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Showing 181 to 200 of 1886 Records
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2017 (12) TMI 1711
Principles of natural justice - the petitioner did not respond to the revision notice dated 16.08.2017 - petitioner's case is that they sent a representation dated 20.09.2017 by registered post requesting for time and such representation was received in the office of the respondent on 21.09.2017 as seen from the postal acknowledgement card and the respondent could have granted time - HELD THAT:- This Court is of the view that one more opportunity may be granted to the petitioner to go before the Assessing Officer, more so, when the proposed revision of assessment is based upon the materials culled out from the official website of the Department. Such direction would be coupled with certain conditions.
Petition allowed by way of remand.
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2017 (12) TMI 1710
Principles of natural justice - no opportunity to cross examine one Ghanshyam Pandey was afforded - transport of goods took place or not - Assessment Year 1995-96 - HELD THAT:- The fact that the business had closed down by the time the Assessing Authority proceeded to frame the assessment order all over again on 17 October 2006, cannot result in the assessee being visited with adverse consequences since undisputedly he had been insisting from the very beginning that the statement of the said witness was being denied and that an opportunity to cross examine must be provided.
When taxing authorities choose to levy tax or conclude that payment of tax has been evaded on the basis of statements of individuals, the assessee must necessarily be granted an opportunity to cross examine. Such adverse material can neither be introduced nor form the foundation for the imposition of additional tax without an opportunity being accorded to the assessee to challenge the statement in cross examination - this Court finds itself unable to sustain the orders passed by the Assessing Authority as well as the Tribunal.
Revision allowed.
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2017 (12) TMI 1709
Specific Performance in relation to the agreement - bar created by Section 31 of the Bombay Prevention of Fragmentation and Consolidation of Holdings Act - HELD THAT:- Validity and enforceability of the agreement in question is concerned, it was rightly held by the High Court to which we concur that the agreement in question is not hit by Section 48 of the Maharashtra Co-operative Society Act inasmuch as the agreement to sell in itself does not create any interest in the land nor does it amount to sale under Section 54 of the T.P. Act. It only enables the intending buyer to claim specific performance of such agreement on proving its terms. In other words, there lies a distinction between an agreement to sell, and sale. The latter creates an interest in the land once accomplished as defined under Section 54 of the T.P. Act. It was also rightly held on facts to which we concur that since the dues of the Land Development Bank were repaid, the question of applicability of Section 48 did not arise. We, therefore, find no ground to disagree with this factual finding.
This being a finding of fact, it could not be disturbed in second appeal and was binding on the High Court. It was more so when the first Appellate Court had recorded its finding by appreciating the entire evidence on record. We, therefore, find no ground to disagree with this finding of the High Court.
Time limitation - HELD THAT:- It was rightly held by the High Court to which we again concur that, firstly, it was neither raised before the Trial Court and nor before the first Appellate Court; and secondly, it being a mixed question of law and fact, the same could not be examined, for the first time, in second appeal by the High Court. We agree with the finding of the High Court calling for no interference.
Appeal dismissed - decided against Revenue.
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2017 (12) TMI 1708
Addition u/s 40(a)(ia) - TDS was not deposited with the statutory period, the expenditure so claimed was voluntarily added back in the computation of income as not allowable under section 40(a)(ia) - HELD THAT:- Where in respect of any sum, tax has been deducted in any subsequent year, such sum shall be allowed as deduction in computing the income of the previous year in which such tax has been paid. In such circumstances, the conclusion of CIT(A) to hold that since genuineness of expenditure stood examined in assessment year 2005-06 and tax was duly deducted in assessment year 2006-07, therefore, the disallowance made in the impugned order of assessment was on account of non-genuineness of expenditure was not tenable.
