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Showing 21 to 40 of 1612 Records
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2022 (4) TMI 1592 - ITAT INDORE
Admission of additional evidences by CIT(A) - as alleged by revenue that there is violation of the provisions of Rule 46A of the Income Tax Rules, 1962 - HELD THAT:- Whenever any additional evidences are admitted, the CIT(A) is duty bound to provide a copy of such additional evidences to the AO so that the AO after making further inquiry can make his comments on such evidences by way of a Remand Report. We find that in the instant case, the ld. CIT(A) has not only forwarded the additional evidences to the AO, but, on such additional evidences, the AO has also furnished his Remand report and we further find that in the impugned Order, the ld. CIT(A) has mentioned at many places that such Remand Report was duly taken into consideration while passing the impugned Order. We also find that before us, the ld. CIT(DR) could not point out any specific instance where the ld. CIT(A) had not taken the comments of the AO into his consideration. Thus, in our view, there was absolutely no violation of the provisions of Rule 46A of the Income Tax Rules, 1962 in the present case - Decided against revenue.
Assessment u/s 153A - Addition u/s 40A - cash expenditure in violation to the provisions of sections 40A(3)/40A(3A) ascertained by the Special Auditors - HELD THAT:- We find that the AO, while making the impugned additions on account of disallowance u/s. 40A(3)/ 40A(3A) of the Act in the assessment years under consideration, has not made any single reference to any incriminating material found during the course of the search. Before us, CIT (DR) has also not brought on record any single incriminating material on the basis whereof the additions have been made by the AO in the assessment order for the years under consideration. We find that the years under appeals are non-abated assessment years. It is a settled proposition of law that addition in non-abated assessment years can be made only on the basis of incriminating material found during the course of search.
We find support from the decision of the Hon’ble Delhi High Court in the case of CIT vs. Kabul Chawla [2015 (9) TMI 80 - DELHI HIGH COURT] wherein held that completed assessments can be interfered with by the AO while making the assessment under Section 153 A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment.
Thus no addition could have been made by the AO in the assessee’s income in a completed year of assessment without having recourse to any incriminating material. We find full substance in the legal plea taken by the assessee that all the assessment years under appeal are those in respect of which no assessment proceedings could be said to be pending on the date of initiation of the search in the case of the assessee on 07/01/2016 and therefore, merely on the basis of entries found recorded in the regular audited books of account of the assessee, no addition could have been made for making disallowance u/s. 40A(3)/40A(3A) - Decided in favour of assessee.
Unexplained expenditure - CIT(A) deleted the addition - AO, from the subject loose papers, noted that the seized document contains details of summary of capital and interest working found in search and seizure action u/s. 132 - HELD THAT:- We find that on the basis of such seized document, the AO reached to the conclusion that the assessee had actually incurred such expenses and such expenses were also claimed by it in its books of account. For reaching such conclusion, the AO took a stand that no books of accounts were produced and therefore, whether or not such expenses have been claimed by the assessee in its books of accounts could not be verified at her end. According to the AO, the assessee has claimed such interest expenditure which are not allowable in the nature. However, we find merit in the contention of the assessee that first of all, the entire books of account in the soft copy were seized by the search party. Secondly, such books of account were duly produced before the Special Auditors and such production of books of account before the Special Auditors is evident from the various findings as regard to the cash payments etc. given by the Special Auditors which have been referred to by the AO in the body of the assessment order itself. Further, we find that without making a reference to the regular books of account, the same could not have been referred to the Special Auditors u/s. 142(2A) of the Act. Thus, the findings given by the AO that the assessee had not produced books of account, in our view, are not factually correct.
From financial statements, we did not find claiming of any expenditure by way of interest on share capital as presumed by the AO on the basis of the seized document. We find merit in the contention of the assessee that merely for the purpose of computing the opportunity cost of investment in the assessee company, computation of interest was made on notional basis and from such computation itself, it cannot be conclusively held that such interest expenditure were actually incurred or paid by the assessee company to various shareholders. In view of such finding, we find absolutely no justification in the action of the ld. AO in making the addition in the assessee’s income on account of interest on capital and accordingly no interference is called for in the finding of Ld.CIT(A). - Decided against revenue.
Suppression of profit for A.Y. 2012-13 - CIT(A) deleted the addition partly - CIT(A) has applied net profit rate of 1.5% of suppressed sales and has confirmed the addition partly - assessee had maintained two set of books of account as held by both the authorities below - HELD THAT:- We are in agreement with the contention of the assessee that the unaccounted set of books of account maintained by the assessee in the name of M/s. ABC Ltd. are not correct and complete and there were many expenditure which although, apparently incurred by the assessee were not found recorded. In such circumstances, respectfully following the decisions of Balchand Ajit Kumar [2003 (4) TMI 76 - MADHYA PRADESH HIGH COURT] and again in the case of Manmohan Sadhani [2007 (10) TMI 246 - MADHYA PRADESH HIGH COURT] we uphold the findings of the ld. CIT(A) in applying the net profit rate of 1.5% on the amount of suppressed sales which has resulted into confirmation of addition partly. Revenue ground Dismissed.
Undisclosed income - difference in figures of capital and loans as per Tally data of ABC Ltd. and the audited accounts of the assessee - CIT(A) deleted the addition - HELD THAT:- The present case is a case of suppression of liabilities in audited books of account vis-à-vis the parallel set of books of account. In our considered view, under the scheme of the law, any undisclosed investment or undisclosed expenditure can be subject matter of addition either u/s. 69 or s. 69A or s. 69B or s. 69C of the Act but in the present case the issue is with regard to unexplained liability. We find that the addition was made by the AO on the only basis of the difference in the audited financial statements and the parallel data. But since, the difference cannot lead to assumption of any income, whether real or deemed, in the hands of the assessee, in our considered view, there was absolutely no justification for the AO to make the impugned addition. Accordingly, we find no infirmity in the action of the ld. CIT(A) in deleting the entire addition. Decided against revenue.
Unaccounted cash payment - Undisclosed transactions found recorded in the books of M/s. ABC Ltd.- subject addition was made by the AO on the basis of one computerized excel sheet seized and inventorized - CIT(A) deleted the addition - HELD THAT:- We find that it is not the case of the Revenue that the assessee company was holding any agriculture land at Mortaka and therefore, without having any other corroborative evidence, merely on the basis of such excel sheet, it could not have been conclusively held that such expenditure were incurred by the asseseee company itself. Accordingly, we find no infirmity in the action of the ld. CIT(A) in deleting the addition - Decided against revenue.
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2022 (4) TMI 1591 - NATIONAL COMPANY LAW TRIBUNAL CHENNAI
Sanction of Composite Scheme of Amalgamation - Section 230 to 232 and other applicable provisions of the Companies Act, 2013 - HELD THAT:- After analyzing the Scheme in detail, this Tribunal is of the considered view that the scheme as contemplated amongst the petitioner companies seems to be prima Mac/e in compliance with the provisions of the Companies Act, 2013. Further there seems to be no objection on the part of the shareholders that the Scheme is in any way detrimental to the interest of the shareholders of the Company. In view of absence of any other objections having been placed on record before this Tribunal and since all the requisite statutory compliances having been fulfilled, this Tribunal sanctions the Scheme of Amalgamation along with Company Petitions as well as the prayer made therein.
The Company Petitions are allowed and the Composite Scheme of Amalgamation annexed with the Company Petition s is hereby sanctioned and shall be binding on the members, Secured, unsecured creditors and shareholders of the Transferor/ Transferee Companies.
