TP Adjustment - comparable selection - admission of appeal on substantial question of law.
HELD THAT:- Appeal admitted on the following substantial question of law:
“Whether on the facts and circumstances of the case and in law, the Tribunal is satisfied in holding that if the Related Party Transactions in a case do not exceed 25% of the total sales, the same can be taken as a comparable case ignoring the decisions of the Tribunal in the case of M/s. Benetton India Pvt. Ltd [2011 (11) TMI 194 - ITAT DELHI] and in the case of Wills Processing Services (I) Pvt. Ltd. [2014 (4) TMI 814 - ITAT MUMBAI] wherein it has been held that Related Party Transactions should be in the vicinity of 10% to 15% of the total sales for comparability analysis?
Registry is directed to communicate copy of this order to the Tribunal. This would enable the Tribunal to keep papers and proceedings relating to the present appeal available, to be produced when sought for by the Court.
Assessment made on non existing company - order is passed by the AO in the name of the company which has merged with another company and now changed its name - HELD THAT:- As decided in Maruti Suzuki India Ltd (successor of Suzuki Power train India Ltd.) [2017 (9) TMI 387 - DELHI HIGH COURT] has held on identical facts that assessment order is not tenable if it is passed in the name of non-existent company.
Thus, order was not tenable for having been framed in the name of a non-existent company - Decided in favour of assessee.
LTCG - invoking Section 50C - lower authorities have gone by the reduced jantri price for the purpose of invoking Section 50C of the Act so as to make the impugned long term capital gains addition , also accepted by CIT(A) - HELD THAT:- No reason to concur with the above extracted findings as the impugned addition u/s. 50C(2) of the Act mandates reference to the DVO in case an assessee contests the jantri price in question to be higher than fair market value of the relevant capital asset.
As Sunil Kumar Agarwal case [2014 (6) TMI 13 - CALCUTTA HIGH COURT] it holds that such a reference is mandatory even if an assessee does not make any such prayer. We therefore accept assessee’s sole substantive grievance for statistical purposes and remit the issue back to the Assessing Officer to proceed afresh as per law u/s. 50C(2) of the Act by making reference to the DVO. Assessee’s appeal is allowed for statistical purposes.
Jurisdiction of the Trial Court post-decree - Functus Officio status of the Trial Court - suit filed by the plaintiff-Nagarathnamma was decreed by the Trial Court, restraining the defendants from interfering with the plaintiff's peaceful possession and enjoyment of the suit schedule property - application under Section 151 of the Code of Civil Procedure, 1908 - HELD THAT:- This Court called for explanation from the concerned Judge, who passed the impugned orders as to under what circumstances, he has issued directions to provide the police protection and to issue katha in respect of the agricultural lands, that too after disposal of the suit between the parties and this Court also made it clear that the petitioners are claiming their rights in respect of Site Nos. 34, 35 and 37 and it is always open for the petitioners to approach the Competent Court or appropriate Court to protect their rights, if any in accordance with law.
Functus Officio status of the Trial Court - HELD THAT:- Once the decree passed by the Trial Court on 1-4-2017 has reached finality, the learned Judge, who passed the judgment and decree becomes functus officio and he cannot alter or direct any authorities to implement the decree and if somebody violated the decree passed by the Trial Court, it is always open for the decree-holder to protect his rights as per the decree in accordance with law. Unfortunately, in the present case, learned Judge proceeded to issue direction to the Joint Commissioner, BBMP, Byatarayanapura to issue katha in favour of the plaintiff in respect of the agricultural lands, for which the BBMP has no power - Once the decree reached finality, the learned Judge who passed the judgment and decree becomes/functus officio and absolutely the Trial Judge, who passed the decree has no power to issue such directions. In a judgment and decree passed by the Trial Court, utmost the Trial Judge can correct any arithmetical/clerical errors as contemplated under the provisions of Sections 152 and 153 of the Code of Civil Procedure. Beyond that, he cannot issue any directions, that too in respect of agricultural lands directing the Joint Commissioner, BBMP to issue katha. Therefore, the impugned orders cannot be sustained.
