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2015 (9) TMI 1678 - ITAT DELHI
Long term capital gain - Additions made by the AO in the absence of complete satisfactory documentary evidence - HELD THAT:- As decided in KAMAL KUMAR S. AGRAWAL (INDL.) & ORS. [2009 (7) TMI 1251 - ITAT NAGPUR] Assessee has placed on record all the evidences to support the sale transactions including the quotation of the said shares on the date of sale which tallies with the sale price of the assessee. No opportunity to cross-examine the broker was given to the assessee. These authorities have held that no adverse cognizance of the fact that the broker could not be produced or the companies were not found at their addresses can be taken. Thus the above mentioned authorities are squarely applicable to the assessee.
In view of the evidences and authorities placed on record by the assessee, in the absence of any evidence or document brought on record by the assessing officer to negate the contentions raised by the assessee, the transaction of sale of the said shares was genuine and resulted into a long term capital gain of ₹ 13,52,6501- to the assessee. Thus the addition is hereby deleted assessing officer is directed to assess the long term capital gain as declared by the assessee and charge the same to tax @ 10%. Thus this ground of appeal is allowed.
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2015 (9) TMI 1677 - ITAT AHMEDABAD
Addition of claim u/s. 54EC of REC bond, hutment charges paid and brokerage paid - Whether CIT(A) has erred in law and on facts in admitting the fresh evidences and submission without giving any opportunity to the A.O. being heard on the principles of law and natural justice and thereby violated the provision of Rule 46A of the I.T. Rules - HELD THAT:- Deductions claimed by the assessee are reasonably supported by documentary evidences and just because the AO has some apprehensions, without any supporting material, the disallowances cannot be made. It was not for the AO to consider what ought to have happened in ideal circumstances.
All that he was to see whether there were any inconsistencies in the claim made by the assessee, or whether the claim so made was devoid of supporting evidences. Clearly, that was not the case. There was thus no good reasons to reject the claim of deduction for brokerage and removal of hutments. Learned CIT(A) was thus quite justified in giving the impugned relief. We approve the relief so granted by the ld. CIT(A) and decline to interfere in the matter.
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2015 (9) TMI 1676 - ITAT CHANDIGARH
Rectification u/s 154 - whether the excess depreciation was correctly disallowed - HELD THAT:- In the present case the alleged “mistake” sought to be rectified is the depreciation granted to the assessee u/s 32, on applicable rates for the entire year, which as per the AO should actually have been restricted to 50% only since on the basis of information on record with the AO, the assets were put to use only in February 2007 and thus for less than 180 days. Thus AO wanted to reappreciate facts on record which have already been considered.
The fact that the assets were put in use in February 2007 is a matter of debate. In the proceedings u/s 147, the assessee had stated that his assets were put to use on 28/08/2006. The assessee had also produced evidence of the same in the form of copy of WIP Plant & Machinery and WIP Electric Installation for the F.Y 2005-06 and 2006-07 showing the date of purchase of these assets, Fixed assets Register for the F.Y 2005-06 and 2006-07 showing the date of purchase,installation and date of put to use of these assets, Certificate of M/s Power Tracks approved Chartered Engineers to prove the date of installation of the new plant and machinery, Certificate of Central Excise Department regarding installation of new plant and machinery all of which showed that the assets were installed by August 2006. It supports case of assessee on merits.
On the other hand the AO has relied upon detail of WIP provided by the assessee during reassessment proceedings which showed that the Capital WIP was capitalized in the month of February 2007 to believe that the assets were put to use for less than 180 days. Clearly this appears to be a matter which requires long drawn process of reasoning. The mere fact that capital WIP was capitalized in the month of February does not settle the issue of claim of depreciation. The assets may have been installed and ready for use earlier as claimed by the assessee.
The point therefore is clearly debatable and requires further investigation which is not permissible u/s 154 of the Income Tax Act.
