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192 orders · Page 4 of 4
The Tribunal held that the CIT(A) should have considered the appeal on merits, especially since the assessee disputed the addition and the liability. The CIT(A) should have allowed the assessee an opportunity to seek exemption under Section 249(4) and passed a speaking order.
The Tribunal held that interest income earned from investments made under statutory compulsions by the co-operative society would be considered business income eligible for deduction under section 80P(2)(a)(i). The matter was restored to the AO for verification of these compulsions.
The Tribunal condoned the delay in filing the appeal before the CIT(A) based on the assessee's bonafide mistake and the principles of substantial justice. The matter was remanded to the CIT(A) for adjudication on merits.
The Tribunal noted that an order passed by the PCIT under section 264 of the Act is not appealable to the ITAT under section 253 of the Act. Therefore, the Tribunal lacks the jurisdiction to adjudicate issues arising from such an order.
The Tribunal held that the reimbursement of salary and related costs for seconded employees does not constitute Fees for Technical Services (FTS) under the Income Tax Act or the India-UK Double Taxation Avoidance Agreement (DTAA). This decision was based on previous rulings and the distinction between service tax and income tax implications.
The Tribunal noted that the assessee had offered higher income and that the interest income was part of its business operations. It also observed that the CIT(A) considered only a portion of the interest income and that the assessee had also paid interest on loans taken for business purposes. Therefore, the matter required fresh verification.
The Tribunal accepted the assessee's request for withdrawal of the appeal. The appeal was dismissed as withdrawn.
The Tribunal noted that the lower authorities did not adequately verify the cash deposits made by the assessee during the demonetization period, nor did they consider the circulars issued by the CBDT regarding such verifications. The assessee was directed to provide details to substantiate the genuineness of the deposits.
The Tribunal allowed the appeal of the assessee. Regarding the primary issue of whether the consideration for software sale and ancillary services constitutes royalty, the Tribunal followed its own previous decisions for Assessment Years 2015-16 and 2016-17, which in turn relied on the Supreme Court's decision in Engineering Analysis Centre of Excellence (P.) Ltd. v. CIT. The Tribunal noted that the Supreme Court held that the definition of royalty under the DTAA is not amended by retrospective amendments to Section 9(1)(vi) of the Act, and that only the right to use software, without the right to exploit copyright, does not amount to royalty. The Tribunal also referenced the Supreme Court's observation in GE Technology that DTAA provisions are relevant for tax deduction at source and that an assessee is entitled to the benefit of a DTAA. The Tribunal further held that the amendments to Section 9(1)(vi) by the Finance Act, 2012, including Explanations 5 and 6, were not clarificatory and that an assessee cannot be expected to apply expanded definitions retrospectively. The Tribunal also noted that any ruling on the expansive language in the explanations to Section 9(1)(vi) would have to be ignored if it is wider and less beneficial than the DTAA definition, as per Section 90(2) of the Act. Consequently, the ground of the assessee was allowed.
The Tribunal held that the reimbursement of salary and related costs for seconded employees does not constitute Fees for Technical Services (FTS) under the Income Tax Act or the India-UK Double Taxation Avoidance Agreement (DTAA). This decision was based on previous rulings and the distinction between service tax and income tax implications.
The Tribunal held that the assessee was not given a reasonable opportunity of being heard by the Ld.CIT(A). Therefore, the issue is remitted back to the file of the Ld.CIT(A) for fresh consideration, with a direction to allow the assessee to furnish full details regarding the sources and genuineness of the cash deposits.
The Tribunal noted that the AO and CIT(A) did not properly verify the documents related to the cash deposits and did not consider the assessee's application for additional evidence. The Tribunal referred to CBDT circulars regarding the verification of cash deposits during demonetization and opined that the assessee should be given an opportunity to present evidence.
The Tribunal noted that the AO sought explanation at the fag-end of the assessment proceedings, violating principles of natural justice. The reasons for nonappearance before CIT(A) were considered sufficient cause. The Tribunal admitted the additional documents and decided to revisit the assessment.
The Tribunal noted that the Tax Audit Report did not indicate a disallowance under section 36(1)(va) and that the addition made under section 143(1) was outside the scope of permissible adjustments. The Tribunal also considered that the due date for employee contribution payment might not be the 15th of the month as indicated in the audit report. Relying on the Hon'ble Supreme Court's decision in CHECKMATE SERVICES PVT LTD VS CIT-1, the Tribunal directed the AO to verify payments and restrict disallowance to only delayed payments.
For AY 2013-14, the tribunal admitted the additional ground and remitted the issue of the notice under section 143(2) to the NFAC for verification. For AY 2017-18, the issue of interest paid on unsecured loans was remitted to the AO for fresh verification.