The petitioners brought to the notice of the Court that after the judgment and decree is passed, the learned Judge who passed the impugned orders becomes functus officio and therefore, the impugned orders passed are without jurisdiction and hence, it is the duty of this Court to set right the same in order to maintain judicial discipline in the legal system. Even in the absence of the present petitions, once it is brought to the notice of this Court by the petitioners or respondents, it is the duty of this Court to exercise the powers under Article 227 of the Constitution of India to rectify the mistake committed by the learned Judge, who passed the impugned orders, which are totally without jurisdiction.
Whether by virtue of the provisions contained in Section 24 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, the proceedings lapsed in the instant case? - interpretation of statute - expression used 'compensation has not been paid' in Section 24(2) relate to deposit of the amount as envisaged Under Section 31(2) of the Act of 1894 or not - HELD THAT:- There is already a reference made as to the applicability of Section 24 in Yogesh Neema and Ors. v. State of M.P. and Ors. [2016 (1) TMI 1511 - SC ORDER]. There are several other issues arising which have been mentioned above but have not been considered in Pune Municipal Corpn. [2014 (1) TMI 1643 - SUPREME COURT]. Thus, here is a case where the matter should be considered by a larger Bench.
Let the matter be placed before Hon'ble the Chief Justice of India for appropriate orders.
Challenge to order of injunction granted - seeking a decree of permanent injunction for infringement of trade mark, passing off and for damages against the Respondents - protection of Plaintiff's trade marks 'TOYOTA', 'TOYOTA INNOVA', 'TOYOTA DEVICE' and the mark 'Prius' of which the Plaintiff claimed to be a prior user - Territoriality principle vs. Universality doctrine in trademark law -
Infringement of registered trademarks - HELD THAT:- The finding that the trade mark 'Prius" did not have transborder reputation permeating into India is, therefore, incorrect. He has also urged that the test of passing off always rest upon a likelihood of confusion irrespective of the stage at which the matter may be considered. The fact that the trade mark 'Prius' was registered in favour of the Defendants was irrelevant insofar as the Plaintiff's claim for passing off is concerned - The use by the Defendants of the multiple trade marks of the Plaintiff ('TOYOTA', 'TOYOTA INNOVA' and 'TOYOTA DEVICE MARKS'); the conditional injunction Order dated 10.08.2000; the violation thereof; all have been urged by Shri Chidambaram to contend that the aforesaid facts are strong evidence of dishonest intention on the part of the Defendants to defraud the Plaintiff to derive undue benefit from the goodwill and reputation of the trade mark of which the Plaintiff is the first user.
Territoriality principle - Universality doctrine in trademark law - HELD THAT:- To give effect to the territoriality principle, the courts must necessarily have to determine if there has been a spill over of the reputation and goodwill of the mark used by the claimant who has brought the passing off action. In the course of such determination it may be necessary to seek and ascertain the existence of not necessarily a real market but the presence of the claimant through its mark within a particular territorial jurisdiction in a more subtle form which can best be manifested by the following illustrations, though they arise from decisions of Courts which may not be final in that particular jurisdiction.
Once the claimant who has brought the action of passing off establishes his goodwill in the jurisdiction in which he claims that the Defendants are trying to pass off their goods under the brand name of the claimant's goods, the burden of establishing actual confusion as distinguished from possibility thereof ought not to be fastened on the claimant. The possibility or likelihood of confusion is capable of being demonstrated with reference to the particulars of the mark or marks, as may be, and the circumstances surrounding the manner of sale/marketing of the goods by the Defendants and such other relevant facts.
Proof of actual confusion, on the other hand, would require the claimant to bring before the Court evidence which may not be easily forthcoming and directly available to the claimant. In a given situation, there may be no complaints made to the claimant that goods marketed by the Defendants under the impugned mark had been inadvertently purchased as that of the Plaintiff/claimant. The onus of bringing such proof, as an invariable requirement, would be to cast on the claimant an onerous burden which may not be justified. Commercial and business morality which is the foundation of the law of passing off should not be allowed to be defeated by imposing such a requirement. In such a situation, likelihood of confusion would be a surer and better test of proving an action of passing off by the Defendants.
