Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
March 17, 2015
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
TMI SMS
Highlights / Catch Notes
Income Tax
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TDS on Subscription for Broadband facility - not in the nature of technical services and therefore TDS need not be made thereon as per the provisions of section 194J of the Act - AT
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Depreciation on a part of issue of shares capitalised to Plant & Machinery and factory equipment denied - there is independent provision for amortisation expenses in connection with share issue expenses - disallowing the depreciation on the amount capitalized confirmed - HC
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Eligibility to the benefit of exemption of Sec. 11 & 12 denied - legitimacy of expenditure on advertisement - payment made to M/s. SBC in which the trustees of the assessee society are the partners - assessee trust has not violated the conditions of Sec. 13(1)(c) - AT
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Inflation of salary and wages - if we consider the case of 26 persons who had left the job in the month of August and September 2008 full explanation is not available - Therefore inflation of salary and wages cannot be ruled out totally - amount disallowed partly - AT
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Capital gains on account of development agreement - Unless there is willingness on the part of the developer to perform his part of the contract, there cannot be a ‘transfer’ of capital asset as envisaged u/s 2(47)(v) read with section 53A of the TP Act - AT
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Validity of reopening of assessment - Out of these two conflicting jurisdiction charts only one should be correct - period of implementation of the jurisdiction chart could be different - matter remanded back for verification - AT
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Maintainability of appeal filed by appellant [Shri R.Subba Rao, former Managing Director] in his individual capacity against the order of the learned CIT(A) passed in the case/name of the Company - appeal dismissed - AT
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Disallowance of claim of Exemption u/s.54F - investment in the purchase / acquisition of a new property should necessarily be in the name of the assessee and not in the name of another person - AT
Customs
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Enhancement of the penalty - Assessee not declared the currency - enhancement of penalty by the learned Commissioner was not called for since only the appellant was in appeal before the Commissioner and Revenue was not in appeal - AT
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Levy of anti dumping duty - appellant mis-declared the country of origin of the goods - Once such fraud is detected the goods render to be confiscated being smuggled goods under section 2 (39) of Customs Act 1962 - AT
Corporate Law
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Winding up proceedings - We cannot be a mere on looker as to the deliberate disregard that the respondent had shown to this Court by making deliberate suppression. - HC
Service Tax
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Denial of exemption benefit of Notification No. 32/2004-ST - CBEC circulars cannot restrict or expand the amplitude of an exemption notification nor can they add/subtract conditionalities thereto/there from. - AT
Articles
Notifications
Circulars / Instructions / Orders
News
Case Laws:
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Income Tax
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2015 (3) TMI 503
Deduction u/s.10A - Revenue assails the order of the CIT(A) in directing the AO to exclude the reimbursement of expenditure incurred in foreign exchange towards foreign travel and insurance expenses both from the export turnover as well as total turnover while computing the deduction under Section 10A - Held that:- Respectfully following the decision of Tata Elxsi Ltd. (2011 (8) TMI 782 - KARNATAKA HIGH COURT ) we uphold the order of the learned CIT (Appeals) in directing the Assessing Officer to reduce the expenditure incurred in foreign currency on travelling, insurance and provision of technical services abroad from both export turnover and total turnover for the purpose of computing the deduction under section 10A of the Act in the case on hand as there should be uniformity in the ingredients of both the numerator and the denominator of the formula - Decided against revenue. Subscription for Broadband facility - whether not in the nature of fees for technical services (‘FTS’) and therefore there is no requirement for TDS to be made under Section 194J? - CIT(A) delted disallowance - Held that:- Revenue failed to bring on record any material evidence or place before us any judicial decision that controverts the finding of the learned CIT(A) on this issue. In this view of the matter, we concur with the view of the learned CIT(A) in following the aforesaid judicial pronouncements CIT V Bharti Cellular Ltd. [2008 (10) TMI 321 - DELHI HIGH COURT], Skycell Communication Ltd. V CIT [2001 (2) TMI 57 - MADRAS High Court], Expeditors International (India) (P) Ltd. V CIT [ 2008 (8) TMI 399 - ITAT DELHI-F] and Pacific Internet (India) (P) Ltd. V ITO [2008 (12) TMI 429 - ITAT MUMBAI] that endorse the view that the payment of ₹ 337,080 towards subscription of broadband facility are not in the nature of technical services and therefore TDS need not be made thereon as per the provisions of section 194J of the Act. - Decided against revenue. Repair charges disallowed - CIT(A) allowed claim - Held that:- In an appreciation of the facts on record we concur with the observations of the learned CIT(A) that the view of the Assessing Officer, that the expenditure incurred on repairs and maintenance and shifting of assets being capital in nature, is not borne out by any material evidence to establish that the said expenditure of ₹ 17,94,630 has resulted in any enduring benefit to the assessee. Before us also except for raising the ground, the Revenue had not been bring on record any material evidence to controvert this finding of the learned CIT(A) and restore the view of the Assessing Officer. In this view of the matter, we uphold the finding of the learned CIT(A) that the expenditure of ₹ 17,94,830 incurred on repairs and maintenance and shifting of assets is revenue in nature.- Decided against revenue.
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2015 (3) TMI 502
Depreciation on a part of issue of shares capitalised to Plant & Machinery and factory equipment denied - Held that:- As relying on Commissioner of Income Tax Vs. Mahindra Ugine and Steel Co.Ltd. [2000 (2) TMI 26 - BOMBAY High Court] the expenditure as incurred by the assessee in the present case can very well be said to fall within the provisions of Section 35D of the Act which provides for amortisation of certain preliminary expenses which includes expenditure in connection with the issue, for public subscription, of shares in debentures. Thus there is independent provision for amortisation expenses in connection with share issue expenses. Under the circumstances, we agree in disallowing the depreciation on the amount capitalized. - Decided in favour of revenue.
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2015 (3) TMI 501
Entitlement to claim deduction under section 80-IA - Held that:- As all the business undertakings are wind mills and they have claimed the benefit of deduction under Section 80IA of the Income Tax Act for the assessment years in question and for the subsequent years as well. Having exercised their option and their losses have been set off already against other income of the business enterprise, the assessee in this appeal falls within the parameters of Section 80IA of the Income Tax Act. In the decision reported in Velayudhaswamy Spinning Mills V. Asst. CIT (2010 (3) TMI 860 - Madras High Court) there appears to be no distinction on facts. - Decided in favour of assessee.
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2015 (3) TMI 500
Penalty u/ s. 271(1)(c) - concealed income being the peak credits in the bank account of the assessee and his family members - ITAT deleted levy - Held that:- As per the order of the CIT (Appeals), the assessee has given justification for showing additional income in the subsequent return vide letter dated 02.10.2006. Had the letter not inwarded and it was mere say coupled with the aspect that no such letter was available as per AO in the file, matter may be different but when the letter was already inwarded, whether it was sent to the AO by the concerned office would not impair the aspect of bonafide or the aspect of voluntary disclosure of taxable income. The aspect of bonafide or nonconcealment of the income is essentially a question of fact. When the first appellate authority and the second appellate authority, viz., Tribunal which is the ultimate fact finding authority after the consideration of the evidence has found that there was no concealment of the income, further scrutiny by way of reappreciation of evidence in the appeal before this Court would be beyond the scope of the present appeal. - No interference is called for to the impugned order of the Tribunal. - Decided in favour of assessee.