In case of T.S. Balram, ITO, Vs. Volkart Brothers and Others, 1971 (8) TMI 3 - SUPREME COURT held “ A decision on a debatable point of law is not a mistake apparent from record.” Hon’ble Punjab & Haryana High Court in case of CIT Vs. Investment Trust of India Ltd. [2009 (8) TMI 9 - PUNJAB AND HARYANA HIGH COURT] held “ the issue relating to disallowance of depreciation on the ground that the asset did not exist in the assessee’s business of hiring out assets, is a debatable one and hence cannot be the subject matter in rectification proceeding.” Therefore the provision of section 154 of the Income Tax Act, 1961 is not attracted to the instant case. - Decided in favour of assessee.
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2015 (9) TMI 1675 - MADHYA PRADESH HIGH COURT
Dishonor of Cheque - section 138 of NI Act - existence of legally enforceable debt or not - validity of second complaint - HELD THAT:- It is an undisputed fact that in respect of earlier cheque issued by the present applicant a criminal case was preferred u/S. 138 of the Negotiable Instruments Act and a judgment of conviction was also delivered by the Judicial Magistrate First Class, Narsingarh. Fine was also imposed. An appeal was preferred against the judgment of conviction ie., No. 231/2007 and both the parties in Lok Adalat, on 25/7/2000, have agreed to withdraw pending litigation. A cheque was also given in the light of the settlement of ₹ 3,51,750/- and the same has been dishonoured. The second complaint has been preferred on account of dishonour of the second cheque.
The apex Court in the case of LALIT KUMAR SHARMA VERSUS STATE OF UP. [2008 (5) TMI 429 - SUPREME COURT] in almost similar circumstances has held that the question of entertaining a second complaint, does not arise as the cheque was not issued in discharge of debt or liability of the Company. It was issued on account of a settlement arrived at between the parties.
Appeal allowed.
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2015 (9) TMI 1674 - ITAT BANGALORE
TDS u/s 194A - considering the Board to be an institution, association or body falling within sub-clause (f) of clause (iii) of sub-section (3) of Section 194A - Whether the State Welfare Board constituted through the notification issued under / in consonance with Section 18(1) of the Building and Other Construction Workers’ (Regulation and Employment and Conditions of Service) Act, 1996 could be considering as a corporation established by a Central / State or Provincial Act, falling within the meaning of notification GO No.SO 3469, dt.22.10.1970 ? - HELD THAT:- The common genus that runs through all the three clauses is that ownership is vested with the Government either by way of holding the shares or by way of financing. If a company whose shares are held by the government is considered as one falling within sub-clause (f) of clause (iii) of section 194A of the Act, there is no reason why a welfare board constituted in accordance with the Central enactment should be excluded from its ambit. Especially so since funds of the Board was nothing but only cess collected by contractors under a statutory edict.
Apart from the above, what we find is that the Board has been established through a notification issued, under section 18 of Building and other Construction Workers’ (Regulation and Employment and Conditions of Service) Act, 1996. This Section has been reproduced by us above at para ten above. Clause (2) thereof states that the Board shall be a body corporate. To understand what is a body corporate, when a ready definition is not available in the relevant statutes, the best place to look is the Companies Act, 1956.
A body corporate is considered equivalent to a corporation. The board can thus very well be construed as a corporation. It has been constituted to exercise the powers conferred on a State under the Building and other Construction Workers’ (Regulation and Employment and Conditions of Service) Act, 1996. Thus in our opinion the methodology in which and the purpose for which the board has been created, when seen along with the wording of SO No.3469, dt.22.10.1970, would show that it could claim itself to be falling within subclause (f) of clause (iii) to sub-section (3) of Section 194A of the Act. Assessee had a bonafide reason to believe that interest payment on deposits placed by the Board did not warrant deduction of tax at source.
Assessee was justified in considering the Board to be an institution, association or body falling within sub-clause (f) of clause (iii) of sub-section (3) of Section 194A of the Act. It had every reason to hold a bonafide belief that it was not liable to deduct tax at source on the interest payments effected by it to the Board. Especially so since Board gave all details to the assessee as to how it was constituted and also explained why the interest paid to it was exempt. In the facts and circumstances of the case, we are therefore of the opinion that assessee could not be deemed to be one in default for not deducting tax at source on interest paid to the board. Accordingly we set aside the orders of the Ld. CIT (A) and that of ITO (TDS) treating the assessee as one in default u/s.201(1) and levying interest u/s.201(1A) of the Act. - Decided in favour of assessee.