The evidence of the Plaintiff's witnesses themselves would be suggestive of a very limited sale of the product in the Indian market and virtually the absence of any advertisement of the product in India prior to April, 2001. This, in turn, would show either lack of goodwill in the domestic market or lack of knowledge and information of the product amongst a significant Section of the Indian population. While it may be correct that the population to whom such knowledge or information of the product should be available would be the Section of the public dealing with the product as distinguished from the general population, even proof of such knowledge and information within the limited segment of the population is not prominent. All these should lead to eventually agree with the conclusion of the Division Bench of the High Court that the brand name of the car Prius had not acquired the degree of goodwill, reputation and the market or popularity in the Indian market so as to vest in the Plaintiff the necessary attributes of the right of a prior user so as to successfully maintain an action of passing off even against the registered owner.
In any event the core of the controversy between the parties is really one of appreciation of the evidence of the parties; an exercise that this Court would not undoubtedly repeat unless the view taken by the previous forum is wholly and palpably unacceptable which does not appear to be so in the present premises.
If goodwill or reputation in the particular jurisdiction (in India) is not established by the Plaintiff, no other issue really would need any further examination to determine the extent of the Plaintiff's right in the action of passing off that it had brought against the Defendants in the Delhi High Court. Consequently, even if we are to disagree with the view of the Division Bench of the High Court in accepting the Defendant's version of the origin of the mark 'Prius', the eventual conclusion of the Division Bench will, nonetheless, have to be sustained.
It is deemed proper to affirm the order(s) of the Appellate Bench of the High Court and dismiss the appeals filed by the Appellant/Plaintiff - appeal dismissed.
Cenvat credit in respect of special additional duty of Customs - denial on the ground that said duty is not excise duty and the said duty was paid by the importer not by the appellant - whether the appellant is entitled for Cenvat credit in respect of special additional duty of Customs paid by the supplier of input and passed on to the appellant? - HELD THAT:- The Cenvat credit in respect of SAD is admissible. It does not made any difference whether the SAD of Customs was paid by the importer or otherwise. If the goods is suffering SAD the same can be passed on to the ultimate buyer who is eligible for Cenvat credit on SAD of Customs.
There are no reason why the SAD paid by the supplier cannot be allowed as Cenvat credit - the impugned order is set aside - appeal allowed.
Maintainability of petition - availability of alternative remedy - Seeking to set aside assessment order imposing value added tax for the period from March, 2013 to March, 2014 - HELD THAT:- Inasmuch as, an effective alternative remedy is available to the petitioner for questioning the order of the 1st appellate authority, this writ petition is not entertained, for adjudication on merits.
Having regard to the fact that the petitioner is seriously disputing its liability to pay VAT, as it has already paid the service tax for the same service, it is opined that interest of justice would be served, if the petitioner is permitted to file the appeal before the Tribunal and pending the appeal, the respondent concerned is restrained from recovering the disputed tax, subject to the petitioner paying 25% of the disputed tax, within eight weeks from today. On such payment, the Tribunal shall dispose of the appeal on merits.
Deduction u/s 80P(2)(a)(i) - interest income earned on the surplus fund i.e. Interest on Reserve, Bad Debt, MSSS & 5% on the FD general - HELD THAT:- In the instant case the assessee has shown income from the fixed deposits maintained with the bank as discussed in the preceding paragraph. The above interest income was disallowed by the AO on the ground that it is not arising from the credit facilities provided to the members therefore it is not eligible for deduction u/s 80P(2)(a)(i).
As noticed that the AO has made the disallowance of interest income on the fixed deposits (general) for ₹ 40,76,664.00 but the CIT(A) has deleted the addition made by the AO to the tune of 5% of the interest income - Hon’ble ITAT has restored the issue raised by the assessee to the file of AO for fresh adjudication for the same assessment year. The relevant extract of the order has already been produced in the preceding paragraph. As the present issue of interest is common with that of the assessee, therefore we are inclined to restore the same issue to the file of AO for fresh adjudication in accordance with the law.
