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Archive for the ‘Tribunal’ Category


Simran Singh Gambhir vs. DDIT (ITAT Delhi)

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DATE: July 21, 2015 (Date of pronouncement)
DATE: September 1, 2015 (Date of publication)
AY: 2008-09
FILE: Click here to view full post with file download link
CITATION:
S. 271(1)(c): Offering interest on maturity on Bonds as “long-term capital gains” instead of as “income from other sources” is a mere change in the head of income and a case of bona fide mistake which does not attract penalty

The interest of all the three years was offered to tax in the year of maturity and not year-wise. This is just change in the head of income under which the income is offered to tax. The taxation of the receipt is changed to the head of income ‘other sources’ from the head of income ‘capital gain’. The explanation filed by the assessee is bona fide. This is a case of a bona fide mistake on part of the assessee

Posted in All Judgements, Tribunal

Hasmukh N. Gala vs. ITO (ITAT Mumbai)

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DATE: August 19, 2015 (Date of pronouncement)
DATE: August 27, 2015 (Date of publication)
AY: 2010-11
FILE: Click here to view full post with file download link
CITATION:
S. 54: Giving advance to builder constitutes "purchase" of new house even if construction is not completed and title to the property has not passed to the assessee within the prescribed period

The word ‘purchase’ used in Section 54 of the Act should be interpreted pragmatically. The intention behind Section 54 was to give relief to a person who had transferred his residential house and had purchased another residential house within two years of transfer or had purchased a residential house one year before transfer. It was only the excess amount not used for making purchase or construction of the property within the stipulated period, which was taxable as long term capital gain while on the amount spent, relief should be granted. Principle of purposive interpretation should be applied to subserve the object and more particularly when one was concerned with exemption from payment of tax

Posted in All Judgements, Tribunal

Infogain India Pvt. Ltd vs. DCIT (ITAT Delhi)

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DATE: August 19, 2015 (Date of pronouncement)
DATE: August 27, 2015 (Date of publication)
AY: 2008-09
FILE: Click here to view full post with file download link
CITATION:
Transfer Pricing: Circumstances in which the Profit Split Method (PSM) has to be preferred over the TNMM for determining the ALP and method of allocation of profits between the assessee and the AE under the PSM explained

The Profit Split Method (PSM) first identifies the profit to be split for the associated enterprise from the controlled transactions in which the AEs are engaged. It then splits these profits between the AEs on an economically valid basis that approximates the division of the profit that would have been anticipated and reflected in an agreement, transaction or a residual profit intended to represent the profit that cannot readily be assigned to one of the parties. The contribution of each enterprise is based upon a functional analysis and valued to the extent possible by any available reliable standard market data. The functional analysis is an analysis of the functions performed (taking into account assets used and risk assumed) by each enterprise

Posted in All Judgements, Tribunal

Mitsui & Co. India Pvt. Ltd vs. DCIT (ITAT Delhi)

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DATE: August 20, 2015 (Date of pronouncement)
DATE: August 27, 2015 (Date of publication)
AY: 2007-08, 2008-09
FILE: Click here to view full post with file download link
CITATION:
Transfer Pricing: Transactions of providing support services to “Sogo shosha” entities cannot be characterized as trading transaction for purposes of comparison and determining ALP and the cost of sales cannot be included

The activities of purchase and sale i.e. trading involves risk and finance whereas in the activity of support services i.e. intending transactions the assessee has neither to incur any financial obligation nor carries any significant risk. The nature of two activities is absolutely different. The activities of trading i.e. purchase and sale are highly insignificant as compared to activity of support service which constitutes the core business activities of the assessee. The TPO and DRP are wrong in applying the trading margins ignoring the facts of the case that the assessee being a service provider the trading margins cannot be applied. Further, the TPO DRP have gone wrong in including the cost of sales in OP/TC ignoring the fact the value of the sale under no circumstances effects the activities of the assessee company, a service provider. For support services the correct method is the TNMM and the assessee has computed the same on the basis of OP/TC. The OECD guidelines also supports this contention that in TP study business transactions cannot be recharacterized. The support service or intending provided by the assessee company is nothing but a trading facilitation both in form and substance

Posted in All Judgements, Tribunal

Shivalik Venture Pvt. Ltd vs. DCIT (ITAT Mumbai)

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DATE: August 19, 2015 (Date of pronouncement)
DATE: August 22, 2015 (Date of publication)
AY: 2009-10
FILE: Click here to view full post with file download link
CITATION:
S. 115JB: (i) Even if an amount is credited to the P&L A/c, the assessee can seek exclusion of that amount for purposes of “book profits” if a note to that effect is inserted in the A/cs (ii) The exemption conferred by S. 115JB to sums exempt u/s 10 should be extended to all sums which are not chargeable to tax

The profit arising on transfer of capital asset to its wholly owned Indian subsidiary company is liable to be excluded from the Net profit., i.e., the Net profit disclosed in the Profit and Loss account should be reduced by the amount of profit arising on transfer of capital asset and the amount so arrived at shall be taken as “Net profit as shown in the profit and loss account” for the purpose of computation of book profit under Explanation 1 to sec. 115JB of the Act. Alternatively, since the said profit does not fall under the definition of “income” at all and since it does not enter into the computation provisions at all, there is no question of including the same in the Book Profit as per the scheme of the provisions of sec. 115JB of the Act

