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Showing 81 to 100 of 1477 Records
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2016 (4) TMI 1398
Characterization of income - nature of income - rental receipts of the assessee - business receipt or income from house property - HELD THAT:- For Asst. Year 2006-07 in assessee’s own case [2015 (10) TMI 2743 - ITAT MUMBAI] tribunal has confirmed the order of CIT(A) and considered the business centre service charges as business receipts - premises are in the control of the assessee and the assessee is required to provide services as per the agreement for which personnel on permanent basis were to be employed. Thus, the management and administration of the mall vested with the assessee. The detailed finding recorded by the CIT(A) has not been controverted by the department by bringing any positive material on record.
Issue in favour of the assessee for holding that such commercial exploitation renders income from business rather than income from house property. - Decided against revenue.
Disallowance of interest u/s. 36(1)(iii) - assessee has failed to substantiate the commercial expediency of giving interest free advances to the sister concerns out of its interest bearing borrowings - HELD THAT:- Assessee before us clearly stated that the assessee and its sister concerns are engaged in the business of real estate and this fact was argued before CIT(A) by assessee. He explained that the assessee has embarked upon setting up malls/business centre in a very big way in India . Developing and managing malls/shopping complexes is a very complex specialized business activity. It requires huge capital investment, manpower and, above all, expertise and knowledge in retail market and consumer behavior. The sister concerns of the assessee were in mall management and development business since many years due to which they had acquired relevant expertise and knowledge in the field of Mall Management Co. Ltd. As these concerns were already in mall business and the assessee had advanced amounts to these concerns as a part of its short term and long term strategy to expand its mall business, including construction of premises for the assessee in popular commercial centre for enabling the assessee to establish itself mall business. In view of the above facts and circumstances, we are of the view that the CIT(A) has rightly deleted the disallowance of interest - Decided against revenue.
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2016 (4) TMI 1397
Maintainability of appeal - low tax effect - HELD THAT:- The departmental appeal has been filed wherein the tax effect involved is much less than ₹ 10 lakh.We dismiss the departmental appeal considering the material available on record.
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2016 (4) TMI 1396
Scope of Review - the review petitions were ordered to be heard by a Five-Judge Bench - HELD THAT:- After giving our thoughtful and due consideration, we are of the view that the judgment delivered in Christian Medical College [2013 (10) TMI 432 - SUPREME COURT] needs reconsideration. We do not propose to state reasons in detail at this stage so as to see that it may not prejudicially affect the hearing of the matters.
Suffice it is to mention that the majority view has not taken into consideration some binding precedents and more particularly, we find that there was no discussion among the members of the Bench before pronouncement of the judgment.
Review petition allowed - the judgment dated 18th July, 2013 recalled and the matters are directed to be heard afresh.
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2016 (4) TMI 1395
Reopening of assessment u/s 147 - eligibility of reasons to believe - HELD THAT:- Under the substituted section 147 existence of only the first condition suffices - if the AO for whatever reason has reason to believe that income has escaped assessment it confers jurisdiction to reopen the assessment. It is, however, to be noted that both the conditions must be fulfilled if the case falls within the ambit of the proviso to section 147. The case at hand is covered by the main provision and not the proviso.
Ingredients of section 147 are fulfilled, the Assessing Officer is free to initiate proceeding under section 147 of the Act. While issuing the notice u/s.148 of the Act, for the purpose of reopening of assessment, the final outcome of the proceedings is not relevant and at the initial stage, what is required is “reason to believe” but not established fact of escapement of income.
At the stage of issue of notice, the only question is whether there was relevant material on which a reasonable person could have formed a requisite belief, whether the material would conclusively approve the escapement is not the concerned, at the time of reopening of the assessment. AO has not required to establish by conclusive evidence that the issue raised in reopening assessment would be calculated with the addition of income in reassessment order.
Issue of notice u/s.148 of the Act, for the purpose of reopening of assessment u/s.147 of the Act is based on material available before the Assessing Officer in respect of undisclosed bank account in foreign countries so as to believe that the income was escaped from the assessment, while framing the original assessment. Hence, reopening of assessment is valid. - Decided against assessee.
