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Showing 161 to 180 of 1925 Records
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2019 (8) TMI 1766
TP Adjustment - selection of MAM - RPM v/s TNMM - assessee had selected “Resale Price Method” (RPM) as the most appropriate method for benchmarking its purchase transactions with the AEs - TPO rejected RPM and applied TNMM as the most appropriate method - HELD THAT:- For the purpose of application of RPM what is relevant is that as to whether there is any value addition or not to the goods purchased by the assessee for resale or not. In case, there is no significant value addition and the finished goods which are purchased from the AE are resold in the domestic market in the same form, then the gross profit margin earned on such transactions becomes the determinative factor for benchmarking the international transactions of the assessee with its AE by taking RPM as the most appropriate method. Our aforesaid view is supported by the order in the case of Fresenious Kabi India (P) Ltd. [2017 (6) TMI 1298 - ITAT PUNE] wherein it was held that in case of distribution activity the selling and marketing expenses which are borne by the assessee would not lead to any value addition to the product in question.
We find substantial force in the contention advanced by the ld. A.R that as per Rule 10B(1)(b) in the Income Tax Rules, 1962, the RPM can safely be taken as the best suited method for determining the ALP of the international transactions in the case of the assessee before us, which as observed by us hereinabove had imported formulations from its AE and resold the same without making any value addition to unrelated parties in the domestic market.
We are unable to subscribe to the view taken by the TPO/DRP that merely for the reason that complete information about the business profile and financial data in respect of companies selected by the assessee as comparables in its TP study report was not available in the public domain or furnished by the assessee, therefore, for the said reason the application of the said method for benchmarking the international transactions of the assessee was to be rejected.
Rejection of the comparables which were selected by the assessee in its TP study report - As regards the three companies which were rejected by the TPO as comparables viz. (i) Abbott India Ltd; (ii) Duchem Laboratories Ltd.; and (iii) Lyka Exports Ltd., we are in agreement with the view taken by the TPO/DRP that as the said companies had a different year ending, therefore, the results emerging therefrom was not contemporaneous, and hence as per Rule10B(4) they were not suitable for being considered for arriving at a feasible comparison. However, at the same time, we are unable to persuade ourselves to accept the rejection of one of the comparable selected by the assessee company viz. M/s Daga Global Chemicals Ltd.
It is the claim of the assessee that as the aforementioned company viz. Daga Global Chemicals Ltd. alike the assessee was engaged in the business of distribution, therefore, it was rightly selected as a comparable for benchmarking analysis. We have given a thoughtful consideration to the aforesaid contentions advanced by the ld. A.R and find substantial force in the same. In our considered view, as the DRP had declined to include the aforementioned company i.e Daga Global Chemicals Ltd. as a comparable, apparently on the basis of misconceived facts as had been canvassed by the ld. A.R before us, therefore, in all fairness the matter requires to be restored to the file of the TPO for fresh adjudication. The TPO after considering the aforesaid claim of the assessee in respect of the aforementioned company, viz. Daga Global Chemical ltd, is directed to readjudicate the issue as regards inclusion of the same in the final list of comparables for benchmarking the international transactions of the assessee as per RPM.
We set aside the view taken by the TPO/DRP as regards the rejection of RPM as the most appropriate method for benchmarking the international transactions of the assessee and substituting the same by applying TNMM. The matter is restored to the file of the TPO, who is directed to re-determine the ALP of the international transactions of the assessee after accepting RPM as the most appropriate method.
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2019 (8) TMI 1765
Direction for supply of TDS Certificate - dismissal of the present execution petition on the ground that orders sought to be executed are purely interim orders - Ld. Counsel for the DH has argued that the said orders are executable under Order 36 of CPC. Moreover, he submits that remedy under Order 15A of CPC is not an alternative remedy and the DH under law is entitled to file both the execution petition and application under Order 15A of CPC simultaneously because they are separate proceedings.
HELD THAT:- Both the parties are directed to file case laws in support of their respective submissions and a short written synopsis with e-copy within three weeks with advance copy to each other.
Put up for orders/clarifications on 04.10.2019.
