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534 orders · Page 2 of 11
The Tribunal noted that the appeals and cross-objections were taken up together as they shared common factual backgrounds and issues. The Tribunal's decision on the core issue of whether administrative support services constitute 'fees for technical services' or 'included services' under the India-USA DTAA, and whether reimbursements are taxable, is not fully detailed in the provided excerpt. However, the excerpt indicates that the Ld.CIT(A) had made certain findings regarding the nature of services and reimbursements, which the Revenue contested. The Revenue's grounds of appeal primarily challenge the Ld.CIT(A)'s deletion of additions made by the AO on account of administrative support services and reimbursements, arguing they are taxable as FTS. The assessee's cross-objections raise issues of jurisdiction, time-barring of assessment/reassessment, and procedural defects. The provided text ends abruptly before the Tribunal's final decision and reasoning on these points are fully articulated. The Tribunal's operative directions, such as remand or deletion, are not explicitly stated in the provided portion of the judgment.
The Tribunal noted that the assessee's reason for delay was not supported by documentary evidence, and the delay was substantial. However, considering the assessee was out of India, the Tribunal remanded the case to the Commissioner to give one more opportunity to the assessee to substantiate the delay.
The Tribunal held that a cooperative bank is a species of a cooperative society and therefore, interest income earned from it is eligible for deduction under Section 80P(2)(d). The judgments relied upon by the revenue were distinguished as dealing with different sections or facts.
The assessee sought withdrawal of the appeal on the grounds that registration under section 80G of the Act was granted on 13.05.2024. The revenue did not raise any objection to the withdrawal.
The Tribunal took on record additional evidence submitted by the assessee. It was observed that most expenses were paid via account payee cheques, through banking channels, and with TDS deducted where applicable. However, for 'other sundry expenses', a portion was incurred in cash and deemed unverifiable.
The Tribunal noted that the assessee did not represent their case before the AO or CIT-A, despite opportunities. However, considering the assessee was out of India during proceedings, it was deemed appropriate to grant one more opportunity. The CIT-A had dismissed the appeals for non-prosecution without deciding on merits.
The Tribunal held that the TPO was required to pass an order on or before October 31, 2019, which is 60 days prior to the date of limitation for completing the assessment proceedings (December 31, 2019). The TPO's order dated November 1, 2019, was therefore barred by limitation. The Tribunal relied on the decision of the Hon'ble Madras High Court in Pfizer Healthcare India (P.) Ltd. v. JCIT [433 ITR 28], which held that the period of 60 days prior to the expiry of the limitation period for assessment must be computed by excluding the last day of the assessment period. Consequently, the TPO order was considered non-est. Since the TPO order formed the foundation for the assessment, and it was found to be time-barred, the subsequent final assessment order also became barred by limitation. The Tribunal found no reason to interfere with the findings of the Ld. CIT(A) and dismissed the revenue's appeal. As the revenue's appeal was dismissed on the point of law, the Tribunal deemed it unnecessary to delve into the merits of the case, and thus, the assessee's cross-objection was also dismissed.
The Tribunal held that the issues raised in the appeals had been decided by its coordinate benches in earlier assessment years. Specifically, concerning the transfer pricing adjustment on Correspondent Banking Activities, the Tribunal noted that the Ld. CIT(A) had followed the view of his predecessors, which allowed 75% of the costs for such activity. The Tribunal also referred to a coordinate bench decision in AY 2002-03 and 2003-04 which found that the Indian banks needed to establish relations with overseas banks, and the marketing of Nostro accounts and trade finance services by the assessee's INM IB division did not warrant additional charges as reciprocal benefits were derived. Regarding Nostro Account Maintenance Charges, the Tribunal, following decisions in the assessee's own case and Oman International Bank SAOG, held that these charges are in the nature of bank charges for maintaining accounts and are not subject to tax deduction at source under Section 195 of the Act. Consequently, the provisions of Section 40(a)(i) are not attracted, and the assessee cannot be treated as an 'assessee in default' for not withholding tax. The Tribunal also found no merit in the revenue's contention that these charges are 'interest' under Section 2(28A) as no material was produced to link them to borrowed money, debt, or unutilized credit facilities. The appeals by the assessee were partly allowed, and those of the revenue were also partly allowed.
