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Case Laws
Showing 181 to 200 of 1912 Records
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2016 (12) TMI 1736
MODVAT/CENVAT Credit - inputs used partially in the manufacture of duty paid goods as well as partly in exempted goods - demand of reversal of an amount of 8% of the value of limestone cleared to Unit-II - Held that:- The entire MODVAT credit availed by the appellant on the duty paid explosives utilised for mining of limestone has been reversed alongwith interest - once the MODVAT credit availed has been reversed, it should be considered as not availed ab initio - appeal allowed - decided in favor of appellant.
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2016 (12) TMI 1735
Exemption u/s 54 - Long Term Capital Gains (LTCG) - construction of new residential property - failure to deposit the unutilized amount in the capital gain accounts scheme - Held that:- assessee is entitled for cost of construction in respect of Residential property, even though the assessee has not invested in capital gain accounts scheme but complied the main condition, of the provisions of the section 54(i) of the Act. Accordingly, we remit the disputed issue to the file of the Assessing Officer to consider the deduction u/s. 54 of the Act for construction cost incurred by the assessee as above and Assessing Officer should provide adequate opportunity to the assessee to substantiate their cost of construction before passing the order on merits. - Decided in favor of assessee.
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2016 (12) TMI 1734
Anti-Competitive act - Quantum of penalty - The Commission has calculated the penalty at the rate of 2% against the maximum of 10% on the average turnover of the Appellants for the years 2010-2011, 2011-2012 and 2012-2013 - Held that:- The term 'turnover' is interpreted for the purposes of Section 27(b) of the Act to mean value of goods and services which are made subject matter of investigation under Section 26 of the Act and hence liable for punishment under Section 27 of the Act - Penalty has to be calculated with reference to the gross premium received by UIICL as insurance provider under RSBY/CHIS scheme and penalty for each of the Appellants will be a proportion of their share in such premium.
In determining the rate of penalty at 2%, the Commission has considered the peculiarities of the insurance sector and the importance of insurer solvency for the consumer, as a mitigating circumstance. Bid rigging in public procurement for a social welfare scheme was treated to be an aggravating circumstance.
The aggravating circumstance identified by the Commission does not apply to the facts of this case. It cannot be denied, and the Commission had taken cognizance of the internal note of OICL(reproduced in paragraph 6.6 of this Order) indicating that the Appellants were aware of the likelihood of incurring losses and OICL actually refused to share business, but despite that, UIICL proceeded to bid for the tender. From such conduct, it is evident that the Appellants who were Public Sector Companies, in their zeal to participate in a Government sponsored Health Insurance Scheme benefiting the poor, ignored prudence and the restraints of the competition law. Such conduct cannot constitute an aggravating circumstance.
However, the burden of penalty will ultimately be transferred to public, as the Appellants are owned by the Government - the penalty be restricted to 1% of the relevant turnover.
Appeal allowed in part.
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2016 (12) TMI 1733
Time Limitation - the submission of the appellant is that the proceeding initiated by the Service Tax department for recovery of service tax is barred by limitation of time in as much as the period involved is from January to June, 2004; whereas the show cause notice was issued on 28/07/2006, which is beyond the period of limitation prescribed under Section 73 - Held that:- The issue with regard to the limitation aspect is settled by the Tribunal in the case of Jaipur Ex-Servicemen Welfare Cooperative Society Ltd. [2015 (2) TMI 660 - CESTAT NEW DELHI], this decision has analyzed the diverse views prevalent at the relevant time and thereafter has arrived at the conclusion that the extended period of limitation in Section 73 cannot be invoked to demand service tax.
Appeal allowed on the ground of limitation.
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2016 (12) TMI 1732
Non consideration of license applications - remittance of fees - Deemed License - Held that:- The attempt of the petitioner was to deliberately refuse the registered cover and then claim benefit of the deeming provision. This Court is unable to countenance such a contention - This Court does not find any reason to entertain the writ petition - petition dismissed.
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2016 (12) TMI 1731
Addition made on account of interest income from investment in Co-Operative Societies u/s. 80P(2)(d) - A.O. computed the disallowance u/s. 14A r.w.r. 8D - Held that:- The issue is squarely covered in favour of the assessee and against the revenue by the decision of the Tribunal in assessee’s own case for A.Y. 2008-09 [2013 (11) TMI 364 - ITAT AHMEDABAD] as held that Provisions of Section 14A have wrongly been invoked in this case – Decided against the Revenue.
