|
Advanced Search Options
Case Laws
Showing 1 to 20 of 1662 Records
-
2022 (9) TMI 1664
Seeking stay on recovery of outstanding demand - HELD THAT:- We are of the view that the assessee deserves conditional stay. Further, keeping in view the submission of assessee, we direct the AO to adjust refund of Rs. 39 crores, stated to be due to the assessee, towards recovery of a part of the demand raised for the impugned assessment year.
Subject to such adjustment, as directed, recovery of the balance outstanding demand shall remain stayed for a period of 180 days from the date of this order or till the disposal of the corresponding appeal of the assessee, whichever is earlier. Further, accepting assessee’s prayer, we direct the Registry to fix the corresponding appeal for hearing on 14.11.2022, on an out of turn basis.
-
2022 (9) TMI 1663
Seeking to invoke inherent power of this Court under Section 482 of the Code of Criminal Procedure, 1973 (Cr.P.C.), for quashing FIR - whether the material available on record demonstrates at least prima facie that the criminal proceedings initiated against the applicant in the form of registration of FIR for offence under Section 420 of the IPC deserve to be continued or that such proceedings deserve to be terminated at this stage itself? - HELD THAT:- The parameters for exercise of inherent power of this Court under Section 482 of the Cr.P.C. are by now well settled and elaborated upon in a series of judgments of the Hon’ble Supreme Court, starting from State of Haryana vs. Bhajanlal, [1990 (11) TMI 386 - SUPREME COURT].
The Hon’ble Supreme Court has also deliberated upon the tendency of giving colour of criminality to purely commercial and civil disputes, for the reason that invoking civil remedies leads to a long wait for the aggrieved person to get appropriate relief. In the case of M/s.Indian Oil Corporation vs. NEPC India Ltd. and others [2006 (7) TMI 575 - SUPREME COURT], in this context, the Hon’ble Supreme Court held 'While no one with a legitimate cause or grievance should be prevented from seeking remedies available in criminal law, a complainant who initiates or persists with a prosecution, being fully aware that the criminal proceedings are unwarranted and his remedy lies only in civil law, should himself be made accountable, at the end of such misconceived criminal proceedings, in accordance with law. One positive step that can be taken by the courts, to curb unnecessary prosecutions and harassment of innocent parties, is to exercise their power under section 250 Cr.P.C. more frequently, where they discern malice or frivolousness or ulterior motives on the part of the complainant.'
As per the allegations made by the non-applicant No. 2, not only did the applicant induce him into entering into a contract for sale of coal, but when huge outstanding amount became due, he further induced the non- applicant No. 2 to enter into the aforesaid agreement to discharge the liability, specifying the dates when amounts would be repaid in installments. The non-applicant No. 2 has alleged that only Rs. 5,00,000/- were paid and the entire balance of Rs. 75,00,000/-, which was to be paid in 05 equal installments of Rs. 15,00,000/-, was not paid by the applicant.
Merely because the same set of facts alleged by the non-applicant No. 2 could also give rise to civil proceedings against the applicant ought not to be a factor held against the non-applicant No. 2 or in favour of the applicant, while considering the present application. It is in this context that the Supreme Court in the case of Pratibha Rani vs. Suraj Kumar [1985 (3) TMI 60 - SUPREME COURT] has observed that it is anathema to suppose that when a civil remedy is available, criminal prosecution is completely barred.
Conclusion - In the facts of the present case, it could not be said that the non-applicant No. 2 caused the FIR to be registered, only with a view to bring about pressure on the applicant, as an arm twisting tactic, for recovery of the amounts due from the applicant. It is found that prima facie the ingredients of the offence defined under Section 415 of the IPC and punishable under Section 420 thereof, can be said to be made out and the criminal proceedings do not deserve to be nipped in the bud. No case is made out by the applicant to invoke our inherent jurisdiction under Section 482 of the Cr.P.C. in order to allow the present application.
The application is dismissed.
-
2022 (9) TMI 1662
Disallowing investment allowance u/s 32AC - claim not allowable to business of generation, transmission or distribution of power - HELD THAT:- We note that it is now well settled proposition that generation of electricity amounts to manufacture or production of any article or they qualifying for deduction u/s 32AC. The case laws of Tribunal in Giriraj Enterprises [2017 (3) TMI 189 - ITAT PUNE] and Hon’ble High Courts Atlas Export Enterprises [2015 (3) TMI 846 - MADRAS HIGH COURT] duly supports this proposition. No contrary decision from Hon’ble jurisdictional High Court was cited before us. Hence, we uphold the well reasoned order of Ld. CIT(A). Appeal by the Revenue is dismissed.
