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Showing 41 to 60 of 1476 Records
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2016 (3) TMI 1447
Exemption u/s 11 denied - registration of the Society u/s 12A(a) cancelled - HELD THAT:- We find that the Hon’ble Tribunal [2015 (9) TMI 1550 - ITAT AMRITSAR] has cancelled the order of CIT by which he had cancelled the registration u/s 12A(a) of the Act, therefore, the basis on which the exemption u/s 11 has been denied does not survive. In view of the above, we are in agreement with argument of learned AR that after restoration of registration by Hon'ble Tribual, the assessee is eligible for exemption u/s 11. Appeal filed by assessee is allowed.
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2016 (3) TMI 1446
Change in classification of services provided - harvesting and transportation of sugarcane from field to factory - manpower recruitment or supply agency service or business auxiliary service? - HELD THAT:- To be heard along with Central Excise Appeal No. 305 of 2014 & Central Excise Appeal No. 200 of 2014.
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2016 (3) TMI 1445
Revision u/s 263 by CIT - Excess manufacturing cost claimed by the assessee - HELD THAT:- We find that no adverse inference with regard to melting loss of 72 kgs. can be drawn. Hence, this issue cannot be subject matter of revision proceedings u/s 263 of the Act. We further observed that the manufacturing costs, i.e wages, packing material and testing, refining charges & melting loss were genuine and incurred for business purposes. It is not the case of CIT that any of these expenses were found by to be bogus or sham. The only observation in this regard is that the expenses were excessive. In the earlier paragraphs we have already explained that the manufacturing costs were not excessive. Rather the costs incurred compared favourable with the ‘making charges’ recovered from related party. We have thus fully substantiated the genuineness and reasonableness of manufacturing costs incurred by the assessee. The direct costs and making charges incurred by the assessee were reasonable and even the prices charged from the related party were commensurate with the costs incurred by the assessee. Hence, the direction given by CIT for making addition on account of excess manufacturing cost is therefore vacated.
Sales made to related parties at lower prices - Addition u/s 40A(a)(2) - Similar disallowance was deleted by the Gujarat High Court in the case of CIT v. Indu Nissan Oxo Chemical Industries Ltd. [2015 (2) TMI 818 - GUJARAT HIGH COURT] .wherein the disallowance made u/s. 40A(2)B) in respect of payments made to the directors were deleted by the High Court, observing that the recipient of payments was taxed at maximum rate and therefore there was no avoidance or evasion of taxes as envisaged u/s 40A(20(b) of the Act. In view of the above, we are of the view that CIT was wrong in invoking provisions of Sec. 40A(a)(2) and doubting the sales made by the assessee to its sister concern, M/s Anjali Jewellers. Hence, on this issue revision cannot be made by CIT u/s 263 of the Act.
Loss of gold incurred by the company in the course of manufacture of jewellery - After considering the details & documents for AYs 2011-12 & 2012-13, more specifically the quantitative details of gold and jewellery manufactured, the AO accepted the reasonableness of melting loss of 5.28% and 4.81% in AYs 2011-12 & 2012-13 and no adverse inference was drawn. Even, the melting loss of 4.81% incurred in AY 2012-13 was not disputed by the Assessing Officer. The above facts show that the Department while framing the assessments u/s. 143(3) of the Act for the immediately preceding AY 2009-10 and subsequent AYs 2011-12 & 2012-13 accepted the melting loss of 5% in the assessee’s line of business. In the circumstances, we are of the view that CIT’s observations with regard to the melting loss of gold of 72 kgs. being excessive in AY 2010-11 and the directions given to examine the same is unjustified and contrary to the jurisdictional facts of the case. Hence, the same are quashed.
Certain bills held to be bogus - It shall be appreciated that M/s Anjali Estate & Developers had credited contractual income and offered profit to tax at normal tax rates. These jurisdictional facts further prove that there was no tax avoidance arrangement or siphoning of profits. Both the assessee and M/s Anjali Estate & Developers were taxed at normal tax rates. Moreover, the assessee did not claim deduction of the impugned bill bearing number 006aEd/0-11 in the relevant FY 2009-10 but had deferred it and carried forward to the next year. On the other hand, M/s Anjali Estate 7 Developers had accounted the bill as contractual income of FY 2009-10 and paid tax at normal tax rates on its annual income. It is therefore not a case where the assessee had booked higher repairs & maintenance costs to avoid taxes and/or siphoned off profits to sister concern. The revision order of CIT that repairs & maintenance charges were being paid in order to avoid tax was factually incorrect, and without any cogent basis or material. Accordingly, we cancel the directions of CIT in this regard. Hence, this issues of assessee is allowed.
