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. JSW Steel (Salav) Limited (Formerly known as M/s. Welspun Maxsteel Ltd.) Versus DCIT, Central Circle-22, Mumbai and Vice-Versa

Disallowance made u/s.14A - Held that:- We find that the assessee had an exempt income to the tune of ₹ 7.97 lakhs,that the AO made disallowance of ₹ 2.84 lakhs, invoking the provisions of section 14 A r.w.r. 8D of the Rules, that the FAA enhanced disallowance to ₹ 21.80 lakhs,that both the authorities held that there was no proof that the assessee had sufficient own funds to make investments in shares during the year under consideration. We have gone through the balance sheet .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

es not claim any expenditure for earning exempt income no dis - allowance can be made invoking the provisions of section 14A r.w.r.8D of the Rules. - Decided in favour of assessee - Addition under the head sundry balances written off - Held that:- There is no bar on making a claim about the sums written off in a slump sale transaction. The assessee had taken over the assets as well as the liabilities of VI. In the remand report proceedings,the assessee had submitted the evidences proving tha .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ally did not pay such tax. The loss claimed by the assessee was directly linked with business activity and, therefore,was a business loss. The writing off of the amount is not in dispute. So, even if it could not be allowed u/s.36 the same is allowable u/s.28 of the Act. Therefore, we allow Ground No.2. - Addition under the head insurance claim written off - Held that:- We find that the claim had arisen after the slump sale took place,that the erstwhile company had claimed loss with the insu .....

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 FAA, we decide Ground No.3 in favour of the assessee. - FAA was not justified in enhancing the book profit u/s. 115JB of the Act with regard to 14A disallowance. - Addition on account of bogus expenditure - Held that:- If we go through the above statement of BG and the letter of the assessee dt.3.12.2012, it becomes clear that the BG had made the disclosure of ₹ 5 crores in the capacity of MD of the company and that the assessee had promised to pay outstanding taxes.The land de .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

R Rajendra A.M.- Challenging the order,dated 07/10/2014,of the CIT(A)-39,Mumbai the Assessing Officer (AO)and the assessee have filed cross appeals for the AY.2011-12.The assessee has also filed appeal for the AY.2010-11.As most of the issues in these appeals are common,so,we are adjudicating them by passing a single order. ITA/69/Mum/2015,AY. 2010-11: Brief background- 2. An action u/s. 132 of the Act was carried out on 13/10/2010 at the business/residential premises of persons of Well Spun gro .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nt proceedings,the AO found that the assessee was in receipt of exempt income by way of dividend of ₹ 7.97 lakhs,that it had made investment in shares to the tune of ₹ 2.99 crores,that no disallowance u/s.14A was made.He directed the assessee to file submission in that regard.The assessee submitted that it had made investment out of its own funds and accruals.However,the AO did not agree with the assessee and referring to the judgment of Godrej & Boyce Manufacturing Company Ltd.( .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ering the available material,the FAA held that the assessee had received tax-free dividend income of ₹ 7.97lakhs,that it had claimed that no expenditure was incurred for earning the exempt income,that it had made investment of ₹ 2.99 crores in shares and had submitted that investment was made for strategic purposes that it had not established satisfactorily that entire investment had been made out of internal accruals alone,that no details were filed to prove that it had sufficient 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

Alternatively,it was argued that reasonable disallowance should be made keeping in consideration the exempt income earned by the assessee.The Departmental Representative (DR)supported the order of the FAA. 2.4. We have heard the rival submissions and perused the material available on record. We find that the assessee had an exempt income to the tune of ₹ 7.97 lakhs,that the AO made disallowance of ₹ 2.84 lakhs, invoking the provisions of section 14 A r.w.r. 8D of the Rules, 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

t the shares purchased by the assessee for the year under appeal was not a strategic investment.We find that the AO/FAA has not mentioned anything about the expenditure incurred by the assessee for earning exempt income.In our opinion if the assessee does not claim any expenditure for earning exempt income no dis - allowance can be made invoking the provisions of section 14A r.w.r.8D of the Rules. Considering the above,first Ground of appeal is decided in favour of the assessee. 3. Second effect .....

