The Bangalore bench of the CESTAT, recently held that for claiming refund of Service Tax under Business Auxiliary Service, the certificate issued by STPI Authority is not required.
The appellants, in the instant case, appellants are engaged in providing Information Technology Software Service and Business Auxiliary Services.
Before the Tribunal, they challenged the order of the first appellate authority who granted refund to the appellant subject to submitting the SOFTEX copies duly certified by Software Technology Park of India (STPI) authorities to the Assistant Commissioner for verification.
The appellants contended that as per the direction of the Commissioner (A), appellant moved an application to the Director of STPI seeking the SOFTEX copies for Business Auxiliary Service. But the STPI authorities vide their communication dated 1.11.2017 informed the appellant that SOFTEX need to be filed for software ITES exports done through Data Communication Link and need not be filed for Business Auxiliary Service.
Allowing the appeal, the Tribunal held that the submission of certificate issued by STPI authority is not required for claiming the refund under the Business Auxiliary Services and the STPI have also clarified the same vide its communication dated 1.11.2017. “Therefore, in view of this, I find that the Commissioner (A)s order is not sustainable in law and therefore, I set aside the impugned order to this extent vide which he has directed the party to submit the SOFTEX duly certified by STPI authorities. With these modifications, both the appeals are allowed to the extent prayed before me and the lower authorities will quantify the refund amount after verifying the documents and thereafter, sanction the eligible amount of refund.”
Subscribe Taxscan Premium to view the JudgmentIn West Bengal State Co-operative Bank Ltd. v. DCIT, the Kolkata bench of Income Tax Appellate Tribunal in its recent order has held that the payment made by banks to casual workers on festive occasion can be allowed as deduction under section 37 of the Income Tax Act.
The bench comprising J.Sudhakar Reddy (AM) &A.T. Varkey (JM) were held so while allowing the appeal of assessee.
The appeal was carried before the tribunal against the order of CIT (A) that the expenses were in the nature of salary/wages paid as bonus during Eid/Durga Puja festival to casual staffs like peon, lift man, security staff etc. employed by the appellant through another service provider which is also being a co-operative society and such expenditures are very much incidental to and for the purpose of carrying on day to day business and allowable u/s 37 of the Income Tax Act, 1961.
After hearing the rival contentions, the tribunal bench found that this issue covered by the decision of the Co-ordinate Bench of the Tribunal in the assessee’s own case wherein held that expenditure of an amount paid as Tips & Baksis by the bank to casual workers on festive occasion cannot be disallowed.
Based on this aforementioned decision the bench allowed the grounds of assessee.
Subscribe Taxscan Premium to view the JudgmentProvisional figures of Direct Tax collections up to 15th January, 2018 show that net collections are at Rs. 6.89 lakh crore which is 18.7% higher than the net collections for the corresponding period of last year. The net Direct Tax collections represent 70.3% of the total Budget Estimates of Direct Taxes for F.Y. 2017-18 (Rs. 9.8 lakh crore). Gross collections (before adjusting for refunds) have increased by 13.5% to Rs. 8.11 lakh crore during April, 2017 to 15th January, 2018. Refunds amounting to Rs.1.22 lakh crore have been issued during April, 2017 to 15th January, 2018.
There has been consistent and significant improvement in the position of Direct Tax collections during the current fiscal across all parameters. The growth rate of Total Gross DT Collections has improved from 10.0% in Q1, to 10.3% in Q2, to 12.6% in Q3 and to 13.5% as on 15th January, 2018. Similarly, the growth rate of Total Net DT Collections has climbed up from 14.8% in Q1, to 15.8% in Q2, to 18.2% in Q3 and to 18.7% as on 15th January, 2018.
The growth has been particularly good in the collections under Corporate Income Tax (CIT). Gross CIT Collections, which were growing at the rate of 4.8% in Q1, attained a growth rate of 5.1% in Q2, 10.1% in Q3 and 11.4% as on 15th January, 2018. Similarly, the growth rate of Net CIT Collections increased from 10.8% in Q2, to 17.4% in Q3 and to 18.2% as on 15th January, 2018.
Having concerns over the issues on entertainment tax which has been subsumed into the Goods and Services Tax (GST), the PVR group has filed an appeal before the Allahabad High Court.
