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× Latest Case Laws on Income Tax by various Income Tax Appellate Tribunals in India

These are the latest case laws decided by various Income Tax Appellate Tribunals (ITAT) of India on Income Tax which have been published recently. The case laws are open for discussion and we invite expert comments from our members on its applicability and effect on relevant issues.

04-06-2019, Punjab Stainless Steel, Section 9, 195, 133(6), Tribunal Delhi

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1 week 5 days ago #9662 by amit
Section - 9, 195, 133(6), 40(a)(ia), 95, 9(1)(i)
Order Date - 04-06-2019
Favouring - Partly allowed for statistical purpose
Court - Tribunal Delhi
Appellant - Punjab Stainless Steel Inds.
Respondent - ACIT
Justice - G. D. AGRAWAL VP & SUCHITRA KAMBLE JM
Citation - 619Taxpundit78
Appeal No. - I.T.A. No. 5532/DEL/2016
Asstt. Year - 2012-13

Order

PER : SUCHITRA KAMBLE, JM

These four appeals are filed by the assessee and Revenue against the orders dated 31/12/2015 & 23/08/2016 for Assessment Year 2011-12 & 2012-13 passed by CIT(A)-12, New Delhi.

2. The grounds of appeal are as under:-

I.T.A. No. 5532/DEL/2016 (A.Y 2012-13)

“1. That on the facts and in law, the Id. Commissioner (Appeals) has erred in sustaining estimated disallowance of Rs. 3,87,932/- @ 2.17% of the total payments of polishing of Rs. 1,78,76,711/-. The disallowance is entirely base less, whimsical and unstainable for the reasons:-

(a) the appellant has admitted produced all the necessary and required evidence including their PANS, Names and addresses of the contractors and their bills containing full particulars of quantities, rates etc.

(b) all the payments has been made to them by means of account payee cheques after deduction of TDS in all the cases.

(c) the evidence filed has not been assailed by the id. A.O. is there any rebutted of the facts or evidence. No tangible materials.

2. That on facts and in law, the id. Commissioner (Appeals) has erred in confirming disallowance of Rs. 38,968/- by reducing the rate of depreciation on some Electrical equipments and fittings for installing Plant and Machinery in the A.Y. 2002-03 as forming part of the block of assets entitled to 15% and depreciation allowed till the A.Y. 2009-10i

(a) There being no change facts and the W.D.V of the assets being brought forward by the Revenue since the A.Y. 2009-10, there was no justification for disturbing the W.D.V. of the block of assets by isolating these items on different perception by the Id. A.O. of the nature of these items and also violating the Rule of estoppal.

(3) On the facts and in law, the id. Commissioner (Appeal) has erred in confirming on addition of Rs. 2,14,220/- an account on notional interest on interest free advances to eight parties aggregating to Rs. 17,85,158/- on the ground that these interest free advances has no business nexus and if they had not been made the appellant had to pay lower interest on his interest carrying borrowings. The Ld. Commissioner (Appeal) erred in overlooking the following facts:-

(a) these advance are made in the earlier years mostly much prior to the A.Y. 2010-11 and no notional interest was assessed.

(b) the fact that these allegedly interest free advances were made out of interest carrying borrowed funds has not been denied by the A.O.

(c) the appellants own interest free funds lying in interest free current accounts of the parties alone amounted to Rs. 22.55 crores at the being of the year and Rs. 22.22 crores at the end of year against the interest free advances of Rs. 25,97,038/- at the being of the year and Rs. 17,85,158/- at the end of the year. The same position prevailed during the earlier years.

(d) that it was well settled that unless there was a direct nexus between the borrowed funds and the net interest free advances which were from common pool of funds and the interest free funds available with the assessee far exceeding the assesses own interest free advances, no disallowance of interest on addition of notional interest could be made.”

I.T.A. No. 1107/DEL/2016 (A.Y 2011-12)

“1. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs. 61,31,446/- made on account of disallowance of commission paid to non residents without properly appreciating explanation 2 to sec. 9(1)(vii) and explanation 2 to sec. 195 of the IT Act, 1961 while deciding the TDS provision u/s195, that it is not applicable to nonresident commission agent?

2. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs. 61,31,446/- made on account of disallowance of commission paid to non residents while ignoring the merits of the case i.e. assessee has not produced any contract or agreement regarding commission thereby raising a doubt over the payment of commission itself?

3. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in restricting the addition of Rs.25,74,432/-made by disallowing 15% of polishing charges, to Rs.3,73,469/-, while ignoring the fact that in the earlier years CIT(A) has itself allowed disallowance of 15% which was upheld by ITAT and for the AY 2009-10 the disallowance in respect of polishing charges was made by AO @15% against which assessee has not gone on for appeal.?

I.T.A. No. 1147/DEL/2016 (A.Y 2011-12)

Ground of Appeal No. 1

“That on the facts and the evidence of the case, the Id. CIT (Appeals) has erred in sustaining disallowance out of the total polishing charges payments of Rs. 1, 71, 62, 870/-, a sum of Rs. 3, 69, 479/- representing petty payments aggregating to Rs. 3, 73, 469/- to five petty job workers who at the time of assessment were either not found at their old address or did not comply with the notices U/s 133 (6) though the payment were duly supported by their bills specifying the quantities of the work done and the further fact that in accordance with the general practice of the appellant, the payments were made to them by means of account payee cheques.

Ground of Appeal No. 2

That the Id. CIT (Appeals) has erred in conforming the allowance of deprecation @ 10% instead of 15% on the W.D.V. of installed electrical panels, switch boards, pvc wire and conductors and also some payments made to the electricity department for lying transmition lines for the production and plant and machinery of the appellant. The authorities below failed to appreciate that this items were not in the category of normal "furniture/fittings including electrical fittings"

Ground of Appeal No 3

That on the facts of the case the Id. CIT (Appeals) has erred in conforming the addition of Rs. 1, 91, 465/- been the notional interest of interest free advances aggregating to Rs. 15, 97, 038/-. She failed to appreciate that:-

(a) As the appellant had its own interest free funds far exceeding the sum of Rs. 15, 97, 038/-:-

(b) No disallowance had been made in the earlier years with reference to these advances:-

(c) There was no direct nexus between these advances and borrowed funds.”

I.T.A. No. 6036/DEL/2016 (A.Y 2012-13)

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