We also find that CIT DR has though extensively relied on enquiries conducted by learned AO but has failed to controvert the factual findings recorded by learned CIT (A), and the status of directions to the revenue authorities to take appropriate action as per law for AY 2005-06 and bring to tax the above expenditure as non genuine in AY 2005-06. As relying on SIR KIKABHAI PREMCHAND VERSUS COMMISSIONER OF INCOME-TAX (CENTRAL) , BOMBAY [1953 (10) TMI 5 - SUPREME COURT] we uphold the deletion of addition
Addition on account of discrepancy in the books of accounts of the assessee company - HELD THAT:- The fact of the matter remains that ₹ 2,00,00,000/- was explained by the assessee having been paid by debiting account of the group company and such payments have been made through banking channels. The revenue has not been able to place any material to rebut the aforesaid cogent explanation tendered in the appellate proceedings. No opportunity was granted in the assessment proceedings. We also notice that identical addition had been made in the order of assessment dated 31.12.2010 u/s 153A/143(3) of the Act in pursuance to search conducted on 5.11.2009 under section 132(1). The said addition stood deleted in an order passed by CIT(A) though the revenue has preferred an appeal but such deletion of addition has not been challenged before us which also supports the aforesaid claim of the assessee company. Having regard to the aforesaid factual position, we uphold the deletion of addition
Addition being an expenditure incurred on payments to SCLL as compensation by the assessee company - statement of Shri S.K Gupta, Director SCLL recorded in which Shri Gupta and reportedly stated that SCLL was involved in giving bogus entries, that the impugned transaction with Puri Construction Ltd. was not a genuine transaction - HELD THAT:- The addition so made solely on the basis of statement of Sh. S.K. Gupta’s statement and without rebutting the documentary evidences so relied on by the assessee company is hereby deleted - The material available on record that the statement of arbitrator, Sh. Om Prakash, retired Additional & Sessions Judge, who acted as an arbitrator between assessee company and M/s SCLL wherein, the learned judge had accepted regarding the award so granted between dispute pending between assessee and M/s SCLL and the said fact has not been rebutted by the learned counsel of Revenue and as such, this fact is also important to establish and substantiate the fact that the amount so paid to M/s SCLL is genuine and justified.
Addition on account of land development expense paid to M/s Manami Construction Pvt. Ltd. - HELD THAT:- Documentary evidences were arbitrarily brushed aside by both learned AO and CIT (A) and further, the reliance so placed on investigation carried out by learned AO was prior to the date of affidavit of director of M/s Manami Construction Co. Pvt. Ltd., wherein, current address of the said concern was furnished by the assessee company and further, all the details in the shape of nature of work done and payment made was also furnished before the learned AO, which all remained unrebutted and uncontested by lower authorities - Thus the disallowance made and sustained is deleted and the ground raised by the appellant is allowed.
Assessment u/s 153A - original assessment proceedings under section 143(3) - HELD THAT:- We have noticed that AO in section 153A proceedings has merely repeated the additions so made in original assessment proceedings under section 143(3) of the Act and there was no new addition made by learned AO during section 153A proceedings. Thus, on the date of search i.e. on 05.01.2009, the assessee company’s assessment was finalized on 31.12.2008 and as such, the proceedings were not pending on the date of search and thus, additions could only have been made in proceedings under section 153A of the Act only when any incriminating material was found during the search.
The only material (if any) on which reliance is placed by AO is the statement of Sh. Mohinder Puri and construing it to be incriminating in nature is also unjustified, as the statement cannot be construed to be incriminating in nature and more specifically when the said statement has been retracted subsequently and has not been acted upon and as such, the additions so made in an order under section 153A/143(3) of the Act for impugned assessment year are in excess of scope of assessment.
Thus, it is held that the additions so made under section 153A of the Act are mere repetition of additions made in assessments already made under section 143(3) of the Act and as such, all the additions so made are beyond the scope of assessment of provisions of section 153A of the Act and thus, the said ground raised in Rule 27 of ITAT Rules by assessee – appellant is allowed.
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2017 (12) TMI 1707
Fringe Benefit Tax - power of CIT(A) to entertain the revised computation of the value of fringe benefits filed by the assessee before the AO - computing the value of chargeable expenditure for fringe benefits the assessee had considered the reimbursement of medical expenses as chargeable expenditure for calculation of fringe benefit tax - assessee claimed that the return of fringe benefit filed by it should be treated so as not to include reimbursement of medical expenses - HELD THAT:- Law is now well settled that the appellate authorities have the power to entertain a new claim by the assessee even in the absence of a revised return of income. CIT(A) erred in not examining the claim of the assessee for the reason that the claim made by the assessee to exclude certain items of the expenditure from value of fringe benefit was contrary to the return of fringe benefit filed by the assessee. The tax liability cannot be determined on the basis of admission and has to be in the light of the relevant statutory provision. We therefore hold that the CIT(A) was not justified in examining the claim of the assessee in this regard. We therefore proceeded to examine the correctness or otherwise of the claim by the assessee in this regard.