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2015 (3) TMI 499
Reopening of assessment - notice dated 31st March, 2014 challenged seeks to re-open the assessment for the Assessment Year 2009-10 - bring to tax the share premium received by the Petitioner on issue of shares to its non-resident holding company - Held that:- Issue arising in the present Petition namely seeking to bring to tax the share premium received by the Petitioner on issue of shares to its non-resident holding company stands covered by the decision of this Court in Vodafone India Services (P.) Ltd. (2014 (10) TMI 278 - BOMBAY HIGH COURT) in favour of the Petitioner wherein held there can be no reason to believe that income chargeable to tax has escaped assessment. Submission of Revenue that powers of re-opening within a period of four years from the end of assessment year is very wide ignores the fact that even in cases of less than four years, there must be reason to believe that income chargeable to tax has escaped assessment. In the absence of condition precedent under Section 147 of the Act being satisfied, no notice for re-opening of an assessment can be sustained. - Decided in favour of assessee.
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2015 (3) TMI 498
Discrepancy in the valuation of closing stock - addition to income - ITAT upholding the action of the CIT (A) in deleting the addition - Held that:- Considering the assessee's submission that there was no reason to value the stock with flat profit rate of 25 per cent but admitted that in the assessment years 1985-86, 1986-87, 1987-88 and 1988-89, the gross profit rate remained fluctuating from 23.14 per cent to 26.12 per cent, therefore, for the purpose of annual valuation of closing stock, Assessee followed principle of average and applied the same by taking flat rate of 25 per cent since in some years it was on higher side i.e. upto 26.12 and for some of the years slightly on lower side i.e. upto 23.14. This process adopted by Assessee was found genuine and bona fide by CIT (Appeals) (hereinafter referred to as "CIT(A)"), and, thus, in appeal, it reversed findings of Assessing Officer of addition of ₹ 1,51,000/-. The Assessing Officer took the view that valuation of stock should have been on highest profit rate, but this view taken by Assessing Officer has not been found reasonable and, hence, reversed by CIT (A). The Tribunal has concurred with the view taken by CIT (A) and has confirmed the order passed by CIT (A). This is a concurrent finding of fact recorded by CIT (A) and Tribunal. In absence of any patent illegality or arbitrariness shown therein, no reason to interfere with the same - Decided against Revenue. Valuation of closing stock - differences in the valuation of the stock as shown in the stock statement filed with the Bank and one before the Assessing Officer - ITAT upholding the action of the CIT (A) in deleting the addition - Held that:- CIT (A) has clearly observed that one of the statement relied on by Assessing Officer was dated 3.4.1989, i.e., in relation to assessment year which ended on 31.3.1989, though this subsequent statement was not relevant for the year already ended on 31.3.1989. Moreover, the said statement was provisional. Therefore, the addition of ₹ 7,01,537/- was wholly baseless. This finding also has been confirmed by Tribunal. Since on this aspect there is concurrent finding recorded by both the authorities below, in absence of any perversity or illegality therein, we do not find any reason to interfere with the same. - Decided against Revenue. Disallowance of the quality control expenses - ITAT deleted disallowance - Held that:- It is not in dispute that a sum of ₹ 4,42,592/- was actually paid towards quality control expenses to one R.N. Yadav, who appeared as witness and admitted to have received the aforesaid amount which was for 21 months. The Assessing Officer on its own conjectures and surmises took the view that such huge amount was not justified to be paid as quality control, particularly when the technical qualification of Sri R.N. Yadav was not disclosed. Repeatedly we asked from learned counsel appearing for Revenue as to what kind of technical qualification in the nature of business Assessee was doing, was expected from Sri R.N. Yadav, to which he could give no reply. Once it is admitted that under the head of 'quality control expenses' the aforesaid amount was actually paid and the person concerned admitted to have received the same, we do not find that Tribunal has erred in law in affirming the decision of disallowance of ₹ 4,42,592/-. Moreover, here also, concurrent finding has been recorded by both the authorities below which could not be shown perverse in any manner. - Decided against Revenue. Disallowance of commission paid in respect of sales made to the Government Department - ITAT upholding the action of the CIT (A) in deleting the addition - Held that:- it is evident from record that a sum of ₹ 17,39,330/- was actually paid towards commission for procuring Government Orders, i.e., the Government Orders received by Assessee for supply. The names and details of parties to whom commission paid was also disclosed before Assessing Officer. CIT(A) has found that it is not the case of Assessing Officer that those persons are Benamidar of appellant. It is not the case of Revenue that the money, so given, came back to Assessee himself. The question whether commission was necessary to be paid or not is not to be examined from the point of view of Assessing Officer but what actually has been done by Assessee is to be examined. Once commission has actually been paid, the same cannot be disallowed only on the ground that payment of commission was not necessary. It is not the case of Revenue that amount of commission paid was excessive in comparison to the nature of business. - Decided against Revenue.
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2015 (3) TMI 497
Penalty u/s 271(1)(c) - whether Assessing Officer has not recorded any positive and categorical satisfaction about concealment in the assessment order? - ITAT deleted penalty levy - Held that:- What is required in law is satisfaction of assessing officer which should be apparent from the order, regarding concealment of particulars of income or furnishing of inaccurate particulars of such income. The provisions of section 271(1)(c) are penal in nature, thus must be strictly construed, and the element of satisfaction should be apparent from the order itself. It is not for the courts to go into the mind of the authorities or trace the reasons from the file of such authorities. - Decided in favour of assessee
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2015 (3) TMI 496
Disallowance u/s 14A - whether Tribunal could have reduced the quantum of disallowance without recording satisfaction in terms of Section 14A? - whether Rule 8D was prospective or retrospective? - Held that:- A perusal of the impugned order reveals that after holding that Rule 8D of the Rules is prospective in operation, the Tribunal abruptly or should we say arbitrarily proceeded to reduce the quantum of disallowance recorded by the Assessing Officer. Answer the question of law in favour of the revenue, allow the appeal to the limited extent of error in determining the quantum of disallowance and remit the matter to the Assessing Officer for determining the quantum of disallowance, after granting an adequate opportunity to the Assessee to put forth his pleas regarding the quantum of disallowance. - Decided in favour of revenue.
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2015 (3) TMI 495
Assessee in default - orders passed by the Tax Recovery Officer, by which he has enhanced the rent of the premises of which they are tenants and to recover the same from the respective accounts of the petitioners maintained by the Reserve Bank of India - Held that:- No force in submission of learned counsel for the Income Tax Department. The provisions of Section 23 (1) (a) of the Act relied upon by learned counsel relate to the determination of income from house property for the purpose of filing of I.T. returns and assessment thereof and the same has no relevance at all so far as fixation of rent payable by a tenant to the landlord is concerned. Any such fixation of fair rent or higher rent can only be either on the basis of agreement between the parties or by the exercise of powers in areas covered by the provisions of the Bihar Buildings (Lease, Rent and Eviction) Control Act,1982 by the competent authorities therein and not unilaterally by the Tax Recovery Officer or any other Officer of the Income Tax Department. Thus entire action of the Tax Recovery Officer and the consequential action taken by the respondent No.2, Reserve Bank of India, are de hors the powers conferred upon them by the law of the land and they are, accordingly, quashed. - Decided in favour of assessee.