Before the High Court, the petitioners contended that Uttar Pradesh government had earlier, promised to allow multiplexes and cine malls retain a portion of entertainment tax for five years, on the basis of investments they make. However, this has been broken after the tax was subsumed into GST.
After admitting the petition on file, the High Court issued a notice to the state Government asking it to explain its scheme of entertainment tax.
The firm has challenged the new tax on the principle of promissory estoppels, which is a legal principle that says a promise is enforceable by law even if made without formal consideration.
The Income Tax Appellate Tribunal said Business Advances made without interest to Indian and subsidiaries can’t be disallowed under the provisions of the Income Tax Act, 1961.
The Revenue, in the instant case, was aggrieved by the order of the first appellate authority who deleted the disallowance of interest under Section 36 (1) (iii) of the Income Tax Act on the plea that assessee was having sufficient own funds for investment in subsidiary company.
The bench, after considering the rival contentions, observed that the assessee has incurred expenses on behalf of certain foreign subsidiaries and Indian subsidiary and shown them under the head ‘Advances Recoverable’.
The bench comprising Judicial Member Amarjit Singh and Accountant Member R.C.Sharma also observed that the assessee doesn’t follow the system of charging interest on such debits of expenses incurred on their behalf. Such advances did not attract any adjustment in Transfer Pricing order also. However, the Ld. AO considered these debit balances as advances without interest and disallowed Rs. 1,07,54,398/- out of interest u/s 36(1)(iii).
Subscribe Taxscan Premium to view the JudgmentThe State Bank of India (SBI) has invited application for the post of Deputy Manager (Internal Audit).
State Bank of India (SBI) is an Indian multinational, public sector banking and financial services company. It is a government-owned corporation with its headquarters in Mumbai, Maharashtra. On 1st April, 2017, State Bank of India, which is India’s largest Bank merged with five of its Associate Banks (State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala and State Bank of Travancore) and Bharatiya Mahila Bank with itself.
Number of Vacancies:
Educational Qualification (as on 1/12/2017):
Experience Criteria:
Age Limit: 21 – 35
How to Apply:
Application registration (b) Payment of fees (c) Photograph & Signature scan & upload. Visit Bank’s website https://bank.sbi/careers OR https://www.sbi.co.in/careers – Recruitment of Specialist Cadre Officer in State Bank of India.
Last Date to apply online: 28/01/2018.
Subscribe Taxscan Premium to view the JudgmentThe Goa State Government, last week notified the establishment of Advance Ruling Authority under the current Goods and Services Tax (GST) regime.
A Notification issued on 2nd January 2018, said that Goa Authority for Advance Ruling consist of (i) Shri Rajan K. Satardekar, Additional Commissioner of State Tax, Goa State. (ii) Shri S. K. Sinha, Additional Commissioner, Central GST, Goa.
The Notification shall come into force with immediate effect.
An advance ruling helps the applicant in planning his activities which are liable for payment of GST in advance. It also brings certainty in determining the tax liability, as the ruling given by the Authority for Advance Ruling is binding on the applicant as well as Government authorities.
Subscribe Taxscan Premium to view the JudgmentThe Reserve Bank of India (RBI) has reiterated Legal Tender status of 10 coins of different designs.
It has come to the notice of the Reserve Bank that in certain places there is reluctance on part of traders and members of public to accept ₹ 10 coins due to suspicion about their genuineness.
It is clarified that the Reserve Bank puts into circulation, the coins minted by mints, which are under the Government of India. These coins have distinctive features to reflect various themes of economic, social and cultural values and are introduced from time to time.
As coins have longer life, coins of different designs and shapes circulate in the market at the same time. So far the Reserve Bank has issued ₹ 10 coins in 14 designs and the public has been informed of their distinctive features through Press Releases (list appended). All these coins are legal tender and can be accepted for transactions.
The Reserve Bank has in the past also issued a Press Release (November 20, 2016) requesting members of the public to continue to accept coins of ₹ 10 denomination as legal tender in all their transactions without any hesitation.
The Reserve Bank has also advised banks to accept coins for transactions and exchange at all their branches.
