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Showing 21 to 40 of 1860 Records
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2018 (6) TMI 1842
Receipts chargeable to tax u/s 44BB - Whether revenues of the Assessee as Fees for technical Services (‘FTS’) ? - as argued services rendered by the Assessee were ‘in connection’ with installation/handling tools to facilitate wellhead/ X-mas tree installation relating to prospecting etc. of mineral oil.- HELD THAT:- In view of the above decision of Co-ordinate Bench rendered in the case of assessee itself for A.Y. 2010-11 as relying on ONGC [2015 (7) TMI 91 - SUPREME COURT] we have no reason to take a contrary view. Accordingly, we also hold that the receipts of the assessee are chargeable to tax as per provisions of section 44BB of the Act.
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2018 (6) TMI 1841
Manufacturing and sale of finished goods outside the books of account - HELD THAT:- We find that no justification whatsoever has been given by the AO as to why the value of semi finished goods sold to its sister concern should not be considered in the total production of the yr for the purpose of determining the percentage of scrap generated.
There is no material on record on the basis of which the suspicion of the AO can be supported that over and above the semi finished goods, the assessee produced finished goods, we note that the CIT(A) has given a categoric finding that the AO has neither rejected books of account nor brought out any evidences to support the suspicion that there was unaccounted manufacturing and sale of finished goods nor has AO made out any case that there were unaccounted sales. Addition having been made on suspicion in peculiar facts, we find, has correctly been deleted by the CIT(A). In the absence of any infirmity, the departmental ground is dismissed
Disallowance of Expenses - HELD THAT:- On a careful consideration of the same, we find that admittedly the disallowances have been made and been sustained by the AO and the CIT(A) respectively without any cogent reason. The books of account have been produced. Evidences supporting the claim are available on record. In the absence of any rebuttal on the same, the AO or for that matter, the tax authorities are not justified to enter into the terrain for determining the reasonableness of the expenditure. The legal position on the said aspect is well settled. Respectfully following the precedent, ground No. 2 of the assessee is allowed.
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2018 (6) TMI 1840
Validity of possession notice - grievance of the petitioners as set out in the writ affidavit is that the bank did not obtain proper valuation of the secured assets which it proposed to sell - HELD THAT:- In the case on hand, it is an admitted fact that a clear thirty day notice period was not maintained, as the notice under Rule 8(6) of the Rules of 2002 was issued on 01.03.2018 and publication of the auction sale notice in newspapers, under Rule 9(1) of the Rules of 2002, was on 03.03.2018. There is, thus, a clear violation of the statutory mandate which vitiates the exercise undertaken by the bank in the context of the Rules - In the case on hand, the demand notice under Section 13(2) of the SARFAESI Act was issued by the bank on 11.07.2017 and the possession notice was issued on 11.09.2017. Therefore, even if the date of the notice, i.e., 11.07.2017, is excluded, more than sixty days gap was maintained before issuance of the possession notice on 11.09.2017. The contention of the petitioners in this regard is therefore without merit and is accordingly rejected.
As regards the alleged failure on the part of the bank to consider the representation dated 01.09.2017 made by the petitioner firm, it appears that the only plea advanced thereunder was to extend time till 31.10.2017 to regularize the accounts. Even though the symbolic possession notice, under Section 13(4) of the SARFAESI Act read with Rule 8(1) of the Rules of 2002, was issued shortly thereafter on 11.09.2017, the bank did not take any concrete measures till 01.03.2018, when it issued the notice under Rule 8(6) of 2002. The petitioners did not establish before this Court that any substantial payment was made by them before the end of October 2017 as promised by them. The bank specifically stated in its counter that the petitioners made no such payment to establish their bonafides and the said averment remains unrebutted.
However, given the clear violation of the statutory mandate of Rules 8(6) and 9(1) of the Rules of 2002 in the context of the amended Section 13(8) of the SARFAESI Act, the action of the bank in bringing the secured assets of the petitioners to sale under the notice dated 01.03.2018 issued under Rule 8(6) of the Rules of 2002 and the auction sale notice dated 01.03.2018 issued under Rule 9(1) thereof, published in the newspapers on 03.03.2018, cannot be sustained.