-
2022 (9) TMI 1661
TP Adjustment - interest payable on fully convertible debentures of the assessee - benchmarking the interest rate in international transactions - assessee has benchmarked the interest on the debentures at a coupon rate of 17.75% based on prime lending rate of the SBI prevailing on the board meeting date at which the fully convertible debentures were issued at + 3% per annum.
HELD THAT:- As benchmarking of interest to be paid or payable of FCCDs before its conversion to equity. As mentioned elsewhere in the order, there would be no occasion for the assessee to repay the loan to it’s A.E (on account of the nature of FCCD), therefore, the currency in which loan was taken or to be paid would not be relevant for the purpose of determining the interest rate.
As we have already mentioned that as per the assessee, FCCDs are debt in nature till its conversion into equity. Therefore, there is no recharacterization of the transaction by the TPO / Assessing Officer. Further, the TPO/Assessing Officer cannot act as a silent spectator and accept the nature of transaction as claimed by the assessee, though there were contradiction on the characterisation by assessee with that of terms and conditions of issuance of the instrument. The economic substance of the document is different than what had been claimed by the assessee.
As per the assessee, the FCCDs are debt till it is converted into equity. Hence, there is no recharacterization by the AO/TPO. Assuming the case of the assessee that FCCDs are equity then we must look into the substance over the form of the instrument, which can be ascertained by looking into its terms and conditions of allotment. As discussed hereinabove, the terms and conditions clearly show that the FCCDs are debt till its conversion.
Yet another reason to above conclusion is that there is no recharacterization of the instrument by the Assessing Officer as there is no concept of paying the interest on the equity by the company to its holder under the Companies Act or under Income Tax Act or under the Accounting standards. The reliance of the assessee on the RBI policy for the non- convertible debenture is not relevant. In view of the above, we do not find any substance in the argument of the assessee that the Assessing Officer has recharacterized the nature of transaction. See Maanaveeya Development & Finance P. Ltd. [2021 (12) TMI 1440 - ITAT HYDERABAD]
Accordingly, we hold that FCCDs are debt, therefore, the benchmarking done by the learned lower authorities are correct by applying LIBOR plus 200 points, which is in consonance with the RBI guidelines issued for the purposes of FDI. Decided against assessee.
-
2022 (9) TMI 1660
Stay on recovery of outstanding demand - HELD THAT:- Merits of the additions giving rise to the present demand can be considered only at the time of hearing of the appeals and not at this stage. However, after considering the facts and material placed before us, prima facie, we are of the view that some of the additions made are repetitive in nature and have been decided by the Tribunal in favour of the assessee in earlier assessment years.
Thus, in our view, assessee has made out a prima facie case for grant of conditional stay. According to facts and figures placed before us by the learned counsel for the assessee in assessment year 2017-18, the demand that will remain on uncovered issues will work out to Rs. 46,40,31,341. Whereas, in assessment year 2018-19, assessee would be entitled for refund of Rs. 5,63,88,931, if, rectification application is allowed.
We direct the assessee to pay a sum of Rs. 10,00,00,000 against the aggregate outstanding demand, as a condition of stay.
We further direct, out of the amount of Rs. 10,00,00,000 as directed, upfront, the assessee shall pay an amount of Rs. 4,36,11,069 within four weeks from the date of this order. The balance amount of Rs. 5,63,88,931 shall be paid by assessee after disposal of its rectification application, stated to be pending before the Assessing Officer/TPO, either by way of adjustment of refund, in case, it arises or assessee shall pay it within two weeks from the date of disposal of rectification application. Subject to the above, recovery of the balance outstanding demand shall remain stayed for a period of 180 days or till disposal of the corresponding appeal of the assessee, whichever is earlier.
Accepting submission of assessee to fix an early date of hearing, we direct the Registry to fix the corresponding appeals for hearing on 13.12.2022, on an out of turn basis.