The Institute of Chartered Accountants of India (ICAI) today announced that the declaration of results of Chartered Accountants Final examination held in November 2017, Common Proficiency Test(CPT) held in December 2017 and the Information Systems Audit (Assessment Test)(ISA-AT) held in December 2017 is rescheduled to today 8 p.m.
Earlier, the announcement of results was scheduled at 2.00 PM today.
The said results will now be declared at around 8.00 PM on 17th January 2018 and will be hosted at the websites such as icaiexam.icai.org, caresults.icai.org, icai.nic.in etc.
While dismissing the appeal filed by the revenue Delhi bench of Income Tax Appellate Tribunal (ITAT) has held that the share application money received cannot be treated as unexplained for the purpose of Section 68 of the Income Tax Act, 1961 if the Assessing Officer (AO) doesn’t made any investigation on the documentary evidences at the period of assessment.
In the instant case the assessee company has filed its return of income for the relevant assessment year declared a loss of Rs.2,75,807.
During the course of assessment proceedings, the AO noticed that during the year under consideration, the assessee-company has received fresh share application money of Rs.10,63,50,000 from M/s. Jaisri Properties Exports Pvt. Ltd and the assessee was asked to furnish evidence in support of the genuineness of the share application money. In response, the assessee submitted all the supporting documents of the genuineness of the share application received from the Investor Company including name of the party, address, PAN, bank statement etc.
Without considering the above evidences, the AO confirmed the addition by observing that the assessee company has failed to prove the financial capacity of the investor firm.
Assessee approached the Tribunal against the order.
After analyzing the facts in deep, the bench comprising of Judicial Member Bhavnesh Saini and Accountant Member Prashant Maharishi observed that the assessee company produced sufficient documentary evidence before A.O. to prove the source of share application money. And it is also clear that the AO failed to conduct any enquiry and scrutiny of the documents at assessment stage, it indicate that the AO did not perform his duties at the assessment stage so as to make addition against the assessee-company.
The division bench further said that the assessee-company discharged initial onus to prove identity of the Investor Company including its creditworthiness and genuineness of the transaction in the matter. Hence in such a situation the AO has no right to made any addition cannot be treated the share application money as unexplained.
Subscribe Taxscan Premium to view the JudgmentITAT Kolkata, in DCIT v. M/s Feegrade & Company Ltd, held that railway punitive charges are eligible for tax deduction under the provisions of the Income Tax Act, 1961.
The bench comprising N.V.Vasudevan (JM) & Waseem Ahmed (AM) was hearing an appeal filed by Assessee, who is a mining company. During the assessment proceedings, AO found that the assessee claimed deduction of Railway Punitive Charges’ which was recorded in the books under the head ‘ Freight and Transporting expenses ‘.
According to the AO these charges were in the nature of expenses incurred for any purpose which is an offence or which is prohibited by law and therefore ought not to be allowed as a deduction while computing the income from business as per the provision of Explanation to Section 37(1) of the Income Tax Act.
The stand of the assessee was that these payments were not in the nature of penalty for infringement of law and were purely in the nature of compensatory charges and therefore cannot be disallowed under Explanation to section 37(1) of the Act.
CIT (A) held that railway punitive charges were compensatory payments and cannot be disallowed under Explanation to Section 37(1) of the Income Tax Act. Aggrieved by the order of CIT (A) the revenue has raised ground before the Tribunal.
The counsel for revenue highlighted before ITAT that statutory provision makes it clear that the punitive charges are in addition to freight and other charges and also they meant to as penalty. On contrary assessee placed reliance on Kolkata Bench in the case of DCIT vs. M/s. Feegrade & Company Pvt. Ltd. wherein held that railway punitive charges were not hit by Explanation to section 37(1) of the Act.
The tribunal considered the rival submission and perused the records and identical issues involved cases. The ITAT mentioned the decision of the Karnataka High Court in the case of Mamta Enterprises (supra) where the criminal offence was compounded and the compounding fees was claimed as deduction.
The tribunal bench mentioned under some circumstances like breach of penal provisions of Customs Act for which fine was paid; the expenses were not allowed as deduction.
According to the fact and situation of instant case the bench observed it as the claim of the assessee for deduction was rightly allowed by CIT (A).
