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Showing 21 to 40 of 1393 Records
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2017 (6) TMI 1373 - ITAT COCHIN
Unexplained cash deposits in bank account - assessee submitted that the cash deposits is made out of the sale proceeds of a property sold by his wife - HELD THAT:- The purchase made by the assessee’s wife in year 2008 for Rs.2 lakhs has been sold in the year 2011 for a sum of Rs.3,35,700/-. There is no material on record nor any evidence produced by the assessee before the Tribunal to show that the assessee’s wife had received a sum of Rs. 31 lakhs on the sale of property vide sale deed No.201/2011 (sale deed dt 20-1-2011). In the absence of any material produced by the assessee, I have no other option but to confirm the addition of Rs.30 lakhs made by the Assessing Officer.
Assessing Officer has not given credit of Rs.3,35,700/- disclosed in sale deed against the cash deposits of Rs. 30 lakhs. As long as the Department does not have a case that the sale proceeds of the assessee’s wife has not been deposited in any other Bank account, I am of the view that the sum of Rs.3,35,700/- disclosed in the sale deed of the assessee’s wife should be given due credit against the cash deposits of Rs.30 lakhs in assessee’s ICICI Bank account. Therefore, the assessee gets the benefit of Rs.3,35,700/- and balance of Rs. 26,64,300/- (Rs.30,00,000 – Rs.3,35,700 = Rs.26,64,300) is sustained as income of the assessee from the undisclosed sourceC- Appeal filed by the assessee is partly allowed.
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2017 (6) TMI 1372 - BOMBAY HIGH COURT
Murder - Assault - snatching of jewellery and cash/dacoity - identification of respondent Nos. 3 to 5 in test identification parade by only eye witness - presence of other cogent evidences or not - appeal against acquittal - HELD THAT:- It is an admitted fact that the identification parade took place after 17.9.2007. In view of the admissions given by PW 1 Chandraprbaha, the identification of respondent Nos. 3 to 5 by PW 1 Chandraprabha before the Court cannot be relied upon. There is no other cogent and clinching evidence on record to connect any of the respondents to the crime. Looking to the evidence on record, the conclusion arrived at by the learned Sessions Judge is a reasonable and possible view.
The plenitude of power available to the Court hearing an appeal against acquittal is the same as that available to a court hearing an appeal against an order of conviction, but, however, there are a plethora or decisions of the Supreme Court which hold that the court hearing an appeal against acquittal, will not interfere solely because a different possible view may arise on the evidence.
The Supreme Court in the case of C. Anthony Vs. K.G. Raghavan Nair [2002 (11) TMI 353 - SUPREME COURT] has observed that while hearing an appeal against an order of acquittal, if two reasonable conclusions can be reached on the basis of evidence on record, the appellate court should not disturb the finding of the trial court.
The order of acquittal need not be interfered - appeal dismissed.
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2017 (6) TMI 1371 - ITAT PUNE
Disallowance u/s 14A r.w.r. 8D - additional disallowance u/s. 14A qua investment where the amount is still lying in share application money pending allotment of shares - HELD THAT:- DR has not been able to show any material difference in the facts and circumstances in the assessment year under appeal vis-à-vis assessment year 2009-10, wherein these issues have been considered and adjudicated by the Co-ordinate Bench of the Tribunal in favour of the assessee. Following the decision of Co-ordinate Bench of the Tribunal, we allow ground No. 1 of the main grounds of appeal and the additional ground Nos. 1 to 3 raised by the assessee.
We have also considered the judgment in the case of Pradeep Kar Vs. Assistant Commissioner of Income Tax [2009 (6) TMI 331 - KARNATAKA HIGH COURT] We find that the facts in the said case are entirely different. The issue before the Hon’ble High Court in said case was with respect to disallowance u/s. 14A on investment made in shares by using borrowed funds. In the backdrop of above facts the Hon’ble Court held; u/s. 14A, expenditure relating to exempt income is not allowable. In our considered view, the above judgment does not support the case of Department.
