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Showing 181 to 200 of 1215 Records
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2021 (11) TMI 1036
Validity of assessment order - impugned orders challenged on the ground that the impugned orders are contrary to law and without consideration of the reply filed by the petitioner - violation of principles of natural justice - HELD THAT:- It is noticed that notice dated 13.07.2021 was issued to the petitioner and fixed a personal hearing. It was served on the petitioner on 15.07.2021. However, the petitioner did not participate in the hearing before the respondent. Since the petitioner has shown no interest in participating before the respondent, there is no merits in the present writ petitions - That apart, the impugned order is dated 09.08.2021. There is also no explanation forthcoming as to why the petitioner did not choose to file a writ petition on an earlier occasion and why the petitioner has chosen now to approach this Court under Article 226 of the Constitution of India. There is no explanation as to why the petitioner did not participate in the hearing before the respondent in the affidavit filed in support of the present writ petition.
The petitioner is given liberty to workout the remedy before the Appellate Commissioner by filing an appeal within a period of thirty days from the date of receipt of a copy of this order - Petition dismissed.
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2021 (11) TMI 1035
Late payments towards EPF and ESI under section 36(1)(va) - amount deposited after the due date but before the due date of filing of return of income - AO made the additions of the impugned amounts for the reasons that the assessee did not deposit the amounts of employees contribution as per the provisions of section 36(1)(va) - HELD THAT:- As decided in MOHANGARH ENGINEERS AND CONSTRUCTION COMPANY [2021 (9) TMI 1319 - ITAT JODHPUR] we do not accept the Ld. CIT(A)’s stand denying the claim of assessee since assessee delayed the employees contribtion of EPF & ESI fund and as per the binding decision of the Hon’ble High Court in Vijayshree Ltd. [2011 (9) TMI 30 - CALCUTTA HIGH COURT] u/s 36(1)(va) of the Act since assessee had deposited the employees contribution before filing of Return of Income. Therefore, the assessee succeeds - also see SALZGITTER HYDRAULICS PRIVATE LIMITED VERSUS ITO, WARD 3 (1) HYDERABAD [2021 (6) TMI 1059 - ITAT HYDERABAD] and MOHANGARH ENGINEERS [2021 (8) TMI 563 - ITAT JODHPUR].
Thus the impugned addition on account of deposits of employees contribution of ESI & PF prior to filing of the return of income u/s 139(1) of the Act, in both the years under consideration prior to the amendment made by the Finance Act, 2021 w.e.f. 1.4.2021 vide Explanation 5, are deleted. - Decided in favour of assessee.
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2021 (11) TMI 1034
Seeking removal of Respondent Nos. 3 to 7 from the CoC - there is neither any default nor any debt is owed - reconstitution of cancel entire voting rights of Respondent Nos. 3 to 7 and undertake appropriate changes to the present voting rights of the rest of the CoC members in view of the said fraud perpetrated by the Respondents - HELD THAT:- It is very clear to the Bench that R1 and R7 in the above-mentioned transactions have defrauded the Corporate Debtor Company and such an act is squarely covered under Section 66 (1) and 66 (2) of the Code - R1 and R2 who are the suspended directors in their defense have mentioned that the forensic report is incomplete and that the auditors have not conducted detailed review of the operations of the Corporate Debtor company. The Bench notes that the Respondent Number 1 and 2 who are the suspended directors have raised baseless technical objection regarding choice of sampling method and sampling technique. It is clear to the Bench that they have no defense regarding their conduct in the whole matter wherein they had fraudulently taken out money from the Corporate Debtor’s Bank account and had paid back same amount to the related parties of the alleged homebuyer.
The Bench therefore notes that R7 has not provided any proper explanation regarding its collusion and being a party to the fraudulent transactions.
Removal of R3 to R7 from CoC and also as financial Creditor/ Home- Buyer, as there is no debt own to them by the Corporate Debtor company and purported infusion of funds by each of these Respondent were returned back to them through their related parties (relatives) on the same day or the next day by Respondent Number 1 and 2 who are suspended directors of the Corporate Debtor company - these transactions of purported creditors are vitiated by fraud, therefore all these transactions are declared as null and void.
Petition disposed off.
