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Showing 21 to 40 of 1817 Records
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2017 (5) TMI 1803 - ITAT MUMBAI
Revision u/s 263 by CIT - allowability of interest u/s 36(1) (iii) and 14A - HELD THAT:- The issue of allowability of interest u/s 36(1) (iii) and 14A was exhaustively examined in the course of regular assessment proceedings including issue of capitalization and revenue expenditure and the AO after examining in detailed all the aspects disallowed part of interest expenditure u/s 14A and in computing capital gains and allowed balance expenditure u/s 36(1)(iii) of the Act. It is an undisputed fact that the assessee has already challenged the interest disallowance by filing an appeal which is still pending as on date.
From the records, it is also reflected that the AO has examined all the aspects including source and utilization of funds for land transaction and in this respect, the AO had issued summons u/s 133(6) of I.T. Act to Americorp which was duly responded with all details. Therefore, in the light of above facts and circumstances, it cannot be concluded by Ld. Pr.CIT that no inquiry was done or enquiry done was inadequate. However as per the facts of the present case, it is a case of detailed inquiry by partly disallowing and partly allowing the same. It is a settled law that the power conferred u/s 263 of the I.T. Act, upon the Commissioner cannot be invoked for reactivating stale issues.
Therefore, after considering the above facts and circumstances of the present case, we allow these grounds of appeal filed by the assessee as the order of Pr. CIT u/s 263 is not sustainable. Decided in favour of assessee.
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2017 (5) TMI 1802 - DELHI HIGH COURT
Cancellation of the registration of the selling dealer - restoration of C-Forms - HELD THAT:- The matter is covered in favour of the Petitioner by the decision of this Court in Jain Manufacturing (India) Pvt. Ltd. v. The Commissioner Value Added Tax [2016 (6) TMI 304 - DELHI HIGH COURT]. Learned counsel for the Respondents states that the Value Added Tax Officer has, being conscious of the above judgment, already recommended restoration of the C Forms. He assures the Court that the necessary orders will be passed in that regard not later than four weeks from today.
Taking the assurance of learned counsel for the Respondents on record, the writ petition is disposed of.
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2017 (5) TMI 1801 - RAJASTHAN HIGH COURT
Reopening of assessment u/s 147 - Assessment barred by limitation - HELD THAT:- Before proceeding with the matter it will not be out of place to mention that the second assessment order for the year 94-95 was over on 29th February, 2000.
Taking into consideration that the second reassessment order was between the same parties, the transactions were examined and reopened for the third time after a lapse of almost one year on 28th March, 2001. This is nothing but against the fact that has been observed by Delhi High Court in WEL INTERTRADE PRIVATE LIMITED (FORMERLY WEL INTERTRADE LIMITED) & ANOTHER [2008 (8) TMI 18 - HIGH COURT DELHI] - It is nothing but harassment and in the year 95-96 which has been considered by the CIT(A) is complete answer to the issue.
Decided in favour of the assessee against the department.
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2017 (5) TMI 1800 - DELHI HIGH COURT
Validity of assessment - Jurisdiction of AO issuing notice - assessment was completed without AO’ being ACIT issuing notice to the Assessee under Section 143(2) - HELD THAT:- AO having jurisdiction i.e. Respondent No.1 ought to have issue a notice under Section 143(2)(a) of the Act within the prescribed time limit i.e., 30th September, 2014 in order to proceed with the assessment. Considering that a similar mistake of an AO not having jurisdiction over the Assessee issuing a notice to it had been committed earlier, there was no occasion for the Revenue to continue to repeat the same mistake and expect that it will be condoned.
The impugned assessment order is unsustainable in law since it has been passed without the AO having jurisdiction over the Assessee issuing notice to it under Section 143(2)(a) within the prescribed time limit i.e. on or before 30th September, 2014. The impugned assessment order dated 31st March, 2016 is hereby set aside.
