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Showing 21 to 40 of 1398 Records
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2016 (10) TMI 1378 - ITAT BANGALORE
Validity of the assessment order passed u/s 153C - necessity of recording satisfaction - Whether satisfaction was recorded by the A.O. in the case of searched person that the incriminating material found during the course of search belongs to the assessee? - HELD THAT:- As decided in assessee husband case SHRI GALI JANARDHANA REDDY [2016 (11) TMI 530 - ITAT BANGALORE] no satisfaction was recorded by the AO in his capacity as AO of the searched person because it is seen that the so-called satisfaction note prepared by the AO is in his capacity as AO of assessee, although he happens to be the AO of the searched persons also, it could not be shown by the revenue that any satisfaction note was prepared by him as AO of searched persons and therefore, under these facts, this is to be accepted that no satisfaction was recorded by the AO of searched person.
As case of M/s. Gopi Apartment [2014 (5) TMI 158 - ALLAHABAD HIGH COURT] and case of Calcutta Knitwears [2014 (4) TMI 33 - SUPREME COURT] and Manish Maheshwari [2007 (2) TMI 148 - SUPREME COURT] are applicable and therefore, respectfully following these judgments, we hold that in the present case, notice issued by the AO u/s. 153C of the I.T. Act deserves to be quashed - Decided in favour of assessee.
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2016 (10) TMI 1377 - MADRAS HIGH COURT
Seeking a direction to the respondents to return the cheques taken from the petitioner during the inspection conducted by the second respondent in the place of business of the petitioner on 19.9.2016 at 6 PM - HELD THAT:- Time and again, this Court held that the officials of the Enforcement Wing cannot collect cheques or even collect tax in the nature of advance tax and this practice has been deprecated and the leading decision on this point is in the case of HOTEL BLUE NILE VERSUS STATE OF TAMIL NADU [1992 (9) TMI 309 - MADRAS HIGH COURT].
The action of the second respondent in retaining the cheques issued by the petitioner is not sustainable - Petition allowed.
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2016 (10) TMI 1376 - ORISSA HIGH COURT
Seeking to quash the Technical Bid Evaluation Summary under Annexure-4 and the consequential Financial Bid Opening Summary under Annexure-5 - direction for fresh evaluation of the Bid taking into account the materials - reason for rejection of the tender of the petitioner was communicated to the petitioner before the financial bids were opened, or not - time to produce the renewed licence should have been granted to the petitioner before rejecting his tender, or not.
While rejecting the bid of the petitioner, it has to be seen whether any reason has been assigned by the authority or not? - HELD THAT:- Reason means the faculty of rational thought rather than some abstract relationship between propositions and by this faculty, it is meant the capacity to make correct inferences from propositions, to size up facts for what they are and what they imply, and to identify the best means to some end, and, in general, to distinguish what we should believe from what we merely do believe. The importance of giving reason, it reveals a rational nexus between facts considered and conclusions reached.
In UNION OF INDIA VERSUS. MOHAN LAL CAPOOR & OTHERS [1973 (9) TMI 99 - SUPREME COURT] and in UMA CHARAN VERSUS STATE OF MADHYA PRADESH AND ANR. [1981 (8) TMI 235 - SUPREME COURT], the apex Court held reasons are the links between the materials on which certain conclusions are based and the actual conclusions. They disclose how the mind is applied to the subject-matter for a decision whether it is purely administrative or quasi-judicial and reveal a rational nexus between the facts considered and conclusions reached. The reasons assure an inbuilt support to the conclusion and decision reached. The fair play requires recording of germane and relevant precise reasons when an order affects the right of a citizen or a person irrespective of the fact whether it is judicial, quasi-judicial or administrative. The recording of reasons is also an assurance that the authority concerned applied its mind to the facts on record and it is vital for the purpose of showing a person that he is receiving justice.