The Tribunal acknowledged that the cash deposits were part of the assessee's business receipts from sales, and since no other income source was established and sales were admittedly in cash, the net profit rate of 8% as offered under the presumptive taxation scheme should be applied to the cash deposits. The AO was directed to apply this 8% net profit rate.
The Tribunal noted that the CIT(A) had passed an ex-parte order. However, in the interest of natural justice, the Tribunal set aside the CIT(A)'s order and restored the appeal to the CIT(A)'s file for fresh examination after affording adequate opportunity to the assessee.
The Tribunal held that the administrative support services provided by the assessee to its subsidiary were not 'Fees for Technical Services' (FTS) or 'Fees for Included Services' (FIS) under the India-USA DTAA. The services were considered administrative and managerial support, not involving the 'make available' of technical knowledge or expertise.
The Tribunal held that the issue was a difference in the rate of depreciation due to interpretation of the asset's classification, not a false or bogus claim. Since the assessee disclosed all relevant facts and the dispute was on the taxability/interpretation of the law, penalty could not be imposed.
The Tribunal held that the AO and CIT(A) rejected the assessee's explanation and supporting documents without proper opportunity for examination or cross-examination of the family members. The addition of Rs. 15,00,000/- made under OCM was deemed not justified as the deposit was made before demonetization and the assessee provided evidence of its source.
The Ld. Commissioner (Appeals) restricted the addition for bogus purchases to 12.5% of Rs. 2,25,04,993/-. The Revenue appealed against this reduction, seeking a 100% addition. The Tribunal, relying on the Hon'ble Jurisdictional High Court's dictum in PCIT vs. Ashwin Puruthotam Bajaj (ITA No.576 of 2018), affirmed the CIT(A)'s decision to sustain the addition at 12.5%, finding no reason to deviate from the established precedent.
The Tribunal observed that the assessee's mother's case with an identical issue was decided in favor of the assessee, allowing the method of accounting adopted while following ICDS for AY 2016-17. The Tribunal found the tax authorities' action improper, stating that the assessee has the right to change the valuation method for closing stock at any point if it's a prudent method.
The Tribunal noted that the CIT(A) passed the order ex-parte without adjudicating on merits due to the assessee's non-response. In the interest of natural justice, the Tribunal set aside the CIT(A)'s order and restored the issues to the CIT(A)'s file for fresh adjudication after providing an adequate opportunity of being heard to the assessee.
The Tribunal held that a cooperative society is distinct from a cooperative bank and that Section 80P(4) does not apply to the assessee. Therefore, interest earned from cooperative banks is eligible for deduction under Section 80P(2)(d).
The Tribunal held that interest income earned by a cooperative society from its investments with other cooperative societies is deductible under section 80 P (2) (d) of the Income Tax Act. The provisions of section 80 P (4) are not applicable as the assessee is not a cooperative bank.
The Tribunal noted that the issue of double deduction arises when the cost of a capital asset is claimed as an application of income, and then depreciation is also claimed on the same asset. However, it was observed that the assessee claimed depreciation on a capital asset which was never claimed as a deduction for application of income. This aspect was not properly examined.
The Tribunal held that since the AO estimated net profit for cash deposits made before and after the demonetization period, the same logic should apply to deposits made during the demonetization period. The Tribunal directed that a 10% net profit rate should be applied to the entire cash deposits across all three periods.
The Tribunal held that a cooperative society is distinct from a cooperative bank and that interest earned from cooperative banks is eligible for deduction under Section 80P(2)(d). The Tribunal distinguished the present case from the Supreme Court's decision in The Totgars Co-operative Sale Society Ltd.
The Tribunal observed that notices were sent to an email address different from the one provided by the assessee in Form No. 35, and this fact was not refuted by the Revenue. Therefore, in the interest of justice, the case was remanded.