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2022 (4) TMI 1590 - ITAT MUMBAI
Nature of expenditure - software expenses - AO treated it as capital expenditure - HELD THAT:- Upon hearing the parties, we find that this is a recurring issue since assessment year 2004-05 to 2011-12. In all these years, the Tribunal took a view in favour of the assessee, as has been agreed by the DR. It is also brought to our notice that notice further appeal has been preferred by the Revenue against the decision of the Tribunal. This being the factual matrix, consistent with the earlier decisions of the Tribunal, we uphold the order of the Ld.CIT(A) and reject the ground raised by the Revenue. This ground of appeal of the Revenue fails.
Addition of notional interest income in respect of toll road from Madhya Pradesh State Industrial Development Corporation - HELD THAT:- As counsels representing the parties submitted that this issue has been restored to the file of the Assessing Officer for the assessment years 2004-05 to 2011-12. Therefore, consistent with the earlier decisions of the Tribunal for the above assessment years, the issue in ground 2 raised by the Revenue is restored to the file of the Assessing Officer for de novo consideration in line with the directions issued for the assessment years 2004-05 to 2011-12. This ground is treated as allowed for statistical purpose.
Disallowance of payments made to clubs - HELD THAT:- Upon hearing the parties, we find that this issue is covered in favour of the assessee by the earlier orders of the Tribunal for the assessment years 2005- 06 to 2011-12. Therefore, consistent with the earlier decisions of the Tribunal for the assessment years 2005-06 to 2011-12, we uphold the order of the CIT(A) on this issue.
Depreciation on residential properties - AO held that depreciation claimed in respect of house properties, income from which were chargeable as ‘Income from house property’, was not allowable - HELD THAT:- Upon hearing the parties, we note that this issue has been decided by the Tribunal in favour of the assessee for earlier years, i.e. A.Ys. 2004-05 to 2011-12. There is no change in the facts and circumstances of the issue. Therefore, being consistent with earlier orders of the co-ordinates benches, we allow this ground raised by the assessee. Ground 1 of the appeal is allowed.
Depreciation on toll road - HELD THAT:- The issue stands squarely covered by the decision of the Tribunal for the assessment years 2010-11 and 2011-12 [2019 (12) TMI 1499 - ITAT MUMBAI], wherein the “C” Bench of this Tribunal by following the decisions of the Tribunal for assessment years 2008-09 and 2009-10 [2019 (11) TMI 1368 - ITAT MUMBAI] has restored the issue to the file of the Assessing Officer with direction to the Assessing Officer to decide the issue keeping in view the directions of the Tribunal for the A.Ys. 2004-05 to 2007-08. This ground is allowed, for statistical purpose.
Disallowance u/s 14A read with rule 8D - HELD THAT:- We restore this issue to the file of the Assessing Officer to follow the directions of the Tribunal for the A. Y. 2004-05 to 2007-08 [2019 (4) TMI 1809 - ITAT MUMBAI] and recompute the disallowance in accordance with the directions therein. We also direct the Assessing Officer to recompute the disallowance keeping in view the decision of the special bench of Delhi in the case of ACIT vs Vireet Investments Private Limited [2017 (6) TMI 1124 - ITAT DELHI]. This ground is allowed for statistical purpose
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2022 (4) TMI 1589 - ITAT MUMBAI
Revision u/s 263 - borrowed satisfaction or non independent satisfaction recorded - CIT initiated the proceedings based on the recommendations filed by the AO that TPO has passed the order u/s.92CA(3) without considering the SAR report in which the report containing various discrepancies relating the related party transactions - HELD THAT:- We observe that the 263 proceedings were initiated mainly based on the satisfaction recorded by the AO that Ld. Pr.CIT needs to revise the Assessment Order u/s. 263 of the Act. It clearly indicates that the 263 proceedings were initiated on the behest of the satisfaction recorded by the Assessing Officer not by the Ld. Pr.CIT.
As relying on ALFA LAVAL LUND AB C/O ALFA LAVAL (INDIA) LTD. [2021 (11) TMI 327 - ITAT PUNE] we are also of the view that Ld. Pr.CIT cannot initiate the proceedings with the borrowed satisfaction and not satisfying the twin conditions laid down u/s. 263 of the Act. Therefore, in our considered view the proceedings initiated u/s.263 of the Act with a borrowed satisfaction is bad in law. Accordingly, proceedings initiated u/s. 263 of the Act are set aside. Decided in favour of assessee.
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2022 (4) TMI 1588 - ITAT MUMBAI
Revision u/s 263 - issue decided in favour of the assessee in preceding AY by the Tribunal, a superior Appellate Authority - as per CIT AO has erred in allowing assessee’s claim of deduction u/s 80IB(10) in respect of sale of FSI generated from its project at Mayanagar, Worli, Mumbai - HELD THAT:- No doubt while adjudicating appeal for AY 2013- 14, the Tribunal has referred to the Assessment Order for AY 2015-16 which is now subject of revision, nevertheless, the Co-ordinate Bench decided the issue in favour of assessee on merits and not solely by placing reliance on the assessment order for AY 2015-16. The reference to Assessment Order for AY 2015-16 is for giving impetus to the independent findings given in the order.
Tribunal de-hors the assessment order for AY 2015-16 has come to the conclusion that the assessee is eligible to claim deduction u/s 80IA(10) on SRA project at Mayanagar, Worli approved under DC Regulation 33(10). Once, the issue has been decided in favour of the assessee in preceding AY by the Tribunal, it was incumbent upon the PCIT to follow the order of Tribunal, a superior Appellate Authority.
PCIT in the impugned order does mention the fact about the order of Tribunal in assessee’s own case for AY 2013-14, but, decline to follow the same on the premise that the sole reason for allowing claim of deduction u/s. 80IB(10) of the Act was the assessment order for AY 2015-16. The reason given by PCIT to disregard the order of Tribunal for AY 2013-14 is misconceived, hence, unsustainable.
It is evident from records that the AO in AY 2015-16 has taken a view that is supported by the decision of Tribunal. The assessment order cannot be held to be erroneous merely for the reason that it has resulted in loss of revenue. If only one of the twin condition is satisfied, the order passed by the assessing officer cannot be revised u/s. 263 of the Act.
In the instant case, we find that the view taken by the assessing officer in allowing assessee’s claim of deduction under section 80IB(10) is one of the possible views backed by the order of Tribunal in assessee’s own case in respect of the same very project in the AY 2013-14. Therefore, the assessment order cannot be said to be erroneous. The impugned order is unsustainable and is liable to be quashed.
Revisional jurisdiction is transaction of sale of FSI to FourZone Realtors Pvt. Ltd. - In the instant case, no material is available on record to suggest that on the fresh issue raised while passing the order under section 263 of the Act, the PCIT had granted opportunity of hearing to the assessee. Thus, without affording opportunity of hearing to the assessee on the fresh issue, the PCIT could not have taken up the issue in exercise of his revisional powers. Adjudicating fresh issue without affording opportunity of hearing to the assessee makes the order unsustainable and hence, liable to be quashed.
Revisional powers invoked by the PCIT consequent to proposal of revision received from Addl. CIT - Section 263 mandates two preconditions to be complied before coming to the conclusion that the assessment order is erroneous and prejudicial to the interest of revenue. These two primary conditions are, (i) examination of records by the PCIT/CIT, and (ii) consideration by the PCIT/CIT of the order passed by assessing officer. Thus, it is the action of PCIT/CIT to examine records and consideration of order that opens the gate for exercising revisional powers u/s. 263 of the Act. From reading of above provisions of the section it is explicitly clear that the section does not give leverage to PCIT/CIT to exercise revisional jurisdiction on proposal received from any other authority under the Act. The key to unlock passage for exercising revisional powers is examination of records and consideration of assessment order by the PCIT/CIT.