Considering the meaning of "reasons" and its essentiality in passing the orders and applying the same to the present context, it reveals from the additional affidavit filed by the State-opposite parties 1 and 2 that the documents giving reasons have been attached as Annexure-A to the said affidavit. With the writ petition, the petitioner has filed only the first page of the summary uploaded on the website, in which it was merely stated that the tender of the petitioner has been rejected on technical grounds - On perusal of the summary along with the minutes, it is clear that the same was signed by the authorized personnel at 6.14 P.M. on 15.05.2015 and both the documents were uploaded on the same date at 6.15 P.M., which is not denied by the learned counsel for the petitioner.
The first contention of the learned counsel for the petitioner that no reason for rejecting the tender documents of the petitioner was given, does not have merit as clear reason that the petitioner had not furnished valid registration certificate as an 'A' Class Contractor, has been assigned in the minutes uploaded on the website.
Time ought to have been given to the petitioner to furnish the renewed certificate of registration - HELD THAT:- Unless such time was required to be given in the terms and conditions of the Tender Documents, the opp. parties could not have given such opportunity to the petitioner. All the documents were required to be filed along with the tender papers, and in case had any extra time been given to the petitioner for furnishing the renewed licence, the same would have amounted to deviation of the terms of the tender conditions. As such, the opp. parties cannot be said to have faulted in not giving time to the petitioner to furnish such certificate.
The reasons for rejection of the tender of the petitioner had duly been communicated and there was no necessity for giving any time to the petitioner to produce the document which was lacking, i.e., the registration certificate in the present case - there are no illegality or irregularity has been committed by the authority so as to call for interference with the order impugned in Annexures-4 and 5 - petition dismissed.
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2016 (10) TMI 1375 - GUJARAT HIGH COURT
Perjury - petitioner had suppressed her true income - whether it is expedient in the interest of justice that such prosecution would be necessary? - HELD THAT:- This Court notices that the Court has elaborately discussed the law and applied the said law to the facts to hold that the petitioner has not stated the correct facts on oath. She has stated that she was doing household work and has no source of income while her income is Rs.40,000/per month from the business. She has of course, revealed that she has received sum of Rs. 4 lakhs from the earlier marriage. With regard to the income tax returns, she is found to have given false evidence. With regard to the fixed deposit and the amount that has been credited in her FDR, she stated that she has no knowledge with regard to her accounts in Central Bank of India and Rajkot Cooperative Bank. The husband also examined the witness, who was Inspector in the IncomeTax Department, wherein she submitted her personal income and her incometax returns have been brought on the record to indicate that from the year 201112 she has income from business at Rs.1,48,251/. The business profit was worth Rs.1,84,251/- - The Court on noticing that she was getting sufficient income from the fixed deposit receipt and yet has not admitted in the evidence produced by her stating that she has no source of income, had directed the initiation of the prosecution under section 195 read with section 340 of the Code of Criminal Procedure.
As can be noticed from the chronology of events and the evidence that has been adduced before the Court concerned, it is certain that the injury which could have been sustained by the other side has not resulted on account of this alleged falsehood because respondent No.2 could find out at an appropriate time the details which he has furnished before the Court. So far as its impact on the administration of justice is concerned, this Court has no reason to interfere as often it is found that the litigants coming before the Court chose to speak blatant lies and do so with complete impudence - Laws which are otherwise in favour of the distressed wife when are sought to be misused by declaring completely incorrect facts and also by suppressing the material aspect, the trial Court at the time of considering the case found that the impact on the administration of justice would make it expedient for it to direct the prosecution.
Petition disposed off.
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2016 (10) TMI 1374 - ITAT BANGALORE
TP Adjustment - interest on loans from its AEs - HELD THAT:- Sasken India earns mostly in foreign currency with 80% of its sales and some of the domestic sales being in foreign currency. As per the newly introduced Safe Harbour rules by the CBDT, the prescribed ALP rate is the base rate of SBI if the loan to Indian subsidiaries outside India is in Indian currency. All these facts are acknowledged by the TPO in his order.