The Tribunal held that the Assessing Officer (AO) failed to record his dissatisfaction with the assessee's suo motu disallowance, which is a prerequisite for invoking Rule 8D. Therefore, the disallowance made by the AO under Section 14A and the enhancement by the CIT(A) were deleted.
The Tribunal noted that the Commissioner rejected the application without affording the assessee an opportunity to be heard and on a hyper-technical ground, sidelining the provisional certificate. For substantial justice, the case was remanded.
The Tribunal noted that the unsecured loan was received in A.Y. 2012-13, and the department had not questioned its genuineness or made any addition regarding this loan in that year, with the returned income being accepted. Consequently, the Tribunal ruled that the disallowance of interest on the loan in the current year (A.Y. 2013-14) is not justified since the loan was not treated as bogus/non-genuine in the preceding year. The addition of Rs. 2,15,014/- was therefore deleted.
The Tribunal upheld the decision of the lower authorities, confirming the taxation of the assessee at the higher rate of 40%. It held that Explanation 1 to Section 90, retrospectively inserted, clarifies that a higher tax rate for foreign companies (not declaring/paying dividends in India) is not considered less favorable. The Tribunal dismissed the reliance on a Calcutta High Court judgment, stating it was not a binding precedent as it did not consider Explanation 1 to Section 90.
The tribunal held that the assessee had claimed interest expenditure under the head 'business income' which could not be allowed as such. However, the AO disallowed the excess interest expenditure of Rs. 4,01,576/- without assigning a valid reason and without establishing a lack of nexus between borrowed funds and funds advanced. Therefore, the addition was deleted.
The Tribunal held that since the reassessment proceedings were quashed, the penalty proceedings initiated during those proceedings cannot survive. The penalty orders were deleted.
The Tribunal condoned the delay in filing the appeals for both assessment years, considering the affidavit submitted by the assessee explaining the reasons for the delay. The matters were restored to the file of the CIT(A) for deciding them on merits.
The Tribunal condoned the delay in filing the appeals for both assessment years, considering the affidavit submitted by the assessee explaining the reasons for the delay. The matters were restored to the file of the CIT(A) for deciding them on merits.
The Tribunal observed that the CIT(A) had passed the order without considering the assessee's reply. Therefore, the Tribunal set aside the CIT(A)'s order and restored the issues to the CIT(A)'s file for fresh adjudication, with an opportunity for the assessee to present further replies.
The Tribunal noted that while penalty proceedings were initiated for concealment of income, the AO ultimately levied the penalty for furnishing inaccurate particulars of income. The Tribunal held that the AO did not record any satisfaction for initiating penalty proceedings for furnishing inaccurate particulars, and the penalty cannot be levied on a limb for which no satisfaction was recorded.
The Tribunal observed that in previous assessment years and in similar cases decided by co-ordinate benches, interest earned from investments in co-operative banks has been allowed as a deduction under Section 80P(2)(d). Following these precedents, the Tribunal held that the assessee is entitled to claim the deduction for interest income earned from co-operative banks.
The Tribunal held that a co-operative bank is a species of co-operative society, and interest earned from investments with co-operative banks is deductible under Section 80P(2)(d). The Tribunal distinguished the present case from the Totgars Co-operative Sale Society Ltd. judgment cited by the revenue.
The Tribunal observed that in previous assessment years and in similar cases decided by co-ordinate benches, interest earned from investments in co-operative banks has been allowed as a deduction under Section 80P(2)(d). Following these precedents, the Tribunal held that the assessee is entitled to claim the deduction for interest income earned from co-operative banks.
The Tribunal observed that in previous assessment years and in similar cases decided by co-ordinate benches, interest earned from investments in co-operative banks has been allowed as a deduction under Section 80P(2)(d). Following these precedents, the Tribunal held that the assessee is entitled to claim the deduction for interest income earned from co-operative banks.
The Tribunal noted that the assessee had provided invoices, made payments through banking channels, and mapped these purchases to sales. Following the Bombay High Court's decision, the Tribunal held that only the profit element on such bogus purchases could be added to the total income.
The Tribunal held that administrative support services provided by a group entity to its subsidiary for day-to-day management do not constitute 'Fees for Technical Services' or 'Fees for Included Services' under the India-USA DTAA. Such services do not involve making available technical knowledge or expertise.