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 assessee had neither submitted the details required not furnished any proof to show that the amount in question had been offered for tax in the earlier years.Invoking the provisions of section 36(1) (vii)of the Act,he made a disallowance of ₹ 84.65 lakhs. 3.1. During the appellate proceedings before the FAA, the assessee stated that it had written off grant receivable from ASIDE (Rs. 71.78 lakhs) and Service Tax (Rs. 12.87 Lakhs),that it had acquired a sponge iron unit as a going concer .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

as not paid by it, the assessee wrote it off.The assessee submitted copies of letters of Maharashtra Maritime Board wherein it was mentioned that and amount of ₹ 253.09 lakhs was released to the erstwhile company towards Central assistance scheme.The additional evidences produced by the assessee,were admitted under rule 46A of the Rules by the FAA and were forwarded to the AO. After considering the remand report of the AO and the rejoinder and the submissions of the assessee,the FAA held 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

ition to be fulfilled by the assessee itself and not by any other person,that the assessee had taken over the assets and liabilities at fair market value in contrast to written down value in the books of accounts of the seller company, that the conditions of section 36 were not satisfied.Finally,he upheld the disallowance made by the AO. With regard to the alternate argument,he observed that it would tantamount to writing off and asset taken over under slump sale,that it would be a 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

im the written off balances for the claim for the year under consideration . 3.3. We have heard the rival submissions and perused the material available on record.We find that the assessee had acquired M/s.Vikram Ispat (VI)from M/s. Grasim Industries during the year under consideration as a going concern,that VI was granted Central assistance by Maharashtra Maritime Board,that out of the total grant of ₹ 380 lakhs the board released assistance of ₹ 253.09 lakhs only,that 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

itten off in a slump sale transaction.The assessee had taken over the assets as well as the liabilities of VI. In the remand report proceedings,the assessee had submitted the evidences proving that the erstwhile entity had offered the income under the head other income. It is found that grant receivable from ASIB of ₹ 71.78 lakhs was credited in the P&L A/c. for the period ended 22.5.2009.Thus, the amount written off during the year under consideration was already offered for taxation. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

w Ground No.2. 4. Next ground of appeal deals with confirming the addition of ₹ 9.37 crores under the head insurance claim written off.During the assessment proceedings,the AO found that the AO found that the assessee had debited its profit and loss account by insurance claim written off of ₹ 9.37 crores.He directed it to file necessary details in that regard.After considering the same,he held that the write-offs were not related to any income offered to tax in earlier years,that sam .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

#8377; 3.61 crores in the AY.s 2008-09 and 2009-10 in accordance with the provisions of section 50,that the insurance company repudiated the claim on 25/05/2012,that all the conditions of section 36 were satisfied, that the debt arose in the ordinary course of business carried on by the assessee and had been taken into account in computing assessable income in the past.The FAA ordered for remand report from the AO in that regard. After considering submissions of the assessee and remand report, h .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

9 and 2009- 10 it had shown STCG of ₹ 2.09 crores and ₹ 3.61crores in accordance with the provisions of section 50 with regard to claim of insurance made by it, the insurer i.e. The New India Assurance Co.Ltd. repudiated the claim made by the assessee. The DR relied upon the order of the FAA. 4.3. We have heard the rival submissions. We find that the claim had arisen after the slump sale took place,that the erstwhile company had claimed loss with the insurance company, that the claim .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

3 in favour of the assessee. 5. Remaining two grounds,deal with levy of interest/penalty.Ground 4 is consequential and ground five is premature.So fourth ground is allowed for statistical purposes and fight ground is dismissed. ITA/70/Mum/2015-AY.2011-12: 6. First effective ground of appeal,raised by the assessee,is about confirming the addition of ₹ 13.18 lakhs made by the AO u/s.14 A r.w.r. 8D of the Rules. 6.1. While deciding the identical ground for the earlier year (at paragraph numbe .....

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,following our order for Ground No.1 we hold that FAA was not justified in enhancing the book profit u/s. 15JB of the Act with regard to 14A disallowance.Second ground stands allowed. 8. Next two grounds,deal with levy of interest and penalties u/s.271.Both the issues are consequential/premature.So,third ground is allowed for statistical purposes and last ground is dismiseed. ITA/394/Mum/2015-AY.2011-12: 9. The solitary ground of appeal,raised by the AO, is about deleting the addition of some 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

to explain as to whether the income admitted by it during the search proceedings had been offered to tax. It was also directed to produce the supporting documents in that regard.He further asked the assessee to explain as to why the depreciation claimed, if any, should not be disallowed in case the expenditure was capitalised.The assessee was also directed to specify the end use of the funds raised by Maginot Trading Co.Pvt.Ltd.In its response, dt.3.12.2012,the assessee stated that disputed pay .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

