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Showing 121 to 140 of 1831 Records
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2017 (5) TMI 1717
Assessment of assessee insurance company - allowability of prior period expenditure - Whether only an expenditure inadmissible under Sections 30 to 43B of the Act, can be adjusted to the balance of the profits disclosed in the Account? - HELD THAT:- It is evident, assessee has not claimed any deduction of prior period expenditure as inferred by the AO. On the contrary, the assessee has voluntarily added back part of the expenditure to the total income, following the consistent accounting method adopted by it. It is also evident that assessee is following similar method of accounting from earlier assessment years and offered similar income on account of adjustment of prior period income and expenditure and the AO in assessments completed u/s. 143(3) has accepted non only such accounting treatment given by the assessee but also the income offered. Therefore, when the assessee has not claimed any deduction on account of prior period expenditure by debiting it to the profit & loss account, the disallowance made by the AO is totally unjustified. Therefore, we direct deletion of the amount from the income of the assessee. The ground raised by the assessee is allowed and that of the department is dismissed.
Disallowance made u/s. 14A - HELD THAT:- As relying on case of ICICI Prudential Insurance Company Ltd. [2012 (11) TMI 13 - ITAT MUMBAI] held when the income of the assessee as well as the expenditure are governed by specific provision which have an overriding effect then it is not open for the AO to invoke the other provisions of the Act for carrying out the disallowance of adjustment in the income. Thus, we hold that no disallowance u/s 14A can be made in the case of the assessee and hence grounds raised by assessee allowed.
Depreciation on computer software - HELD THAT:- There is no dispute to the fact that the assessee has acquired software and installed them in its computer. The AO has denied assessee’s claim of depreciation only for the reason that the payment to be made for the software has been deferred to subsequent assessment year as per license agreement. In our considered opinion, that cannot be a valid reason to disallow assessee’s claim of depreciation, once the assessee has acquired the asset and used it for the purpose of its business. The factual finding of the learned CIT(A) that, assessee has in fact acquired the software and installed in its computers has not been controverted by the learned DR. No infirmity in the order of the learned CIT(A) in allowing assessee’s claim of depreciation, since, the assessee is otherwise eligible to claim depreciation on computer software under the provisions of the Act. - Assessee appeal allowed.
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2017 (5) TMI 1716
Valuation - related party transaction - the appellant strongly contested that they are a private limited company registered under Companies Act, 1956 and M/s Neminath Tubes Industries is a partnership firm. As such, a private limited company cannot be a relative of a partnership firm - demand of differential duty applying Rule 9 readwith Rule 11 of Central Excise Valuation Rules, 2000 - HELD THAT:- The show cause notice as well as both the lower Authorities proceeded against the appellant to recover differential duty only on the ground that the appellants are “relative” of M/s Neminath in terms of Section 4 (3) (b) (ii). The said provision is applicable only if the parties are “relative” as per Section 2 (41) of the Companies Act, 1956. We note that a juristic person, like a private limited company, cannot be called as a ‘relative’ of a partnership firm. The scope of term “relative” will apparently apply to only natural persons - Reference can be made to the decision of Tribunal in CCE, Raipur vs. Akash Ispat Ltd. [2016 (2) TMI 683 - CESTAT NEW DELHI].
On this ground alone, the proceedings against the appellant are unsustainable. Even if some of the Directors of the appellant are partners of the buying firm, this by itself do not make them related persons. It is a well settled legal position that the relationship between two legal entities are to be established by the facts applicable to each case.
The lower Authorities have misdirected themselves in examining the legal provision of Section 4 (3) (b) (ii), and without examining the facts of the present case applied a completely inapplicable provisions of law to decide the valuation issue - Appeal allowed - decided in favor of appellant.