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2017 (5) TMI 1799 - ITAT MUMBAI
Penalty u/s 271(1)(c) - Defective notice u/s 274 - Default of Concealment of particulars of income and Furnishing of inaccurate particulars of income - treatment of business loss as speculation loss - HELD THAT:- Applicability of Explanation to Section 73 of the Income Tax Act in the case of assessee in view of the judgments passed in the case of CIT vs. HSBC Securities and Capital Markets India Pvt. Ltd.[2012 (6) TMI 715 - BOMBAY HIGH COURT] is a debatable question and even otherwise treatment of business loss as speculation loss by the AO can neither be treated as the particular of income being concealed nor can it be called as furnishing inaccurate particulars of income. Assessee during the assessment or appellate proceedings had not furnished wrong or incorrect particulars of income. Merely based on change of head, the AO cannot adduce the concealment or furnishing inaccurate particulars of income by the assessee.
Perusal of the notice issued u/s 274 r.w.s. 271 reveals that the AO has not deleted the inappropriate words and parts of the notice, whereby it is not clear as to the default committed by the assessee, i.e. whether it is concealment of particulars of income or furnishing of inaccurate particulars of income that the penalty under section 271(1)(c) of the Act is sought to be levied. In this regard, we find that in the case of M/s Manjunatah Cotton & Ginning Factory [2013 (7) TMI 620 - KARNATAKA HIGH COURT] relied on by the assessee, has held that such a notice, as has also been issued in the case on hand, is invalid and the consequential penalty proceedings are also not valid.
Thus we hold that the notice issued under section 274 r.w.s. 271 for initiating penalty proceedings under section 271(1)(c) of the Act in the case on hand is invalid and consequently, the penalty proceedings are also invalid. Therefore the penalty levied by AO and upheld by the Ld. CIT(A) is hereby dropped. Appeal filed by the assessee stands allowed.
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2017 (5) TMI 1798 - CHHATTISGARH HIGH COURT
Validity of assessment order - Legality and validity of the notice - Power of revision by Commissioner conferred under Section 49 (3) of the Chhattisgarh Value Added Tax Act, 2005 - when the proceeding is deemed to have been initiated under Section 49 (3) of the Act, 2005? - HELD THAT:- The word “initiate” or “initiation” has not been defined in the Act, 2005. Since it has not been defined in the Act, it would be appropriate to refer the dictionary meaning of the word “initiate”. In Webster's Third New International Dictionary, the word “initiate” has been defined as to begin or set going; make a beginning of; perform or facilitate the first actions, steps or stages of. Likewise, in Shorter Oxford English Dictionary, the word “initiate” has been defined as to begin, commence, enter upon; to introduce, set going, originate - The word “initiate” has been used in Section 20 of the Contempt of Courts Act, 1971. Section 20 of the Contempt of Courts Act, 1971 provides that no court shall initiate any proceedings for contempt, either on its own motion or otherwise, after the expiry of a period of one year from the date on which the contempt is alleged to have been committed.
The aforesaid provision came up for consideration before the Supreme Court in the matter of Pallav Sheth v. Custodian and Others [2001 (8) TMI 1239 - SUPREME COURT]. and Their Lordships while considering the scope and meaning of the word “initiate” under Section 20 of the Contempt of Courts Act, 1971 have held that in the case of suo motu proceedings, contempt proceeding must be initiated by the court by issuing a notice and in other cases initiation can only be by a party filing an application. Further, the Supreme Court clearly held that under Section 20 of the Contempt of Courts Act, 1971, action can be initiated, either by filing an application or by the court issuing notice suo motu, within a period of one year from the date on which the contempt is alleged to have been committed.
Thus, in the considered opinion of the Court what is required and condition precedent for initiation of proceeding by invoking Section 49 (3) of the Chhattisgarh Value Added Tax, 2005, would be initiation of proceeding under Section 49 (3) of the Act, 2005 and initiation can be done only when the revisional authority applies its mind to the facts of the case of his own motion or on the information received. Once there is application of mind by the revisional authority for exercise of suo motu proceeding on the basis of the information received and he decides to issue notice as contemplated in Rule 61 of the Chhattisgarh Valued Added Tax Rules, 2006, then the exercise of initiation is complete and initiation cannot be said to be done only when the notice is received under Rule 61 by the assessee. Service of notice to the assessee is a further step after initiation of suo motu proceeding by the revisional authority to complete and conclude the exercise of suo motu revisional jurisdiction.