-
2022 (9) TMI 1659
Dishonour of final bills despite certification of completion of the tender work - petitioner argues that there is absolutely no reason for not honouring the bills - fictional disputes - HELD THAT:- The respondents having already taken possession of the property on 05.04.2017, having certified satisfactory completion of the work, having obtained a certificate to that effect from their designated architect, having gloriously inaugurated the building which has been put to use on day to day basis, now cannot turn around to complain that the work has not been done satisfactorily. What bewilders this Court is, the enormous delay culpably brooked by the respondents in sending negative response to the petitioner. More than one year after the building was handed over, such an apparently unsustainable stand could not have been taken by the respondent-Corporation which is an instrumentality of the 1st Respondent-Government in the light of R D SHETTY vs. INTERNATIONAL AIRPORT AUTHORITY OF INDIA [1979 (5) TMI 144 - SUPREME COURT]. It hardly needs to be stated that the 'State' and its instrumentalities should conduct themselves as model litigants than to tread on lose soil of technical objections.
It is a well settled position of law that only a genuine dispute merits reference for arbitration and not 'fictional disputes' of the kind. This view gains support from a decision of Madhya Pradesh High Court in INDIAN OIL CORPORATION LTD. AND OTHERS VERSUS M/S TATPAR PETROLEUM CENTRE [2022 (1) TMI 1483 - MADHYA PRADESH HIGH COURT], wherein it is observed 'Whether the assertion made by one and the denial made by the other leaves to passing of any particular order by one of the party is not necessary for arising of a dispute. An assertion by one and denial/said assertion by another is enough for germination of the concept of a dispute.'
A dispute which otherwise can be fairly adjudged on the basis of pleadings of the parties accompanied by the evidentiary material on record, cannot be relegated to adjudication elsewhere, more particularly when the respondents happen to be the governmental bodies answering the definition of 'State' under Article 12. It is not that the so called dispute squarely falls within the realm of private law, either; there is Karnataka Transparency in Public Procurements Act, 1999 and Rules promulgated thereunder. There are sufficient elements of public law. A contract to which State is a party, does not create an island completely immune from judicial review under Article 226 & 227.
This is a fit case for levy of exemplary costs for the ill-treatment meted out to the scrupulous citizen who had done the work for the State entities. A message should loudly go to the quarters that be, that the courts would not tolerate indolence on the part of public bodies when interest of the citizen is put to peril. Both the sides having been heard even on this aspect of the matter, this court is of the considered opinion that the second respondent-Corporation should be saddled with a cost of Rs. 2, 00, 000/-payable to the petitioner in addition to interest at a reasonable rate for the delay in making payment in terms of undisputed bills, that are already authenticated by the concerned.
Conclusion - i) Public bodies must act with fairness and transparency, and they cannot rely on technicalities to evade their obligations. ii) The respondents' actions were arbitrary and unjust, and it was appropriate for the writ court to intervene to ensure justice for the petitioner.
Petition allowed.
-
2022 (9) TMI 1658
TP Adjustment - determination of arms’ length price for intra group services received by the appellant assessee - HELD THAT:- As the issue is recurring one right from A.Y. 2009-10 to 2015-16 and is covered in favour of the assessee by the decisions of the Co-ordinate Benches of the Tribunal deciding the issue in favour of the assessee in all the assessment years.
Determination of arm’s length price and an adjustment made on account thereof towards advertisement, marketing and promotion expenses - We find that issue is squarely covered by the decisions of the Co-ordinate Benches in earlier assessment years in assessee’s own case from AY 2010-11 to 2015-16. Accordingly we set aside the DRP direction on this issue and direct the AO/TPO to delete the adjustment made and consequently ground no. 3 is allowed.
Disallowance made in respect of rental paid in respect of motor cars by treating the same as capital expenditure - HELD THAT:- We have perused the facts of the case in the light of the decisions of Coordinate Benches from AY 2009-10 to 2015-16 in assessee’s own case and find that the issue is recurring one which has been decided in favour of the assessee.
Disallowance of depreciation on moulds - HELD THAT:- As following the orders of Coordinate Benches from A.Y. 2011-12 to 2015-16, we restore this issue to the file of the AO for fresh verification and decide the same in accordance with the provisions of the Act.
Disallowance u/s 14A - HELD THAT:- The issue is settled one that no disallowance can be made where there is no exempt income as laid down in Chettinad Logistics Pvt. Ltd. [2018 (7) TMI 567 - SC ORDER] We, therefore, respectfully following the decision of the Hon’ble Apex Court set aside the order of DRP on this issue and direct the AO to delete the disallowance. The ground No. 8 is accordingly allowed.