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2017 (5) TMI 1715
Loss on account of derivative activities - modification of the client code - AO believed the client code modification to be mala fide to escape the tax liability - AO confirmed the aforesaid loss from National Stock Exchange (NSE) u/s 133(6) and found that several modifications were carried out by these brokers in the codes of the client - HELD THAT:- On perusal of the records we find that client code modification was done negligible nos. of times whereas the total number of trade transactions are 3,11,866 only. Thus the client code modification is less than 1 per cent of the total trading transactions.
It is undisputed fact that the client code was modified fewer number of times and this fact was very much in the knowledge of the stock exchange. It is because that the information for the modification of the client code was gathered by the AO from the NSE which proves beyond doubt that the assessee has not modified any client code without informing to the NSE. Had there been mismatch in the code between the report submitted by the broker of the assessee and that of the NSE, the question/doubt on the genuineness of the transaction arise?
No justification for the allegation of the AO that the client code modification was with the mala fids intention. When the client code was modified on the stock exchange without informing the same day then it can be inferred there is some mala fide intention. Had client modification done after the transactions period when the price of the commodity has already changed, then perhaps there could have been some basis to presume that client code modification is intentional. However, when the client code modification is done online on the stock exchange, in our opinion, there was no basis or justification to hold the transaction to be bogus.
All transactions at the exchanges have been duly accounted in the books of account maintained by the concerned parties. Such profit/loss has been duly accounted whenever the transactions have been closed. Thus, whatever profits/loss have been generated or accounting of actual trade, have been offered and brought to the charge of tax in the cases of concerned assessee. These findings of facts recorded by the ld CIT(A) have not been controverted by the Ld. DR at the time of hearing before us.
When the transaction has been duly accounted for and the profit/loss has accrued to the concerned parties in whose names transactions have been closed, there cannot be any basis or justification for considering those profit/loss in the case of the assessee on the basis of mere presumption or suspicion. It is not the case of the Revenue that such alleged has not actually been incurred - Decided in favour of assessee.
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2017 (5) TMI 1714
Disallowance of mine closure obligation - HELD THAT:- As decided in own case [2014 (9) TMI 629 - ITAT HYDERABAD] Mine closure obligation is not a contingent liability but an ascertained liability. Since the quantum of such ascertained liability has to be determined year-wise, we direct the assessee to furnish the relevant data to the Assessing Officer towards mines closure obligation. The Assessing Officer shall verify such data and recompute the disallowance, if any, warranted, in accordance with law and after giving reasonable opportunity of hearing to the assessee. Assessee's grounds on this issue are treated as allowed for statistical purposes
Depreciation on lease hold land treating the same as intangible asset - HELD THAT:- Assessee is entitled to depreciation as charged to the P & L account in accordance with its business exigencies. We direct accordingly. On the claim of deduction/s.80G, the A.O., is directed to verify the receipts and allow the deduction in accordance with the provisions of Income-tax Act,1961
Claim of expenditure towards Corporate Social responsibility - HELD THAT:- Direct the Assessing Officer to examine the nature of the expenditure claimed in this year also and accordingly redetermine the allowability of such expenditure in accordance with law and in consonance with the observations of the Tribunal for earlier years.
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2017 (5) TMI 1713
Disallowance of administrative expenses on ad hoc basis - HELD THAT:- AO observed that evidence which was produced in support of Administrative and other Expenses were defective in one way or other. Admittedly, the disallowance is made on adhoc basis, no specific defect or shortcoming is pointed out by the authorities below. Therefore, under the facts of the present case, we hereby direct the Assessing Officer to delete the disallowance made on account of Administrative Expenses. This ground of the Assessee’s appeal is allowed.
Disallowance of electricity expenses by invoking of provision of section 40A(3) - HELD THAT:- We are unable to accept the contention of the Ld. Counsel for the assessee, as provisions are quite clear the decision have been rendered under the belief that if any Government Company qualifies to be state in term of Article 12 would be entitled for exemption under Rule 6DD(b).