In the entire impugned order the PCIT has nowhere mentioned that the revisional powers u/s. 263 have been exercised upon his examination of records and consideration of the order passed by the Assessing Officer. The PCIT has initiated revisional proceedings consequent to proposal received from Addl. CIT- Range Head, hence, the mandatory requirement of section 263 of the Act in the present case is not satisfied. In facts of the case, we are of considered view that the impugned order suffers from legal infirmity.
Thus we hold the impugned order untenable, hence, the same is quashed.
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2022 (4) TMI 1587 - ALLAHABAD HIGH COURT
Validity of reopening of assessment - period of limitation - Date of issuance of notice - As petitioner submits that the limitation for issuing notice under Section 148 of the Income Tax Act, 1961, for the assessment year 2016-17 was available to the respondents only up to 31.3.2021 whereas the impugned notice was issued on 1.4.2021, therefore, in view of the law laid down by this Court in the case of Daujee Abhushan Bhandar Pvt. Ltd. Vs. Union of India and 2 others (2022 (3) TMI 784 - ALLAHABAD HIGH COURT] the impugned notice and reassessment order, both being wholly without jurisdiction are liable to be quashed.
As respondents prays for and is granted a week's time to obtain instructions or to file a counter affidavit.
Put up as a fresh case on 6.5.2022 before the appropriate Bench.
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2022 (4) TMI 1586 - TELANGANA HIGH COURT
Seeking direction to the respondent to release the Fixed Deposits encashed by and lying in the possession of the respondent - Bank Guarantee - proceeds of crime or not - HELD THAT:- It is stated that the petitioner had already furnished Bank Guarantees to the respondent by way of letter in the year 2019 itself, but the same has not been considered till date by the respondent and that it cannot keep both FDRs and Bank Guarantee with it, as such, the respondent is liable to accept the Bank Guarantee furnished by the petitioner.
Application is allowed directing the respondent to accept the Bank Guarantee furnished by the petitioner in lieu of Fixed Deposits by releasing the same in favour of petitioner pending appeal.
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2022 (4) TMI 1585 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL AT CHENNAI
Seeking ‘six months’ time to remit the ‘residual balance amount’ together with ‘overdue interest’ - Implementation of the ‘Resolution Plan’ - HELD THAT:- It is abundantly made clear by this ‘Tribunal’ that the implementation of the ‘Resolution Plan’ can go on and the ‘Monitoring Committee’ is permitted to perform the act of ‘partial disbursement’ of ‘Plan Amount’ - Further, the ‘Resolution Applicant’ shall ensure the continuation of ‘All Projects’ by keeping the “Bank Guarantee Alive” and by making payment for the encashed ‘Bank Guarantee’.
Thus, the impugned order wherein the amount paid as ‘Earnest Money Deposit’ by the ‘Applicant’ shall have to be forfeited and proceedings under Section 74 (3) of the I&B Code, 2016 have to be initiated as per Law shall not hold good - appeal disposed off.
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2022 (4) TMI 1584 - ITAT MUMBAI
Allowance of expert incentive - capital or revenue nature - as per AO assessee has merely stated that the expert incentive is capital in nature and has not given any further clarification as to what was the purpose for which the subsidy has been given nor has it clarified as to the purpose for which the subsidy has been utilized - HELD THAT:- As regards SHIS, the incentive was given with the objective to promote investment in technology upgradation and was granted @ 1% of FOB value of Export. The investment in technology is clearly a capital expenditure. So far as the incremental incentive scheme is concerned, the incentive was linked with incremental export if a particular year, export sale was more than certain percentage of export in the preceding year, the assessee becomes entitled for this incentive. The said incentive was connected to expenses of investment in new plant and machinery, hence, the incentive is capital in nature. With regard to, Market Linked Focus Product Scheme (MLEPS) is concerned, the incentive was granted in order to export of products of high export intensity employment potential and is incentivized at 2% of FOB value of exports. This incentive was linked to employment generation by the company connected to the export of goods and mercantile. It is linked with capital in nature. The CIT(A) has placed reliance upon the decision of the Hon’ble Supreme Court in the case of CIT Vs. Ponni Sugars & Chemicals Ltd.[2008 (9) TMI 14 - SUPREME COURT], Eastman Exports Global Clothing Pvt. Ltd. [2016 (7) TMI 951 - ITAT CHENNAI] and Sutlej Textiles & Industries Ltd. [2015 (7) TMI 515 - ITAT DELHI] and M/s. Gloster Jute Mills Ltd. [2014 (7) TMI 172 - ITAT KOLKATA]. These issues have duly been examined and discussed by CIT(A) in his order.
The scheme is self-explanatory. There is nothing on record to which it can be assumed that the same is not in existence. No reason has been explained to which it can be assumed that the CIT(A) has granted the relief wrongly and illegally. The facts are not distinguishable at this stage. In view of the facts and circumstances and the law considered by the CIT(A), we are of the view that the finding of the CIT(A) is quite correct which is not liable to be interfered with at this appellate stage. Accordingly, we affirm the finding of the CIT(A) on this issue and decide this issue in favour of the assessee against the revenue.
Allowance of claim of the Education Cess - Hon’ble ITAT has passed the order dated 26.10.2021 in the case of M/s. Kanoria Chemicals & Industries Ltd. [2021 (10) TMI 1153 - ITAT KOLKATA] in which it is held that the Education Cess is the part and parcel of the tax. It is also argued that the Finance Bill 2022 has also cleared the situation in which Education Cess has been treated as a part of the tax. However, on the other hand, the Ld. Representative of the assessee has strongly relied upon the order passed by the CIT(A) in question. Taking into account of all the facts and circumstances, we observed that the Hon’ble ITAT in the case of M/s. Kanoria Chemicals & Industries Ltd.[supra] has passed the order by relying upon the decision of the K. Srinivasan [1971 (11) TMI 2 - SUPREME COURT]
Subsequently, the Finance Bill, 2022 has been passed in which the preposition of Education Cess has been dealt with and accordingly the Education Cess is being treated as part and parcel of the tax and the claim of expenses in connection with the Education Cess is not liable to be allowed. Accordingly, we set aside the finding of the CIT(A) and decide this issue in favour of the revenue against the assessee.
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2022 (4) TMI 1583 - CALCUTTA HIGH COURT
Dismissal of revisional application of the petitioners - time bared - inordinate delay without valid reason - in spite of granting several adjournments to the petitioners, petitioners did not contest the case - HELD THAT:- Petitioners’ plea of Covid-19 is not tenable, since the impugned order dated 31st July, 2019, was received by the petitioners on August 8, 2019, which was not in the Covid-19 period, and not only that, this Court has been functioning normally even for more than last six months.
Furthermore, since the first petitioner is a big company having transaction of almost Rs.20 crores in a year, it must have been a team of professionals to handle its legal affairs - Petitioners cannot take the plea of being a lay man staying in a remote village by taking advantage of such type of plea in approaching the Writ Court.
Since it is a court of equity and it is for those who are diligent and vigilant and not for the slumberers over their rights.
The petition is dismissed on the ground of inordinate delay without any cogent reason.
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2022 (4) TMI 1582 - ITAT CHENNAI
Levy of DDT - specific ground challenging levy of DDT on the ground that the assessee had already remitted DDT on 06.10.2015 and the payment is reflected in Form No.26AS - HELD THAT:- We find that the assessee has taken a specific ground challenging levy of DDT on the ground that the assessee had already remitted DDT on 06.10.2015 and the payment is reflected in Form No.26AS. Therefore, considering the fact that the issue raised by the assessee is a legal issue and further, the question of computation of DDT is purely depend upon taxes paid by the assessee on distribution of dividend and hence, by following the decision of the Hon’ble Supreme Court in the case of M/s.National Thermal Power Co. Ltd. v [1996 (12) TMI 7 - SUPREME COURT] we admit additional grounds filed by the assessee.