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2015 (9) TMI 1673 - GUJARAT HIGH COURT
Sale of land under litigation - invalidation of the transaction - Jurisdiction for initiation of SCN - after 37 years from the date of the revenue entry, the proceedings are initiated under the Ordinance - HELD THAT:- It is by now well-settled that if the action of initiation of the SCN is without jurisdiction, or exfacie barred by delay, the court may entertain the petition under Art. 226 of the Constitution.
At this stage, we may refer to the decision of the Apex Court in case of STATE OF PUNJAB VERSUS BHATINDA DISTRICT CO-OP. MILK P. UNION LTD. [2007 (10) TMI 300 - SUPREME COURT], wherein the showcause notice issued in purported exercise of the revisional power came to be challenged, inter alia, on the ground that the notice was beyond the period of limitation.
If the action is to be initiated for setting aside of a transaction under the Ordinance by invoking section 54 read with section 75 of the Ordinance, it has to be within reasonable period - in the present case, the proceedings is initiated after more than 35 years. Hence, we find that the initiation of the action itself can be said as beyond reasonable period and the bar of delay and laches could operate against the authority in initiation of the action. The aforesaid aspect is coupled with two additional circumstances, one is that the land has changed hands further during the period of delay and the ownership is transferred by the purchaser to the another person and the second is that the revenue entries were mutated. Thereafter, they were also certified by the competent authority and in spite of that, no action was taken for cancellation of such entry or otherwise or even for declaration of the transaction as invalid within reasonable period. If during the period of delay, the rights of the parties in the properties are altered, the delay would operate as a bar with more gravity and when the ownership is changed during the period of delay, the bar for not taking action within reasonable period would also operate with more gravity against the authority in initiation of the action.
The contention should fail even if considered in either way. If considered to be patent in any case, the action was required to be initiated within reasonable period which has not been initiated. If the contention is considered on the ground that the error was latent, then also, as per the provisions of the Bombay Land Revenue Code read with the Rules, before any entry is mutated in the revenue record, the notice under section 135D is required to be served to the original owner.
When the respondent no.5 originated the Government machinery, the bonafide would be lacking since one who is a party to the transaction cannot be heard to say at a later stage that the transaction is not valid that too after a period of about more than 35 years. In any case, respondent no.5 had moved the authority and the impugned action of issuance of show cause notice has been taken, but when the Court considers the aspect of reasonable period and finds that the exercise of the jurisdiction was barred by delay and the consequential action could be said as without jurisdiction, the question of locus on the part of respondent no.5 may not assume much importance.
Petition allowed.
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2015 (9) TMI 1672 - PUNJAB AND HARYANA HIGH COURT
Dishonor of cheque - summon of order - the present petitioner was summoned to face trial on the basis of summoning order - HELD THAT:- The petitioner had resigned from the Board of Directors of the Company on 1.4.2013; her resignation was duly accepted in the Board meeting on 1.4.2013 itself, and required information was sent on Form 32 [Annexure P/6] to the Registrar, the petitioner ceased to be Director of Company on 1.4.2013. More so, she is not the signatory to the cheque. The alleged cheque is dated 13.04.2013 and was returned dishonoured on 10.7.2013. Thus, on the date of issuance of cheque, the petitioner was not the Director PARKASH SOM 2015.09.24 15:45 I attest to the accuracy and authenticity of this document of the Company. More so, she was not the signatory to the cheque in question.
Petition allowed.
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2015 (9) TMI 1671 - SC ORDER
Income under the head "Management Development Programme and consultancy charges - whether exemption was not admissible because the requirement which is set out in sub-section (4A) of section 11 has not been satisfied? - Admissibility of depreciation - asset purchased by trust - ITAT allowed claim - HELD THAT:- Delay condoned.
