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Showing 61 to 80 of 1412 Records
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2017 (6) TMI 1352
Deduction u/s. 54 - assessee has not appropriated towards construction of new residential house as it was not completed - HELD THAT:- In our opinion as held by Hon’ble Karnataka High Court in the case of CIT vs Smt. V.S. Shantha Kumari [2015 (8) TMI 274 - KARNATAKA HIGH COURT] completion of construction within three years was not mandatory and it was necessary that construction should be commenced, it should be proved by the assessee that construction is for residential house. The Hyderabad Bench of the Tribunal in the case of Muneer Khan vs. ITO,[2010 (8) TMI 752 - ITAT HYDERABAD] had held that assessee may use borrowed funds for construction of new residential property and deduction u/s.54 of the Act denied on the reason that assessee used some fund other than consideration received on transfer of capital asset - on that reason deduction u/s.54 of the Act cannot be denied - we remit the entire issue in dispute with regard to Sec. 54 of the Act to the file of the ld. Assessing Officer with a direction to the ld. Assessing Officer to verify whether assessee has actually made investments in construction of new residential property, though it was not completed and decide thereupon.
Enhancement of assessment - unexplained investments - payments was not made with reference to the construction of residential house - HELD THAT:- Whether payments made towards construction to other parties on the instruction of assessee’s contractor, it is to be examined by enquiring those parties and it should be seen that it is properly reflected in their books of accounts as per law. Without examining them, it is not possible for us to sustain the addition on this count - are inclined to remit this issue also back to the file of the ld. Assessing Officer for further enquiry. This ground is also remitted to the file of the ld. Assessing Officer for fresh consideration.
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2017 (6) TMI 1351
Unexplained cash deposits - assessee explained that amount was contributed by his brother for marriage of two daughter and out of sale proceedings of popular plants etc. - HELD THAT:- The assessee has been making deposits in the bank account during the entire year. Therefore, explanation of assessee that amount was contributed by his brother for marriage of two daughter and out of sale proceedings of popular plants etc. has no relevance to the matter because assessee has been continuing in making deposit in his bank account. The source of the bank deposit has not been explained. At one stage assessee explained that withdrawals have been made out of the bank account for the purpose of incurring marriage expenses.
When amounts were withdrawn for the purpose of marriage, there is no question of redeposit of the same amount in the bank account of the assessee as is contended by assessee - assessee failed to explain source of the cash deposit in the bank account to the satisfaction of the authorities below. AO has already extended sufficient benefit to the assessee for the purpose of making the addition on this issue - Assessee submitted that it being an old case, it is difficult for assessee to produce evidence or material on record to explain entire deposits in the bank account, therefore, on the face of the same submission it is clear that assessee is not in a position to explain the source of the cash deposit in the bank account. The appeal of assessee itself has no merit same is therefore dismissed.
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2017 (6) TMI 1350
Reduction of share capital - Article 52 of the Articles of Association of the Company - HELD THAT:- Since the requisite statutory procedure has been fulfilled, the Company Petition is made absolute in terms of the prayer clause of the Petition.
All concerned regulatory authorities to act on certified copy of the order and the form of minutes forming part of the Petition, duly certified by the Deputy Director, National Company Law Tribunal. The Petitioner Company undertakes to file the same with the Registrar within 30 days from the date of the receipt of the order.
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2017 (6) TMI 1349
Inheritance of property - Seeking partition of the plaint schedule property excluding the first defendant - first defendant was at best a manager only who had suffered a civil death on becoming a priest - Court below has applied the principles of Canon Law ignoring the provisions of the Indian Succession Act, 1925 - HELD THAT:- It may be true that a Hindu ascetic or a Christian priest would sever his connection with the members of his natural family on entering into a religious order as per the prestine Hindu Law or the Canon Law. The ascetic or the priest in that sense may be said to have suffered a civil death making him ineligible to inherit a property either by intestate succession or testamentary succession. But the scenario has changed after the enactment of the Hindu Succession Act, 1956 and the Indian Succession Act, 1925 which only governs the parties as regards inheritance and succession.
We are in perfect agreement with the decisions of the Karnataka High Court and Madras High Court that Indian Succession Act, 1925 does not make a departure in the case of a Christian priest or nun. There is absolutely no statutory prohibition for a Christian priest or nun in the matter of intestate or testamentary succession of property ofcourse in his/her personal capacity.