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2015 (3) TMI 494
Re-working of the profits invoking section 10A r.w.s. 80-IA(10) - Usage of arithmetic mean as per the transfer pricing study report for determination of 'ordinary profits' for the purpose of section 10A(7) read with section 80IA(10) - Held that:- Result of the Transfer Pricing assessment can at best be taken as an indicator for the Assessing Officer to investigate as to whether or not there exists any arrangement which has resulted in more than ordinary profits qua the requirements of section 10A(7) r.w.s. 80-IA(10) of the Act. Even if it is accepted that the difference between the operating margins of the assessee and the comparables show existence of more than the ordinary profits in the hands of the assessee, so however, it was still imperative for the Assessing Officer to establish on the basis of substantive evidence and corroborative material that qua section 10A r.w.s. 80-IA(10) of the Act, the course of business between the assessee and the associated enterprises is so arranged that the business transacted between them produces to the assessee more than the ordinary profits with the intent of abusing tax concession. Quite clearly, in the entire assessment order, there is no whisper of any material or evidence in this regard. We thus conclude, holding that in the present case, the Assessing Officer has not proved that any arrangement had been arrived between the parties which resulted in higher profits. Consequently, the re-working of the profits by Assessing Officer by invoking section 10A r.w.s. 80-IA(10) of the Act is not justified. The action of the Assessing Officer to restrict the deduction u/s 10A of the Act to ₹ 7,74,60,281/- as against the claim of ₹ 36,35,09,382/- is hereby set-aside. Thus, assessee succeeds on this aspect. - Decided in favour of assessee. Transfer pricing adjustment - computation of arm's length price with its associated enterprises in respect of System Integration segment of the assessee - adoption of most appropriate method - Held that:- The objective of adopting the most appropriate method, which in the present case is TNM Method, is to determine the arm's length price of the international transactions. Therefore, the adjustment, if any that is required to be made as a consequence of the application of the most appropriate method is to be made with respect to the value of the international transactions entered with associated enterprises alone. Thus the adjustment which is made by the TPO on the entire turnover of the System Integration segment of the assessee is erroneous and that it should be restricted to the international transactions entered with associated enterprises alone. - Decided in favour of assessee. Value of transactions with associated enterprises is only ₹ 67,25,00,000/- as against the transactions with non-related parties of ₹ 30,82,00,000/- comprised in the transactions considered by the TPO - Held that:- We uphold the plea of the assessee that the determination of the Transfer Pricing adjustment, if any, should be restricted to the value of the international transactions carried out by the assessee with its associated enterprises. - Decided in favour of assessee. Exclusion of Hindustan Dorr-Oliver Ltd. from the final set of comparable - the said concern has been excluded on the ground that it has not incurred any bad debts - Held that:- ncurrence of bad debts in the course of carrying on business is a generally accepted incident of business. The bad debts incurred in the course of carrying on of business is a commercial loss which is indeed permissible as a deduction while computing the profits, subject of-course to the prescribed conditions under the statute. Nevertheless, de hors the provisions of the Act, in common parlance also bad debt is understood as a charge against the profits of the business. So however, the vagaries of the business are such that it may be possible that in a particular year a concern may not incur bad debts at all or it may also happen that in a particular year, certain extraordinary bad debts are incurred by a concern. Be that as it may, without going into merits of the filter setup by the TPO to exclude those concerns who have not incurred any bad debts at all, in the context of Hindustan Dorr-Oliver Ltd., we find that assessee has justifiably pointed out that the incident of bad debts, liquidated expenses is present. Therefore, in our view, the said concern has been inadvertently excluded from the final set of comparables, even if one goes with the filter applied by the TPO. - Thus we direct the Assessing Officer/TPO to include the said concern in the final set of comparables. - Decided in favour of assessee.
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2015 (3) TMI 493
Eligibility to the benefit of exemption of Sec. 11 & 12 denied - legitimacy of expenditure on advertisement - payment made to M/s. SBC in which the trustees of the assessee society are the partners - whether the assessee trust has violated the condition of Sec. 13(1)(c) r.w.s. 13(2)(c)? - CIT(A) held that the funds of the society are not applied or used or diverted for the benefit of the person referred to section 13(3) in violation of condition laid down u/s 13(1)(c) & 13(2)(c) - Held that:- The Ld. AR explained with the chart that as per the card rates of the different newspapers which are placed on record, the assessee is more benefited by giving the work to M/s. SBC. He submits that the entire designing and art work required for the advertisement was compiled and prepared by M/s. SBC and no separate payment is made. The assessee has filed the comparative chart showing the benefit received by the assessee society vis-à-vis other client. The assessee has also filed the copies of the Invoices and the Zerox copy of the respective newspapers like Sakal etc. The assessee has also filed the sample bills for the other agencies on which M/s. SBC has not given any discount at all. The assessee has also filed sample bills of M/s. SBC raised on the assessee trust i.e. Bill No. 823 dated 01-09-2007 on which the card rate charges are less than the Newspaper rate as per comparative chart filed by the assessee. The assessee has subsequently demonstrated before us that if the average rate of discount is worked out given to the assessee as compare to card rate which is almost 10%. We also find that M/s. SBC has also done the work for other clients i.e. non-related parties to whom no discount or reduction in the card rates are given. Considering the totality of the evidence before us, we concur with the finding of the Ld. CIT(A) that by giving the advertisement work to M/s. SBC, the assessee trust has not violated the conditions of Sec. 13(1)(c) to deprive to get the benefit of exemption u/s. 11 & 12 of the Act.- Decided against revenue.
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2015 (3) TMI 492
Subsidy receipt - whether capital or revenue receipt? - Held that:- In this case subsidy was provided for setting up of industry in the backward area but in our opinion, that is not important because if the Government of Punjab decided to encourage the industry and particularly small scale industry in the whole State then nature of such subsidy would not change. In case before us, the subsidy was given in the category of small scale industry and under further sub- head export oriented units. The subsidy is directly related to plant and machinery. Therefore in our opinion, in this background the subsidy is clearly of capital nature and accordingly we set aside the order of the learned Commissioner of Income-tax (Appeals) and hold that subsidy received by the assessee from the Government of Punjab is in the nature of a capital receipt. - Decided in favour of assessee. Inflation of salary and wages - Addition on account of various workers employed by the assessee - CIT(A) deleted part addition - Held that:- Assessing Officer has clearly accepted the position in respect of duplication of attendance cards in respect of 35 workers but still he did not mention that this was a mistake. Similarly even after having records in respect of payment to contractor no comments were offered. However, the learned Commissioner of Income- tax (Appeals) mentioned that 26 persons have left job in the month of August and 14 in the month of September and this was verified by the AO but the same does not explain the discrepancy. We fail to understand if the workers have left and that fact has been verified then how it can be said that the assessee has failed to explain the discrepancy. Finally the assessee has produced wages and salary register for verification and for which no comments were given and even the CIT (Appeals) has not given any findings. In our opinion, the assessee has successfully explained the existence of extra attendance cards in respect of the number of the cards found during the survey but however, at the same time if we consider the case of 26 persons who had left the job in the month of August and September 2008 full explanation is not available. Therefore inflation of salary and wages cannot be ruled out totally. Ends of justice would meet if a disallowance of ₹ 8 lakhs is made in respect of inflation of salary and wages in this case - Decided partly in favour of assessee. Valuation of the closing stock - undisclosed sales - CIT(A) deleted addition - Held that:- Assessing Officer suspected that the assessee has indulged in unaccounted sales, are not there. The first ingredient in this regard is impounding of list of C-Form which was matched by the assessee with the actual sales conducted in the earlier years. Secondly there was no proper application of the rates for which proper evidence was furnished and proper objections were filed before the Assessing Officer which was simply rejected because same were numerous. Thirdly some stock was lying in Madhya Pradesh for which proper evidence has been filed. One more aspect was considered for determining of undisclosed sales and it was that the assessee had employed more workers then actually shown in the books of account and for which addition of ₹ 86,57,239 was made on that account which was reduced to ₹ 43,69,886 by the learned Commissioner of Income-tax (Appeals) because he accepted the contention regarding duplication of workers and contractor workers. However, we have already adjudicated this ground in abovenoted paragraphs and addition has been reduced to only ₹ 8 lakhs which was made only on estimated basis by us. Therefore this factor is also not available for the conclusion that the assessee had undisclosed sales. We also find force in the submission that during survey proceedings or otherwise the Revenue has not brought any material on record in the form of any sales bills or diary notings that some sales have been conducted outside the books of account. Therefore in our opinion, this addition is totally uncalled for and accordingly we delete the same. - Decided in favour of assessee.