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2016 (3) TMI 1444
Addition of Additional Conveyance Allowance - HELD THAT:- We find that the first issue about additional conveyance allowance granted to DO of LIC is covered in favour of the assessee by this tribunal orderin the case of S. N. Mishra [1998 (12) TMI 111 - ITAT JABALPUR] this issue is covered in favour of the assessee.
Addition on account of expenses incurred for the business of LIC to the extent of 40% of Incentive Bonus received from LIC - Instead of 40% as claimed by the assessee, deduction can be allowed to the extent of 30% of incentive bonus if it is found that the assessee has been able to establish that to that extent, actual expenses were incurred for increase of the business of LIC. Neither the A.O. nor the learned DR of the revenue could point out that any expenses out of Rs. 13,41,092.94 is not incurred for increase of the business of LIC. Under these facts, by respectfully following this judgment of T. K. Ginarajan [2013 (8) TMI 261 - SUPREME COURT] we hold that to the extent of 30% of incentive bonus which comes to Rs. 921,736/- should be allowed as deduction from Incentive bonus as against deduction of Rs. 12,28,982/- claimed by the assessee on account of expenses incurred for the business of LIC to the extent of 40% of Incentive Bonus Rs. 30,72,453/- received from LIC. This issue is decided partly in favour of the assessee.
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2016 (3) TMI 1443
Revision u/s 263 by CIT - wrongfull allowance of exemption u/s 11 by AO - rental receipt from kalyana mandapam was understated in the return of income and it was falsely classified as corpus donation for the purpose of claiming exemption u/s 11 - as per CIT while letting out the community hall, the trust used to collect major portion of the rent as corpus donation and used to collect a minimum amount as rent, referring to the proviso to sec. 2(15) legislature took away certain activities of general public utility outside the purview of charity u/s 2(15) of the Act by inserting two provisos to sec. 2(15) - as per assessee he has utilized the entire money received on letting out of community hall for charitable activity, therefore, the AO has rightly allowed the claim of the assessee.
HELD THAT:- When the AO has not examined the utilization of rent for charitable activity, this Tribunal is of the considered opinion that utilization of the income of the assessee-trust for charitable activity needs to be examined year by year for allowing the claim of the assessee u/s 11 - CIT(E) also has not examined the utilization of the fund for charitable purposes.
CIT(E) proceeded as if the proviso to sec. 2(15) of the Act would make the assessee-trust not eligible for exemption u/s 11 of the Act. This Tribunal is of the considered opinion that proviso to sec. 2(15) is applicable in respect of the trust whose object is advancement of any other general public utility.
In the case before us, it is not the object of the trust to advance any public utility service. The main object as per the trust deed is to establish educational and medical institution and also providing scholarship to the needy people. Therefore, proviso to sec. 2(15) may not be applicable at all.
This Tribunal is of the considered opinion that the matter needs to be reexamined by the Assessing Officer in the light of the material available on record with regard to utilization of the income for charitable activity. Accordingly, while confirming the exercise of jurisdiction by the CIT(E), the Assessing Officer is directed to examine the utilization of the income of the assessee-trust in the light of the material available on record including the tax evasion petitions said to be received and thereafter decide the claim of exemption u/s 11, in accordance with law after giving a reasonable opportunity to the assessee - Appeal of the assessee is partly allowed
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2016 (3) TMI 1442
TP Adjustment - comparable selection - HELD THAT:- Companies functionally dissimilar with that of assessee deselected.
Exclusion on the ‘abnormal profits’- As seen from the order of CIT(A) the reasons for rejection are that they are having ‘negative margins’/ losses. Therefore, grounds raised by the Revenue are not maintainable. Hence, rejected.
Foreign Exchange Gain/Loss as operating in nature - HELD THAT:- This issue is held in favour of assessee and against Revenue in all the cases as the foreign exchange gain/loss is accruing as part of business activity and on the billing/billed amount. So, the same is rightly treated as part of operating income. M/S. CISCO SYSTEMS (INDIA) PRIVATE LTD. [2014 (11) TMI 849 - ITAT BANGALORE], SAP LABS INDIA (P.) LTD.[2010 (8) TMI 676 - ITAT, BANGALORE] AND M/S. GEM PLUS JEWELLERY INDIA LTD. [2010 (6) TMI 65 - BOMBAY HIGH COURT].
Deduction u/s 10A - exclusion of Telecommunication Charges for export turnover and total turnover - HELD THAT:- AO excluded the Telecommunications charges and Travelling charges from estimated turnover. Ld.CIT(A) following the Co-ordinate Bench decision has directed the AO to exclude the same from total turnover as well. This direction is as per the principles on the subject. The jurisdictional High Court in the case of CIT Vs. Tata Elxsi [2011 (8) TMI 782 - KARNATAKA HIGH COURT] has held that whatever is excluded from estimated turnover should also be excluded from total turnover. The direction of Ld.CIT(A) is upheld. Grounds are rejected.