The impugned notice dated 01.03.2018 issued under Rule 8(6) of the Rules of 2002 and the consequential auction notice dated 01.03.2018 issued under Rule 9(1) thereof, published in the newspapers on 03.03.2018, is set aside - petition allowed.
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2018 (6) TMI 1839
Common intent of committing murder - sustaining grievous injury as a result of assault by the Appellant - acquittal of the accused - HELD THAT:- It is by now well settled that the Appellate Court hearing the appeal filed against the judgment and order of acquittal will not overrule or otherwise disturb the Trial Court's acquittal if the Appellate Court does not find substantial and compelling reasons for doing so. If the Trial Court's conclusion with regard to the facts is palpably wrong; if the Trial Court's decision was based on erroneous view of law; if the Trial Court's judgment is likely to result in grave miscarriage of justice; if the entire approach of the Trial Court in dealing with the evidence was patently illegal; if the Trial Court judgment was manifestly unjust and unreasonable; and if the Trial Court has ignored the evidence or misread the material evidence or has ignored material documents like dying declaration/report of the ballistic expert etc. the same may be construed as substantial and compelling reasons and the first appellate court may interfere in the order of acquittal.
The High Court, while convicting the Appellant has confirmed the judgment of acquittal passed in favour of the Accused Nos. 2 to 5. Their acquittal as confirmed by the High Court is not questioned by the State before this Court. Thus, the judgment of the High Court acquitting Accused Nos. 2 to 5 has attained finality. Therefore, it is clear that the Trial Court and the High Court have, on facts, not believed the case of the prosecution in respect of the assault by the Accused Nos. 2 and 3 - Absolutely no material is found against the Appellant herein to convict him for the offences Under Section 302 Indian Penal Code inasmuch as he had not played any role in the death of the two deceased. In addition to the same, both the Courts have, on facts concluded that there was no common intention on the part of the accused, in commission of crime.
The Appellant is acquitted of the offence punishable Under Section 302, Indian Penal Code. Consequently, the judgment of the High Court convicting him for the said offence stands set aside - judgment passed by the High Court convicting the Appellant for the offence Under Section 326 Indian Penal Code and sentencing him for imprisonment of 7 years stands confirmed and is imposed a fine of Rs. 10,000/-. In default of deposit/payment of fine (if not already deposited) within eight weeks from today, the Appellant shall undergo imprisonment for two years additionally. The fine, if recovered, shall be paid to PW. 23 (informant-Honnamma) as compensation - Appeal allowed in part.
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2018 (6) TMI 1838
TDS u/s 194A - interest payable to the claimants on compensation awarded under Employees' Compensation Act - HELD THAT:- Section 194A of Income Tax Act, 1961, clearly provides that any person, not being an individual or a Hindu undivided family, responsible for paying to a ‘resident’ any income by way of interest, other than income by way of interest on securities, shall deduct income tax on such income at the time of payment thereof in cash or by issue of cheque or by any other mode. Compensation awarded under Motor Vehicles Act or Employees' Compensation Act in lieu of death of a person or bodily injury suffered in a vehicular accident, is a damage and not an income and cannot be treated as taxable income.
As well settled that interest awarded by the Motor Accident Claims Tribunal on a compensation is also a part of compensation upon which income tax is not chargeable as also held by the Division Bench of this Court in Court on its own motion vs. The H.P. State Cooperative Bank Ltd. And others[2014 (10) TMI 972 - HIMACHAL PRADESH HIGH COURT]. The same principle will be applicable in the present case also.
Deduction of income tax by petitioner/Insurance Company on the interest accrued/awarded on the compensation deposited by the petitioner/Insurance Company is illegal and is contrary to the law of land.
This petition is disposed of directing Income Tax Officer, Nahan to refund the TDS to the petitioner/Insurance Company within ten weeks from date of receiving information thereof, failing which petitioner company shall also be liable to pay interest @ 9% per annum on the said amount with effect from 1st February, 2018, till payment/deposit.