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2015 (3) TMI 491
Reopening of assessment - Disallowance of claim u/s 42 - principle of merger - CIT(A) allowed part relief - Held that:- In the present case, notice u/s 148 of the Act has been issued on 24.12.2008 in relation to Assessment Year 2001-02 and hence, reopening of the assessment is beyond the period of four years from the end of the relevant assessment year. In the light of the reasons recorded and on perusing the assessment order framed u/s 143(3) of the Act in relation to the year under consideration which indicates that as far as the claim of deduction u/s 42 is concerned, the assessee had claimed deduction of ₹ 19.92 crores (rounded off) but after considering the submissions of the assessee, the Assessing Officer after due application of mind had restricted the deduction u/s 42 at ₹ 46.09 lacs (rounded off). It is also an undisputed fact that against the order of the Assessing Officer passed u/s 143(3) of the Act, the assessee had preferred appeal before the CIT(A) on various grounds which also included the deduction u/s 42 of the Act. The CIT(A) vide order dated 16.07.2004 after considering the submissions, had granted relief to the assessee of ₹ 18.74 crores (rounded off) and thus held assessee to be eligible for deduction u/s 42 at ₹ 19.21 crores as against assessee’s claim of ₹ 19.92 crores and which was restricted to ₹ 46.09 lacs by the Assessing Officer meaning thereby that the order of the Assessing Officer on the issue of deduction u/s 42 stood merged with the order of the CIT(A) and thus had no independent existence of its own. We also find that Hon’ble Gujarat High Court in the case of United Phosphorus Ltd vs. ACIT [2011 (3) TMI 1555 - GUJARAT HIGH COURT] has held that when the assessment order in respect of items for which assessment is sought to be reopened has merged with the order of CIT(A), and as such has no independent existence, and therefore, the assessment could not be reopened in respect of the said items. Thus in the present case the assumption of jurisdiction u/s 147 of the Act is not valid - Decided in favour of assessee. . Reopening of assessment - higher depreciation claim in respect of share of investments for exploration of mineral oils in joint venture with Niko Resources Ltd which included the depreciation on oil wells - Held that:- It is an undisputed fact that the reasons for re-opening of assessment u/s. 147 of the Act was recorded on 31.03.2005 and the same were communicated to the Assessee by ACIT vide letter dated 09.01.2006. In response to the notice for reopening, Assessee vide its letter dated 11.01.2006 had objected to initiation of re-assessment. Assessee's objection to reassessment proceedings were not passed by a separate order but were disposed by the A.O in the assessment order dated 22.03.2006 passed u/s. 143(3) r.w.s. 147 of the Act and this fact has not been controverted by Revenue. Revenue has not brought any contrary binding decision of Hon'ble Apex Court or Hon'ble jurisdictional High Court in support of its contention that the order disposing of the objections of the Assessee to reassessment proceedings along with the assessment order is in order and therefore valid as per law. We therefore, respectfully following the aforesaid decision of Hon'ble Gujarat High Court in the case of General Motor India Pvt. Ltd. [2012 (8) TMI 714 - GUJARAT HIGH COURT] quash the assessment order dated 22.03.2006. - Decided in favour of assessee. TDS at lower rate or not deducted - remittance to non-resident companies/parties - AO concluded payments made by the assessee to Total UAE was taxable as per the provisions of Income-tax Act and Tax Treaty between India & UAE - Assessing Officer also noted that the assessee had already remitted the total payment to the non-resident company and therefore, he was of the view that the tax deducted at source has to be arrived by grossing u/s 195 of the Act and that the assessee was also liable for simple interest on the tax amount for the delay as per section 201(1A) - CIT(A) dismissed assessee appeal - Held that:- In the present case, we find that ld. CIT(A) had not gone into the merits of the case but decided the issue only by relying on the decision of Hon’ble Karnataka High Court in the case of Samsung Electronics [2011 (10) TMI 195 - KARNATAKA HIGH COURT] without passing a speaking order. Since the matter has not been decided on merit by the CIT(A), we are of the view that the matter needs to be re-examined at his end. We, therefore, restore the issue back to the file of the CIT(A) to decide the issue afresh on merits in accordance with law and in the light of the decision of the Hon’ble Apex Court in the case of GE India Technology Centre P. Ltd. (2010 (9) TMI 7 - SUPREME COURT OF INDIA )wherein held that Section 195(2) is based on the "principle of proportionality". The said sub-Section gets attracted only in cases where the payment made is a composite payment in which a certain proportion of payment has an element of "income" chargeable to tax in India - Decided in favour of assessee for statistical purposes.
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2015 (3) TMI 490
Transportation charges paid to GAIL - TDS liability u/s 194C or u/s 1941 - CIT(A) deleting the amount of TDS liability determined by the ITO(TDS) u/s 1941 - Held that:- As relying on asseessee's own case [2013 (7) TMI 1 - ITAT LUCKNOW] GAIL has not only supplied/transported the gas sold by it but also the gas purchased by the assessee from other sellers. In those cases the transmission charges paid by the assessee to GAIL certainly attracts the provisions of section 194C of the Act as per circular No. 9 of 2012 of CBDT. From a careful perusal of the orders of the lower authorities, we find that the assessee has also admitted in his written submissions filed before the CIT(A) that it has also purchased the gas from other sellers i.e. Reliance Industries Ltd. apart from the GAIL but the same was transported by the GAIL and the assessee had paid transmission charges to the GAIL and also deducted TDS on the payment but this aspect has not been clarified by any of the lower authorities as they have treated the entire payment of transmission charges as has been made u/s 194I or 194C of the Act. In the light of these facts, we are of the considered opinion that this aspect is required to be examined by the lower authorities as to how much transmission charges are paid by the assessee to GAIL for transportation of the gas purchased by it from GAIL and also the amount of transmission charges paid by the assessee to GAIL for transportation of gas purchased from other agencies. Accordingly, we set aside the order of CIT(A) and restore the matter to the file of the Assessing Officer with the direction to reexamine the issue afresh in the terms indicated above. If it is proved that the assessee has deducted the TDS on the transmission charges paid to GAIL for transmission of gas purchased from other agencies, no disallowance can be made, otherwise the Assessing Officer is required to act in accordance with law. - Decided in favour of revenue for statistical purposes. Validity of rectification u/s 154 - Assessee in default on non-deduction of TDS on the payment of transmission charges - AO passed an order under section 154 and substituted section 194C by section 194I having noted that by typographical mistake in the order, section 194C was mentioned in place of section 194I - CIT (Appeal) deleting the amount of TDS liability for the A.Y. 2010-11 determined by the ITO(TDS) U/s 1941 - Held that:- Having carefully examined the order of the ld. CIT(A), we find that the ld. CIT(A) has disposed of the appeal in the light of the Tribunal’s order for assessment years 2007-08 to 2009-10, in which the Tribunal has given a specific finding that TDS is not required to be deducted in case the purchase is made from GAIL. With certain directions, the Tribunal has also set aside the order of the ld. CIT(A) and restored the matter to the Assessing Officer. In the light of these facts, the rectification application is not sustainable. We accordingly find no infirmity in the order of the ld. CIT(A) and we confirm the same. - Decided against revenue.
