Tax
CIT(A) Accepted Stereo-Typed Defences On Behalf Of Taxpayer In Perfunctory Manner Sans Any Preliminary Inquiry: Delhi ITAT Remits Matter
Finding that both the AO and the CIT(A) have failed to discharge their quasi-judicial duties in a just and proper manner, the Delhi ITAT observed that the CIT(A) has passed a non-descript and cryptic order without dealing with the fundamental aspects of the matter.Explaining that proper examination of all materials are incumbent in law, the ITAT highlighted that the CIT(A) ought to have...
No Addition Warranted U/s 68 Once Taxpayer Has Discharged Identity & Credit-Worthiness Of Subscribers: Kolkata ITAT
The Kolkata ITAT reiterated that once the assessee has submitted the documents relating to identity, genuineness of the transaction, and credit-worthiness of the subscribers, then the AO is duty bound conduct to conduct an independent enquiry to verify the same.The Bench of Sanjay Garg (Judicial Member) and Manish Borad (Accountant Member) observed that “the assessee has successfully...
No Penalty Is Leviable U/s 271(1)(C) If Bona Fide Mistake In Original Return Was Corrected By Revised Computation During Assessment: Mumbai ITAT
On finding that assessee had made bona fide mistakes in the computation of its total income while filing its original return, which were later corrected by filing revised computation during assessment proceedings, the Mumbai ITAT deleted the penalty levied u/s 271(1)(c) of the Income Tax Act.The Bench of the ITAT comprising of Sandeep Singh Karhail (Judicial Member) and Prashant...
No ALP On AMP Expense Is Warranted In Absence Of Agreement Between Assessee And Its AE For Service W.r.t Brand Promotion Activity: Chennai ITAT
The Chennai ITAT deleted the ALP adjustment made towards advertisement expenses (AMP expenses) for alleged brand enhancement for its AE by assessee manufacturing and selling cars in India as well as exporting them to its AEs and non-AEs abroad.The Bench comprising Mahavir Singh (Vice President) and Manoj Kumar Aggarwal (Accountant Member) on identical issue, noted that the Coordinate bench...
Segregation Of Contract Manufacturing Activity And Distribution Is Fair And Reasonable: Mumbai ITAT
The Mumbai ITAT rejected the assessee's own recharacterization as value added distributor (VAD) and upheld the CUP method to benchmark import of Active Pharmaceutical Ingredients (APIs).The Bench comprising Vikas Awasthy (Judicial Member) and Gagan Goyal (Accountant Member) observed that “segregation of Contract Manufacturing activity and Distribution is fair and reasonable. Merely for...
Depreciation Should Be Removed For Calculation Of Net Profit Margin And Cash PLI Is Justified Method: Kolkata ITAT
The Kolkata ITAT recently decided on comparables selection and adoption of Cash PLI in case of entity engaged in production of continuously annealed, cold-rolled steel / coils and sheets for automotive sector.The Bench comprising Dr. Manish Borad (Accountant Member) and Anikesh Banerjee (Judicial Member) observed that “The assessee stated that considering depreciation as a part of the...
Time Barred Reference By AO To TPO By Giving Go Bye To Mandate Of Sec 92CA Is Clearly Erroneous: Mumbai ITAT Upholds Revision U/s 263
Finding that the AO had received the approval from the office of CIT well before the last date for passing of the TP order, but went in slumber and held on to himself the approval from CIT for more than six months, the Mumbai ITAT ruled that the reference made by Assessing Officer to the TPO was clearly time barred and invalid.The ITAT therefore upheld the CIT's invoking revisional...
Kolkata ITAT Directs TPO To Follow DRP's Directions With Respect To Aggregation Approach
The Kolkata ITAT remitted the case of ALP adjustment qua payment of Cylinder Rental Charges and import of Fixed Assets in case of assessee (engaged in manufacture, storage, and transmission of industrial gases as well as execution of turnkey cryogenic/gas engineering and project design requirements) for AY 2012-13.The Bench comprising Dr. Manish Borad (Accountant Member) and Mr. Anikesh...
Delhi ITAT Deletes ALP Adjustment Qua Interest On Loan To AEs, Considering Tenure & Commercial Prudence
The Delhi ITAT deleted the ALP adjustment made on account of interest on loan extended to AE by assessee, engaged in manufacturing of Seamless, ERW Pipes and Tubes, and trading of Pipes and Tube.The Bench comprising Saktijit Dey (Vice President) and Dr. B.R.R. Kumar (Accountant Member) observed that “With regard to the guarantee in the agreement between Citibank, Singapore and JPSPL, it...
Date Of Agreement Can't Be Construed As Date Of Sale Of Shares, For Purpose Of Computation Of Capital Gains: Mumbai ITAT
The Mumbai ITAT ruled that the date of the agreement by no stretch of imagination could be the date of sale of the shares by the assessee to the purchaser, for purpose of computation of capital gains.The Bench of Prashant Maharishi (Accountant Member) and Kavitha Rajagopal (Judicial Member) observed that “As per the decision of Bharti Gupta Ramola v. CIT [2012] 20 taxmann.com 762 the date...
PCIT Cannot Enlarge Scope Of Limited Scrutiny By Invoking Sec 263: Chennai ITAT
Finding that the case of assessee was selected for limited scrutiny by the AO, the Chennai ITAT ruled that the PCIT cannot enlarge the scope of limited scrutiny u/s 263 of the Income tax Act.The Bench of V. Durga Rao (Judicial Member) and Manjunatha, G. (Accountant Member) observed that “it is not a fit case to invoke the provisions of section 263 of the Act and pass revision order, where...
Only Profit Element On Non-Genuine Purchases Merits To Be Disallowed And Not Entire Purchases: Mumbai ITAT
Referring to the decision of Bombay High Court in case of PCIT vs. Ram Builders (454 ITR 444), the Mumbai ITAT reiterated where assessee was involved in execution of civil works and it had shown purchases from twelve parties even if assessee failed to produce said parties for verification, then AO could not have treated entire purchases as non-genuine purchases but only profit element on...