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2019 (8) TMI 1764
Non issuance of notice u/s.143(2) - notice served u/s.143(2) of the Act was by different Assessing Officer having no jurisdiction on the assessee - Whether transfer of case u/s 127 proved? - HELD THAT:- Assessment u/s.143(3) of the Act was completed by the ITO, Ward 2(4), Aurangabad whereas, the notice u/s.143(2) of the Act was issued to the assessee by the ITO, Ward 2(1), Aurangabad.
As the assessment was completed without issuing the notice u/s.143(2) of the Act by ITO, Ward 2(4), Aurangabad. Moreover, if at all, there was change of jurisdiction from ITO, Ward 2(1), Aurangabad to ITO, Ward 2(4), Aurangabad, provision of section 127 of the Act is absolutely clear that a reasonable opportunity of hearing should be given to the assessee which was not done in the present case.
In the present case of the assessee, when one Officer has issued notice u/s.143(2) of the Act, his jurisdiction was transferred and another Officer has been placed for framing assessment. First of all on this transfer of case, the assessee should have been informed and hearing should have been taken place. Secondly, the Officer who ultimately completed the assessment, should have issued notice u/s.143(2) of the Act to the assessee again. In this case, notice has been issued by the ITO, Ward 2(1), Aurangabad and assessment was completed by the ITO, Ward 2(4), Aurangabad which is not permissible within the scope and ambit of the Act. Appeal of the assessee is allowed.
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2019 (8) TMI 1763
Maintainability of appeal - monetary limit as prescribed as per Circular No.3 of 2018 dated 11th July, 2018 - Scope of amendment - HELD THAT:- On the query of the Court as to whether the Circular is applicable to pending matters, the learned counsel draws the attention of this Court to the communication dated 20th August, 2019 made by the Central Board of Direct Taxation to all the Chief Commissioners of Income Tax clarifying at paragraph No.3 that the monetary limit prescribed in Circular No.17 of 2019 is applicable to all pending Special Leave Petitions, Appeals, Cross Objections and References.
We permit the appellant to withdraw the appeal for the reasons stated above. Liberty is also granted to the appellant to seek revival of this appeal, if it is found that the matter falls within the exception carved out in Clause 10 of Circular bearing No.3 of 2018.
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2019 (8) TMI 1762
Levy of service tax - survey and map making service - service of civil construction wherein ‘survey and mapmaking’ was also involved - period from 1 April 2010 till 31 March 2012 - time limitation - HELD THAT:- The respondent-assesee have prima facie rendered works contract service to the various Government departments/ agencies, and ‘survey and mapmaking’ is incidental work in the same. Further, it is also found that under the definition of ‘works contract’ as defined in Section 65(105)(zzzza), it specifically excludes works contract in relation to roads, railways, dams etc. Admittedly, the respondent-assessee have done the work in the nature of work for Railways, Dam or roads, which is not disputed. The view that in a work of complex nature, the predominant work being in the nature of works contract and survey/ map making being a part of it, can not be segregated and subject to tax under the different headings.
Extended period of limitation - HELD THAT:- There is no case of suppression of facts or any collusion or mis-conduct on the part of the respondent-assessee as they had maintained proper records in the ordinary course of business and have filed their ST 3 – 3 returns regularly. In view of this, the demand for the extended period is barred by limitation.
This appeal filed by the Revenue is dismissed.
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2019 (8) TMI 1761
Computation of set off of MAT credit u/s.115JAA - whether it should be excluding surcharge and cess or including surcharge and cess - HELD THAT:- Judgment rendered by us in [2019 (7) TMI 185 - MADRAS HIGH COURT] in the assessee's own case for the earlier assessment year has become final and the Revenue has not preferred any appeal. There is no material placed before this Court to show that the Revenue has filed an appeal before the Hon'ble Supreme Court against our judgment. Hence, we are inclined to follow the said decision in the assessee's own case for the earlier assessment year.- Decided in favour of assessee.
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2019 (8) TMI 1760
TP addition in respect of the international transaction of payment of Royalty - HELD THAT:- The issue is of recurring in nature - As decided in own case [2019 (8) TMI 369 - ITAT PUNE] decided it in assessee’s favour by deleting the transfer pricing addition on account of Royalty. Similar view has been followed in all the subsequent years up to the year under consideration. The ld. DR could not point out any distinguishing feature in the facts for this year vis-à-vis the preceding years. Following the precedent, we direct to delete the transfer pricing addition in respect of Royalty.