The terms state cannot be construed as Government as given in the aforesaid provision. The terms state, is used for a public purpose but for the purpose of interpretation of rules 6DD(b), this cannot be taken as if all the Government’s companies are exempt merely because they qualified to be termed as state under Article 12 of the Constitution of India. Had the intention of the legislation was to exempt other Government Companies as well as same would have been mentioned in the provision of rule 6DD(b) as has been specifically mentioned in clause (a) of Rule 6DD in respect of Reserve Bank of India, Banking Company., State Bank of India or any Subsidiary Banking any Cooperative Bank, Land mortgaged Bank any Primary Agricultural Credit Society, any Primary Credits society, Life Insurance Corporation of India.
Clause (b) of Rule 6DD cannot be stretched to the extent of bringing every Government entity/company into the fold of exempt category. Therefore, had the intention of the legislation was to exempt the Government electricity company, it would have been mentioned in the Clause (b) of Rule 6DD. Therefore, this Ground of the assessee’s appeal is dismissed.
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2017 (5) TMI 1712
Depreciation on Windmills - put to use for a period more than 180 days or not? - @80% despite the windmills having been used for business purpose only after 30th September, 2010 - HELD THAT:- There is no doubt that electricity was generated by the windmills on itsconnection to the grid which admittedly happened on 17.07.2010. What is required u/s. 32 of the Act is that an asset should be put to use for claiming depreciation. There is no requirement that asset should be put to use for commercial production. Even otherwise in the case of electricity, whether generated during trial period or generated after trial run, the product remained very same. In the circumstances, we are of the opinion that the CIT (Appeals) was justified in taking a view that the windmills were put to use for a period more than 180 days during the relevant previous year and allowing the full claim of depreciation.
Electrical installation for the windmill and cost of civil works for windmill - whether considered as part of the cost of the windmill and allowed depreciation at the rates prescribed for windmill? - HELD THAT:- When specified civil structures and specified electrical installation work are necessary for installation of a windmill, in our opinion such items cannot be considered as independent pieces of machinery or plant or building. In these circumstances, we are of the opinion that ld. Commissioner of Income Tax (Appeals) was justified in allowing the claim of the assessee.
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2017 (5) TMI 1711
Eligibility to be considered for appointment to the post of Computer - appellant was initially declared entitled for counselling but later on she was declared disqualified being lacking requisite qualificational eligibility - HELD THAT:- The petitioner has placed on record a letter dated 30.5.2013 issued by the competent authority of the Government of Rajasthan declaring the certificate of RS-CIT equivalent to the qualification of the degree/diploma issued by a university established by law or an institution recognised by the Government of Rajasthan in the subjects of Computer Science/Computer Application/Information Technology. Though a sur-rejoinder was filed on behalf of the State of Rajasthan, but nothing has been said about equivalence given under the letter dated 30.5.2013 - In light of the letter dated 30.5.2013, we are of the view that the petitioner is eligible to be considered for appointment to the post of Computer as per the Rules of 1971 being having a degree in Computer Science from a university established by law.
The petitioner is declared entitled to be considered for appointment to the post of Computer under the Rajasthan Statistical Subordinate Service Rules, 1971 - petition allowed.
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2017 (5) TMI 1710
Classification of goods - waste or not - product arising in the process of manufacture of sponge iron in the rotary kiln where non-coking coal is added to the iron ore - original authority while deciding the demand of duty on this product classified the same under 2619.00 as coal dust/coal shell/char dust and confirmed the duty demand - HELD THAT:- The impugned goods are nothing but waste arising during the course of manufacture of sponge iron. In the impugned order, the learned Commissioner (Appeals) has referred to the Chemical Examiner's report which indicates that the goods are predominantly comprising of coal. The use of the impugned goods is also as fuel to generate heat.
The product is akin to coal and accordingly is to be classified under 2701.00 - Appeal dismissed - decided against Revenue.