TP Adjustment - corporate guarantee fee - HELD THAT:- We direct the AO/TPO to compute corporate guarantee fee @ 0.5% of total corporate guarantee given to their AEs.
Disallowance of interest expenditure u/s.36(1)(iii) - assessee has diverted interest bearing funds for the purpose of investments made in subsidiary company M/s.Aban Holdings Pvt. Ltd., Singapore - AO has disregarded the arguments of the assessee that the investment made in share capitals of subsidiary company is for commercial expediency and the assessee derives business advantage in the nature of sharing Revenue from operations along with its subsidiary company. Therefore, when there is a commercial expediency, the question of disallowance of interest expenses does not arise - HELD THAT:- There is no dispute with regard to the fact that M/s.Aban Holdings Pvt. Ltd., Singapore, is a 100% subsidiary of assessee company. It was also not in dispute that the assessee company and subsidiary companies are in the business of rendering services in connection with exploration of oil and gas. The assessee had owned rigs required for carrying out its business activity in the name of subsidiary company in Singapore, for the sole purpose of getting financial advantage by arranging funds required for acquiring rigs.
Assessee has filed necessary evidences to prove that the investment made in subsidiary company is facilitated the subsidiary company to rise further capital from the Banks and Financial Institutions, to have a better debt equity ratio. We further noted that the assessee and the subsidiary company are in common business, having some business advantage in growing business in international market. Therefore, we are of the considered view that the assessee, as a businessman, has taken a prudent decision to make investments in subsidiary company to derive commercial advantage and thus, we are of the considered view that the AO as well as the DRP are erred in disallowing interest expenses u/s.36(1)(iii) of the Act, for diversion of interest bearing funds to make investment in subsidiary company.
TDS u/s 195 - disallowance of professional and consultancy fee paid to non-residents u/s.40(a)(i) - HELD THAT:- We find that an identical issue had been considered by the Tribunal, in the assessee’s own case for the AY 2015-16, wherein, the Tribunal by following its earlier decision for the AYs 2007-08 & 2012-13 held that the payment made by Branch Office of the assessee at Dubai to non-resident service provider does not come under the definition of fee for technical services and thus, remitted the matter back to the file of the AO to examine the issue afresh in light of the discussions and Article-7 of DTAA between India and UAE. We set aside the issue to the file of the AO and direct the AO to follow the directions of the Tribunal given in the assessee’s own case for the earlier assessment years, to decide the issue for the impugned assessment year in accordance with law.
Disallowance of drilling services & management fees paid to non-residents for failure to deduct TDS u/s.195 - An identical issue has been considered by the Tribunal, in the assessee’s own case for the AY 2015-16 [2021 (4) TMI 768 - ITAT CHENNAI wherein, by following its earlier decision for the AY 2012-13, held that twin conditions of rendering services in India and utilization of such services in India are not satisfied to bring the impugned payment within the definition of fee for technical services as per Sec.9(1)(vii) of the Act read with explanation and thus, the question of deduction of TDS on said payments does not arise.
Denial of tax credit u/s.90 towards Income Tax paid in Singapore - The issue of disallowance of withholding taxes u/s.90 of the Act, is squarely covered in favour of the assessee by the decision of co-ordinate Bench in the assessee’s own case for the AY 2015-16 [2021 (4) TMI 768 - ITAT CHENNAI in IT (TP) A No.86/Chny/2019, wherein, the Tribunal by following its earlier order for the AY 2012-13, remitted the issue back to the file of the AO and direct the AO to re-examine the issue in light of the directions given by the Tribunal for the earlier years.
Disallowance of loss of forward contracts - AO has disallowed Forex loss claimed by the assessee on the ground that the transactions are in the nature of speculative transactions as per the provisions of Sec.43(5) and further, the assessee has failed to file necessary evidences to prove that the import/export obligation is in excess of value of forward contracts entered into by the assessee - HELD THAT:- We find that an identical issue had been considered by the Tribunal in the assessee’s own case for the AY 2015-16 [2021 (4) TMI 768 - ITAT CHENNAI] in IT (TP) A No.86/Chny/2019, wherein, the Tribunal by following its earlier decision for the AY 2012-13, set aside the issue to the file of the and direct the AO to re-consider the issue in light of the decision of the ITAT Bangalore Benches in the case of M/s.Essilor India Pvt. Ltd. v. DCIT [2020 (2) TMI 1487 - ITAT BANGALORE]
Disallowance u/s.14A r.w.r.8D - HELD THAT:- We find that there is no merit in the arguments of the assessee that it has sufficient own funds to make investments in shares/mutual funds which yielded exempt income, because, the AO has made disallowance under third limb of Rule 8D @ 0.5% of average value of investment in respect of other expenses, but not towards interest expenses under the second limb of Rule 8D of Income Tax Rules, 1962. Therefore, the arguments of the assessee that it has sufficient own funds devoid of merits.
Disallowance computed by the AO @ 0.5% of average value of investment, it is an admitted fact that the assessee has earned exempt income however, not made any suo moto disallowance of expenses in relation to exempt income, even though, the assessee has debited various expenses into the P&L A/c. It is logical to conclude that when the assessee has common expenses for taxable and exempt income, then the possibility of certain expenses attributable towards exempt income, cannot be ruled out. Therefore, we are of the considered view that there is no error in the reasons given by the AO to determine the disallowance u/s.14A r.w.r.8D of Income Tax Rules.
AO has considered only those investments, which yielded exempt income for the impugned assessment years. Therefore, we are of the considered view that there is no error in the findings given by the AO to make addition towards disallowance u/s.14A of the Act. Hence, we are inclined to uphold the findings of the lower authorities and reject the ground taken by the assessee.
Disallowance u/s.14A r.w.r.8D to book profit computed u/s.115JB - As we find that the ITAT Special Bench in the case of M/s.Vireet Investments Pvt. Ltd. [2017 (6) TMI 1124 - ITAT DELHI] held that computation under Clause (f) of Explanation-1 to Sec.115JB(2) of the Act, is to be made without resorting the computation as contemplated u/s.14A r.w.r.8D of Income Tax Rules, 1962, which means, disallowance made u/s.14A r.w.r.8D of Income Tax Rules, 1962, cannot be added to book profit computed u/s.115JB of the Act. Hence, we direct the AO to delete the additions made towards disallowance u/s.14A r.w.r.8D of Income Tax Rules, 1962, to book profit computed u/s.115JB of the Act.
Addition towards interest receipts on the basis of Form 26AS - AO has made additions towards interest receipts on the basis of Form 26AS on the ground that the assessee could not file reconciliation explaining the difference between interest received from M/s.Aban Green Power Pvt. Ltd., as per the books of accounts, when compared to Form 26AS - explanation of the assessee before the AO that the assessee has filed reconciliation explaining the difference between interest income accounted for the books of accounts of the assessee and the interest income reported in Form 26AS - HELD THAT:- We find that the AO has made addition towards interest income on the basis of Form 26AS by observing that there is a difference between interest income reported in Form 26AS and interest income as per the books of accounts. It was the explanation of the assessee that it has filed a reconcile explaining the difference and according to the assessee, the difference amounting to Rs.8,52,000/- represents lease rental received by the assessee from the very same company, which includes service tax portion. Further, the assessee has accounted lease rental and service tax separately which resulted in difference in income as per the books of accounts when compared to Form 26AS. The said difference has been explained to the AO by filing a detailed reconciliation statement. Facts are contradictory. The AO claims that the assessee has not filed reconciliation, whereas, the assessee claims that it has filed reconciliation. Therefore, we are of the considered view that the issue needs to be remitted back to the file of the AO for further verification. Hence, we set aside the issue to the file of the AO and direct the AO to re-examine the claim in light of submissions of the assessee in accordance with law.