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2015 (3) TMI 489
Capital gains on account of development agreement - whether agreement entered into by the assessee with M/s Amsri Developers Pvt. Ltd. on 04/05/2007 did not arise in AY 2008-09? - CIT(A) deleted addition - Held that:- Unless there is willingness on the part of the developer to perform his part of the contract, there cannot be a ‘transfer’ of capital asset as envisaged u/s 2(47)(v) read with section 53A of the TP Act. Though the assessee had entered into the development agreement in the previous year relating to the AY under dispute, but, as the developer has neither performed nor is willing to perform his part of the contract, the development agreement fails. Even as on date there is no development activity by the developer. The conversion of the land from agricultural to non-agricultural has also not taken place. For this very reason the assessee along with land owners have filed a suit in the city civil court for cancellation of the development agreement, which is pending. In these circumstances, it cannot be said that there is transfer of property giving rise to capital gain. - Accordingly,as relying on case of Bhavya Constructions Pvt. Ltd. and others [2015 (4) TMI 295 - ITAT HYDERABAD] we uphold the order of the CIT(A) and dismiss the grounds raised by the revenue in this regard. - Decided against revenue.
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2015 (3) TMI 488
Validity of reopening of assessment - assessee trust “AOP” has infringed the provisions by advancing a sum of ₹ 3,05,00,000/- to the persons alleged to be the persons specified in sub Section 3 of Section 13 of IT Act - Reasons recorded and notice for reopening u/s.148 were issued by ITO, Ward-5(1), Baroda, but the assessment was made u/s.144/148 by ITO, Ward-2(3), Baroda - Held that:- According to us it is not possible that for one particular territorial jurisdiction two Revenue Officers could have the jurisdiction to assess those tax payers. Out of these two conflicting jurisdiction charts only one should be correct. When we have raised this question during the course of hearing then a probability was expressed that the period of implementation of the jurisdiction chart could be different. However, specific period of implementation of the jurisdiction was not informed to us. We, therefore, consider it necessary that the authenticity of the jurisdiction chart as relied upon by the Assessee should be verified. Side by side the details in respect of jurisdiction as furnished by learned DR can also be verified from the record available with the Revenue Department. Since, before us two contradicting statements have been made about the area of jurisdiction and the name of the Assessing Officer of this Assessee, therefore, this contradiction can be resolved by examining the office records of the Revenue Department. This exercise can be undertaken by learned CIT(A) by summoning the jurisdiction recorded of the Revenue Department. - All the Appeals either filed by the assessee or by the Revenue Department may be treated as allowed but for statistical purpose only.
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2015 (3) TMI 487
Deemed dividend u/s 2(22)(e) - loans taken by the assessee from M/s Bhambani Shipping Pvt. Ltd. whereas Mr. Hariram Bhambani is holding 90% shares of M/s Bhambani Shipping Pvt. Ltd. and 20% shares of the assessee company and whereas, M/s Bhambani Shipping Pvt. Ltd. had reserves and surplus of ₹ 2,53,87,248/- - CIT(A) deleted the addition - Held that:- In the instant case, the ld. CIT(A) recorded a categorical finding to the effect that the assessee is not a shareholder of M/s Bhambhani Shipping Pvt. Ltd., therefore, the amount received by the assessee is not liable to be taxed u/s 2(22)(e) of the Act. This finding of the ld. CIT(A) has not been controverted by the ld. D.R. by bringing any positive material on record. The ld. CIT(A) has relied on the decision of ITAT Special Bench in the case of ACIT vs. Bhaumik Colours Pvt. Ltd. [2008 (11) TMI 273 - ITAT BOMBAY-E ] wherein it was held that provisions of section 2(22)(e) can be applied only in the hands of the beneficial and registered shareholder of the company which has given loan. Respectfully following the decision of Hon’ble jurisdictional High Court and ITAT Special Bench, as discussed above we do not find any infirmity in the order of the ld. CIT(A) for deleting the addition made u/s 2(22)(e) of the Act. - Decided in favour of assessee. Disallowance of hiring charges u/s 40(i)(a) - CIT(A) deleted addition - Held that:- Since the amount was already paid and the taxes are paid by the recipient, in our opinion, the decision of the Special Bench in the case of Merilyn Shipping & Transports (2012 (4) TMI 290 - ITAT VISAKHAPATNAM) is applicable and by following the decision of the ITAT, Mumbai Benches (supra) we hold that the Tax Authorities have wrongly invoked provisions of section 40(a)(ia) in the instant case. No infirmity in the order of the ld. CIT(A) deleting the disallowance u/s 40(a)(ia) of the Act. - Decided in favour of assessee.
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2015 (3) TMI 486
Penalty u/s 271(1)(c) - CIT(A) confirmed the penalty - maintainability of appeal filed by appellant [Shri R.Subba Rao, former Managing Director of the said company] in his individual capacity against the order of the learned CIT(A) passed in the case/name of the Company - Held that:- The term ‘assessee aggrieved’ used in S.253(1), being a person competent to file an appeal before the Tribunal, is only the person who is an aggrieved party liable to pay tax in terms of the order against which the appeal is to be preferred. As discussed there is no tax payable by the appellant in the present case as a result of the impugned order passed by the learned CIT(A), and consequently, he cannot treated as an ‘aggrieved party’. We, therefore, hold that the appellant is not entitled to file the present appeal against the impugned order passed by the learned CIT(A) confirming the penalty imposed by the Assessing Officer under S.271(1)(c) on the company and consequently the present appeal, being not maintainable, is liable to be dismissed in limine. We accordingly dismiss this appeal holding the same to be not maintainable. - Decided against assessee.
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2015 (3) TMI 485
Disallowance of claim of Exemption u/s.54F - LTCG on Transfer of shares - purchase agreement was entered into on 30.12.2006; more than one year before the date of sale of the long term capital asset and was registered on 28.3.2011, which is more than two years after the date of sale of the long term capital asset, the Assessing Officer denied the assessee's claim for exemption - Held that:- What has transpired is that an amount of ₹ 67,15,910 has been paid to the builder before one year from the date of sale and after two years from the date of sale of long term capital asset for acquiring a flat in the name of the daughter and this has with the time frame laid down in section 54F. It is incorrect to say that the appellant has obtained a substantial domain over the new residential flat as the flat has been booked in the name of the appellant’s daughter. Even what the appellant’s daughter had obtained by making such payment is only an enforceable right. This does not tantamount to acquisition of a new residential house as contemplated in 54F. As rightly observed by the learned CIT(A), this is not a case where only the property has not been registered within the time specified under Section 54F of the Act. We also find, from an appreciation of the facts on record, that the assessee's claim that he has obtained a substantial claim over the residential flat, as it has been booked in his daughter’s name is not correct, as the assessee does not have even an enforceable right in the matter vis-a-vis Brigade Enterprises Ltd. The provisions of law in this regard are very clear, in that the investment in the purchase / acquisition of a new property should necessarily be in the name of the assessee and not in the name of another person and the subsequent intimation of change of the booking of the flat in the name of the assessee by a mere letter of Brigade Enterprises Ltd., does not fulfill the requirements of the provisions of section 54F of the Act. See Jai Narayan V ITO [2007 (8) TMI 295 - PUNJAB AND HARYANA HIGH COURT] - the authorities below have correctly rejected the assessee's claim for exemption of ₹ 88,98,970 under Section 54F of the Act. - Decided against assessee.