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2016 (3) TMI 1441
Admission of the additional evidences furnished before the ld. CIT(A) - CIT- A denied admission - HELD THAT:- We find substance in the contentions of the ld. Counsel for the assessee. It is notable that even though the remand report of the AO was sought by the ld. CIT(A) on the said additional evidences, he finally did not admit such evidences for consideration. Such an action of the ld. CIT(A) is not justified in view of the proposition made in the case of Sahrukh Khan vs. DCIT [2006 (7) TMI 532 - ITAT MUMBAI]
CIT(A) had called for the remand report on the additional evidences so furnished, he has to admit the same on record for consideration on merits. CIT(A), however, failed to do so, but refused to admit the same, which is not tenable in view of the aforesaid decisions. We further note that factum of calling of remand report on merits of the additional evidences etc. does not arise in the case of Moser Bear India Ltd.[2008 (12) TMI 19 - DELHI HIGH COURT] relied upon by the ld. CIT(A). Therefore, the decision of Hon’ble Delhi High Court, in our opinion, does not help the Revenue, having been rendered in different context.
Besides, on perusal of the impugned order it reveals that the ld. CIT(A) has not passed speaking order on merits of the case also by recording his specific findings on the objections of the AO and the submissions of the assessee, but has simply endorsed the views taken by the AO in a very slip shod manner. Therefore, the issues under consideration need fresh adjudication by the Revenue authorities. Since the Assessing Officer has to examine the additional evidences in order to verify the sundry creditors and to examine veracity of depreciation claimed, it will be expedient in the interest of justice to restore the matter to the file of Assessing Officer for deciding both the issues de novo after considering the additional evidences noted above which shall be furnished by the Assessee before him in support of its claims. The Assessing Officer shall pass a speaking order in accordance with law - Appeal of the assessee is allowed for statistical purposes.
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2016 (3) TMI 1440
Correct method of accounting - Addition on account of recognizing the income by applying the percentage of completion method as per Accounting Standard-7 issued by ICAI - HELD THAT:- We note that assessee was following project completion method from the beginning for calculating its income from the projects and the department was accepting the same throughout, however, this year only the AO has not accepted this method without spelling out how this method distorts the projects. Admittedly, the assessee is not a contractor so revised AS-7 need not be followed by the assessee who is Real Estate Developer.
As the construction is completed up to 53.95%, therefore, the project was not complete and real profits cannot be estimated from the same. The ld. CIT (A) has rightly held that the AO has not pointed out any discrepancy that method followed regularly by the assessee was distorting or under estimating the profits and since no such facts and figures have been brought on record by the AO, therefore, the method regularly followed by the assessee cannot be interfered with. Therefore, the percentage completion method applied by the AO cannot be applied in the case of the assessee. Therefore, in view of the above, we do not find any infirmity in the order of the CIT (A) and accordingly, we uphold the same. - Decided against revenue.
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2016 (3) TMI 1439
Penalty u/s 271(1)(c) - Whether the Tribunal was justified in holding that the prior approval taken for levy of penalty from Additional Commissioner does not fulfill the mandate under Sec.274 which provide for taking approval from Joint Commissioner in complete defiance of the definition of “Joint Commissioner of Income Tax” provided u/S.2 (28C) of the Act, which includes “Additional Commissioner of Income Tax ? - HELD THAT:- On a bare perusal of the above definitions and sec. 2(28C) read with 274(2) in particular, it is clear that 'Joint Commissioner' means a person appointed to the post of Joint Commissioner of Income-Tax and includes Addl. Commissioner of Income-Tax and granting approval by the Addl. Commissioner of Income-Tax u/sec. 274(2)(b) of the Act on a permission sought by the AO before imposing penalty u/sec. 271(1)(c), in our view is accorded by the authority competent under the law.
Taking into consideration above, the Tribunal in our view erred in quashing the penalty order merely on the premise that Addl. CIT does not find place in Sec. 274(2)(b) and imposition of penalty is bad and void ab initio.
Also contention raised by the learned counsel for the assessee about the Circular dated 10.12.2015. In our view the said Circular may not be applicable for the reason that the Revenue has assailed the penalty amounting to Rs.29,02,743/- and not only the penalty reduced by the CIT(A). Before the Tribunal, both the Revenue as well as the assessee preferred appeals and the entire penalty as referred to hereinbefore, was in issue before the Tribunal and now before this Court. Therefore, we reject the contention of the learned counsel for the assessee as the Circular has no application.
