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Showing 21 to 40 of 1750 Records
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2016 (11) TMI 1735 - DELHI HIGH COURT
Determination of tax in certain special cases - tax on LTCG u/s 112(1) - Invocation of proviso to Section 112(1) in applying the lower tax @ 10% - foreign exchange benefits - AO turned down the assessee’s claim and imposed a higher rate of tax @ 20% - as submitted that in this case, the assessee did benefit from the foreign exchange fluctuations and was therefore barred from claiming benefit under Section 112(1) - ITAT applying the lower tax @ 10% - HELD THAT:- This Court notices that the assessee’s claim was examined by the ITAT which based its decision entirely on the judgement in CAIRN UK HOLDINGS LIMITED VERSUS DIRECTOR OF INCOME-TAX [2013 (10) TMI 430 - DELHI HIGH COURT] - This Court examined the interface between Section 48 and Section 112(1) of the Act and concluded the case in favour of the assessee that, like in the case of Cairn UK Holdings Ltd. that despite deriving foreign exchange benefits, the main benefit under Section 112(1) of the Act could not be denied. Since there is a previous ruling by this Court which we have disinclined to disagree with the impugned order, no question of law arises. The appeal is therefore dismissed.
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2016 (11) TMI 1734 - ITAT MUMBAI
TP Adjustment - research and development support services provided by the assessee to its associated enterprises - Comparable selection - HELD THAT:- Assessee provided assistance to its associated enterprises in conducting and co-ordinating testing, trials and experiments; interpretation of results of various such trials; assistance in literature search and any other services required by the associated enterprises with respect to the above. It is also emerging from record that in order to perform such functions, assessee is maintaining laboratory premises and employing necessary infrastructure suitable for such research and analytical testing., thus Companies functionally dissimilar with that of assessee need to be deselected.
Addition of interest on delay in realisation of dues from associated enterprises - HELD THAT:- As decided in assessee own case [2013 (1) TMI 60 - ITAT MUMBAI] we find that the assessee has no interest liability and it does not have any external borrowings. Even if the payments have been made by the A.E. beyond the normal credit period, there is no interest cost to the assessee. Moreover, there is no such agreement whereby interest is to be charged on such a delayed payment.
From the summary of payment submitted it is seen that the billing is done on quarterly basis and, accordingly, the payment is being received. Therefore, the delay is not wholly on account of late payment by the A.Es only. Moreover, the T.P. adjustment cannot be made on hypothetical and notional basis until and unless there is some material on record that there has been under charging of real income. Thus, on the facts and circumstances of the case, we are of the opinion that addition an account of notional interest relating to alleged delayed payment in collection of receivables from the A.Es, is uncalled for on the facts of the present case and is, accordingly, deleted.
Addition of foreign travel expenses - HELD THAT:- As entire disallowance is based on mere conjectures and surmises. In fact, what the DRP records that the details of expenses are “inadequate and not fully satisfactory”. In our considered opinion, the aforesaid inference of the DRP is not based on any factual support and, in fact, not even a single instance has been brought out which would show non-business purposes of the expenditure.
Quite clearly, even the adhoc disallowances are also required to be founded on certain specific discrepancies, an aspect which is conspicuous by its absence in the orders of authorities below for the year under consideration. Therefore, in our view, no disallowance can be upheld in this year on the basis of the order of Tribunal for Assessment Year 2009-10, which has been rendered in the background of specific findings of the lower authorities in that year. In the absence of any specific discrepancy/infirmity having been brought out by the lower authorities, the adhoc disallowance of 25% of foreign travel expenses is untenable - Decided in favour of assessee.
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2016 (11) TMI 1733 - SUPREME COURT
Seeking an injunction against the First Respondent from selling, removing or dismantling any assets of the Kota units till the entire amount due to the workmen was determined and settled - BIFR held that the Second Respondent cannot escape responsibility towards the rehabilitation of the Kota unit on the ground that there is change in management - HELD THAT:- It is clear from a plain reading of Section 22 A of the Act that the Board can issue a direction not to dispose of assets only to a sick inACdustrial company. There is no dispute that the First Respondent is not a sick industrial company and that it purchased the assets from a sick industrial company in accordance with the Sanctioned Scheme. The BIFR was not correct in passing an order of status quo and directing the First Respondent not to alienate/transfer the assets by its orders dated 05.05.2008 and 30.06.2008.