As pleaded that the impugned loan to its AEs were out of its own funds , not out of borrowed funds, the loans are given in US dollars, interest was received in Indian rupees and when such transactions between it and its AEs are in international transactions the ratio of the above cases ie the transaction would have to be looked upon by applying commercial principles in regard to international transaction and in such cases the domestic prime lending rate would not have applicability and the international rate fixed being LIBOR would come into play.
On the facts and circumstances of the case, we are of the considered opinion that the issue requires to be examined by the TPO afresh in the light of the above materials and the ratios and accordingly remit the issue to the TPO.
Disallowance u/s 14A - AR pleaded that the disallowance made u/s 14A read with rule 8D(2)(iii) has been made without demonstrating the incorrectness of the claim of the assessee that it has not incurred any expenditure towards earning exempt income. The said disallowance is therefore bad in law - HELD THAT:- We are of the considered opinion that the issue requires to be examined by the AO afresh in the light of the above amendments and accordingly remit the issue to the AO.
Addition under the caption ‘Excess deduction' u/s.10A /10AA - HELD THAT:- On the facts and circumstances of the case, it is clear that neither the AO has examined these issues properly nor they received due attention at the hands of the DRP. We are of the considered view that the above issues are required to be adjudicated by the AO afresh in the light of the above ratio and if the facts are similar to apply the above ratios accordingly and hence these issues are also remitted to the AO.
Short credit of TDS - assessee submitted that since the AO has not allowed TDS credit -TDS credit should be fully allowed as claimed in the return of income - HELD THAT:- We find that the DRP has directed the AO to verify the credit from the record, vis-à-vis, the claim made by the assessee and give credit to it accordingly. We direct the AO to give credit to the amount claimed by the assessee.
Deduction u/s.10A - HELD THAT:- DRP had followed the judgment of Hon’ble jurisdictional High Court in the case of Tata Elxsi Ltd [2011 (8) TMI 782 - KARNATAKA HIGH COURT] in directing exclusion of items deducted from export turnover from total turnover also for working out the deduction u/s.10A - Just for the reason that appeal has been filed by the Revenue against the judgment of jurisdictional High Court would not be a reason not to follow the jurisdictional High Court’s judgment. We do not find any lacunae in the order of the DRP - In the result, appeal of the Revenue stands dismissed.
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2016 (10) TMI 1373 - ITAT JAIPUR
Addition u/s 40A(3) - return of income was filed by the assessee on presumptive basis u/s 44AF - HELD THAT:- We find merit in the submission of assessee that similar issue was decided by this Bench in favour of assessee as respectfully following the decision of ITAT Ahemdabad Bench in the case of Gopalsingh R Rajpurohit [2004 (7) TMI 271 - ITAT AHMEDABAD] hold that once the assessee has filed his return u/s 44AF, no further disallowance can be made u/s 40A(3) of the Act. It is noteworthy that in this case no trading irregularity was found and addition has been sustained only on technical issue of Section 40A(3) of the Act. The presumptive system of tax u/s 44AF starts with non-obstante clause and overrides other provisions. There is no justification in making the addition which is deleted. Since the addition is deleted on merits, there is no need to go into alternative ground. Thus the appeal of the assessee is allowed.
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2016 (10) TMI 1372 - ITAT MUMBAI
Income deemed to accrue or arise in India - ‘royalty’ received from the Indian entity - existence of PE in India - Income taxable in India either under the Income Tax Act or under India-USA DTAA - AO did not accept the claim of the assessee and assessed the royalty @ 15% under India-USA DTAA - HELD THAT:- The very issue of existence of PE in India has been considered by the Hon’ble ITAT. The income of the assessee company does not qualify for the definition of Royalty in term of income tax Act 1961. The AO himself has accepted in the assessment order that the income of the assessee cannot be taxed as Royalty. Once the income of the assessee company does not qualify under the definition of Royalty, the income has to be held as business income. The business income cannot be taxed in the absence of PE in India. We have seen that the Hon’ble ITAT has categorically held that the WBPIPL is not the PE of the assessee company.
