|
Advanced Search Options
Case Laws
Showing 1 to 20 of 1569 Records
-
2022 (8) TMI 1570
LTCG - Indexation on the cost of acquisition - indexation on the installments paid for the flat should be allowed from the date of allotment of flat i.e. the F.Y. 2004-05 or payment of installments in the year of actual payment - HELD THAT:- We hold that the assessee is entitled to the benefit of indexation on the total cost of acquisition from the year of allotment of flat dehors the fact that the assessee has paid installments over a period of time subsequent to the date of allotment. Thus, assessee succeeds on ground No.2 of the appeal.
Penalty levied u/s. 271(1)(c) - notice issued u/s. 274 r.w.s. 271 is vague, hence defective as notice has been issued in a Performa without striking off the irrelevant limb of section 271(1)(c) - HELD THAT:- The irrelevant clause of section 271(1)(c) of the Act has not been struck off while issuing the notice. The notice mentions both the limbs of section 271(1)(c) of the Act i.e. “concealed the particulars of income” and/or “furnished inaccurate particulars”. The Jurisdictional High Court in the case of Mohd. Farhan A. Shaikh [2021 (3) TMI 608 - BOMBAY HIGH COURT (LB)] has held that non-striking of irrelevant matter in the notice render the notice defective and hence, the entire penalty proceedings are vitiated.
In the assessment order the AO has recorded satisfaction for levy of penalty u/s. 271(1)(c) on the charge of ‘furnishing inaccurate particulars of income’. However, while levying penalty vide order dated 31/03/2016, the Assessing Officer has time and again mentioned both the limbs/charge of section 271(1)(c) of the Act i.e. “inaccurate particulars of income” and “concealment of income”. This expression have been used in the penalty order repeatedly in varied forms. Thus, there was ambiguity in the mind of Assessing Officer about the exact charge under section 271(1)(c) of the Act for which penalty is to be levied. The Hon'ble Apex Court in the case of T. Ashok Pai [2007 (5) TMI 199 - SUPREME COURT] has held that concealment of income and furnishing inaccurate particulars carry different connotations. Hence, these expressions cannot be used inter changeably - Decided in favour of assessee.
-
2022 (8) TMI 1569
Maintainability of appeal on low tax effect - Addition in respect of foreign remittances shown by the assessee as gifts deleted by ITAT - HELD THAT:- The present appeals, wherein, the tax effect is said to be less than the monetary limit imposed, are dismissed as withdrawn, keeping open the substantial questions of law for determination in appropriate cases.
-
2022 (8) TMI 1568
Disallowance of software development expenses - AO noticed that the assessee had incurred expenditure on purchase, development of software and other upgradation charges included under the head EDP expenses - AO was of the opinion that such expenses confer enduring benefit to the assessee and, therefore, disallowed the same as capital expenditure - HELD THAT:- In so far as expenses incurred on purchase of MS Office software, server upgradation charges and software development charges are concerned, we are of the considered view that the same were incurred to keep update with change in technology and therefore, the assessee had to incur such expenditure to upgrade his software.
Element of upgradation does not automatically make the expenditure capital. However, the same cannot be said for purchase of Modem & UPS and billing software development charges. In our considered opinion, expenses incurred on these items give advantage in capital field and, therefore, the same cannot be Revenue expenditure.
Billing software development charges are part of the profit earning apparatus of the assessee and, therefore, would be regarded as capital in nature.
We restrict the disallowance to the extent of Modem & UPS purchases of Rs. 1,09,200/- and billing software development charges of Rs. 11,30,400/- and direct the Assessing Officer to delete the other disallowances. Ground No. 2 is partly allowed.
LTCG computation - increasing the amount of long term capital gains computed by the assessee by denying benefit of indexation - invocation of Explanation to section 73 - HELD THAT:-Explanation to Section 73 of the Act is not at all applicable on the facts of the case in hand. Firstly, because the assessee is engaged in marketing and distribution of entertainment software and production of TV serials and is also engaged in distributing pay channels and secondly, admittedly, there is no loss in the transaction of sale of shares. In fact, there is long term capital gain returned by the assessee.
We do not find any merit in the application of Explanation to Section 73 - AO is directed to delete addition. Ground No. 3 is, accordingly, allowed.
Denial of set off of brought forward losses as claimed by the assessee - HELD THAT:- As it is incumbent upon the Assessing Officer and also on the ld. CIT(A) to explain why the claim of set off of brought forward losses are not allowed to the assessee. Therefore, in the interest of justice, we restore this issue to the file of the AO. AO is directed to allow the claim of set off of brought forward losses as per the relevant provisions of the Act and after affording reasonable opportunity of being heard to the assessee. Ground No. 4 is allowed for statistical purposes.
-
2022 (8) TMI 1567
Sale of sugar on concessional rate to members - HELD THAT:- Similar issue has come up for consideration before co-ordinate Bench of Pune Tribunal in the case of Shree Adinath SSK Ltd. Vs. ACIT [2022 (5) TMI 1561 - ITAT PUNE] wherein held excess sugar cane price paid to Members and Non-members and the issue of sale of sugar at concessional rate to Members are remanded to the file of the ld. A.O for fresh adjudication for the purpose of giving effect to the directions of the Hon’ble Apex Court KRISHNA SAHAKARI SAKHAR KARKHANA LTD. [2012 (11) TMI 669 - SUPREME COURT] in its proper perspective.