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2018 (6) TMI 1837
Violation of SAST Regulations - takeover exercise couched as a loan agreement - secured loan advanced by VCPL to RRPR - scope of conversion option and the purchase option (outlined in the loan agreement) and call option - No public announcement to acquire shares of the target company made - whether execution of the set of agreements (i.e the Loan Agreement between VCPL and RRPR along with the Call Option agreements through VCPL’s affiliates binding the Promoters of NDTV) partakes of the structure of a loan transaction or an arrangement entered into by the parties to acquire “control” over NDTV under Regulation 12 read with regulation 14(3) of SEBI (SAST) Regulations, 1997? -
HELD THAT:- All the concerns attached to the manner in which the loan agreements and call option agreements were entered into and the subsequent conduct of the noticee do not substantiate its argument that the transaction was only in the nature of a loan. Instead, it appears that the loan agreement and call option agreements were used to shroud the true nature of the transaction which was acquisition of beneficial interest in NDTV Ltd. The elaborate mechanism adopted by the noticee and its associates appear to be solely to deflect attention from this acquisition and thus covetously overcome the obligations imposed by the Takeover Regulations.
In effect, the transaction is not to secure the loan but to acquire control over all the affairs of the Target Company leaving only the right to control the “editorial policies of NDTV” to the Promoters and Borrowers, right from the day of execution of the loan agreement.
Thus in our view, the takeover exercise has been conveniently couched as a loan agreement with the predominant intention of the Noticee being to acquire control over NDTV without contemplating any repayment of the loan, whatsoever, from the Promoters or Borrowers. The transaction documents admittedly confer Conversion Option, Purchase Option and the Call option, and if the voting rights is to give full effect to the Transaction Documents, it would straightaway mean that the 52% of the voting rights of NDTV have to be exercised by the Promoters as per the dictates of the Lender and the same may traverse the specified Veto rights under Schedule 3. What is certain is the idea of the Noticee to start exercising control through the Promoters by keeping a tight hold on 52% of the shares of NDTV, through the threefold 'Options' conveyed by the Promoters, by helping them to meet the loan repayment that was pending to ICICI Bank.
The related issue as to whether veto rights confer any rights of control in favour of the noticee is not relevant for consideration in the instant case as the veto rights in Schedule 3 are eclipsed by the operative provision in Clause 20 of the Loan Agreement and are not significant enough for an independent consideration from the 'control' angle.
A close look at the structure of the transaction revolving around the conversion option and the purchase option (outlined in the loan agreement) on the one hand and a call option on the other clearly reveals that the transaction structure is unusual and peculiar to say the least.
The absence of an explicit clause in the Loan Agreement rendering the conversion option void on repayment of loan is strikingly abnormal and it clearly lays out an unfettered path for the noticee to stake its access to NDTV, albeit through the medium of RRPR. The call option construct is also strangely devoid of any time limitations and it endows the noticee (and its affiliates) the right to acquire 26% of NDTV shares from RRPR, at any time with no linkage to the loan. The strike price of the call option has been set so high (at a premium of 51% to the then average market price by noticee's own admission in its reply dated May 21, 2018) that it renders the whole exercise of collateralization of the loan a non-starter. Given the price history of NDTV shares, the argument of the noticee about the call option serving as a collateral seems very hollow.
Thus the noticee i.e. VCPL did indirectly acquire control in NDTV Ltd., by entering into the Loan agreement and the Call Option agreements on 21st July, 2009, thereby obligating it to make a public announcement of an open offer under Regulation 12 read with regulation 14(3) of SEBI (SAST) Regulations, 1997, as alleged in the SCN.
Order:
a) The noticee shall make a public announcement to acquire shares of the target company in accordance with the provisions of the SAST Regulations, 1997, within a period of 45 days from the date of this order;
b) The noticee shall along with the offer price, pay interest at the rate of 10% per annum from the date when they incurred the liability to make the public announcement till the date of payment of consideration, to the share-holders who were holding shares in the target company on the date of violation and whose shares are accepted in the open offer, after adjustment of dividend paid, if any.