Thus, respectfully following the decision of the Hon’ble ITAT in the assessee’s own case [2011 (12) TMI 195 - ITAT MUMBAI] we are of the view that the income of the assessee is not taxable in India and we direct the AO to delete the addition proposed on this account - Decided in favour of assessee.
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2016 (10) TMI 1371 - BOMBAY HIGH COURT
Sanction of scheme of Amalgamation - Sections 391 to 394 of the Companies Act, 1956 - HELD THAT:- From the material on record, the Scheme appears to be fair and reasonable and is not violative of any provisions of law and is not contrary to public policy. No other party has come forward to oppose the Scheme in the Court.
Since all the requisite statutory compliances have been fulfilled, the Company Scheme Petition No. 317 of 2016 filed by the Transferor Company is made absolute in terms of the prayer made under sub- clauses (a) to (d) of Clause 35 and the Company Scheme Petition No. 318 of 2016 filed by the Transferee Company is made absolute in terms of the prayer made under sub-clauses (a) to (d) of Clause 34.
The Petitioners are directed to file a copy of the Scheme of Amalgamation with the concerned Registrar of Companies, electronically, along with E-Form INC 28 in addition to physical copy as per the relevant provisions of the Companies Act, 1956/ 2013, which ever is applicable - application disposed off.
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2016 (10) TMI 1370 - ITAT CHANDIGARH
Exemption u/s 10(23C) (iiiab) - CIT(A) rejecting the claim of the assessee - HELD THAT:- The assessee filed a letter written by the Principal Secretary, Government of Punjab, Deptt. of Technical Education & Industrial Training, Chandigarh, to The Chief Commissioner of Income Tax, Aayakar Bhawan, Chandigarh Memo No. 01/02/2014-4TE2/821193/1 dated 17.8.2016, wherein it is claimed among other things that the revenue generated by the Institute belongs to the Consolidated Fund of the Government and the same has been permitted to be retained by the Institution for achieving the objectives of the society as yearly grant. This letter was not before the lower authorities, when the issue of grant of exemption u/s 10(23C)(iiiab) has been adjudicated.
CIT(A) has to consider this letter, as the contents therein go to the root of the matter and take a fresh view on the matter. The claim made in this letter require verification. Thus, we set aside all these appeals to the file of the CIT(A) for de novo adjudication in accordance with law. Appeal allowed for statistical purposes.
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2016 (10) TMI 1369 - ITAT RAJKOT
Disallowance of deduction u/s. 80IA(4) - deduction from the profits of developing the infrastructure facility - AO noticed that assessee has claimed deduction under the provision of section 80-IA(4) against its work contract income which the Assessing Officer said is not in accordance with law - HELD THAT:- Assessee entered into a contract with the government and the nature of work carried out shows that the assessee carried the work directly and it has employed various resources as stated above. Assessee has made huge investments in all kinds of resources for its business, namely plant and machineries, structures at sites, working capital, human resources, technical expertise etc.
Assessee possesses its own technical knowledge of how to develop and lay roads, dams, bridges etc.. The assessee has purchased and employed its own materials for development and construction of the infrastructure facility. The entire planning of its business as also the work has been done by the assessee and not by the Government.
Assessee can be said to be a developer and cannot be denied deduction from the profits of developing the infrastructure facility though it may not operate or maintain the same, particularly in view of the in insertion of the word or in sec.80-IA(4) of the act. In view of the facts and circumstances as stated above and legal legal findings as referred in the above judicial pronouncements, we considered that the assessee is entitled to a deduction under section 80IA(4) of the act, therefore, we uphold of the order of the learned CIT (A) - Appeal of the revenue is dismissed.
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2016 (10) TMI 1368 - ITAT BANGALORE
Validity of orders passed u/s 201(1) and 201(1A) - validity of Assessment u/s 153(2A) order passed by the A.O. as barred by limitation - HELD THAT:- CIT (A) has held that the provisions of section 153 (2A) does not apply to orders passed u/s 201 (1) and 201 (1A). It is noted by him in Para 3.2 of his order that as per the A.O. Section 153 (2A) of the Act applies to only orders enumerated therein and does not cover orders passed u/s 201 (1) and 201 (1A).