The judgments relied upon by the assessee basically are the principles of interpretation of the provisions of law, before us when the provision is self explicit clear and plain language is unambiguous, need no interpretation.
The judgment in the case of Brij Mohan [1979 (8) TMI 2 - SUPREME COURT] was a case relating to the change of law before and after amendment made in sec. 271(1)(c) clause (iii) of the Finance Act, 1968. In our view, this case is not relevant for the present purpose. - Decided against assessee.
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2016 (3) TMI 1438
Disallowance of payments of PF/ESIC paid beyond the due date prescribed under the relevant statutes - issue is squarely covered against the assessee by Gujarat High Court [2014 (1) TMI 502 - GUJARAT HIGH COURT] wherein it was held that section 43B does not apply to employees contribution.
HELD THAT:- Leave granted.
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2016 (3) TMI 1437
Validity of sale deed - Maintainability of Suit for permanent injunction - time limitation - Suit for declaration against the present petitioners as well as respondents No.2, 3 and 4 claiming declaration of sale deeds executed by defendants No.1 and 2 in favour of defendants No.3, 4 and 5 (the present petitioners) as null and void - HELD THAT:- From reading of 53-A of Transfer of Property Act, it is clear that a prospective purchaser is entitled to protect his possession, only if, he has done something further in pursuance of the contract. In the present case, though the alleged agreements to sale and possession of the Respondent No.1 are disputed but even if, they are considered as it is, clear from the plaint that the Respondent No. 1 has done nothing in pursuance of the alleged agreements to sale. It is also not pleaded that the Respondent No.1 was ready and willing to perform his part of contract or was willing to get sale deed executed. It is also pertinent to mention that according to the proviso no such right is available against the purchaser for consideration without notice like the present petitioners. Hence, the Respondent No. 1 is not entitled to maintain the suit for permanent injunction u/s 53-A of the Transfer of Property Act.
Maintainability of suit for permanent injunction - HELD THAT:- In view of proviso to the Section 53-A of the Transfer of Property Act and also in view of section 41(h) of the Specific Relief Act, because the Respondent No.1 has not resorted to equally efficacious remedy i.e. by filing a suit for specific performance, hence the suit for permanent injunction was not maintainable.
It is not in dispute in the present case that the Respondent No.1 is not the owner of the suit land as there is no conveyance deed in his favour and the Respondent No. 1 is claiming his right on the basis of alleged agreements to sale. It cannot be disputed that in view of clear provision of section 54 of the Transfer of Property Act, an agreement to sale does not confer any title. Thus, if the Respondent No. 1 himself is not the owner of the suit property, how can he challenge the title of the other who acquired title by registered sale deed in his favour. It is settled position of law that a person can challenge the title of other, only if, he himself is having title in the suit property. Apart from it in view of the proviso to section 34 of the Specific Relief Act, until the Respondent No. 1 claims ownership or claim relief for specific performance for acquiring title for he is entitled to claim, in absence of the same, a mere suit for declaration as the present suit is clearly hit by the proviso to section 34 of the Specific Relief Act.
The question is, when the suit property and claim of the Respondent No.1 is the same, why was the relief prayed in the present suit not claimed/prayed in the previous suit, while the same could have been and should have been claimed in the previous suit and if the same was not claimed or omitted to be claimed, the subsequent suit would be clearly hit by the provisions of Order II Rule 2 CPC. In view of the aforesaid provision of law, present suit is clearly barred by law and hence, the plaint is liable to be rejected - The provisions of Order VI Rule 4-A of CPC are mandatory in nature and it is clear from the bare perusal of the suit, it is clear that there no necessary pleadings which are mandatorily required to be made in the plaint. Thus failure to comply with the aforesaid mandatory provisions of law would lead to rejection of the plaint.
Time Limitation - HELD THAT:- It is also clear that the present suit filed in the year 2011 to challenge the sale deeds of the year 1995 i.e. after 16 years is clearly barred by time, while the period of limitation is only 3 years. It is also not in dispute that the petitioners’ name in the revenue record were also recorded in the year 1995. Thus, the suit filed by the Respondent No.1 is clearly barred by limitation.
The manner in which the learned trial court has dealt with the judicial precedent relied upon by the petitioners is also not proper because it has merely been observed that those citations are not applicable in the present circumstances without any discussion. Even all objections, which are purely legal objections, are not considered and decided. This approach of the learned trial court clearly amounts to failure to exercise the jurisdiction vested in it by law - the suit filed by the Respondent No.1 is clearly barred by law and allowing its continuance would be gross misuse of process of law, hence the plaint deserves to be rejected and consequently the suit deserves to be dismissed.