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Customs
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2015 (3) TMI 513
Confiscation of the currency and enhancement of the penalty - Assessee not declared the currency - Held that:- As regards the decisions of the Tribunal submitted and relied upon by the appellant, we find that in one case viz., [2005 (4) TMI 213 - CESTAT, CHENNAI], the appellant therein had indicated the purpose of carrying the currency and had given specific details as to why he needed the same. In this case, no such details are coming forth. In the second case, the currency was released by reducing the redemption fine imposed but the total amount was within the limit prescribed. Therefore both the decisions relied upon by the appellant are not applicable to the facts of this case. Since none of the decisions cited by the appellant are applicable to the facts of this case, we uphold the impugned order as regards confiscation since there is no dispute that the currency was not declared, so concealed in the baggage and could not have been detected but for the information received by the customs authorities. As regards penalty, we find that the enhancement of penalty by the learned Commissioner was not called for since only the appellant was in appeal before the Commissioner and Revenue was not in appeal and therefore the enhancement of penalty from ₹ 25,000/- to ₹ 50,000/- is set aside and penalty is reduced to ₹ 25,000/- only - Decided partly in favour of assessee.
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2015 (3) TMI 512
Levy of anti dumping duty - Notification No.72/01 dated 28.06.2001 - Enhancement in duty - Held that:- The appellant mis-declared the country of origin of the goods to be Taiwan while the country of origin and export was Thailand. There is no dispute on the levy of anti-dumping duty. Therefore it may be said that the value mis-declared related to mis-declared goods. Once such fraud is detected the goods render to be confiscated being smuggled goods under section 2 (39) of Customs Act 1962. Accordingly appellant looses all right to take plea to legalize the illegality. Therefore, we do not disturb the enhanced value arrived at by Revenue. This is in relation to Customs duty. - Decided against assesse.
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2015 (3) TMI 511
Misdeclaration of goods - allegation of claiming excess export incentives was proved only after the test of the impugned goods conducted by the Customs - Pre deposit ordered - Non compliance of pre deposit order - Held that:- While considering the stay application, there is a factual error has been committed by the Commissioner (Appeals) holding that the appellant has claimed undue export incentives. In fact, the appellant is a CHA only and he has no concern with the export incentives given by the department but the same was given to the exporter only. In these circumstances, the impugned order deserves no merits. Accordingly, I set aside the impugned order and remand the matter back to the Commissioner (Appeals) to consider the contentions of the appellant afresh to decide the stay application first thereafter to decide the appeal on merits - Decided in favour of appellant.
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2015 (3) TMI 510
Rejection of refund claim - SAD - Endorsement of invoice - Held that:- As per the Notification no. 102/07 ibid there should be an endorsement on the invoice that the credit of SAD paid will not be available as credit to the buyer. Consequently, the refund of SAD is available to the trader/importer. Admittedly, in this case, although there is no endorsement on the invoice, the buyer is also not able to take credit as the buyer is not registered with the Central Excise department. As the buyer is not able to take credit of SAD, the condition of Notification no. 102/07 is fulfilled to entitlement of the refund of SAD. In these circumstances, the appellant is entitled for refund claim. Therefore, I set aside the impugned order - Decided in favour of assessee.
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2015 (3) TMI 509
Penalty u/s 112(a) - Confiscation of goods of importer - Held that:- Importer has approached the Settlement Commission and got settled the case thereon. Following on the decisions in the cases of Colombowala (2007 (7) TMI 514 - CESTAT, MUMBAI) and Mukesh Garg (2012 (8) TMI 721 - DELHI HIGH COURT), wherein it has been held that if the case against the main party has been settled, I hold that the penalty on the appellant is not imposable. Therefore, I set aside the impugned order - decided in favour of appellant.
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Corporate Laws
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2015 (3) TMI 508
Company in liquidation - Status of Electricity dues - Statutory dues under Section 529 and 529A of the Companies Act,1956 - Held that:- It is, thus, clear that the amounts paid or payable towards maintenance and other allied expenses, necessary to keep the asset or assets in good repair or protect them, cannot be characterized as secured debts so as to be covered by Section 529A. They are undoubtedly expenses within the meaning of Section 476. In the present case, the impugned order of the Single Judge left the actual determination of the amounts to the official liquidator. This Court does not propose to alter that direction; however, it is open to the PSPCL and all other parties to urge such contentions as are available to them in respect of the charges claimed by the former. It is submitted by PSPCL that the dues payable for the disputed period are not only in respect of electricity charges of actual consumption, but also charges recoverable on account of services and monthly minimum charges and “wheeling charges”, without which such services cannot be made available to the individual unit, as in the case of the factory in question. The Official Liquidator (OL) shall go into these rival contentions and decide the issue having regard to the submissions made as to whether any apportionment is to be made between the various respondents and if so, to what extent. -The appeal is allowed in the above terms. The PSPCL shall file its comprehensive claim with respect to the amounts to be paid for the disputed period i.e. January, 2009 to January, 2013 within six weeks from today, before the official liquidator.
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2015 (3) TMI 507
Application for approval of Scheme of Amalgamation under section 391 & 394 of the Companies Act - Regional Director observation regarding compliance of As-14 issued by the ICAI , Individual benefits due to cancellation of inter investments including non compliance of AS-7 & As-9 , Non filing of Form 2 (Return of Allotment) & Form 66 (Compliance Certificate). Held that:- In reply to regional director observations, it is submitted that since the Assessee Company is not engaged in the work of carrying out construction contracts and hence revised Accounting Standard-7 is not applicable and it is not bound to follow percentage completion method of accounting. Further, it has also been submitted that provisions of Accounting Standard-7 cannot override the provisions of section 145 of the Income Tax Act in so far as the computation of business income for the purpose of determining assessable income is concerned. It is further submitted that with respect to the Assessee Company, the provisions of Accounting Standard-9 shall be applicable. The Assessee Company has stated that it has been following aforesaid method of accounting on year to year basis. Further submitted that Transferor Company has already filed Form 2 with the Registrar of Companies in respect to Financial Year as on 31.03.2011 and a copy of the same has also been attached.Compliance Certificate under section 383A of the Act of Transferee Company with respect to Financial Year 2012-2013 is already filed and a copy of the same has been attached. In view of the approval accorded by the shareholders of the Petitioner Company, Representation/Report filed by the Official Liquidator and the Regional Director, Northern Region and the submissions of the Petitioner Company, there appears to be no impediment to the grant of sanction to the Scheme of Amalgamation. Consequently, sanction is hereby granted to the Scheme of Amalgamation under Sections 391-394 of the Companies Act, 1956. The Petitioner Companies will comply with the statutory requirements in accordance with law. - Scheme of Amalgamation approved.