Disallowance of expenses u/s.37(1) - AO disallowed a sum on the basis of Audit Report issued by the Auditors, as per which, the sum referred to a penalty paid with respect to delayed reversal of service tax credit availed by the assessee - HELD THAT:- As perused the materials available on record and gone through orders of the authorities below. The assessee claims that expenses reported by the Tax Auditor in Clause 21(a) of Form 3CD pertains to interest paid on delayed reversal of service tax credit, whereas, the AO noted that the assessee has paid penalty for delayed reversal of service tax credit. Facts need to be verified by the AO. Hence, we set aside the issue to the file of the AO and direct the AO to re-examine the issue in light of claim of the assessee in accordance with law.
Disallowance of MAT credit - AO has denied the MAT credit only on the ground that the tax payable under normal provisions of the Act is higher than the tax payable under book profit for both the assessment years -HEDL THAT:- It was the explanation of the assessee before the AO that if the AO passes order giving effect to the order of the Tribunal, then tax payable under normal provisions of the Act, would be less than the tax payable under the provisions of Sec.115JB of the Act. We find that the assessee is entitled for MAT credit for taxes paid under book profit and such taxes can be carry forward to subsequent years. The AO has not denied the fact that the assessee is not entitled for MAT credit, but denied MAT credit only on the ground that income tax payable under normal provisions is higher than tax payable under book profit. On the other hand, the assessee proved that if relief allowed by ITAT, is considered by the AO, then tax payable under book profit, is higher than tax payable under normal provisions of the Act. Therefore, we are of the considered view that the facts need to be examined by the AO to allow credit for MAT in accordance with the provisions of Sec.115JB of the Act. Hence, we set aside the issue to the file of the AO and direct the AO to re-examine the claim of the assessee in accordance with law.
Levy of dividend distribution tax (“DDT") - AO has passed final assessment order u/s.143(3) r.w.s.144C(13) of the Act, without considering the fact that the assessee had paid DDT and such tax was reported in Form 26AS - HELD THAT:- As perused the materials available on record. The AO has levied DDT on the ground that the assessee does not paid tax within specified period. It was the explanation of the assessee that the assessee has paid DDT on 06.10.2015 and the same was reported in Form 26AS. The facts need to be verified. Therefore, we are of the considered view that the issue needs to be set aside to the file of the AO. Hence, we set aside the issue to the file of the AO and direct the AO to reexamine the claim of the assessee in light of evidences filed to prove the facts that the assessee had already paid DDT. If assessee has already paid DDT, then the AO is directed to delete the addition towards DDT.
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2022 (4) TMI 1581 - ALLAHABAD HIGH COURT
Seeking grant of anticipatory bail - misappropriation of fund - HELD THAT:- On due consideration to the arguments advanced by the learned counsel for the parties and in view of the law laid down by the Apex Court in the case of SUSHILA AGGARWAL AND OTHERS VERSUS STATE (NCT OF DELHI) AND ANOTHER [2020 (1) TMI 1193 - SUPREME COURT], the applicant is entitled to be granted anticipatory bail in this case.
The anticipatory bail application of the applicant is allowed. In the event of arrest, let the accused-applicant Pramod Kumar Singh, be released forthwith in the aforesaid case crime on bail on furnishing a personal bond of Rs. 50,000/- with two sureties each in the like amount to the satisfaction of the Court concerned with the conditions imposed.
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2022 (4) TMI 1580 - ITAT CHENNAI
Disallowance of management fees/royalty paid - lack of genuineness and commercial expediency - HELD THAT:- The assessee had paid management fees to M/s.India Offshore Inc. for rendering various services in connection with location of suitable rigs that are available in the market, opportunities worldwide, technical specifications of available rigs, negotiation with equipment suppliers and other services, etc., since 1986. The payment made to M/s.India Offshore Inc. was approved by the Ministry of Commerce & Industry, Department of Industrial Policy & Promotion. The assessee has paid the amount after deducting applicable TDS as per the provisions of Sec.195 of the Act. The assessee had also filed necessary evidences including agreement between the parties for rendering services. Further, the ITAT had considered the very same issue for the earlier assessment years and after considering the necessary evidences filed by the assessee, held that expenditure was incurred in terms of agreement entered into by the assessee and M/s.India Offshore Inc. vide agreemen and further, the said agreement was renewed from time to time.
In this view of the matter and consistent with view taken by the coordinate Bench in the assessee’s own case for the AYs 2010-11 & 2011-12, [2017 (11) TMI 1946 - ITAT CHENNAI] we are of the considered view that there is no error in the reasons given by the Ld.CIT(A) to delete the additions made towards disallowance of management fees/royalty paid to M/s.India Offshore Inc.
Validity of re-assessment order passed - Assessee argued that AO had issued notice u/s.148 on the last day of time limit prescribed under the Act - HELD THAT:- We find that the Act prescribed for issuance of notice within six years from the end of relevant assessment year and thus, even if notice issued on the last day of the prescribed time limit, the said notice should be a valid notice and thus, the assessment order passed u/s.147 on the basis of the said notice, cannot be held to be invalid. The case laws relied upon by the assessee on this issue has been considered and opined that those case laws are not applicable to the facts of the present case.
As regards, the second objection of the assessee in light of provisions of Sec.147 we find that the AO has recorded reasons, as per which, income chargeable to tax, has been escaped assessment on account of failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment and thus, we are of the considered view that there is no merit in the arguments of the assessee that re-opening of assessment after a period of four years is invalid, when there is no failure on the part of the assessee. The case laws relied upon by the assessee in this regard are considered and opined that facts for those cases are different from the facts of the present case and thus, not considered. Hence, ground taken by the assessee challenging validity of re-opening of assessment are rejected.
Disallowance of loss on Foreign Currency Exchange Rate - AO had disallowed Forex loss on the ground that Forex loss on loans/liabilities relating to fixed assets shall be capitalized and cannot be allowed as Revenue expenditure and assessee had also failed to furnish necessary evidences to prove that Forex loss is on account of Revenue expenditure and thus, disallowed total Forex loss debited into the P & L A/c u/s.37(1) - HELD THAT:- r, exchange gain or loss would be capital in nature if the foreign currency was held as an asset. We further noted that in the present case, foreign fluctuation loss incurred by the tax payers, has no nexus or relation with the asset purchased. Once a particular expenditure has been wholly and exclusively incurred for the purpose of business, the same needs to be allowed as deduction. In the present case, although assessee claims to have furnished various evidences to prove Forex loss incurred on account of fluctuation in foreign exchange, is not related to acquisition of any asset from a country outside India and hence, it cannot be added to cost of asset in terms of Sec.43A of the Act, but the fact brought on record by the AO shows that the assessee has not filed any evidences. Therefore, we are of the considered view that although in principle we agree with the stand taken by the assessee to treat Forex loss on loans/liabilities is a Revenue in nature, but whether the facts with regard to the nature of loans/liabilities and the purpose of such loan whether the loans have been taken for acquisition of an asset from a country outside India or for regular business purpose of the assessee are not forthcoming. Therefore, we deem it appropriate to set aside the issue to the file of the AO for further verification. Hence, we set aside the issue to the file of the AO and direct the AO to re-examine the claim of the assessee in light of various evidences filed by the assessee and also by following the decision of the Hon’ble Supreme Court in the case CIT v. Woodward Governor India Pvt. Ltd [2009 (4) TMI 4 - SUPREME COURT]. and also the decision of the Hon’ble Supreme Court in the case of CIT v. Tata Iron & Steel Co. Ltd [1997 (12) TMI 5 - SUPREME COURT].