The present civil revision stands allowed - The application preferred under Order VII Rule 11 of the Code of Civil Procedure, 1908 stands allowed and the plaint is rejected.
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2016 (3) TMI 1436
Deduction u/s 54F - Claim available for only one residential house purchased or constructed - deduction denied as assessee has utilized the net consideration for investment in two residential properties - assessee has not yet completed the entire residential house - HELD THAT:- Assessee will be entitled for benefit u/s 54F of the Act with respect to investment in only one residential house property at Parsik Hills, Belapur as the said residential house property is completed at later point of time vis-à-vis acquisition of the residential flat at NRI Complex, Nerul in November 2007 and the provisions of Section 54F(2) of the Act will get invoked and be applicable with respect to residential flat at NRI Complex, Nerul being acquired in November 2007 i.e. prior to completion of investment in residential house property at Parsik Hills, Belapur, and the investment in construction of residential house property at Parsik Hills, Belapur shall be entitled for benefit u/s 54F as the assessee has sold two plots of land and the AO has rightly allowed the exemption u/s 54F with respect of investment made by the assessee in the construction of the residential house property at Parsik Hills, Belapur.
Benefit u/s 54F of the Act of the investment in construction of residential house property at Parsik Hills, Belapur on the ground that the property was not in livable condition to occupy owing to non-production of evidence with regard to basic amenities like place for cooking/kitchen/toilet, bathroom, approach road within the plot etc. and non production of evidences regarding any electricity or telephone or tap water connection having been granted to the structure - The intention of the Legislature was to encourage investments in the acquisition of a residential house and completion of construction or occupation is not the requirement of law. The words used in the section are 'purchased' or 'constructed'. For such purpose, the capital gain realized should have been invested in a residential house. The condition precedent for claiming benefit under the said provision is the capital gain realized from sale of capital asset should have been parted by the assessee and invested either in purchasing a residential house or in constructing a residential house.Thus, benefit u/s 54F of the Act cannot be denied to the assessee during the year ending March, 2008 merely because the assessee has not yet completed the entire residential house at Parsik Hills, Belapur while the assessee can complete the house with a stipulated period of three years from the date of transfer of original asset, the deduction cannot be denied merely on the ground that construction is not completed . Our decision is fortified by the decision of Hyderabad- Tribunal in the case of Narsimha Raju Rudra Raju [2013 (11) TMI 415 - ITAT HYDERABAD]
Thus, in our considered view, the assessee shall be entitled for benefit u/s 54F of the Act with respect to investment made by the assessee in construction of residential house property at Parsil Hills, Belapur as allowed by the AO and we set aside the orders of the CIT(A) in this regard and restore the orders of the AO.
Assessing the agricultural income earned by the assessee as income under the head “income from other sources”- HELD THAT:- No details regarding procurement of seeds or labour or water for carrying out the agricultural operations has been produced by the assessee even in the second round of litigation. No details were produced with respect to the crop cultivated or produced from the agricultural land even by the caretaker - In the absence of any cogent material/evidence brought on record by the assessee with respect to the actual carrying on the agricultural activity in the said land stated to be agriculture land, the said income cannot be assessed to tax as ‘agricultural income’ and the same shall be charged to tax as ‘income from other sources’, hence this ground of appeal raised by the assessee is dismissed and the findings of the authorities below are confirmed. We order accordingly.
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2016 (3) TMI 1435
Liability of Stamp Duty payable by the developer and the allottees - bipartite agreement between the State and the developer - Sections 33/47(A) of the Indian Stamp Act, 1899 - HELD THAT:- Bereft of the required materials before the High Court, the Court was not justified in adjudicating the issue at the first instance when there is a statutory scheme provided for adjudication of such issues by the competent authorities concerned.
In that view of the matter, without expressing any further opinion, the judgment is set aside. The parties are relegated to the competent authority under the Indian Stamp Act in the State of Uttar Pradesh for the adjudication of the dispute - appeal disposed off.
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2016 (3) TMI 1434
Deduction u/s. 80P(2)(c)(ii) - Disallowing deduction in respect of incomes earned by the assessee from Locker Rent, Ambulance Rent, Commission on Collection of MSEB bills and Health Club - HELD THAT:- We observe that on similar grounds the assessee has filed appeals before the Tribunal against the order of Commissioner of Income Tax (Appeals) for assessment years 2010-11 and 2011-12 [2016 (4) TMI 473 - ITAT PUNE] decided in favour of the assessee.
No material has been placed on record by the Revenue to controvert the findings of Coordinate Bench. In such circumstances, we do not find any reason to take any contrary view.