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2021 (11) TMI 1033
Income accrued in India - royalty receipts - India - USA DTAA - Taxability of offshore software and hardware maintenance and support services - long-term software and hardware maintenance and support agreements, signed between the assessee and PGCIL for Southern and Western region - HELD THAT:- From the explanation provided in the MOU that forms an integral part of tax treaty that service only, if it makes available technical knowledge, experience, skill, know-how or processes to the service recipient. The receiver of this service can be said to acquire the relevant skills used by service provider only if he acquires those skills in such a way that he can himself use them independently without getting any assistance or being dependent on the service provider in future.
The facts of the present case clearly show that the offshore maintenance and support services provided by the assessee PGCIL are not geared towards making available any technical knowledge, experience, skills, know how or processes to PGCIL.
Our view is supported by the fact that the term of the agreement is five years and services provided by the assessee are repetitive and ongoing in nature. This means that PGCIL is not able to apply technical or skill use by the assessee for rendering such services. Given that repetitive nature of the services, it would be factually incorrect to allege that the services make available any technical knowledge, expertise, skill, knowhow or processes to PGCIL.
The taxability of offshore software and hardware maintenance and support services has to be examined in terms of beneficial provisions of Article 12 of the tax treaty.
We find that in the case in hand, the customer would not be able to apply technology on its own and the customer would continue to depend on the assessee for provision of software and hardware maintenance and support services in future as well.
DR, in his written submissions, has reiterated the findings of the DRP which, as mentioned elsewhere, were based on incorrect facts. Further, judicial decisions relied upon by the ld DR are not applicable on the facts of the case In hand qua the agreement under dispute.
Considering the facts of the case in totality, in light of the judicial decisions discussed here in above, we are of the considered view that the receipts from PGCIL do not qualify as ‘Royalty’ under Article 12(4)(a) and 12(4)(b) of the India US DTAA. The same is directed to be deleted.
Scope of NDPL contract. This is relevant only for Assessment Years 2010–11, 2011–12 and 2012–13 - NDPL contract is divided into two purchase orders. The first purchase order is towards software licenses and second purchase order is for offshore services. For Assessment Year 2010–11, the assessee received consideration under both purchase orders but for Assessment Year 2011– 12 only license fee under first purchase order was received and in 2012– 13 only service fee was received under second purchase order.
Under the first purchase order, no copyright has been transferred to NDPL and there is only right to use the software, which is clear from the relevant contract. This issue has now been well settled by the Hon'ble Supreme Court in the case of Engineering Analysis Centre of Excellence Pvt Ltd [2021 (3) TMI 138 - SUPREME COURT]
In light of the aforementioned decision of the Hon'ble Supreme Court, since the payment towards software license does not qualify as “Royalty” services even if connected with such software, do not qualify as FIS under Article 12(4)(a) of the India US DTAA read with MOU/Protocol. The DRP’s findings in Assessment Year 2010–11 are premised on the basis that the software supplied by the assessee qualifies as “Royalty”. This finding is incorrect in light of the decision of the Hon'ble Supreme Court [supra].
The other finding of the DRP that consideration for US dollar 1 lakh is towards software and hardware is also incorrect. The entire consideration of US dollar 1 lakh is towards software as is evident from the contract with NDPL. The relevant clause of the contract relating to scope of service makes it clear that services are in the nature of remote troubleshooting and do not make available any skill, knowledge, experience to NDPL.
Considering the facts of the case in light of the decision of the Hon'ble Supreme Court in the case of Engineering Analysis Centre of Excellence Pvt Ltd [supra] we are of the considered view that the consideration for services in connection with supply of software do not qualify as FIS under Article 12(4)(a) or 12(4)(b) of the India USDTAA. We, accordingly, direct for deletion of the addition.
Charging of interest under section 234B and 234C - HELD THAT:- This has been settled by the Hon'ble Supreme Court in the case of Mitsubishi India Ltd [2021 (9) TMI 875 - SUPREME COURT] in which the Supreme Court has held that prior to Assessment Year 2013–14, no interest is to be charged under section 234B of the Act. Charging of interest under section 234C is consequential. We, accordingly, direct the Assessing Officer to charge interest as per provisions of the law.