CIT (A) has reproduced the provisions of section 153 (2A) and since section 201 is not refereed therein, he confirmed the assessment order on this aspect. Now we examine the applicability of the judgment rendered in the case of CIT vs. Jodhan Real Estate Development Corporation Pvt. Ltd. [2004 (7) TMI 43 - RAJASTHAN HIGH COURT] - We find that in that case, fresh order passed u/s 104 was also in dispute as time barred and the tribunal held in that case that it is time barred and this tribunal order was upheld by Hon’ble Rajasthan High Court.
We are of the considered opinion that if section 153 (2A) is applicable to order passed u/s 104 then there is no reason or basis to hold that it is not applicable to order passed u/s 201 and 201 (1A). Accordingly, we hold that all these orders passed by the A.O. u/s 201 and 201 (1A) are time barred. Hence these are quashed.
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2016 (10) TMI 1367 - ITAT PUNE
Deduction u/s.80IA - operating of Container Freight Station (CFS) - scope of term infrastructure facilities - HELD THAT:- As decided in own case [2012 (5) TMI 260 - DELHI HIGH COURT] held that an ICD is not a port but It Is an inland port. The case of CFS is similarly situated In the sense that both carry out similar functions. i.e.. warehousing, customs clearance and transport of goods from. Its location to the seaports and vice versa by railway or by trucks in containers. Thus, the issue is no longer res integra. Respectfully following this decision, it Is held that a CFS is an Inland port whose Income is entitled to deduction u/s 80-IA(4).
Since the Ld.CIT(A) while deciding the issue in favour of the assessee has followed the decision of the Tribunal in assessee’s own case as well as various other decisions, therefore, in absence of any contrary material brought to our notice against the decision of the Tribunal in assessee’s own case, we do not find any infirmity in the order of the CIT(A) allowing the claim of deduction u/s.80IA(4). Merely because the Revenue has filed an appeal before the Hon’ble High Court, the same in our opinion cannot be a ground to take a contrary view than the view taken by the Tribunal especially in absence of any order reversing the decision of the Tribunal. Accordingly, we uphold the order of the CIT(A) and the grounds raised by the Revenue are dismissed.
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2016 (10) TMI 1366 - SUPREME COURT
Refusal to condone a period of 65 days in re-filing the objections Under Section 34 of the Arbitration and Conciliation Act, 1996 - HELD THAT:- Section 34(3) has no Application in re-filing the Petition but only applies to the initial filing of the objections Under Section 34 of the Act. It was submitted on behalf of the Respondent that Rule 5(3) of the Delhi High Court Rules states that if the Memorandum of Appeal is filed and particular time is granted by the Deputy Registrar, it shall be considered as fresh institution. If this Rule is strictly applied in this case, it would mean that any re-filing beyond 7 days would be a fresh institution. However, it is a matter of record that 5 extensions were given beyond 7 days. Undoubtedly, at the end of the extensions, it would amount to re-filing.
Also, Petitioner has offered an explanation for the delay for the period after the extensions.
It is deemed appropriate in the interest of justice to set aside the impugned Order - appeal allowed.