Leave granted. The matter to be heard along with Civil Appeal LISSIE MEDICAL INSTITUTIONS VERSUS COMMISSIONER OF INCOME TAX [2013 (7) TMI 1143 - SC ORDER]
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2015 (9) TMI 1670 - ITAT HYDERABAD
Disallowance of provision for leave encashment u/s. 43B(f) - HELD THAT:- We do not see any reason to interfere with the order of the Ld. CIT(A). Even though it is a fact that Hon'ble Calcutta High Court in the case of Exide Industries Ltd., Vs. Union of India [2007 (6) TMI 175 - CALCUTTA HIGH COURT] has struck down provisions of Section 43B(f), the Hon'ble Supreme Court stayed that order. Consequently, the provisions of Section 43B(f) are applicable, CIT(A)’s order is in accordance with the principles on the subject. We however, direct the Assessing Officer (AO) to give relief to assessee in case Hon’ble Supreme Court also concurs with the opinion expressed by the Hon'ble Calcutta High Court. The ground for the time being is considered allowed for statistical purposes.
Disallowance of payment of ocean freight - disallowance u/s 40(a)(ia) - Admission of additional evidence - HELD THAT:- Since the additional evidence is required to be examined as both AO and CIT(A) gave contradictory findings, in the interest of justice, we admit the additional evidence and remit the issue to the file of AO to examine the said payments and if the payments are to the agents of foreign shipping liners, we make it clear that amounts cannot be disallowed U/s. 40(a)(ia), as there is no need to make TDS on such payments. This issue was already crystalised in favour of assessee - in case the payments are made to local shipping agents of non-resident ship liners, then AO is directed to exclude the amount as provisions of Section 40(a)(ia) does not apply to the payments. With these directions, ground is considered allowed for statistical purposes.
Disallowance of payment made towards transport charges - disallowance u/s. 40(a)(ia) - whether amounts are covered by the provisions of TDS or not? - HELD THAT:- AO has to establish that the payments made are covered by the provisions of TDS. It was submitted that these are Hamali charges/local auto charges and these payments were below ₹ 20,000/-. In case assessee reimburses said amounts, there is no need for deduction of TDS. Just because single debit entry was made, it cannot be automatically considered that amount is covered by provisions of Section 40(a)(ia). AO is bound to examine the payments made and whether each amount is liable for deduction of tax or not, therefore even in the above three cases, AO has to establish that the amounts paid are required to be covered under the provisions of TDS. Therefore, we restore the examination of the amounts to the file of AO to examine whether the said reimbursement made by the assessee are covered by the provisions of TDS so as to attract disallowance u/s. 40(a)(ia). Appeal allowed for statistical purposes.
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2015 (9) TMI 1669 - ITAT MUMBAI
TP Adjustment - international transaction with the Associated Enterprise (AE) on software development services - inclusion of certain comparable companies by the TPO to benchmark the profit margin of the assessee on such transactions - HELD THAT:- The assessee company is a subsidiary of Somero Enterprises Inc Mauritius, which in turn is a subsidiary of Dassault Systems France which is premier global software developer and product like Cycle Management Solutions. It is the holding company of Delmia Corporation, USA. The assessee was established as 100% export oriented Unit registered under STPI. It is mainly engaged in the provision of software developer and other related services primary to its group companies, thus companies functionally dissimilar with that of assessee need to be deselected.
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2015 (9) TMI 1668 - ITAT CHANDIGARH
Addition of interest expenses and storage charges - HELD THAT:- AO has bifurcated these expenditure to AY 2005-06 and AY 2006-07. So the issue is when can it be said that the liabilities have crystallised. It is not in dispute that the final lifting of the paddy was completed during the relevant AY and the account also got settled then after several correspondences between the assessee and PSWC whereby some waivers were granted to the assessee.
A certificate of receipt towards interest and towards storage charges during FY 2005-06 issued by PWSC has been placed at PB 4.1. The authenticity of this certificate has not been challenged. No doubt as evident from the working of the interest and storage charges, the incurring of the liabilities have been determined with reasonable certainty, but it cannot be said that the actuals have been quantified correctly as extension of interest as well as storage waivers have been given by the PSWC. In other words, it can be safely said that the liability got crystallised during AY 2006-07 when the dues have been squared up. Thus, as find the contention of the assessee as put forth deserves to be accepted.