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2021 (11) TMI 1032
TP Adjustment - Comparable selection - HELD THAT:- ICRA Techno Analytics Ltd comparable has been considered as not comparable in the case of Electronics and Imaging India Pvt. Ltd. cited [2016 (2) TMI 1123 - ITAT BANGALORE] Accordingly, we direct the AO /TPO to exclude the same from list of comparables.
Infosys Ltd. having a huge brand value and intangibles as well as having bargaining power, the same cannot be compared with the assessee who is providing services to its AE.
Persistent Systems Ltd is functionally dissimilar, being engaged in software product development and intellectual property led business.
Tata Elxsi company even in the software development segment is engaged in diversified activities of product design services, innovation design, engineering services, visual computing labs, etc. No contrary view has been brought to our notice regarding comparability of this company with that of a pure software development service provider. Accordingly we direct to exclude from the list of comparables.
Cat Technologies Ltd.- This has to go back to the file of AO/TPO to verify the related party transaction and if there is no related party transaction, this comparable is to be considered as comparable, while determining ALP of international transactions. With these observations, we remit the issue to the file of AO/TPO for fresh consideration.
Disallowance u/s 40(a)(ia) on deprecation claimed on purchase of Software - HELD THAT:- We find force in the argument of the ld.AR in view of the judgment in the case of Engineering Analysis Center of Excellence Pvt. Ltd., [2021 (3) TMI 138 - SUPREME COURT] wherein it is held that software purchased from nonresident is rightly capitalized by assessee in its books of account and are entitled for depreciation u/s 32 of the Act and not allowable to deduct TDS. As such, it cannot be denied depreciation on the purchase of software which has been actually capitalized by the assesee and directed to grant rate of depreciation on purchase of software and this been capitalized by the assessee.
Disallowance of depreciation on goodwill - HELD THAT:- Similar issue came up for consideration in assessee’s own case before the Hon’ble Supreme Court in the case of CIT Vs. Simfs Securities Ltd. [2012 (8) TMI 713 - SUPREME COURT] wherein it is held that “A reading of the words "any other business or commercial rig nature" in clause (b) of Explanation 3 to section 32(1) indicates that good-will would fall under the expression. The principle of ejusdem generis would strictly apply while interpreting the expression which finds place in Explanation 3(b). Goodwill is an asset under Explanation 3(b) to section 32(1) of the Act. Where the Commissioner (Appeals) held that the difference between cost of an asset and the amount paid by the assessee constituted good-will and that the assessee in the process of amalgamation had acquired right in the form of goodwill because of which the market worth of the assessee stood increase.
Depreciation @ 60% of turnover and net working equipment allowed.
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2021 (11) TMI 1031
Maintainability of petition - availability of alternative remedy or not - Levy of tax and penalty - detention of vehicles - HELD THAT:- It is an admitted position that no further appellate forum is now available to the petitioners against the impugned order of the appellate authority and the petitioners have no forum for remedy except this Court under Article 226 of the Constitution.
In view of the fact that no remedy is available to the petitioners this writ petition is admitted on condition that petitioners will deposit with the respondent concerned further 20 per cent of the disputed amount of tax within two weeks from date and if such deposit is made respondent concerned shall release the seized vehicles in question along with goods within three days from making such deposit subject to compliance of formalities.
List this matter for final hearing after five weeks.
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2021 (11) TMI 1030
Lack of jurisdiction in issuance of the impugned notice - Whether notice suffers from any inherent defect or jurisdiction? - HELD THAT:- No proceedings have been initiated against M/S Bhardwaj Unibuild Pvt Ltd. Therefore, it cannot be said that the notice suffers from any inherent defect or jurisdiction. Clearly the issuing authority, namely, Assistant Commissioner is the proper officer with respect to the noticee M/s Bhardwaj Constructions. Other objection being raised by the learned counsel for the petitioners arising from the business transfer w.e.f. dated 30.09.2018, is factual. It may be examined by the adjudication proceedings.
It is also found that the notice has been issued solely of the dictates of the higher authority. Though reference has been made to the communication received from the Additional Commissioner, we provide that in the event of petitioner no.2 participating in the proceeding and filling its objection, the respondent no.2 shall make an independent application of mind to the material on record and the objections raised by the petitioners and pass appropriate and reasoned order without being influenced by opinion, if any.