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2017 (6) TMI 1370 - ITAT MUMBAI
Estimation of income - Bogus purchases - assessee has purchased materials from the parties so identified by the Sales tax department - CIT(A) restricted the addition to 8% - HELD THAT:- Decision taken by Ld CIT(A) does not call for any interference. In the instant case, the AO has not proved that the impugned purchases have not been sold. As submitted by Ld A.R, an item cannot be sold without purchasing the same. Hence there is no reason to disallow entire amount of purchases. Accordingly, in the facts and circumstances of the case Ld CIT(A) was justified in restricting the disallowance to 8% of the alleged bogus purchases. Accordingly I uphold the order passed by Ld CIT(A) on this issue. Appeal filed by the revenue is dismissed.
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2017 (6) TMI 1369 - ITAT PUNE
Exemption u/s 11 - violation of provisions of section 13(1)(c)(ii) and 13(2)(b) - HELD THAT:- A perusal of the trust deed shows that the trust was created in the year 1930 i.e. much prior to the enactment of Income Tax Act, 1962. Thus, the first condition to fall within the scope of proviso to section 13(1)(c)(ii) of the Act is satisfied.
Benefit to be granted to the assessee or the person referred to in sub-section (3) in application or uses of the property or income of trust is concerned, the use or application of the property should be in compliance of the mandatory terms of the trust - From perusal of English translation of the Trust Deed it appears that the trustees were in possession of the residential part of the property on second floor. As per the assertions of ld. AR, the legal heirs of the author of the trust were in possession of part of property on ground floor as well. Admittedly, there is a clear mandate in the trust deed that part of the property which is in possession of author of the trust shall be for the sole purpose of occupancy by the author of the trust or his legal heirs. The part of the property which is subject matter of dispute are 3 shops on ground floor of the building.
From the perusal of English translation of Trust Deed the details of the property in possession of the author of the trust at the time of execution of Trust Deed is not discernible. Under such circumstances, we are of considered opinion that this issue needs a re-visit to the Assessing Officer. Representative of both the sides concur on the point that the part of property referred to in the Trust Deed has to be clearly identified - Assessing Officer is directed to ascertain the part of property which was in the possession of author of the trust at the time of execution of the trust in the year 1930, qua which mandate has been given for the exclusive use by the author of the trust and his legal heirs.
In case the shops under question are part of the property which was in possession of the author of the trust deed at the time of execution, then the assessee clearly falls within the exception as mentioned in proviso to section 13(1)(c)(ii) of the Act.
The benefit of exemption shall not be available to the extent there is violation of provisions of section 13(1)(c) and the same be brought to tax at the maximum marginal rate. In case the Assessing Officer comes to the conclusion that shops are not part of the property as mandated in the Trust Deed, the addition has to be made to the extent of violation of provision of section 13(1)(c)(ii) and 13(2)(b) of the Act. The Assessing Officer before deciding this issue afresh in accordance with our directions shall grant opportunity of hearing to the assessee, in accordance with law.
Both the appeals i.e. the appeal by the assessee in assessment year 2010-11 and the appeal of the Department in assessment year 2011-12 are allowed for the statistical purpose in the aforesaid terms.
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2017 (6) TMI 1368 - NATIONAL COMPANY LAW TRIBUNAL CHENNAI BENCH
Oppression and mismanagement - provisional attachment orders of the shares of the Petitioner - Sec. 187 C (6) of the Companies Act 1956 and Sec.89(8) of the Companies Act, 2013 - HELD THAT:- It is on record that the Petition has been filed on 07.04.2017 and at that point of time, there was no legal bar as to filing of the Petition and the Petitioner fulfilled the requirements under section 244 of the Company's Act, 2013 as reflected from our order dated 13.04.2017. The order of attachment of shares of the petitioner and the issuance of notice to the Petitioner is dated, 19.05.2017 which is subsequent to the filing of the petition. It is also on record that the Competent Authority is yet to complete investigation to reach a final conclusion with regard to the status of the shares, i.e., whether or not the shares are falling within the purview of the benami property. Therefore, unless any final order is passed, to declare that the shares held by the Petitioner are falling within the purview of the benami property, the Petition cannot be thrown out on the ground that a provisional order for attachment of shares of the petitioner is passed by the Competent Authority.