It is not disputed by the revenue that reimbursement of medical expenses was perquisite in the hands of the employees and tax is payable on the employee on such perquisite subject to basic deduction and exemption allowed under the Act. Under section 115WB(3) such expenditure cannot be part of fringe benefit provided by the employer to the employees. Therefore the claim of the assessee to exclude the reimbursement expenses from the chargeable expenditure for calculation of fringe benefit tax has to be accepted. The decision of DCIT vs Wipro Ltd [2014 (9) TMI 953 - ITAT BANGALORE] supports the plea of the assessee in this regard.
As far as the plea of the assessee for excluding the expenditure of providing uniforms to the chauffeurs is concerned it is clear from the policy of the company and the nature of its business that these are necessary for the purpose of carrying on its business and cannot be regarded as any benefit or welfare facility provided to the employee by the employer. CBDT Circular referred to by the ld. Counsel for the assessee clearly provides that similar items of expenses cannot be considered for the purpose of arriving at the value of fringe benefit. We therefore agree with the submissions of the assessee that the aforesaid item of expenditure cannot be include as expenditure in providing the fringe benefit.
The claims made by the assessee for exclusion of both the items of expenditure are accepted and the AO is directed to exclude the aforesaid expenditure from the chargeable expenditure for calculation of fringe benefit for levying of fringe benefit tax. - Decided in favour of assessee.
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2017 (12) TMI 1706
Addition u/s 69 - undisclosed investment - Search u/s 132 was conducted at business cum residential premises of assessee - addition on the basis of a ledger, seized from the possession of Shri Manish Tambi whose premises were covered under search operation u/s 132 - as alleged assessee has not provided the reasonable explanation offered to him, the evidences produced before him about the nature and source of investment - HELD THAT:- Issue in question is covered by the decision SHRI MANISH TAMBI VS. THE DCIT CENTRAL CIRCLE-1 JAIPUR AND VICE-VERSA. [2014 (3) TMI 1148 - ITAT JAIPUR] as held addition u/s 68 of the Act can be made only if any sum is found credited in the books of the assessee. A book means a collection of sheets of papers bound together with the intention that such binding shall be permanent and papers used are kept collectively in one volume. A book which contains successive entries of items maybe a good memorandum book but until those entries are totaled or balanced or both as the case may be, there is no reckoning and no accounts. A book which merely contains entries of items of which no account is made at any time, is not a ‘’book of account’ in a commercial sense. Thus the addition made u/s 68 is not justified.
Addition u/s 69B - Also peak determined by the A.O. is not correct, otherwise also, when once peak amount has been added then no separate addition is required. It seems that the A.O. has not properly prepared the list of debtors and creditors based on any logic. CIT(A) has confirmed the addition under the Provisions of Section 69B. This section relates to investment made by the assessee in the acquisition of bullion/jewellery or other valuable articles but it does not speak about any investment in debtors. Moreover, Section 69B also stipulates the position where the investment exceeds the amount shown in the books of account. Since the assessee does not maintain any books of account wherein the debtors and creditors are reflected , therefore, this addition has also been wrongly made and upheld u/s 69B - Decided in favour of assessee.
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2017 (12) TMI 1705
Addition u/s 69B - unexplained investments and interest thereon - HELD THAT:- Peak determined by the A.O. is not correct, otherwise also, when once peak amount has been added then no separate addition is required. It seems that the A.O. has not properly prepared the list of debtors and creditors based on any logic.
CIT(A) has confirmed the addition under the Provisions of Section 69B. This section relates to investment made by the assessee in the acquisition of bullion/jewellery or other valuable articles but it does not speak about any investment in debtors.
Section 69B also stipulates the position where the investment exceeds the amount shown in the books of account. Since the assessee does not maintain any books of account wherein the debtors and creditors are reflected , therefore, this addition has also been wrongly made and upheld u/s 69B of the Act. Hence, in our considered opinion, only commission income has to be determined in this case and nothing more. Accordingly, we reverse the findings of the ld CIT(A) and order to delete the entire addition so made. - Decided in favour of assessee.