Though the show cause notice is not happily worded inasmuch as it does appear to suggest on first blush that the demand has been confirmed, yet it is again provided that the demand may be confirmed only after considering the petitioners' objections and meeting the same by a reasoned order. Respondent no.2 may also take care in future in wording such show cause notices appropriately - Petition disposed off.
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2021 (11) TMI 1029
Payment of remuneration and the litigation expenses incurred by the applicant - HELD THAT:- Applicant has failed to produce any written communication between himself and Mr. Gagan Bothra accepting the amount of fee payable to the Applicant and as such balance as claimed cannot be considered at this stage - Admittedly CoC has not approved the legal expenses payable to the IRP and the legal cost incurred by him as required under Regulation 33 of CIRP Regulations and as such claim of the IRP cannot be considered at this stage.
Petition dismissed.
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2021 (11) TMI 1028
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - time limitation - HELD THAT:- The application is complete and the term loan facility has been availed by the Corporate Debtor and the same has not been repaid by the Corporate Debtor, therefore there is default in payment of debt. That there is a valid Assignment of Debt and before the expiry of limitation period to initiate proceedings, there is a payment of ₹ 15 crore pursuant to the order of DRT and order of DRT is placed on record. Aggrieved by the order of DRT, Corporate Debtor went in Writ Petition before the Hon'ble High Court, Delhi. Hon'ble High Court's judgement is also placed on record - There is a valid acknowledgement on the part of the Corporate Debtor in the form of Settlement Proposal and there is settled law as declared by Hon'ble NCLAT in the matter of Manesh Agarwal Vs Bank of India and Anr. [2020 (8) TMI 697 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] where it was held that Article 137 of the Limitation Act shall be applicable for an Application filed under Sections 7, 9 or 10 of the I&B Code. Since the account of the Corporate Debtor was classified as NPA on 29th January 2013. Therefore, default started on 29th January 2013 and three years period of limitation was available for applying u/s Section 7 of the Code - thus, a fresh period of limitation of three years started w.e.f. 01st June 2016 in terms of Section 18 of the Limitation Act. Thus it is clear that the petition filed under Section 7 of the Code on 29th September 2018 is well within limitation.
The term "Without prejudice to the rights and contentions of the Corporate Debtor" does not negates the admission of the liability of the debt. Acknowledgement of liability under Section 18 of the Limitation Act, 1963 itself demands a broader interpretation to serve the ends of justice - it is opined that OTS shall constitute a valid acknowledgement under Section 18 of the Limitation Act, 1963.
Petition admitted - moratorium declared.
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2021 (11) TMI 1027
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - breach of Employment Contract - HELD THAT:- The counsel for Corporate Debtor would contend that the claim of the entire amounts made by the Operational are false and are denied. The counsel would contend that the Operational Creditor went on a vacation to Bali despite leave being not sanctioned which is in complete violation of the terms and conditions of appointment and thereby causing termination of services.
The counsel for Corporate Debtor would also contend that after the Operational Creditor termination, many clients who were availing services had abruptly cancelled their procedures apparently under Operational Creditor influence which is poaching of clients thereby causing huge loss to the Corporate Debtor as such the Operational Creditor is guilty of gross misconduct. The amounts which had to be refunded to the Corporate Debtor is ₹ 2, 13,000/- during the period from September, 2018 to January, 2019. Infact, the Corporate Debtor was seriously considering taking legal action for recovery of the amounts from the Operational Creditor - The counsel for Corporate Debtor would also contend that the Operational Creditor influenced other two Doctors and staff to leave the organisation and join a competitor which amounts to gross misconduct and poaching of staff and sharing crucial information of the Corporate Debtor with the competitors.
Prima facie there is a breach of Employment Contract, she went outside without sanction of any leave or permission. Relying on the documents filed by both the parties, the petition deserves to be dismissed.
The petition is dismissed.