. Respectfully following the decision cited hereinabove, the issue with respect to sale of sugar at concessional rate to Members is remanded back to the file of the ld. A.O for fresh adjudication. Appeal of assessee is allowed for statistical purposes.
-
2022 (8) TMI 1566
Penalty u/s 271AAA - undisclosed income - assessee had not paid tax and interest - principal argument is that nothing was found during the course of search; assessee had voluntarily filed return of income more than what he had admitted before the DDIT - Whether the compliance with all the three conditions mentioned in Sub-section (2) of Section 271AAA mandatory or not? - HELD THAT:- Admittedly, as recorded by the Tribunal, third condition namely, the payment of tax, together with interest, if any, has not been fulfilled by the assessee.
In view of the above, first substantial questions raised by the appellant is answered in favour of the Revenue holding that compliance of all three conditions in Sub-clause (2) of Section 271AAA of the Act are mandatory.
Reduction of penalty commensurate with quantum of tax which the appellant has deposited, is also answered against the assessee and in favour of the revenue, because, admittedly, appellant had not disclosed the income at all. But for search, the same could not have been unearthed. Having filed the returns, the assessee did not comply with condition No. 3 in Sub-Section (2). If the second question were to be answered in favour of assessee, it will amount to placing premium on a person who does not abide by law.
Decided against assessee.
-
2022 (8) TMI 1565
Suit for specific performance is barred by limitation or not - amended Section 10 of the Specific Relief Act is prospective or retrospective in operation - entitlement to the relief of specific performance - benefit of Section 12 of the Specific Relief Act in view of the part payment made in respect of the contract.
Whether the suit for specific performance is barred by limitation? - HELD THAT:- The vendors were entitled to rescind the contract as there was a breach of condition, i.e, ‘time was the essence’. Coming back to the point of limitation, it is clear that Article 54 of the Limitation Act mandates that in this case at hand, the date fixed for payment of consideration was three months from the date of the agreements (i.e. 26.03.1997 and 27.03.1997). In any case, the time period for filing the suit had commenced from 26/27.6.1997 and would have expired after three years, i.e., in the end of June 2000.
Article 54 of the Limitation Act provides for two consequences based on the presence of fixed time period of performance. It is only in a case where the time period for performance is not fixed that the purchaser can take recourse to the notices issued and the vendors’ reply thereto. In the case at hand, the aforesaid circumstances do not come into play as a fixed time period was clearly mandated by Clause 3 read with Clause 23 of the agreements to sell - there would not have been any reason for this Court to continue the analysis on merits. However, we feel that even on merits, the purchaser’s case cannot be countenanced in law.
Whether the amended Section 10 of the Specific Relief Act is prospective or retrospective in operation? - HELD THAT:- When a substantive law is brought about by amendment, there is no assumption that the same ought to be given retrospective effect. Rather, there is a requirement for the legislature to expressly clarify whether the aforesaid amendments ought to be retrospective or not - it is clear that ordinarily, the effect of amendment by substitution would be that the earlier provisions would be repealed, and amended provisions would be enacted in place of the earlier provisions from the date of inception of that enactment. However, if the substituted provisions contain any substantive provisions which create new rights, obligations, or take away any vested rights, then such substitution cannot automatically be assumed to have come into force retrospectively. In such cases, the legislature has to expressly provide as to whether such substitution is to be construed retrospectively or not.
There are no hesitation in holding that the 2018 amendment to the Specific Relief Act is prospective and cannot apply to those transactions that took place prior to its coming into force.
Whether the purchaser is entitled to the relief of specific performance? - HELD THAT:- The purchaser did not voluntarily adhere to the time stipulation under the contract. In order to bypass the condition of time being the essence, the purchaser invoked the standard of good faith. Aforesaid standard prescribes a higher duty of care for parties entering into a contract. Unless such duty is expressly stipulated, good faith standard cannot be implicitly read into any contract - Section 16(c) of the Specific Relief Act would only come into force if the purchaser was ready and willing to perform the contract within the three month period prescribed under Clause 3 of the agreements. The aforesaid conclusion is also bolstered by the fact that specific performance can only be granted when essential terms of contract are not violated in terms of Section 16(b).
The purchaser was not ready or willing to perform his part of the contract within the time stipulated and accordingly, specific performance cannot be granted for the entire contract - The trial Court has rightly answered this point against the plaintiff and the Appellate Court, on an erroneous appreciation of the facts and law, reversed the said findings.
In any case, whether the purchaser is entitled to take benefit of Section 12 of the Specific Relief Act in view of the part payment made in respect of the contract? - HELD THAT:- There was no inability on part of the parties to perform the rest of the contract or the remaining part was waived. In this case, the purchaser breached the essential condition of the contract, which altogether disentitles him to claim specific performance. There is no doubt that the claim of purchaser is hit by delay and laches on their part as they did not take appropriate measures within the stipulated time and filing of the suit was delayed by almost five years - This is not an appropriate case for granting relief to the purchaser in terms of Section 12 of the Specific Relief Act, 1963 as the claim of the purchaser is barred by delay, laches and limitation.