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2016 (3) TMI 1433
Revision u/s 263 - Deduction u/s 80IB(10) in respect of a project developed by it as per the approval given by the Slum Redevelopment Authority(SRA) for the project - As per CIT Assessee should be taken as a new project and not Slum Redevelopment scheme - HELD THAT:- It is an admitted fact that the assessee has not undertaken Slum Redevelopment Scheme, i.e., development of any existing slum. It has constructed flats as per the scheme framed by the SRA in accordance with their design in a open land. Hence we are of the view that the Ld CIT(A) was justified in holding that, for all practical purposes, it should be taken as a new project and not Slum Redevelopment scheme.
In the instant case, it is not shown that the assessee has not claimed relaxation of the conditions specified in clause (a) or (b) of section 80IB(10) of the Act by virtue of first proviso. Hence from this angle also, there is no requirement that the project of the assessee should be notified by CBDT.
Whether the assessee was a developer or builder? - We agree with the view taken by ld CIT(A) that the agreement entered between the assessee and SRA should be considered as a whole in order to ascertain the status. CIT(A), on examination of the agreement in whole, has taken the view that the assessee cannot be considered as a mere contractor simply for the reason that the land was conveyed to the SRA, since the assessee has taken up the entire responsibility to construct the tenements along with infrastructural facilities. The building so constructed was later handed over to the SRA. In consideration of the same, the assessee has got TDR. Hence, we are in agreement with the said observations of the Ld CIT(A) - the assessee could have been taken as a contractor, only if the SRA has taken up the responsibility to construct the building and the assessee was awarded the contract to construct the building. This is not the case here. The assessee has taken up entire responsibility of the project to develop and complete the project. Hence, the Ld CIT(A) was right in holding that the assessee was a developer in this project.
With regard to the observation of the AO that the assessee “appears” to have not completed the project before 31.3.2008, we notice that the very use of the word “appears” by the AO shows that he was also not sure about his allegation. In any case, the Ld CIT(A) has taken note of the possession certificate given by the SRA, as per which all the buildings were handed over to it before 31.3.2008, meaning thereby, the assessee has completed the construction before that date.
In view of the above, we do not find any infirmity in the order of Ld CIT(A) passed for AY 2007-08 and accordingly uphold the same.
AY 2006-07 challenging the revision order passed by Ld CIT u/s 263 - The order passed by Ld CIT(A) for assessment year 2007-08 would show that the issues considered by Ld CIT are debatable in nature, i.e., the view taken by the assessing officer for allowing deduction u/s 80IB(10) of the Act was a possible view. Accordingly as per the decision rendered in the case of Malabar Industrial Company [2000 (2) TMI 10 - SUPREME COURT] the impugned revision order is liable to be set aside, since the one of possible views taken by the AO would not render the assessment order prejudicial to the interest of the revenue. It is well settled proposition of law that the twin conditions specified in sec. 263 of the Act, viz., (a) assessment order is erroneous and (b) it is prejudicial to the interest of revenue, should be shown as existing before passing revision order u/s 263 of the Act. Further, on merits also, we have noticed that the various reasons cited by the AO/Ld CIT does not merit acceptance. Hence, the impugned revision order is liable to set aside.
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2016 (3) TMI 1432
Recalling of the 04 named witnesses declined - Common ground seeking recalling was that Sh. R.S. Hooda, Advocate , who was the leading defence counsel was critically ill during the trial and due to inadvertence, certain important questions, suggestions with respect to the individual roles and allegations against the respective petitioners, the injuries sustained by the witnesses, as well as the alleged weapons of offence used, had not been put to the said witnesses - HELD THAT:- In the opinion of this Court a case for recalling is made out to ensure fair opportunity to defend and uphold the concept of fair trial. The conceded fact that 148 accused persons are facing trial together, wherein the prosecution has examined 102 witnesses regarding different roles/weapons/injuries attributed to various accused qua various victims on the day of occurrence stretched over a period of time within a huge area of factory premises, does raise a sustainable inference that there was a confusion during the conduct of the trial leading to certain inadvertent omissions and putting proper suggestions on material aspects, which are crucial for the defence in a trial inter alia for an offence under Section 302 IPC, although the accused were represented by battery of lawyers with Sh. R.S. Hooda, Advocate being the lead lawyer.
The accused-petitioners are charged with heinous offences including under Section 302 IPC and it was stressed that the purpose of recalling is not to set up a new case or make them turn hostile but only to have a proper defence as it is to be judicially noticed that for lack of proper suggestions by the defence to the prosecution witnesses, the learned trial Courts at times tend to reject the raised defence on behalf of the accused. Some of such omissions and suggestions by way of illustration have been spelt out in the body of the petitions and some are stated to be withheld for avoiding any prejudice to the defence, nevertheless the stated purpose is not to render the prosecution witnesses hostile to the case of prosecution. Hence such inadvertent omissions and lack of suggestions have to be accepted to be bonafide and constituting a valid reason requiring the approach of the Court to be magnanimous in permitting such mistakes to be rectified, moreso when the prosecution, concededly, were permitted twice to lead additional evidence by invoking the provisions under Section 311 Cr.PC on no objection of the defence, after the closure of the prosecution evidence.