Addition of interest expenses - HELD THAT:- We do not find any merit in this ground of appeal of the revenue. The assessee was to recover the amount from sister concern on account of sales made to this party which has no connection whatsoever with the interest and storage paid to PSWC for lifting of the paddy. Since for lifting of the paddy, assessee used storage facility of PSWC, therefore, amount was spent for the purpose of business only. Further, assessee has not claimed any interest expenditure in assessment year under appeal. Therefore, addition made by the Assessing Officer was wholly unjustified. CIT(Appeals), on proper appreciation of the facts and material on record correctly deleted the addition and this ground of appeal of the revenue is accordingly, dismissed.
Addition on account of valuation of closing stock - HELD THAT:- It is clear that assessee has been able to prove reduction in the valuation of the closing stock because these commodities get deteriorated and explanation of the assessee is supported by material on record, therefore, authorities below were not justified in making and confirming the addition on account of undervaluation of closing stock. We, therefore, set aside the orders of the authorities below and delete the addition
Addition u/s 68 as unexplained credit - HELD THAT:- Assessee has been able to prove creditworthiness of the creditor and all these evidences on record also prove that assessee entered into genuine loan transaction with the creditor. Therefore, the initial burden lay upon the assessee to prove identity/existence of the creditor, its creditworthiness and genuineness of the transaction have been discharged by the assessee. AO has, however, not brought any evidence on record to prove that loan was not genuine in the matter. Therefore, there was no justification for the authorities below to make addition against the assessee under section 68
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2015 (9) TMI 1667 - ITAT DELHI
Non perusal of appeal - various adjournment seeked - HELD THAT:- Record shows that on each of the dates mentioned above adjournment has been moved coupled by the fact that the defect pointed out by the Registry requiring the assessee to carry out necessary action to ensure that the Tribunal fee is deposited under the correct head as indicated by the notice dated 22.08.2013 till date has not been acted upon and remain unaddressed leads to the conclusion that the assessee is not serious in pursuing the appeal filed. The appeal is dismissed in limine.
We add that in case the assessee is serious in pursuing the appeal filed then it would be at liberty to pray for a recall of this order by moving an appropriate petition and also by taking appropriate action to correct the defects pointed out. The Co-ordinate Bench considering the petition if so moved, if so satisfied with the explanation and the actions of curing the defects may recall this order. The said order was pronounced in the open Court in the presence of the parties.
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2015 (9) TMI 1666 - SUPREME COURT
Illegal gratification - offences both under 7 and 13 of Prevention of Corruption Act, 1988 - HELD THAT:- In the absence of any proof of demand for illegal gratification, the use of corrupt or illegal means or abuse of position as a public servant to obtain any valuable thing or pecuniary advantage cannot be held to be proved. The proof of demand, thus, has been held to be an indispensable essentiality and of permeating mandate for an offence Under Sections 7 and 13 of the Act. Qua Section 20 of the Act, which permits a presumption as envisaged therein, it has been held that while it is extendable only to an offence Under Section 7 and not to those Under Section 13(1)(d) (i) & (ii) of the Act, it is contingent as well on the proof of acceptance of illegal gratification for doing or forbearing to do any official act. Such proof of acceptance of illegal gratification, it was emphasized, could follow only if there was proof of demand. Axiomatically, it was held that in absence of proof of demand, such legal presumption Under Section 20 of the Act would also not arise.
The proof of demand of illegal gratification, thus, is the gravamen of the offence Under Sections 7 and 13(1)(d)(i) & (ii) of the Act and in absence thereof, unmistakably the charge therefor, would fail. Mere acceptance of any amount allegedly by way of illegal gratification or recovery thereof, dehors the proof of demand, ipso facto, would thus not be sufficient to bring home the charge under these two sections of the Act - As a corollary, failure of the prosecution to prove the demand for illegal gratification would be fatal and mere recovery of the amount from the person accused of the offence Under Sections 7 or 13 of the Act would not entail his conviction thereunder.
The materials on record when judged on the touch stone of the legal principles adumbrated hereinabove, leave no manner of doubt that the prosecution, in the instant case, has failed to prove unequivocally, the demand of illegal gratification and, thus, we are constrained to hold that it would be wholly un-safe to sustain the conviction of the Appellant Under Section 13(1)(d)(i) & (ii) read with Section 13(2) of the Act as well - impugned judgment and order of the High Court is hereby set-aside - appeal allowed.