Disallowing the deduction in respect of claim of assessee in respect of education cess confirmed.
Short grant of tax deducted at source/tax collected at source - The issue needs to be examined at the level of AO. Accordingly the same is restored to the file of the AO with the direction to examine and allow the same after doing the necessary verification.
Appeal of the assessee is allowed for statistical purposes.
-
2022 (9) TMI 1657
Addition u/s 68 - long-term capital gain as a bogus accommodation entry - onus to prove - HELD THAT:- We observe that the assessee has purchased these scrips and the transactions were all routed through proper banking channel and in Registered Stock Exchange. We also observed that the AO has merely relied on the report from investigation wing and just because assessee has declared some profit and claimed deduction u/s. 10(38) of the Act he proceeded to make the additions.
As decided in M/s. Pratibha S. Mhatre [2021 (6) TMI 660 - ITAT MUMBAI] Error upholding the action of the AO in bringing the long term capital gains on sale of shares as unexplained income of the assessee treating the same as just an accommodation entry. The ld AO is directed to grant exemption u/s 10(38). Decided in favour of assessee.
-
2022 (9) TMI 1656
Seeking to quash seizure memo - HELD THAT:- In view of the facts of the present case, and as the goods have already been released, it is not inclined to interfere with the decision of the High Court quashing the seizure memo. However, it is clarified that the quashing of the seizure memo does not mean the appellants cannot investigate, and proceed in accordance with law under the provisions of the Customs Act, 1962.
The appeals are disposed of.
-
2022 (9) TMI 1655
Reopening of assessment - assessee has taken accommodation entries - no addition was made for the item for which assessment was reopened - HELD THAT:- The name of four accommodation providers, which has been discussed in the reasons for reopening is not discernable in this list of seventeen entities.
Therefore, these concerns have not been demonstrated by the AO as connected in any manner to the four bogus concerns from whom the assessee alleged to have taken accommodation entries and the assessment of the assessee was reopened for verifying that aspect. Thus the addition made by the AO is totally unconnected with the issue for which assessment was reopened.
Whether AO can make addition of any other item which was detected during the reassessment proceedings as escaped income? - Expression “and also” employed in section 147 cannot be read as being in the alternative. It means that if no addition is being made on an item for which assessment was reopened, then Assessing Officer cannot add any other item. He ought to have reopened the assessment again for the purpose of adding those escaped item because that creates an independent circumstance for proceeding against an assessee. There might be various aspects of limitation etc. would come to the rescue of assessee. Thus we are of the view that the CIT(Appeals) has rightly deleted the addition. Decided against revenue.
-
2022 (9) TMI 1654
Challenge to Arbitral Award - quantum of compensation that is to be granted to the Appellants - determination of 'just' compensation under a social welfare - Reliability on income tax returns and sudit reports to determine 'loss of income' - Treatment of Income from Business Ventures and other Investments - Treatment of Income from House Property and Agricultural Land
Determination of 'just' compensation under a social welfare - HELD THAT:- Motor Vehicles Act of 1988 is a beneficial and welfare legislation that seeks to provide compensation as per the contemporaneous position of an individual which is essentially forward-looking. Unlike tortious liability, which is chiefly concerned with making up for the past and reinstating a claimant to his original position, the compensation under the Act is concerned with providing stability and continuity in peoples' lives in the future.
Reliability on income tax returns and sudit reports to determine 'loss of income' - HELD THAT:- It would be pertinent to divide the income as mentioned in the audit reports into two parts - (a) Income from Business Ventures and other Investments and (b) Income from House Property and Agricultural Land. It should be emphasized that these audit reports only showcase amounts which specifically stem from the shares and interest held by the Deceased in the businesses and it is not a case wherein the entire turnover of businesses are depicted as Deceased's income. Moreover, it deserves to be clarified that the income under the abovementioned two parts have been computed at gross value as per the audit reports and includes the deductions such as interest paid on loans and expenses incurred by the deceased.
Treatment of Income from Business Ventures and other Investments - HELD THAT:- The mere fact that the Deceased's share of ownership in these businesses ventures was transferred to the Deceased's minor children just before his death or to the dependents after his death is not a sufficient justification to conclude that the benefits of these businesses continue to accrue to his dependents. On the contrary, it has come on record that the Deceased was actively involved in the day-to-day administration of these businesses from their stage of infancy, had undergone specialized training to administer his business and that the audit reports neatly delineate Deceased's share of income from the businesses. These facts necessitate that the entire amount from the business ventures is treated as income. Similarly, the amount earned from the bank interests and remaining investments must also be included as income.