Considering the facts and circumstances involved in the case, as detailed in the petition, we are inclined to grant interim relief as prayed, and appoint Mr.S.Santhanakrishnan as Chartered Accountant and Mr.R.Sridharan as Company Secretary, whose names have been recommended by the Petitioner and direct them to undertake forensic audit of the state of affairs of the company including accounts-cum-banking and statutory compliance including Sales Tax, Excise, Customs, FEMA, Companies Act, GATT and other laws applicable and statutory records of RI company including the Income and Expenditure of Respondent No. 1.
Application disposed off.
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2017 (6) TMI 1367 - KERALA HIGH COURT
Requirement to satisfy the deficit additional court fee ie; 0.5% to make it 1%, by virtue of the amendment effected as to the payment of legal benefit fund - Section 25(1) of the KVAT Act - HELD THAT:- The learned counsel for the petitioner submits that taking note of the pendency of the proceedings before the learned Single Judge, the interest of both the sides was protected by the learned Single Judge of this Court as per Ext.P10 judgment, whereby the petitioner was required to execute a simple bond without sureties undertaking to satisfy the alleged deficit of 0.5% ie; the balance out of the total enhanced 1% if the issue comes to be decided in favour of the Government and against the assessee.
It is pointed out that the appeals preferred after 1.4.2016 have to be considered in AP. ISMAIL (ANWAR TRADERS) VERSUS STATE OF KERALA AND ANOTHER [2005 (7) TMI 626 - KERALA HIGH COURT] does not come to the rescue of the petitioner in such context. It is also stated that several cases are pending consideration before the learned Single Judge in this regard. - Though there is no appeal from the afore cited judgment, this Court would grant a conditional order, directing consideration of the appeal on executing a simple bond without sureties before the Assessing Officer with respect to the enhanced legal benefit fund. If at all the issue is found against the petitioner/assessee, the Assessing Officer would recover the same as tax dues and remit it to the legal benefit fund.
The Original Petition is disposed off.
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2017 (6) TMI 1366 - MADRAS HIGH COURT
Seeking waiver of demurrage during the detention period of the goods - grievance of the petitioner before this Court is that the full waiver of demurrage for the consignment under the Bill Entry Nos. 8088486, 8082686, 8083074 & 8082580, dated 23.01.2015 was not granted, even though the petitioner is entitled for the same - HELD THAT:- This Court, at this stage, is not expressing any view on the claim made by the petitioner, as it is for the respondents, more particularly the third respondent to consider and decide on such claim. As the present writ petition is filed with limited prayer seeking for the disposal of the representation dated 05.05.2017 by the third respondent, without expressing any view on the merits of the matter, this writ petition is disposed of, only with a direction to the third respondent to consider the said representation of the petitioner and pass orders on the same on its own merits and in accordance with law, after hearing the petitioner as well, within a period of three weeks from the date of receipt of a copy of this order.
Petition disposed off.
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2017 (6) TMI 1365 - ITAT MUMBAI
Estimation of income - Bogus purchases - HELD THAT:- Even in case due to the reasons that either the assessee failed to prove the genuinity of purchases or the parties not appeared on the notices issued by the AO, under the Income Tax Act, the tax authority must tax the only real income. Thus, if the transaction is not verified, the only taxable is a taxable income component not the entire transaction.
We are of the opinion that in order to fulfil the gap of Revenue leakage, disallowance of reasonable percentage of the impugned purchase will meet the end of justice.
In the present case, the assessee has total purchase of Rs.2,09,75,237/- and the alleged bogus purchases are only of Rs.9,21,532/- which is hardly 4.39% of total purchases. The GP percentage in the present case is 23.4% which is much higher than the VAT rate charged by the Maharashtra Government. As a matter of fact, the VAT department is charged from 4% to 12.5% by the Govt. of Maharashtra on various purchases. Considering the totality of the fact and in order to fulfil the gap of Revenue leakage, the disallowance of reasonable percentage will meet the end of justice in the present case. Thus, considering the peculiarity of the present case, we deemed it appropriate to reduce the disallowance @ 10% of impugned purchases (10% of Rs. 9,21,532/-).