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2015 (9) TMI 1665 - GUJARAT HIGH COURT
Vires of Section 2(1)(c)(iva) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and Section 2(d)(vi) of the Recovery of Debts due to the Banks and Financial Institution Act, 1993 - action taken under the Securitisation Act prior to the amendment under Securitisation Act - initiation of fresh action under Section 13 of the Securitisation Act.
HELD THAT:- In the present case, action was initiated in any case, admittedly, prior to January, 2013 and therefore when the amending Act was not in force, action of the respondent Bank under the Securitisation Act at the given point of time cannot be maintained. However in any case, amending Act has come into force and the remedy under the Securitisation Act is available to the respondent Bank. Respondent Bank if desirous, may initiate action by issuing fresh Notice under Section 13 of the Securitisation Act in accordance with law.
The action taken by the respondent No.2 Bank under the Securitisation Act prior to the amending Act, i.e. January, 2013 is held to be bad in law. Consequentially, property in question, possession of which is taken over, will be required to be reentrusted by respondent Bank to the petitioner by drawing appropriate Panchnama, with further condition that it would be open to the respondent Bank to deploy security for guarding of the property and there will be further prohibitory injunction against the petitioner not to transfer or alienate the possession, title or rights in the property in any manner whatsoever for a period of four months from the date of re-entrustment of the property by the respondent Bank to the respective petitioners.
As the action taken by the Bank under the Securitisation Act prior to January, 2013 is not held to be legal and valid and is declared illegal, consequential action as that of authorisation or order passed under Section 14 of the Securitisation Act would also no more survive - Petition disposed off.
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2015 (9) TMI 1664 - ITAT MUMBAI
Disallowance u/s 14A - mandation of “satisfaction” having regard to the accounts of the assessee about the claim of the assessee - HELD THAT:- For making disallowance u/s 14A, the condition precedent is that the conditions laid down in sub-section (2) and sub-section (3) of section 14A has to be mandatorily fulfilled. If such conditions are not satisfied, then no disallowance u/s 14A can be triggered. Here in this case, not only from the accounts of the assessee but also looking to the nature of expenditure incurred and nature of investments standing in the Balance sheet, it cannot be held that any disallowance u/s 14A is called for.
Nowhere the AO has given his “satisfaction” having regard to the accounts of the assessee about the claim of the assessee, that no expenditure has been incurred, which can be said to be attributable for making investment capable of earring exempt income or has yielded the exempt income is false or incorrect. Accordingly, on these facts we hold that no disallowance u/s 14A is called for
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2015 (9) TMI 1663 - ITAT CHANDIGARH
TDS liability on contribution made by the appellant to the concessionaires towards the project u/s 194C - demand created u/s 201 /201(1A) - Payee has already paid tax on the income on which there was a short deduction of tax at source - HELD THAT:- In the instant case the Concessionaire / Payee included the amount of grant made by the assessee in his return of income and had already paid taxes on the returned income as per the regularly followed accounting policy and, therefore, present case is squarely covered by the decision of the Hon'ble Supreme Court in the case of Hindustan Coca Cola Beverage (P) Ltd Vs. CIT [2007 (8) TMI 12 - SUPREME COURT] wherein held that where the Payee has already paid tax on the income on which there was a short deduction of tax at source, recovery of tax cannot be made once again from the tax deductor - where the assessee has already paid tax on the income on which there was a short deduction of at source, recovery of tax cannot be made once again from the tax deductor.