Thus, the contract was breached due to the conduct of the plaintiff/purchaser, who were not willing to perform the contract after entering into a time sensitive agreement. In any case, it is an admitted fact that plaintiff had paid only part consideration. Though there is a forfeiture clause in the agreement, this Court with a view of rendering complete justice between the parties, deems it appropriate to direct the vendors/appellants to repay the said amount with interest @ 7.5% p.a. from the date such payment was made by the purchaser to the vendors, till the entire amount is paid back. We further direct the vendors to pay the entire amount to the credit of the suit account within six months from the date of receipt of a copy of the order.
Conclusion - i) The suit for specific performance was barred by limitation, as the purchaser failed to file the suit within the prescribed period. ii) 2018 amendment to Section 10 of the Specific Relief Act was substantive and could not be applied retrospectively. iii) The purchaser was not entitled to specific performance due to his failure to perform his contractual obligations within the stipulated time. iv) Section 12 of the Specific Relief Act did not apply, as the purchaser's failure was due to his own conduct.
Appeal allowed.
-
2022 (8) TMI 1564
Service tax liability of the respondent on Agency Commission from Maruti Udyog Ltd., DGS&D - non-registration of the respondent's unit No. 1 i.e. 21 Vidhan Sabha Marg, Lucknow - HELD THAT:- The Tribunal has set aside the demand holding that the adjudicating authorities have absolutely ignored the principles of judicial discipline by not following the binding order passed by the Tribunal, whereas the Tribunal is also required to follow the judicial discipline while deciding the issue involved in appeal, which was pending consideration before the Tribunal in another appeal after remand by this court. Once the same issue involved in the appeal is pending consideration before the Tribunal after remand by this court it is incumbent upon the Tribunal to decide the issue afresh in accordance with law and unless the Tribunal decides the issue it cannot be said that the said order dated 17.12.2015 has attained finality and adjudicating authority should follow the judgment and order passed by the Tribunal, which is still pending for fresh consideration. Therefore the Tribunal ought to have decided both the appeals, involving several common issues, together. Thus the substantial question of law involved in this appeal is answered accordingly.
Conclusion - Tribunal orders must attain finality before being relied upon in subsequent decisions.
The impugned judgment and order dated 04.02.2022 is not sustainable and the appeal is liable to be allowed.
-
2022 (8) TMI 1563
Dismissal of an application filed by the present Appellant (UCO Bank) as the Financial Creditor u/s 7 of the Insolvency and Bankruptcy Code, 2016 on the ground of limitation - whether a promise made by the debtor to pay the time barred debt would fall within the purview of Section 25(3) of the Indian Contract Act, 1872? - whether the limitation is to start running from the date promise is made, for a period of three years as required under Article 137 of the Act? - HELD THAT:- The letter dated 25.10.2019 is a sufficient evidence of the promise made by the Respondent to the Appellant to make the payments which are due, approved in the JLM held on 19.05.2017 and thus, would fall within the purview of Section 25(3) of the Indian Contract Act, which provides a promise and that too in writing. Undoubtedly, if the period of limitation is to be counted from the date of the default (NPA) and the application under Section 7 having been filed, it would be barred by limitation if it is to be seen in terms of Section 18 of the Act. But keeping in view the fact that after the expiry of period of limitation of three years, prescribed under Article 137 of the Act, if the Respondent has made the promise (commitment) to make the payments of the unpaid time barred debt, approved in the JLM, then it is a sufficient evidence to show the intention of the Respondent for creating a new agreement with the Appellant for the purpose of making payments of the unpaid debts.
The matter is remanded back to the Adjudicating Authority to consider the application filed under Section 7 of the Code, having been filed within the period of limitation and decide the same in accordance with law - petition allowed by way of remand.
-
2022 (8) TMI 1562
Estimation of income @ 10% of the turnover by rejecting the book results - disallowing the expenditure as the assessee had failed to comply with the notices issued u/s 143(2) of the Act by resorting to best of judgement assessment - HELD THAT:- It is settled position of law that the Assessing Officer while making the best judgement of assessment must make honest and fair estimate of income of an assessee. The same must not be capricious but should have reasonableness to the available material on record under the facts and circumstances of the case.
In the present case, the disallowance resulted into profit @ 40% of the contract receipts which is very unreasonable. When the matter carried on appeal before the ld. CIT(A), one of the courses available before the CIT (A) is rejecting the book results, estimating the profits. This action of the ld. CIT (A) is not under challenge before us. Therefore, in our considered opinion, the ld. CIT (A) had rightly exercised one of the possible course of action available before him, when the additions were made by the Assessing Officer are arbitrary, unreasonable etc. Decided against revenue.