Hon’ble Bombay High Court in the case of CIT vs Shri Hariram Bhambhani [2015 (2) TMI 907 - BOMBAY HIGH COURT] also held that Revenue is not entitled to brought the entire disputed sale consideration, but the only profit attributable on the unrecorded sale consideration can alone be the subject to tax. With this observation, the appeal of assessee is partly allowed.
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2017 (6) TMI 1364 - ITAT CUTTACK
Revision u/s 263 - valuation of work-in-progress (WIP) and profit element contained therein - HELD THAT:- We find that in the instant case, it is not in dispute that during the course of assessment, the AO called for details of closing work-in-progress, which was furnished by the assessee and was also examined by the AO. It is not the case of the ld Commissioner of Income Tax that the Assessing Officer has not examined the valuation of closing work in progress. That being so, in our considered view, CIT could have interfered with the order of the Assessing Officer u/s.263 only when it finds that the conclusion of the Assessing Officer is either erroneous in fact or erroneous in law. Without returning a clear finding that the order of the Assessing Officer was erroneous, the ld Commissioner of Income Tax could not interfere with such an order u/s.263 for making a fishing or roving enquiry.
In the instant case, we find that CIT has simply observed that the submission of the assessee needs verification. As per the provisions of section 263, CIT could have either himself verified the submission of the assessee or could have got the submission of the assessee verified by other agencies and thereafter if he would have come to the conclusion that the order passed by the Assessing Officer in respect of the issue was actually erroneous then only he could have interfered with the order of the Assessing Officer. In the circumstances, we find that the order of the ld Commissioner of Income Tax in respect of this issue is bad in law and untenable. We, therefore, set aside the order of the Commissioner of Income Tax in respect of this issue.
As per revised computation furnished by the assessee, its total income was ₹ 11,58,84,250/-, which was mistakenly taken by the Assessing Officer at ₹ 1,58,48,250/- and short levy of interest u/s.234C - In respect of second and third issue, mentioned herein above before us, ld A.R. of the assessee has candidly conceded that there was mistake in the order of the Assessing Officer. The only submission is that the error in the assessment order in respect of the said two issues could have been rectified by the Assessing Officer u/s.154 of the Act and, therefore, exercise of power u/s.263 of the Act was excessive.
We find that as per provisions of section 263 of the Act, the ld Commissioner of Income Tax can exercise the jurisdiction when he finds that the order of the Assessing officer is erroneous and prejudicial to the interests of the revenue. Nowhere, the said section provides that if the error is apparent then powers conferred u/s.263 upon the Commissioner of Income Tax cannot be exercised. Hence, we do not find any force in the above submission of the assessee. Therefore, the order of the Commissioner of Income Tax in respect of above two issues are confirmed and the related grounds of appeal of the assessee are dismissed.
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2017 (6) TMI 1363 - ITAT PUNE
Exemption u/s 11 - denial of exemption by invoking the provisions of Sec.13(1)(c) - HELD THAT:- We find that Ld.CIT(A) while deciding the issue in favour of the assessee had relied on the decision of the Co-ordinate Bench of the Tribunal in assessee’s own case for A.Y. 2008-09 [2015 (3) TMI 493 - ITAT PUNE]. Before us, Revenue has not placed any material on record to demonstrate that the facts in the year under appeal are distinguishable to that of earlier years. In view of the aforesaid facts and following the same reasoning of the Tribunal in assessee’s own case for A.Y. 2008-09, we find no reason to interfere with the order of Ld.CIT(A). Thus, the grounds of Revenue are dismissed.