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2016 (4) TMI 1394
Set off of income offered u/s.68 against the loss incurred by the assessee - AO had not allowed the set off of the income offered u/s.68 against the loss incurred in all the regular heads of income specified in Section 14 - HELD THAT:- As in M/S. ERODE ANNAI SPINNING MILLS P. LTD. [2015 (11) TMI 587 - ITAT CHENNAI] business loss of the assessment year under consideration could be set off against the income assessed u/s.68 under the head ‘other sources’. However, the issue on hand before us in this appeal is whether unabsorbed depreciation of earlier years could be set off against deemed income u/s.69 of the Act or not, which is totally different issue. Section 72 of the Act does not permit set off of accumulated losses and unabsorbed depreciation against any other head of income other than the income from “profits and gains of business or profession”. Being so, the above order of the Tribunal has no application to the facts of the present case.
Once unabsorbed depreciation is considered as part of current depreciation, no doubt, the net result of computation under the head 'Profits and gains of business or profession' for any given year would be inclusive of such unabsorbed depreciation. Needless to say that any loss as a result of such computation whether on account of unabsorbed depreciation or not would not be susceptible to a set off against income under the head salaries on account of specific Bar contained in sub-s. (2A) of s. 71 of the Act. Neither s. 72 nor s. 32(2) of the Act would in any way affect the inter-head adjustments specified u/s 71 of the Act nor the application of specific bar contained in sub-s. (2A) thereof. This being the case, we are of the opinion that the AO as well as the learned CIT(A) was well justified in not allowing the claim of the assessee for having its unabsorbed depreciation from earlier years to be set off against salary income.
Accordingly, we are of the opinion that the CIT(A) is justified in disallowing set off of unabsorbed depreciation from earlier years against income from other sources. Hence, the appeal of Revenue is allowed.
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2016 (4) TMI 1393
Addition of cash credits or investments unexplained u/s 68 / 69 - Assessee submitted that documents may help the assessee to substantiate the claim of receipt from his son-in-law - HELD THAT:- As in the interest of natural justice, the assessee should be provided with one more opportunity to prove the claim of receipt from his son-in law, since the same has been claimed to have been received in 2001. If it is proved that the above said amount was received in 2001, the same cannot be assessed during the year under consideration, since what was received during the year under consideration was only refund of amount given to Shri Prasad.
It is the responsibility of the assessee to substantiate the claim of receipt of loan in the year 2001. According to Ld A.R, the documents relating to criminal proceedings may throw light on the above said claim. Accordingly, we set aside the order of Ld CIT(A) on this issue and restore the same to the file of the AO with the direction to examine the same afresh in the light of documents that may be furnished by the assessee in this regard.
For remaining amount of ₹ 3.00 lakhs, the claim of the assessee is that the same is required to be given to Shri Ruban Thomas, the son in law of the assessee, i.e., according to the assessee, the same represents reimbursement of litigation expenses met by his son-in-law. This issue is connected with the claim of receipt of loan from sonin- law of the assessee. Accordingly, set aside this issue also to the file of the AO - Appeal of the assessee is treated as allowed for statistical purposes
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2016 (4) TMI 1392
Disallowance of guest house expenses - HELD THAT:- Identical issue has been decided by the Tribunal against the assessee in the earlier years. We find that while deciding the appeal for the AY 1996-97 [2013 (8) TMI 520 - ITAT MUMBAI] - Ground No. 1 is decided against the assessee.
Interest credited to interest suspense account taxed in earlier years - HELD THAT:- During the course of hearing before us, representatives of both the sides conceded that issue stands decided in favour of the assessee subject to verification by the AO with respect to the earlier years.
Disallowance in respect of payment for scientific research - HELD THAT:- AR agreed that assessee had not challenged the order for the year 1996-97 before the Tribunal. As the assessee had accepted the order of the FAA for the earlier year, we are of the opinion that there is no need to disturb the order of the CIT(A) for the current year as facts for both the years are identical- except that the amounts involved are different. Confirming the order of the FAA Ground No. 3 is decided against the assessee.
Exemption u/s. 10(15)(iv)(h) - assessee had claimed entire interest received on tax free securities exempt u/s. 10(15)(iv)(h) - as per assessee expression “income” meant “net income” i. e. receipt minus expenditure - HELD THAT:- AO had allowed expenditure to the extent of ₹ 25. 43 crores and had disallowed expenditure of ₹ 45. 51crores on proportionate basis, that the FAA directed the assessee to furnish details to prove that borrowed funds were not used for making investment yielding exempt income, that the assessee had admitted that it was not possible to co-relate the investment with own funds, the assessee had claimed that its own funds including reserves and surpluses were about ₹ 30, 000 crores for the year under consideration. The AO had applied the provisions of section 14A of the Act. In our opinion law relating to allowing expenditure with regard to exempt income has evolved since the appeal was decided by the FAA for the year under consideration. The AO/FAA did not have the benefit of the cases dealing with the provisions of section 14A, while making the assessment /deciding the appeal. Matter needs further verification/investigation. Therefore, in the interest of justice we are restoring back the issue the file of the AO for fresh adjudication. He is directed to afford reasonable opportunity of hearing to the assessee . Ground No. 4 is decided in favour of the assessee in part.