Treatment of Income from House Property and Agricultural Land - HELD THAT:- In the instant case, documents produced on record indicate two salient aspects with respect to 'Lakshmi Complex', which was the sole source of rental income for the deceased. The partition deed related to the land on which the commercial building is situated, highlights that the building was constructed on account of the joint investment made by the Deceased and his partners. Furthermore, as per the rental records, 'Lakshmi Complex' was leased out to more than ten different commercial entities. Hence, keeping in mind that - first, the rental amount which is sought to be deducted partakes the character of investment; and second, that the managerial skills required for supervising the said building would require sophisticated contract management skills and goodwill among the business community, it is necessary that we determine the value of managerial skills of the Deceased on the higher side - it is deemed appropriate to award Rs. 2,50,000/- as the amount for the Deceased's managerial skills. It is clarified that the said amount would also include the amount for the managerial skills in respect of the Deceased's agricultural lands.
Conclusion - i) Income tax returns and audit reports are reliable for determining the deceased's income. ii) The deceased's active involvement in his businesses justified treating the business income as personal income. iii) Managerial skills in managing properties should be valued, and a portion of the income from such sources should be considered in the compensation. iv) Compensation must be calculated liberally, considering future prospects and personal expenses.
Appeal disposed off.
-
2022 (9) TMI 1653
MAT Applicability of Section 115JB to the assessee Electricity Company - As decided by HC said provisions prior to its amendment in the year 2012, would not cover the electricity company. The Kerela High Court in case of Kerela State Electricity Board [2010 (11) TMI 127 - KERALA HIGH COURT] had taken such a view in similar circumstances.
HELD THAT:- In view of order passed by this Court in [2022 (10) TMI 363 - SC ORDER] the instant special leave petition is also dismissed.
-
2022 (9) TMI 1652
Disallowance being loss incurred in foreign currency exchange fluctuation on account of ECB loss holding the same as capital in nature - HELD THAT:- Admitted facts are that the assessee has availed an external commercial borrowing to part finance its expansion project. The loan was drawn down and utilized for the purpose of fixed assets all of which were purchased from domestic market i.e., domestic assets. The assessee did not use the loan for purchase of assets from abroad.
Accordingly, fluctuation in the exchange rate viz-a-viz the rate at which loans was available, the transactional gain or loss is to be assessed as Revenue. Respectfully following in the case of Wipro Finance Ltd [2022 (4) TMI 694 - SUPREME COURT] we allow the claim of assessee.
Disallowance of expenses relatable to exempt income by invoking the provisions of section 14A r.w.rule 8D - HELD THAT:-Assessee did not make any submission qua which limb of Rule 8D, disallowance is made, he could not brought out any submissions. Hence, we dismiss this ground of assessee.
Appeal filed by the assessee is partly allowed.
-
2022 (9) TMI 1651
Estimation of income - bogus purchases - HELD THAT:- Since the issue is squarely covered by the decision of Pankaj K. Choudhary [2021 (10) TMI 653 - ITAT SURAT] wherein held disallowances @ 6% of impugned purchases / disputed purchases would be sufficient to meet the possibility of revenue leakage
As there is no change in facts and law and Revenue is unable to produce any material to controvert the aforesaid findings of the Co-ordinate Bench (supra). We find no reason to interfere in the above said order - we dismiss the appeals of the assessees and we allow the appeals of the Revenue partly.
-
2022 (9) TMI 1650
Approval of scheme of amalgamation of six companies - it is alleged that valuer has made valuation disregarding the methodology, methods or share entitlement ratio and has proceeded on guess work to arrive at a share exchange ratio - HELD THAT:- It is considered appropriate to dispose of these appeals with a direction that the order of the NCLAT dated 29.11.2019 is set aside and the scheme of amalgamation as approved by the NCLT in respect to four private limited companies(respondent nos.4 to 7) with the appellant under order impugned dated 12.04.2018 confirmed.
Appeal disposed off.
-
2022 (9) TMI 1649
Provisional release of seized gold - petitioner has failed to cooperate in response to the show cause notice issued to him - HELD THAT:- Looking to the fact that the objections have already been filed before the competent authority in so far as the seizure of the gold is concerned, the order passed by the Tribunal assailed on the ground urged before us has lost its relevance. The release of the seized gold, however, is bound to be secured against an adequate bank guarantee. The Tribunal having considered the matter has already directed the respondent to furnish bond for full value of the seized gold.