The Tribunal noted that the primary issue regarding the assessee's eligibility for deductions under Section 11 and the applicability of Section 2(15) was already remitted back to the CIT(A) for fresh consideration. Therefore, the current appeal arising from a Section 154 order should also be decided along with the pending quantum appeal.
The Tribunal held that filing Form 67 is a procedural requirement and not mandatory, and that the Double Taxation Avoidance Agreement (DTAA) overrides the Act. The disallowance for employees' PF contribution was sustained based on the Supreme Court's decision in Checkmate Services.
The Tribunal noted that the CIT(A) had dismissed the appeal without condoning the significant delay. The assessee argued that the delay condonation application was filed and considered during the physical hearing stage, but the subsequent migration to the NFAC resulted in it being overlooked. The Tribunal found merit in restoring the matter to the CIT(A) for proper consideration.
For AY 2013-14, the tribunal admitted the additional ground and remitted the issue of the notice under section 143(2) to the NFAC for verification. For AY 2017-18, the issue of interest paid on unsecured loans was remitted to the AO for fresh verification.
The Tribunal held that delay in filing Form 67 does not disallow FTC, as filing the form is a directory requirement and the Double Taxation Avoidance Agreement (DTAA) overrides the Act and Rules. The Tribunal directed the Assessing Officer to grant the FTC after due verification.
The Tribunal allowed Ground No. 4.1 to 4.7 of the assessee's appeal concerning the cost contribution charges. The Tribunal noted that this issue had been considered in the assessee's own case for assessment year 2010-11, where the ITAT had deleted the additions made on account of cost contribution charges by following decisions of the Tribunal in the cases of Dresser Rand India Pvt. Ltd. and AWB India Pvt. Ltd. The Tribunal observed that in those cases, it was held that how an assessee conducts its business is its prerogative, and the revenue authorities cannot question the wisdom of engaging outside experts. The Tribunal emphasized that the real question is whether the price of the service is what an independent enterprise would have paid. The Tribunal also noted that the Hon'ble jurisdictional High Court had confirmed the ITAT's order for AY 2010-11, holding that no substantial question of law arose. Furthermore, the DRP for assessment year 2011-12 had also followed the ITAT's decision for AY 2010-11, as the facts and circumstances remained the same. Therefore, respectfully following these precedents, the Tribunal directed the deletion of the addition proposed on account of cost contribution charges. The appeal was partly allowed for statistical purposes.
The Tribunal held that the issue regarding deduction u/s 80P(2)(a)(i) of the Act is restored to the AO for de novo consideration in light of the Supreme Court's judgment in the case of Mavilayi Service Co-operative Bank Ltd. Similarly, the issue regarding deduction u/s 80P(2)(d) of the Act is also remitted to the AO for fresh consideration, with a direction to verify if the interest/dividend was received from investments made with cooperative societies.
The Tribunal held that interest earned by a cooperative society on its investments with scheduled banks, even if made from its own funds, is not eligible for deduction under Section 80P(2)(a)(i). However, it directed that proportionate expenses incurred in earning such interest should be allowed as a deduction under Section 57(iii).
The Tribunal held that the interest income earned by the assessee from investments in a co-operative bank is not eligible for deduction under Section 80P(2)(a)(i) as it is not operational income. Furthermore, deduction under Section 80P(2)(d) was also denied as the investment was made in a co-operative bank holding an RBI license, which is excluded from the definition of a co-operative society for the purposes of Section 80P(4).
The Tribunal noted that the issue revolves around the eligibility for deduction under Section 80P(2)(a)(i) or 80P(2)(d) on interest income from investments in District Co-operative Banks. The CIT(A) denied the claim based on High Court and Supreme Court judgments. The assessee argued that investments were statutorily required and income derived from them should be treated as business income.
The Tribunal noted that the issue revolves around the eligibility for deduction under Section 80P(2)(a)(i) or 80P(2)(d) on interest income from investments in District Co-operative Banks. The CIT(A) denied the claim based on High Court and Supreme Court judgments. The assessee argued that investments were statutorily required and income derived from them should be treated as business income.
The Tribunal held that the interest income earned by the assessee from investments in a co-operative bank is not eligible for deduction under Section 80P(2)(a)(i) as it is not operational income. Furthermore, deduction under Section 80P(2)(d) was also denied as the investment was made in a co-operative bank holding an RBI license, which is excluded from the definition of a co-operative society for the purposes of Section 80P(4).