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2017 (5) TMI 1709
Penalty u/s 271CA - default in collecting tax at source on further sales in compliance with the provisions of section 206C(1) - HELD THAT:- In identical set of facts in the own case of the assessee, this Tribunal has upheld the order of the CIT(Appeals) deleting the penalty levied u/s 271CA wherein held "Reasonable cause" as applied to human action is that which would constrain a person of average intelligence and ordinary prudence. It can be described as a probable cause. It means an honest belief founded upon reasonable grounds, of the existence of a state of circumstances, which assuming them to be true, would reasonably lead any ordinarily prudent and cautious man, placed in the position of the person concerned, to come to the conclusion that same was the right thing to do. The cause shown has to be considered and only if it is found to be frivolous, without substance or foundation, the prescribed consequences follow.
In view of the same we agree with the Ld.CIT(A) that the assessee had reasonable cause for not collecting tax at source ,the absence of which is essential for levying penalty as held by the Delhi High Court in the case of woodward governor [2001 (4) TMI 34 - DELHI HIGH COURT]. We therefore uphold the order of the Ld. CIT(Appeals) deleting the levy of penalty under section 271CA of the Act. - Decided in favour of assessee.
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2017 (5) TMI 1708
Demand of service tax - export of services - import of services - other services rendered within India - reverse charge mechanism - Circular dated 24.02.2009 - HELD THAT:- It is an admitted fact on record that the appellant had received the services from the Overseas Service Provider prior to 18.04.2006. Since Section 66 A was inserted by Finance Act, 2006 w.e.f. 1.5.2006, we are of the view that the services provided prior to 18.04.2006 will not be leviable to service tax under reverse charge mechanism.
The Hon’ble Bombay High Court in the case of Indian National Shipowners Association Vs. Union of India [ 2008 (12) TMI 41 - BOMBAY HIGH COURT ] has held that the recipient of taxable service is liable to pay service tax only w.e.f. 18.04.2006. Further, the CBEC vide Circular dated 26.09.2011 has also endorsed such view - Thus, the Commissioner should examine the judgement of the Honb’ble Bombay High Court and the circular of CBEC and accordingly decide the issue, whether the appellant should be eligible for the benefit or not.
Export of service - HELD THAT:- The appellant has provided scientific and technical consultancy service for the benefit of overseas service receivers. The circular dated 24.02.2009 issued by CBEC has clarified that such type of service falls under the “category III service” and as per Rule 3(1)(iii) of the Export Service Rules, no service tax shall be leviable on such service. However, the adjudicating authority has not discussed this aspect in the impugned order - the adjudicating authority is required to examine the case of the appellant as to whether it is governed under the Export of Service Rules as per the decision of the Tribunal and the Circular of CBEC referred supra for a proper finding on the issue.
Other services provided by the appellant within the country - HELD THAT:- The adjudicating authority should verify the payment particulars made by the appellant. Any amount against the liability confirmed, if not paid, the same should be recovered, since the appellant has not contested the liability confirmed in the adjudication order.
The matter is remanded back to the adjudicating authority for de novo adjudication - appeal allowed by way of remand.
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2017 (5) TMI 1707
Addition towards deferred revenue income - HELD THAT:- Similar issue came for consideration before this Tribunal in assessee's own case for assessment year 2009-10 [2016 (7) TMI 1553 - ITAT CHENNAI] wherein the Special Bench of Tribunal allowed the claim of assessee to defer the income, we are inclined to dismiss the ground taken by the Revenue.
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2017 (5) TMI 1706
Short term capital gain - Whether transaction did not belong to the appellant individually and the transactions were required to be considered in the hands of AOP in which the appellant was a member with 1/7th share? - HELD THAT:- Short term capital gain, but while doing so, he has not taken into account the expenditure incurred in levelling the plot. Undisputedly the assessee has carved out 90 plots out of the total lands purchased and for its carving out, some expenditure is bound to be incurred.