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2016 (10) TMI 1365 - ITAT KOLKATA
Revision u/s 263 - treatment to income - compensation received under compromise - As per CIT AO wrongly assumed the facts as transfer of capital asset which is incorrect inasmuch as the assessee never had any trade mark right in Southeast Asia and transfer of capital asset does not arise - According to the CIT, the agreement that was entered into between the assessee and M/s. Group Danone is in the nature of non-compete agreement, not to launch the biscuit products under the trade mark ‘TIGER’ in Singapore and Malaysia and the amount that was received by the assessee was towards loss of profits on account of the assessee company’s inability to launch its products in Singapore and Malaysia and only because the assessee withdrew its right to expand business in Singapore and Malaysia, and consequently incurred loss of future profit, which they could have otherwise arranged, the compensation was paid - HELD THAT:- It could be seen from the submissions of the assessee before the AO, the assessee placed reliance on so many decisions in respect of their contentions to object the treatment of the amount either as business income or as capital gain. Having considered all these facts and also the law laid down in such decisions, the AO consciously reached a conclusion that the income is to be treated as capital gain but not as either capital receipt or business income. This is one of the probable views that could have validly be taken. By no stretch of imagination could it be said that the AO mechanically passed this order taking the view that the income has to be charged as capital gain. The AO made enquiries, called for details of such income and having considered the submissions of the assessee in respect of all the three probable views i.e. capital receipt, business income and capital gain, the AO for the reasons recorded in his order at page nos. 7 to 10, came to the conclusion that the income in dispute has to be charged as capital gain but not as capital receipt or business income. In this factual context, we are called upon to examine the question whether the CIT is justified in terming the order of AO as erroneous and without proper enquiry or on wrong assumption of the facts.
In JMC Projects (India) Ltd. [2015 (12) TMI 1510 - GUJARAT HIGH COURT] held that the power u/s. 263 of the Act cannot be exercised when though addition has been made on the footing or the premise which are not to the satisfaction of the Commissioner to make additions on better premise with better reasoning or on different application of legal principles.
We are of the firm conclusion that the Assessment Order is not the result of non application of mind or wrong assumption of facts or without any proper enquiry. And it, therefore, follows that assumption of jurisdiction u/s. 263 of the Act by the Ld. CIT is unwarranted and the order cannot be sustained. We, therefore, quash the same. Appeal of assessee is allowed.
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2016 (10) TMI 1364 - BOMBAY HIGH COURT
Reopening of assessment u/s 147 - Whether reasons as recorded do not indicate any reason to believe that income chargeable to tax has escaped assessment? - HELD THAT:- The reasons, as recorded merely indicate that there was client code modification which lead to a non genuine loss. The reasons do not indicate, how the aforesaid facts led to the AO having reason to believe that income chargeable to tax has escaped assessment. Therefore, prima facie there is absence of link between information obtained and escapement of income chargeable to tax. Thus, the reasons, as recorded, do not prima facie indicate the reasons to believe that income chargeable to tax has escaped assessment.
The contention on behalf of the Revenue that this would be done at the time of assessment, does not satisfy the jurisdictional requirement of AO having reason to believe that the income chargeable to tax has escaped assessment at the time of issuing the impugned notice.
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2016 (10) TMI 1363 - DELHI HIGH COURT
Seeking sanction of Composite Scheme of Arrangement and Amalgamation - sections 391-394 of the Companies Act, 1956 - HELD THAT:- Various directions with regard to dispensing with various meetings issued - application allowed.
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2016 (10) TMI 1362 - SUPREME COURT
Direction issued to restrict the selection of Assistant Prosecuting Officers only to the number of posts that were advertised - HELD THAT:- The Appellants participated in the selection which was initially for 38 posts which later increased to 74 posts. They could not be appointed due to the judgment of the High Court which directed the selection to be only for 38 posts. In view of there being no fault on the part of the Appellants, we examined whether we could exercise our judicial discretion to direct their appointments. We realise that any such direction given by us for their appointments would be contrary to the Rules. Judicial discretion can be exercised by a Court only when there are two or more possible lawful solutions. In any event, Courts cannot give any direction contrary to the Statute or Rules made thereunder in exercise of judicial discretion.
The selection pursuant to the advertisement dated 19.09.2009 should be confined only to posts that were advertised, the additional posts that were created after the expiry of the recruitment year shall be filled up by issuance of an advertisement afresh. In view of the shortage of Assistant Prosecuting Officers in the State of Uttarakhand, we direct the authorities to expedite the process of selection.
Appeal dismissed.