Estimation of profit @ 10% of gross receipts from execution of civil contracts - as submitted that once book results were rejected by the CIT(A), the estimation of profit should be made either on past history of the assessee or the profits of the comparables in the similar line of business - HELD THAT:- We are of the considered opinion that in order to meet the ends of justice, we direct the AO to estimate the profit @ 5% of the contract gross receipts. Accordingly, the Cross Objection stands partly allowed.
-
2022 (8) TMI 1561
Challenge to petition - impugned order has been passed in violation of the principles of natural justice as also by an authority who lacked pecuniary jurisdiction - HELD THAT:- Since an advance copy of the petition already stood served upon the respondents, it is informed that the matter is already under consideration and suo motu revisional proceedings under Section 108 of the Punjab GST/CGST Act, 2017 are contemplated. In view of such development learned State counsel further makes a statement that till such time said revisional proceedings are not taken up and concluded, the impugned GST DRC 07 order dated 03.03.2022 (Annexure P-8) would not be put into operation.
In the light of such categoric stand taken on behalf of the State, there would be no occasion for this Court to examine the legality and validity of the impugned order dated 03.03.2022 (Annexure P-8) at this stage.
Petition disposed off.
-
2022 (8) TMI 1560
'State' under Article 12 of the Constitution - Challenge to Letters whereby all credit facilities extended to him have been recalled - challenge to the consequent SARFAESI Notice at Annexure-L - defaults committed by the petitioner eventually resulting into its “debt being classified as non performing asset”.
'State' under Article 12 of the Constitution - HELD THAT:- When the preliminary issue as to maintainability of the Writ Petition is raised, what needs to be examined is not invariably the status of answering respondent as ‘State’ or its ‘instrumentality’ but the ‘essential nature’ of its action called in question. Since the enactment of the Constitution, our system has moved from the formality of ‘status’ of an entity to the substance of its ‘function’, while adjudging the claim for writ remedies. In other words, even if the respondent Bank answers the description of ‘other authorities’ under article 12, that per se may not justify invocation of constitutional jurisdiction - The Scheme does not exclude the exercise of Bankers Prudence which as of necessity avails in a reasonable measure while making commercial decisions of the kind. Banks handle public money as trustees and therefore, consistent with ‘public trust norms’ they should be allowed to take certain decisions as would prove prudent in the given circumstances - Though petitioner may be right in saying that the ECLGS Loan Scheme answers the generic definition of ‘law’ given under Article 13(3) of the Constitution still that does not advance his case inasmuch as the same is not put in challenge as being repugnant to Part III Rights. On the contrary, petitioner wants to found right to relief on the basis of said scheme.
Customer's duty to the bank - HELD THAT:- The Apex Court in PRADEEP KUMAR vs. POST MASTER GENERAL [2022 (3) TMI 1 - SUPREME COURT] observed that 'The Privy Council parted company with the observation by the Court of Appeal here and repelled the plea that it was necessary to imply into a contract between a banker and the customer a wider duty and that it was not a necessary incident of banker/customer relationship that the customer should owe his banker a wider duty of care. This duty is in the form of an undertaking by the customer to exercise reasonable care in executing his written orders so as not to mislead the bank or to facilitate forgery. The Privy Council accepted that an obligation should be read into the contract as the nature of this contract implicitly requires. In other words “the term sought to be implied must be one without which the whole transaction would become futile and inefficacious.'
Culpable conduct of borrower qua the bank - HELD THAT:- Petitioner’s challenge to the arbitral award at the hands of Commercial Court having been negatived, presently a further challenge is said to have been pending before a Division Bench of this court, is beside the point. There was a duty owed by the petitioner to the respondent-Bank to disclose about the notice of termination of lease when it had first applied for a huge loan furnishing the said lease deed as one of the securities for repayment; it also owed the duty to disclose this when it was availing the said additional credit facility when already there was an arbitral award. However clandestinely withheld that crucial information from the bank.
Banker's prudence and husbanding its funds - HELD THAT:- Petitioner is not a peasant or a petty farmer who has availed some frugal loans for mitigating the hardships of life. It is an incorporated company purporting to be worth crores of rupees. Its Managing Director & other Directors have participated in contracting the loans in hundreds of crores of rupees. A customer owes to the Bank a duty to disclose all facts and circumstances that would in the ordinary course of business figure in the decision making process as to the intended loan transaction. This duty becomes more pronounced when such transactions involve huge loans & liabilities. A perusal of the petition papers leaves no manner of doubt as to clandestine failure on the part of borrower in discharging this duty, to say the least - the impugned action of the lender Bank cannot be said to be vulnerable for challenge in writ jurisdiction.
Emergency credit loan guarantee scheme and banker's prerogative - HELD THAT:- The ECLG scheme promulgated by the Central Government which the petitioner’s counsel heavily banked upon in support of his case, at its guideline 18 (xiv) imposes an obligation on the lender bank to secure its interest by taking all reasonable measures - When the lender Banks in given facts & circumstances of the case take a decision as dictated by the prudence, for abruptly recalling the credit facilities, it is not for the courts to sit in appeal over their wisdom. Writ Courts neither have means nor the expertise to re-evaluate the “prudential decisions” of the Banks that are made in the ordinary course of their commercial transactions with accumulated wisdom in the trade.