Transfer pricing addition in the international transaction of Indenting Commission - HELD THAT:- Similar issue came up for consideration again before the Tribunal in its order for A.Y. 2006-07 [2019 (8) TMI 1053 - ITAT PUNE]. Since this appeal came up through the route of the Dispute Resolution Panel in which there was no such categorical finding about the transaction being at arm’s length price or not as was there for the A.Y. 2005-06, the Tribunal restored this matter to the file of AO/TPO for a fresh adjudication. However, for the year under consideration, it is observed from TPO’s order that the assessee submitted a detailed calculation to the TPO by considering the Material cost and Depreciation cost in the base of costs and demonstrated that the transaction was at the ALP. The TPO did not controvert such a position but went with his earlier view that these costs were not required to be considered, which view has been overturned by the Tribunal for earlier years. Thus, it is evident that the facts and circumstances of the instant year are similar to those of the A.Y. 2005-06. Following the precedent, we order to delete the addition.
Capitalization of expenditure on the Premises - HELD THAT:- As found that the facts and circumstances of this ground are mutatis mutandis similar to those of preceding years. The Tribunal for the A.Y. 2006-07 [2019 (8) TMI 1053 - ITAT PUNE]and earlier years has upheld capitalization of expenses in relation to the Premises at 40%. Following the precedent, we direct accordingly.
Disallowance at 10% of Miscellaneous expenses - HELD THAT:- Since the extent of disallowance made by the AO accords with that upheld by the Tribunal in the assessee’s own case for the immediately preceding year, following the same, we uphold the addition, more specifically because of the uncontroverted finding returned by the AO that the entire bills were not produced for verification. This ground, therefore, fails.
Addition towards Commission at 7.5% - HELD THAT:- Here again, it is found that similar issue came up for consideration before the Tribunal in the assessee’s own case for earlier years. In its order for the A.Y. 2006-07 [2019 (8) TMI 1053 - ITAT PUNE] the Tribunal has deleted such disallowance. Following the precedent, we order to delete the addition.
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2019 (8) TMI 1759
Auction of 256 Containers - remission of sale proceeds to the Resolution Professional/ Corporate Debtor's - HELD THAT:- After the initiation of CIRP and declaration of moratorium, the Customs Authority/Respondent could not have auctioned the goods stuffed in the 256 containers. But, since the goods have been sold by auction and taken away by the bona-fide buyers, there is no use pursuing the buyers and thus it would be in the interest of the Corporate Debtor that the sale proceeds of ₹ 10,60,10,000/- are directed to be deposited with the Resolution Professional, along with the remaining 667 containers still lying with the Customs.
The Custom Authorities shall remit/pay the amount of ₹ 10,60,10,000/- as the sale proceeds in their possession within two weeks of the date of receipt of this order, to the Resolution Professional/ Corporate Debtor's account either by way of Demand draft or through e-payment facility in the Bank directly, to be provided by the Resolution Professional to the Respondent, immediately - Application disposed off.
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2019 (8) TMI 1758
Maintainability of application - it is submitted that the application filed by the applicant is not listed today, as directed - HELD THAT:- Application is to be heard along with the other applications. It was not numbered as the application is found defective. Ld. Counsel for the applicant is directed to cure the defect and the Registry is directed to list the application, if it is defect free, along with the CP for hearing.
For filing further Progress Report list it on 01/10/2019.
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2019 (8) TMI 1757
Dishonor of Cheque - principal accused persons have absconded and Non-Executive Director and a Chartered Accountant by profession, has been going through the ordeal of facing criminal proceedings - applicability of principle of vicarious liability for IPC offences - HELD THAT:- Even though the corporate entity is an artificial person which acts through its Officers, Directors, Chairman etc., if such a Company commits an offence involving mens rea, it would normally be the intent and action of that individual, who acted on behalf of the Company. A person, who has perpetrated the commission of an offence on behalf of a Company can be made as an accused, along with the Company, if there is sufficient evidence of his active role coupled with criminal intent [emphasis supplied]. This is the cardinal principle of criminal jurisprudence, unless the statute specifically provides for the applicability of the doctrine of vicarious liability like in the case of Negotiable Instruments Act, 1881, Employees Provident Fund Act, 1952, Food Safety and Standards Act, 2006, etc.