Neither was any specific plea made nor any issue framed or evidence let in as regards the alleged custom amongst the diocesan priests to desist from holding property on entering into the Holy Order. To hold that one would suffer a 'civil death' and be deprived of his property on entering into the Holy Order would be a naked infringement of Article 300- A of the Constitution of India. Ofcourse it is the volition of a Hindu ascetic or a Christian priest to relinquish his right over his personal property in favour of a Mutt or Monastery in a manner known to law. But there cannot be any automatic deprivation of property acquired by way of intestate or testamentary succession by the mere fact that one has entered into the religious order and renounced his worldly pleasures - The finding of the court below that the first defendant did not derive any right over the plaint schedule property under Ext.B1 Will for the only reason that he had become a priest even before is unsustainable in law.
The natural heirs are the children of George (who are the plaintiffs and defendants 2 to 4) and the children of Eleeswa (who reportedly had died on 4.4.1961 leaving behind six children). The children of Eleeswa were not impleaded in the suit and there was no plea of non joinder of necessary parties either in the written statement and a remand of the case is hence unwarranted. Suffice it to say that there was a substantial representation for the estate and the children of Eleeswa shall be brought on record in the proceedings for the passing of a final decree. A preliminary decree for partition is accordingly passed declaring that half right would devolve on the children of George and the other half right on the children of Eleeswa. The extent of property covered by the two sale deeds (Document Nos.1020/1995 and 1737/1995) are however unavailable for partition since the first defendant had alienated the same.
Any one of the parties are free to apply for the passing of the final decree in regard to the property remaining and allotted under Ext.B1 Will and the impugned decree is modified accordingly.
The Appeal Suit is allowed and the memorandum of Cross Objections is dismissed.
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2017 (6) TMI 1348
Jurisdiction - power of DRI to issue SCN - HELD THAT:- Similar issue has come up before this Tribunal on many earlier occasions also. The Tribunal remanded the cases to the original adjudicating authority.
Reliance placed in the case of M/S SHRI MAHINDERA DUGAR, SHRI MAHENDER DUGAR AND PHOTOCOPING SERVICES VERSUS CC, NEW DELHI (IMPORT & GENERAL) [2017 (6) TMI 662 - CESTAT NEW DELHI] where it was held that matter remanded to the original adjudicating authority to first decide the issue of jurisdiction after the availability of Hon'ble Supreme Court decision in the case of Mangli Impex and then on merits of the case but by providing an opportunity to the assessee of being heard.
Matter remanded to the original authority for a fresh decision - appeal allowed by way of remand.
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2017 (6) TMI 1347
Maintainability of appeal - low tax effect - HELD THAT:- CBDT has issued Circular No. 21 of 2015 dated 10.12.2015 with retrospective effect, revising the monetary limit to ₹ 10,00,000/- for not filing appeals before the Tribunal. Learned CIT(DR) could not controvert the fact that tax effect involved in the appeal is less than ₹ 10,00,000/-.
From para 10 of the above Circular, it is palpable that the Instruction is applicable to the pending appeals also with retrospective effect and there is a clear-cut direction to the Department to withdraw or not press such appeals filed before the ITAT, wherein tax effect is less than ₹ 10,00,000/-.
Going by the prescription of the afore-noted Circular, we are of the view that the Revenue should have either not filed the instant appeal before the Tribunal or withdrawn the same as the tax effect in this appeal is admittedly less than the prescribed limit i.e. ₹ 10,00,000/- for not filing the appeal. Accordingly, we dismiss the instant appeal without going into merits of the case. However, the Department is at liberty to file the Miscellaneous Application, if the tax effect is found to be more than the prescribed limited of ₹ 10 lacs or otherwise. Appeal of the Revenue stands dismissed.
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2017 (6) TMI 1346
Disallowance u/s 14A r.w.r. 8D - HELD THAT:- Admittedly, the year under appeal is assessment year 2005-06 i.e. the year when the provisions of Rule 8D of the Rules were not on Statute. The Hon’ble Bombay High Court in Godrej Boyce Mfg. Co. Ltd. [2010 (8) TMI 77 - BOMBAY HIGH COURT] had held the said provisions to be prospective in nature, hence the same were not applicable to the year under appeal. Accordingly, the findings of CIT(A) in para 2.8.11 needs to be reversed. The CIT(A) himself though in the paras thereafter have admitted that the provisions of Rule 8D of the Rules are not applicable and in view of the provisions of section 14A of the Act, disallowance of ₹ 1 lakh was made. We uphold the said disallowance of ₹ 1 lakh under section 14A of the Act. Accordingly, the ground of appeal No.2 is decided as indicated above.