Reduction u/s. 80M - HELD THAT:- As decided in M/S. MODERN TERRY TOWELS LTD., [2012 (8) TMI 776 - BOMBAY HIGH COURT] the provisions of section 80HHC of the Income-tax Act, 1961, are entirely different from those of sections 80M and 80AA. There is no basis for importing the provisions of section 80HHC for interpreting section 80M. That would not lead to a satisfactory computation of the net dividend under section 80M. Tribunal was justified in law in allowing special deduction under section 80M in respect of gross dividend without deducting estimated expenses therefrom.
Disallowance of depreciation on leased assets - HELD THAT:- In the case of bank it is not permitted under the Banking Regulation Act to engage in the business of leasing of equipments. Following the decision of Special Bench of this Tribunal in case of IndusInd Bank Ltd. [2012 (3) TMI 212 - ITAT MUMBAI] we hold that the transaction in question is finance lease and not operating lease. Accordingly, we uphold the orders of the authorities below qua this issue - Decided against assessee.
Un-earned interest on doubtful advances as per sec. 43D - AR stated that the amount in question had already been disallowed in the past, that there cannot be disallowance of the same amount in two years - HELD THAT:- We find that the claim made by the assessee of double disallowance of the same amount has not been considered. Therefore, in the interest of justice we are reverting back the issue to the file of the AO to decide the issue afresh after affording reasonable opportunity of hearing to the aa. Gr. No. 7 stands partly allowed in favour of the assessee.
Deduction for provision for bad and doubtful debts u/s. 36(1)(viia) - HELD THAT:- FAA after considering the assessment order and the assessee’s order held that section 36(1)(viia) prescribed upper limit for deduction in respect of provision for bad and doubtful debts, that the assessee could not allow deduction for any amt exceeding the limit even if the provision had been created as per the directions of the RBI. During the course of hearing before us, representatives of both the sided agreed that issue stand decided against the assessee by the Tribunal in own case [2013 (8) TMI 520 - ITAT MUMBAI] - When the allowable claim has been accepted by the AO under the provision of section 36(1)(viia) then merely the provision made on the basis of RBI guidelines does not become allowable for deduction in contravention of the provision of section 36(1)(viia). It is pertinent to note that when the claim of deduction specifically provided u/s 36(1)(viia) then the same cannot be allowed by applying any other provision. - Decided against assessee.
Contribution to SBI Retired Employees Medical Fund - Addition u/s 40A - HELD THAT:- Tribunal was of the opinion that provisions of section 40A(9) should not make any harm to the expenditure incurred bonafide, that the contribution by the assessee bank was not disputed by the AO, stating that the same was not bonafide, that the funds were not controlled by the assessee banks, that the bonafide contribution made by the assessee as an employer was not hit by section 9 of section 40A of the Act. In the case under consideration, there is no doubt about genuineness of payment nor it is the case of the AO or FAA that Trust was not bonafide or the expenditure was not incurred wholly and exclusively for the employees. Considering these facts of the case and following the judgment of State Bank of Travancore [1986 (1) TMI 1 - SUPREME COURT] Ground No. 9 is decided in favour of the assessee.
Write off bad debts u/s. 36 (1) (iii), Recovery of bad debts written off u/s. 41(4) and Income earned from foreign branches - HELD THAT:- Remitting back all the three issue to the file of the AO for fresh adjudication. AO may afford a reasonable opportunity of hearing to the assessee.
Disallowance of depreciation on matured investments - HELD THAT:- Identical issue has been decided by the Tribunal against the assessee in the earlier years. We find that while deciding the appeal for the AY 1996-97 [2013 (8) TMI 520 - ITAT MUMBAI] - Ground No. 1 is decided against the assessee.
Loss on revaluation of permanent category investments - HELD THAT:- A security capital is employed, it is a part of normal course of business of a bank and the money which was not lend to the borrower but was invested in the form of deposits in another bank cannot be said to have become ceased to be part of stock in trade of bank. Keeping in view the ratio of these judicial pronouncements, we hold that the investment in question very much represented stock in trade of the baking business of the assessee and the loss on the revaluation thereof is allowable as deduction. Accordingly, the impugned order of the ld. CIT(A) on this issue is set aside and the A. O. is directed to allow the deduction claimed by the assessee on account of loss on revaluation of investment.