Other interest income - We notice that these funds were created to meet the requirement of the provisions of West Government Co-operative Societies Act 1983 as discussed above. Therefore in our considered view the impugned interest income is eligible for deduction u/s 80P(2)(a)(i).
We find that the impugned issue has already been decided by the Hon’ble ITAT in the own case of the assessee for the AY 2008-09 in [2012 (4) TMI 832 - 13-04-2012] where the Co-ordinate Bench of this Tribunal was pleased to delete the addition made by the AO. The relevant extract of the order has already been produced in the preceding paragraph.
Thus, we hold that the impugned interest income earned on MSSS, Reserve Fund & on Bad debts Funds is eligible for deduction under section 80P(2)(a)(i) of the Act. Thus, the ground raised by the Revenue is partly allowed for statistical purposes.
Addition made on account of subsidy received by the assessee -AO disallowed the deduction claimed by the assessee u/s 80P(2)(a)(i) by observing that the same is not arising from the activities of providing credit facilities to the members - HELD THAT:- As in the own case of the assessee for the AY 2008- 09 [2012 (4) TMI 832 - 13-04-2012] as in respect of the subsidy amount since it is of non-capital in nature the same cannot be disallowed by applying the ratio laid down in the case of the Totgars Co-operative Sales Society Ltd. [2010 (2) TMI 3 - SUPREME COURT]
Deduction u/s 80P(2)(a)(i) of the Act on account of the provision for Ex-gratia - HELD THAT:- As undisputed that in the instant case the assessee is claiming deduction u/s 80P(2)(a)(i) of the Act. Therefore, the disallowance of ex-gratia will result into higher deduction to the assessee u/s 80P(2)(a)(i) of the Act. Thus, there will no effect on the tax liability of the assessee even after making the addition of the provision for exgratia expense.
Classification of Execution Application and Chamber Summons - directions is sought to the registry to classify this application as an application in its commercial division - Payment of the decretal amount in US dollars and the calculation of the shortfall - requirement for decuction of TDS - HELD THAT:- The amounts deposited by respondent under the orders of this Court cannot, by any stretch of imagination, be termed as payments as envisaged in Order 21 Rule 1 of CPC and as such the judgment debt. As per Order 21 Rule 1 of CPC, the modes of payment of a money decree are : (a) by depositing into the Court whose duty it is to execute the decree, or send to that Court by postal money order or through a bank; or (b) out of Court, to the decree-holder by postal money order or through a bank or by any other mode wherein payment is evidenced in writing; and (c) otherwise as the Court, which made the decree, directs. A deposit of any amount by a judgment debtor in the Court to purchase peace by way of stay of execution or to show bonafides for preventing an order of winding up is not a payment of decretal amount in terms of Order 21 Rule 1 of CPC which prescribes specific modes for the satisfaction of a money decree.
The payment made by the decree holder under Rule 1 of Order 21 of CPC and a deposit made by the judgment debtor in Court for obtaining stay of execution of decree are altogether different courses adopted by the judgment debtor. Payment under Order 21 Rule 1 of CPC satisfies a decree holder whereas, a deposit in the Court to avoid execution keeps the amount beyond the reach of the decree holder and leaves him waiting for its release - claimant is well within its right to claim the difference in the amounts payable as on date of payment/realization and the amounts received, which works out to US $ 319,816/- as on 23rd November 2017 increasing at US $ 144 per day.
The question of deduction of any income tax at source by respondent also does not arise. This amount of Rs. 10,00,000/- plus accumulated interest also should be remitted by the Prothonotary and Senior Master into the same account of claimant as was done earlier. Of course, credit will be given to respondent for this amount remitted based on the exchange rate prevailing on the date of remittance. It is open to respondent also to write to the Prothonotary and Senior Master to immediately remit to claimant amount in US dollars equivalent to Rs. 10,00,000/- plus accumulated interest.
The respondent is directed to pay to claimant balance of the decretal amount, i.e., US $ 319,816/- increasing at the rate of US $ 144 per day from 24th November 2017 until payment and/or realization together with Rs. 8 lakhs being costs payable under the arbitration award. Respondent to also pay interest at 8% p.a. on the amount of Rs. 8,00,000/- from the date it became due as per award (6 weeks from 21st February 2011-date of award).