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2018 (6) TMI 1836
Reopening of assessment u/s 147 - Necessity of recording satisfaction by the AO as required prior issuing the notice u/s 147 - unexplained investment in share capital - HELD THAT:- AO himself was of the view that the amount so invested in share application money needs verification, despite that he has the reason to believe that the investment in share application money and extent of availability during the year 2006-07 (wrongly mentioned in the reasons recorded as “2006-06”) is from (wrongly mentioned in the reasons recorded as “form”) undisclosed sources which is escaped to tax, which is not sustainable in the eyes of law as laid down in the case of Sampatraj Dharmichand Jain [2016 (7) TMI 67 - GUJARAT HIGH COURT] wherein it has been observed that “reopening may not be permitted for mere verification purpose.” Appeal of the assessee is allowed.
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2018 (6) TMI 1835
Authority to consider and decide the issue on prayers made by the Chartered Accountants' Firm - HELD THAT:- As petitioner states, no order conveying the decision as directed by this Court [2018 (2) TMI 2096 - DELHI HIGH COURT] has been received by the petitioner
Notice, for the respondent accepted. Let compliance affidavit be filed within six weeks. Response thereto be filed within two weeks thereafter.List on November 27, 2018.
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2018 (6) TMI 1834
Levy of Anti-Dumping Duty - import of melamine - whether any legal right has accrued to the applicant from the Notification dated 28.01.2018? - HELD THAT:- In the instant case, the interest of the applicant is that in the event the writ petition is dismissed, the applicants would continue to enjoy the benefit of the anti-dumping duty being imposed at the rate of 331.10 USD per metric ton in respect of import of melamine from Peoples’ Republic of China. As such, the eventual interest of the applicant is in the fruit of the present litigation, as to whether they would continue to get the eventual benefit that may be derived from the decision in the writ petition. From the said point of view also, by applying the proposition of law laid down by the Supreme Court in Deputy Commr., Hardoi [1953 (10) TMI 37 - SUPREME COURT] in paragraph-14, where the eventual interest of the applicant is the outcome of the writ petition, so as to whether they will continue to have the eventual benefit of the rate of anti dumping duty be at Rs.331.10 USD per metric ton, the applicant is found not to be a necessary party in the present proceeding.
As the initiation of the investigation under Rule 5 of the Rules of 1995 was initiated as per the written application of the applicant, the applicant may have some interest in the present writ proceeding and also the applicant would be in a good position to provide the Court, the appropriate material which may ultimately help in the appropriate adjudication of the matter.
This court is of the view that it would be appropriate to allow the petitioner to be an intervenor in the connected writ proceeding - the law has been made clear by the Supreme Court in SARASWATI INDUSTRIAL SYNDICATE LTD. VERSUS COMMISSIONER OF INCOME-TAX [1999 (3) TMI 3 - SUPREME COURT], wherein, it has been held that the only purpose of granting an intervention application is to entitle the intervenor to address arguments in support of one or the other side.
Application allowed.
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2018 (6) TMI 1833
Exemption u/s 11 - computing benefit of accumulation - inclusion/exclusion of deemed income - HELD THAT:- A careful perusal of the language employed in section 11 makes it crystal clear that exemption is available only on the ‘income (within the meaning of section 11 and not on the ‘deemed income’). Consequently, the assessee cannot accumulate deemed income either u/s 11(1)(a) or 11(2).
As following the esteemed views of Natwarlal Chowdhury Trust case [1989 (8) TMI 19 - CALCUTTA HIGH COURT] we uphold the plea of the assessee that, for the purpose of computing benefit of accumulation, deemed income is to be taken into account. The addition as confirmed by the CIT(A), must, therefore, stand deleted. We order so.
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2018 (6) TMI 1832
Eligibility for benefit of N/N. 21/2002-Cus., Sl. No. 244 (List 26), item No. 13 - Import of Extra High Tension cable exceeding the voltage of 33,000 volt (about 132k volt current) - Department has solely relied upon the definition as contained in McGraw Hill dictionary - HELD THAT:- After going through the definition as contained in McGraw Hill dictionary it appears that the same confined only to Cathode Ray Tube (CRT) which are generally used to manufacture of computer monitor and picture tube of T.V. etc. The imported cable does not belong to that category. Therefore, the Ld. Commissioner (Appeals) has rightly set aside the order of the Lower Adjudicating Authority and by extending the benefit under the notification - there are no infirmity in the order of the impugned order, so the same is hereby sustained.