In so far as the release of gold on the basis of bank guarantee of 30% of the value of the gold with auto renewal clause is concerned, the said clause is modified and it is provided that the respondent shall extend bank guarantee to the tune of 50% of the value of the gold with auto renewal clause in favour of the revenue authority. On fulfilling the two conditions modified above, the gold seized by the revenue is directed to be released forthwith and preferably within a period of 10 days. The release of gold shall abide by the proceedings arising out of show cause notice dated 2.11.2021 issued under Section 124 of the Customs Act, 1962.
Appeal disposed off.
-
2022 (9) TMI 1648
Objections filed by him before the Commissioner of Customs (Preventive) in response to the show cause notice dated 2.11.2021 - HELD THAT:- The petitioner is stated to have filed his objections on 1.2.2022.
The Commissioner of Customs (Preventive) is directed to deal with the petitioner's objections against the show cause notice dated 2.11.2021 and finalize the same by passing a reasoned and speaking order expeditiously, preferably, within a period of two months from the date of production of a copy of this order alongwith the application. It is made clear that this Court has not dealt with the issue at hand on merits.
Petition disposed off.
-
2022 (9) TMI 1647
Unexplained cash deposit - Addition u/s 68 - HELD THAT:- Assessee has established the sales with the bills. The sales were duly accounted for in the books of account. Therefore, the addition made under section 68 of the I. T. Act is not justifiable, as the amount was available with the assessee as opening balance of cash-in-hand as per cash book and cash received from the sales.
Since these were Revenue Receipts, the same had also been offered to tax and due taxes had already been paid. AO had randomly made the addition, without pinpointing any abnormality therein. As such, the addition made by the Assessing Officer and confirmed by CIT (A) is not sustainable in the eye of law. Decided in favour of assessee.
Addition of 15% of shop maintenance expenses and vehicle maintenance expenses - HELD THAT:- It is trite that the AO cannot, under law, make such unsustainable ad-hoc disallowances in the absence of any defect in the assessee's books.
Neither of the lower tax authorities had pointed out any voucher wherein the genuineness of the expenditure claimed to have been incurred by the assessee was not wholly and exclusively for the purpose of its business, nor was it the case of the Revenue that any part of the expenditure in question was either found to be bogus, or fictitious.
Evidently, there has been no clear finding as to the number of vouchers requiring denial of allowances with the amount of expenditure and nature of defects therein or therewith. Department could not bring out any material on record to substantiate its conclusion as logical. Also, there is no evincible rationale in arriving at the percentile of disallowance in the present case. Therefore, the ad-hoc disallowance made in an arbitrary manner cannot be held to be justified. The disallowances are deleted.Decided in favour of assessee.
-
2022 (9) TMI 1646
Deduction u/s. 80P - interest earned from deposits kept with nationalised banks - contradictory judgements on the issue - HELD THAT:- Pune Benches of the Tribunal in Sureshdada Jain Nagari Sahakari Patsanstha Maryadit [2019 (4) TMI 682 - ITAT PUNE] decided the question of availability of deduction u/s 80P on interest income by noticing earlier case of Shri Laxmi Narayan Nagari Sahakari Pat Sanstha Maryadit [2015 (8) TMI 1085 - ITAT PUNE] has allowed similar deduction. In the said case, the Tribunal discussed the contrary views expressed in Tumkur Merchants Souharda Credit Cooperative Ltd. [2015 (2) TMI 995 - KARNATAKA HIGH COURT] allowing deduction u/s. 80P on interest income and that of the Hon’ble Delhi High Court in Mantola Cooperative Thrift Credit Society Ltd. [2014 (9) TMI 833 - DELHI HIGH COURT] not allowing deduction u/s. 80P on interest income earned from banks.
Both the Hon’ble High Courts took into consideration the ratio laid down in the case of Totgar’s Cooperative Sale Society Ltd. [2010 (2) TMI 3 - SUPREME COURT] No direct judgment from the Hon’ble jurisdictional High Court on the point having been pointed out, the Tribunal in Shri Laxmi Narayan Nagari Sahakari Pat Sanstha Maryadit [2015 (8) TMI 1085 - ITAT PUNE] preferred to go with the view in favour of the assessee by the Hon’ble Karnataka High Court in the case of Tumkur Merchants Souharda Credit Cooperative Ltd. [2015 (2) TMI 995 - KARNATAKA HIGH COURT] Assessee appeal allowed.