Stay of recovery of the disputed service tax demand excluding interest and penalty - Business Auxiliary Services - GTA service - Renting of immovable property for commercial purpose - commission paid to foreign agents - penalty - HELD THAT:- Post on 21-12-2017.
Capital Gains - year of transfer of asset - Transfer of Property Act by irrevocable Power of Attorney - transfer of the 14,307 sq.ft. of the land by applying the provisions of Sec. 50C for the AY 2010-11 - assessee had not been able to produce any documentary evidence, any proof of the transaction claimed, to have taken place during the year 2002 - as submitted that the property having already been transferred by a registered Power of Attorney and possession in respect of the said land having been handed over through the registered irrevocable Power of Attorney, the Capital Gains was not liable to be assessed for the AY 2010-11 - as argued same transaction could not be taxed again in the AY 2010-11, just because, the Sale Deed was registered only during the said assessment year
HELD THAT:- As in view of the principles laid down by the Hon’ble Supreme Court in the case of Shri Balbir Singh Maini 2017 (10) TMI 323 - SUPREME COURTit is held that the Capital Gains, if any, in respect of the transfer of the 14,307 sq.ft. of the land is assessable only during the year 2002 as has been rightly disclosed by the assessee in their returns for the AY 2002-03. Even otherwise, a perusal of the proviso to Sec. 50C(1) inserted by Finance Act 2016 w.e.f. 01.04.2017 clearly admits that the provisions of Sec. 50C are not to apply in the event that the date of agreement fixing the amount of consideration and the date of registration for transfer of the capital asset are not the same, then the value adopted or assessed or assessable by Stamp Valuation Authority on the date of agreement, may be taken for the purpose of computing the full value of the consideration of such transfer subject to conditions.
In the present case, admittedly, the Power of Attorney is considered as the agreement and the Sale Deed executed are in two different assessment years and the consideration having already been received by the assessee on the execution of the irrevocable registered Power of Attorney and the same having been offered to tax during the AY 2002-03, the provisions of Sec. 50C itself cannot be brought to play in the case of the assessees. Assessee appeal allowed.
Undisclosed income declared at the time of search - argument of Non considering disclosure made by the assessee in his statement recorded u/s. 132(4) - assessee vehemently stated that the disclosure made by the group was bifurcated in the hands of different Members of the group and the disclosure was honoured by including the undisclosed income declared at the time of search in the hands of the other assessees of the group.
HELD THAT:- We find that nobody attended during the assessment proceedings of the assessee nor anybody attended proceedings before the First Appellate Authority. Therefore, it appears that the assessments made in the cases of other assessees of the group were not verified and the entire disclosure amount has been added in the hands of the appellant assessee.
In our considered opinion, a grave prejudiced has been caused to the assessee by such non verification. Therefore, in the interest of justice, we restore these appeals to the files of the A.O.
A.O. is directed to verify from the assessment records of Shreem Developers and Others, The amount of undisclosed income offered during the course of the search proceedings as per the statement mentioned hereinabove. If the A.O. is satisfied that the undisclosed income has been taxed in the hands of other members of the group then there is no reason why the same income should be taxed in the hands of the assessee. The assessee is directed to furnish necessary details and substantiate its claim before the AO. Assessee appeal allowed for statistical purpose.
Classification of services - Business Auxiliary Services or not - commission or a discount received, as a consideration from airlines - HELD THAT:- The respondent is engaged in the activity of freight forwarding. They are booking cargo in various airlines and pay freight for the same. The said freight is collected from shippers. The airlines pay to the respondent certain portion of such freight as a commission/discount. This is sought to be taxed in “Business Auxiliary Service.”
Similar dispute before Tribunal are noted on various occasions. One such reference can be made to the Tribunal’s decision in the case of COMMISSIONER OF SERVICE TAX, NEW DELHI VERSUS M/S. KARAM FREIGHT MOVERS [2017 (3) TMI 785 - CESTAT NEW DELHI] wherein it was held that brokerage and commission received from various airlines cannot be considered as a commission earned for acting on behalf of the airlines. This is more akin to a discount or incentive provided by the airlines on the freight charges which is on principal-to-principal basis, with no knowledge of the shipper.