AO did not taken into account the expenditure incurred in this regard and he has computed the short term capital gain without taking into account the expenditure incurred after the purchase of plot. This approach of AO is incorrect as for developing a plot, some expenditure is bound to be incurred. Therefore, this issue requires readjudication by the AO and accordingly set aside the order of CIT(Appeals) and restore the matter to the file of AO with a direction to reexamine the claim of expenditure incurred in levelling of the plot or otherwise relevant for the purpose of computation of short term capital gain. - Appeals of the assesses are allowed for statistical purposes.
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2017 (5) TMI 1705
Disallowance 40(a)(ia) on account of late payment of TDS,interest suspense account and sundry creditors - AR submitted that the assessee had paid tax deducted at source before the due date of filing of return, that the provisions of section 40(a)(ia) were not applicable - HELD THAT:- We find that the assessee itself had admitted that taxes were paid in the subsequent AY. In the cases of Rajendra Yadav (2016 (3) TMI 358 - ITAT JAIPUR) and Amruta Quarry Works (2016 (7) TMI 1246 - ITAT AHMEDABAD), the Tribunal had held that amendment to section 40(a)(ia) was retrospective in nature, that the amount to be disallowed under the said section had to be restricted to 30% of the impugned expenditure.
Respectfully following the above orders of the Tribunal, we hold that disallowance should be restricted to 30% effective Ground of appeal is decided in favour of the assessee in part. As the appeal for the subsequent AY.is not before us, we are not passing any order in that regard.
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2017 (5) TMI 1704
Disallowance of expenditure pertaining to payment of ESI and EPF - HELD THAT:- Amount allowable and cannot be treated as income of Assessee. The case of Spectrum Consultants India (P.) Ltd., Vs CIT [2013 (7) TMI 414 - KARNATAKA HIGH COURT] held that amounts which were paid before the due date of filing of return are required to be allowed.
The Hon’ble Karnataka High Court followed its earlier decision in the case of CIT vs Sabari Enterpirses [2007 (7) TMI 169 - KARNATAKA HIGH COURT] where the Divisional Bench of the Karnataka High Court after extracting Section 2(24)(x), Sec. 36(1)(viia) and Sec. 43B(b) of the IT Act, held that the contributions rendered by Assessee to EPF and ESI are allowable deductions, even though made beyond the stipulated period as contemplated under the mandatory provisions of Sec. 36(1)(viia) r.w.s 2(24)(x) of the IT Act and Sec 43B
Case of CIT vs ALOM Extrusions Ltd.[2009 (11) TMI 27 - SUPREME COURT] has dismissed the Revenue appeals and accordingly those orders have become final. Respectfully following the same, since the amounts were paid much before the due date for filing return of income, A.O’s action in treating the same as income of Assessee cannot be supported. Accordingly, said addition is deleted. - Decided in favour of assessee.
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2017 (5) TMI 1703
Maintainability of appeal - substantial question of law or not - Section 35G of the Central Excise Act, 1944 - CENVAT credit - HELD THAT:- As is discernible from paragraphs 4 and 5 of the impugned order of the Tribunal, the Commissioner (Appeals) had granted CENVAT credit to the assessee on the basis of materials on record and entering findings and conclusions based on documents, records, photographs and Chartered Engineer’s certificate. It is well within the jurisdiction and competence of that authority, namely, the Commissioner (Appeals) to decide on materials.
There is no substantial question of law arising for decision in this appeal in terms of Section 35G of the Central Excise Act, 1944 - appeal dismissed.
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2017 (5) TMI 1702
Disallowance u/s.14A r.w.r. 8D - CIT-A directing to exclude the investment made by assessee in subsidiary companies and investments which did not yield exempt income while computing the disallowance u/s.14A r.w.Rule 8D - HELD THAT:- It is appropriate to remit the issue to the file of AO to consider the disallowance u/s.14A r.w.Rules 8D to find out whether interest bearings borrowed fund were used to acquire the shares in the companies or making advance to the subsidiaries. With this observation, we restore the issue to the file of AO for fresh consideration.