Several contentions have been raised by both sides during the course of hearing of these Appeals which we have not adverted to as they are not relevant for adjudication of the dispute in these appeals. We express no opinion on the jurisdiction of BIFR under other provisions of the Act. It is open to the BIFR to review the implementation of the Sanctioned Scheme and pass suitable directions.
The AAIFR held that the Second Respondent has no liability in respect of Kota units which have been sold to the First Respondent. The said findings were not challenged by the First Respondent in the Writ Petition filed in the High Court. The High Court set aside the entire order dated 11.12.2008 without taking note of the findings in favour of the Second Respondent - Appeal dismissed.
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2016 (11) TMI 1732 - ITAT BANGALORE
TP Adjustment - filters adopted by the TPO - HELD THAT:- From the above finding of the DRP, it is very clear that the order of the DRP is very cryptic and without any reasoning and therefore, we find force in the submissions of the assessee that the entire issue should be restored back to the file of the AO/TPO/DRP for fresh decision. Hence, we set aside the order of the AO and restore the matter back to his file for a fresh decision after allowing adequate opportunity of being heard to the assessee.
No adjudication is called for on merit of any of the issues involved in this appeal. Appeal of the assessee is partly allowed for statistical purposes.
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2016 (11) TMI 1731 - BOMBAY HIGH COURT
Grant of complete waiver of deposit under section 18 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 - default in payment of liabilities - HELD THAT:- The statements of object and reasons of the SARFAESI Act indicate that the financial sector, being one of the key drivers in India's efforts to achieve success in rapidly developing its economy, did not have a level playing field as compared to other participants in the financial markets of the world. There was no legal provision for facilitating securitisation of financial assets of banks and financial institutions, and unlike international banks, the banks and financial institutions in India did not have the power to take possession of securities and sell them. The Legislature felt that our existing legal framework had not kept pace with the changing commercial practices and financial sector reforms, which resulted in delays in recovery of defaulting loans. This in turn had the effect of mounting levels of non-performing assets of banks and financial institutions. In order to bring the Indian Banking Sector on par with International Standards, the Government set up two Narasimhan Committees and the Andhyarujina Committee for the purposes of examining banking sector reforms.
Section 18(1) clearly stipulates, any person aggrieved by any order made by the DRT under Section 17, may prefer an appeal to the DRAT within 30 days from the date of receipt of the order of the DRT. The 2nd proviso to Section 18(1) stipulates that no appeal shall be entertained by the DRAT unless the borrower has deposited with it 50% of the amount of debt due from him, as claimed by the secured creditors or as determined by the DRT, whichever is less. The 3rd proviso to Section 18(1) gives a discretion to the DRAT to reduce the aforesaid amount to not less than 25%, provided the DRAT gives reasons for the same which are to be recorded in writing. What becomes clear from the aforesaid provisions is that there is a jurisdictional bar from entertaining an appeal filed by the borrower from an order passed under Section 17, unless the borrower deposits 50% of the amount of debt due from him, as claimed by the secured creditors or as determined by the DRT, whichever is less - There is also a discretion granted to the DRAT to reduce this amount to 25% provided it finds adequate reasons for doing so and gives reasons, that are recorded in writing. If this deposit is not made, then the DRAT has no jurisdiction to entertain the appeal of the borrower.
There was non-compliance of Rules 6(2) and 8(6) of the SARFEASI Rules. It is true that the said rules [Rules 6(2) and 8(6)] are mandatory and ordinarily have to be complied with by the secured creditor before it proceeds to sell its secured assets. Rule 6(2) comes into play when the secured creditor seeks to sell movable property and Rule 8(6) comes into play when the borrower is selling immovable property.