Posted in All Judgements, Tribunal

DCIT vs. Garware Polyester Ltd (ITAT Mumbai)

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DATE: August 14, 2015 (Date of pronouncement)
DATE: August 22, 2015 (Date of publication)
AY: 2007-08
FILE: Click here to view full post with file download link
CITATION:
S. 115JB: Amount towards waiver of loan under OTSS, credited to "General Reserves" and not to the P&L Account cannot be added to "book profits"

Assessing Officer has not specified categorically that as to how the Part II & III of Schedule VI has not been followed or is against the prescribed accounting standard there is a requirement of law that waiver of loan taken for utilizing capital expansion is to be routed only through profit and loss account and cannot be credited to the ‘General Reserve’, i.e. directly in the Balance sheet

Posted in All Judgements, Tribunal

First Blue Home Finance Ltd vs. DCIT (ITAT Delhi)

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DATE: June 4, 2015 (Date of pronouncement)
DATE: August 18, 2015 (Date of publication)
AY: 2008-09
FILE: Click here to view full post with file download link
CITATION:
Transfer Pricing: The allotment of shares/ receipt of share application money by the assessee from the AE for a price less than the book value of the shares cannot be regarded as a “deemed loan” by the assessee to the AE and notional interest cannot be imputed thereon

Though the international transaction on capital account per se cannot call for any addition on account of transfer pricing adjustment because of the absence of any provision under the Act charging income from such transactions, but the transactions flowing out of such original transaction on capital account, having impact on the profitability of the assessee, would be required to pass the mandate of Chapter-X of the Act. In other words, if such offshoot transactions of the original transaction on capital account, such as, interest or depreciation are not at arm’s length price, then it is mandatory to determine their ALP and make addition, if any, on account of transfer pricing adjustment

Posted in All Judgements, Tribunal

ACIT vs. R.P.G.Credit & Capital Ltd (ITAT Delhi)

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DATE: August 7, 2015 (Date of pronouncement)
DATE: August 13, 2015 (Date of publication)
AY: 2004-05, 2006-07, 2009-10
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CITATION:
Strictures passed against the Dept for ‘mischievous adamancy to attempt to mislead the Tribunal’, ‘obduracy and adamancy in filing meritless appeal’, ‘travesty of justice’, ‘Mocking at the system by filing the appeals’, ‘grave assault on the trust and reputation of fair play enjoyed by the tax administration’ etc

We are pained to address the serious damage done by this deliberate, mischievous and selective reference to facts by such responsible persons which grievously damages the public faith and belief in the honest fair play of the tax administration. The conscious and selective reference to facts demonstrates that at the very stage of filing of the appeal its fate and conclusion was known for which specific purpose the facts were attempted to be obfuscated. The filing of present appeal with complete knowledge of its fate by the Revenue only reflects the mischievous adamancy to attempt to mislead the Tribunal and waste the time of the Court and the officers concerned

Posted in All Judgements, Tribunal

DCIT vs. Cybertech Systems & Software P. Ltd (ITAT Mumbai)

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DATE: August 7, 2015 (Date of pronouncement)
DATE: August 13, 2015 (Date of publication)
AY: 1997-98, 1998-99, 1999-00
FILE: Click here to view full post with file download link
CITATION:
S. 271(1)(c): Claim that interest income is eligible for s. 10B exemption, though upheld by the ITAT for an earlier year, is so implausible that it attracts penalty for concealment/ furnishing inaccurate particulars of income

We, in view of the foregoing, find no merit in the assessee’s case. It, to our mind, has not adduced any explanation, much less substantiated it, except for a bald assertion (i.e., of the said interest income as being a part of the assessee’s business income). The reliance on the decisions by the hon’ble jurisdictional high court, which we have found to be in fact supportive of the Revenue’s case, with the law in the matter being, in fact, well settled, is only a false plea or a ruse. Reliance on the decision by the tribunal for a subsequent year (AY 2000-01) is, under the circumstances, again, completely misplaced. A plausible explanation towards its’ claim/s saves penalty u/s. 271(1)(c), in view of, again, the settled law in the matter which though is completely missing in the present case

Posted in All Judgements, Tribunal

CIT vs. Hind Agro Industries (ITAT Chandigarh)

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DATE: August 12, 2015 (Date of pronouncement)
DATE: August 13, 2015 (Date of publication)
AY: 2010-11
FILE: Click here to view full post with file download link
CITATION:
S. 144: If books are rejected and Gross Profit rate is estimated, separate disallowance of expenses cannot be made

When such an estimate is made it is in substitution of the income that is to be computed under s. 29. In other words, all the deductions which are referred to under s. 29 are deemed to have been taken into account while making such an estimate. This will also that the embargo placed in s. 40 also taken into account

Posted in All Judgements, Tribunal

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