Payment of royalty - Nature of expenditure - capital expenditure or revenue expenditure - HELD THAT:- As decided in own case payment made for the user of the logo is always revenue in nature
MAT computation - addition relating to expenditure incurred for exempt income while computing the book profit u/s.115JB - HELD THAT:- Disallowance made u/s.14A r.w. Rule 8D cannot be added while computing book profit u/s.115JB of the Act that the disallowance is only disallowance for the purpose of computing taxable income of the assessee in the normal course. There is no provision in the Act to add these kind of disallowance while computing book profit u/s.115JB and it cannot change the book profit on this count. Therefore even if there is an addition in view of provision u/s.14A r.w.Rule 8D, that cannot be added back to compute the book profit u/s.115JB. This ground is allowed.
Transfer to Reserve Fund as required under Section 45-IC of the Reserve Bank of India Act and claimed the same as appropriation of funds by overriding title - HELD THAT:- As decided in ow case [2016 (8) TMI 1204 - ITAT CHENNAI] assessee claims that it is only an appropriation of funds by overriding title. This Tribunal examined the very same issue for assessment years 2003-04 to 2009-10 and found that the transfer of funds, as required under Section 45-IC of the Reserve Bank of India Act, is only an application of income, therefore, liable for taxation. In view of the decision of this Tribunal in the assessee's own case, for assessment years 2003-04 to 2009-10, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed.
Addition of interest u/s. 234D - HELD THAT:- As decided in ow case [2016 (8) TMI 1204 - ITAT CHENNAI] DR rightly submitted by the Ld. D.R., interest is charged under Section 234D of the Act on the excess amount refunded to the assessee while processing a return under Section 143(1) of the Act. Even though it is an interest levied on the amount refunded to the assessee, in fact, it is an interest for delayed payment of tax. In other words, the amount refunded to the assessee while processing return under Section 143(1) of the Act was considered as nonpayment of tax and interest was charged for the period in which the assessee was holding the amount. Therefore, the interest paid by the assessee cannot be construed as expenditure for earning the income or for business purpose
Disallowance made u/s.40(a)(ia) - The main contention of the ld.A.R is that nothing is payable at the end of the close of the Financial year, as such the issue is squarely covered by the order of the Special Bench of the Tribunal in the case of Merilyn Shipping and Transports v. Addl. CIT [2012 (4) TMI 290 - ITAT VISAKHAPATNAM] - HELD THAT:- There is a force in the argument of the ld.A.R and the Special Bench cited supra considered this issue and decided the issue in favour of the assessee. We are inclined to remit this issue to the file of the ld. Assessing Officer with similar direction. These grounds raised by the assessee is allowed for statistical purposes.
Bad Debts disallowance u/s 36 (1)(vii) - AO rejected the claim of bad debts of the assessee at the threshold on the reason that it was not written off in its books of accounts maintained by the assessee under Companies Act, 1956 and the A.O has not examined whether it was written off in its books of accounts maintained for income-tax purposes - HELD THAT:- The Income Tax Act requires for the assessee to follow a parellelly consistent method of accounting in accordance with section 145 thereof. The books maintained for the purposes of the Income Tax Act shall comply with the provisions of section 145 and shall form the basis for an assessment thereunder. The error in the order of assessment is the juxtaposition of the two books by the assessing officer. The creation of a provision for bad debts in the corporate accounts thus does not, in any way, impact the claim of bad debt u/s 36(1)(vii) of the Act in the regular computation of income. This submission of the department stands rejected. (Para 7)
Thus, it is clear that the claim of bad debts relates to debts actually written off and not a provision made in this regard and therefore, in accordance with the provisions of Section 36 (1)(vii), written off the bad debt and the claim is allowable
As per the judgement of the Hon’ble Supreme Court in the case of TRF Ltd. v. CIT [2010 (2) TMI 211 - SUPREME COURT] as held that after 01.04.1989, it is not necessary for the assessee to establish that the debt, in fact, has become irrecoverable. It is enough if the bad debt is written off as irrecoverable in the accounts of the assessee. Hence, it is appropriate on our part to remit the entire issue as done by the Tribunal in the earlier occasion to the file of AO for his due examination of the books of accounts maintained by the assessee under the Income Tax Act, 1961and the ld. Assessing Officer decides thereupon.