What is common to both the provisos to Section 40(a)(ia) and Section 201 (1) of the Act is that as long as the Payee / resident has filed its return of income disclosing the payment received by and in which the income earned by it is embedded and has also paid tax on such income, the assessee would not be treated as a person in default. See CIT Vs. Ansal Land Mark Township (P) Ltd [2015 (3) TMI 403 - DELHI HIGH COURT]
No doubt there is a mandatory requirement u/s 201 to deduct tax at source under certain contingencies, but the intention of the legislature is not to treat the Assessee as a person in default subject to the fulfillment of the conditions as stipulated in the first proviso to Section 201(1). The first proviso to section 201(1) of the Act was inserted w.e.f. 1.7.2012. The Hon'ble Delhi High Court has categorically held that insertion of the second proviso to Section 40(a) (ia) also requires to be viewed in the same manner. According to Hon’ble High Court this again is a proviso intended to benefit the Assessee. The Hon'ble High Court ruled that the second proviso to Section 40 (a) (ia) of the Act is declaratory and curative in nature and should be given retrospective effect from Ist April 2005. - Decided against revenue
Interest u/s 201(1) (1A) - As claimed before us that the recipient / payee had filed the return for the year under consideration declaring loss, therefore, no interest u/s 201(1A) is required to be charged from the assessee (Payer) for not deducing tax at sources. Even if the assessee herein deducts / remit the TDS amount on the income paid to recipient / payee, the same is liable to be refunded to the said recipient / payee and there is no tax liability in their hands. In our view, there is no loss to the Revenue. While taking such a view we are supported by the decision of ITAT, Lucknow Bench in the case of DCIT v Sahara India Commercial Corporation [2014 (12) TMI 721 - ITAT LUCKNOW]
Tax at source u/s 206C - main contention of the assessee is that the project namely Kiratpursahib-Una Road project was awarded on Built – Operate - Transfer (BOT) basis - HELD THAT:- As the aforesaid project was awarded on BOT basis and the amount was received as commission fee and not as toll fee, therefore, the provisions of section 206C(7) cannot be applied to the amount received. Section 206C (7) provisions are not attracted in the facts and circumstances of the present case as the assessee had received the payment as commission fee and not as toll fee. In our opinion, the CIT(A) has taken a correct view, therefore, we uphold his view and dismiss the appeal of the Revenue.
Default u/s 206C(7) - appellant was required to collect TCS on toll fee - as per the Appellant the concessionaire is responsible for overall operation and maintenance of the project facility and not merely granted the usance of the toll plaza - HELD THAT:- Provisions of section 206C are mandatory to collect tax under certain contingencies, but the intention of the legislature is not to treat the assessee as a person in default subject to fulfillment of the conditions stipulated in the proviso to section 206C(6A) - the insertion of second proviso to section 40(a) (ia) of the Act also requires to be viewed in the same manner. This again is a proviso intended to benefit the assessee. The effect of the legal fiction created thereby is to treat the assessee as a person not in default to deduct or collect tax at source under certain contingencies. The first proviso to section 201(1) and proviso section 206C(6A) were brought on statute on 1.7.2012 for rationalization of tax deduction at source (TDS) and Tax Collection at Source (TCS) provisions. These provisions are declaratory and curative in nature and have retrospective effect from 1st April, 2005 being the date from which sub section (ia) to section 40(a) was inserted by Finance (No.2). Act, 2004 - the impugned demand created under section 206C(1C) / 206C(7) of the Act are, hereby deleted. The appeal of the assessee stands allowed.
Levying the penalty u/s 271CA - HELD THAT:- Under section 271CA, the penalty is imposed for failure to collect tax at source. Since, we have held that there was no failure on the part of the assessee to collect tax at source, therefore, no penalty can be validly levied u/s 271CA of the Act. It is well settled law that the very basis on which penalty was levied, are deleted, there remains no basis at all for levying the penalty. Since, there was no failure on the part of the assessee to collect tax at source; therefore, there remains no basis at all for levying the penalty u/s 271CA of the Act. Accordingly, we allow the appeals and cancel the impugned penalty levied by the Assessing officer and confirmed by CIT(A) for all the assessment years - Decided in favour of assessee
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2015 (9) TMI 1662 - MADRAS HIGH COURT
Imported of second hand Digital Multifunction Print and Copying Machines - Single member bench of HC allowed the writ petition [2012 (4) TMI 68 - MADRAS HIGH COURT] by directing the such goods may be directed to be released, on payment of the appropriate customs duty and on the fulfillment of the conditions prescribed by law - Revenue contended that, the judgement of Supreme Court was not correctly interpreted in the COMMISSIONER OF CUSTOMS, CUSTOM HOUSE VERSUS M/S. CITY OFFICE EQUIPMENT AND OTHERS [2013 (4) TMI 655 - MADRAS HIGH COURT] - HELD THAT:- The matter being covered by the judgment of the Division Bench of this Court in Commissioner of Customs, Tuticorin vs. City Office Equipment, these appeals are liable to be dismissed in terms of the said judgment.