Addition u/s 68 - unexplained cash addition as assessee could not prove the source of advances received - HELD THAT:- Revenue’s claim that during the course of survey concerns giving advances were found to be non-existent. However, the assessee claims that the above concerns were having PAN and the new address could have been ascertained from Registrar of Companies. It is also noted that the ACB, Govt. of Rajasthan, Jaipur has conducted the similar enquiries against the concerns at Mumbai and found the concerns were not existing on the given registered office addresses. The ld.AR of the assessee submitted that lower authorities have referred and relied on the enquiries conducted by the ACB, Govt. of Rajasthan, however, no such report of ACB was made available to the assessee at any stage. Assessee was not provided opportunity to controvert the report if any. There is violation of natural justice. Law does not allow such act. Thus it will be in the interest of equity and justice to restore the issue to the file of the AO to decide it afresh - Decided in favour of assessee for Statistical purposes.
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2017 (12) TMI 1704
Valuation of closing stock - assessee following weighted average method - AO rejected the valuation made by assessee and instead applied FIFO method - books of accounts have been rejected by AO to the extent of the valuation of stocks - HELD THAT:- Statutory provisions for computation and disclosure of income chargeable under the head profit and gains of business or profession, we find that undisputedly assessee has been following weighted average method in valuing the closing stock in the previous years which has not been disturbed by revenue authorities.
Weighted average method is also considered to be one of the method which reflects the fairest possible approximation of cost incurred, by the Institute of Chartered Accountants in their Accounting Standards. Therefore we do not find any justification in rejecting this method of valuation by AO. Moreover AO has also not furnished any reasonable explanation for rejecting the method consistently adopted by assessee. We are therefore inclined to allow this ground raised by assessee. As we have upheld the weighted average method for valuation of closing stock, we allow ground raised by the assessee wherein the books of accounts have been rejected by Ld. AO to the extent of the valuation of stocks.
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2017 (12) TMI 1703
Deduction u/s 10AA - denial of deduction as the assessee-company had not provided any services and the assessee-company had not complied with the condition stipulated under sub-section (4) of section 10AA - CIT-A deleted addition - HELD THAT:- Any undertaking established in a SEZ is entitled to claim a relief from its profits, provided it is engaged in the manufacture or production of articles or things or provision of any service. From the above, BRL being in unit has correctly claimed relief under section 10AA of the Act on income derived from export of research services. The appellant is entitled to Section 10AA relief.
It is undisputed fact that the M/s. Biocon Ltd., also enjoys the SEZ status. Therefore, by selling platform technology to the assessee-company, the motive of tax evasion cannot be attributed to M/s. Biocon Ltd., Furthermore, M/s. Mylan Ltd., also said to be unrelated party. Therefore, it cannot be even imagined that without any value addition by the assessee-company, M/s. Mylan would have paid so much of consideration. This factor, should clinch the issue in favour of the assessee-company. Thus viewed from any angle, the assessee-company cannot be denied the benefit of deduction u/s. 10AA though the reasoning adopted by the CIT(A) is cryptic. No reason to interfere with the order of the CIT(A) this issue. - Decided against revenue
TDS liability on reimbursement of actual cost incurred - addition u/s 40(a)(ia) - HELD THAT:- There was no dispute with regard to the contention of the assessee-company that subject payments are merely reimbursement of the cost incurred and no profit element was present. Further there was no dispute that the payees had shown receipts as income in their respective hands and discharged the tax liability. In the light of these facts, we hold that the assessee-company is not under obligation to deduct tax at source on the payments which are not liable to tax in the hands of the payee. Further we find no reason to differ with the reasoning of the CIT(A) that when the second proviso to section 40(a)(ia) is applicable to the facts of the present case there is no obligation to deduct tax at source and consequent disallowance u/s. 40(a)(ia). See M/S. TE CONNECTIVITY INDIA PVT. LTD. VERSUS INCOME-TAX OFFICER (LTU) (TDS) , BANGALORE [2016 (5) TMI 1222 - ITAT BANGALORE] . Thus, we do not find any reason to interfere with the order of the CIT(A). - Decided against revenue
TDS u/s 195 - services rendered by non-resident parties - HELD THAT:- The assessee-company is only entitled to use the annual report given by those parties which does not mean that technology is made available to it. The co-ordinate bench of Tribunal (Delhi) in the case of ITO vs. Nokia India Pvt. Ltd. [2015 (7) TMI 476 - ITAT DELHI]) has considered an identical issue The assessee-company is not under obligation to deduct tax at source on the payments made to non-resident parties and therefore, the question of consequent disallowance u/s. 40(a)(ia) does not arise. Thus, the grounds of appeal are allowed.
disallowance u/s. 14A - HELD THAT:- In the present case, there is no dispute that surplus fund far exceeds investments made. Therefore, it should be presumed that investments are made out of surplus funds of the assessee and the question of disallowance on account of interest does not arise.