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2016 (12) TMI 1730
Initiation of penalty proceedings u/s 269SS read with section 271D - Held that:- Both these grounds are premature as mere initiation of penalty proceedings the assessee is not aggrieved, he will have the full opportunity to explain his case therefore ground Nos. 1 and 2 are dismissed.
Addition on unconfirmed balance of sundry creditors - AR submitted that amount of creditors of ₹ 2914046/- have also been paid or write off by the appellant during FY 2009-10 and 2011-12 and has been offered to the income for taxation in those respective years. As submitted this details with the with the prayer for admission of additional evidence on such write back. He pleaded that for this issue the matter may be verified by the AO and after the same is offered for taxation for subsequent years as stated by him if found to be correct then addition in the current year may be deleted - Order pronounced in the open court on 16/12/2016.
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2016 (12) TMI 1729
CENVAT Credit - input services - shifting of establishment - case of Revenue is that just because the input services were availed in the previous premises before March 2013, authorities below should not have disallowed the services availed without considering the use of input service in both the premises - Held that:- It is clear that even though invoices were in the name of the old premises, input services were availed and utilised at both the new and old premises during the transition period from January to March 2013. Ultimately, entire activity was carried out from new premises in March 2013.
The use of input service to provide taxable output service being fulfilled without being contradicted by Revenue, the stationary showing the address of the previous premises shall not debar the appellant to Cenvat credit of service tax paid on the input services used - appeal allowed.
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2016 (12) TMI 1728
Treatment of foreign exchange fluctuations and brand expenses - Held that:- It is undisputed that the question of law sought to be urged is identical to the one [2016 (12) TMI 1727 - DELHI HIGH COURT] in which this Court declined to interfere on the same issue i.e. treatment of foreign exchange fluctuations and brand expenses. No question of law arises
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2016 (12) TMI 1726
Disallowance of mark to market loss on foreign exchange forward contract loss - whether the said loss was not a notional loss and hence cannot be allowed - Held that:- The impugned order of the Tribunal dismissed the Revenue's appeal before it on the above issue by following the decision of Supreme Court in Commissioner of Income Tax Vs. Woodward Governor India (P) Ltd. [2009 (4) TMI 4 - SUPREME COURT]. Revenue very fairly states that an identical issue as arising herein had came up for consideration before this Court in Commissioner of Income Tax Vs. M/s. D. Chetan & Co. (2016 (10) TMI 629 - BOMBAY HIGH COURT) and the appeal of the Revenue was dismissed as not giving rise to any substantial question of law. - Appeal dismissed.
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2016 (12) TMI 1725
Constitutional validity of clause (i) of the proviso to 245R (2) - Advance Rulings - When can a question be stated to be 'pending'? - whether the said provision is discriminatory and violative of Article 14 of the Constitution of India as well Article 25 of the Double Taxation Avoidance Agreement (‘DTAA’) between India and the Republic of South Korea? - Held that:- No legal and valid ground for interference. The Special Leave Petitions are dismissed.
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2016 (12) TMI 1724
Orders passed without allowing the petitioner an opportunity to file its return - no notice under Section 142(1)(i)- Held that:- At this juncture, we deem it appropriate that the petitioner may be given one last opportunity to file its return for the assessment year 2004-05.
We, therefore, grant the petitioner ten days' time from the date of issuance of the certified copy of the order to file its return for the assessment year 2004-05. In case, they do so, the assessing authority may proceed to consider the same in accordance with law.
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2016 (12) TMI 1723
Classification of imported goods - Duty free Import or not? - import of disposable sterilized dialyser and micro barrier for filtering blood - Held that:- An identical issue has came up before Hon'ble Calcutta High Court in the case of Sanwar Agarwal vs. CC [2016 (4) TMI 621 - CALCUTTA HIGH COURT], wherein Circular No.19/2013 was set aside as it was not issued under statutory provisions. It was held that executive instruments which have no statutory force, cannot override the law.
Any notice, circular guidelines etc. which run contrary to statutory law cannot be enforced.
Appeal allowed - decided in favor of appellant.