Culpable conduct of petitioner qua the bank -The Apex Court time and again has warned that the cases of unscrupulous litigants should be thrown out at the threshold vide S.P.CHENGALVARAYA NAIDU (DEAD) BY LRS vs. JAGANNATH (DEAD) BY LRS [1993 (10) TMI 315 - SUPREME COURT]. Petitioner has suppressed about the availability of alternate remedy in law. The petitioner seeks to call in question the Notice issued u/s 13(2) of the SARFAESI Act, 2002. There is an alternate and more efficacious relief availing to the borrower/noticee for doing this, by invoking remedial provisions of the Act. Writ remedy is not the panacea for all such arguable legal injuries - No extraordinary circumstances are demonstrated from the records despite vociferous submissions of petitioners’ counsel warranting grant of relief in constitutional jurisdiction.
Conclusion - i) Though petitioner may be right in saying that the ECLGS Loan Scheme answers the generic definition of ‘law’ given under Article 13(3) of the Constitution still that does not advance his case inasmuch as the same is not put in challenge as being repugnant to Part III Rights. ii) The petitioner's non-disclosure constitutes a breach of the contractual relationship with the bank. iii) The petitioner's claims of innocence and lack of intent to deceive are dismissed. iv) The impugned action of the lender Bank cannot be said to be vulnerable for challenge in writ jurisdiction. v) Writ Courts neither have means nor the expertise to re-evaluate the “prudential decisions” of the Banks that are made in the ordinary course of their commercial transactions with accumulated wisdom in the trade. vi) No extraordinary circumstances are demonstrated from the records despite vociferous submissions of petitioners’ counsel warranting grant of relief in constitutional jurisdiction.
-
2022 (8) TMI 1559
Levy of Additional tax liability for execution of subsisting Government contracts - HELD THAT:- These writ petitions are disposed of by giving liberty to the petitioners to file appropriate representations before the Additional Chief Secretary, Finance Department, Government of West Bengal within four weeks from date. On receipt of such representations the Additional Chief Secretary, Finance Department shall take a final decision within four months from the date of receipt of such representation after consulting with all other relevant departments concerned.
-
2022 (8) TMI 1558
Entitlement to reimbursement of the increased tax component under the Goods and Services Tax (GST) regime - It is the case of the petitioner that the petitioner is entitled for reimbursement of the tax and thus the petitioner is also entitled for price adjustment - HELD THAT:- The fact of the matter is that the agreements were signed at the time, when Tamil Nadu Value Added Tax Act, 2006 was in force. The parties have factored 2% Vat under the provisions of the Tamil Nadu Value Added Tax, 2006. The nature of work carried out by the petitioner appears to be a work contract within the meaning of the Tamil Nadu Value Added Tax, 2006 as it stood then. Now under the provisions of the respective GST enactments of 2017, it is supply.
This writ petition is disposed off by directing the respondents to consider and pass orders on the petitioner's representation dated 16.01.2018, 07.01.2019, 06.01.2020, 25.01.2022 and in the light of the provisions of the respective GST enactments of 2017 and after considering the requirement of G.O.Ms.No.296, Finance (Salaries) Department dated 09.10.2017 and in the light of the Section 64A of the Sale of Goods Act, 1930.
-
2022 (8) TMI 1557
Refund of service tax paid on services received prior to obtaining approval from the Approval Committee under Notification No. 12/2013-ST - whether the refund application can be allowed in respect of the services which were received prior to the approval granted by the Approval Committee? - HELD THAT:- In the case of M/S DIVI’S LABORATORIES LTD. VERSUS COMMISSIONER OF CENTRAL TAX, VISAKHAPATNAM [2021 (9) TMI 358 - CESTAT HYDERABAD], considering the same issue, the Tribunal has observed 'The finding of Commissioner (Appeals) that since ocean freight service has been included in the list of services with SEZ services authorities only on 27.11.2017 i.e. subsequent to their refund application, the retrospective application can not be allowed is not sustainable.'
Conclusion - The issue is no longer res integra and the Tribunal has been consistently taking the view that till the time the services are input services for the developer, the refund claim made as per Notification No. 12/2013 could not have been denied just for the reason that at the time of receipt of services, there was no approval of Approval Committee cannot be upheld.
Appeal allowed.
-
2022 (8) TMI 1556
Disallowance of sub-contracting expense - AO disallowed the same holding it to be mere provision - DRP affirmed the disallowances made on the ground that it is an unascertained liability and the assessee had not deducted tax at sources - contention of A.R. is that the expenses claimed in this assessment year is reversed in the subsequent year and offered to tax and therefore no disallowance is warranted in the year under consideration - HELD THAT:- The liability of the assessee to deduct TDS arises on making the provisions even on debiting the same to suspense account or any other account by whatever name called, which will also include a “provision” created in the books of account of the assessee. Therefore, it is not possible for the assessee to argue that there was no accrual of expenditure in accordance with the mercantile system of account followed by assessee. Therefore, TDS obligation do catch triggered. In view of this, we are of the opinion that the expenditure cannot be allowed in the assessment year under consideration.