As regards disallowance of indirect expenditure, in the absence of recording satisfaction as to how claim of the assessee is incorrect, no disallowance can be made. The assessee-company placed reliance on the decision of the co-ordinate bench cited supra and the ratio of the decision is squarely applicable to the facts of the present case. Thus, this ground of appeal is allowed.
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2017 (12) TMI 1702
Review petition - Payment made without deducting any tax at source - alternative point urged, of the payee being exempted from payment of income tax - HELD THAT:- We have by our order in CIT vs Central Roller Flour Mills Ltd. [2017 (1) TMI 1672 - CALCUTTA HIGH COURT] held that review is possible in exercise of jurisdiction under section 260A of the Income Tax Act, 1961. We are satisfied that the assessee has made out good ground for review.
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2017 (12) TMI 1701
Restoration of the name of the Applicant Company to the Register of Companies - HELD THAT:- It is an admitted fact that the Company did not file its Annual Accounts and Annual Returns with effect from the Financial Year ending 2000-01 onwards till date due to which it has been "struck off' from the Register of the Companies during 2005, as the show cause notice was given on 20th of July, 2005 as contemplated under Section 560(1) of the 1956. There is no plausible Companies Act, explanation provided in the Application for non-filing of the Annual Accounts and Annual Returns with effect from 2000-01 onwards till date. It has also been admitted by the PCS during the hearing that the Company is not currently engaged in any business, it has only a plot of land. Therefore, a shell/ defunct company cannot be ordered to be restored.
This Bench is not satisfied to order the restoration of the name of the Company to the Register of Companies maintained by the concerned Registrar of Companies. Accordingly, the Company Application stands rejected.
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2017 (12) TMI 1700
Oppression and Mismanagement - it was alleged that the petitioner is interfering in the Company affairs along with his wife so as to cripple the Company - HELD THAT:- The shareholding of the Petitioner was not at all affected but in order to set right the affairs of Company, which is at crucial stage, the petitioner was removed from the position Of MD and Director in accordance with law. As rightly pointed out by the respondents, when Company itself has not started its operations as per its object as mentioned in its memo and all funding of the Company is met through sources of family of second respondent, the question of oppression and mismanagement in the affairs of Company, even to examine, is too premature.
The petitioner's interest is not too much adversely affected especially being a minority share holders and the mother is head of family. The petitioner is legally and morally bound by the decisions taken by the second respondent, who is mother Of petitioner and Chairperson also. The petitioner has also failed to establish any ingredients as prescribed under Sections 241 to 244 of Companies Act, 2013 so as to interfere in the affairs of the Company. However, the petitioner still holders of 13 % of Shares of the Company, is entitled for due notice for any ensuing meetings of the Company, and the Company should follow principles of natural justice, in conducting any future meetings/taking any decision(s).
The petitioner failed to make out any case so as to interfere in the affairs of the Company - petition dismissed.
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2017 (12) TMI 1698
Amortization of cost paid towards the acquisition of wasting asset i.e. mining land/leasehold land u/s 37 - Whether ITAT has not legally erred in not allowing the claim? - HELD THAT:- We are in complete agreement with the view taken by the tribunal, therefore, first issue is required to be answered in favour of the department and against the assessee.
Depreciation on license to use the land for mining - whether not covered by the definition of intangible asset u/s 2(11) ? - HELD THAT:- On a close scrutiny of Sub section 32 (ii) of the Income Tax Act in respect of depreciation of- (ii) know-how, patents, copyrights, trade marks, licences, franchises or any other business or commercial rights of similar nature, being intangible assets acquired on or after the 1st day of April, 1998,
In our considered opinion, the rights which are given to the assessee are of commercial rights which are akin to license for mining.