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2016 (12) TMI 1722
Assessment u/s 153A - Held that:- For the previous year 2006-07, the assessment year 2007-08, this assessment year succeeds the period of search and not preceeds. From the plain language of the provisions contained in Clause (b) of Sub-Section (1) of Section 153A of the Act, it is clear that the assessment u/s 153A could have been framed for the 6 assessment years which precedes the assessment year 2007-08. We are of the confirmed view that the assessment u/s 153A could have been framed for the assessment years 2001-02 to 2006-07 only and not for the assessment year 2007-08. As the assessment for the assessment year under consideration was framed by the AO u/s 153A, therefore, this assessment was not valid in the eyes of law and void ab initio. The same is quashed. Since, we have quashed the assessment order under consideration, considering the same as invalid.
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2016 (12) TMI 1721
Disallowance u/s 37(1) - payment made to SEBI for infringement of law, which is a fee for compounding an offence - Held that:- We find that the ld. CIT(A) has deleted the above addition by following the decision of Co-ordinate Bench of the Tribunal in the case of Reliance Share and Stock Brokers (P) [2014 (10) TMI 781 - ITAT MUMBAI] wherein the similar issue has been decided in favour of the assessee as held fee cannot be equated with a penalty and is a payment to enable the assessee to carry on its business in the normal course - Decided in favour of assessee
Capital gain computation - Allow indexation benefit from AY 1998-99 and not from AY 2005-06 - shares of BSE were acquired by the assessee in the year 2005-06 only - Held that:- We find from the order of ld. CIT(A) that the appeal of the assessee has been allowed by the First Appellate Authority on the basis of ratio laid down in the case of G Das Capital Markets Pvt.Ltd [2014 (9) TMI 164 - ITAT MUMBAI] in case of sale of capital asset being equity share allotted to the shareholder of a recognized stock exchange in India under scheme of demutualization, shall be the cost of acquisition of its original membership of the exchange - capital gain computed on sale of shares of BSE by taking the cost of acquisition and allowing indexation thereon as per provisions of law. - Decided against revenue
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2016 (12) TMI 1720
TPA - TPO has considered other Finance charges as ‘operating cost’ - DRP has directed the AO to verify from the computation of total income as to whether the above expenses have been disallowed treating the same as capital in nature - Held that:- There is no need to interfere with the directions of the DRP on the issue. Whether the up-front fees paid is part of the operating cost or not is a factual matter to be verified and therefore, the ground does not deserve any merit at this end. Accordingly, the same is rejected.
Selection of comparables - Held that:- Assessee is involved in providing support services in connection with CAE/CAD modeling and iterative simulation. It receives the basic design from its group company with respect to CAD modeling and makes a 3D CAD modeling data of vehicle components using CAD software tools. Assessee is a routing support service provider and it assumes less than normal risk associated with carrying out such business. Companies functionally dissimilar with that of assessee need to be deselected from final list.
Functional comparability need to be decided on the basis of the information available in the annual report and not based on the website information which may vary and may not be reliable.
Treating the provision for bad and doubtful debts and bad debts written off as nonoperating expenses for the purpose of margin computation of comparable companies as selected by TPO - Held that:- DRP has not erred in confirming the TPO's stand of treating the provision for bad and doubtful debts and bad debts written off as nonoperating expenses for the purpose of margin computation of comparable companies as selected by TPO.
Deselection of companies who fails export earning filter as the export turnover was 91.41 Lakhs as against domestic turnover of ₹ 13.33 Crores.
ALP adjustment - Held that:- ALP adjustment should only be restricted to international transactions and not to the entire turnover of assessee. However, this requires verification by the AO/TPO. Therefore, we direct the AO/TPO to verify and restrict the adjustment only to the international transactions. Ground is considered allowed for statistical purposes.
Working capital adjustment - Held that:- There is no need for making any negative working capital adjustment when assessee does not carry any working capital risk. In fact, TPO should have done necessary working capital adjustment to the profits of the selected comparables so as to make them comparable to the assessee. In view of this, we direct the TPO not to make negative working capital adjustment”.
Non-setting off of unabsorbed depreciation - Held that:- We direct the AO/TPO to follow the directions of the DRP and allow the unabsorbed depreciation as per the provisions of the Act. Ground is accordingly considered allowed.
Comparable selection - reasons given by the DRP in excluding the company, not only on the basis of the high turnover but also with reference to the brand value etc. is acceptable.