The accused-petitioners are in custody and having nothing to gain from delaying the trial. The reasons assumed for declining the recalling in the impugned order dated 16.11.2015 (P-1) are clearly misconceived and thus vitiated. It is apparent from the provisions of Section 311 Cr.PC as interpreted by the Courts that the exercise of the power to recall is not circumscribed by the stage at which such a request is made but is guided by what is essential for the just decision of the case.
The respective applications dated 30.11.2015 (P-4 in both the petitions) under Section 311 Cr.PC seeking recall of the named witnesses are allowed - Petition allowed.
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2016 (3) TMI 1431
TP Adjustment - comparable selection - HELD THAT:- Vishal Information Technologies cannot be considered as a comparable with the assessee-company. Hence, we direct the AO/TPO to exclude this company from the list of comparables for the purpose of bench marking the international transactions with its AE.
Saffron Global Ltd - The fact that there was a proposal for merger of this company with Triton Corporation and the accumulated losses are more than 50% of net worth, the internal controls require to be improved and increase in turnover is not a relevant factor for excluding this company as a comparable. These factors have no impact either on the comparability or profitability of the current year and therefore, we uphold the findings of the ld.CIT(A) and this ground of appeal filed by the assessee-company is dismissed.
Companies not comparable as they have related party transaction - The provisions of Section 92 provides that income arising from international transaction is to be computed having regard to ALP. Section 92F(ii) defines “arm’s length price” to mean a price which is applied or proposed to be applied in a transaction between persons other than associated enterprises, in uncontrolled conditions. To compute ALP the results of the international transaction are bench marked against comparable uncontrolled transaction. The mandate of s. 92F(ii) is that ALP shall be computed considering price applied or proposed to be applied in transactions between non- AE’s.
When selection of external comparables, one needs to ensure that such external comparables are uncontrolled. The companies having controlled transactions therefore needs to be eliminated. Then the issue that crops up is what should be the related party transaction ratio for excluding as comparable. This issue had come up before the Tribunal in numerous cases. The Delhi Coordinate Bench in the case of M/s Sony India Pvt. Ltd [2008 (9) TMI 420 - ITAT DELHI-H ], held that the companies having relating party transactions of not exceeding 15% can be taken as a comparable.
The law is fairly well settled to the extent that the companies having in related party transactions more than 15% cannot be considered as comparable. Accordingly, we are of the opinion that the ld.CIT(A) was not justified in holding that only the companies having no RPT should alone be considered. Therefore, we hold that Allsec Technologies, Transworks Information and Ace Software can be considered as comparable. However, Wipro BPO cannot be considered as a comparable on account of fact that it is substantial intangibles and enjoying huge goodwill - we hold that Wipro BPO cannot be considered as a comparable.
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2016 (3) TMI 1430
Accrual of income - interest on non- performing assets - year of assessment - whether interest on NPAs has also accrued to the assessee as on 31-03-2012 and is taxable? - CIT-A deleted the addition - HELD THAT:- As it is clear that this issue is covered by the judgment of the Hon’ble High Court in the case of CIT Vs Canfin Homes Ltd. [2011 (8) TMI 178 - KARNATAKA HIGH COURT] and by following the said judgment of the Hon’ble jurisdictional High Court this Tribunal has decided the issue in favour of the assessee for the assessment year 2010-11 [2015 (10) TMI 598 - ITAT BANGALORE] Following the earlier order of this Tribunal in assesee’s own case we do not find any error or illegality in the impugned order of the CIT(A) qua this issue.
Addition of interest on investments in government securities - assessee did not offer the interest accrued, but not due on government securities to tax - AO has made an addition by holding that the interest accrued but not due on government securities is income accrued to the assessee during the year under consideration and accordingly, brought the same to tax - HELD THAT:- It is clear that this issue is decided in favour of the assessee by this Tribunal by following the decision of the Hon’ble Kerala High Court in case of CIT Vs Federal Bank [2008 (1) TMI 195 - KERALA HIGH COURT] as well as the judgment of jurisdictional High Court in the cased of Karnataka Bank Ltd. [2014 (11) TMI 221 - KARNATAKA HIGH COURT] Following the earlier order of the Co-ordinate Bench of this Tribunal in assessee’s own case, we do not find any error or illegality in the impugned order of the CIT(A) on this issue. Hence, ground no.3.2 of the revenue is dismissed.