The Tribunal held that interest earned by a cooperative society on its investments with scheduled banks, even if made from its own funds, is not eligible for deduction under Section 80P(2)(a)(i). However, it directed that proportionate expenses incurred in earning such interest should be allowed as a deduction under Section 57(iii).
The Tribunal restored the matter to the Assessing Officer (AO) to provide the assessee with an opportunity to prove that the employees' contribution was paid within the due dates. The AO was directed to afford a reasonable opportunity of hearing and consider the necessary evidence.
The Tribunal noted that the assessee was unable to participate before the lower authorities due to unavoidable circumstances, specifically the Finance Manager's illness and recovery from heart surgery. The assessee prayed for the issue to be remitted back to the AO for fresh consideration.
The Tribunal held that for interest income earned from cooperative banks, the eligibility for deduction under Section 80P(2)(d) depends on whether the cooperative bank is carrying on banking business as defined under the Banking Regulation Act, 1949. If the cooperative bank is not transacting banking business with the public, it would not be a cooperative bank under Section 56 of the Banking Regulation Act and thus the deduction under Section 80P(2) cannot be denied by invoking Section 80P(4). The Tribunal restored the issue of claim of deduction under Section 80P(2)(d) for interest earned from cooperative banks to the AO for fresh adjudication, considering the judgments of the Hon'ble Apex Court in The Totgars Co-operative Sale Society Ltd. and the Hon'ble Karnataka High Court in Tumukur Merchants Souharda Co-operative Ltd. Regarding interest earned from commercial banks, the Tribunal directed the AO to allow the expenditure incurred while computing income under the head 'Income from Other Sources' in relation to earning such interest, in accordance with Section 57 of the Act. The appeals were allowed for statistical purposes.
The Tribunal restored the issue of deduction u/s 80P(2)(a)(i) to the AO for de novo consideration, relying on the Apex Court's decision in Mavilayi Service Co-operative Bank Ltd. The AO was also directed to verify the claim for deduction u/s 80P(2)(d) based on investments with co-operative societies. The issue regarding demonetization deposits was remitted to the AO for fresh examination in light of CBDT circulars and the assessee's substantiation of genuineness.
The Tribunal held that interest income from deposits in banks is not operational income and therefore not eligible for deduction under Section 80P(2)(a)(i). However, the assessee is eligible to claim the cost of funds for earning such interest income, and the matter is remitted to the AO for determination. The provision for audit fee was allowed as a business expenditure.
The Tribunal held that it was incorrect for the NFAC to decide the penalty appeal ex-parte on merits without considering the pending quantum appeal. The request to hear both appeals together or defer the penalty appeal was reasonable.
The Tribunal noted that the assessee had not provided complete purchase and sales details, and the lower authorities had questioned the genuineness of cash sales. However, considering the assessee's offer to produce necessary documents, the issue was remitted back to the AO for fresh consideration.
The Tribunal upheld the CIT(A)'s deletion of additions related to amortization of premium on investments. The decision was based on the Hon'ble Karnataka High Court's judgment in the assessee's own case, which relied on earlier precedents regarding business expenditure.
The Tribunal directed the AO to verify if the interest income was received from investments made with cooperative societies. If so, it would be eligible for deduction under Section 80P(2)(d). If considered as income from other sources, relief under Section 57 would be granted.
The Tribunal directed the AO to verify if the interest/dividend was received from investments made with Cooperative Societies. If such income is from cooperative societies, it is eligible for deduction under Section 80P(2)(d) as per Supreme Court's ruling. If the interest is considered 'Income from other sources', relief under Section 57 is applicable.
The Tribunal held that cooperative societies providing credit facilities to their members are entitled to deduction under Section 80P(2)(a)(i) of the Act, referencing the Supreme Court's decision in Mavilayi Service Co-operative Bank Ltd.
The Tribunal noted that the Supreme Court in Mavilayi Service Co-operative Bank Ltd. held that cooperative societies providing credit facilities to members are entitled to deduction under Section 80P(2)(a)(i). The Tribunal seems to be considering this precedent.
The Tribunal admitted additional evidence filed by the assessee, including bank statements and an affidavit from the deceased lender's heirs, as these documents were not available earlier. The Tribunal decided to remit the issue back to the lower authorities to examine these new documents and provide an opportunity for hearing to the assessee.
The Tribunal restored the issue of deduction under Section 80P(2)(a)(i) to the AO for de novo consideration, following the Supreme Court's ruling in Mavilayi Service Co-operative Bank Ltd. For deduction under Section 80P(2)(d), the AO was directed to verify if interest/dividend was from investments in cooperative societies, allowing deduction if so, and to grant relief under Section 57 if income was from other sources.