The facts of this case clearly show that the 1st Respondent - borrower itself, to pay the dues of Respondent Nos. 2 to 5, had agreed to sell the subject properties. In fact, the 1st Respondent - borrower proposed that the subject properties would be sold to M/s. Shubham Developers for Rs. 7.47 crores and thereafter to Respondent No. 6 for Rs. 6.76 Crores. When these transactions did not fructify, Respondent Nos. 2 to 5 revoked the OTS sanctioned in favour of the 1st Respondent - borrower and thereafter proceeded to sell the subject properties under the provisions of the SARFAESI Act - This being the factual position, it is clear that the 1st Respondent - borrower had given up its right of redemption [as contemplated under Rules 6(2) and 8(6)] by itself offering to sell the subject properties to pay the dues of Respondent Nos. 2 to 5.
Application disposed off.
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2016 (11) TMI 1730 - ITAT AHMEDABAD
Disallowance u/s 14A r.w. Rule 8D - disallowance pertaining to proportionate interest and administrative expenditure - HELD THAT:- As held in Morgan Stanley India Securities Pvt [2014 (1) TMI 1412 - ITAT MUMBAI] interest disallowance is to be computed on net interest figure instead of the gross one. The Revenue does not dispute this legal position. We thus find force in assessee’s contention on this limited aspect of interest disallowance and direct the AO to proceed on net interest basis only. We agree with ld. CIT(A)’s findings in principle and remit the issue back to the Assessing Authority to re-compute the impugned interest disallowance afresh after affording adequate opportunity of hearing to the assessee. The assessee’s only substantive ground as well as its appeal partly succeeds for statistical purposes.
Nature of expenditure - business development expenditure - HELD THAT:- Both the ld. Representatives are ad idem that this tribunal’s order in assessee’s own case for AYs 2005-06 to 2009-10[2016 (2) TMI 1353 - ITAT AHMEDABAD] follows yet another decision in its case pertaining to AY 2001-02 holding identical business development expenditure to be Revenue in nature. Ld. Departmental Representative fails to point out any distinction on the relevant facts involved. We thus find no reason to interfere in the CIT(A)’s conclusion under challenge. The Revenue fails in its first substantive ground.
Addition of outstanding creditors liability - AO invoked the above statutory provision for the reason that the assessee had been showing the impugned liabilities for a time period exceeding three years - HELD THAT:- The case file indicates that this tribunal in AY 2009-10 [2016 (2) TMI 1353 - ITAT AHMEDABAD] follows hon’ble jurisdictional high court’s decision in CIT vs. Nitin S. Garg, [2012 (5) TMI 30 - GUJARAT HIGH COURT] to hold that such a reason in absence of any evidence proving remission or cessation of liability is not sustainable. The Revenue does not point any exception thereto in facts of the instant case. We accordingly follow judicial consistency to uphold the CIT(A)’s findings under challenge. This latter ground as well as Revenue’s appeal is declined.
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2016 (11) TMI 1729 - CUTTACK HIGH COURT
Seeking grant of bail - Illegal execution of warrant of arrest or not - illegal detention in custody or not - whether petitioner and other police staff poured kerosene from a jerrycan upon the deceased persons or the deceased person has committed suicide? - HELD THAT:- It is revealed that statements of the inmates of the family accused the petitioner to have caused death of the deceased persons, whereas the outsiders eye witnesses including one of the accused in other case who was inside the jeep and accompanied police officials gave different version saying self immolation by the deceased persons to avoid arrest. It is also revealed that one of the witnesses stated to have recorded the dying declaration of Sk. Sabir where he has named the present petitioner, but the treating physician stated that the deceased having 95% burn injury has no ability to talk.
It appears that the Investigating Officer has maintained both the above statements while opposing bail, but had recorded to the effect that "accused persuaded his mission to execute the N.B.W. issued by the court as a result of which the deceased persons committed self immolation which was with the knowledge of persuasion of the accused for which prima facie case under section 304 Part-II of the Indian Penal Code is made out". When the Investigating Officer has come to conclusion about a case of self-immolation of the deceased persons as per the statements of the eye witnesses, prima facie case is yet to be made out against the present petitioner. Whether self-immolation is within the knowledge of the present petitioner or not can be decided at the time of trial. It is too early to opine on the merit of the case, but as per discussions made above and the opinion of the Investigating Officer, it is the considered opinion of this Court that prima facie case against the petitioner for the purpose of granting bail is yet to be formulated.