The appeal filed by the Revenue is dismissed.
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2018 (6) TMI 1831
Deduction u/s 80IE - Tax Audit Report alongwith Form No. 10CCB were filed before the AO manually whereas it is mandated by Income Tax Act rules to file relevant tax audit report and Form 10CCB electronically - HELD THAT:-As not disputed that the assessee filed the requisite tax audit report in Form No. 10CCB during the course of assessment proceedings and before the assessment order was passed by the AO. The Hon’ble Madras High Court in case of CIT vs. AKS Alloy Pvt. Ltd. [2011 (12) TMI 39 - MADRAS HIGH COURT] while considering an identical issue of not filing of audit report in Form 10CCB along with return of income but filed the same before the assessment was completed held that filing of audit report along with the return was not mandatory but directory and that if the audit report was filed at any time before the framing of the assessment, the requirement of the provisions of the Act should be held to have been met.
The order of Hon’ble Madras High Court has been affirmed by the Hon’ble Supreme Court in case of CIT vs. G.M. Knitting Industries (P.) Ltd.[2015 (11) TMI 397 - SC ORDER] - Decided against revenue.
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2018 (6) TMI 1830
Valuation - registration Charges, insurance Charges, handling charges received and paid on behalf of the customer of a motor vehicle, form part of the sale price, of such motor vehicle or not - Incentive and discount, received from the automotive manufacturers form part of the "sale price" or needs to be treated as a "sale price" of the motor vehicle sold to the customer or whether it results in reduction of set off? - claiming set off, on purchased motor vehicle and used it as "Demo Vehicles", irrespective of the fact that such vehicle continuing to be "stock-in-trade" or not being treated as "capital asset" in the books of accounts of the Applicant - Whether the prayer of prospective effect, considering the fact that the decision of the Hon. High Court of Judicature at Bombay in the case of Sehgal Auto riders Private Limited [[2011 (7) TMI 55 - BOMBAY HIGH COURT]] was rendered on 11th July, 2011 and whereas the decision of the Hon'ble Supreme Court of India in the case of K.T.C. Automobiles [[2016 (1) TMI 1046 - SUPREME COURT]] was rendered only on 29th January, 2016?
Registration charges and hand selling charges - HELD THAT:- On going through the factual position, proforma invoice, and sale contract and seen that the property, particularly possession of a motor vehicle passes or can pass legally to the purchaser only after obtaining valid registration under the Motor Vehicles Act and the purchaser gets entitled to use the vehicle in public places. It is also seen that after complying the stipulated condition to make vehicle road worthy, only the property in goods passes legally to customer. Moreover, the registration charges are recovered for making the road worthy to comply the stipulated condition and statutory compulsion before ascertainment of goods or delivery of the Motor Vehicles and therefore would be included in the meaning of 'sale price' under Section 2(25) of the MVAT ACT, 2002 - all charges related, charged and paid by customer before the legally passing of property in goods would be considered in the sale price.
Discount offered and reimbursed to the applicant from his vendor amount to sale price or otherwise - HELD THAT:- The applicant had received the payment of the price for the discount offered to customers. The applicant has received above credit notes to reimburse the amount of discount offered to customer, therefore, the amount of Rs. 22,026 is liable to be included in the sale price would be liable to sales tax.
Claim of ITC which is not paid into government treasury - HELD THAT:- While passing the credit of Rs. 22,026, the automotive manufacturer company has reduced tax load of Rs. 2974/- on said amount. Thus they have reduced their tax liability to that extent and not paid tax into government treasury. Therefore, the claim of ITC in this respect is not found sustainable and thus required to be rejected.
ITC on Demo car - Whether the Applicant is entitled to claim set off, on purchased motor vehicle and used it as "Demo Vehicles", irrespective of the fact that such vehicle continuing to be " stock-in-trade" or not being treated as "capital asset" in the books of accounts of the Applicants? - HELD THAT:- The ITC is allowable provided that the vehicle are not capitalized. The matter is related to finding of fact. The assessing officer/investigating officer should verify the books as to whether vehicle is capitalized or otherwise.