Disallowance of Excise duty on obsolete stock - HELD THAT:- The assessee had made provision of Excise duty which as per the assessee, was included in the closing stock and was also paid before the due date of filing the return of income. We find that similar issue of provision of Excise duty on obsolete stock arose before the Tribunal in assessment year 2004-05 [2015 (12) TMI 1742 - ITAT PUNE] wherein as held that the assessee is entitled to the claim of deduction under section 43B of the Act as the aforesaid amount admittedly, was paid before the due date of filing the return of income for the instant assessment year, as certified by the Auditor in the audit report in Annexure 7 attached to the Form No.3CD, wherein it has been certified that the amount of Excise duty paid up to date of filing the return of income.
Adhoc addition by valuing the stock of scrap as on 31.03.2005 - assessee explained that it was its policy not to value any scrap at the close of the year and the said policy was consistently followed from year to year - CIT(A) restricted the addition by revaluing the stock @ ₹ 5 per Kg., estimated on adhoc basis - HELD THAT:- The assessee is consistently following the method of accounting, wherein whenever scrap was sold by the assessee, the receipts from the sale of such scrap were accounted for in the books of account. However, scrap which was available at the end of year had not been shown as part of the closing stock. The estimated value of the stock which has been upheld by the CIT(A) is also ₹ 75,000/- as against the same, the assessee during the year under consideration had sold scrap for about ₹ 18 crores, which has been included as receipts of the business for the year under consideration by the assessee. In view thereof, where a consistent approach has been followed by the assessee, we find no merit in the inclusion of value of scrap as on the close of the year at ₹ 75,000/- as part of income of assessee. - Decided in favour of assessee.
TP Adjustment - MAM Selection - benchmarking the transaction of manufacturing of wires - adjustment made on account of arm's length price of the manufacturing division i.e. export of wire - assessee had applied TNMM method with net profit margin as the Profit Level Indicator (PLI) in order to benchmark the arm's length price - TPO had applied the CPM method and had considered the rate of GP as comparison in order to benchmark the arm's length price of international transactions - HELD THAT:- We find merit in the plea of assessee that where transactions under the same segment are inter-linked, then they are to be aggregated in the hands of assessee. This plea of aggregation has been accepted and adopted in the hands of assessee in the earlier years and even in the later years. Accordingly, the same merits to be applied in the year under consideration also.
TNNM method is the most appropriate method to be applied to benchmark the international transactions of exports to associated enterprises. The assessee aggregated all the international transactions under this division and applied TNNM method and found the transaction of exports to associated enterprises at arm’s length. However, the Assessing Officer is directed to verify the said claim of assessee by applying single year’s data and compute the adjustment, if any, in the hands of assessee after affording reasonable opportunity of hearing to the assessee.
Export of Seamless tubes and pipes - Since the facts of the present case are identical to the facts in earlier and subsequent years, we find no merit in the said stand of the TPO. Where the transactions are inter-linked, then aggregation approach is to be applied as held by us in the paras hereinabove in respect of division of manufacturing of wires. The said aggregation approach has been applied by the TPO himself in assessee’s own case in both the preceding and succeeding years except the year under consideration. Since there is no difference in the factual aspects, we find no merit in the approach adopted by the TPO. Once the aggregation approach is to be applied, then thereafter, CUP method cannot be applied because both the activities having controlled transactions of import of service charges, management fees, etc. and hence, are tainted. See RACOLD THERMO LIMITED [2015 (10) TMI 1747 - ITAT PUNE] and JOHN DEERE INDIA PVT. LTD., (JOHN DEERE EQUIPMENT PVT. LTD.) [2015 (3) TMI 318 - ITAT PUNE]
Accordingly, we allow the claim of assessee in this regard. The TPO is directed to apply the TNNM method on single year’s data and compute the adjustment, if any, in the hands of assessee. Reasonable opportunity of hearing shall be given to the assessee in this regard.
Adjustment made to international transactions of management service fees - Receipt of management services from Sandvik group entities - HELD THAT:- We find merit in the claim of assessee and in view of gamut of evidences filed by the assessee establishing its claim of receipt of management support services from Sandvik entities, which in turn, was as per terms of agreement, then there is no merit in making any adjustment on account of payment of management fees. Upholding the order of CIT(A), we reverse the findings of the TPO in this regard as the same are without any basis, in view of specific covenants of the agreement entered into by the assessee with Sandvik AB, Sweden.
Where the management services have actually been rendered, may be, by Sandvik entities, then the arm's length price of such a transaction cannot be taken at Nil. The assessee has applied TNNM method to determine the arm's length price of payment of management fees by aggregating the transactions at Nil. Accordingly, we hold that no addition is merited in the hands of assessee on account of transfer pricing adjustment on the transaction of payment of management services to Sandvik AB, Sweden.
