. It was thus, strongly submitted that the view taken by the Assessing Officer is one of the possible views on the matter and therefore, not amenable to the jurisdiction of the revisional authority. 5.1. The Ld. Pr. CIT agreed in principle that when there are two views possible and if Assessing Officer takes one of the courses permissible in law, the CIT cannot e .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

CIT observed that the Assessing Officer failed to cause enquiries regarding the alleged trading activity pertaining to the entities with whom the activities are conducted. Further, investments by Sterling Inc., Belize City was not investigated by the Assessing Officer and documents were accepted at face value. He therefore, concluded that the matter requires re-examination by the Assessing Officer properly and accordingly, set aside the assessment order with a direction to the Assessing Officer .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ar. Since he has called for all the details with regard to the investments made by the assessee, merely because the Commissioner holds a different view it cannot be alleged that the activity was in the nature of round-tripping. In fact, the Ld. Commissioner had not specifically mentioned as to how the activity can be considered as round-tripping activity and even he could not point-out as to how the investment into shareholding of Star Line Holdings etc., was not properly investigated. In fact c .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

unsustainable and as a necessary consequence the assessment order cannot be considered to be erroneous and prejudicial to the interests of the Revenue. In this regard, the Learned Counsel for the assessee, strongly relied upon the decision of the Apex Court in the case of Malabar Industrial Co., Ltd, 243 ITR 83 wherein the Court observed that in order to invoke the provisions of section 263 of the Act, the CIT has to be satisfied with twin conditions namely (a) the order of the Assessing Office .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

while accepting the plea of the assessee and what is required to be verified is, whether there was application of mind by an enquiry; once there is a proper enquiry it cannot be called as erroneous merely because the Commissioner entertains a different opinion on the matter. Learned Counsel for the assessee thus strongly submitted that the order passed by the CIT is bad in law inasmuch as there was no material on record to suggest that the order passed by the Assessing Officer is erroneous and 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

soner can invoke revisionary powers. 2. Rampyari Devi Saraogi vs. CIT (1968) 67 ITR 84 (SC) (A short stereo-typed assessment order, despite not producing evidence in respect of money lending business done and interest income shown to have been received by the assessee would be sufficient to come to the conclusion that the order passed by the Assessing Officer is erroneous.) 3. CIT vs. Infosys Technologies Ltd., 341 ITR 293 (Karnataka) (HC) (If the assessing authority failed to verify the particu .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

se the CIT holds a different opinion the order passed by the Assessing Officer cannot be said to be erroneous. He also relied upon the decision of Hon ble Delhi High Court in the case of D.G. Housing Project Ltd., 20 taxman 587 in support of his contention that the CIT cannot direct the Assessing Officer to conduct further enquiry to verify as to whether first order passed by the Assessing Officer is erroneous or not. In the said case the assessee sold immovable property and claimed capital loss .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

pably wrong/unsustainable in law, it can be corrected by the Commissioner in exercise of revisional powers but in order to hold that the view taken by the Assessing Officer is wrong the Commissioner has to conduct necessary enquiry before passing an order under section 263; the Court further remarked that in cases where there is inadequate enquiry but not lack of enquiry, the Commissioner must give a finding that the enquiry is insufficient and in order to come to such a conclusion the Commissio .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he revisional authority jumped to the conclusion merely because the activity was within the same group of companies and such surmises should not be the basis for concluding that the order passed by the Assessing Officer is erroneous and prejudicial to the interests of the Revenue. He also relied upon the decision of the Hon ble Mumbai High Court in the case of CIT vs. Credit Bank 196 taxman 329 wherein the Court observed that Assessing Officer having made enquiries and arrived at a conclusion th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

g to the conclusion, except on surmises, with regard to nature of round-tripping activity, and no further investigation was made by the Commissioner before holding that the order passed by the Assessing Officer is erroneous and prejudicial to the interests of the Revenue. 8. We have carefully considered the rival submissions and perused the record and we have also carefully gone through the case law relied upon by both the parties. There is no dispute with regard to the principle as to what is 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

 

 

 

 

 

what is new what is new
  ↓     Latest Happenings     ↓  

News: Notification Issued For GST Actionable Claim On Branded Food Products

News: GST Refund - Blockage of Working Capital of Exporters - earlier also there was a normal blockage of funds for a period of 5-6 months at least

News: Clarification about Transition Credit - ₹ 1.27 lakh crore of credit of Central Excise and Service Tax was lying as closing balance as on 30th June, 2017 - claim of credit of ₹ 65,000 crore is not unexpected

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

Article: MISTAKES IN DRAFTING

Forum: Duty Drawback- Urgent

Highlight: The Customs and Central Excise Duties Drawback Rules, 2017 and All Industry Rates (AIRs) of Drawback related changes -reg. - Circular

Highlight: The definition of "subsidiary company" or "subsidiary" u/s 2(87) of the Companies Act, 2013 shall come into force w.e.f. 20-9-2017