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2017 (6) TMI 1362 - MADRAS HIGH COURT
Criminal Conspiracy - seeking to transfer the cases pending on the file of the Court of XI Additional City Civil and Sessions Judge for CBI Cases, (Banks and Financial Institutions) to the Principal Sessions Judge at Chennai, (Special Court for Prevention of Money Laundering Act), where application filed by the second respondent, namely, Directorate of Enforcement, is pending - sanctioning housing loans/ additional housing loans without adhering to the basic Banking norms of pre-sanction requirements to various persons - Sections 120 (B), read with 420, 468 and 471 of the Indian Penal code, 1860 as well as Section 13 (2) read with 13 (1) (d) of the Prevention of Corruption Act, 1988 - HELD THAT:- The main ground on which the instant transfer sought for by the petitioners is that the the second respondent, namely, the Directorate of Enforcement, has also filed a private complaint before the Special Court for Prevention of Money Laundering Act, i.e. Principal Sessions Judge at Chennai, which is constituted for trying the cases contemplated under the Act, 2002 and same has also been taken cognizance by the the Special Court for the aforesaid offences. Therefore, it is the contention of the learned counsel for the petitioners that since the second respondent has initiated proceedings under the provisions of the Act, 2002, Special Court constituted for the said Act, i.e. Principal Sessions Judge, Chennai, alone is competent to try the cases. Hence, the learned counsel for the petitioners prayed for allowing the petitions.
Merely because private complaint was filed by the 2nd respondent before the Special Court with regard to Money laundering, it cannot be stated that the cases investigated by the CBI with regard to the aforesaid crime also have to be tried by the Special Court constituted under the Act, 2002. If such view has been taken by this Court, there will be unwarranted delay in entire criminal prosecution launched by the CBI before the concerned Court. The object of constituting a Special Court is only to speed up the trial with regard to money laundering - Admittedly, in the instant cases, the CBI has not charge sheeted the petitioners for the offence relating to money laundering as contemplated under the Act, 2002. That being the case, the relief sought for by the petitioners seeking to transfer of the aforesaid cases from the file of the XI Additional City Civil and Sessions Judge for CBI cases, cannot be ordered merely because such cases also involve serious bank frauds.
This Court is of the view that no prejudice would be caused to the accused in allowing the trial to be continued in the CBI Court. That apart, even in a case and counter case arising out of the same transaction, there cannot be any common evidence and the evidence of each case, has to be assessed independently for deciding the same. Therefore, the contention of the learned counsel for the petitioners that the evidence would be common in the CBI charge sheeted case as well as the case pending on the file of the Special Court for Prevention of Money Laundering is not sustainable in law - Petition dismissed.
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2017 (6) TMI 1361 - BOMBAY HIGH COURT
Non-consideration of the issues u/s 115JB and 80IB(10) - Interest u/s 234(B) and 234(C) - HELD THAT:- The matter will have to be remitted to the Tribunal with regard to non-consideration of the case of the assessee with regard to deduction under Section 80IB(10) of the Act. The learned Counsel for the assessee concedes that when the matter is being remitted, the Tribunal may also reconsider the issue about the interest u/s 234(B) and 234(C) afresh on its own merits in accordance with law.
Revenue does not seriously dispute that the matter is required to be remitted for reconsideration of the issue of interest u/s 234(B) and 234(C) of the Act and also about deduction u/s 80IB(10) of the Act.
The impugned order dated 21.02.2014 passed by the Tribunal is quashed and set aside. The Tribunal shall reconsider the case put forth by the assessee and the Revenue on all the issues afresh and on its own merits in accordance with law, expeditiously.
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2017 (6) TMI 1360 - NATIONAL COMPANY LAW TRIBUNAL, AHMEDABAD
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existing of debt and dispute or not - HELD THAT:- The dispute must be pending in suit or arbitral proceedings which is instituted before the receipt of demand notice under section 8 of the code.
In view of the decision of National Company Law Appellate Tribunal in Kirusa Software Pvt. Ltd. versus Mobilox Innovation P. Ltd. [2017 (6) TMI 984 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, MUMBAI], the dispute need not be in a suit or other proceedings and it could be even by way of reply to Demand notice but the Adjudicating Authority has to see whether the dispute raised by the corporate Debtor in the reply notice is a bona fide on substantial grounds or it is only raised to give a colour of dispute or it is illusory dispute.
Bona fide dispute on substantial grounds or not? - HELD THAT:- The two disputes goes to the very aspect of limitation regarding the enforceability of the claim of the petitioner. It is a mixed question of fact and law and it is triable issue. The dispute raised by respondent company is bona fide dispute on substantial grounds.