Regard being had to the facts and circumstances of the case as discussed, including the nature of allegation and punishment prescribed for the alleged offence, let the petitioner be released on bail on furnishing bail bond of Rs. 1,00,000/- with two solvent sureties each for the like amount to the satisfaction of the court in seisin over the matter subject to condition imposed - bail application disposed off.
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2016 (11) TMI 1728 - ITAT MUMBAI
Penalty u/s 271(1)(c) - Defective notice u/s 274 - whether it is for concealment of income or for furnishing of incorrect particulars of income? - HELD THAT:- In New Sorathia Engg. Co [2006 (1) TMI 71 - GUJARAT HIGH COURT] it has been held that ‘where penalty order and order of Commissioner (Appeals) showed that no clear-cut finding had been reached as to whether penalty under section 271(1)(c) was being levied for concealment of particulars of income by assessee or whether any inaccurate particulars of income had been furnished, order of penalty could not be sustained.
In CIT vs. Smt. Kaushalya [1995 (1) TMI 25 - BOMBAY HIGH COURT] has held that ‘The vagueness and ambiguity in the notice had also prejudiced the right of reasonable opportunity of the assessee since he did not know what exact charges he had to face. In this background, quashing of the penalty proceedings for the assessment year 1967-68 seems to be fully justified.’
We hold that the notice issued by the AO u/s 274 r.w.s. 271 for the AY 2003-04 for initiating penalty proceeding u/s 271(1)(c) of the Act in the present case is invalid. The order of the CIT(A) directing the AO to impose penalty u/s 271(1)(c) is thus set aside. Appeal filed by the assessee is allowed.
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2016 (11) TMI 1727 - ITAT MUMBAI
Penalty u/s 271(1)(c) - Defective notice u/s 274 - whether it is for concealment of income or for furnishing of incorrect particulars of income? - HELD THAT:- In New Sorathia Engg. Co [2006 (1) TMI 71 - GUJARAT HIGH COURT] it has been held that ‘where penalty order and order of Commissioner (Appeals) showed that no clear-cut finding had been reached as to whether penalty under section 271(1)(c) was being levied for concealment of particulars of income by assessee or whether any inaccurate particulars of income had been furnished, order of penalty could not be sustained.
In CIT vs. Smt. Kaushalya [1995 (1) TMI 25 - BOMBAY HIGH COURT] has held that ‘The vagueness and ambiguity in the notice had also prejudiced the right of reasonable opportunity of the assessee since he did not know what exact charges he had to face. In this background, quashing of the penalty proceedings for the assessment year 1967-68 seems to be fully justified.’
We hold that the notice issued by the AO u/s 274 r.w.s. 271 for the AY 2003-04 for initiating penalty proceeding u/s 271(1)(c) of the Act in the present case is invalid. The order of the CIT(A) directing the AO to impose penalty u/s 271(1)(c) is thus set aside. Appeal filed by the assessee is allowed.
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2016 (11) TMI 1726 - CESTAT CHENNAI
Refund of CENVAT Credit - input services utilised for manufacture of goods at nil rate of duty supplied to the SEZ as well as exported - Rule 5 of Cenvat Credit Rules, 2004 - HELD THAT:- There is an exception provided in sub-rule (6) of Rule 6 of Cenvat Credit Rules, 2004 to the application of sub-rule (1) to (4) thereof. Clearances made to SEZ are not governed by the denial provision. Appellant’s submission is therefore certainly correct to say that any attempt to deny the refund of input credit shall make the services or goods exported costlier and will amount to export or deemed export of taxes which is not permitted in international trade practice as well as supply to SEZ domestically.
Therefore, denial of refund to the appellant by the application of Rule 5 of Cenvat Credit Rules, 2004 is not reasonable, for which, the order of the authority below is set aside - appeal allowed.
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2016 (11) TMI 1725 - BOMBAY HIGH COURT
Dishonor of Cheque - return of packet with the endorsement "unclaimed" - good service of statutory notice or not - HELD THAT:- There is a well-established presumption that the return of packet with the endorsement "unclaimed" is good service. Obviously, this means that an intimation of the packet was left with the Defendant at Navi Mumbai address and the Defendant was required to claim that packet. This is settled by a long line of authority on an interpretation of Section 27 of the General Clauses Act and Section 114 of the Evidence Act.