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2015 (3) TMI 506
Appeal against order of stay of winding up proceedings - Held that:- The present case would however, stand on a complete different footing. In the instant case, admittedly the order of winding up was passed on a date when there was no reference pending. Pertinent to note, the order of winding up was passed on July 30, 2010 whereas the reference was registered on September 12, 2013. Once the order of winding up was passed the lis brought by the creditor stood disposed of and the company Court would become functus officio on such issue. However the process would start for beneficial winding up through the Official Liquidator and the Company Court would have a supervisory and/or administrative role in the process as the Official Liquidator would act as custodian of the company in liquidation subject to the supervision of the Court. In the process of execution of such order of winding up, there might arise be various problems that Official Liquidator may face. Interested parties might have various conflict in the process of winding up, all such complaints would however, be dealt with by the Company Court in judicial side that would be an extension of the role of the Company Court in supervising the process of winding up. The matter may be viewed from another angle. Even on completion of the inquiry and upon consideration of the chance of revival the BIFR or AAIFR as the case may be, comes to conclusion, there was no such scope and the company was liable to be wound up, it would recommend for winding up. In the instant case order of winding up has already been passed hence in case BIFR or AAIFR ultimately comes to such a conclusion they would have to recommend winding up that would be superfluous. Such eventuality would cause an absurd situation that was never contemplated in SICA. We cannot be a mere on looker as to the deliberate disregard that the respondent had shown to this Court by making deliberate suppression. They left no stone unturned in stalling the process of winding up. However, they could not bring any plausible scheme that could take care of an effective process of discharge of debt and at the same time revival of the unit. All such attempt failed before this Court. Each and every order was passed upon giving due consideration to their contentions. Before the Court of Appeal, when they pressed their appeal against the order of winding up, they deliberately suppressed the pendency of the BIFR proceeding. When they failed they tried to stall the sale, ultimately used the last resort taking recourse to SICA. Our conscience would prick, if we uphold the judgment and order of the learned Company Judge. We have no hesitation to hold, the entire conduct of the respondent and their approach made as discussed above, was nothing but a deliberate attempt to forestall the process of winding up. If we allow the same that would be a premium to dishonesty. - Appeal allowed.
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Service Tax
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2015 (3) TMI 526
Waiver of pre deposit - appellants availed CENVAT credit twice on the Invoice - availment of CENVAT credit on the basis of photocopies of invoice and failed to produce the original copy of invoices - failure to submit the ST-3 returns for the half year period - Held that:- As regards the issue relating to availment of CENVAT credit, the entire amount has been paid with interest. The learned counsel submits that the credit was availed twice and was a clerical mistake and the only ground for imposition of penalty by the learned Commissioner is the observation that appellant has not provided proof of deposit of CENVAT credit with interest. He submits that proof had been produced and is available. It can be said that prima facie appellant has made out a case for waiver in respect of this amount. As regards non submission of Originals - counsel submits that they are still making efforts to trace the original documents and they may be able to find out if time is given and matter may be remanded to the original authority to show that appellants gets another opportunity to produce the documents. As regards the issue, it relates to late submission of ST-3 returns. The Commissioner has observed that appellants have paid the late fee but payment particulars have not been produced. Since I have decided to remand the matter to the original authority, the payment particulars also may be produced before him so that he verifies the same. - Matters remanded back - Decided in favour of assessee.
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2015 (3) TMI 525
Denial of refund claim - appellants have failed to fulfill the conditions in Clause 2 (c) (d) (e) of the Notification No. 41/2007. - Held that:- In the show-cause notice itself it was stated that appellant was not a registered central excise manufacturer and therefore he was required to file a declaration with the concerned jurisdictional Assistant Commissioner which had not been done by them. They had also not obtained the service tax code. Moreover refund claim is required to be filed within two months from the quarter and the first two claims were filed much later. - On going through the appeal memorandum, I find that the appellants have claimed that these are only procedural omissions and therefore substantial benefit should not be denied. Other than saying that the omissions happened in the beginning because of lack of knowledge and ignorance, there is no other explanation forthcoming. It is seen that the Notification was issued on 06.10.2007 and even after one year, the appellants did not take care to fulfill the conditions and there is not even a claim that conditions have been fulfilled subsequently. It cannot be said that these are not substantive conditions for sanctioning of refund - Decided against assessee.
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2015 (3) TMI 524
Consulting Engineers service - Demand confirmed Jointly and severally - reverse charge mechanism - Held that:- As is evident from the paragraph from the impugned order, the demand on the appellants M/s Jai Bharat Maruti Ltd. has been confirmed in terms of the reverse charge mechanism under Rule 2 (1) (d) (iv) of the Service Tax Rules. It is no longer res-integra that the levy of Service Tax on the recipient of Service under reverse charge mechanism was not legally sustainable prior to 18.4.2006 when Section 66A was introduced in the Finance Act 1994 as has been held, for example, in the case of Commissioner of Central Excise Vs. Bayers Diagnostics [2012 (9) TMI 633 - Gujarat High Court] by Gujrat High Court. It is seen that the period involved in this case is 1998-1999 to 2002-03 and therefore the appellant M/s Jai Bharat Maruti Ltd. can not be required to pay the impugned service tax under the reverse charge mechanism even if the service received by them is held to be classifiable under Consulting Engineering Service. - impugned demand is clearly unsustainable - Decided in favour of assessee.
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2015 (3) TMI 523
Denial of exemption benefit of Notification No. 32/2004-ST - Non fulfillment of conditions of Notification - Held that:- conditions prescribed by the CBEC circular dated 27.7.2005 seem to go beyond the requirement of the exemption notification. It is settled law that CBEC circulars cannot restrict or expand the amplitude of an exemption notification nor can they add/subtract conditionalities thereto/there from. However, this point is not being laboured here as the decision in the case is not predicated thereon. - Decided against Revenue.
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Central Excise
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2015 (3) TMI 517
Waiver of pre deposit - CENVAT Credit - credit taken on molasses and mash tone - Held that:- As far as the demand for reversal of credit in respect of molasses consumed in the manufacture of denatured spirit, prima facie , we do not find any merit in the contention of the Revenue that the appellant was not entitled to take credit at all. As regards the reversal of credit on rectified spirit cleared as such the appellant has discharged a sum @6% of the value of the rectified spirit cleared as such. In these circumstances, and also considering the decisions of the Tribunal [2006 (9) TMI 59 - CESTAT,BANGALORE] and [2007 (4) TMI 31 - CESTAT,BANGALORE], the appellant has made out a strong case for grant of waiver of pre-deposit. Accordingly, we grant unconditional waiver from pre-deposit of the dues adjudged against the appellant and stay recovery thereof during the pendency of the appeal. - Stay granted.
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2015 (3) TMI 516
Waiver of pre deposit - CENVAT Credit - broker's service - Input service - Held that:- From the records, it is seen that the distributor appointed by the appellant have undertaken sales promotion activity also inasmuch as they have placed advertisements for the products manufactured by the appellant in the print media. Further, we observe that in the case of Bhushan Steel Ltd., in a similar situation, the adjudicating authority had allowed Cenvat Credit. In the Ambika Overseas case [2011 (7) TMI 980 - PUNJAB & HARYANA HIGH COURT] also, the Hon'ble Punjab & Haryana High Court has allowed Cenvat Credit treating the services rendered by commission agents as an “input service.” In view of the above, the appellant has made out a case for grant of stay. Accordingly, we grant unconditional waiver from pre-deposit of the dues adjudged and stay recovery thereof during the pendency of the appeal. - Stay granted.