In case of a Non-Executive Director, they cannot be presumed to be involved in the day-to-day affairs of the running of the Company and they cannot be made liable just because they have attended Board Meetings or signed Balance Sheets.
In the instant case, the only allegation that is found against the petitioner in the Final Report and in the materials collected by the prosecution during the course of investigation, is that the petitioner did not interfere with the illegal act committed by A-1 to A-3, and thereby he has abetted the commission of crime under Section 109 of IPC. Therefore, the prosecution has proceeded against the petitioner more on an assumption and by applying the principle of vicarious liability, without there being any material to show that the petitioner had perpetrated the commission of the offence, by playing an active role coupled with criminal intent. Unless, this minimum requirement is satisfied, the petitioner cannot be made as an accused in this case.
There are no materials available against the petitioner to proceed further against him before the Court below. It is true that even a strong suspicion is enough to frame charges against an accused person. If material is available, this Court cannot go into it and analyse such materials at this stage. However, such a suspicion must be based on some material and not on mere assumptions or surmises. In this case, no material is available against the petitioner - the continuation of the proceedings against the petitioner is an abuse of process of Court and in the considered view of this Court, the petitioner should not be made to face the ordeal of trial before the Court below.
Petition allowed.
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2019 (8) TMI 1756
Seeking grant of Bail - bail applications rejected on the premises that in case the petitioners are enlarged on bail, they may try to influence the witnesses and there is possible danger of justice being thwarted by granting bail to the petitioners - Offence u/s 302, 307, 147, 148, 149 IPC and Section 25 of the Arms Act - HELD THAT:- Section 439 Cr.P.C. gives an unfettered discretion to the High Courts or Court of Sessions to admit an accused on bail, but that discretion must be exercised judicially. The Court can always refuse bail on any of the grounds, be it possibility of tampering with the prosecution evidence by the person seeking bail, gravity and seriousness of the offence or otherwise.
Admittedly, the petitioners have moved bail applications in succession when the same are being dismissed. It is settled law that the person seeking bail has to clearly demonstrate change in the circumstances, in case his earlier bail application was dismissed - In the case in hand, the learned Senior Counsel for the petitioners has tried to sketch out the ground for grant of bail mainly on the premise that now there is change in the circumstances. The change, as per the learned Senior Counsel is that now the learned Trial Court has recorded the testimonies of three prosecution witnesses and their testimonies create a doubt qua the veracity of the prosecution case - this Court does not see any change in the circumstances and mere examination of some of the prosecution witnesses cannot be said to be a ground for change in circumstances and ultimately for grant of bail. In a catena of cases, the Hon'ble Supreme Court, as also different High Courts, culled out the principles for grant of bail.
In the case in hand, this Court cannot shut its eyes to gravity and seriousness of the crime, the manner in which the alleged crime was perpetrated, the fact that there is possibility that in case the petitioners are enlarged on bail, they may tamper with the prosecution evidence, as most of the prosecution witnesses are yet to be examined. This Court also finds that presently the trial is at crucial stage and there is strong possibility that in case the petitioners are enlarged on bail, they may tamper with the prosecution evidence and they will be in a position to influence and threaten the prosecution witnesses.
In the present case and also the material, which has come on record and without discussing the same at this stage, this Court finds that the present are not the fit cases where the judicial discretion to admit the petitioners on bail is required to be exercised in their favour.
The petition dismissed.
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2019 (8) TMI 1755
Royalty receipt - Income taxable in India or not - existence of PE in India - Income taxable in India or not - existence of PE in India - customer royalty programmes, provided by the assessee to its client and customers - fees for technical services amounted to royalty under Article 12 of India – US DTAA - HELD THAT:- This question is covered by the ruling of this Court in assessee’s case i.e. Director of Income Tax Vs. Sheraton International Inc.[2009 (1) TMI 27 - DELHI HIGH COURT]. Decided against the Revenue.