Prospective Effect - HELD THAT:- It is settled principle that the issue of prospective effect is to be considered on fact and circumstances of each case separately. There is no straight jacket formula to say that prospective effect is to be given in typical circumstances - The tax liability of the applicant on the receipt of handling charges or service charges related to reqistration only is protected from period 11th July, 2011 to 29th January, 2016 only.
Application disposed off.
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2018 (6) TMI 1829
TP Adjustment - legal and professional charges under intra-group services - TPO had passed a rectification orderwhich has resulted in reduction of total adjustment from Rs. 42,50,763/- to Rs. 9,91,844/- only which represents the disallowance of mark-up charged by the AE - HELD THAT:- As AR submitted that and if the assessee’s ground was accepted in principle, the adjustment with respect to the mark up will not be contested by the assessee, in such a situation, we direct the AO to pass the final assessment order incorporating the adjustment only to the extent of Rs. 9,91,844/- and also protect the assessee’s right to raise these grounds again in this assessment year in the event of the final assessment order not having been passed restricting the transfer pricing adjustment to Rs. 9,91,844/- only.
Directions of the Ld. DRP in confirming the provision for loss on suspended contracts by treating the same as contingent liability - HELD THAT:- The amount represents bank guarantee furnished by the assessee to its customers which was given in the year under consideration but en-cashed by the customers in AY 2011-12. It is also undisputed that the assessee has already offered to tax the amount of advance which had been forfeited from the customers and to which the bank guarantee relates. The bank guarantee has been en-cashed in the subsequent assessment year, therefore, the liability has crystallized in the subsequent assessment year when it was en-cashed on 28/04/2010. The fact remains that at the time of furnishing the bank guarantee, it was not known as to when the liability will crystallize. Accordingly, we find no reason to interfere with the directions of the Ld. DRP.
TP Adjustment - services offered by the AE were not stewardship services - HELD THAT:- DRP has taken note of the fact of the assessee providing substantial evidence in form of e-mails, correspondence with the AE etc. so as reach a conclusion that the AE was rendering services which were beneficial for the assessee in conducting its business and some benefits might have accrued to the overall group but the primary beneficiary was the assessee. DRP concluded that the services rendered by the AE were not in the nature of stewardship activity. Although the Department has assailed these directions of the Ld. DRP, in the proceedings before us, the Department could not point out any factual or legal error in the directions of the Ld. DRP by leading any evidence to the contrary. In such a situation, we are not in a position to differ from the findings of the Ld. DRP and we, accordingly, dismiss ground no. 4.
Disallowance pertaining to advances and deposits written off - HELD THAT:- DRP directed deletion of disallowance by observing that from the material available on record, the same appeared to be revenue in nature. Thus, it is not the case of the department that the issue was not examined. The Ld. DRP has returned a categorical finding in this regard and, accordingly, we find no reason to interfere on this issue also. Ground No. 2 also stands dismissed.
Allowance of provision for warranty - HELD THAT:- DRP has noted that the facts were identical in AY 2008-09 and the year under consideration and, therefore, the disallowance was to be deleted. We also find that the department’s challenge to the findings of the Ld. CIT (A) on this issue in AY 2008-09 was dismissed by the ITAT . The Department has not been able to bring out any distinguishing factor with respect to the facts in the proceedings before us. In the circumstances, we find no reason to interfere and dismiss ground no. 3.
DRP directing that the TPO/AO to consider the margin realized by the assessee only from its international transactions with its AEs and there cannot be entity level margins - HELD THAT:- A perusal of the directions of the Ld. DRP shows that this aspect has not been considered in a proper perspective by the Ld. DRP and the directions in this regard have been given without recording a finding of fact in this regard and without giving any sound reason for such direction. In the circumstances, we have no option but to restore this ground to the file of the Ld. DRP with a direction to pass a speaking order on the issue after giving proper opportunity to the assessee. Accordingly, ground no. 2 stands allowed for statistical purposes.