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2015 (3) TMI 515
Waiver of pre deposit - Denial of the benefit of Notification No. 8/2003-CE dated 01/03/2003 - Held that:- Following decision of Universal Packaging [2010 (9) TMI 561 - CESTAT, MUMBAI] upheld by Bombay High Court [2013 (10) TMI 140 - BOMBAY HIGH COURT]. Appellant has made out a strong case in its favour for grant of stay. Accordingly, we grant unconditional waiver from pre-deposit of the adjudicated liabilities against the appellant and stay recovery thereof during the pendency of the appeal - Stay granted.
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2015 (3) TMI 514
Denial of CENVAT Credit - provisions of Rule 12 of the Cenvat Credit Rules, 2002 read with Section 11A of the Central Excise Act, 1944 - equivalent penalty under Section 13 - Held that:- In view of the specific provisions of law which provided for payment of duty on wires and taking of CENVAT Credit of the duty so paid during the period prior to 8.7.2004, the credit availed by the appellant in such case is in accordance with law and, therefore, the appellant has rightly availed the credit. Accordingly, I set aside the impugned order - Decided in favour of assesse.
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CST, VAT & Sales Tax
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2015 (3) TMI 522
Validity of impugned order passed - Jurisdiction error - Held that:- there is no dispute with regard to the fact that both the respondents have got concurrent jurisdiction. However, once an order has been passed by the superior officer, the officer, lower in rank, cannot decide the application under Section 27 of the Act with regard to escape turn over. Learned counsel also relied on the judgment of the Allahabad High court in Commissioner of Sales Tax vs. Kumar Brothers [1982 (1) TMI 179 - ALLAHABAD HIGH COURT] and the judgment of the Delhi High Court in Valvoline Cummins Limited vs. Deputy Commissioner of Income Tax and another [2008 (5) TMI 20 - HIGH COURT OF DELHI] - order has been passed by the first respondent, who is admittedly lower in rank to that of the second respondent. Nowhere in the provisions of the Act, it is stated that an officer lower in rank cannot decide the application. The provision to Section 2(5) of the Act makes it very clear that any assessing officer is empowered to make assessment under this Act. - Decided in favour of assessee.
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2015 (3) TMI 521
Liability of tax - Whether the nature of transaction/joint development agreement between the land owner and the developer, in the present case, would oblige either of them to pay tax on the transfer of goods involved in the execution of works contract in respect of developer's 3 share and/or land owner's share and if yes, who has to pay the tax - Held that:- these questions undoubtedly arise for consideration in these matters, were admittedly not raised/considered before/by the Tribunal. In view thereof, learned counsel for the parties, have agreed for remand of these matters to the Karnataka Appellate Tribunal with direction to consider these questions - Following decision of Larsen & Toubro Limited and another Vs. State of Karnataka and another [2013 (9) TMI 853 - SUPREME COURT] - Decided against Revenue.
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2015 (3) TMI 520
Violaion of principle of natural justice - Opportunity of hearing not provided - Assessee instead of preferring application for this reason filed petition under Section 84 of the Tamil Nadu Value Added Tax, 2006 for rectification of the impugned order - Held that:- When admittedly, the petitioner has chosen to file the application under Section 84 of the Act for rectification of the impugned order and if the impugned order is set aside on the ground raised by the petitioner, the petition filed under Section 84 would become infructuous. From the records, I find that a detailed order has been passed by the respondent and it is not required any interference by this Court. Even though learned counsel for the petitioner relying an order passed by this Court in [2015 (3) TMI 392 - MADRAS HIGH COURT], but the facts involved therein, are not applicable to the present case and this Court is not inclined to follow the above decision. - matter remanded back - Decided in favour of assessee.
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2015 (3) TMI 519
Validity of Tribunal's order - Whether Hon'ble Tribunal erred in deleting liability of penalty by permitting such adjustment of carried forward input tax credit - held that:- Following decision of - State of Gujarat Versus Dashmesh Hydraulic Machinery [2015 (3) TMI 134 - GUJARAT HIGH COURT] - Same fact situation arises in the present matter. Under the circumstances, when the question is already covered by the decision of this Court, it cannot be said that any substantial questions of law would arise for consideration in the present appeal. - Decided against Revenue.
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2015 (3) TMI 518
Validity of revisional order passed by the Commissioner of Commercial Taxes - exparte order and without serving any notice of hearing - Held that:- Counsel for the respondent State has presented the records of the proceedings of the year 2007-08 of the Commercial Taxes Officer, South Circle, Ranchi before this Court. We have perused the said record and we are of the considered opinion that the notice was not served upon the petitioner and an exparte order has been passed. - Therefore, impugned order is set aside - Matter remanded back - Decided in favour of assessee.
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Indian Laws
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2015 (3) TMI 505
Aggrieved by an recovery order of Debt Recovery Appellate Tribunal (DRAT) - Fraudulent Transaction - Petitioner was not the party to the proceedings under the DRT - Held that:- In the present case the suit filed by the Petitioner, initially decided the threshold issue of maintainability. The court held in favour of the petitioner and proceeded to entertain the suit. Further proceedings before the DRT and DRAT, however continued. In these circumstances, the recovery proceedings could not be interdicted. It is also a matter of record that the suit has reached an advanced stage of the proceedings; issues have been framed and the parties have to lead evidence. If at this stage, the Bank is allowed to proceed against the property and ultimately the petitioner’s pleas succeed, he would have been prejudiced irrevocably. As against this, the bank is in possession of the suit property and is also the decree holder to the tune of ₹ 35,62,112/-. If the mortgage transaction is held to be genuine, it would be free to proceed against it. The proceedings under Article 226 of the Constitution of India are discretionary and meant to reach out wherever the justice of the case demands a particular direction. The courts have discretion to issue such orders ex debito justitiae. Next, there must be ever present to the mind the fact that our laws of procedure are grounded on a principle of natural justice which requires that men should not be condemned unheard, that decisions should not be reached behind their backs, that proceedings that affect their lives and property should not continue in their absence and that they should not be precluded from participating in them. Of course, there must be exceptions and where they are clearly defined they must be given effect to. But taken by and large, and subject to that proviso, our laws of procedure should be construed, wherever that is reasonably possible, in the light of that principle. Therefore, on a balance of the equities, we are of the opinion that the recovery proceedings should not go on till the suit is decided finally one way or the other. The respondent/Bank is hereby restrained from proceeding further the recovery of the amounts stated, due claimed against the petitioner till final judgment is delivered. - Decided in favour of appellant.
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2015 (3) TMI 504
Default in repayment of loan - Publication of photographs of defaulters in the newspapers - One time settlement pending adjudication before the Debts Recovery Tribunal - Held that:- I pronounce no view with regard to the validity, legality or sufficiency of the one time settlement claim to be arrived at between the parties. The Debts Recovery Tribunal or any other forum competent in law to adjudicate such issue will do so. So far as the publication of photographs of the writ petitioners in the newspapers and other places are concerned, as laid down in Ujjal Kumar Das [2015 (2) TMI 1046 - CALCUTTA HIGH COURT] , the bank has no power to do so under the SARFAESI Act, 2002 or the Rules framed thereunder. The Kerala High Court in Venu [2015 (3) TMI 438 - KERALA HIGH COURT] has laid down that the bank cannot publish advertisement in violation of Article 21 of the Constitution of India. Significantly both the aforesaid two decisions were rendered against the State Bank of India. State Bank of India in spite of such decisions is persisting in continuing with threats of publication of photographs in the newspapers and other places. In view of the ratio in Ujjal Kumar Das and Venu , the order impugned before me dated September 10, 2014 issued by State Bank of India cannot be sustained and is hereby quashed. - Decided in favour of appellant.
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