Assessing Officer had disallowed the claim was that the payment was in the nature of dividend. Once the amount has been taxed in the hands of recipient i.e. Sandvik AB, Sweden, as income on account of rendering of management services, there is no merit in the said stand of Assessing Officer in treating the said payment to be dividend and accordingly, the same is dismissed. The grounds of appeal No.2a and 2b raised by the Revenue are thus, dismissed.
Nature of expenditure - software application as revenue expenditure - HELD THAT:- In view of the ratio laid down in assessee’s own case in earlier years [2015 (12) TMI 1742 - ITAT PUNE] and the facts being similar, we uphold the order of CIT(A) in allowing the expenditure incurred on software application. The ground of appeal No.3 raised by the Revenue is thus, dismissed.
Addition on account of closing stock of obsolete inventory - HELD THAT:- As relying on own case [2015 (12) TMI 1742 - ITAT PUNE] we uphold the order of CIT(A) in deleting addition made on account of value of obsolete inventory as part of closing stock.
Allowing set off of losses suffered by the newly set up EOU unit against its other business income - HELD THAT:- As relying on own case [2015 (12) TMI 1742 - ITAT PUNE] we hold that the assessee is entitled to set off of losses of EOU unit against the other business income, if any, assessed in the hands of assessee for the captioned assessment year. Balance loss, if any, would be carried forward to the succeeding years to be adjusted as per the provisions of the Act. Ground of appeal raised by the Revenue is also dismissed.
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2017 (6) TMI 1345
Disallowance of interest u/s.36(1)(iii) - disallowing entire interest on term loans/working capital loans paid to banks/others treating them to be capital in nature on the assumption that all these loans were utilized for investment in its wholly owned foreign subsidiary i.e. Aban Holdings Pte Limited - HELD THAT:- As decided in own case [2016 (10) TMI 807 - ITAT CHENNAI] we are inclined to remit the issue to the file of AO on similar direction. Further, we direct the AO to verify whether the investment is made in subsidiary to have a controlling interest, or to avoid the dilution of controlling interest, or to keep the controlling interest intact as per object clause of Memorandum of Association of the assessee company and to decide thereupon. Hence, this ground is partly allowed for statistical purposes.
Disallowance u/s.14 A - assessee accounted an amount as dividend income from mutual funds / shares during the year and claimed the same as exempt u/s.10(34) - HELD THAT:- As decided in own case [2016 (10) TMI 807 - ITAT CHENNAI] AO has to consider the assessee’s own fund i.e. capital and reserves as available on the date of investment which yields exempted income and thereafter he shall apply the Formula in Rule 8D and also exclude investments in subsidiaries.
With this observation, we remit the issue relating to disallowance u/s.14A r.w.r.8D to the file of AO for fresh consideration. Hence, this ground is allowed for statistical purposes.
TDS u/s 195 - expenditure incurred on account of management fees and consultancy charges paid outside India -Disallowance u/s.40(a)(i) - HELD THAT:- The Explanation incorporated in section 9 declares that “where the income is deemed to accrue or arise in India under clause (v),(vi) and (vii) of sub-sec.(1), such income shall be included in the total income of the non-resident, whether or not be resident as a residence or place of business or business connection in India”. The plain reading of the said provisions suggests that criterion of residence, place of business or business connection of a non-resident in India has been done away with for fastening the tax liability. However, the criteria of rendering service in India and the utilization of the service in India to attract tax liability u/s.9 (i)(vii) remained untouched and unaffected by the Explanation to Sec.9 of the Act and outside India. Therefore, the twin criterion of rendering of services in India and utilization of services in India become evidently necessary condition to deduct tax However, in respect of said payments, the rendering of services being purely off shore and outside India, the whatever paid towards said services does not attract tax liability.
We inclined to remit the issue to the file of Assessing Officer to examine the issue afresh in the light of above order along with concerned DTAA and decide thereupon. The issue is partly allowed for statistical purposes.
Disallowance of depreciation u/s.32 for non deduction of TDS - assessee has claimed depreciation @ 20% towards Dry Docking Expenses, which was capitalized for which the assessee should have deducted TDS u/s.195 - HELD THAT:- We are of the opinion that the depreciation cannot be disallowed which is to be granted on the cost of capital assets on which there is no question of TDS. See M/S. CRESCENT CHEMSOL PVT. LTD. VERSUS THE ACIT 10 (1) , MUMBAI. [2011 (3) TMI 1808 - ITAT MUMBAI]
Admission of additional ground - Disallowance of FCCB expenditure - claim of premium on FCCB in the return or revised return - assessee has taken a plea before the DRP to consider this issue, but refused to entertain it on the reason that it was not before the TPO/AO - HELD THAT:- As all the facts are available on record and assessee made a claim, it is appropriate to remit the issue to the file of AO for his consideration. In view of the judgement of Supreme Court in the case of National Thermal Power Co. Ltd. v. CIT [1996 (12) TMI 7 - SUPREME COURT], wherein it was held that a legal ground can be raised at any stage of appeal.