There are no merit in the present appeal by the Revenue - appeal dismissed.
Sanction of Amalgamation Scheme - Sections 230 to 232 of the Companies Act, 2013 - HELD THAT:- From the material on record, the Scheme appears to be fair and reasonable and is not in violation of any provisions of law and is not contrary to public policy. None of the parties concerned have come forward to oppose the Scheme.
Since all the requisite statutory compliances have been fulfilled, Company Scheme filed by the Transferor and Transferee Company are made absolute in terms of prayer clause of the petition - The Petitioner Companies to pay costs of Rs. 25,000/- each to the Regional Director, Western Region, Mumbai. Transferor Company to pay cost of Rs. 25,000/- to the Official Liquidator, High Court, Bombay.
Refund of excess service tax paid - Reverse charge mechanism - HELD THAT:- The petitioners states that they had made representation dated 16th June, 2015 receipt of which has been disputed by the respondent nos. 1 to 4. There is no need to record any finding regarding the same as the petitioner can file an application seeking refund and it can make all averments and assertions as were made in the representation dated 16th June, 2015.
Recording the aforesaid statement of the petitioner that it would make an application for refund and directing that the same would be dealt with by the first to fourth respondents, in accordance with law, the writ petition is disposed of, without any order as to costs.
CENVAT Credit - primary argument of UniDeritend Ltd. is that the credit was available to them prior to amendment in Rule 7(d) of the Cenvat Credit Rules, 2004 and therefore they cannot be asked to follow the said Rule 7(d) - Penalty - HELD THAT:- In the instant case, while the invoices were raised prior to the amendment, there is no evidence if the payment was made prior to the amendment. Thus if the credit was available prior to the amendment is also a doubtful proposition. In any case UniDeritend Ltd. has availed the credit of duty paid by them after the amendment and thus the law as it existed at the time when they converted the duty paid by them into cenvat credit would be the law applicable to the said credit. Since at the time of availing cenvat credit, sub-rule (d) of Rule 7 and Explanation 3 of the said rule was in existence at the time of availing credit, UniDeritend Ltd. was required to follow the same and avail the credit only in terms of Rule 7(d) read with Explanation 3. In these circumstances, the demand of reversal of credit is upheld.
Penalty - HELD THAT:- The plain language of the Rule is very clear and leaves no scope for doubt. Under these circumstances, imposition of penalty is justifiable.
Appeal of UniDeritend Ltd. is dismissed and appeal of Revenue is allowed.
Maintainability of appeal - petitioners apprehend that, the Appellate Authority will disallow the appeal as the Appellate Authority has expressed its mind in course of the hearing as recorded in a writing issued by the Advocate for the petitioner - HELD THAT:- In the facts of the present case, the decision of the Appellate Authority is awaited. The submissions made on behalf of the petitioners as the observations of the Appellate Authority as perceived by the petitioners are yet to be reduced in writing by the Appellate Authority. The decision of the Appellate Authority will appear from the communication of such decision. It is premature to speculate on the submissions and the observations made in the course of hearing of the appeal.
There are no merit to interfere in the present writ petition - petition dismissed.
Applicability of provisions of section 115JB - assessee is a Corporation, which is mainly engaged in the business of manufacturing of Cold Rolled & High Tensile Steel - HELD THAT:- As agreed by the representative of both the sides, the solitary issue involved in this appeal of the Revenue is squarely covered by the decision of the Coordinate Bench of this Tribunal rendered in assessee’s own case vide its common order [2016 (2) TMI 458 - ITAT KOLKATA] wherein a similar issue was decided after discussing all the relevant aspects as well as case laws in details by the Tribunal before summarising its conclusion.
We respectfully follow the order of the Coordinate Bench of this Tribunal for the said years and uphold the impugned order of the ld. CIT(Appeals) in directing the AO not to assess the total income of the assessee by application of section 115JB of the Act. Appeal of the Revenue is dismissed.
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