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2015 (9) TMI 1661 - ITAT KOLKATA
Addition u/s. 41(1) - remission or cessation of liability - HELD THAT:- Section 41 (1) would apply in a case where there has been remission or cessation of liability during the year under consideration subject to the conditions contained in the statute being fulfilled. Additionally, such cessation or remission has to be during the previous year relevant to the assessment year under consideration.
In the present case, both elements are missing. There was nothing on record to suggest there was remission or cessation of liability that too during the previous year 2006-07 relevant to the assessment year 2007-08 which was the year under consideration. It is undoubtedly a curious case.
Even the liability itself seems under serious doubt. AO undertook the exercise to verify the records of the so called creditors. Many of them were not found at all in the given address except in the case of Narayan Chandra Gorai and M/s. Stesalit Limited. These inquiries were made ex parte and in that view of the matter, the assessee would be allowed to contest such findings. Nevertheless, even if such facts were established through bi-parte inquiries, the liability as it stands perhaps holds that there was no cessation or remission of liability and that, therefore, the amount in question cannot be added back as a deemed income under section 41(1) - no alternative except to delete the addition as made by AO and confirmed by CIT(A). Appeal of assessee is allowed.
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2015 (9) TMI 1660 - ITAT MUMBAI
Levy of penalty u/s. 271(1)(c) - addition on account of excess shortage - exparte appeal - HELD THAT:- We have heard the Ld. Departmental Representative at length and carefully perused the orders of the authorities below. In so far as the addition on account of excess shortage is concerned, the Tribunal has deleted the said addition, therefore, to this extent, no penalty is leviable.
On the addition on account of valuation of closing stock is concerned, we find that even in the quantum appeal, the Tribunal has categorically denied to accept the additional evidence which were not relevant in the case of the assessee. The relevant portion of the Tribunal’s order is exhibited at page-3 & 4 of CIT(A)’s order, based on which the Ld. CIT(A) has confirmed the penalty. We, therefore, do not find any error or infirmity in the findings of the Ld. CIT(A). Order of the Ld. CIT(A) is confirmed.
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2015 (9) TMI 1659 - ITAT PUNE
Disallowance of deduction claimed u/s.80IB(4) - profits derived from its unit located at Silvassa in the Union Territory of Dadra & Nagar Haveli, an industrially backward area specified in 8th Schedule to the Act - HELD THAT:- We find that the issue relating to disallowance of deduction u/s.80IB(4) has been recurring every year from Assessment Year 2005-06 onwards. The Assessing Officer has been disallowing deduction u/s.80IB(4) in all the aforesaid assessment years on the same ground. In Assessment Years 2005-06 and 2008-09 the CIT(A) upheld the findings of AO on the issue, whereas in Assessment Years 2006-07 and 2007-08 the CIT(A) allowed the claim of deduction u/s.80IB(4). Against the findings of the CIT(A) the assessee filed appeal before the Tribunal in Assessment Years 2005-06 and 2008-09 and the Revenue filed appeal before the Tribunal in Assessment Years 2006-07 and 2007-08.
Since the issue raised in the impugned assessment year is identical and no change in the facts and circumstances have been pointed out by either sides, we deem it appropriate to remit this issue back to the file of Assessing Officer for fresh adjudication in accordance with the order of the Tribunal [2015 (2) TMI 1317 - ITAT PUNE] . Thus, ground Nos. 1 to 7 in the appeal of assessee are allowed for statistical purposes.
Disallowance of the commission expenses claimed by the assessee - HELD THAT:- Assessee has stated at the bar that the documents as sought by the Assessing Officer are now available with the assessee and the same can be furnished, if an opportunity is granted. We deem it appropriate to remit this issue back to the file of the Assessing Officer with a direction to assessee to file the necessary documents in support of the claim. The Assessing Officer after considering the documents furnished by the assessee shall decide the issue afresh, in accordance with law. This ground of appeal of assessee is also allowed for statistical purposes.
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