TDS u/s 195 - non deduction of tds on professional and consultancy fee paid - disallowance u/s.40(a)(i) - HELD THAT:- An identical issue has been considered by the Tribunal, in the assessee’s own case for the AY 2015-16 for the AY 2015-16, wherein, by following its earlier decision for the AY 2012-13, held that twin conditions of rendering services in India and utilization of such services in India are not satisfied to bring the impugned payment within the definition of fee for technical services as per Sec.9(1)(vii) of the Act read with explanation and thus, the question of deduction of TDS on said payments does not arise. We set aside the issue to the file of the AO and direct the AO to re-consider the issue in light of the directions given by the Tribunal for the earlier years and decide the issue in accordance with law.
Disallowance of depreciation on difference in foreign exchange outflow - addition on the ground that although the assessee claims to have made additions to fixed asset being Drill Ship but assessee could able to file evidences - explanation of the assessee before the AO that there is no actual difference in the foreign currency outflow on account of acquisition of any asset and he has capitalized purchase of new asset as per invoices, whereas, the disclosure in annual accounts is only on the basis of actual outflow of foreign currency transactions, therefore, on that basis additions cannot be made - HELD THAT:- Assessee claimed that it has filed all evidences to prove acquisition of asset and further, amount reported in notes to accounts, is only on the basis of actual remittances of foreign currency during the relevant Financial Year which is nothing to do with additions made to fixed assets. The assessee further claims that additions made to fixed assets, is supported by necessary Invoices. The facts are contradictory. The AO records that the assessee did not file any evidences, whereas, the assessee claims that it has filed all evidences. The facts need to be verified. Hence, we set aside the issue to the file of the AO and direct the AO to re-examine the claim of the assessee in light of various evidences filed to prove additions made to fixed assets. In case, the AO finds that the assessee has filed necessary evidences, then the AO is directed to delete the addition made towards disallowance of depreciation.
CIT(A) power deleting addition - Challenging violation of Rule 46A - HELD THAT:- As we find that the Ld.CIT(A) had deleted the additions made by the AO towards payment made to M/s.Haledon International Corporation u/s.40(a)(i) of the Act, by following the decision of ITAT in the assessee’s own case for the AY 2012-13 in earlier round of litigation, where the Tribunal has categorically held that payment made to M/s.Haledon International Corporation does not come under the definition of fees for technical services as defined u/s.9(1)(vii) of the Act and thus, the assessee is not required to deduct TDS u/s.195 of the Act and consequently, payments made to said non-residents cannot be disallowed u/s.40(a)(i) of the Act. Since, the Ld.CIT(A) has given his findings on the basis of findings of the Tribunal for the earlier assessment years, we are of the considered view that the question of admission of additional evidences by the Ld.CIT(A) and violation of Rule 46A of Income Tax Rules, 1962, does not arise and hence, we reject the ground taken by the Revenue.
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2022 (4) TMI 1579 - ITAT BANGALORE
TP Adjustment - Subsidiaries/branches of assessee situated in various countries have availed the services rendered by OnMobile USA and therefore the costs incurred in that regard are to be shared by the 6 entities - submissions of Ld.AR that, this would lead to reduction in the income of assessee in India and shifting of the same to foreign country which is contrary to the transfer pricing provisions and the entire adjustment made by the Ld.AO/TPO, is on the premise that, the services were availed by the said subsidiaries/branches in their respective jurisdiction from assessee, which is contrary to the facts - HELD THAT:- We remand the transfer pricing issues alleged by assessee in ground number 3-7 back to Ld.TPO. The Ld.TPO would analyse the documents/evidence is filed by assessee and understand the business model in order to verify the arm’s-length of the international transactions undertaken by assessee. The Ld.TPO is directed to consider the transfer pricing issues de no move in accordance with law and by giving proper opportunity of being heard to assessee.
Action of Ld.TPO in imputing interest by taking Indian PLR as against USB LIBOR - HELD THAT:- We have perused the decisions relied by the Ld.AR in the light of submissions advanced by both sides. It is a settled position that interest rates should be the marketer to remind interest rate applicable to the currency concerned in which the loan is to be repaid. We direct the Ld.TPO to compute interest on delayed interest payable based on the currency in which the said interest is payable to assessee. The Ld.TPO cannot apply Indian PLR in this transaction. Interest if any is to be computed it has to be computed by adopting LIBOR. We therefore remand these issue back to the Ld.TPO to recompute the interest on the interest payable to assessee by the subsidiaries/branches by adopting LIBOR.
Credit of taxes, deducted at source not granted by AO - HELD THAT:- Both assessee as well as the Ld.DR submitted that, these issues may be remanded to the Ld.AO/TPO to consider it in accordance with the evidence is filed by the assessee. Accordingly all these issues are remanded to assessee to consider the claim after verification of the documents filed by assessee in accordance with law.
Grant of depreciation of the rate of 60% on NMS CG/TX cards, switches et cetera as these items come within the definition of “computer”.
Granting deduction under section 10A - profits and gains as are derived by an undertaking from the export of articles or things or computer software for a period of ten consecutive assessment years - HELD THAT:- As decided by Hon’ble Karnataka High Court M/S. ONMOBILE GLOBAL LTD. [2021 (1) TMI 923 - KARNATAKA HIGH COURT] the assessee is engaged in the business of mobile added value services, which involve content development in its STP unit. It has further been held that the assessee has a dedicated studio in this STP unit where music related content is developed. The assessee procures music and other contents on the third parties. The assessee also uses its studios for content development. It has further been held that assessee is engaged in the activity of developing content and conversion of procured content into mobile readable format and the same would qualify to be classified as content development or data processing and the same would be covered under the notification dated 26.09.2000 issued by the Central Board of Direct Taxes. The High Court of Delhi in ML OUTSOURCING P. LTD [2014 (9) TMI 396 - DELHI HIGH COURT] and MCKINSEY, [2015 (3) TMI 1226 - DELHI HIGH COURT], has interpreted the notification and has held that intention of the legislature is not to constrain or restrict but to enable the Board to include several services of products of similar nature in the ambit of Section 10A of the Act. It has further been held that the notification covers within its ambit even the services which cannot be sent abroad. Thus, the Tribunal has rightly held that the assessee is entitled to benefit of deduction under Section 10A
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2022 (4) TMI 1578 - CALCUTT HIGH COURT
Seeking a direction on the North Eastern Railway to withdraw a letter of termination dated 31st March, 2021 issued by the Senior Divisional Commercial Manager - HELD THAT:- Clause 23.2 of the Agreement in terminating the contract requires the Railways to give one month’s notice of termination to the Leaseholder except in cases of breach of agreement. The Railways have not sent any intimation or notice to the petitioner alleging breach of the terms. The clarification sent by the Railways on 3rd December, 2020 contains guidelines for dealing with cases relating to non-commencement of leased contract of parcel space and indicates Scenario-3 where a Leaseholder has not commenced contract corresponding Passenger Special Train service. The Railways have not alleged any breach of the contractual terms even in this letter but appears to have invoked Scenario-3 in terminating the contract by the letter dated 31st March, 2021 - It is an admitted fact that the termination was made without giving any notice to the petitioner as required under clause 23.2 of the Agreement. It should also be noted that clause 23.2 does not contain any provision for blacklisting the Leaseholder in case of violation of the terms or under any other condition.