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2016 (4) TMI 1391
Correct head of Income - FD interest - business income or income from other sources - HELD THAT:- Not in dispute that the assessee had to invest funds in fixed deposits and offered them as security for the overdraft facilities it received from banks.
In the case of Indo Swiss Jewels Ltd. [2005 (9) TMI 47 - BOMBAY HIGH COURT]had held that where interest is earned on inter corporate deposits made from surplus funds which are set apart for payment of imported machinery, the said interest income has to be assessed as business income.
In the case of Koshika Telecom Ltd. [2006 (2) TMI 140 - DELHI HIGH COURT] has taken the view that where deposit of margin money by an assessee with a bank was linked with the furnishing of bank guarantee to be given to the Department of Telecommunications, for obtaining a licence by an assessee who was in the business of telecommunication, the same has to be treated as business income.
In the case of Commissioner Of Income-Tax v. Lok Holdings [2008 (1) TMI 365 - BOMBAY HIGH COURT] held that money received by a property developer from prospective purchases during the progress of construction and where such funds were deposited by an assessee with the bank, interest earned on such deposits was held to have arisen out of business activity and, therefore, the same had to be construed as income from business. In view of the above, we are of the view that the order of CIT(A) holding that the interest income is income from business has to be upheld. - Decided in favour of assessee.
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2016 (4) TMI 1390
Validity of Section 22(12)(d)(a) of the West Bengal Value Added Tax Act, 2003 - challenge on the ground that merely because a registered dealer deals with another registered dealer whose registration is subsequently cancelled does not imply that the concerned transaction at a time that both the dealers held valid registration certificates could be questioned - HELD THAT:- There appears to be substantial merit to the challenge. All that a registered dealer has to do before entering into any transaction with another registered dealer is to assess whether such other dealer has a valid registration certificate. Once a dealer satisfies himself as to the validity of the registration certificate of other dealer, it may be too harsh to question the transaction upon the subsequent cancellation of the registration of the selling dealer, unless an element of connivance is established.
The report dated February 22, 2016 is set aside inasmuch as the same denies the input tax credit cited by the petitioner merely on the ground that the other dealers' registration certificates were cancelled ab intio and without taking into account that at the time that this petitioner entered into the relevant transactions with the other dealers, the other dealers held the valid certificates the other dealers' names figured on the respondents' website.
Petition disposed off.
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2016 (4) TMI 1389
Setting aside of notice inviting tenders for completing the residual work, for which, contract was awarded to the respondent No.2 agency - privity of contract - HELD THAT:- The petitioner has no privity of contract with either respondent No.2 or IOC, the principal assigner of the contract. In fact, counsel for the IOC has stated that whatever outsourcing agreements executed were without the permission of IOC. Be that as it may, under no condition the petitioner can claim any relief against IOC, particularly in facts of the present case. Firstly, the entire issue is in realm of contractual relations. Secondly, large number of disputed questions of facts are involved. Thirdly, there is no privity of contract between the petitioner and the IOC - Mere completion of the work even by the principal agency need not always be the sole criteria for payment when complex contractual obligations are to be performed.
Petition dismissed.
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2016 (4) TMI 1388
Benefit of interim order - continuation of employment of respondents - HELD THAT:- By way of an interim order by staying the operation of relieving order and by directing the Appellants to continue to employ the Respondents herein, the Tribunal has virtually decided the O.A. itself and granted the main relief by way of an interim order.
The order granted by the Tribunal dated 2.2.2016 and the confirmation of the same by the High Court vide impugned order dated 29.3.2016 cannot be allowed to stand.
Appeal disposed off.
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2016 (4) TMI 1387
Allowable business expenditure - share issue expenses incurred or raising capital for purchase of plant and machinery, purchase of consumables like diesel, oil and coal, deduction u/s 80M on the entire dividend income received, payments made to Glaxo Sports Club do not fall within the purview of Section 40A(9),Head Office Administrative Expenses and interest cost be not allocated to the Nasik Units for computing the quantum of deduction under Section 80I/80IA for the Nasik Units and disallowances made by him as part of profit of eligible unit on proportionate basis for the purpose of deduction u/s 80IB and 80IB - HELD THAT:- This Court dismissed the Revenue's appeal in [2013 (2) TMI 789 - BOMBAY HIGH COURT] - The questions raised therein were identical to question arrived herein. No distinguishing features have been shown to us for the subject assessment year from that existing for the A.Y. 199596. In the above view, question nos. (1), (2), (5), (6), (7) and (8) do not give rise to any substantial question of law. Thus, not entertained.