Whether the revisional authority has initiated proceeding under sub-section (3) of Section 49 of the Act, 2005 well within the period prescribed? - HELD THAT:- The penalty proceeding has been closed against the petitioner by order dated 29-7-2013 (Annexure P-2) and three calendar years would expire on 31-12-2016, and in the instant case, the Commissioner, Commercial Tax in exercise of suo motu jurisdiction applied its mind to the facts of the case, it appears, on or before 26-12-2016 and issued notices to the petitioner on 26- 12-2016. Therefore, the proceeding is deemed to have been initiated on or before 26-12-2016 before completion of three calendar years from the date of imposing penalty i.e. 29-7-2013 - the contention of the petitioner that the notice dated 26-12-2016 issued by the revisional authority is without jurisdiction and without authority of law sans merit.
The writ petition is dismissed.
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2017 (5) TMI 1797 - ITAT MUMBAI
Deduction u/s. 80IA(4) - contractor v/s developer - as per ao while executing the project, had acted in the capacity of a contractor, therefore, the deduction cannot be allowed to the assessee as pre-requisite of the section to enable the assessee to claim deduction is that he should be a developer - HELD THAT:- As in the own case [2014 (11) TMI 1266 - ITAT MUMBAI] issue 80IA(4) was decided by the Tribunal. The facts and circumstances in the case during the year under consideration are exactly same. Respectfully following the order of the Tribunal, we direct the A. O. to allow the claim for deduction u/s 80IA(4) of the Act.
Disallowance made u/s. 14A r. w. Rule 8D - HELD THAT:- As in the own case [2014 (11) TMI 1266 - ITAT MUMBAI] profit was much more than the investment in the joint venture company therefore the disallowance made by the A. O. by invoking the provisions of section 14A of the Act was not justified. Accordingly the A. O. directed to delete the same.
Disallowance of interest u/s 36(1)(iii) - We found that the cash profit of the assessee company that have been earned during the year as reduced by the amount of investment in joint venture company, was in excess to the monies advanced to Chafal as on the cut-off date, therefore it can be safely presumed that advance have been given against profits of the year and not out of interest bearing funds. This view has been supported by the decision of Hon’ble Bombay High Court in the case of Reliance Utilities & Power Ltd. [2009 (1) TMI 4 - BOMBAY HIGH COURT] Fact that no further advance was given during the year and no disallowance was made in the preceding year also supports the case of the assessee. Accordingly we do not find any merit in the action of the A. O. in disallowing the interest u/s 36(1)(iii) - Decided in favour of assessee.
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2017 (5) TMI 1796 - ITAT AHMEDABAD
Disallowance being grant given by the appellant to Sabarmati Salt Farmers Society and claimed as deductible expenditure u/s.36(1)(xii) - HELD THAT:- It is essential to bear in mind the fact that the reason of disallowance, in the original assessment proceedings, was that there was, according to the AO, a possibility of the amount coming back to the assessee, and, for that reason, amount could not be treated as having been spent.
Merely because the assessee has not been able to file the fund utilization report cannot be ground enough to disallow the claim of the assessee. There is no dispute that the amounts were advanced in the course of the business of the assessee, and it has not even been case of the AO either, and, there is also no dispute that this amount is no longer recoverable from the Sabarmati Salt Farmer’s Society as it has been wound up. In these circumstances, the objection taken by the AO, in the original assessment proceedings, does not hold good any longer.
In any case, as the assessee rightly claims, it is at best, even going by the improvised version of the AO, a case of bad debt or a loss incidental to business which is allowable anyway. CIT(A)’s action of upholding the disallowance, for want of fund utilization report, is thus unsustainable in law and on the facts of this case. The approach adopted by the authorities below in interpreting the terms of remand is too pedantic and hyper technical to meet our approval. The directions given by the Tribunal are to be interpreted in the light of its object and context. That consistently has been approach of the Hon’ble Courts above.