It is also significant that the termination letter was issued by the Railways only after and as a counterblast to the petitioner’s letter of 6th February, 2021 by which the petitioner served 60 days notice under clause 23.1 of the Agreement to terminate the contract and sought refund of the security deposit - The facts in the present case reflect a wholly arbitrary action taken on behalf of the Railways which also includes breach of the petitioner’s right to a hearing before such action was taken against the petitioner.
The impugned letter of termination falls foul of the contractual terms between the parties. The letter of termination is also in violation of the petitioner’s right to a fair hearing before the Agreement was terminated and the petitioner’s security deposit forfeited. The action of debarring the petitioner from future tenders is highhanded, arbitrary and against the contractual terms executed between the parties.
As recognised by the Supreme Court in ERUSIAN EQUIPMENT & CHEMICALS LTD. VERSUS STATE OF WEST BENGAL & ANR. [1974 (11) TMI 89 - SUPREME COURT], blacklisting has the effect of preventing a person from the privilege and advantage of entering into a lawful relationship with the Government for purposes of gains. The Supreme Court was also of the view that fundamentals of fair play require that the person concerned should be given an opportunity to represent his case before he is put on the blacklist.
This Court finds the impugned letter of termination dated 31st March, 2021 liable to be revoked and set aside - Application allowed.
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2022 (4) TMI 1577 - BOMBAY HIGH COURT
Appellant seeks leave of the court to withdraw the petition with liberty to approach this court or any Meera Jadhav forum as advised, if petitioners are not satisfied with the orders to be passed by SEBI in the settlement applications filed by some of the respondents or in the show cause notices issued to some of the respondents before us.
Respondents states that show cause notices have been issued to 62 entities and considering the situation that we have just come out of Covid-19, an attempt will certainly be made to dispose the proceedings at the earliest. Mr. Andhyarujina appearing for respondent no.4 states that proceedings before SEBI pertaining to respondent nos.3 and 4 are going on and it is not like what petitioners have stated that there is no progress. We are not going into this aspect but considering the over all situation, we would expect the SEBI, i.e., respondent no.1 to complete the proceedings pending before them which have been agitated in this petition, as early as possible within 6 months. Liberty to apply for extension.
All rights and contentions of the parties are kept open. We clarify that we have not made any observations on the merits of the matters pending before the SEBI.
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2022 (4) TMI 1576 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH, NEW DELHI
Striking off of the Appellant/Company’s name from the Registrar of Companies - contention of the Appellant is that the 1st Respondent/Registrar of Companies has nowhere prayed that the Appellant/Company should remain struck off, rather it had prayed that the Appellant/Company be directed to file all the pending returns of the Appellant/Company.
HELD THAT:- Section 252(3) of the Companies Act, 2013 points out that one of the three conditions need to be satisfied before exercising the ‘jurisdiction’ to restore a company to the ‘Registrar of Companies’ on the file of ‘Registrar of Companies’. In fact, the ‘Company’ at the time of its name was struck off was to carry on business, or it was in operation, or it is otherwise just that the ‘Name of the Company’ be restored on the ‘Register’.
The ‘Liability’ under Section 92 of the Companies Act, 2013 is that even a defunct company, like every other Company is under an obligation to file the Statutory ‘Annual Returns’ till it is wound up or till such time, the Company is struck off by the Registrar u/s 248 of the Companies Act, 2013.
As far as the present case is concerned, even though, the 1st Respondent/‘Registrar of Companies’ has come out with the plea that the ‘Company’ was incorporated on 25.08.1985 and the last Annual Return and Balance Sheet was submitted by the ‘Company’ to its office, before it was considered to be ‘struck off’, relate to the ‘Financial Year’ that ended on 31.03.2006 and later, no documents were filed by the ‘Company’ to claim the status of a ‘Dormant Company’ under Section 455 of the Companies Act, 2013, this ‘Tribunal’ taking note of the fact that the ‘Company’ has ‘Assets and Liabilities’ and more so, keeping in mind that the ‘right to seek restoration’ of the name of the ‘Company’ (to be entered in the ‘Register of Companies’) is not extinguished/lost as long as 20 years have not expired, and besides these, the 1st Respondent in its ‘Reply’ before the ‘Tribunal’ had mentioned that the ‘Tribunal’ may kindly issue directions to the ‘Appellant’/‘Petitioner’ to file all documents of the ‘subject company with it, of course, within the time specified by the ‘Tribunal’, in all ‘Fairness’ ‘Reasonableness’ and ‘Equitableness’ is of the earnest opinion that it is just and proper to restore the name of the Company and that the omissions/latches/failures on the part of the Management of the Company in not filing the ‘Annual Returns’ and ‘Financial Statements’ in time can be fastened with a levy of cause, to secure the ‘Ends of Justice’. Otherwise, it will cost ‘irreparable hardship’ and ‘Prejudice’ to the ‘Company’, as opined by this ‘Tribunal’.
Impugned order set aside - appeal allowed.
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2022 (4) TMI 1575 - SUPREME COURT
Benami transactions - indulgence in prohibited transactions - second appellant passed an order provisionally attaching the property of the respondent company under Section 24(4)(b)(i) of the Act pending adjudication by the first appellant - period of limitation for filing an appeal - as mainly contended on behalf of the respondents that the orders passed by the first appellant are barred by limitation - As decided by HC [2022 (2) TMI 602 - MADRAS HIGH COURT] Learned Judge was not correct in entertaining the writ petitions, when there being an efficacious appeal remedy under Section 46 of the Act, where all the contentions, including whether the order has been passed by the Adjudicating Authority in accordance with Section 26 (7) of the Act, could have been raised and decided. As already discussed and delved in detail above, the words “date of the order” appearing in Section 46 can only be interpreted and read to mean “date of receipt of the order” for the purpose of computing the limitation for filing the appeal under Section 46 of the Act.
Learned Judge without going into the question of maintainability of the writ petitions, travelled into the case on the ground of limitation raised by the respondents / writ petitioners, as prescribed under Section 26(7) of the Act and rendered a finding on the same.
HELD THAT:- Issue notice, returnable on 18th July, 2022.
In the meanwhile, the petitioner would file an appeal before the appropriate authority on all grounds permissible including the ground pertaining to limitation. If the appeal is preferred within ten days from today, the some would not be dismissed on the ground of delay.
Dasti service, in addition, is permitted.
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2022 (4) TMI 1574 - ITAT MUMBAI
TP adjustment in relation to intra-group services - Payment of Global Client Management Fee - partial adjustment in respect of international transaction pertaining to Payment of Global Client Management Fee - HELD THAT:- It is clear beyond doubt that similar international transaction pertaining to Payment of management service fees undertaken by assessee with same AE in subsequent assessment years was accepted by TPO and no adjustment was made. There is no change in facts and circumstances in the subsequent assessment years. Thus, in view of the above legal and factual position, we hold that ALP of international transactions pertaining to Payment of Management Service Fees cannot be determined at NIL and adjustment made by TPO and confirmed by DRP is directed to be deleted.
As regards the international transaction of Payment of Global Client Management Fee, it is also evident that TPO in subsequent assessment years has partially accepted the assessee’s submission of rendition of service by AE and made ad-hoc adjustment without applying any prescribed method under section 92C(1) of the Act. Further, it is also unrebutted that receipt of service from AE has resulted in growth of assessee’s business as the revenue and profitability has increased over the years. The Revenue could not controvert any of the facts nor could place any material on record to the contrary to suggest that Revenue is aggrieved by part relief granted by the DRP.