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2021 (11) TMI 1026
Revision u/s 263 - claim of carried forward of losses u/s 72A allowed by AO - as per HC Sanction of a scheme of amalgamation under Section 18 of the said Act necessarily implies that the requirements of Section 72A of the Income Tax Act have been met and the BIFR must exercise the power conferred upon it by Section 3 2 ( 2} of the said Act and make the declaration contemplated by Section 72A of the Income Tax Act - action of the assessing officer, though prejudicial, can hardly be termed as ‘erroneous’ - HELD THAT:- SLP dismissed.
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2021 (11) TMI 1025
Additions of delayed employees contribution towards ESI/PF - AR submitted that the assessee-company deposited employee’s contribution of PF/ESI though with a delay of few days from the due dates mentioned in the respective Acts, however the same was deposited well before the due date of filing of return of income - HELD THAT:- In the instant case, admittedly and undisputedly, the employees’ contribution to ESI and PF collected by the assessee from its employees have been deposited well before the due date of filing of return of income u/s 139(1) of the Act. Further, the ld D/R has referred to the explanation to section 36(1)(va) and section 43B by the Finance Act, 2021 and has also referred to the rationale of the amendment as explained by the Memorandum in the Finance Bill, 2021, however, we find that there are express wordings in the said memorandum which says “these amendments will take effect from 1st April, 2021 and will accordingly apply to assessment year 2021-22 and subsequent assessment years”.
In the instant case, the impugned assessment year is assessment year 2019-20 and therefore, the said amended provisions cannot be applied in the instant case - See SHRI GOPALAKRISHNA ASWINI KUMAR VERSUS THE ASSISTANT DIRECTOR OF INCOME TAX, BENGALURU [2021 (10) TMI 952 - ITAT BANGALORE] - Decided in favour of assessee.
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2021 (11) TMI 1024
Denial of exemption u/s.11 - applicability of proviso to section 2(15) - HELD THAT:- This Tribunal for A.Y. 2009-10 in assessee’s own [2021 (10) TMI 224 - ITAT MUMBAI] case had duly addressed the (i) issue of claim of exemption us/.11 of the Act together with its eligibility for the assessee herein; (ii) applicability of proviso to section 2(15) of the Act; (iii) applicability of CBDT Circular No.11/2008 dated 19.12.2008; (iv) applicability of decision of Kolkata Tribunal in the case of Indian Chamber of Commerce vs. ITO [2014 (12) TMI 256 - ITAT KOLKATA], among other decisions; and (v) narrating the objects of the assessee trust, giving a categorical finding that the said objects are indeed charitable in nature and not intended for the purpose of profit.
We find from the perusal of the order of the ld. CIT(A),had individually analysed the varied stream of receipts/incomes derived by the assessee and had concluded those receipts to be earned with a profit motive. We find that the very same stream of receipts/incomes were indeed present in A.Y. 2009-10 also for the assessee. The very same stream of incomes/receipts were found to be charitable in nature by this Tribunal in A.Y. 2009-10. There is absolutely no differentiating fact brought on record by the ld. Departmental Representative (ld. DR for short) before us to drive home the point that the decision rendered by this Tribunal for A.Y. 2009-10 is not applicable to the years under consideration.
In view of the identical facts prevailing in A.Y. 2009-10 with that of the years under consideration, we hold that the decisions rendered hereinabove by this Tribunal for A.Y. 2009-10 shall apply mutate mutandis for the years under consideration also. Accordingly, ground nos. 1 to 4 raised by the assessee for all the years under consideration are allowed.
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2021 (11) TMI 1023
Income accrued in India - Hardware receipts held to be chargeable to tax in India - receipts on sale of hardware with software embedded therein can be taxed as royalty or not? - assessee is a non-resident foreign company incorporated in United Kingdom - hardware is primarily in the form of viewing cards, Set-top-Box (STB) and other connected components,usually used in viewing television through satellite. The embedded software is required to run the hardware components - assessee claimed before the AO that the receipts not offered to tax cannot be regarded as royalty in the hands of the assessee and in particular in the light of the definition of royalty as given in article 12(3)(a) of the Double Taxation Avoidance Agreement (DTAA) between India and UK - HELD THAT:- Since the AY is AY 2010-11 (ie, prior to the Finance Act, 2012 amendment by way of inserting Explanation 4 to Section 9(1)(vi) of the Act, as per the SC in its judgment, the Finance Act, 2012 amendment has to be read as expanding the scope of royalty with prospective effect from the Assessment Year 2013-14 (After FA, 2012 was enacted) and cannot be upheld as clarificatory so as to apply retrospectively for previous assessment years (para 73 - 74, 78 and 79). Therefore, the payments made under the customer contracts are not be treated as “royalty” under section 9(1)(vi) of the Act itself for the subject AY 2010-11, even without reference to the DTAA. Under the DTAA, clearly these are not “royalty” payments under Article 12 of the India – UK DTAA as held by the SC (UK DTAA has also been examined by the SC para 40.