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2019 (8) TMI 1754
Addition made on account of exemption of income from pension fund u/s 10(23AAB) - HELD THAT:-we find that the CIT(A) has decided the matter of controversy on the basis of the decision of Hon’ble ITAT in the assessee’s own case for the A.Y.2010-11 in [2017 (1) TMI 1760 - ITAT MUMBAI]as passed on the basis of decision of the Hon’ble Bombay High Court in case of LIC of India Ltd. [2011 (8) TMI 47 - BOMBAY HIGH COURT]. Accordingly, the claim of the loss of the Pension Fund was held to be allowable claim. The section 44 of the Act has clearly been distinguished on account of loss in the pension scheme. The facts are not distinguishable at the stage. No law contrary to the law relied by the assessee has been produced before us. Since the case of the assessee has duly been covered by the decision of the Hon’ble ITAT in the assessee’s own case (supra), therefore, we are of the view that the finding of the CIT(A) is quite justifiable which is not liable to be disturbed at this stage. Accordingly, this issue is decided in favour of the assessee against the revenue.
Addition made on account of deduction claimed on Dividend Income u/s 10(34) - whether dividend income was assessable under the head income from business and profession and cannot be computed separately to claim exemption u/s 10(34) as this will amount to violation of provision of section 44 of the Income Tax Act - HELD THAT:- As in the assessee’s own case for the A.Y.2010-11 in [2017 (1) TMI 1760 - ITAT MUMBAI]qua the provisions of section 44 of the Act, we find that the finding of the CIT (A) in para 5.3 of his order is fair and reasonable as the same is taken based on the various binding judicial precedents in the cases of LIC vs. Addl. CIT. [1977 (11) TMI 25 - BOMBAY HIGH COURT], ICICI Prudential Insurance vs. ACIT; [2012 (11) TMI 13 - ITAT MUMBAI], and SBI Life Insurance Company Ltd vs. CIT etc [2014 (5) TMI 1067 - ITAT MUMBAI] Accordingly, we affirm the order of the CIT (A) on this issue too. Thus, both the issues raised by the Revenue are allowed in favour of the assessee.
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2019 (8) TMI 1753
Maintainability of appeal - low tax effect - Addition u/s 68 - bogus loan arranged through a proven shell company controlled and operated by an entry provider - HELD THAT:- Vide the Circular 17 of 2019 dated 08.08.2019 CBDT has enhanced the monetary limit for filing appeals before the ITAT from the existing limit of ₹ 20 lacs to ₹ 50 lacs. Since, the tax effect in the present appeal is less than ₹ 50 lacs, this appeal is not maintainable. Hence, we dismiss the appeal filed by the Revenue as not maintainable/withdrawn. In the result, appeal filed by the revenue for assessment year 2008-2009 is dismissed.
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2019 (8) TMI 1752
Capital gain computation - Addition invoking the provisions of section 50C - immovable property falls under litigation for quite a number of years - Whether market value of the property will be considerably less than the value determined by the Stamp Valuation Authority because normally valuation of the State Stamp Authority would be a pre-determined value based on the market value of the surrounding land having clear title? - HELD THAT:- The sale value realised by the assessee is approximately 73% of the value determined by the Valuation Officer and the Valuation Officer has adopted 94% of the market value determined by the State Stamp Valuation Officer.
We are of the firm view that the allowance granted by the Valuation Officer is too low considering the drawbacks of the land sold by the assessee. The assessee has realised reasonable amount as sale consideration from his litigated property being 73% of the value determined by the Valuation Officer and therefore there is no necessity to disturb the sale value as the same could be treated as the market value of the property considering the drawbacks of the property. We hereby direct the AO to delete the addition made in the hands of the assessee while computing his long-term capital gains. Appeal of the assessee is allowed.
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2019 (8) TMI 1751
Condonation of delay in filing the appeal - wrong statement made in the application filed for condoning the delay that the original order had not been served upon the Appellant - HELD THAT:- The hearing of the delay condonation application will not be adjourned, learned Counsel for the Appellant/ Applicant has not appeared today to press the delay condonation application.
As is clear of the earlier order dated 22 February, 2019, the original copy of the order-in-appeal dated 18 September, 2018 was served upon the learned Counsel of the Appellant on the 24 September, 2018 as is clear from the dispatch register - Despite this fact, a wrong statement was made in the application filed for condoning the delay that the original order had not been served upon the Appellant. Service of the original order upon the learned Counsel for the Appellant is service upon the Appellant. It has also been stated by the learned Counsel for the Appellant that the same Counsel who had appeared before the Commissioner (Appeals) had instructed the learned Counsel who had drafted this Appeal. Though, learned Counsel for the Appellant had sought time to verify the facts, but learned Counsel has not appeared today to press the application.