Expenditure incurred on computerization of Mines Department of the Government of Rajasthan - whether not qualify to be an expenditure expended “wholly and exclusively for the purpose of business” allowable u/s 37 ? - HELD THAT:- Taking into consideration the expenses which are done in view of decision in SA Builder’s case [2006 (12) TMI 82 - SUPREME COURT] and other judgments relied on the assessee, the issue is answered in favour of the assessee.
Benefit of deduction u/s 80IA - sum received on account of minimum guarantee covenant under the agreement by holding the same to be not ”derived” from the business of power generation undertaking - HELD THAT:- regarding liquidated damages which are given are business losses which the undertaking ought to have done, if the machines which were delivered to the assessee would have performed very well, therefore, damages which were given for loss of business which was guaranteed by the supplier, ALPINE SOLVEX LTD. [2004 (11) TMI 58 - MADHYA PRADESH HIGH COURT] will not apply in the present case. This is not damages for compensation for business loss. In that view of the matter, this issue is also answered in favour of the assessee and against the department.
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2017 (12) TMI 1697
Penalty u/s 271(1)(c) - Quantum additions deleted - HELD THAT:- CIT(A) has quashed the penalty orders is evident from the ground raised by the Department itself. A perusal of the impugned order shows that the reason for quashing the penalty orders has been the fact that the issue has been decided in favour of the assessee which has affirmed the order of the ITAT [2015 (12) TMI 1805 - ITAT CHANDIGARH] . Accordingly, once the additions stand deleted, the Revenue’s appeal in the peculiar facts and circumstances has no merit. - Decided against revenue
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2017 (12) TMI 1696
Disallowance of Bank Charges - as per AO assessee company had paid the bank charges for processing of working capital loan which in his opinion was a capital expenditure and hence not allowable under section 37(1) - HELD THAT:- DR had not brought to our notice any distinguishing facts in the present case as compared to the facts in the preceding years wherein identical expenditure had been held to be revenue in nature and allowed in appeal both by the CIT(Appeals) and the I.T.A.T. For the aforesaid reason, since the issue stands decided in favor of the assessee in preceding years and in the absence of any distinguishing facts having been brought to our notice, we uphold the order the of the Ld. CIT(Appeals) deleting the disallowance of bank charges
Addition u/s 14A r.w.r. 8D - A.O. made the impugned disallowance on account of the fact that the assessee company had made investments in shares/mutual funds, the income from which was exempt from tax - CIT(Appeals), restricted part addition as disallowance made on account of interest as per rule 8D(2(ii) of the Income Tax Rules,1962, for the reason that the assessee had sufficient interest free funds of its own for making the investments. The disallowance on account of administrative expenses as per rule 8D(2)(iii) was however upheld - HELD THAT:- No infirmity in the order of the Ld. CIT(Appeals) deleting the disallowance. The assessee had repeatedly contented both before the A.O. and the CIT(Appeals), that it had utilized its own interest free funds for the purpose of making the impugned investments which were made in earlier years. As submitted by the assessee that the said investments were made in financial years 2005-06 & 2006-07 when the cash accruals from the business of the company were to the tune of ₹ 37.08 Crores and ₹ 51.71 Crores which were sufficient for making the impugned investments of ₹ 34.65 Crores. Copies of financial statements of the said years were also filed. Based on the above facts the CIT(Appeals), we find, deleted the disallowance made following the decision of the jurisdictional High Court in the case of Hero Cycles Ltd. [2009 (11) TMI 33 - PUNJAB AND HARYANA HIGH COURT]
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2017 (12) TMI 1695
Restraint from encashing the Bank Guarantee furnished by the petitioner for securing the payment of custom duty - import of Hot Rolled Plates for Loharinag Pala Hydro Electric Power Project, Dist: Uttarkashi, Uttarakhand - HELD THAT:- It, prima facie, appears that the petitioner’s bank guarantees were to be released and NTPC Ltd. was required to furnish its bank guarantee(s) in lieu thereof.
Issue notice.
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2017 (12) TMI 1694
Revision u/s 263 by CIT - As per CIT no enquiries were conducted by AO in respect of sundry creditors - Whether no enquiry was undertaken by the Pr. CIT to come to the conclusion that the original assessment order was erroneous and prejudicial to the interest of revenue? - HELD THAT:- On perusal of the order of the ld CIT, it is noticed that it has not stated how the order of the AO is erroneous as complete income including the job work income was shown. It was also not stated that how the survey of the premises of the father of the assessee has made the order erroneous.