Thus this issue is remitted back to the file of AO, if require, the AO should call for remand report from the TPO and decide the issue in accordance with law and on merit, we refrain from commenting on merits as the lower authorities to decide it. Hence, this ground is remitted to the file of AO for fresh consideration.
Claim of withholding tax u/s.90 - HELD THAT:- As decided in own case [2016 (10) TMI 807 - ITAT CHENNAI] we are inclined to hold that once the interest income subject to tax in any manner in the hands of the assessee, the corresponding tax credit to be given. Accordingly, this ground is remitted to the AO to examine the issue in the light of our above findings.
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2017 (6) TMI 1344
Validity of notice u/s.143(2) belatedly - notice issue beyond prescribed time - validity of revised return filed - notice beyond the statutory period of six months from the end of the financial year - HELD THAT:- Admittedly, the last revised return filed by the assessee on 26.02.2014. This was admittedly a valid revised return. The AO has also not rejected the revised return. The assessee has also given his Explanation for filing the said revised return. In fact, after the said revised return was filed, notice u/s.142(1) has been issued on 10.12.2014 and show cause notice have been issued on 23.12.2014 and on 12.03.2015. In response to the show cause notice issued by the AO on 23.03.2015, intimating the assessee to provide his response by 27.03.2015, the assessee has intimated that the notice u/s.143(2) has not been issued on the assessee within the prescribed time. In fact, before the show cause notice being issued by the AO, the assessee never had an opportunity to intimate the AO that notice u/s.143(2) had not been issued.
A perusal of the provisions of Sec.143(2) shows that the said notice is not assessment year specific but it is return specific.
Its time limit is computed from the end of the financial year in which the return is furnished. It is mandatory for the issuance of notice u/s.143(2) in the event that the AO proposes to make assessment u/s.143(3).
In the present case, the AO having not issued notice u/s.143(2) in respect of a valid revised return filed on 26.02.2014 and more so, the said return have not been treated as invalid, the consequential assessment is bad in law, in view of the principles laid down in the Hon’ble Supreme Court in the case of ACIT vs. Hotel Blue Moon reported in [2010 (2) TMI 1 - SUPREME COURT]. Further, in view of the position in law that if a revised return is filed u/s.139(5) and if such return is a valid return then the assessment can be completed only on the basis of such revised return as has been held in the case of Orissa Rural Housing Development Corporation Ltd. [2011 (12) TMI 230 - ORISSA HIGH COURT] the assessment is liable to be annulled. - Decided against revenue.
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2017 (6) TMI 1343
Bogus purchases - applying peak credit theory - AO received specific information from the Director General of Income Tax, Mumbai that the Sales Tax Department, Government of Maharashtra has found that the assessee is involved in taking accommodation entries of bogus purchases - HELD THAT:- It is settled legal position that once the assessee has filed all the necessary details before the AO , it is for the AO to disprove the evidences submitted by the assessee and point out further defects in the books of account before making addition on account of bogus purchases. In the instant case before us, the whole conclusion has been drawn by the revenue authorities merely on conjectures, surmises and presumption that the assessee might have taken the hawala entries from the hawala operators and the cash so generated was used for making purchases from the gray market.
No concrete findings with the necessary evidences were given by the revenue authorities for making the addition/enhancement. We are not in agreement with the conclusion drawn by the FAA that the addition as made by the AO u/s 69C was correct with the further enhancement by the ld.CIT(A). Accordingly, we set aside the order of the ld.CIT(A) on this issue and direct the AO to delete the additions.
GP estimation - AO observed that the GP of the assessee in the current year was 6.02% as compared to 6.36% in the immediate preceding year - AO was not convinced with the contention of the assessee that the fall in GP is due to overall market conditions and also that the sales of the assessee increased to ₹ 6,30,62,994/- as compared to ₹ 6,09,13,726/-/- in the immediate preceding year and made addition at the rate of 0.5% - HELD THAT:- CIT(A) acted primarily on the conjecture, surmises and presumptions by coming to the conclusion the assessee saved taxes from 4 to 12% by purchasing goods from gray markets and accordingly, enhanced the addition by 4% of the tainted purchases of ₹ 2,73,65,128/-. CIT(A) has not given any concrete basis but generalised that 4 to 12% were generally saved when the purchases were made from gray market. It is pertinent to note the fact that the assessee has also paid amount of sales tax which the so called hawala operators should have paid who provided accommodation entries to the assessee as the assessee was forced to pay the sales tax by VAT authorities. The enhancement of income is unreasonable and uncalled for in view of the facts and discussion made hereinabove. We do not find any justification or reasons for enhancement by applying GP of 4% on the bogus purchase of ₹ 2,73,65,128/- as against 0.50% by the AO. We do agree with the ld.CIT(A) on the issue of confirming the GP addition in order to equalize the GP on tainted amount of purchases which is made at the rate of 0.50% on bogus purchases which comes to ₹ 1,36,825/-/- - Decided partly in favour of assessee.