Loss on suspended contracts - HELD THAT:- Ld. DRP has discussed the issue at length on pages 11 and 12 of its directions and has held that the contention of the assessee is allowable in view of the facts. The AO is directed to give effect to the directions of the Ld. DRP in this regard. Accordingly, this ground is treated as allowed.
Rectification of mistakes u/s 154 - failure to provide an opportunity to the assessee of being heard before enhancing the income and this violated the provisions of section 154(3) - HELD THAT:- The Hon’ble Apex Court in the case of Chockalingam & Meyyappan [1962 (10) TMI 48 - SUPREME COURT] is precisely holding that principle of natural justice has to be followed by the authorities. As per Section 154(3) of the Act amendment/rectification which has the effect of enhancement of an assessment or reducing a refund or otherwise increasing the liability of the assessee shall not be made unless the authority concerned gives notice to the assessee of its intention to do so. Therefore, it is obligatory under the statute to issue notice by the tax authority to give a reasonable opportunity of being heard to the Assessee. This is clearly set out u/s 154 of the Income Tax Act and it has to be followed by the tax authorities at the initial stages. If this procedure of issuing the notice and giving reasonable opportunity of being heard is not followed, any further exercise will be non est. Therefore, the order itself becomes void ab initio. In the circumstances, we have no other option to set aside the impugned rectification order as being void ab initio.
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2018 (6) TMI 1828
Miscellaneous applications seeking to recall the order passed by this Tribunal [2019 (10) TMI 1549 - ITAT KOLKATA] wherein this Tribunal had dismissed the appeals of revenue for want of grounds of appeal - HELD THAT:- The revenue had filed grounds of appeal before us and both the parties on verification of records considered that these grounds of appeal were duly approved by the Pr. CIT even before filing of appeals of Tribunal. Since this fact remains undisputed and in view of the fact that the grounds filed by the revenue are before us , we are now inclined to recall the orders passed by us. Accordingly, the miscellaneous applications of the revenue are allowed. The registry is directed to fix for hearing on 31.07.2018 and both the parties are informed in the open court about the scheduled date of hearing and no fresh notices would follow.
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2018 (6) TMI 1827
Assessment of trust - claim of depreciation as assessee had claimed the amount incurred on purchase of assets in earlier years as application of income - set off of loss of earlier deficit with current year income - HELD THAT:- After hearing Ld. DR and on perusal of the impugned order we find that, since the issues raised in the grounds of appeal are squarely covered by the judgement of Hon’ble Jurisdictional High Court and other High Courts which has been followed by the Ld. CIT (A), therefore, we do not find any merits in the grounds raised by the department and accordingly the assessee’s current claim is allowed which is in lying with the judicial precedence of the aforesaid High Court judgments. Appeal of the revenue is dismissed.
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2018 (6) TMI 1826
Disallowance of deduction claimed u/s 54B - HELD THAT:- In the case of the co-owner Shri Keshav Sunderam Rajam [2017 (12) TMI 1852 - ITAT CHENNAI] this Tribunal remitted the matter back to the file of the AO. AO was directed to re-examine the matter afresh in the light of the material that may be produced by the assessee and thereafter decide the issue afresh in accordance with law, after giving a reasonable opportunity to the assessee.
Since the present assessee is also one of the co-owners of the property, for the sake of consistency, this Tribunal is of the considered opinion that the matter needs to be re-examined by the AO - Accordingly, the orders of both the authorities below are set aside and the issue raised by the assessee is remitted back to the file of the AO. AO shall re-examine the matter in the light of the material that may be produced by the assessee, more particularly the Adangal extract and other relevant documents, and thereafter decide the issue afresh in accordance with law, after giving a reasonable opportunity to the assessee. Appeal filed by the assessee is allowed for statistical purposes.
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2018 (6) TMI 1825
TP Adjustment - selection of certain comparables - HELD THAT:- Companies rejected on functional dissimilarity as well as the RPT more than the threshhold limit.