The intention of the petitioner is obvious that he wants to compel respondent company's management to pay money claimed by him which according to him is due to him. The very fact that the previous management of the respondent company on the date of handing over of the company to the Reliance Defence & Engineering Ltd. handed over copy of the ledger for the period 01.04.2015 to 18.01.2016 speaks volumes of the understanding between the petitioner and the previous management of the respondent company. Object of the code is to ensure reorganisation and insolvency resolution of corporate persons, individuals etc. and a time bound manner for maximisation of value of assets, persons, to promote entrepreneurship etc. If this petition is admitted it would negate the object for which Insolvency code was brought into force. The petitioner has got several other remedies to recover the amount due to him, if any, in other forums. But the remedy chosen by this petitioner in this forum is not at all in accordance with the object of the code. The intention of the petitioner is somehow to collect the amount allegedly due to him. In the case on hand respondent company raised bona fide dispute on substantial grounds on the claim made by the petitioner.
Petition dismissed.
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2017 (6) TMI 1359 - MADRAS HIGH COURT
Duty Drawback - applicability of time limit of three months provided in the Circular No.36/2010-Cus., dated 23.09.2010 - HELD THAT:- Neither Rule 12(1)(a) of the Customs, Central Excise Duties and Service Tax Drawback Rules, 1995, nor Section 149 of the Customs Act, 1962, prescribes, any time limit for processing the claim of duty drawback - Furthermore, Mr.Chopda, has not been able to show any other provision in the Act or, the Rules framed thereunder, which provide for a time limit for processing the claim lodged for duty drawback.
The Tribunal has not accepted the stand of the Revenue that the Assessee's claim can be subject to time limit, as provided in the 2010 Circular - the appeal is dismissed as withdrawn.
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2017 (6) TMI 1358 - ITAT MUMBAI
Validity of reopening of assessment u/s 147 - addition on account of actuarial surplus - change of opinion - Whether A.O. has not brought any tangible materials on record to indicate that there was an omission or failure on the part of the assessee company to disclose fully and truly all material facts necessary for the assessment - HELD THAT:- As during the assessment proceedings the assessee furnished actuarial report Form-I, which shows the negative reserve. The AO made the addition of ₹ 81,000/- during the original assessment proceeding on account of actuarial surplus. The negative reserve was a part of the documents furnished during the assessment. Thus, it cannot be said that there was non-disclosure of material fact relevant for assessment. The assessing officer while passing the assessment order, the AO referred the actuarial report as reflected in para-2 of assessment order passed under section 143(3) - thus, it is not the case where the assessing officer has not made inquiry in respect of negative reserve, which has been shown in report under Form-I (Actuarial Report).
After examining the Actuarial Report made the addition of ₹ 81,000/-, while passing the order of assessment. The assessment order was passed with due application of mind. The assessing officer has not brought any tangible material on record to show that there was any failure on the part of assessee to disclose fully and truly all material on record necessary for assessment. As per our considered view, it was merely a change of opinion of assessing officer.
On merit we have seen that similar issue arose in AY 2005-06 and the assessee filed appeal before Tribunal. The Tribunal on the basis of order of High Court in ICICI Prudential Life Insurance Co [2015 (7) TMI 1259 - BOMBAY HIGH COURT] remanded the issue to the file of AO - The AO in pursuance of order of Tribunal deleted the additions on account of negative reserve its order. - Decided against revenue.
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2017 (6) TMI 1357 - ITAT BANGALORE
TP Adjustment - Determination of ALP - transactions between related parties - computation of the location saving by the TPO - TPO proceeded to. make assessment on the basis of location saving available to the assessee being doing its research and trial activity in India in comparison to US - HELD THAT:- The location saving and advantage are universally accepted in cross border trade so far as the transactions are not entered into solely for the purpose of avoiding tax and particularly the transactions between the related party with motive to shift the benefit of location saving and advantage to the counter part where either there is no tax or very low tax is attracted. Therefore the concept of Base Erosion and Profit Shifting (BEPS) is relevant only in respect of the transactions which are entered into with the sole purpose of avoidance of tax and· treaty shopping.