Subscribe Taxscan Premium to view the JudgmentWith a view to bringing transparency, the Insolvency and Bankruptcy Board of India (IBBI), in a circular issued on Tuesday, said that an Insolvency Professional shall, within the time stipulated, should disclose his relationship with the following persons, namely, (i) the Corporate Debtor, (ii) other Professional(s) engaged by him, (iii) Financial Creditor(s), (iv) Interim Finance Provider(s), and (v) Prospective Resolution Applicant(s) to the Insolvency Professional Agency of which he is a member.
The Insolvency and Bankruptcy Code, 2016 read with regulations provide for the appointment of an insolvency professional [(Interim Resolution Professional (IRP) / Resolution Professional (RP)] to conduct the resolution process (Corporate Insolvency Resolution Process and the Fast Track Process) and discharge other duties. These authorize the Insolvency Professional to appoint registered valuers, accountants, legal and other professionals to assist him in the discharge of his duties in the resolution process.
For t5he above purpose, the ‘relationship’ includes the following four kinds of relationships at any time or during the three years preceding the appointment.
Firstly, Where the Insolvency Professional or the Other Professional, as the case may be, has derived 5% or more of his / its gross revenue in a year from professional services to the related party. Secondly, Where the Insolvency Professional or the Other Professional, as the case may be, is a Shareholder, Director, Key Managerial Personnel or Partner of the related party. Thirdly, Where a relative (Spouse, Parents, Parents of Spouse, Sibling of Self and Spouse, and Children) of the Insolvency Professional or the Other Professional, as the case may be, has a relationship of kind A or B with the related party. Fourthly, Where the Insolvency Professional or the Other Professional, as the case may be, is a partner or director of a company, firm or LLP, such as, an Insolvency Professional Entity or Registered Valuer, the relationship of kind A, B or C of every partner or director of such company, firm or LLP with the related party.
The circular mandates furnishing of disclosures on the website within three working days.
“The Insolvency Professional shall provide a confirmation to the Insolvency Professional Agency to the effect that the appointment of every other professional has been made at arms’ length relationship.,” the circular said.
It was further said that the disclosures shall be made in respect of ongoing resolution processes as to date and all subsequent resolution processes. The disclosures due on the date in respect of the ongoing processes shall be made to the respective Insolvency Professional Agency by 31st January 2018, it clarified.
“The Insolvency Professional shall ensure timely and correct disclosures by him and the other Professionals appointed by him. Any wrong disclosure and delayed disclosure shall attract action against the Insolvency Professional and the other Professional as per the provisions of the law,” it added.
Subscribe Taxscan Premium to view the JudgmentWith a view to promote zero-emission vehicles and thereby to reduce pollution, the Goa government has decided to exempt electronic vehicles from the levy of Road Tax.
The exemption Notification was issued by the directorate of transport under sub-section (2) of Section 11 of the Goa, Daman and Diu Motor Vehicles Tax Act 1974, and will come into effect from the date of its publication in the official gazette.
A notification signed on Friday states, “In exercise of the powers conferred by sub-section (2) of Section 11 of Goa, Daman and Diu Motor Vehicles Tax Act, 1974 (Act 8 of 1974), the government of Goa exempts electric operated vehicles (EOVs) from the payment of tax. The notification shall come into force from the date of its publication in the official gazette.”
As of now, only a few States have exempted the e-vehicles from taxation.
Last month, the auto industry body, Society of Indian Automobile Manufacturers (SIAM) had suggested reduction of GST on electric automobiles to 5%, besides one-time I-T deduction of 30% of vehicle price for non-financed buyers. SIAM had also sought exemption of road tax for EVs to promote in India.
The Insolvency and Bankruptcy Board of India (IBBI) said that yesterday issued circular clarifying norms for fees payable to an insolvency professional and to other professionals appointed by an insolvency professional.
As per the Code of Conduct for Insolvency Professionals under the IBBI (Insolvency Professionals) Regulations, 2016, an insolvency professional must provide services for remuneration which is charged in a transparent manner and is a reasonable reflection of the work necessarily and properly undertaken. He shall not accept any fees or charges other than those which are disclosed to and approved by the persons fixing his remuneration.