The Defendant has been properly served in view of the substituted service effected in Gurgaon; and, in any event, the presumption against the Defendant regarding service being effected in Navi Mumbai must also be drawn since the packet was properly despatched as required through the Sheriff's office and has been returned 'unclaimed'.
List the Suit for ex parte decree on 9th December 2016.
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2016 (11) TMI 1724 - ITAT MUMBAI
Validity of order passed u/s.143(3) r.w.s.153B(1)(b) - there was a search at the premises of the assessee, wherein incriminating documents and jewellery were found - addition was made by the AO on account as alleged to be received by assessee on account of payment from Natvar Parikh & Co. in addition to consideration mentioned in settlement deed for transfer of shares of NPCL - AR raised an additional ground to the effect that amount of capital gain so offered by the assessee was received out of family settlement, therefore, not liable to tax - CIT- A deleted the addition - HELD THAT:- These jewellery were acquired by the assessee out of drawings. Considering the withdrawals made by the assessee during the year amounting to Rs.43,14,569.30 towards personal expenses and the income declared by the assessee amounting to Rs.2,81,83,911/-, we do not find any merit for the addition of Rs.74,565/- so made by AO.
As assessee has not filed any revised return with regard to the capital gains originally offered in the return of income, the AO has declined to consider assessee’s claim of amount having been received under family settlement and not liable to tax. By the impugned order the CIT(A) confirmed the action of AO. From the record we found that during the year assessee sold shares of NPCL to the company itself, under a family arrangement scheme, endorsed by Company Law Board's order dated 30.03.2006, 13.04.2006 & 26.02.2007. Long term Capital gain arising out of said sale is Rs.16,23,94,604/-. Assessee invested the same in house property u/s 54F and residual amount of Rs.2,08,64,396/- was offered for capital gain and paid taxes accordingly. Assessee filed its return of income for the present year under assessment on 01.08.2007 declaring a total income of Rs. 2,81,83,911/- which includes the said capital gain. The said return was filed voluntarily by the assessee u/s 139 (1). No revised return has been filed by the assessee till date.
In view of the decision of Hon’ble Supreme Court in case of National Thermal Power Co. Ltd. [1996 (12) TMI 7 - SUPREME COURT] we accept the additional ground raised which is purely legal in nature. All the related facts are already on the record of the lower authorities, therefore, there is no hesitation in accepting the legal ground.
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2016 (11) TMI 1723 - ITAT KOLKATA
TDS u/s 194J OR 194C - ‘assessee in default’ in terms of section 201 and interest u/s 201(1A) - non-deduction of tax at source for payments made towards interconnect charges (including port charges, access charges, roaming charges and pass through charges) - HELD THAT:- As relying on own case [2015 (9) TMI 1358 - ITAT KOLKATA] for carrying out any work, manpower is sine qua non and without manpower, it cannot be said that work has been carried out. Under section 194C each and every work/service is not covered, hence the nature of work done or service performed is required to be seen. Moreover, the term 'work' is defined in section 194C of the Act. The word 'work' in section 194C referred to and comprehends only the activities of workman. It is the physical force which has comprehended in the word 'work'. We have already held that the payment of roaming charges does not require any human intervention. Hence in the absence of human intervention, the services rendered in the context of the impugned issue does not fall under the definition of 'work' as defined in section 194C and hence the provisions of section 194C are not applicable to the impugned issue.
We find that there is no dispute on the non-applicability of provisions of section 194I of the Act in the instant case. We also draw support of our finding from the decision of Delhi Tribunal in the case of Bharti Airtel Limited & Anr [2016 (3) TMI 680 - ITAT DELHI] wherein they have held that the subject mentioned payments do not fall under the ambit of ‘fee for technical services’ or under ‘royalty’ u/s 194J of the Act.