Hon’ble Supreme Court in the case of Engineering Analysis Centre of Excellence (P) Ltd. [2021 (3) TMI 138 - SUPREME COURT] ) held that A copyright is an exclusive right that restricts others from doing certain acts. A copyright is an intangible right, in the nature of a privilege, entirely independent of any material substance. Owning copyright in a work is different from owning the physical material in which the copyrighted work may be embodied. Computer programs are categorised as literary work under the Copyright Act.
The court held that a licence from a copyright owner, conferring no proprietary interest on the licensee, does not involve parting with any copyright. It said this is different from a licence issued under section 30 of the Copyright Act, which grants the licensee an interest in the rights mentioned in section 14(a) and 14(b) of the Copyright Act. What is ‘licensed’ by the foreign, non-resident supplier to the distributor and resold to the resident end-user, or directly supplied to the resident end-user, is the sale of a physical object which contains an embedded computer program. Therefore, it was a case of sale of goods.
Whether the provisions of the Act can override the provisions of the DTAA? - By virtue of Article 12(3) of the DTAA, royalties are payments of any kind received as a consideration for "the use of, or the right to use, any copyright "of a literary work includes a computer program or software. It was held that the regarding the expression "use of or the right to use", the position would be the same under explanation 2(v) of section 9(1)(vi) because there must be, under the licence granted or sales made, a transfer of any rights contained in sections 14(a) or 14(b) of the Copyright Act. Since the end-user only gets the right to use computer software under a non-exclusive licence, ensuring the owner continues to retain ownership under section 14(b) of the Copyright Act read with sub-section 14(a) (i)-(vii), payments for computer software sold/licenced on a CD/other physical media cannot be classed as a royalty.
The terms of the licence in the present case does not grant any proprietory interest on the licencee and there is no parting of any copy right in favour of the licencee. It is non-exclusive non-tranferrable licence merely enabling the use of the copy righted product and does not create any interest in copy right and therefore the payment for such licence would not be in the nature of royalty as defined in DTAA. We therefore hold that the sum in question cannot be brought to tax as royalty.
On the question whether the sums in question can be taxed as FTS, we agree with the submissions made by the learned counsel for the Assessee set out in paragraph-18 & 19 of this order and hold that the sums in question cannot be brought to tax as FTS.
Whether the sum which was offered to tax by the assessee and which by virtue of our conclusions as aforesaid cannot be regarded as royalty or FTS and hence cannot be taxable, the Revenue should be directed to not to tax the aforesaid sum also - Thus taxability of receipts on sale of set-top-box, the amount offered to tax by the assessee which is now found to be not taxable cannot be brought to tax. We hold and direct accordingly and allow the ground of appeal.
Reimbursements from Cisco Video for expenses incurred on behalf of Cisco Video - HELD THAT:- We hold that pure reimbursement does not give rise to any income and the decisions cited by the learned AR in this regard lay down the above principle. We find that the revenue authorities have not firstly held that as to whether there was one-to-one tally of sums spent by the Assessee that was reimbursed by NDS Pay Tv. Once this factual finding is rendered then there has been no payment for any services whatsoever. The question is can one infer that the sums reimbursed were for services rendered by Assessee when there is one to one tally. In our view it cannot be said so. As we have already mentioned the AO has proceeded to draw inferences on surmises and conjectures. Firstly there is no evidence to show that services were rendered which can be termed as FTS. Under the DTAA FTS can be taxed only when it makes available technical knowledge to the person making payment. On the application of “make available” clause of the DTAA, there is no finding whatsoever as to what was the technical service made available to NDS Pay TV. We, therefore, deem it fit to set aside this issue and remand the same for consideration by the AO in the light of the observations made above (in particular with regard to actual tally of expenses incurred and reimbursed by NDS Pay Tv to Assessee), in accordance with law, after affording assessee opportunity of being heard.