Disallowing re-imbursement of travelling and conveyance expenses and the reimbursement of Salary and Allowance u/s 40 (a) (i) - HELD THAT:- As decided in own case [2017 (9) TMI 1024 - ITAT DELHI] AR submits that while computing the disallowance u/s 40(a)(i) of the Act the AC should have considered the factual situation that has a bearing on the computation of disallowance u/s. 40 (a) (i) of the Act. From a reading of the assessment order, we find that the Assessing Officer did not consider any further facts while complying with the directions of the DRP, as such, this fact needs verification at the end of the Assessing Officer, after affording an opportunity to the assessee to furnish the requisite details that have a bearing on the disallowance u/s. 40 (a) (i) of the Act. We, therefore, set aside this aspect to the file of the Assessing Officer.
Respectfully following the order of the Tribunal in assessee’s own case in the preceding assessment year we deem it proper to restore this issue to the file of the Assessing Officer/TPO for adjudication of the issue afresh.
Delayed contribution made to Employees Provident Fund (EPF) - HELD THAT:- It is an admitted fact that the contributions to employee’s provident fund though deposited beyond the prescribed date as per the PF act, however, the same has been deposited prior to the due date of filing of return of income. The coordinate Benches of the Tribunal are taking the consistent view that where the EPF is deposited prior to due date of filing of return of income, no disallowance u/s. 43B or 2 (24) (x) read with 36 (1) (va) can be made. Since admittedly the EPF has been deposited prior to due date of filing of return of income, therefore, we hold that no disallowance is called for in the instant case. We, therefore, direct the Assessing Officer to delete the disallowance. The ground raised by the assessee on this issue is accordingly allowed.
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2018 (6) TMI 1824
Jurisdiction of AO over the assessee - appeal carried by the ACIT-39 to the Appellate Tribunal was dismissed as not competent - HELD THAT:- Assistant Commissioner of Income Tax-39, who had no jurisdiction over the assessee, carried an order in appeal to the Appellate Tribunal against an order passed by the Commissioner (Appeals). At the relevant time, the ITO-44 had jurisdiction over the assessee.
The appeal carried by the ACIT-39 to the Appellate Tribunal was dismissed as not competent. The order of the Appellate Tribunal was challenged by the Revenue in this Court. This Court did not interfere with the order of the Tribunal and the matter rested there without this Court’s order being challenged by the Revenue before the Supreme Court. In the present case, the matter pertains to the same assessment year when the ITO-44 has preferred an appeal where the initial assessment was not done by the ITO-44 but such assessment was conducted by the ACIT-39 at a point of time when ACIT-39 lost jurisdiction over the assessee pursuant to the said CBDT Notification of 2002.
Since there was a fundamental error, the Appellate Tribunal dismissed the appeal as incompetent since the order of the AO who had no jurisdiction to undertake the assessment qua the assessee could never have been found to be legal or resurrected.
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2018 (6) TMI 1823
Disallowance of depreciation on the amount of cost of plant & machinery incurred as reimbursement to Gulbrandsen Chemicals Inc., USA - as alleged that the assessee has neither reduced the amount form the cost of asset nor disallowed the depreciation - HELD THAT:- We find that the expenditure were pertaining to professional fees for setting-up of the Plant and the travelling cost of the Architects etc. which were incurred by Gulbrandsen Chemicals Inc., USA, and were paid by it on behalf of the appellant to external third parties during the period from 2000 to 2002. We noticed that before the AO that it had set-up its Plants during the period of 2000 to 2002 in India.
As per the appellant in this phase, it had very limited organizational and functional resources and therefore Gulbrandsen Chemicals Inc., USA assisted it in Plant set up phase engaging external service providers (such as Plant Consultant, Architect etc.). We hold that any expenditure incurred in relation to creation of a capital asset should be capitalized to the relevant asset. Appellant accordingly it also capitalized the amount of Rs. 1,42,66,483/- spent for setting up of the Plants to the respective plants account in FY 2006-07 when it received debit notes from Gulbrandsen Chemicals Inc., USA for such reimbursement. They made the payment.
A.O. has invoked Section 43A on the basis of misconception in as much as receipt was for reimbursement from the company and same was the debit to the company and this aspect is not disputed. On account of aforesaid discussion, we allow the appeal of the appellant and direct the A.O. to allow excess depreciation - We allow this ground of appeal.
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