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2017 (6) TMI 1342
Disallowance made in respect of payment to unapproved gratuity fund - Assessee paid sum by way of contribution towards gratuity to a trust which was created for the benefit of employees of the assessee company - AO noted that the said gratuity fund scheme was not approved by the CIT - AO and the CIT(A) thus, invoked the provisions of section 36(1)(v) of the Act to disallow the said claim of assessee as the amount was not paid to an approved gratuity fund - HELD THAT:- As relying on Tata Iron & Steel Co. Ltd. [1975 (2) TMI 22 - BOMBAY HIGH COURT] amount which has been paid by the assessee towards an unapproved gratuity fund is duly allowable as deduction under section 37(1) of the Act though the assessee is not entitled to claim the deduction under section 36(1)(v) of the Act. Accordingly, the ground of appeal No.1 raised by the assessee is allowed.
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2017 (6) TMI 1341
Filing of the option letter - allegation of non-filing of monthly return electronically - TNVAT Act - HELD THAT:- Such filing is disputed by the other side specifically by contending that some records are fabricated by the petitioner. Therefore, in view of the above said disputed question of fact, this Court is not inclined to interfere, as it is open to the petitioner to raise the contention before the Appellate Authority, who is also the fact finding authority. Insofar as the next contention viz., filing of the monthly return electronically is concerned, again this Court is not inclined to interfere, since it is an admitted fact that the petitioner has chosen to file the returns after a period of three years i.e., in the year 2015.
Accordingly, without expressing any view on the merits of the contentions raised by the respective parties, these writ petitions are disposed of, with liberty to the petitioner to agitate the matter before the Appellate Authority by way of filing an appeal, within a period of four weeks from the date of receipt of a copy of this order. If any such appeal is filed, the Appellate Authority shall consider the same on its own merits and in accordance with law, without reference to the period of limitation.
Petition closed.
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2017 (6) TMI 1340
Maintainability of appeal - low tax effect - HELD THAT:- As appellant submits that the tax effect involved in the present appeal is less than ₹ 20 lakhs and as per the CBDT Circular No.21 of 2015 dated 10th December, 2015, the department has taken a policy decision not to prosecute the appeals wherein the tax effect is less than ₹ 20 lakhs.
In view of the above, the learned Counsel for the appellant seeks leave to withdraw the appeal. The appeal stands disposed of as withdrawn.
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2017 (6) TMI 1339
Assessment of income - purchase of the assessee has been treated/added as unaccounted expenditure, and also total turnover of the assessee as unaccounted profits - Assessee argued that the AO while completing the assessment giving effect to the order of the Tribunal had not provided adequate opportunity to the assessee - HELD THAT:- The fact that the total income of the assessee for the AYs 2000-01 to 2006-07 has come down from ₹ 125 Cr. to ₹ 18.5 Cr. on the basis of the mere evidences which have been produced before the AO itself given ground to grant the assessee one more opportunity to produce further evidences, if any, before the AO.
.CIT(A) has dismissed the assessee’s appeals on the basis of the letter filed by the assessee dated 11.06.2014, reading of which clearly shows the frustration of the assessee on account of his ill-health and predicament also gives reason that the issues in the appeal must be restored to the file of the AO. Not only this, the fact that the total purchase of the assessee has been treated/added as unaccounted expenditure, and also total turnover of the assessee as unaccounted profits – a practical impossibility, which would need readjudication. This being so, the fact that the Ld.AR of the assessee has admitted that he has been able to compile all the details in respect of the additions made in the assessment and that he would be in a position to explain all the additions, in the interest of natural justice, the issues in this appeal are restored to the file of the AO for re-adjudication after granting the assessee adequate opportunity to substantiate his case. Appeals filed by the assessee allowed for statistical purposes.
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2017 (6) TMI 1338
Restoration of name of the company in the Registrar of members - section 252(3) of Companies Act - HELD THAT:- On the plain reading of the said provisions it is crystal clear that the Company, or any member, or any creditor can present an application within a period of 20 years from the publication made in the official Gazette of the notice to strike out the name of such Company from the register of the Registrar of Companies and that any of the above referred three category of persons can maintain an application to restore the name of the Company in the register of the Registrar of Companies. The said provisions, amongst others, also permit the restoration of a Company not only if it is shown that the said Company was carrying on business, or was in operation, but also if it was otherwise just that the Company be restored to the register.
