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, Circle-8, Ahmedabad Versus Transformers & Rectifiers (India) Ltd.

ITA No. 3090/Ahd/2011 - Dated:- 4-5-2012 - A. K. Garodia (Accountant Member) And Kul Bharat (Judicial Member) For the Appellant : Vinod Tanwani, SR-DR For the Respondent : Sanjay Majumdar, AR ORDER Kul Bharat (Judicial Member) The present appeal has been field by the Revenue against the order of Ld. Commissioner of Income-tax (Appeals)-XIV, Ahmedabad dated 13-09- 2011 for the assessment year 2008-09 raising the following grounds of appeal. 1) The Ld. Commissioner of Income-tax (Appeals)-XIV, Ahm .....

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 observed that the assessee-company had earned dividend income of ₹ 1,75,92,106/- claimed as exempt income u/s. 10(33) of the Act. He further observed that the assessee incurred interest expenditure of ₹ 4,86,11,489/- and the average investment stood at ₹ 39,73,64,901/-. Therefore, finding the assessee-company in receipt of exempt income the AO called upon the assessee as to why disallowance u/s 14A of the Act should not be made. The assessee-company before the AO submitted as .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

l expenditure program for the new project was yet to take place and accordingly the amount has been parked temporarily in mutual funds. Thus there is a direct nexus between the proceeds of the public issue with the investment in the mutual funds and therefore the amount earned by the company out of the investment made in the mutual fund should be treated as exempt income without applying Rule 8D. A statement showing detailed working of amount invested in the mutual fund out of the proceeds of 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

as to be applied. In our case nexus is clearly proved between the investment and proceeds of the public issue and therefore we are sure that your good office shall satisfy about the utilization of public issue fund for investment in mutual funds for a temporary period from enclosure-1 above and therefore the question of applying Rule 8D does not arise. However, a statement showing working as per Rule 8D as asked by you is enclosed as Encosue-2 (age No.2) without prejudicing the fact that the Rul .....

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 Act. The assessee feeling aggrieved by the order of Assessing Officer filed appeal before Ld. CIT(A) challenging the aforementioned disallowance of ₹ 1,02,02.669/- u/s. 14A of the Act. 3. Before Ld. CIT(A) Learned Authorized Representative of the assessee submitted that no clarification was sought by the Assessing Officer and he applied Rule 8D of the I.T. Rule, 1962 on ad hoc basis he submitted that Rule 8D can be applied only after the AO has satisfied himself convincingly that the as .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ment of Hon ble Bombay High Court in the case of Godrej and Boyce Mfg. Co. Ltd. v. DCIT in ITA No. 626 & WP 758 of 2010 dated 12-08-2010. The assessee further relied in the case of CIT v. Hero Cycles 323 ITR 158 (P & H) passed by Hon ble Punjab and Haryana High Court. The assessee also relied upon the order of ITAT Delhi in the case of Minda Investment Ltd. v. DCIT in ITA No.4046/Del/2009. The assessee also relied upon the order passed by ITAT Delhi in the case of DCIT v. Maharashtra Sea .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

itted that it has not invested any interest bearing funds in the mutual funds which has earned exempt income. It has been submitted by the appellant that the company had come out with its maiden public issue on 27/12/2007 and has received net proceeds of ₹ 139.27 crores which has been invested in mutual funds. No other interest bearing funds have been invested by the appellant in the mutual fund. The appellant has also submitted a statement showing detailed working of amount invested in mu .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

diverted for such investment the need for interest bearing funds would have been lesser. The findings given by the AO are not justified as in this case, there is a direct nexus between the non interest bearing funds and the investment made by the appellant. No disallowance on account of interest u/s. 14A r.w. Rule 8D can be done. There is no doubt that with introduction of Rule 8D, the Assessing Officer need not establish the nexus with the interest bearing fund and the investment made to earn .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

deleted. The A.O has also made disallowance on account of administrative expenses amounting to ₹ 19,86,825/- by applying Rule 8D. This expenditure is supposed to have been incurred on various administrative heads for management and maintenance of the investments made by the appellant in mutual funds. Though the funds for investment were separate that the administrative expenditure is bound to be intermixed and the appellant must have used his existing administrative set up like - employees .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

order passed by Ld. CIT(A) and submitted that assessment order patently erroneous in the light of various judicial decisions cited by him. Ld. AR relied upon the order passed by Ld. CIT(A) in the case of CIT v. Hero Cycles 323 ITR 158 and also the order passed by ITAT Delhi Bench in the case of Minda Investment Ltd. v. DCIT in ITA No.4046/Del/2009. 6. We have heard the rival submissions and perused the materials available on record. It is not disputed that the assessee has earned exempt income 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

t. He further observed that the assessee incurred interest expenditure of ₹ 4,86,11,489/- and the average investment stood at ₹ 39,73,64,901. It is settled position of law that the Rule 8D of the Income Tax Rules, 1962 would apply for the Assessment Year 2008-09 Rule 8D is reproduced as under:- [Method for determining amount of expenditure in relation to income not includible in total income. 8D (1) Where the Assessing Officer, having regard to the accounts of the assessee of a previ .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

l be the aggregate of following amounts, namely:- (i) the amount of expenditure directly relating to income which does not form part of total income; (ii) in a case where the assessee has incurred expenditure by way of interest during the previous year which is not directly attributable to any particular income or receipt, an amount computed in accordance with the following formula, namely:- A x B/C Where A = amount of expenditure by way of interest other than the amount of interest included in .....

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     ↓  

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

Forum: Input credit of gst paid on urd

Forum: 3B mistake

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

Article: WHEN CAN ONE TAKE ITC FOR RCM CASES?



|| 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