TDS u/s 194A - payment of interest on deposits - disallowance u/s 40(a)(ia) - Assessee paid interest on deposits from members and payment to each of the depositors exceeded a sum of ₹ 10,000 - CIT-A deleted the addition - HELD THAT:- CIT(A) has correctly deleted the disallowance made by the AO by following the decision of Bagalkot District Central Co-op. Bank Ltd [2015 (1) TMI 1005 - ITAT BANGALORE] wherein it was held that the Co-operative bank is covered by the exemption specified u/s 194A(3)(v) of the IT Act. Therefore, the co-operative bank is not required to deduct tax at source u/s 194A of the IT Act, 1961.
Disallowance of expenditure on the ground of non-business expenditure - CIT(A) allowed the claim of the assessee and deleted the disallowance - HELD THAT:- As relying on assessee's own case [2015 (10) TMI 598 - ITAT BANGALORE] taking into account the totality of the facts and materials, we are of the considered view that the assessee is entitled to claim this deduction and hence, we allow the grounds of the assessee relating to this issue.
Addition u/s 36(1)(viia) - disallowance of the claim of provision towards NPA - AO was of the view that Explanation to sec.36(1)(vii) of the IT Act, provides that any bad debt or part thereof written off cannot include any provision for bad and doubtful debts. The provision for NPA under the RBI direction is doubtful assets and accordingly, the AO disallowed the claim of the assessee - CIT-A deleted the addition - HELD THAT:- As it is manifest from the finding of the CIT(A) that the claim of the assessee was examined by the CIT(A) as per the provision of Sec.36(1)(viia) and accordingly, the AO was directed to allow the claim under the said provision after verification of the provisions made by the assessee and compliance of conditions provided u/s 36(1)(viia) of the IT Act, 1961. Accordingly, we do not find any reason to interfere with the impugned order of the CIT(A) on this issue and the AO is directed to consider and examine this claim u/s 36(1)(viia) - Decided against revenue.
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2016 (3) TMI 1429
Seeking expunction of certain offending/objectionable remarks in the judgment - inherent power and jurisdiction of this Court to expunge the adverse remarks made by a subordinate Court and considerations involved in expunging those remarks - HELD THAT:- A careful perusal of the extracts of the judgment would show that learned Additional Sessions Judge in its judgment not only criticized the conduct of the petitioner for not making just and fair investigation by making sweeping remarks against him, but also recommended further action against him and upon enquiry and relying upon the said observation/finding, the Sub-Divisional Officer (Police) has issued show-cause notice to the petitioner for initiating departmental/disciplinary action which has given cause of action to the petitioner to file the instant writ petition claiming expunction of above-stated adverse remarks and seeking quashment of impugned notice proposing to take action against the petitioner.
In the matter of MANISH DIXIT AND ORS. VERSUS STATE OF RAJASTHAN [2000 (10) TMI 970 - SUPREME COURT], it has been held by the Supreme Court that castigating remarks against any person should not be made and the Court is required to give opportunity of being heard in the matter in respect of the proposed remarks or strictures and the same is basic requirement, otherwise offending remarks would be in violation of the principles of natural justice.
The petitioner as a investigating officer has investigated the offence in question and charge-sheeted the accused persons and they were tried for the charge-sheeted offences and eventually they were convicted by the judgment rendered by learned Sessions Judge. Certain discrepancies have been pointed out by learned Sessions Judge in the investigation while delivering the judgment and reached to the conclusion that the petitioner tried to save the accused persons and further held that the counter case to S.T. No. 21/2014 was also investigated by the petitioner, whereas, it ought to have been investigated by other police officer and on that basis learned Additional Sessions Judge made offending and adverse remarks against the petitioner and also recorded that the inquiry be conducted against the petitioner and thereafter further action be taken against him.
In the present case, the offending remarks made by learned Additional Sessions Judge in judgment being unmerited and undeserving deserves to be expunged in the ends of justice - adverse remarks made by the learned Second Additional Sessions Judge, Sakti, against the petitioner are hereby expunged - petition allowed.
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2016 (3) TMI 1428
Maintainability of appeal - low tax effect - HELD THAT:- This is an appeal filed by the Revenue. Admittedly the tax effect in this appeal by the Revenue is less than ₹ 10 lakhs.
In terms of CBDT Circular No.21/2015 dated 10th December,2015, F.No. 279/Misc./142/2007-ITJ(Pt.) read with S.268 A of the Income Tax Act 1961, this appeal by the Revenue should have been withdrawn or should not be pressed by the Revenue. In view of the above this appeal by the Revenue is dismissed in limini.
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