When the order had actually been served on the Appellant on 24 September, 2018, the delay has not been explained to the satisfaction of the Tribunal - the delay condonation of the matter is liable to be rejected and is rejected - Appeal dismissed.
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2019 (8) TMI 1750
Transfer of title of shares - HELD THAT:- The 4th and 5th Respondents to transfer the title of all the shares to any party without affecting the business of Appellant-‘Triveni Turbine Limited’ and the 1st Respondent Company- ‘GE Triveni Limited’ and should not affect all the five agreements entered into between parties as referred to in their undertaking before the Tribunal.
The necessary data for running the business of 1st Respondent Company- ‘GE Triveni Limited’, if required to be provided pursuant to the aforesaid five agreements, be provided by concerned Respondents to the 1st Respondent Company- ‘GE Triveni Limited’, if available. All transactions of shares if made shall be subject to the decision of these appeals.
Post both the appeals ‘for admission (after notice)’ on 25th September, 2019 on the top of the list.
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2019 (8) TMI 1749
TP Adjustment - adjustment to the international transaction of the assessee on account of the arm‟s-length price with respect to the interest on overdue receivable - HELD THAT:- Outstanding receivable from the associated enterprises which are shown as a debtor in the books of the assessee are part of the working capital of the assessee. If the outstanding debtors are part of the working capital of the assessee, they have already been included in the working capital adjustment worked out. Thus, if the adjustment proposed by the learned transfer pricing officer and approved by the learned dispute resolution panel accepted working capital adjustment, then it will amount to double addition in the hands of the assessee.
The issue is also squarely covered by the decision of KUSUM HEALTHCARE PRIVATE LIMITED [2017 (4) TMI 1254 - DELHI HIGH COURT] wherein as accepted the reasoning that with the assessee having already factored in the impact of the receivable on the working capital and thereby on its pricing/profitability and that of its comparables, any further adjustments only on the basis of the outstanding receivable would have distorted the picture and re-characterize the transaction - No reason to sustain the addition made by the learned transfer pricing officer incorporated in the final assessment order. Ground number 2 of the appeal of the assessee is allowed.
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2019 (8) TMI 1748
Maintainability of appeal - Monetary limit - Low tax effect - DR submitted that the appeal is protected under the exception provided in paragraph 10(e) of Circular No. 3/2018 dated 11.07.2018 as amended by the Central Board of Direct Taxes vide letter dated 20.08.2018 -Addition u/s 68 - HELD THAT:- It is undisputed position that the tax effect of the quantum additions being contested by the revenue is less than prescribed monetary limit of ₹ 50 Lacs and the same is covered by recently issued low tax effect Circular No.17/2019 dated 08/08/2019 issued by Central Board of Direct Taxes [CBDT]. This recent circular further enhances the monetary limit fixed in earlier Circular No.3 of 2018 dated 11/07/2018 issued by CBDT as amended on 20/08/2018. The aforesaid limits, as per para 13 of the Circular no. 3 of 2018 dated 11/07/2018, applies to pending appeals also.
So far as the plea of Ld. DR is concerned, we find that information received from DGIT (Investigation) would not constitute external sources within the meaning of clause (e) of para 10 of circular no. 03/2018 dated 11/07/2018 as amended on 20/08/2018. This view has been taken in Late Amarchand P. Shah [2019 (8) TMI 1402 - ITAT MUMBAI] wherein it has been held that Directorate of Income Tax (investigation) works under the aegis of investigation division of CBDT who is its controlling authority and hence, could not be called as external source.
We dismiss the appeal with a liberty to the revenue to seek recall of the appeal, if at a later stage, it is found that the matter is covered by any exceptions provided in the aforesaid circular or in case the tax effect of the quantum additions as agitated by revenue exceeds the prescribed monetary limit.
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2019 (8) TMI 1747
Jurisdiction of National Company Law Tribunal, Chennai Bench, when National Company Law Tribunal, Kochi Bench is formed - HELD THAT:- This writ petition is disposed of directing the NCLT, Kochi Bench to finalise the proceedings pertaining to Ext.P12 order passed, at the earliest and at any rate within a period of three months from the date of receipt of a certified copy of this judgment.
Petition disposed off.
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