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2016 (12) TMI 1719
Demand notices during pendency of appeal - Held that: - the present petition stands disposed of by observing that let the first appellate authority finally decide and dispose of the Appeal within a period of four weeks from today in accordance with law and on its own merits after giving an opportunity to the petitioners.
As appeal itself is being ordered to be finally decided and disposed of within a period of four weeks from today, and therefore, respondent no.2 may not insist upon implementation the impugned notices - present Special Civil Application stands disposed of.
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2016 (12) TMI 1718
Nature of income - rental income - income under the head ‘Income from house property” or “Income from other sources” - Assessee received sum from M/s.Tapan Art Centre for allowing them to display their advertisement in the club premises of assessee - Held that:- The income in question cannot be regarded as income from business. The income in question cannot be regarded as “income from house property” also because M/S.Tapan Art Centre was merely allowed to display advertisement board in and around the tennis court. U/s.22 what is chargeable to tax under the head “Income from House Property” is annual value of property consisting of any building or lands appurtenant thereto of which the Assessee is the owner. Since the right to display advertisement in the premises of the Assessee alone was given, the income in question has to be regarded only as income under the head “Income from other sources”. The AO is directed to tax the income in question accordingly and allow deductions permissible while computing deduction under the head “Income from other sources”. The ground of appeal of the Revenue is accordingly partly allowed.
Rent from M/s.Reliance Industries Ltd., who was its member - income in question was claimed to be not taxable in the light of the principle of mutuality - Held that:- Principle of mutuality will not apply in the circumstances of the case as explained by the Hon’ble Supreme Court in the case of Bangalore Club (2013 (1) TMI 343 - SUPREME COURT). In view of the said decision, we are of the view that the income in question is taxable and under the head “Income from House Property”
Interest on Fixed Deposit with Bank who also happens to be a member of the club - income in question was claimed to be not taxable in the light of the principle of mutuality - AO rejected the plea of the Assessee and taxed the income in question under the head “Income from other sources” - Held that:- As already held that principle of mutuality will not apply in the circumstances of the case as explained by the Hon’ble Supreme Court in the case of Bangalore Club (supra). In view of the said decision, we are of the view that the income in question is taxable and under the head “Income from other sources”. The AO is directed to tax the income in question accordingly and allow deductions permissible while computing deduction under the head “Income from other sources”. Gr.No.3 raised by the revenue is allowed.
Sum received from various sponsors for various events that the club organizes on festivals and other occasions - Held that:- The sum in question is taxable. However, as rightly submitted by the learned counsel for the Assessee, the sum in question has to be taxed under the head “income from other sources” and the Assessee should be allowed all expenses permissible as deduction while computing income under the said head of income. We hold and direct accordingly.
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2016 (12) TMI 1717
Refund claim - Consequent upon the fulfilment of the obligation, the petitioner requested, vide letter dated 28.5.2003 that the bank guarantee be discharged - rejection of refund on the ground of time bar - Section 27 of the Customs Act - Held that: - The sequence of dates and events detailed would show that the assessee had made a request for release of Bank Guarantee as early as in 2003 after obtaining the Export Obligation Discharge Certificate, confirming the position that the export obligation has been duly complied with. However, it is only on 22.3.2007 that the Bank Guarantee was discharged by the Department, for reasons best known to them - No explanation is offered by the Revenue as to what were the circumstances that occasioned the delay of more than eight years. The Appellant has been unfairly deprived of the amount of ₹ 4,07,245/- from 2007 onwards till the order of the learned Single Judge on 22.7.2015 directing the grant of refund.
The delay in granting refund was inordinate, unjustified and wholly unacceptable - appeal allowed - decided in favor of appellant.
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2016 (12) TMI 1716
Benefit of Concessional rate of duty - N/N. 4/2006-CE dated 1.3.2006 as amended - appellant has exported cement in 50 kgs. bag - denial of concession on the ground that no MRP was mentioned nor any parameter mentioned in the Standards of Weights & Measures (Packaged Commodity) Rules, 1977 was fulfilled - Held that: - The Tribunal in the case of Jaypee Bela & Rewa Plant vs. C.C.E., Bhopal [2016 (12) TMI 531 - CESTAT NEW DELHI] has observed that where retail sale price was not required to be cleared other than package form would be entitled to the benefit of the N/N. 4/2006-CE - appeallant are allowed the benefit of notification - appeal allowed - decided in favor of appellant.
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