To deal with such transactions between related parties the transfer pricing provisions has been introduced in the statute and are applied for determination of ALP. Therefore the location savings and advantages are very much relevant in the cross border transaction but for limited purpose of carrying out exercise of examination and investigation of the transaction and not as a basis for determining the ALP and consequently adjustment. We find that the Mumbai Bench of the Tribunal in the case of Watson Pharma Pvt. Ltd. Vs. DCIT [2015 (1) TMI 699 - ITAT MUMBAI] has dealt with this aspect and held that when the local comparables are available then instead of going to the location saving as a basis of adjustment, the TNMM shall be preferred.
The orders of the TPO and DRP are not sustainable as suffer from serious defect of considering the location saving as basis ·of adjustment. Further we find that the computation of the location saving by the TPO is purely based on some articles and not on the basis of actual cost in the US in comparison to India. Therefore the price/cost as computed by the TPO is not based on actual data but on presumption of accepting the article on the subject as the comparable cost.
Since the functional comparability of the companies selected by the assessee has not been examined by the TPO as well as no steps were taken to find out the other comparables of the assessee for determination of ALP therefore, the issue of determination of ALP and consequential adjustment, if any, is required to be examined and adjudication afresh at the level of TPO/A.O - As assessee is receiving its price in foreign currency therefore the comparable uncontrolled price shall also have atleast 75% of their revenue in foreign currency otherwise the price received from domestic market may not be acceptable when the assessee is receiving its 100% revenue in foreign exchange. Accordingly, the matter is set aside to the record of the TPO/A.O. for adjudication of the same afresh in the light of our above observations.Appeals allowed for statistical purpose.
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2017 (6) TMI 1356 - ITAT CHENNAI
Delayed employee’s contribution to Provident Fund - HELD THAT:- Section 43B of the Act will not override the provisions of Section 36(1)(va) of the Act with respect to employee’s contribution to provident fund. As pertinent to mention that though employee’s & employer’s contribution to P.F are remitted by the employer, they are separate and distinct for which independent provisions have been cast under the Act. Employee’s contribution to P.F., is nothing but appropriation of a portion of the salary which is legitimately due to the employee and remitted by the employer in the Government treasury on behalf of the employee in accordance with the provisions of the relevant P.F., Act.
Hence it is crystal clear from Section 36(1)(va) of the Act that with respect to remittance of employee’s contribution to recognized Provident Fund, deduction will be allowable to the assessee only if the same is remitted within the due date mentioned in the relevant P.F. Act and with respect to employer’s contribution to recognized Provident Fund, Section 43B of the Act makes it clear that deduction will be allowable if the remittance is made with in the due date of filing the return of income. For the above stated reasons we do not find any infirmity in the order of the Ld. Revenue Authorities. Accordingly, we confirm the Order of the Revenue Authorities on this issue.
Belated remittance of Employees contribution towards ESI - HELD THAT:- Since with respect to employee’s contribution to ESI, provisions of Section 36(1)(va) of the Act apply by virtue of Section 2(24)(x) of the Act, the decision with respect to employee’s contribution towards PF supra will hold good. Accordingly, this issue is also held against the assessee.
Professional consultancy charges paid without deducting TDS - HELD THAT:- We remit back the matter to the file of the Ld.AO to decide the issue in the light of the decision of ANSAL LAND MARK TOWNSHIP (P) LTD. [2015 (9) TMI 79 - DELHI HIGH COURT] after duly verifying the return of income filed by M/s. Manohar Chowdhry Associates and M/s. SAP BPO Services Pvt. Ltd which shall be produced by the assessee before the Revenue Authorities with all requisite particulars. This issue is accordingly disposed off.
Deduction u/s.10B of the Act with respect to interest income - HELD THAT:- We merit in the submission of the assessee because the interest income will neither form part of export turnover nor total turnover as it has to be taxed under the head ‘Income from other sources’. Therefore the ratio laid down in the case Pentasoft Technologies Ltd. [2010 (7) TMI 75 - MADRAS HIGH COURT] will apply in the case of the assessee - We hereby direct the Ld.AO to delete the interest income from the export turnover and total turnover if the same is so included in the export turnover &/or total turnover, while computing deduction u/s.10B.