Interest on DPEA liability allowed as expenditure on year to year basis - whether interest liability was neither claimed as deduction in the return of income nor claimed as expenses in its books of account and at the best was treated as liability in the nature of contingent liability which had neither accrued nor arisen? - HELD THAT:- Revenue had filed an appeal from the order of the Tribunal for A.Y. 1996-97 on an identical question this Court dismissed the Revenue's appeal.
Advance license receivable by the assessee - Whether is to be taxed in the year in which the benefits actually accrue after the imports are effected and not in the year in which the licence is granted to the licencee / assessee? - HELD THAT:- Issue raised herein stands concluded against the Revenue by the decision of the Apex Court in Commissioner of Income Tax Vs. Excel Industries Ltd. [2013 (10) TMI 324 - SUPREME COURT]. No distinguishing features are urged before us to warrant our taking a different view from that taken in Excel India Ltd. (supra).
Disallowances as part of profit of eligible unit on proportionate basis for the purpose of deduction u/s 80IB and 80IB - whether deduction u/s 80IB of the Act cannot be allowed more than what was claimed by the assessee? - HELD THAT:- Question arising herein stands concluded against the Revenue the the decision of this Court in Associated Capsules (P) Ltd. Vs. Commissioner of Income Tax [2011 (1) TMI 787 - BOMBAY HIGH COURT]. No distinguishing features have been pointed out in respect of the present assessee which would warrant taking a different view
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2016 (4) TMI 1386
Addition on account of low house hold withdrawal - HELD THAT:- The section mandates that where in any financial year the assessee has incurred any expenditure and offers no explanation about the source of such expenditure or part thereof or the explanation, if any, offered by him is not in the opinion of the Assessing Officer, satisfactory, the amount covered by such expenditure or part thereof, as the case may be, may be deemed to be the income of the assessee. From these provisions, it is apparent that the onus is on the Revenue to prove that the assessee has actually incurred the expenditure.
There is no evidence or cogent material being brought on record or placed before us by learned D.R. which may prove that the assessee has incurred the expenditure much more than the sum of ₹ 85,000/- which has been withdrawn by the assessee as drawings except the payment of electricity.
AO just estimated the expenditure. Once the Revenue discharges its onus only then the onus gets shifted on the assessee to give explanation proving the nature and source of the expenditure to the satisfaction of the Assessing Officer. Since the Revenue did not discharge its onus we therefore, set aside the order of CIT(A) and delete the addition of ₹ 3 lac made on account of low drawings. Thus, ground No. 1 stands allowed.
Addition made on account of payment of electricity bill except the change in the figures - HELD THAT:- Assessee even though vehemently argued before us but could not prove or submit any cogent material or evidence which may prove the nature and source of these expenses incurred by the assessee. Revenue has discharged its onus by bringing the evidence on record but the assessee could not prove the nature and source therefore, we sustain the order of CIT(A) confirming the order of the Assessing Officer in respect of the addition being made for the payment of electricity bill - Decided against assessee.
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2016 (4) TMI 1385
Classification of services - Business Auxiliary Services - Department took a prima facie view that the contract was for the purpose of packing, loading and unloading etc. of the goods, for which labour was supplied by the respondent to M/s Birla Corporation Ltd. - HELD THAT:- The High Court has simply gone by the contract in question, which was entered into between the respondent and M/s Birla Corporation Ltd. and taking into consideration all the averments, which were made in the show cause notice, on the basis of admitted facts, it has come to a conclusion that even when the allegations in the show cause notice are accepted, the said contract does not amount to providing any 'Cargo Handling Service' as defined under Entry 23 of Section 65 of the Act. Therefore, we are of the opinion that the High Court did not commit any mistake or illegality in entertaining the writ petition when no disputed questions of fact were involved and the legal issue was to be decided on the basis of the facts, as admitted by the parties, which were so specifically recorded by the High Court itself.