We uphold the plea of the assessee and direct the Assessing Officer to delete the impugned disallowance. - Decided in favour of assessee.
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2017 (5) TMI 1795 - ITAT MUMBAI
TP Adjustment - Selection of MAM - DRP adopting of internal TNMM - HELD THAT:- We are unable to persuade ourselves to subscribe to the view arrived at by the DRP in respect of the authenticity of the segmental reporting, veracity of the bifurcation of the expenses pertaining to marketing efforts and various risks associated with the sales pertaining to the Non-AE transactions, which as alleged by the DRP had been bifurcated to the AE segment and not shown on actual basis, as well as the misconceived observation that the assessee had resorted to a comparison between the Non-AE segment local sales of India, as against the AE segment, which we find is absolutely incorrect.
We are afraid that a claim of an assessee cannot be dislodged merely on the basis of allegations and surmises, but can only be so done on the basis of substantial material which could go to irrebutably disprove and consequently dislodge the claim of the assessee, with a clear observation as to what fairly could be held to be the correct state of affairs.
We thus not being persuaded to subscribe to the observations of the lower authorities, therein set aside the order of the AO passed u/s 143(3) r.w.s 144C(13), to the extent the latter had given effect to the order of the DRP and therein set aside the rejection of the internal TNMM as the most appropriate method adopted by the assessee for benchmarking the international transactions of the assessee with its AE’s, and restore the matter to the file of the AO to give consequential effect to the same.
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2017 (5) TMI 1794 - ITAT KOLKATA
Disallowance u/s 14A read with Rule 8D - Expenditure incurred to earn exempt income - HELD THAT:- We respectfully follow the decision of the Coordinate Bench of this Tribunal for A.Y. 2010-11 [2017 (3) TMI 1051 - ITAT KOLKATA] and direct the Assessing Officer to restrict the disallowance under section 14A read with Rule 8D to the extent of exempt dividend income. Ground No. 1 of the assessee’s appeal thus is partly allowed.
MAT computation - addition made on account of excise duty refund and interest subsidy while computing book profit under section 115JB - HELD THAT:- As relying on assessee own case [2017 (3) TMI 1051 - ITAT KOLKATA] we direct the Assessing Officer to delete the addition made on account of excise duty refund and interest subsidy while computing the book profit of the assessee-company under section 115JB of the Act and allow Ground No. 2 of the assessee’s appeal.
Disallowance made under section 14A read with Rule 8D while computing the book profit of the assessee-company under section 115JB - HELD THAT:- As observed that this issue is consequential to the issue involved in Ground No. 1 of the assessee’s appeal for AY 2011-12, which has been decided by us in the foregoing portion of this order. Following our conclusion drawn in AY 2011-12 on the said issue, we direct the Assessing Officer to restrict the disallowance under section 14A read with Rule 8D to the extent of exempt dividend income. Ground No. 3 of the assessee’s appeal thus is partly allowed.
Addition interest subsidy and excise duty refund in computing the income of the assessee under the normal provisions of the Act - HELD THAT:- As decided in own case [2017 (3) TMI 1051 - ITAT KOLKATA] incentives, designed to achieve a public purpose, cannot be construed as production or operational incentives for the benefit of assessees alone. It was further held that making of additional provision in the scheme that the incentives would be available to the eligible industrial units from the date of commencement of commercial production and that these are not to be allowed for creation of new assets cannot be viewed in isolation to treat the incentives as production incentives. Such provisions are intended to ensure that the incentives are made available only to the bona fide industrial units so that the larger public interest of eradicating unemployment is achieved. The Court finally concluded that the incentives received by way of excise duty refund and interest subsidy are capital receipts in the hands of the assessee and therefore not chargeable to tax. - Decided against revenue.