enditure of ₹ 5 crores as unexplained expenditure and added it to the total income of the assessee. 9.2. During the appellate proceedings before the FAA,the assessee made elaborate submissions in that regard.A remand report was called from the AO.After considering available material,the FAA held that BG had admitted the accommodation entries and offered it for taxation,that during appellate proceedings it was claimed that the statement of BG were recorded under confused state of mind, 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

nd contended that statement recorded u/s.132(4) was not retracted,that the FAA had not understood the statement in the right perspective, that the surrender was made in the hands of two corporate entities and not in the individual hands of the BG, that by surrendering the impugned amount the assessee had prevented the department from making further investigation in that regard. He referred to page-7 of the PB wherein details of land development account were available and stated that 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

y was found to be existing at either of the addresses given in the memo. Please furnish the address of this party and explain the transactions with them. Ans: The payments made to M/s. Maginot Trading Co.Pvt. Ltd., amounting to total of ₹ 5.Crores, in the current financial year, made on account of supply of muram at the Raigad site of M/s. Welspun Maxsteel Ltd., is nothing but an accommodation entry arranged by one of the broker for generation of cash by debiting bogus expenses. I confirm .....

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: Construction of single unit bungalow

Forum: Duty Drawback & Input Credit - under GST

Forum: Credit on Repair of Company Car & Its Insurance

Article: SIMPLIFIED E-WAY BILL UNDER GST

Article: SERVICES UNDER REVERSE CHARGE UNDER GST REGIME

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

Highlight: Rate of exchange of conversion of the foreign currency with effect from 22th September, 2017 - Notification

Highlight: Companies (Acceptance of Deposits) Second Amendment Rules, 2017 - Notification

Highlight: 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. - Circular

Highlight: Amendment to Paragraph 2.72 (b) of the Handbook of Procedures of the Foreign Trade Policy (FTP) 2015-20 - Public Notice

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

Circular: Amendment to Paragraph 2.72 (b) of the Handbook of Procedures of the Foreign Trade Policy (FTP) 2015-20

Notification: Companies (Acceptance of Deposits) Second Amendment Rules, 2017

Notification: Rate of exchange of conversion of the foreign currency with effect from 22th September, 2017

Forum: Trans1 return

News: Exchange Rate of Foreign Currency Relating To Imported and Export Goods Notified

Circular: Promote the officers of the Indian Revenue Service (Customs and Central Excise) to the grade of Principal commissioner of customs, GST & CX

Circular: Allocate the charges amongst the Members of the Central Board of Excise and Customs

Circular: Strategy for audits in 2017-18 consequent to GST - Audit by Central Excise and service Department to continue for the accounting year 2016-17 and for the past period

Circular: Appoint the IRS (C&CE) officers as Principal Commissioner (Revision Application) and ex-officio Additional Secretary

Circular: Time limit for filing intimation for composition levy under Rule 3(1) of the CGST Rules, 2017 extended to 16-8-2017

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

Circular: C.B.E. & C. Advisory on Customs related matters on introduction of Goods and Services Tax regime

Circular: List of Reduced Tax Liabilities under GST regime in comparison to present combined Indirect Tax rates

Circular: Works Contract for construction of Flats, Complex — Builders to pass on GST benefit to buyer otherwise anti-profiteering provisions of Section 171 of GST Act to apply

Circular: Clarification regarding applicability of section 16 of the IGST Act, 2017, relating to zero rated supply for the purpose of Compensation Cess on exports – Regarding.

Circular: Clarification on Inter-state movement of various modes of conveyance, carrying goods or passengers or for repairs and maintenance- regarding

News: RBI Reference Rate for US $

Highlight: Addition u/s 23(1)(a) - deemed rent - once the property is let out and at any point of time this remained vacant during the same cannot be brought to tax under the head House properties income.

News: Haryana constitutes screening committee on anti-profiteering

Highlight: Valuation of imported goods - it is necessary to re-examine the matter of both license agreement as well as supply contract simultaneously, to see if the enhanced royalty was in the guise of adjustment of the price of components.

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

Highlight: Cenvat credit availed on Club Membership for the Director is not admissible as it cannot be said to be remotely connected with the activity of manufacture

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

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.

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.

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 $



|| 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