The High Court, on the interpretation of the aforesaid Entry, has observed that two conditions for considering any service to be 'Cargo Handling Service' need to be satisfied, namely; (1) there must be a cargo i.e. a packed or unpacked commodity accepted by a transporter or carrier for carrying the same from one destination to another. It is only after the commodity becomes a cargo, its loading and unloading at the freight terminal for being transported by any mode becomes a cargo handling service, if it is provided by an independent agency and; (2) the service provider must independently be involved in loading-unloading or packing-unpacking of the cargo - in the instant case, as per the contract entered into between the respondent and the customer, namely, M/s Birla Corporation Ltd., the respondent was to supply manpower for working at the packing plant as per the customer's requirement. The contractor-respondent was to ensure that manpower deployed on the work given by customer's officers is executed properly, diligently, uninterruptedly and to the satisfaction of the customer in the factory premises of its works.
It is significant to note that no part of loading or unloading was assigned to the workers of the respondent-assessee upto transportation of the cement bags out of the factory. This work was, in fact, been performed by the automatic machines. It is through these automatic machines, the cement bags were loaded, unloaded, packed or unpacked and this included Cargo Handing Services provided for freight in special containers or for non-containerized freight, services provided by a container freight terminal or any other freight terminal, for all modes of transport and cargo handling service incidental to freight, but does not include handling of export cargo or passenger baggage or mere transportation of goods.
The High Court has rightly concluded that the aforesaid services would not fall within the definition of 'Cargo Handing Services'.
The conclusion of the High Court that services provided by the respondent-assessee did not amount to Cargo Handling Services and, therefore, no such service tax was leviable is upheld - Appeal dismissed.
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2016 (4) TMI 1384
Disallowance u/s 14A read with Rule 8D - HELD THAT:- It is apparent that the provisions of Section 14A read with Rule 8D of the Act is not applicable for the assessment year in question i.e. 2006-2007 and was to be applicable from the assessment year 2008-09 onwards. The Bombay High Court has settled law in this connection in case Godrej & Boyce Mfg. Co. Ltd. Vs. DCIT [2010 (8) TMI 77 - BOMBAY HIGH COURT].
No doubt the expenditure incurred to earn the exempt income is liable to be disallowed on reasonable basis by providing the reasonable opportunity to the assessee in accordance with the law specifically in view of the observations made by the Hon’ble Bombay High Court (Supra). Accordingly this issue is hereby restored to the file of Assessing Officer to re-examine the matter afresh in accordance with law. Accordingly this issue is decided in favour of the Assessee.
Disallowance of expenditure incurred by the Appellant in respect of reimbursement of property taxes to Precision Component(P) Ltd.(PCPL) - HELD THAT:- As A.R. contended the reimbursement of property tax partakes the character of rent only. There is merit in its said contention also. Hence, what is required to be seen is as to whether to aggregate amount of rent plus reimbursements compares well with the earlier years payment. If it does not compare well, then it is the duty of the assessee to justify the payment, this issue required fresh examination at the end of Assessing Officer. Accordingly we set aside the order of learned CIT(A) on this issue and restore this issue to the file of Assessing Officer for fresh examination.
Expenditure incurred upon the advertisement and promotion - HELD THAT:- Keeping in view of the argument advanced by the learned representative of the parties and perusing the record, it is observed that this matter of controversy, has already been adjudicated by the Income Tax Appellate Tribunal in the assessee’s own case [2008 (4) TMI 535 - ITAT MUMBAI] Moreover, this matter of controversy has also been adjudicated by the Hon’ble Bombay High Court in assessee’s own case for the A.Y. 1998-99 wherein, such expenditure has been treated as revenue expenditure.
Commission accrued to the assessee on the date of actual receipt of commission or on the date of payment by the client directly to the principal and not on the raising of invoices - when the commission received by the assessee company is required to be taxed - HELD THAT:- No doubt, the A.O. disallowed the same but the Hon’ble Tribunal in his judgment as Star India Pvt. Ltd. Vs. ACIT [2006 (7) TMI 569 - ITAT MUMBAI] found justifiable to tax an amount at the time of receipt and appeal against the said order was dismissed by the Hon’ble Bombay High Court in [2009 (3) TMI 990 - BOMBAY HIGH COURT]. No doubt in the said circumstance the ground raised by revenue does not seems justifiable therefore we have arrived at this conclusion that the learned CIT(A) has passed the order correctly and judiciously on this issue which does not require to be interfered with at this appellate stage. Hence, this issue is in decided in favour of the assessee.