In the present case in hand, as mentioned hereinbefore, the petitioner No.1 Company is the owner of land ad-measuring 10 bigha- 4 kathas - 19 lechas at Bongaigaon District. Hence, this appears to be a fit case wherein this Court may take judicial notice of the ever rising market value of land. In this regard, I find support from the case of Rattan Arya V. State of Tamil Nadu, [1986 (4) TMI 346 - SUPREME COURT]. The ownership of such a big estate is indicative of the fact that if there is no owner of any land, there is every likelihood of the said land will waste away by encroachment or otherwise or it will become a den for anti-social activities. Fraudulent sale of land in our Country is not uncommon, which would be revealed from the perusal of innumerable case reports where land involved in the suit or proceeding was illegally and fraudulently transferred.
This application deserves to be allowed.
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2017 (6) TMI 1337
Estimation of income - bogus purchases - assessee making unaccounted production out of its shown purchases and selling them through their sister concerns and showing bogus purchases in hand of that sister concern - HELD THAT:- Assessee, who is in the business of manufacturing polymer, was found to be making undisclosed sales. For the assessment year 2007-08, therefore, the Assessing Officer added a sum of ₹ 1.13 crores to the total income of the assessee by way of suppressed sale which was treated as unaccounted for undisclosed income of the assessee.
In the appeal, the CIT(A) reduced the addition on the premise that not the entire unaccounted sale but only the profit element embedded in such sale can be brought to tax in the hands of the assessee. This issue was confirmed by the Tribunal relying on the judgement of this Court in case of Commissioner of Income Tax vs. President Industries [1999 (4) TMI 8 - GUJARAT HIGH COURT]
We are in broadly agreement with the view of the Tribunal. No question of law arises
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2017 (6) TMI 1336
Taxability of interest received u/s 244A - HELD THAT:- So far as taxability of interest Under Section 244 is concerned, under Article 11(4) of India Singapore Treaty, the same is now covered by the decision of the Hon'ble Special Bench in the case of ACIT vs Clough Engineering Ltd[2011 (5) TMI 562 - ITAT, DELHI] -Accordingly, we hold that so far as the issue of taxability of interest u/s 244A in the hands of the assessee, we decide the same in favour of the assessee.
Not granting Credit for TDS, Advance Tax and Self-Assessment Tax - HELD THAT:- We direct the Assessing Officer to grant credit for TDS, Advance Tax and Self-Assessment Tax after due verification.
Income accrued in India - whether the Ld. DRP was correct in holding that the entire liability was extinguished if the payment in question was made at Arm’s Length? - HELD THAT:- This issue has been decided in favor of the assessee in the case of M/s. Set Satellite (Singapore) Pte. Ltd v. Dy.DIT (International Taxation) [2008 (8) TMI 96 - BOMBAY HIGH COURT] wherein it was held that advertisement revenue received by resident of Singapore is not taxable in India. It was held that sales were made on principle to principle basis.
Distribution revenue earned - HELD THAT:- As decided in own case[2015 (9) TMI 793 - ITAT MUMBAI] so far as the issue relating to addition on account of ‘advertisement revenue’ and ‘distribution revenue’ the same stands decided in favor of the assessee by the Tribunal, which has been affirmed by the Hon’ble High Court in Assessment Year 1999-2000 and also in subsequent years. As regards the issue of ‘distribution receipts’ treated as ‘royalty income’, we find that this has been treated as business income and such a finding or conclusion now have attained finality, as pointed out by the Ld. Senior Counsel. Thus, finding of the CIT(A) on both the issues are affirmed and ground no. 1 & 2 are dismissed
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2017 (6) TMI 1335
Admit substantial question of law - income exempt under section 10 considered for purposes of computing the 85% application of income - whether Tribunal was right in holding that the shares of TCS received in the year 200102 were held in breach of section 13(1)(d) ? - whether Tribunal was right in holding that the sale proceeds arising from the sale of bonus shares of TCS were required to be converted into asset/investment permissible under Section 11(5) and hence, clause (iia) of the proviso to section 13(1)(d) would not apply ?
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2017 (6) TMI 1334
Direction to respondents to act in accordance with the guidelines in respondent No.1-Bar Council of India's letter dated 21st September, 2013 - non-enrolment of petitioner as an advocate despite the decision of respondent No.1-Bar Council of India - whether the engagement of the petitioner with the Corporation as Legal Consultant would violate the Rule or not?