As no method u/s 92C(1) of the Act was followed by TPO/ DRP for upholding partial adjustment in respect of international transaction pertaining to Payment of Global Client Management Fee and same was done merely on ad-hoc basis, TPO is directed to delete the transfer pricing adjustment of Rs. 3,66,71,462/- in respect of Payment of Global Client Management Fee.
Rejection of AE as tested party while conducting benchmarking analysis - HELD THAT:- TPO in subsequent assessment years has accepted the transfer pricing analysis submitted by assessee in respect of transaction of payment of Management Service Fees and in respect of intra-group services i.e. payment of Global Client Management Fee granted partial relief. There is no bar in treating foreign A.E as tested party. The only condition is that the tested party should be the least complex entity. It is pertinent to note that in the subsequent assessment years i.e. AY 2015-16, 2016-17 and 2017-18, there was no change in assessee approach of conducting its benchmarking analysis for intra-group services by treating AE as a tested party, as in the assessment year under our consideration. Revenue has failed to give any plausible reason to disturb the tested party selected by the assessee in the impugned assessment year, Thus, maintaining consistency, we direct the TPO to consider AE as a tested party.
Disallowance of expenses u/s 14A r.w.r. 8D(iii) - HELD THAT:- It is now well settled that section 14A of the Act will not apply if no exempt income is received or receivable during relevant previous year. Reliance in this regard can be placed in the case of Cheminvest Ltd [2015 (9) TMI 238 - DELHI HIGH COURT] and in Pr. CIT v. M/S Ballarpur Industries Ltd. [2016 (10) TMI 1039 - BOMBAY HIGH COURT] - In the present appeal, it is clearly evident from the Schedules to the financial statements that no dividend / exempt income was received by the assessee during the relevant previous year. Thus, in the light of settled legal position, we direct the AO to delete the disallowance made u/s 14A r/w Rule 8D. Accordingly, corporate tax grounds in assessee’s appeal are allowed.
Deemed dividend u/s 2(22)(e) - AO treated the loan from subsidiary as deemed dividend - AO submitted that interest bearing loans/advances were taken by the assessee from group companies and thus, the provision of section 2(22)(e) of the Act would not be applicable in present case - HELD THAT:- It is not in dispute that interest bearing loans / advances were accepted by the assessee from other group companies for business exigencies and the same were also repaid during the year alongwith interest @ 12% per annum.
Decision of Pradip Kumar Malhotra [2011 (8) TMI 16 - CALCUTTA HIGH COURT] as followed in SANGITA JAIN [2016 (3) TMI 1202 - ITAT KOLKATA] and ZENON (INDIA) PVT. LTD. [2015 (6) TMI 1119 - ITAT KOLKATA] wherein addition made by AO under section 2(22) (e) of the Act on account of interest bearing loan received by taxpayer was deleted. In view of the facts of the case and aforesaid judicial pronouncements, we hold that the addition under section 2(22)(e) of the Act is un-sustainable. We, therefore, direct the AO to delete the same.
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2022 (4) TMI 1573 - SUPREME COURT
Rape - entire chain was required to be proved beyond reasonable doubt by leading cogent evidence, which the prosecution had failed to prove - last seen theory was proved or not - HELD THAT:- It is true that the entire case of the prosecution rested on the circumstantial evidence, inasmuch as though certain facts were admitted by the Appellant-Accused in his further statement Under Section 313 of Code of Criminal Procedure, like his visit to the house of the victim on the previous evening of the alleged incident, and he having been arrested and brought back from Bhagalpur, Bihar, as per the transit remand granted by the concerned court, there was no eye witness to the alleged incident. The law with regard to the appreciation of evidence when the case of the prosecution hinges on the circumstantial evidence is very well settled.
There cannot be gainsaying that no conviction could be based on the statement of the Accused recorded Under Section 313 of the Code of Criminal Procedure and the prosecution has to prove the guilt of the Accused by leading independent and cogent evidence, nonetheless it is equally settled proposition of law that when the Accused makes inculpatory and exculpatory statements, the inculpatory part of the statement can be taken aid of to lend credence to the case of prosecution - In the instant case also, though the conviction of the Appellant-Accused could not be made merely on his admission of the circumstance of his visit to the house of the informant on the previous day evening of the fateful day, such admission could certainly be taken aid of to lend assurance to the evidence of the prosecution.
Once the theory of "last seen together" was established, the Accused was expected to offer some explanation as to under which circumstances, he had parted the company of the victim. It hardly needs to be reiterated that in the criminal jurisprudence, the entire burden of proving the guilt of the Accused rests on the prosecution, nonetheless if the Accused does not throw any light upon the facts which are proved to be within his special knowledge in view of Section 106 of the Evidence Act, such failure on the part of the Accused may also provide an additional link in the chain of circumstances required to be proved against him. Of course, Section 106 of the Evidence Act does not shift the burden of the prosecution on the Accused, nor requires the Accused to furnish an explanation with regard to the facts which are especially within his knowledge, nonetheless furnishing or non-furnishing of the explanation by the Accused would be a very crucial fact, when the theory of "last seen together" as propounded by the prosecution is proved against him, to know as to how and when the Accused parted the company of the victim.
The prosecution had proved the close proximity of time when the victim was last seen with the Appellant and when the victim was found unconscious and in injured condition, which ultimately resulted into her death. The DNA profile obtained from the hair found from the place of incident and the DNA profile obtained from the source of blood sample of the Appellant was identical, and confirmed that the hair strands were of the Appellant only, as per the opinion at Exhibit P-47 given by P.W.-25 Dr. Pankaj Srivastava, Scientific Officer, FSL, Sagar.
The court has no hesitation in holding that the prosecution had proved beyond reasonable doubt all the circumstances individually and also proved the circumstances forming a chain, so conclusive as to Rule out the possibility of any other hypothesis except the guilt of the Appellant-Accused. It was duly proved that while committing the barbaric acts of rape and sexual assault on the young child-victim aged about 04 years, the Appellant-Accused had inflicted bodily injuries as mentioned in the post-mortem report which had caused her death. The court, therefore, holds that the trial court had rightly convicted the Appellant-Accused for the offences punishable Under Sections 302, 376(2)(i), 376(2)(m), 363, 366 of Indian Penal Code and Section 5(i) read with Section 6 and Section 5(m) read with Section 6 of the POCSO Act. The said order of conviction was affirmed by the High Court; and is being further affirmed by this Court.
Sentence to be imposed on the Appellant - HELD THAT:- The High Court in the impugned order, though made observation in this regard, did not consider it on the ground that the charge Under Section 376A of Indian Penal Code was not framed by the Sessions Court against the Accused. However, it may be noted that in view of Section 215 an omission to state the offence or its particulars in the charge could not be regarded as material, unless the Accused was in fact misled by such error or omission, and it had occasioned a failure of justice. In the instant case, the Accused was already charged for the offence Under Section 302 which is punishable with death or life imprisonment, and was also charged for the offences Under Section 376(2)(i) and 376(2)(m), as covered in Section 376A, Indian Penal Code, which is also punishable upto death sentence amongst other lesser punishments. Hence, non-mentioning of Section 376A in the charge could not be said to have misled the Accused, nor any failure of justice could be said to have occasioned.
While affirming the view taken by the courts below with regard to the conviction of the Appellant for the offences charged against him, it is deemed proper to commute, and accordingly commute the sentence of death for the sentence of imprisonment for life, for the offence punishable Under Section 302 Indian Penal Code - The conviction and sentence recorded by the courts below for the other offences under Indian Penal Code and POCSO Act are affirmed. It is needless to say that all the punishments imposed shall run concurrently.
Appeal allowed.
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