Assessee made alternative argument that the provision was reversed in the next year in its books of accounts and same was offered to tax and disallowance of this assessment year amounts to double taxation in this assessment year as well as in the next subsequent assessment years.
We find force in the argument of the assessee’s counsel. We direct the AO that if the provisions has been disallowed in the assessment year 2014-15, and the reversal of the same in the next assessment year, the same cannot be taxed to that extent on reversal of provisions. Being so, we direct the AO to take note of this in AY 2015-16 in which the assessee made reversal of the provisions. This ground of assessee is disposed of as above.
Disallowance of professional consultancy charges paid to Homeplus Company Ltd. - disallowance u/s 40(a)(ia) of the Act by merely holding that the submissions made by the Assessee is not satisfactory - HELD THAT:- In this case, AO treated the payment of professional charges to Home Plus Company Ltd. as fees for technical services.
In the present case, the payment has been made towards training services and the training services cannot be treated as technical, managerial or consultancy in nature, in terms of DTAA between India and Korea. As relying on Lyods Registered Industrial Services (India) Pvt. Ltd. [2009 (11) TMI 670 - ITAT MUMBAI] we are inclined to hold that the assessee is not liable to deduct TDS on the payment made to Home Plus Company Ltd. towards fee for training service charges. This ground of appeal of the assessee is allowed.
Disallowance of professional consultancy charges paid -disallowance u/s 40(a)(ia) by merely holding that the submissions made by the Appellant is not satisfactory - HELD THAT:- In our opinion, this issue squarely covered by the judgement of De Beers India Minerals Pvt. Ltd. [2012 (5) TMI 191 - KARNATAKA HIGH COURT] recipient after receiving of technology may use or may not use the technology. It has no bearing on the taxability aspect is concerned. When the technical service is provided, that technical service is to be made use of by the recipient of the service in further conduct of his business. Merely because his business is dependent on the technical service which he receives from the service provider, it does not follow that he is making use of the technology which the service provider utilizes for rendering technical services. The crux of the matter is after rendering of such technical services by the service provider, whether the recipient is enabled to use the technology which the service provider had used. Therefore, unless the service provider makes available his technical knowledge, experience, skill, know-how or process to the recipient of the technical service, in view of the clauses in the DTAA, the liability to tax is not attracted.
From the aforesaid discussion it is clear that test is whether the recipient of the service is equipped to carry on his business without reference to the service provider. If he is able to carry on his business in future without the technical service of the service provider in respect of services rendered then, it would be said that technical knowledge is made available.
Disallowance of reimbursement of salary cost - AO held that the payments made partake the character of fees for technical services in terms of explanation 2 to Section 9(1)(vii) of the Act, and therefore in the absence of tax deduction at source, a disallowance u/s 40(a)(ia) is warranted - HELD THAT:-After hearing both the parties, we are of the opinion that similar issue came for consideration before this Tribunal in the case of Abbey Bus Services Pvt. Ltd. [2020 (12) TMI 570 - KARNATAKA HIGH COURT] held that it is evident that the seconded employees have to work at such place as the assessee may instruct and the employees have to function under the control, direction and supervision of the assessee and in accordance with the policies, rules and guidelines applicable to the employees of the assessee. The employees in their capacity as employees of the assessee had to control and supervise the activities of another company. Therefore, the assessee for all practical purposes has to be treated as employer of the seconded employees and expenses incurred by the seconded employees which were reimbursed by the assessee is not liable to deduction to tax at source. There is no obligation in law for deduction of tax at source on payments made for reimbursement of costs incurred by a nonresident enterprise and therefore, the amount paid by the assessee was not to suffer tax deduction at source under section 195. Thus, substantial question of law is answered against revenue.
Re-computation of deduction u/s 10AA - DRP directed AO to reduce the expenses both from the export turnover as well as the total turnover but while doing so, AO did not give effect to the directions - HELD THAT:- After hearing both the parties, we are of the opinion that this is squarely covered by the judgement of HCL Technologies Ltd. [2018 (5) TMI 357 - SUPREME COURT] wherein held “Total turnover” has been defined in sections 80HHC and 80HHE only to exclude additional items given under section. But for this additional exclusion, there was no need to define “total turnover”. Export turnover is a component of total turnover. If the entire turnover represents export proceeds, then the export turnover and the total turnover are identical. It is clear that any exclusion in the export turnover in the numerator will automatically imply exclusion in the denominator as well because export turnover is always a component of total turnover. Decided in favour of assessee.
Non-grant of set off of accumulated Minimum Accumulated Tax (‘MAT’) credit - assessee wants the direction to AO to grant accumulated MAT credit claimed in the return of income. We accede to the request of the assessee’s counsel.
Levy of interest u/s 234A - AR. stated that levy of interest u/s 234A of the Act is bad in law as the assessee has filed return of income in time and if it is charged u/s 234A of the Act, it has to be charged on returned income not on the assessed income - Accordingly, we remit this issue to the filed of AO for reconsideration for the purpose of computation of interest u/s 234A, if it is chargeable.