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2017 (5) TMI 1793 - DELHI HIGH COURT
Seeking grant of anticipatory bail - financial dealings with the complainant, to which agreement dated 01.06.2012 has been executed, is violated - State opposes the bail application and seeks time to file status report - HELD THAT:- The petitioner is directed to join the investigation and in the event of his arrest he be released on anticipatory bail in the sum of Rs.20,000/- with one surety of the like amount to the satisfaction of IO/SHO concerned till the next date with the condition that he shall not contact, threaten or coerce the complainant or any of family members of the complainant during this period or indulge in any illegal activities and that he shall not leave India without prior permission of the Court. The amount of Rs.15 Lakhs as offered by the petitioner be handed over to the complainant in the presence of IO, without prejudice to the rights and contentions of the parties.
Renotify on 17th July, 2017.
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2017 (5) TMI 1792 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL NEW DELHI
Maintainability of appeal - time limitation - HELD THAT:- As the Appellate Tribunal has no jurisdiction to condone the delay for more than 45 days, the appeal is dismissed on the ground of delay.
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2017 (5) TMI 1791 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, BANGLORE
Condonation of delay of more than 45 days in filing appeal - inherent power under Rule 11 of the NCLAT Rules 2016, to condone the delay - grievance of the appellant is that Registrar of the NCLAT has not made any endeavour to decline to register the appeal on failure to remove the defects within 7 days as prescribed under sub-clause (4) of Rule 26 - HELD THAT:- As per the provisions of the NCLAT Rules 2016 read with Section 422 of the Companies Act 2013, if defects are not removed within 7 days and the defects are removed after 7 days i.e. beyond the period prescribed under the rules, the appeal is treated to be a fresh appeal. Such procedure is followed so that the appellants may get advantage of 'court fee' prescribed under the NCLAT Rules and may use the same 'paper book' which are generally voluminous. If the Registrar General would have refused to register the appeal after 7 days, as per clause (4) of Rule 26, the appellant would have filed a fresh appeal with fresh court fee with separate sets of paper book, separate affidavit, separate vakalatnama which would be disadvantageous to the appellants.
Appeal was filed on 31st March 2017, and the defect was to be removed within 7 days i.e. by 7th April 2017. Therefore, no extension of time could have been granted even by the Registrar to remove the defects particularly when the Appellate court has no power to condone delay after 90 days of receipt of judgment which expired on 7th April 2017 in the present case.
In the present case, curiously the applicant has not explained the delay and laches on his part. It has not explained that why the appeal was not filed within 45 days of receipt of the certified copy of the judgment i.e. by 21st February 2017. They have also not explained the delay for preferring the appeal for another 38 days i.e. till 31st March 2017 when it was filed - Though it was open to the applicant to file a petition before Appellate Tribunal with prayer to ignore the minor defects, no such application was filed by appellant. The appeal was taken back on 3rd April 2017 and they re-filed on 1st May 2017 i.e. beyond the period of 90 days from the date of receipt of judgment passed by Tribunal, when Appellate Tribunal had no jurisdiction to entertain the appeal.
The unexplained delay on the part of the applicant and laches on his part show that applicant does not deserve exercise of inherent power - application dismissed.
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2017 (5) TMI 1790 - ITAT HYDERABAD
Unexplained deposits in bank accounts - main grounds are with reference to considering the peak of the amounts as taxable and not each and every individual deposits as there were withdrawals as well - HELD THAT:- Admittedly, Assessee is not in a position to justify fully the large number of deposits. Assessee before CIT(A) furnished certain sources for cash deposits and withdrawals, particularly amounts borrowed by cheques and drawn in cash. Considering that there is no allegation that Assessee has made unexplained investments and/or indulging any business, there is nothing on record to say that the withdrawals cannot be a source of subsequent deposits. In these circumstances, Assessee request for bringing to tax the peak credits can be accepted.
Even though this working is not verifiable by us in the absence of complete details of domestic expenditure or expenditure which is in nature of outgoing out of the withdrawls and the Receipt-Payment statement. Since this aspect was not examined by A.O, we set aside the issue to the file of the A.O to examine the peak credit, based on receipts and payments statement of Assessee and the consolidated deposits and withdrawals in the five banks and to bring to tax only the amount of peak credit / deficit cash as the case may be. Assessee should be given due opportunity by AO to file necessary details. The grounds raised by Assessee are accordingly considered allowed.