Non-grant of credit for TDS - HELD THAT:- It would be just and appropriate to direct the AO to consider the calim of the assessee and allow credit in accordance with law. The issue raised by the assessee in ground No.6 is with regard to levy of interest under section 234B of the Act. In this regard, we find that the issue with regard to levy of interest under section 234B in the case of a non-resident has been settled by the Hon’ble Supreme Court in the case of DIT Vs. Mitsubishi Corporation [2021 (9) TMI 875 - SUPREME COURT] and took when the assessee is a nonresident foreign company incorporated in Japan and when the entire income that arises to them and the payment them is subject to deduction of tax at source there was no question of advance tax payment by assessee, accordingly, no interest under section 234B could be levied upon assessee.
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2021 (11) TMI 1022
Delay in the payment of EPF relatable to the employees’ contribution as far as the time limit set out by the specific Act - HELD THAT:- It is an admitted fact that there was a delay in the payment of EPF relatable to the employees’ contribution as far as the time limit set out by the specific Act is concerned. It is also an admitted fact that the return was filed by the assessee within the due date as per the time limit as set out u/s 139(1) of the Income Tax Act. Hence, the amount of the employees’ contribution of the EPF stood paid before the filing of the return. It is seen that the disallowance made was sustained by Addl. Commissioner on account of the fact that the Amendments carried out by Finance Act 2021 in Sections 36(1)(va) and Sec. 43B were considered to be clarificatory, hence retrospective in nature. The said view has consistently been held to be incorrect by various orders of the ITAT as on a bare consideration of the Notes on Clauses appended to the Finance Bill it was clarified that the Amendment will take effect from the First April 2021. Thus, the legal position thereon is well settled. See INSTA EXHIBITIONS PVT. LTD, C/O. CHACHAN & LATH [2021 (8) TMI 1235 - ITAT DELHI].
We hold that the disallowance sustained in the present appeal by the CIT(A) qua the employees’ contribution despite late payment qua the specific Act cannot be made. Admittedly, in the facts of the present case the payment has been made well within the time line as set out under the Income Tax Act u/s 139(1). Thus, admittedly the return of income was filed well within time after making the specific payments. The position of law that the Amendments carried out by the Finance Act, 2021 are prospective in nature and not declaratory stand well settled. The disallowance, accordingly, cannot be sustained. - Decided in favour of assessee.
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2021 (11) TMI 1021
Disallowance u/s 36 (1)(va) - disallowance on account of late payment of ESI collected from its employees - addition made on account of the fact that this amount out of a payment was found to have been deposited late in terms of the statutory requirements of the specific Act - HELD THAT:- Tribunal has allowed similar claims of the assessee taking note of the fact the various Co-ordinate Benches have consistently held that the amendment to section 36(l)(va) and u/s 43B of the Act effected by the Finance Act 2021 is applicable prospectively. Reading from the Notes on Clauses at the time of introduction of the Finance Act, 2021, it has been held that the amendment is applicable from 2021-22 and subsequent assessment year. Accordingly, considering the factual backdrop of the present case and considering the amendments in Section 36(1)(va) as well as Section 43B carried out by Finance Act, 2021 and Memorandum explaining the provisions in Finance Bill, 2021 we hold that the impugned disallowance is not sustainable. Accordingly, it is directed to be deleted. The appeal of the assessee is allowed.
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2021 (11) TMI 1020
Addition u/s 36(l)(va) - Delay deposits of ESI and PF from salary of the employees - as submitted whole of the amount had been,' deposited well before the due date of filing of Income Tax Return - whether the Amendments carried out by the Finance Act, 2021 in Section 36(l)(va) and u/s 43B of the Act were prospective in nature or retrospective? - HELD THAT:- Tribunal has consistently allowed similar claims of the assessee holding that the Amendments effected by the Finance Act 2021 to section 36(l)(va) and u/s 43B of the income Tax Act are not clarificatory in nature and they do not have retrospective effect and are applicable prospectively. Reading from the Notes on Clauses at the time of introduction of the Finance Act, 2021, it has been held that the amendment being applicable in relation to assessment year 2021-22 and subsequent years. Accordingly, considering the factual backdrop of the present case and considering the amendments in Section 36(1|)(va) as well as Section 43B carried out by Finance Act, 2021 and Memorandum explaining the provisions in Finance Bill, 2021 we hold that the impugned disallowance is not sustainable. Hence, the addition is directed to be deleted as the amount stood deposited by the due date as held in Section 139(1) - Decided in favour of assessee.