Taxability of assets received from Tesco Stores Limited on a Free of Cost basis - whether it is 'benefit arising from the business' of the Appellant and chargeable to tax u/s 28(iv)? - HELD THAT :- We find force in the arguments of the assessee’s counsel. If the depreciation on assets is considered as part of operating profit margin arising from the transaction, and the income from which it is offered to tax, no addition u/s 28(iv) of the Act is warranted, which is already subject to tax pursuant to APA and no further addition is necessary, otherwise it amounts to double taxation. Accordingly, we allow this ground taken by the assessee.
Disallowance of consulting charges paid - HELD THAT:- There is no dispute that the project for which feasibility report obtained for establishment of setting up of new project, which said to be Abdon project. If the project was not taken up and it was incurred for the conducting feasibility of that project and that expenditure to be allowed as a revenue expenditure as the assessee has not derived any enduring benefit on incurring of this expenditure. Accordingly, this issue is remitted to the file of AO to verify whether a project has been taken up or not and if it is not taken up, this expenditure to be allowed as revenue expenditure.
Disallowance of sub-contract expenditure - As decided earlier if no deduction has been made on this payment, this expenditure cannot be allowed in this assessment year under consideration. However, we make it clear that if it is reversed in the next assessment year, it cannot be treated as income on reversal.
Grant of foreign tax credit - After hearing both the parties, we remit this issue to the file of AO to grant foreign tax credit in accordance with law.
-
2022 (8) TMI 1555
Assessment of income as reported in the original return v/s revised return - A.O while passing the assessment order found that, in response to notice u/s 139(9) intimating the assessee of one of the defects, that, the tax payable had not been deposited by the assessee but in response, the assessee has filed another return completely replacing the documents, based on which the original return was filed. - Effect of amalgamation on assessment - HELD THAT:- AO has committed an error by passing assessment order based on standalone basis despite fact that he had full knowledge of amalgamation while making the addition.
A.O should have considered the effect of amalgamation more so in view of the specific mandate of the Hon'ble High Court. A.O has ignored the above facts. Further, as per the decision of Penta media Graphics Ltd. [2010 (1) TMI 753 - MADRAS HIGH COURT] which is also followed by the Delhi Bench of the Tribunal in the case of Bharti Airtel Limited [2011 (2) TMI 1634 - ITAT DELHI] the only course open to the Revenue would be to act as per the scheme sanctioned effective from 01/04/2013 which means that the tax authorities are bound to take note of the state of affairs of the assessee as on 01/04/2013 and a return filed reflecting the same cannot be ignored on the strength of section 139(9) of the Act.
The merits otherwise on the return field have never been challenged by the A.O. Therefore, in our opinion the assessed income as per the return field by the appellant u/s 139(9) of the Act on the basis of consolidated Balance sheet should have been accepted by the A.O. CIT (A) has rightly allowed the Appeal filed by the Assessee by setting aside the Assessment Order.Appeal filed by the Revenue is dismissed.
-
2022 (8) TMI 1554
Condonation of delay filling appeal before CIT - Delay of 314 days in filing the appeal - HELD THAT:- Affidavit seeking condonation of delay shows that the assessee had undisputedly filed the return of income electronically but under bonafide belief that the Form 10CCB was to be filed manually with the AO as and when required thus failed to file the same electronically along with the return of income. No doubt ignorance of law is no excuse but keeping in view the fact that it was first year of filing the return of income along with Form 10CCB electronically and due to human error and under bonafide belief assessee has failed to file the same electronically which was well within their notice.
As decided in Land Acquisition Collector vs. MST Katiji & Others [1987 (2) TMI 61 - SUPREME COURT] when substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have a vested right in injustice being done because of a non-deliberate delay.
So we are of the considered view that assessee has brought on record sufficient causes to condone the delay of 314 days in filing the appeal, which is accordingly condoned as the assessee has the right to be heard on merits. So in these circumstances, we hereby condone the delay of 314 days in filing the appeal by the assessee before the Ld. CIT(A) and consequently present appeal is being remitted back to Ld. CIT(A) to decide afresh on merits.
-
2022 (8) TMI 1553
Wait of one year to get the refund - reply has been given to the Petitioner by the ACIT, Circle-1, Bhubaneswar that as per law he has to wait till the filing of the return and only then he will get back his refund - HELD THAT:- In that view of the matter, it is directed that if the Petitioner files a rectification application within one week from today, the AO will process the said rectification application and pass appropriate orders thereon within a further period of two weeks thereafter. The refund found already due to the Petitioner will then be paid to the Petitioner within a period of two weeks thereafter.
-
2022 (8) TMI 1552
Maintainability of the appeal - execution application filed by the Custodian barred by limitation or not - acknowledgment of liability by the appellant affects the limitation period affects limitation period or not - disclosure of assets - HELD THAT:- An “interlocutory order” denotes an interim or temporary order which does not decide the important rights or liabilities of the parties. The Special Court in AMAR NATH AND OTHERS VERSUS STATE OF HARYANA & OTHERS [1977 (7) TMI 115 - SUPREME COURT] has conclusively held that the execution petition is not barred by limitation. The determination of the issue of limitation affects the rights and liabilities of the parties. Thus, the argument of the first appellant that the appeal is not maintainable in view of Section 10 of the Act of 1992 is rejected.