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2016 (10) TMI 1361 - ITAT MUMBAI
Assessment u/s 153A - valid initiation of search - assessee has challenged execution of warrants and also whether valid search was initiated in this case? - HELD THAT:- Search will be deemed to be concluded on the basis of last panchnama drawn in relation to the person in whose case the warrant of authorization has been issued and in the instant case , we have observed that no panchnama was drawn against the assessee so it can be concluded that search against the assessee got vitiated as no panchnama was ever prepared against the assessee. The search is a serious invasion into the privacy of the person infringing on fundamental rights as enshrined in Article 21 of the Constitution of India and the same cannot be lightly carried out by the State in an casual or lax manner. The Revenue has prepared the Panchnama in the name of ‘Manoj B Punmia and group’ while there is no concept of word ‘group’ in the Act in context of search proceedings.
Incidentally in the instant appeal , there is no panchnama drawn by the Revenue against the present assessee which is an admitted position. Keeping in view the facts and circumstances of the case, we are of considered view that the search proceedings in the case of present assessee got vitiated due to non-preparation of the panchnama in the name of the assessee which evidences conclusion of the search and which effectively decides against whom the Revenue has conducted search so much so further actions are required to initiate assessment proceedings u/s 153A of the Act for the last six years against the person so searched within the time stipulated u/s 153B.
Thus, in the absence of panchnama being drawn against the assessee, no incriminating material having been found pertaining to the assessee and also the premises searched did not belonged to the assessee, it could be concluded based on the cumulative effect of all the above-stated relevant facts that no valid search was conducted against the assessee and the assessment u/s 153A of the Act is bad in law hence liable to be quashed. Why, despite a ‘search’, we observe a ‘notice’ u/s 153C as well as a survey being conducted on the assessee in the present case.
Disallowance made on account of unexplained purchases to 50% - Since, we have declared the proceedings u/s 153A as null and void, these appeals for impugned assessment years have also remained for academic interest only. Since, the basis for making the assessment/reassessment has been declared as null and void, therefore, the same ratio will be applicable to the appeals of the Revenue also, consequently, dismissed, therefore, these appeals are also decided in favour of the assessee.
Incriminating material found during the course of search or not? - The assessee company had filed return of income on 20-10-2004 u/s 139(1) of the Act. The time limit for service of notice u/s 143(2) of the Act for the said relevant period was till the expiry of twelve months from the end of the month in which the return is furnished i.e. up-to 31-10- 2005. The search was initiated on 31-10-2009 and hence the period with in which Revenue could have issued notice u/s 143(2) of the Act to frame assessment under Section 143(3) of the Act has already expired and hence the assessment for the impugned assessment year is a concluded assessment as stipulated u/s 153A of the Act on the date of search on 31- 10-2009. Thus, as per mandate of Section 153A of the Act the concluded assessment can be re-opened for framing assessment u/s 153A of the Act provided there is an incriminating material found during the course of search. Since, in the instant case no incriminating material was during the course of search against the assessee company for the impugned assessment year, no additions can be sustained. - Assessee appeal allowed.
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2016 (10) TMI 1360 - ITAT CHENNAI
Disallowance under section 14A r.w.r 8D towards expenditure incurred for earning exempt income while computing tax under section 115JB - computing the “book profit” of the company under section 115JB of the Act which is a section with fiction another provision with fiction such as section 14A cannot be imported - HELD THAT:- As relying on M/S. BEACH MINERALS COMPANY PVT LTD [2015 (8) TMI 1031 - ITAT CHENNAI] held that while computing the “book profit” of the company under section 115JB of the Act which is a section with fiction another provision with fiction such as section 14A cannot be imported - we hereby hold that in the case of the assessee provisions of section 14A cannot be invoked for the purpose of computing tax under section 115JB of the Act. Thus, this ground raised by the assessee is held in its favour.