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2017 (6) TMI 1355 - ITAT BENGALURU
Assessment of HUF - Addition in the hands of individual member OR HUF - individuals have inherited certain properties through partition of Krishna Reddy, HUF - Income derived from these properties is assessed in individual capacity of the respective persons by the AO - HELD THAT:- It is undisputed fact that in the immediately preceding assessment year i.e. 2003-03, the Hon’ble High Court that this property belongs to HUF of the appellant. Therefore, should be assessed only in the hands of the HUF of the appellant. Hence, the grounds of appeal filed by the assessee are allowed.
For the assessment year 2004-05 unexplained investment on account of cost of construction in residential complex - CIT(A) was not justified in rejecting the same merely on the ground that this property does not find a place in the partition deed. It is always possible that property can be acquired out of nucleus of the funds of the HUF in which event, property always belongs to HUF. Therefore, income arising out of the property should be assessed only in the hands of the HUF. - Appeal of assessee allowed.
Assessment of annual value of property at Renuka Bangalore, in the status of the individual of the assessee - contention of the assessee that it belongs to joint family and therefore, should be assessed in the status of HUF - HELD THAT:- There is no bar under law to throw individual property into common hotchpot of HUF, even if the contention of the assessee that this property was purchased out of funds received on partition under partition from erstwhile HUF of his father to be disbelieved. In the circumstances, we hold that annual value of property is to be assessed in the hands of the HUF. Thus ground No.2 is allowed.
Assessment of annual value at No.1198, Renuka Nilaya, HAL III Stage, Bangalore - As claimed that purchase of site and construction of building thereon have been made out of sale consideration received from assessee’s share of flats in Krishna Apartment which are identified as HUF property - HELD THAT:- We are of the considered opinion that in absence of contrary evidence, explanation tendered in support of source of acquisition of property should be accepted. Therefore, we hold that annual value of property should be assessed only in the individual capacity.
Addition on account of assessment of short term capital gain on sale of property at survey No.39/3, Doddanakundi, Bengaluru - HELD THAT:- It is trite law that in absence of any contrary evidence, explanation tendered by the assessee should e accepted. There is nothing on record to disbelieve the explanation tendered by the assessee. We hold that short term capital gains should be assessed only in the hands of HUF.
Whether assessment can be made on disrupted HUF which is not hitherto assessed to tax? - HELD THAT:- This issue has come up before the Hon'ble jurisdictional High Court in the case of CIT vs. Lakkanna & Sons [2005 (5) TMI 684 - KARNTATAKA HIGH COURT] wherein it was held that where HUF has not been assessed earlier, enabling provisions of section 171 of the Act cannot be applied to assess after partition in status of HUF - Since HUF of respective parties is already disrupted, there cannot be any assessment. Therefore, assessments framed in the present case are cancelled.
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2017 (6) TMI 1354 - ITAT CHENNAI
Application of second proviso to section 40(a)(ia) - Retrospective or prospective effect - whether the second proviso to section 40(a)(ia) of the Act takes effect from 01.04.2013 is applicable to the assessee or not? - diversified views - HELD THAT:- Since there exists two contradictory decisions, we are of the considered opinion that the Hon’ble Supreme Court in the case of CIT v. Vegetable Products Ltd. [1973 (1) TMI 1 - SUPREME COURT] has held that the decision favourable to the assessee have to be acted upon.
in the case of Star Investments Pvt. Ltd. [2016 (6) TMI 1428 - ITAT CHENNAI] wherein the decision of Rajeev Kumar Agarwal [2014 (6) TMI 79 - ITAT AGRA] has been followed, which was affirmed by case of Ansal Landmark Township Pvt. Ltd. v. Addl. CIT [2014 (9) TMI 194 - ITAT DELHI] as subsequently confirmed by the Hon’ble Delhi High Court in the case of CIT v. Ansal Landmark Township Pvt. Ltd. [2015 (9) TMI 79 - DELHI HIGH COURT] and the same was not reverted by the High Court. Thus held that second proviso to section 40(a)(ia) is declaratory and curative in nature and has retrospective effect from 1st April, 2005 - Decided against revenue.
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