In this regard, the Board clarified that “an insolvency professional shall render services for a fee which is a reasonable reflection of his work, raise bills/invoices in his name towards such fees, and such fees shall be paid to his bank account. Any payment of fees for the services of an insolvency professional to any person other than the insolvency professional shall not form part of the insolvency resolution process cost.”
“Similarly, any other professional appointed by an insolvency professional shall raise bills/invoices in his / its (such as registered valuer) name towards such fees, and such fees shall be paid to his / its bank account,” the circular said.
Subscribe Taxscan Premium to view the JudgmentThe Income Tax Appellate Tribunal (ITAT) recently held that when there is two non-jurisdictional High Court’s decisions are opposed to each other, the one in favour of the assessee is required to be followed by the Tribunal.
The bench comprising A.D. Jain, Judicial member and DR. Mitha Lal Meena, Accountant member allowed the appeal of assessee.
The assessee, in the instant case has challenged the reassessment order passed, contending that the said order is not sustainable in law, since no addition was made on the reasons recorded by the Assessing Officer to believe escapement of income.
As per the reasons, according to AIR information received by the Assessing Officer, the assessee had invested an amount for purchase of units of Mutual Fund, out of undisclosed income.
Aggrieved assessee carried the matter before CIT (A) and CIT (A) rejected the assessee’s contention by observing the fact that no addition was made on the reasons recorded and the addition was made on the issue of capital gain arising on transfer of property and decided the matter against assessee.
On ITAT observation the reason for the CIT(A) to do so was that that ‘Sri N Govindaraju’ (Supra) is a decision rendered later than ‘Ranbaxy Laboratories vs. CIT’and ‘CIT vs. Jet Airways India Ltd.’, both of which decisions are in the favour of the assessee on this issue.
The tribunal bench heard both the parties contention and their rival submission and declared that aforementioned cases relied by CIT (A) was not in accordance with law and also added that has been rendered by the jurisdictional High Court so far as the assessee is concerned.
Based on these facts tribunal bench declared that in such a situation where there is two orders of Non-Jurisdictional High Courts, Tribunal should follow the order favoring Assessee.
Subscribe Taxscan Premium to view the JudgmentA two judge bench of the Rajasthan High Court in Commissioner Central Excise Commissionerate vs. National Engineering Industries Ltd held that a service not being delivered outside India and not used outside India but provided for the benefit of foreign entity, can be termed as export of service and therefore, the service provider is not liable to pay Service Tax on the same.
The main question before the High Court was whether a service not being delivered outside India and not used outside India but provided for the benefit of foreign entity, can be termed as export in violation of provisions of Export of Service Rules, 2005 and whose effective use and enjoyment was in India
The Respondent/Assessee- M/s National Engineering Industries Ltd. was engaged in providing services of Commission Agent falling under the category of Business Auxiliary Services under Chapter V of the Finance Act, 1994. The assessee is appointed as distributor by the foreign company to promote sales of their product in India. They get commission on the imports into India when orders are placed through them. The assessee, thus finds buyers in India for the product of foreign seller and procure orders from the Indian buyers for supply of product by the foreign seller to Indian buyer. Indian buyer makes payment to the foreign seller and in turn the foreign seller pays commission to assessee. The assessee were not paying service tax on the commission received in Foreign Currency for the services rendered in India to M/s NTN Corporation, Singapore, NTN Corporation, Japan and NTN Corporation, USA.
The department was of the view that the assessee was liable to pay service tax as the service which starts from the procurement of order from a buyer in India and ends with the import of goods into India and the value of the service is paid from India and received in India through a foreign person. According to them, it was a service neither delivered outside India nor used outside India.
On appeals, the Commissioner also confirmed the findings of the adjudicating authority. Aggrieved, the Respondent appealed to the Tribunal. The Tribunal held that the services rendered were in conformity with that of the requirements for acquiring the status of “export”. Reliance was placed on the decision of CESTAT in the case of Paul Merchants Limited vs. Commissioner of Central Excise and Service Tax. Consequently the appeal was allowed. The Commissioner Central Excise Commissionerate preferred an appeal to the High court.
On second appeal, the Tribunal concluded the issue in favour of the appellant.
The main contention of the appellant-Revenue was that the order for import are procured in India and goods against such orders are imported into India and the portion of commission in foreign currency gets remitted from India which is received back in India. Thus according to him the cycle of service starts from India and finishes in India. In other words it is the same foreign currency remitted out of India is rotating back to India and thus such a service cannot qualify to be the export of service for exemption from service tax.