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2017 (5) TMI 1789 - ITAT DELHI
None appeared on behalf of assessee at the time of hearing of appeal - HELD THAT:- As assessee is no more interested in prosecuting the appeal. Hence, the appeal filed by the assessee is liable to be dismissed for non-prosecution.
As in the case of Commissioner of Income-tax vs. Multiplan India (P) Ltd.[1991 (5) TMI 120 - ITAT DELHI-D] reference filed by the revenue before the Tribunal, which was fixed for hearing. But on the date of hearing nobody represented the revenue/appellant nor any communication for adjournment was received. There was no communication or information as to why the revenue chose to remain absent on that date. The Tribunal on the basis of inherent powers, treated the reference filed by the revenue as un-admitted in view of the provisions of Rule 19 of the Appellate Tribunal Rules, 1963.
In the result, we treat this appeal as unadmitted and dismiss the same in limine.
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2017 (5) TMI 1788 - ITAT MUMBAI
Disallowance u/s 14A r.w.r 8D - Assessee submits that assessment year being 2006-07, the provisions of Rule 8D have no application - HELD THAT:- As perused the order of this Tribunal in Assessee’s own case for earlier assessment years. The Coordinate Bench considered similar situation for the assessment years 2004-05 and 2005-06 [2016 (4) TMI 1427 - ITAT MUMBAI] and directed that 2% of the dividend income be disallowed as expenses attributable for earning dividend income u/s 14A
Following the said order, we direct the Assessing Officer to compute the disallowance at 2% of the exempt income during this assessment year also u/s 14A of the Act. Appeal of the Assessee is partly allowed.
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2017 (5) TMI 1787 - MADHYA PRADESH HIGH COURT
Review Order - error apparent on the face of record or not - no period of limitation in the writ petition - HELD THAT:- Section 3 of the Limitation Act, 1963 which is not applicable per se to the writ proceedings, enjoins a duty upon the Court to take into consideration the period of limitation. Though in a writ petition, there is no period of limitation, but delay and laches is important aspect which is required to be taken into consideration to consider as to whether a litigant has slept over his rights or has invoked the jurisdiction of the Court with due diligence.
Once the Court has recorded a finding that the petitioner has approached this court after delay and laches, we find that only because the plea was not raised in a reply to the writ petition is not a ground for review of the order, as it is not an error apparent on record.
Review petition dismissed.
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2017 (5) TMI 1786 - ALLAHABAD HIGH COURT
Dishonor of Cheque - presumption of service of notice - rebuttal of presumption - delay in the conclusion of the case - HELD THAT:- Facts of the present case shows that despite institution of the complaint case in the year 2013 by the opposite party No. 2 against the applicant, the case could not be concluded for one reason or the other without any fault on the part of opposite party No. 2. The conduct of the applicant shows an effort on his part to defeat the very object of Section 138 which has been enacted to enhance the acceptability of cheque in settlement of liabilities by making the drawer liable for payment of amount for which the cheque was dishonoured.
Perusal of Section 27 of the General Clauses Act, as clearly indicates that there is a presumption of service by registered post. The provisions of the aforesaid Section 27 of the Act regarding presumption of service has been interpreted by Hon'ble Supreme Court and it has been held that there is a rebuttable presumption of service by registered post - It has also been well settled by Hon'ble Supreme Court that when notice is sent at the correct address by registered post and neither acknowledgment nor undelivered registered cover is received back then there is presumption of service although rebuttable. The burden to rebut presumption lies on the party challenging the factum of service.