Highlight: Central Government notified the All Industry Rates of Duty Drawback Schedule w.e.f. 1.10.2017 - Notification

Notification: All Industry Rates of Duty Drawback Schedule w.e.f. 1.10.2017

Circular: Investment by Foreign Portfolio Investors in Corporate Debt Securities Review

Notification: Exemptions on supply of services under UTGST Act

Notification: Rates for supply of services under UTGST Act

Notification: Exemptions on supply of services under IGST Act

Notification: Rates for supply of services under IGST Act

Notification: List of Exempted supply of services under the CGST Act

Notification: Rates for supply of services under CGST Act

Highlight: Acceptance of deposits by companies from its members - conditions relaxed in case of Specified IFSC Public company and a private company - Rule 3 amended

Notification: Rate of exchange of conversion of the foreign currency with effect from 8th September, 2017

News: Tax Payers Advised To Confirm Identities Of Income Tax Search Authorities

Notification: Amendment in Appendix 3 (SCOMET items) to Schedule- 2 of ITC (HS) Classification of Export and Import Items 2012

Forum: GST Invoice

Notification: The Customs and Central Excise Duties Drawback Rules, 2017

Circular: The Customs and Central Excise Duties Drawback Rules, 2017 and All Industry Rates (AIRs) of Drawback related changes -reg.

News: GST implementation smoother than expected: Jaitley

Forum: GST - TRAN1 - filed - Data uploaded with Remarks Processed with Error - Not coming in Electronic credit ledger - need suggession guidance

Forum: 3B mistake

Forum: Input tax credit

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

Forum: Due date of Filing TRAN-1

Highlight: Diversion of income at source - Joint venture agreement - 97% of the receipt transfer to M/s TRG Industries (P) Ltd. - scope of the agreement - it is diversion by overriding title - not taxable in the hands of assessee - HC

Highlight: Expenditure on eligible projects or schemes u/s 35AC - After 01.04.2017 the legislature desired to withdraw such deduction. - The Union legislature was competent to introduce such amendment - HC

Highlight: Transfer of trading assets at cost price, the profit component also stood transferred to the outgoing Directors, which otherwise belonged to the Company - the fact that AO has made the addition in the hands of the Directors would not make any difference - additions confirmed - HC

Highlight: The interest u/s 234B of the Act cannot go beyond the stage of S.245D(I) before the Settlement Commission - HC

Highlight: Galvanized iron pipe is a different commercial commodity than a iron pipe, therefore the activity of galvanization in our considered opinion amounts to manufacture - Deduction u/s 80-IB allowed - HC

Highlight: Penalty u/s 271C - non deduction of TDS on interest paid to sister concerns in terms of Section 194A - Levy of penalty confirmed - HC

Highlight: Disallowance of interest - reference to section 179 - The legislature has also recognised, that the doctrine of lifting of veil in the matter of tax dues is to be applied to prevent fraud etc. and not where the company has suffered despite its normal bona fide function. - HC

News: RBI Reference Rate for US $

Notification: Amendment in Notification No. S.O. 3118(E), dated the 3rd October, 2016

Highlight: Discount on ESOP to be allowed as business expenditure u/s 37(1), during the years of vesting on the basis of percentage of vesting during such period, subject to upward or downward adjustment at the time of exercise of option.

Notification: Central Government appoints the 20th September, 2017 as the date on which proviso to clause (87) of section 2 of the Companies Act 2013, shall come into force

Notification: Companies (Restriction on number of layers) Rules, 2017

Highlight: Penalty u/s 271(1)(c) - additional income disclosure - surrender of income post survey u/s 133A - he disclosure made by the assessee is voluntary in nature, in the revised return - no penalty

Highlight: Reopening of assessment - notice u/s 148 issued on the directions of JCIT / CIT - a perusal of reasons for initiating reassessment proceedings clearly show that they are against the sprit of provisions u/s 147

Highlight: MAT - Adjustment to book profit - computation u/clause (f) of Explanation-1 to section 115JB(2) is to be made without resorting to the computation as contemplated u/s 14A r.w.Rule 8D of I.T. Rules.

Highlight: Addition on account of alleged suppression of service value received - the addition made simply believing the Form 26AS will be an arbitrary exercise of power which cannot be sustained

Notification: Exempts intra state supply of heavy water and nuclear fuels from DAE to NPCIL

Notification: Seeks to amend notification No. 12/2017-UTT(R) to exempt right to admission to the events organised under FIFA U-17 World Cup 2017

Notification: Seeks to amend notification No. 11/2017- UTT(R) to reduce CGST rate on specified supplies of Works Contract Services

Highlight: Liability to pay duty on import of software - Though no authorization was given by the appellant to DHL, it is an undisputed position that the software has, in fact, been ordered by the appellant and have been delivered to them by DHL - the appellant is to be considered as the importer



|| 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