Allowance of depreciation @ 60% on computer peripherals like rack, printer, port, routers, cord etc. - HELD THAT:- This controversy has been decided by the Tribunal in case filed as DCIT Vs. Datacraft India Ltd. [2010 (7) TMI 642 - ITAT, MUMBAI] and by the Hon’ble High Court of Delhi while the deciding the case of CIT Vs. BSES Rajdhani Powers Ltd. [2010 (8) TMI 58 - DELHI HIGH COURT]. The plea which has been taken by the revenue is that the depreciation which has been allowed @ 60% and the value of the paper and other materials, is higher but the matter has been considered by the learned CIT(A) who allowed the same on the basis of the assessment held in the year of 2003-04, 2004-05 and 2005-06.
Determination of arm’s length compensation as per order of the Transfer Pricing Officer(T.P.O) - HELD THAT:- In view of the report of Transfer Pricing Officer no adjustment was made to declare the arm’s length price by the assessee, therefore, in view of the said circumstance no addition on account of transfer pricing adjustment was being made to taxable income declined by the assessee. Nothing came into notice that the findings given by the Assessing Officer as well as learned CIT(A) were wrong against law and fact. Hence this issue is decided in favour of assessee and against the revenue.
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2016 (4) TMI 1383
Liability of service tax of respondent KSFE for the transactions which were subject of consideration - HELD THAT:- In Muthoot FinCorp. Ltd. v. CCE, Visakhapatnam [2009 (8) TMI 236 - CESTAT, BANGALORE], the Tribunal had taken the view that similar transactions were not exigible to service tax. The concept of the transaction is that KSFE provides service by releasing funds to a person in India, as a result of the money transferred through M/s. Paul Merchants Ltd., which is ‘PML’, for short. The Tribunal has noted that as a matter of fact, if a person pays money in England or elsewhere outside India to be given to his relative in India and the KSFE by virtue of the sub-representation agreement arranges to deliver the said money to the beneficiary on verification of identity, for this exercise, the KSFE does not charge any amount as commission or fee from the recipients of the amount. The charge if any levied by the company outside India on the person who pays the amounts is not a transaction in India.
The CESTAT was justified abundantly in following the ratio of Muthoot FinCorp and deciding that KSFE, which was in appeal before the CESTAT, was entitled to an order as has been granted by the Tribunal - Appeal dismissed.
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2016 (4) TMI 1382
Disallowance under section 14A - HELD THAT:- We observe that the assessee has more than sufficient owned funds to make investments. Since it is having huge owned funds and in comparison to that investments are of a very lesser amount, in view of the judgment of the Jurisdictional High Court in the case of Kapsons Associates Investment P. Ltd. [2015 (8) TMI 1277 - PUNJAB AND HARYANA HIGH COURT], we can safely infer that the investments have been made out of owned funds and not from borrowed funds. no disallowance under sect ion 14A of the Act with respect to interest expenditure can be made.
As regards the administrative expenditure, we are in agreement with the submissions of the learned counsel for the assessee that in the case of CIT Vs. Deepak Mittal [2013 (9) TMI 764 - PUNJAB & HARYANA HIGH COURT] has held that in the absence of any satisfaction recorded by the Assessing Officer as to the claim of the assessee, the disallowance made by him on account of administrative expenses under Rule 8D of the Income Tax Rules is not as per law. In view of the above, the act ion of the learned CIT (Appeals) in deleting the disallowance made by the Assessing Officer under sect ion 14A of the Act is confirmed.
Disallowance of interest u/s 36(l)(iii) on investment in shares - shares were actually allocated much later and the money was not actually used by assessee for business purpose - HELD THAT:- From the perusal of record and submissions given by the learned counsel for the assessee, there is no dispute to the fact that the assessee is having more than sufficient owned funds much larger than the total investments made in the share capital of the subsidiary companies. Therefore, we are in agreement with the arguments of the learned counsel for the assessee in view of the judgment of the Jurisdictional High Court in the case of Bright Enterprises [2015 (11) TMI 342 - PUNJAB & HARYANA HIGH COURT] and Kapsons Associates Investments P. Ltd. [2015 (8) TMI 1277 - PUNJAB AND HARYANA HIGH COURT] we can very easily presumed that the investments have been made out of the non interest bearing funds. Therefore, no disallowance under sect ion 36(1) (iii) of the Act can be made. Since it is held that the investments were made out of non interest bearing funds, it is automatically presumed that with regard to these investments the assessee had not made any claim of interest under sect ion 36(1) (ii) - there is no need for the assessee to prove that the funds were lent for business purposes or not. In view of this, we do not find any need to interfere in the order of the learned CIT (Appeals) in this respect
Addition on account of capitalization of capital advance by holding that these were for "purchase of spares" - before AO the assessee claimed these to be for "machinery" and hence filed different facts before Ld. CIT(A) - HELD THAT:- We do not find any infirmity in the order of the learned CIT (Appeals) since he has been fair enough to confirm the disallowance made by the Assessing Officer on account of interest of advance meant for purchase of generator, which is a capital asset to be acquired. However, with regard to two other advances, no capital asset is expected to come into existence. Therefore, the interest on these advances cannot be disallowed by the Assessing Officer. The grounds of appeal raised by the Revenue are dismissed.