In the present case it is undisputed that the notice under Section 138(b) of the N.I. Act was sent by the opposite party No. 2 by registered post to the applicant at the correct address. The facts in this regard have been clearly stated in the complaint filed by opposite party o.2. The drawer of the cheque i.e. the applicant has completely failed to rebut the presumption about the service of notice. He has also failed to show that he had no knowledge that the notice was brought to his address or that the address mentioned at the cover, was incorrect or that the letter was never tendered. Under the circumstances, there is presumption of service of notice sent by opposite party No. 2 to the applicant herein by registered post.
Application dismissed.
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2017 (5) TMI 1785 - CESTAT NEW DELHI
Denial of benefit under abatement claim - allegation is that appellant has not supplied the plant, machinery, equipment to the customers, while providing erection, commissioning and installation services - N/N. 19/2003 -ST dated 15.1.03 and 01/2006-ST dated 1.2.2006 - HELD THAT:- Since the learned Commissioner (Appeals) upon verification of the contract entered into between the appellant and the service-receiver has held that claim of abatement is not permissible as per the contents of the notification, the impugned order cannot be interfered with at this juncture, being passed upon verification of the factual aspects.
Appeal dismissed.
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2017 (5) TMI 1784 - ITAT MUMBAI
Disallowance u/s 14A r.w.r 8D - Excess of own funds - assessee submits that the investment during the year were from the surplus available and thus, the investments were not out of borrowed funds, therefore, it is stated that no disallowance u/s 14A be made - HELD THAT:- As in Avon Cycles Ld. vs. CIT [2014 (9) TMI 207 - PUNJAB & HARYANA HIGH COURT] it is held that where funds utilized by assessee were mixed funds and part of it was invested in earning tax free dividend income, it was held that the interest paid on borrowed fund was also relatable to interest on investment made in tax free funds. Therefore, interest expenditure relatable to investment in tax free funds was to be computed under provisions of Rule 8D (2)(ii).
In CIT vs. HDFC Bank Ltd [2016 (3) TMI 755 - BOMBAY HIGH COURT] it is held that the presumption laid down in CIT vs. Reliance Utilities & Power Ltd. [2009 (1) TMI 4 - BOMBAY HIGH COURT]with regard to investment in tax-free securities coming out of the assessee’s own funds in case they are in excess of the investments made in securities (notwithstanding the fact that the assessee concerned may also have taken some funds on interest) applies, when applying section 14A of the Act. It is reiterated again in HDFC Bank Ltd. [2016 (3) TMI 755 - BOMBAY HIGH COURT]
The order of the Ld. CIT(A) on the above issue is set aside and the same is restored to the file of the A.O. to make an order keeping in mind the principles delineated here-in-above after giving a reasonable opportunity of being heard to the assessee. Thus, 1st ground of appeal is allowed for statistical purposes.
Addition as unproved purchases - HELD THAT:- We find that the transactions with Ashirwad Broker, Lalitbhai Dalal, Madhav Broker do not figure in the order passed by the Tribunal in the assessee’s own case for the A.Y. 2007-08. Therefore, the issue in instant appeal is to be decided on its own facts. The Hon'ble Supreme Court in State of Kerala vs. Shaduli Grocery Dealer [1977 (3) TMI 160 - SUPREME COURT], recognized the importance of oral evidence by holding that the opportunity to prove the correctness or completeness of the return of income necessarily carries with it the right to examine witness and that includes equally the right to cross-examine witness. Thus, the order of the Ld. CIT(A) on the above issue is set aside and the same is restored to the file of the A.O. to pass an order after examining the above three parties and allowing the assessee to cross-examine them. The assessee is directed to file the relevant details before the A.O. Thus, the 2nd ground of appeal is allowed for statistical purposes.
Disallowance of commission paid to the managing director and the executive director u/s 36(1)(ii) - HELD THAT:- We find that the same issue arose before the ITAT ‘F’ Bench Mumbai in assessee’s own case for the immediate preceding assessment year 2007-08. The Tribunal observed that (i) the Ld. CIT(A) has rightly held that the A.O. has not demonstrated that the expenditure incurred was excessive, (ii) the directors have declared the commission in their return of income and are being assessed to tax at maximum marginal rate. Therefore, the Tribunal dismissed the appeal filed by the revenue on the above issue.
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