The Tribunal, citing the Bombay High Court's decision in *Principal Commissioner of Income Tax-17 v. Mohommad Haji Adam & Co (2019)*, ruled that only the profit element embedded in such bogus purchases should be added, as the assessee demonstrated corresponding sales and banking channel payments. Consequently, the AO was directed to restrict the addition to 11.58% of the alleged bogus purchases for both assessment years.
The Tribunal noted that the assessee failed to establish the genuineness of the loan amount and its utilization for business purposes, as well as the genuineness of the interest paid on the loan. The Tribunal found no reason to contradict the findings of the CIT(A) and upheld the additions.
The Tribunal held that since the assessee had already credited the amount of Rs.60,19,934/- to its P&L account and computed its total income by including this sum, the further addition made by CPC under section 41(1) resulted in impermissible double taxation. Consequently, the Tribunal set aside the CIT(A)'s order and directed the Assessing Officer to delete the addition.
The Tribunal held that the holding period for computing capital gains should commence from the date of the allotment letter, making the gain long-term. Consequently, the assessee is eligible for deduction under Section 54F.
The Tribunal held that the payment of lease rent to the related party was reasonable, as the revenue failed to provide any incriminating evidence to controvert the assessee's valuation report. Therefore, the exemption under Section 11 could not be denied.
The Tribunal noted that a coordinate bench in the assessee's own case for AY 2014-15 had held that the reopening of assessment was factually incorrect as the income was already disclosed. The Tribunal found the facts for the current year to be identical and followed the coordinate bench's decision.
The Tribunal held that the disallowance made under section 143(1)(a)(v) was not permissible as the reason for disallowance was not related to non-furnishing of the return within the due date. Furthermore, the Tribunal clarified that cooperative banks are indeed cooperative societies, and interest income derived from them is eligible for deduction under section 80P(2)(d) of the Act.
The Tribunal held that the addition of Rs. 7,86,760/- was wrongly made by the Assessing Officer under Section 56(2)(x) of the Income-tax Act, 1961. The Tribunal observed that for invoking the provisions of Section 56(2)(x)(b)(B) in cases where a property is received for consideration, the difference between the stamp duty value and the purchase price must exceed the higher of Rs. 50,000 or 10% of the consideration. In the present case, 10% of the consideration amounted to Rs. 2,59,87,074/-. The actual difference in stamp duty value and purchase price was Rs. 7,86,760/-, which is significantly less than the 10% threshold. Therefore, the conditions for invoking Section 56(2)(x) were not met. The Tribunal set aside the order of the CIT(A) and deleted the addition made by the AO. The ratio decidendi is that the threshold limit of 10% of consideration for invoking Section 56(2)(x)(b)(B) must be satisfied for an addition to be made when a property is acquired for consideration and the stamp duty value exceeds the consideration.
The tribunal held that the disallowance under section 143(1) was not permissible as the claim for deduction under section 80P(2)(d) was not an "incorrect claim" or exceeding a statutory limit. It clarified that cooperative banks qualify as "co-operative societies" under section 2(19) and 80P(2)(d), making the interest income eligible for deduction. All three appeals for assessment years 2013-14, 2018-19, and 2019-20 were allowed.
The Tribunal held that the adjustment disallowing the 80P(2)(d) deduction under section 143(1) was not permissible as it did not constitute an 'incorrect claim' under the Act. It further ruled that cooperative banks qualify as cooperative societies for the purpose of section 80P(2)(d), making the assessee eligible for the deduction on interest income from such banks. All three appeals were allowed.
The Tribunal held that the disallowance of deduction under section 143(1)(a) was not permissible as it was not an 'incorrect claim' apparent from the return, nor was it due to non-furnishing of return within the due date. Furthermore, cooperative banks are considered cooperative societies, making the interest income derived from them eligible for deduction under section 80P(2)(d).
The Tribunal held that additions made in unabated assessment years following a search action cannot be sustained without the aid of incriminating material. Relying solely on statements without corroborating evidence was deemed insufficient.