We hold that there is no obligation to deduct tax at source for the assessee payer in terms of section 194C or 194J of the Act and hence the assessee cannot be treated as ‘assessee in default’ u/s 201 of the Act. Hence consequentially the interest u/s 201(1A) of the Act cannot be charged on the assessee in the instant case - Assessee appeal allowed.
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2016 (11) TMI 1722 - MADRAS HIGH COURT
Deduction u/s 80P - HELD THAT:- While dealing with Tax Case Appeal [2016 (9) TMI 952 - MADRAS HIGH COURT] a Division Bench of this Court to which one of us (Nooty. Ramamohana Rao, J) is a member, had occasion to consider the very same substantial questions of law which have fallen for consideration in this appeal and those substantial questions of law were answered in favour of the Assessee and against the Revenue, as the Assessee is a mere Co-operative Society but not a Co-operative Bank.
We have not found any error committed by the AO the Appellate Authority and the Tribunal in coming to the conclusions to which they have arrived at. We subscribe to the same reasoning and accordingly, we dismiss this Tax Case Appeal.
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2016 (11) TMI 1721 - ITAT AHMEDABAD
Exclusion of subsidy from the deduction claimed u/s. 80IA - assessee has received subsidy from the State Government in respect of the Capital Assets acquired on or before 31.03.2003 - very purpose of sanction of capital subsidy was to meet the project cost to set up Solid Waste Disposal Project and complete the project - HELD THAT:- As relying on case MEGHALAYA STEELS LTD [2016 (3) TMI 375 - SUPREME COURT] the subsidy received from the State Government is nothing but the recoupment of the cost and hence eligible for the deduction u/s. 80IA of the Act. Common Grievance No. 1 is accordingly allowed.
Exclusion of interest income from the deduction claimed u/s. 80IA - HELD THAT:- A perusal of the financial statements vis-à-vis the computation of income shows that the only head of income shown in the return is “profits and gains of business or profession”.A.O. has also proceeded by computing the assessed income taking the figure from “profits and gains of business or profession”. This means that the A.O. has admittedly accepted the miscellaneous income under head “profits and gains of business”.
As explained that the appellant-company had set aside the amount for expenditures to be incurred for inherent cost relating to the maintenance of the pits. Therefore, the interest income has a direct nexus with the business activity of the assessee, therefore eligible for deduction u/s. 80IA. As in the case of Empire Pumps Pvt. Ltd. [2014 (11) TMI 563 - GUJARAT HIGH COURT] held that interest income is held to be eligible for deduction u/s. 80IA.
Disallowance of provision for Pit Covering Expenses - assessee explained that the liability to incur expenditure on pit covering arises as soon as the pits were dug and the pits are required to be covered after each pit is completely filled as per guidelines issued by GPCB - A.O. denied the contention of the assessee on the ground that the pit is closed immediately and, therefore, the difference between the provision and the amount actually spent could not be explained properly - HELD THAT:- We direct the A.O. to allow the provision for pit covering expenses in totality.
Computation of book profit u/s. 115JB - Hon’ble Supreme Court in the case of Appollo Tyres Ltd. [2002 (5) TMI 5 - SUPREME COURT] held that “while determining the “book profits” u/s.115J, the Assessing Officer could not recompute the profits in the profit and loss account by excluding provisions made for arrears of depreciation”. Assessing Officer has to accept the authenticity of the accounts with reference to the provisions of the Companies Act, which obligate the company to maintain its account in a manner provided by that Act and the same to be scrutinized and certified by statutory auditors and approved by the company in general meeting and thereafter to be filed before the Registrar of companies who has a statutory obligation also to examine and be satisfied that the accounts of the company are maintained in accordance with the recruitments of the Companies Act. Sub-section (1A) of section 115J does not empower the Assessing Officer to embark upon a fresh enquiry in regard to the entries made in the books of account of the company.
Disallowance of Post Closure Expenses - HELD THAT:- As in the light of the stipulation of Gujarat Pollution Control Board and the Scientific Working we direct the A.O. to allow the post closure expenses. Common grievance is allowed.