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2017 (5) TMI 1701
Recovery of unpaid loan amount - bank account has been declared as a non-performing assets - SARFAESI Act - HELD THAT:- Considering the fact that the property is to be auctioned on 08.05.2017, it is directed that for a period of one month, i.e. till 02.06.2017 the auction proceedings shall be kept in abeyance so that the petitioner may avail his remedy, provided the petitioner deposits the amount with the Bank towards advertisement cost/charges, already undergone for this auction on May 8, 2017, within seven days from today.
It is further made clear that the petitioner shall approach the Manager of the concerned Bank/Branch within a period of three days from today, who shall provide the details as to the expenses incurred by the Bank for the advertisement, which shall be paid by the petitioner, failing which the auction shall go on.
Petition disposed off.
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2017 (5) TMI 1700
TP Adjustment - Comparable selection - functional dissimilarity - HELD THAT:- Companies functionally dissimilar cannot be compared with assessee-company which is engaged in IT enabled services.
We direct the AO/TPO to consider only profit margin of the software segment for the purpose of computing while arm's length price of the transaction.
RPT filer of 15% - TPO has applied RPT filter of 25%. The learned AR has not challenged the applicability of this filter. Therefore, we hold that Company failing to meet the filter set be excluded from the list of comparables.
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2017 (5) TMI 1699
Claim of exemption u/s.10 (34) in respect of dividend income - Claim of depreciation to assessee trust - HELD THAT:- The issue under consideration is squarely covered by the decision of Bombay High Court in the case of Jasubhai Foundation [2015 (4) TMI 305 - BOMBAY HIGH COURT] . CIT(A) after considering the decision of Bombay High Court has directed the AO to allow assessee’s claim of exemption u/s.10(34) of dividend income received during the year after due verification. No infirmity in the order of CIT(A) for the direction so given by the AO, which is in terms of decision of the jurisdictional High Court in case of Jasubhai Foundation (supra).
Appeal of the Revenue is dismissed.
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2017 (5) TMI 1698
Reopening the assessment u/s 147 - period of limitation - notice having being issued and served beyond the time limit prescribed u/s. 149 - HELD THAT:- Terminology used in Sub Section (1) of Sec. 149 of the Act is ‘’issued’’ and not ‘’served’’. Admittedly, notice was issued on 31.03.2012, which was within the six year period allowed under said section. Hence, in my opinion, ld. Commissioner of Income Tax (Appeals) was justified in relying on the judgment of Hon’ble Apex Court in the case of R.K. Upadhyaya vs. Shanabhai P. Patel [1987 (4) TMI 5 - SUPREME COURT] and holding that notice having issued within statutorily allowed time period, the reassessment was valid.
Addition sustained by CIT(Appeals) under short term capital gains, though originally done by the ld. Assessing Officer u/s. 69 of the Act, assessee has filed copy of the accounts statement for its investment in Sundaram Bond Saver Inst Bonus (Principal units) as well as Sundaram Bond Saver Inst. Bonus (Bonus Units). There is no dispute that bonus units were issued to the assessee on 23.03.2004. There is also no dispute that ld. Assessing Officer had applied Sec. 94(7) of the Act in the assessment year 2004-2005.
Where a financial asset is allocated to a assessee without any payment, on the basis of holding of any other asset, the cost of the former has to be taken as Nil. In such circumstances, cost of the units received as bonus on 23.03.2004 was rightly considered by the ld. Commissioner of Income Tax (Appeals) as Nil. Since assessee switched out of the said units on 22.09.2004 and received a sum ₹ 49,48,821/-, the said sum was, in my opinion rightly considered as short term capital gains - Decided against assessee
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