CIT(A) powers u/s 251(1)(a) to remand back the issue to AO - CIT(A) erred in directing A.O. to pass a speaking order on the issue of adjudication of provision of Wealth Tax from the statement of taxable income prepared u/s 115JB - HELD THAT:- On perusal of the provisions of sect ion 115JB of the Act and the Explanation appended thereto, we are in agreement with the argument of the assessee that the only amount to be added back for calculating the book prof it under sect ion 115JB is that of income tax. Since the assessee had omitted to exclude wealth tax out of computation of book prof it, the Assessing Officer also did not do the same and had discussed the weal tax provision, we are also in agreement with the content ion of the Department that the CIT (Appeals) having no powers to set aside the issue to the file of the AO. However, in the interest of justice, we would like to send this issue back to the Assessing Officer and direct him to re-compute the book prof it under sect ion 115JB of the Act after excluding wealth tax provision on the same. The ground raised by the Revenue is allowed for statistical purposes.
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2016 (4) TMI 1381
TDS u/s 194H - commission payment to various distributors - relation between assessee and distributor is that of principal to agent - HELD THAT:- As decided in own case [2015 (7) TMI 175 - ITAT JAIPUR] the relationship between assessee and its distributors qua the sale of impugned products is on principal to principal basis, the consideration received by assessee is sale price simpliciter.
There is no relationship of Principal and agent between assessee and distributors as held by authorities below their orders are reversed. Looking at the transaction being of sale/purchase and relationship being of principal to principal the discount does not amount to commission in terms of sec. 194H, the same is not applicable to these transactions. Therefore, assessee cannot be held in default, impugned demand raised applying sec, 194H is quashed. Assessee’s grounds are allowed
TDS u/s 194J on roaming charges paid for facilities provided by service provider - HELD THAT:- This issue squarely covered in favour of the assessee by the decision of the Co-ordinate Bench in assessee’s own case pertaining to the assessment year 2009-10 [2015 (7) TMI 175 - ITAT JAIPUR] these charges are not fees for rendering any technical services as envisaged in section 194J of the Act. Therefore, we reverse the order of the ld CIT(A) and assessee’s appeal is allowed on this ground also
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2016 (4) TMI 1380
Cargo Handling Agent services - demand of service tax - invoking extended period - the appellant-Department has challenged the order of the Customs, Excise & Service Tax Appellate Tribunal, West Zonal Bench at Mumbai, dated 3-9-2014 that was based on the judgment of the Orissa High Court in the case of COAL CARRIERS VERSUS COMMR. OF C. EX., CUS. & ST., BHUBANESWAR [2011 (2) TMI 1140 - ORISSA HIGH COURT] - HELD THAT:- It appears that the Hon’ble Supreme Court has allowed the appeal preferred by the assessees and the Department before the Hon’ble Supreme Court and the judgment of the Orissa High Court in the aforesaid case has been set aside. It appears that the Hon’ble Supreme Court has directed the CESTAT to constitute a larger Bench immediately so that the controversy is decided finally within one year.
The impugned order passed by the CESTAT, dated 3-9-2014 is hereby quashed and set aside. The appeal filed by the respondent herein is restored before the CESTAT at Mumbai.
Appeal disposed off.
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2016 (4) TMI 1379
Suit for recovery - recovery of the security amount against the plaintiff - HELD THAT:- The learned Local Commissioner shall videograph and also take photographs, while executing the commission for which the expenses shall be borne by the plaintiff. The Local Commissioner shall be paid an amount of ₹ 50,000/-, to be paid by the plaintiff. During the execution of the commission, the representatives of the parties shall be present. The Local Commissioner shall execute the commission on Saturday April 9, 2016 at 11.00 AM.
Application disposed off.
List before Joint Registrar for further proceedings on 20th May, 2016.
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