HELD THAT:- Exercising powers under sub-section (2) of Section 26 of the Advocates Act, 1961, respondent No.2-Bar Council of Gujarat solicited opinion of respondent No.1-Bar Council of India. Respondent No.1 adopted an objective procedure of appointing a Committee of Retired Judge of the High Court, obtained report. The final decision was taken on the basis of such report to refuse the enrolment to the petitioner on the ground that it would be in contravention of Rule 49 of the Rules. Thus the expert committee went into the issue and answered it. At this stage contention of party-in-person about constitution of the committee may be dealt with, Bar Council of India had on the contrary required personal presence of the petitioner for giving opportunity to her for hearing. As the party-in-person was not able to remain present, in the fairness, the committee was constituted headed by the Retired Honourable Judge of this Court to have a proper decision on the issue. No illegality was committed by the Bar Council of India in constituting the committee. It was rather just, fair and reasonable stand to have an objective view.
Looking at Rule 49 of the Bar Council Rules, it provides that an advocate shall not be a full-time salaried employee. The conditions attached to the contract of service of the petitioner with the Corporation are reflective of the nature of the employment. The employment envisages that services are required to be rendered during the standard hours of service as per condition No.2. Condition Nos.9 and 7 show that service as legal assistant rendered by the petitioner is a full-time job and attaches with it monthly payable amount of ₹ 25,000/- - The mode of payment of TDS cannot determine the nature of employment for the purpose of Rule 29 of the Rules.
Nothing could be propounded to persuade the Court to take a different view. From the totality of operation of the facts and considering the nature of the service contract of the petitioner with the Corporation, there is no gainsaying that the petitioner incurs debility in terms of Rule 49 as her employment could be characterised as a full-time salaried employment. As a result, refusal by the respondents to grant the petitioner enrolment and the certificate to practice law could be said to be eminently proper and legal - Petition dismissed.
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2017 (6) TMI 1333
Levy of the import fee - import of Denatured Spirit from outside the State - It is the case on behalf of the petitioners that once the spirit is Denatured after it being subjected to a process, the Denatured Spirit is Ethanol and therefore, the same is rendered unfit for human consumption and the same cannot be renatured again so as to divert the same again for potable use and the same is thereafter used only for industrial purpose, the State has no legislative competence to levy fee / import fee on Denatured Spirit / industrial alcohol manufactured and used for industrial purpose because the said subject does not fall under any of the Entries of List II of Schedule 7 of the Constitution of India.
HELD THAT:- Considering the pith and substance of the levy of fees on import of Denatured Spirit / Ethanol on import of the same from other States and considering the fact that there is a Prohibition Act in the State of Gujarat and therefore, considering Article 47 of the Constitution of India and Entry 33 of List II of Schedule 7 of the Constitution of India read with Entry Nos. 6, 8, 24, 51 and 68 of List II and Entry 33 of List III of Schedule 7 of the Constitution of India and the purpose and object for which the import fee is levied, it cannot be said that such a levy is beyond the legislative competence of the State as contended on behalf of the petitioners.
While the impugned levy of fees on import of Denatured Spirit / Ethanol though is held to be within the legislative competence of the State, does it pass the test of quid pro quo or not? - HELD THAT:- The State Government has not undertaken any supervisory activity which will constitute quid pro quo for the imposition of the import fees. As observed by the Hon’ble Supreme Court in catena of decisions more particularly decisions referred to hereinabove, there is a distinction between a “fee” and a “tax”. A tax is levied as part of a common exaction, whereas a fee is payment towards services rendered. The purpose for which the fee is being collected (so stated in the affidavits in reply) viz. to protect the interest of the Distelleries in the State of Gujarat, has no nexus with the import fees to be collected on import of Ethanol from outside Gujarat. Thus, there is no element of quid pro quo. A “fee” is generally defined to be a charge for special services rendered to individuals by some governmental agency. The amount of fee levied is supposed to be based on the expenses incurred by the government in rendering the service. In the present case there is a total absence of any corelation between the expenses incurred by the government and the amount raised by collection of import fee on import of Ethanol from outside Gujarat. Thus, quid pro quo cannot have any possible application in the present case.
The impugned levy of import fee on import of Denatured Ethanol from outside Gujarat and the purpose and object for which the fee is sought to be levied, we are of the opinion that the impugned levy fails the test of quid pro quo. Under the circumstances, the impugned levy of import fee on import of Denatured Ethanol from outside Gujarat as per Rule 52 of the Gujarat Bombay Denatured Spirit Rules, 1959 is invalid in law and is illegal - Petition allowed.
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