Disallowance of deduction u/s. 80IA on account of land and pit construction expenses - HELD THAT:- As the company is in the new line of business, there is no established practice of determining exact expenses incurred on the process of treatment of solid waste. Accordingly, in the beginning year, the company has estimated expenses in relation to the treatment of Solid Waste Management by applying available best parameters and accordingly charged of the expenses to Profit and Loss account of the respective years. Gradually, the company developed scientific method of estimation of expenses and accordingly the company has revised its working to arrive with the exact expenses.
As the revised computation is scientific. We further find that the expenditures claimed in the earlier years were allowed by the revenue. Therefore, write back of the same has a direct nexus with the business activity of the assessee. Hence, the assessee is eligible for the deduction u/s. 80IA of the Act. Ground no. 1 is accordingly allowed.
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2016 (11) TMI 1720 - ITAT PUNE
Powers of the Commissioner (Appeals) - Deduction u/s 80IB(10) denied - income in respect of housing project namely, 'Kamdhenu Siddhi' being developed by the assessee at Kothrud, Pune - AO denied the claim of deduction on the ground that the assessee has not fulfilled the conditions prescribed in section 80IB(10) by not completing the project before the stipulated date - AO also disallowed the compensation paid to the flat owners on the ground that in the agreement done before the Sub-Registrar office it is nowhere written that if the assessee fails to give possession to the flat owners he will be liable to pay compensation - CIT(A) set aside the issue to the file of the Assessing Officer with certain directions - submission of the assessee that after the amendment by the Finance Act, 2001 to the provisions of section 251(1)(a) the CIT(A) has no power to set aside the issue to the file of the Assessing Officer for reconsideration - HELD THAT:- CIT(A) should have decided the issue himself instead of setting aside the matter to the file of the Assessing Officer since he has no power to set aside the matter to the file of the Assessing Officer in view of the amendment to provisions of section 251(1)(a) by the Finance Act, 2001 w.e.f. 01-06-2001. We therefore are of the considered opinion that the matter requires re-visit to the file of the CIT(A) who shall decide the issue himself after obtaining a remand report from the Assessing Officer, if necessary. He shall decide the issue as per fact and law after giving due opportunity of being heard to the assessee. We hold and direct accordingly. Grounds raised by the assessee as well as the revenue are accordingly allowed for statistical purposes.
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2016 (11) TMI 1719 - MADRAS HIGH COURT
Reopening of assessment u/s 147 - Submission of objections so made against reopening of assessment - HELD THAT:- In the light of the decision of the Hon'ble Supreme Court in the case of GKN Driveshafts (India) Ltd.[2002 (11) TMI 7 - SUPREME COURT] the petitioner/assessee is entitled to submit their objections to the reasons for reopening. It is only thereafter the respondent has to pass orders either accepting or rejecting the objections so made. Therefore, at this stage of the matter, the question of quashing the impugned notice does not arise in the light of the fact that after issuance of the impugned notice, by a communication dated 24.10.2016, the respondent communicated the reasons for reopening. Therefore, the petitioner has to comply with the directives of the Hon'ble Supreme Court in the decision in GKN Driveshafts and follow the procedure contemplated therein.
Writ petition is disposed of granting 15 days' time from the date of receipt of a copy of this order, to the petitioner to submit his objections to the reasons for reopening communicated by proceedings dated 24.10.2016. On receipt of the objections, the respondent shall consider the same and pass a speaking order on merits and in accordance with law, within a period of 10 days thereafter.
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2016 (11) TMI 1718 - BOMBAY HIGH COURT
Rectification of mistake u/s 254 - excess addition on account of ‘on–money’ - whether the Tribunal is duty–bound to grant relief to the assessee as claimed during the hearing on the basis of the case eventually found by it, even if there is no specific ground of appeal raised before it in support of such relief.? - HELD THAT:- When an appeal from an assessment is brought before the Tribunal under Section 254(1) of the Act, all questions arising there-from, including questions which are incidental or consequential to such assessment, are open to be agitated before the Tribunal. The Tribunal is empowered to “pass such orders thereon as it thinks fit”. It is one thing to say that the Tribunal must confine itself to the subject matter of the appeal and not go beyond it, but quite another to say that whilst deciding such subject matter it cannot consider questions which are incidental to, or would follow as a consequence of, its determination. If the Tribunal rejects the assessee's case on a particular ground, and if such ground affords a certain relief to the assessee without his having to ever any new facts, such relief cannot be denied on the footing that the assessee never claimed it. If the assessee did not claim it, the Tribunal must grant it suo motu, as a matter of law, if the relief does follow as a legal incident.