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2021 (11) TMI 1019
Liquidation of Corporate Debtor - non-compliances on the part of the Resolution Applicant - provision for extension of payment time provided in the implementation of the Resolution Plan, not existing - HELD THAT:- Although, this Adjudicating Authority was of the view that the Resolution Applicant has grossly failed in meeting its commitments in respect of implementation of the Resolution Plan, liquidation is the last resort when all other available options fail in the CIRP. In the interest of all the stakeholders and also the implementation of the Resolution Plan, after considering all the facts and circumstances of the case, allowed one last opportunity to the Resolution Applicant to fulfil all its commitment and financial obligations stated in the Resolution Plan by 31.10.2021, clearly stating that if it fails this time, actions as may be deemed appropriate as per law, shall be taken. The Resolution Applicant was also directed to submit a Weekly Progress Report in implementation of the Resolution Plan in the Registry. In total disregard to Orders of this Tribunal the Applicant has grossly failed in its commitments.
The conduct of the successful resolution applicant is completely lacking in bona fides and is therefore questionable. After such non-compliances seeking further time for the required compliances, for any reason whatsoever, is not acceptable to this Tribunal at this stage, more particularly when conduct of the applicant in its earlier commitments and compliances in response to earlier Orders of Tribunal in itself is questionable.
This Application is rejected while questioning the conduct of the Resolution Applicant in the entire matter - Application dismissed.
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2021 (11) TMI 1018
Dismissal of appeal for non prosecution - whether notice of hearing was ever served upon the assessee? - HELD THAT:- CIT(A) has dismissed the appeal without providing proper opportunity to the assessee. Moreover, he has not decided the appeal after discussing in detail, his reasons for agreeing with the assessment order. In this view of the matter, another opportunity of hearing requires to be given to the assessee to represent his case fully before the ld. CIT(A). Even otherwise, it is trite [‘S. Velu Palandar [1971 (8) TMI 42 - MADRAS HIGH COURT] and ‘Ms. Swati Pawa [2019 (4) TMI 89 - ITAT DELHI] and incumbent on the ld. CIT(A) to decide an appeal on merit even in the absence of any representation before them.
The matter is remitted to the file of the ld. CIT(A) to be decided afresh on merit, in accordance with law, on affording due and adequate opportunity of hearing to the assessee. The assessee, no doubt, shall cooperate in the fresh proceedings before the ld. CIT(A). All pleas available under the law shall remain so available to the assessee. Assessee appeal allowed for statistical purposes.
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2021 (11) TMI 1017
Late ESI/PF payments - Payment before filing of the return u/s 139(1) in 2018-19 assessment year - HELD THAT:- As we read from the Notes on Clauses at the time of introduction of the Finance Act, 2021 and have held that the amendment is applicable in relation to the assessment year 2021-22 and subsequent years and not retrospectively. Thus, in view of this legal position as considered in the case of CIT Vs Nuchem Limited [2010 (2) TMI 959 - PUNJAB AND HARYANA HIGH COURT] and CIT Vs Hemla Embroidery Mills Pvt. Ltd. [2013 (2) TMI 41 - PUNJAB AND HARYANA HIGH COURT] we are of the view that the additions cannot be made or sustained on the strength of the amendment effected by Finance Act, 2021 to Sections 36(1)(va)/43B of the Act as the legal position thereon is very clear. The departmental stand that it is clarificatory in nature has consistently been rejected.
We find that the claim of the assessee is to be allowed in the year under consideration which is 2018-19 assessment year. The impugned order, accordingly, is set aside and the AO is directed to delete the disallowance. The appeal of the assessee is allowed.
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