The Special Judge has specifically held against the appellant on the ground that there was an acknowledgement of liability within the meaning of Section 18 of the Act of 1963. The finding that there was an acknowledgement of liability within the meaning of Section 18 is premised on the hypothesis that the Act of 1963 would stand attracted. However, it has also been held in the judgment of the Special Court that in any event the Custodian is entitled and liable to recover the amount under the Act of 1992.
Section 29(2) of the Limitation Act stipulates that where a special law prescribes a period of limitation for an application different from the period prescribed in the Schedule of Act of 1963, then Section 3 of the Act of 1963 shall apply as if such period was prescribed by the schedule, and the provisions of Sections 4 to 24 shall apply to the extent that it is not expressly excluded by the special Law. The three-Judge Bench in LS. SYNTHETICS LTD. VERSUS FAIRGROWTH FINANCIAL SERVICES LTD. [2004 (9) TMI 384 - SUPREME COURT] observed that Section 29(2) of the Limitation Act is not applicable to the Act of 1992 since in ‘terms of the provisions of the Act, no period of limitation is prescribed’.
In the present case, the Special Court has proceeded on the basis that there was an acknowledgement of liability by the letter of the appellant dated 22 February 2018. That finding is sought to be assailed by the appellant by urging that the acknowledgement of liability under Section 18 of the Act of 1963 has to be within the period of limitation and in the present case this test is not satisfied - Based on the decision of this Court in L S Synthetics Ltd, the ultimate directions which have been issued by the Special Court cannot be interfered with. The observations contained in the impugned order were for the purpose of issuing the directions for a disclosure of assets and would not preclude the Custodian from urging that the Act of 1963 had no application to the Execution Application which was filed for enforcement of the decree dated 28 February 2003. The directions for the disclosure of assets and other consequential directions which have been issued are not interfered with in this appeal.
The appellant is granted four weeks to file his disclosure of assets subject to his right to urge his submissions in the execution application - the Special Judge is requested to dispose of the Execution Application preferably within a period of two months of the date of receipt of a certified copy of this order - appeal disposed off.
-
2022 (8) TMI 1551
Prayer for recalling or setting aside of the ex-parte decree - Order IX Rule 13 of the Code of Civil Procedure, 1908 - prayer for an order of injunction restraining the plaintiff to proceed in complaint which has been filed pursuant to the ex-parte decree passed by this Court - HELD THAT:- The respondent/plaintiff moved an amendment application dated July 10, 2018 seeking amendment of the plaint (being G.A. No. 1908 of 2018 in C.S. 205 of 2017), the service of the amendment application was returned with the endorsement "item delivery attempted addressee moved".
The amendment application was henceforth allowed by this Court on September 13, 2018 and that the original writ of summons of the amended plaint and one duplicate copy of the writ of summons along with one copy of plaint was despatched through the office of the Sheriff on October 09, 2018 to the learned District Judge, Raipur. However, the Sheriff's office did not receive back the original writ of summons or any service report from the said Court. Whereas, the service made through Speed Post with A/D was returned and received by the office of the Sheriff on November 12, 2018 with the endorsement "undelivered packet marked insufficient address".
Whereas, an attempt for service of the writ of summons along with copy of plaint was made by the Sheriff's office through Learned District Judge, Raipur on February 12, 2019, and the same was returned with remarks as "could not be served upon the petitioner/defendant Company due to non-existence at stated address". Therefore, as it is evident from the facts above, the petitioner/defendant company could not be served the amended plaint and the writ of summons of such plaint each time - From the Chapter IX Rule 3 of the Rules of the High Court at Calcutta (Original Side), 1914, it is patently clear that the instant suit could not have been transferred to the peremptory list of undefended suits by suppressing the material fact that the service of writ of summons and the plaint were pending and consequently incomplete.
From the materials on record, it is apparent that the petitioner/defendant could not be served through the Court with the original plaint, the amended plaint and the writ of summons of the amended plaint as it was not present in the address as mentioned in the service. This is also buttressed by the fact that that the petitioner/defendant gathered knowledge about the pendency of this instant suit only when it received a reply dated March 26, 2019 from respondent/plaintiff's advocate in response to its legal notice dated March 18, 2019 invoking Section 11 of the Arbitration and Conciliation Act, 1996. Therefore, it would be correct to state that all the service were being made to the incorrect address and/or insufficient address denying the petitioner/defendant the basic right to present and defend its case.
The original plaint, the amended plaint as well the writ of summons for the amended plaint could not be duly served upon the petitioner/defendant company, and consequently, the petitioner/defendant was prevented from appearing in the instant suit. In addition to this, an order to transfer this suit to undefended list was secured from this Court by way of suppression of material facts. There has been an abuse of process of Court on part of the respondent/plaintiff to have suppressed the said material facts to secure transfer of the instant suit to the undefended list.
This application seeking the recalling/setting aside of the ex-parte decree in C.S. No. 205 of 2017 dated June 12, 2019 is hereby allowed.
........
|
9911796707