Disallowance being the compensation paid for delayed commissioning of windmills - HELD THAT:- For the relevant assessment year, it appears that the assessee had promised compensation to its sister concerns which are loss making concerns. The apprehension of the Revenue is that the assessee had promised such payments to its clients who are its sister concerns in order to shift its profit to those companies which are loss making companies. Therefore in order to ascertain the genuineness of the promised payment, we hereby remit the matter back to the file of the learned Assessing Officer who shall verify the parameters considered by the assessee while paying compensation to its client M/s. Indonet Global Ltd., for the assessment year 2006-07 [2016 (10) TMI 1358 - ITAT CHENNAI] and if the same falls in parity in the case of the assessee for the relevant assessment year, then allow the claim of deduction though the compensation has been shown only as payable, otherwise pass appropriate orders as per law & merit.
Disallowance being the expenses related to issue of FCCB - foreign currency convertible bonds issue expenses - as submitted that the expenditure is allowable under section 37 of the Act because these expenses related to obtaining loan - HELD THAT:- From the facts of the case, we find that the entire expense is incurred by the assessee during the previous year 2006-07 relevant to the assessment year 2007-08. Further, this is an expense incurred for either raising loan or for raising capital. If the expense is incurred for raising loan then the same will be allowed as deduction spread over evenly for the period of loan extended because it is an expenditure related to the financial charge. However, if the amount is incurred for raising capital, then the same will not be allowed as deduction by virtue of the decision of the Hon’ble Apex Court in the case of Brooke Bond India Ltd. Vs. CIT [1997 (2) TMI 11 - SUPREME COURT] Therefore, we hereby remit back the matter to the file of the learned Assessing Officer for fresh consideration in the light of our observations made herein above.
Disallowance being difference in depreciation as per Companies Act - HELD THAT:- It appears that the assessee had claimed higher depreciation than what is prescribed by the Companies Act while computing book profit for the purpose of tax under section 115JB of the Act, the difference of which being Rs.1,36,56,865/-, though the facts are not clearly emerging out of the order of the learned Assessing Officer or the learned Commissioner of Income Tax (Appeals). Since the facts are not clear, we remit back this issue to the file of the learned Assessing Officer for de novo consideration. We also direct the learned Assessing Officer to consider the decision rendered by us in the Revenue’s appeal [2016 (10) TMI 1358 - ITAT CHENNAI] in the case of the assessee’s own case, and if the facts are identical on the issue as discussed of the above said order then pass appropriate in the light of the same.
Addition being the impairment losses charged to P&L A/c as per Accounting Standard-28 for the purpose of determining book profit under section 115JB - CIT-A deleted the addition - HELD THAT:- Section 2(11) (3A) of the Companies Act provides that the profit and loss account and balance sheet of the company shall comply with the accounting standards.
Accounting Standard-28 states that an asset is said to be impaired when carrying amount of the asset is more than the recoverable amount. It further states that such impairment loss on the asset is to be accounted and the asset should be shown in the balance sheet at its cost less depreciation less impairment loss. Precisely the impairment loss has to be written off in the books of accounts by debiting to profit & loss account and crediting to asset account. This is mandatory as per Accounting Standard-28, which every company has to follow while preparing its statement of affairs.
As held by the learned Commissioner of Income Tax (Appeals) there is no whisper in the provisions of section 115JB of the Act for adding back the impairment loss to the profit & loss account of the assessee while computing “book profit” & tax under section 115JB of the Act. Therefore, we do not find it necessary to interfere with the orders of the learned Commissioner of Income Tax (Appeals) on this issue. - Decided against revenue.
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2016 (10) TMI 1359 - SC ORDER
Validity of Section 2(11) of the Tamil Nadu Value Added Tax Act, 2006 - rate of tax - interstate movement of goods - Change in nature of goods merely on the basis of the location in which they are used - It was held by Madras High Court that The challenge to the validity of Section 2(11) of the Tamil Nadu Value Added Tax Act, 2006, is rejected and the prayer of the writ petitioners for declaration that Section 2(11) is ultra vires and unconstitutional, is dismissed.
HELD THAT:- There are no reason to interfere with the order passed by the a High Court.
SLP dismissed.
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