-
2022 (9) TMI 1645
Revision u/s 263 - assessee has failed to declare in 3CEB report the transactions with related parties - HELD THAT:- It is not a case of simpliciter invoking of revisional jurisdiction u/s 263 of the Act upon receiving of the reference. Thus, the preliminary exercise of examining the records by the PCIT and forming his own view after considering the records was carried out by the PCIT, before invoking jurisdiction u/s. 263. Therefore, the arguments of assessee that provisions of section 263 have been invoked merely on reference without consideration of records by the PCIT as envisaged under the provisions of sub-section (1) to section 263 is unfounded. Therefore, the said argument is rejected.
Transaction between M/s. Metallurgical Services and the assessee is a ‘specified domestic transaction’ and falls within the ambit of section 92BA(i) - The clause (i) to Section 92 BA has been omitted by the Finance Act, 2017 w.e.f. 01/04/2017 without any ‘Saving’ clause. Thus, the effect of said omission without ‘saving’ would be that it shall be deemed that the said clause never existed in the statute.
See Texports Overseas Pvt. Ltd. [2017 (12) TMI 1719 - ITAT BANGALORE] wherein as held that once a particular provision of section is omitted from the statute it shall be deemed to be omitted from its inception unless it is protected by Saving clause or a provision to make it clear that action taken or proceedings initiated under that provision or section would continue and would not be left on account of omission.
We find merit in this arguments of the assessee. Once, it is concluded that the transaction between assessee company and M/s. Metallurgical Services is not a specified domestic transaction, there is no question of reporting the same in Form 3CEB. The assessee succeeds on ground No.2 of the appeal.
Transaction between assessee and Exova (UK) Ltd. is not a transaction with “Associated Enterprises” as defined in Chapter-X of the Act, hence, the provisions of section 92B(1) of the Act are not attracted - The transaction of initial allotment of equity shares to Exova (UK) Ltd. was between two independent, unrelated entities. Hence, there was no obligation on the part of assessee to report said transaction in Form – 3CEB. It is after initial allotment of equity shares by assessee to Exova (UK) Ltd. (subject to shares holding as specified u/s.92A of the Act) that the entities would be covered by the definition of “Associated Enterprises” and any transaction between the said entities, thereafter would fall within the realm of Chapter –X of the Act. We find merit in ground No.3 of the appeal. The assessee succeeds on the same.
Claim of depreciation on goodwill acquired under slump sale agreement - PCIT has disallowed depreciation on Goodwill merely on surmises and conjectures. In so far as the issue of depreciation on Goodwill is concerned, the Hon’ble Apex Court in the case of CIT vs. Smifs Securities Ltd. [2012 (8) TMI 713 - SUPREME COURT] has held that Goodwill is an asset under Explanation 3(b)(as applicable to assessment year under appeal) to section 32(1) of the Act and thus, depreciation on Goodwill is allowable. Undisputedly, in the present case the Goodwill has arisen on slump sale of business by partnership firm to the assessee. The said transaction of purchase of business was on mutually agreed terms and conditions.
this issue was considered and examined by the Assessing Officer during the assessment proceedings. Thus, after examining the issue the Assessing Officer formed an opinion and accepted assessee’s claim of depreciation on Goodwill. The PCIT has erred in invoking provisions of Explanation 2 (a) &(b) to section 263 of the Act. We further observe that while deciding this issue of depreciation on Goodwill, the PCIT on one hand gave a conclusive finding that the Goodwill claimed by the assessee is merely an illusory entry in the books of account and, therefore, no depreciation as claimed can be allowed to the assessee, on the other hand PCIT set aside the issue back to the Assessing Officer to examine the facts involved in the light of observations made. The PCIT in fact has given a specific finding on the issue, without examining the assessee’s claim of depreciation. Ground No.4 of the appeal, ergo, the same is allowed.
PCIT has overstepped in exercising his revisional jurisdiction u/s. 263 of the Act. The two mandatory conditions to be satisfied for exercising revisional powers i.e. the order passed by Assessing Officer should be (i) erroneous and (ii) prejudicial to the interest of Revenue are not concurrently fulfilled in the instant case - Assessee appeal allowed.
........
|
9911796707