Our Court held that the alternative submission did not amount to raising of an additional ground of appeal but the submission was a different facet of the same controversy; it was merely consequential to the finding of the tribunal against the assessee.
The submission would not arise in case the tribunal accepts the assessee’s contention for deduction of the amount as revenue expenditure; but where the tribunal turns down the assessee’s claim and holds it to be capital expenditure, “it is the duty of the Tribunal, even without an alternative submission, to pass necessary consequential orders, suo motu, to give further directions in the matter as the situation may warrant”.
We are of the view that the Tribunal was bound in law to consider the alternative plea raised by the assessee at the hearing of the appeals. The question now is, what relief should be granted on the applications before us. The miscellaneous application taken out before the Tribunal by the assessee clearly brings out an error apparent on record insofar as the original order passed by the Tribunal is concerned. It is particularly so since both the decisions in CIBA India [1993 (1) TMI 35 - BOMBAY HIGH COURT] and Mahalakshmi Textile Mills [1967 (5) TMI 4 - SUPREME COURT] were already available when the Tribunal considered the matter. We are, therefore, of the view that it would be more appropriate to allow the miscellaneous application and direct the Tribunal to consider the alternative plea of the assessee in the light of what we have stated above. Since the final order of the Tribunal on the appeal can only be crystallized after the plea is so considered by the Tribunal, the Reference may have to be returned unanswered.
The writ petition is, accordingly, allowed and the impugned order passed by the Tribunal on the miscellaneous application to the extent it relates to assessment years 1987-88 and 1988-89, is set aside and the miscellaneous application is allowed by directing the Tribunal to consider the alternative plea raised by the assessee in the light of what we have observed above. The Tribunal shall now decide the appeal on merits.
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2016 (11) TMI 1717 - NATIONAL COMPANY LAW TRIBUNAL AHMEDABAD
Seeking interim injunctions - several uncalled for letters/ complaints to bank authorities, the accounts of the company (R-1) could not be operated - HELD THAT:- It is deemed justifiable to pass an interlocutory order granting interim injunction - application disposed off.
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2016 (11) TMI 1716 - ITAT MUMBAI
Bogus purchases - assessee had obtained bogus purchase bills from 14 parties which were stated to be hawala operators - assessee contended that he was engaged in extensive projects and in need of huge quantity of materials to speed up the work of the projects towards completion which made the assessee to make purchases from dealers who offered fine quality of material at rational rates along with early delivery of the goods and thus the assessee, in hasten, did not inquire much about the genuineness of the dealers and their background in respect of default with the sales tax / VAT department - HELD THAT:- The Tribunal, in all such cases, has invariably taken a stand that when GP/NP rates are comparable and sales figures are not disputed by the revenue then entire purchases do not deserve disallowance rather some ad hoc disallowance ranging from 5% to 12.5% has been found to be a reasonable estimation of profit element embedded in the bogus purchases particularly when material consumption factor do not show abnormal deviations. We also observe that CIT(A) has enhanced the amount of bogus purchases with respect to three more parties aggregating to Rs.1,58,00,987/- without confronting the same to the assessee.
We direct that assessee shall suffer disallowance with respect to bogus purchases to the extent of 10% of Rs.2,47,15,690/- as against full disallowance made by AO. The same comes to Rs.24,71,569/-. CIT(A) has enhanced bogus purchases with respect to three parties, two of which already figure in the list of AO. Therefore, no further additions shall be made against party at Serial No. 2&3 of the above table. Qua first party namely “M/s Ramex Trading Impex Pvt. Ltd.” for Rs.69,90,308/-, the matter is remitted back to the file of CIT(A) for fresh adjudication after providing suitable opportunity of being heard to the assessee. The assessee is directed to substantiate its claim before CIT(A) forthwith, failing which CIT(A) shall be at liberty to decided the issue on the basis of material available on record. The appeal of the assessee is thus partly allowed.
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