CIT has stated that why the tax has not been deducted at source on payments to ABC Enterprise. However, in the same order the CIT himself has stated that assessee was the proprietor of ABC Enterprise and M/s. Shiva International. As the payment is made from one proprietary concern to another proprietary concern of the same assessee, DR could not show any provision of tax deduction at source applicable. Furthermore, the ld CIT has not carried out any enquiry to show that order passed by the ld Assessing Officer is erroneous.
In view of this Hon'ble Delhi High Court in Pr.CIT Vs. Delhi Airport Metro Pvt. Ltd [2017 (9) TMI 529 - DELHI HIGH COURT] has held that when no enquiry was undertaken by the Pr. CIT to come to the conclusion that the original assessment order was erroneous and prejudicial to the interest of revenue, it cannot be sustained. When the ld CIT has sent the entire matter back to the file of Assessing Officer for fresh assessment can also be done only after he undertakes an enquiry. Apparently, same is missing in this case. - Decided in favour of assessee.
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2017 (12) TMI 1693
Freezing of Bank Accounts - conditional/unconditional de-freezing - HELD THAT:- Counsel for the petitioner submits that there has been a change in circumstance as show cause notice under Section 124 of the Customs Act has been issued and it is not alleged that the money in the bank accounts is liable to be confiscated. Notice under Section 121 of the Customs Act has not been issued in respect of the money. In these circumstances, the petitioner contends that the order of seizure of operation of the bank accounts deserves interference. Counsel also relies upon Section 110(2) of the Customs Act.
We would like the petitioner herein to first comply with the order dated 16th March, 2017 requiring the petitioner to furnish security for ₹ 10 crores. The said order has not been challenged by the petitioner. Once the said security is furnished, we would consider de-freezing the 43 bank accounts which were subject matter of Writ Petition.
Relist on 3rd January, 2018.
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2017 (12) TMI 1692
Rejection of books of accounts - Addition invocation of provisions of section 145(3) - HELD THAT:- Looking at the accounting standard for inventory valuation we do not find any infirmity in the method of techniques of measurement of cost as well as cost formula used by the assessee. The assessee in fact has followed the accounting standard only.
We find that provision of section 145(3) are incorrectly invoked by the AO and confirmed by the ld CIT(A) because the valuation method is correct and therefore, it does not impact the correctness or completeness of the account of the assessee. In fact it makes the accounts of the assessee complete and correct.
AO has applied the past year’s gross profit ratio in that year also the valuation of the inventory was on similar basis therefore, if opinion of the AO is accepted then it cannot be said that accounts of previous year were correct and complete. The method of valuation of inventory followed by the assessee is year to year same. The assessee has maintained complete quantitative details also. No defects have been pointed out by the AO in the books of account other than what is stated by the Auditor.
To invoke provisions of section 145(3) of the Act it is necessary that accounts of the assessee suffers from latent, patent and glaring errors.
In the present case, we do not find any such finding by the AO. Further, the assessee has given detailed reason for the down fall in the gross profit also. Further, the details of valuation of closing stock of the manufactured goods as per retail method were also filed before the lower authorities and no infirmity was found in the same. In view of this, we do not find any reason to sustain the orders passed by the lower authorities with respect to the invocation of provisions of section 145(3) of the Act and consequently, making the addition to the total income of assessee - Decided in favour of assessee.
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2017 (12) TMI 1691
Addition u/s 14A read with rule 8D - HELD THAT:- As in assessee’s case for the assessment year 2008-09 where in an identical issue on identical facts has been decided as observed that the disallowance should be worked out on proportionate method under rule 8D(2)(iii) and determined disallowance at ₹ 35,120/- applying the proportionate method on the total income and dividend income earned and total expenses in the current year. The only difference in the facts are with regard to the quantum of amount of dividend income earned and the quantum of expenses.
Considering the decision of the Co-ordinate Bench of the Tribunal and the overall expenses as well as the income and total income of the assessee, we are of the view that it would be fair and reasonable if a sum of ₹ 10 lakhs is disallowed under rule 8D(2)(iii). Accordingly, we direct the AO to disallow a sum of ₹ 10 lakhs under rule 8D(2)(iii). Resultantly, the appeal of the assessee is partly allowed.
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9911796707