Taking into consideration of the fact that there were no branches of the company with which the assessee had done his work and merely because subsidiary company had a Branch in India, the bench comprising of Justice Vijay Kumar Vyas and Justice K.S. Jhaveri, upheld the Tribunal’s decision.
The Court found that the assessee had nothing to do with the subsidiary company and upheld the decision of the Tribunal. “In that view of the matter the contention that clause (3) of the Export Rules will come into operation, in our considered opinion, the language used wholly or subsidiary company having branch in India will not disentitle the assesse from benefit, therefore, he is not required to make payment of tax and he will be entitled for exemption.” Said the Bench.
Subscribe Taxscan Premium to view the JudgmentWhile disposing a PIL filed by K.K Ramesh, the Madras High Court said that, the E-Way Bill provisions must take care of the interest of the Revenue.
The division bench comprising of Justice M. Sathyanarayan and Justice R.Hemalatha was hearing a PIL sought direction to use E-way billing for movement or selling of goods in order to prevent cheating. The Petitioner also sought to generate a common portal for sale, supply or transport of all the goods above Rs 5,000.
While disposing the PIL, the division bench observed that, “We find that the counter-affidavit of the Central Government has answered the prayer Nos.(a) to (d) and in the light of the stand taken by the petitioner”.
The Court also added that, “In the considered opinion of this Court, so far as prayer No.(d) is concerned, the above said provision takes care of interest of the Revenue and as such, no further orders are necessary in this Writ Petition. Therefore, this Writ Petition is closed and the order, dated 12.12.2017 passed in this Writ Petition, as extracted below, shall form part of order”.
Subscribe Taxscan Premium to view the JudgmentThe Mumbai bench of Income Tax Appellate Tribunal has ruled that, profit earned by pharmacy shop in the hospital run by a Trust cannot be taxed.
The assessee association of persons (Trust) was assessed u/s 143(3) at Rs.16,73,87,860/- after certain adjustments / disallowances as against returned deficit of Rs.17,60,14,128/- filed by the assessee on 24/09/2012. The Trust was registered u/s 12A with DIT (Exemptions) and also registered with Charity Commissioner Bombay. Accordingly, it claimed exemption under Section 11 of the Income Tax Act, 1961.
During Assessment proceedings, it was noted that the assessee trust was running a pharmacy shop in the hospital and achieved turnover of Rs.42.83 Crores with net surplus of Rs.16.73 Crores which translated into profit rate of 39.07%. The turnover of the shop constituted about 12.82% of total hospital collections. The income from the shop, in the opinion of Ld. AO, constituted business income of the assessee in terms of Section 11(4A).
The assessee defended the same on the ground that drugs were supplied only to in-patients upon consultant’s prescription and the charges of the drugs formed part of final patient bill. However, Ld. AO noted that the Trust Deed did not bar the hospital from selling medicines to outsiders and the activity of pharmacy shop was systematic business activity. The Ld. AO further noted that the trust was not maintaining separate books of accounts for the shop. Finally, the net surplus of Rs.16.73 Crores earned from the shop was assessed as business income against which exemption u/s 11 was denied to the assessee on the premises that the shop was not incidental to attainment of objectives of the trust and the assessee failed to maintain separate books of accounts for the same.
The ITAT bench comprising of Judicial Member Joginder Singh and Accountant Member Manoj Kumar Aggarwal observed that the issue under litigation was already decided in favour of the trust by the CIT (appeals) in the preceding two years. The ITAT also relied on an earlier order passed by the Bombay high court and the tax tribunal in case of other taxpayers. These judicial orders had held that maintenance of a pharmacy is ancillary to the dominant object of running a hospital and is an integral part of the hospital. Thus, the requirement of having separate books of accounts for trading of medicines was also not required.
Subscribe Taxscan Premium to view the JudgmentThe Income Tax Appellate Tribunal recently ruled that the stay can be allowed for penalty under Section 271(1)(c) of the Income Tax Act, 1961 if the same is levied as a result of enhancement of income by the Commissioner of Income Tax (Appeals) while disposing the first appeal.
In the instant case, the assessee has moved stay applications seeking stay of outstanding demand raised in quantum appeal proceedings and penalty proceedings for the AY 2007-08.
The revenue submitted that while conducting a search and seizure operation in Anoop Mehta and his group, it was found that executors of the Estate of late Vrajlal Mehta (father of Anoop Mehta) took steps to bring money lying in the HSBC bank, Geneva into India. Monies were remitted from HSBC Bank Geneva to the account of Estate of late Vrajlal Mehta during the financial year relevant to A.Y. 2012-13 and said receipts were offered as income in A.Y. 2012-13.
The Assessing Officer completed the assessment by making certain additions, which were challenged before the CIT (A). The present stay applications are related to the demand arising on account of enhancement made by CIT(A) and also related to penalty levied by him u/s 271(1)(c) of the Act.
While hearing rival submission bench pointed that explanation of the assessee that two bank accounts belonged to Shri Rajesh Mehta have been accepted by the search officials as well as Assessing Officer.
The tribunal bench has also noticed that the assessee has already paid a sum of ` 2 crores and further a sum of ` 85.84 lakhs requires adjustment. According to this set of facts, ITAT has a view that the balance of convenience is in favour of granting partial stay to the assessee.
Accordingly, ITAT bench acting B.R. Baskaran (AM) & Ramlal Negi (JM) directed the assessee to pay sum of 1.20 crore in two equal installments and also directed the revenue not to enforce the collection of outstanding demand in the case of quantum appeal proceeding as well as in the penalty proceedings till the disposal of the appeals of the assessee or till six months from the date of this order, whichever period expires earlier.
Subscribe Taxscan Premium to view the JudgmentThe Jaipur bench of ITAT recently ruled that the addition in respect of Capital Gain Income can’t be made when Assessee not sold the property and just signed as a confirming party.
The bench including Vijay Pal Rao (JM) & Bhagchand, (AM) was considering the revenues’ appeal emanates from the order of the CIT (A) for the A.Y. 2008-09. The only issue involved in the appeal is deleting the addition of long term capital gain amounting to Rs. 87,75,759/-.
The bench upheld the findings of the first appellate authority that the capital gain income has been declared in the return of income of Smt. Gyanwati Dhakar, who has actually sold this property. The assessee has just signed as a confirming party.
It was therefore, held that the AO was not justified in making addition of Rs.87,75,759/- to the income of the deceased Seema Mukherjee through her legal heirs as long term capital gain as the property was not sold by Seema Mukherjee during the year under consideration and also opinioned that if any addition want to be made and that too under Section 50C of the Income Tax Act, it should have been made in the hands of Gyanwati Dhakhar and not in the hands of the appellant.
Subscribe Taxscan Premium to view the JudgmentWhile granting relief to CIDCO Limited, the Mumbai bench of Income Tax Appellate Tribunal (ITAT) held that the Company is not liable to pay tax for the income earned since it is working as an agent of Maharashtra Government.
In the present case the assessee company worked as an agent of Maharashtra Government. During the year it earned certain sum of income from its transport activities and the Assessing Officer (AO) assess the income and the same was brought into tax in the hands of the assessee.
Before the bench, the assessee contended that it is an agent of the State Government of Maharashtra and the assessee is not doing any trade activity of its own and the entire income of the assessee gets deposited in the consolidated fund of the State and therefore the Revenue Authorities were in error in assessing business income in the hands of the assessee.
But the AO was opinioned that there is no document which has drawn out the Agent-Principal relationship, hence it cannot be confirmed that the assessee worked as a real agent of the Maharashtra Government.
After perusing the material facts and circumstances, the tribunal bench comprising of Judicial Member C.N.Prasad and Accountant Member Manoj Kumar Aggarwal observed that the assessee successfully proved that it has worked as an agent of the Maharashtra Government. The division bench further observed that while analyzing all the financial functions of the assessee it is clear that all dealings have to be routed through authorizations by the Government and all funds receivable shall be in compliance, it indicate that the assessee was a real agent of the state Government of Maharashtra, hence cannot accept the submissions of the revenue and the absence of a document regarding the agent-principal relationship between the assessee and the Maharashtra Government has not relevance in the present circumstances.
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