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TMI Tax Updates - e-Newsletter
January 16, 2016
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Service Tax
Central Excise
CST, VAT & Sales Tax
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
Income Tax
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A roguish leeway of undue enrichment - Levy of Interest u/s 234B when refund is pending / delayed - Income Tax - Direct Tax Code - DTC
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Carry forward accumulated business losses - change in shareholding - The question of 'piercing the veil' at the instance of Yum India does not arise. - in terms of Section 79 of the Act, Yum India cannot be permitted to set off the carry forward accumulated business losses of the earlier years. - HC
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Principle of mutuality - whether the ITAT was right in law in treating the charges received from non-member/guests as not liable to tax? - matter remanded back for ascertaining facts - HC
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Invocation of provisions of section 73 - Loss on sale of investment - No wise businessman will suffer loss neither there is intention to suffer loss rather the investment is gainfully made for earning income, thus, treating the business transaction as speculative in nature is the subjective approach of the Assessing Officer. - AT
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TDS u/s 194I - non deduction of TDS on the amount paid to the lessor towards lease premium - the lease premium to CIDCO is capital expenditure to acquire land with substantial right to construct and could not be considered as rent to be covered u/s 194I of the Act and hence no TDS is to be deducted on the same - AT
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Sale of house property - Denial of the cost of improvement - apart from nonspecification of the work, so that the very basis of the assessee’s claim remains unknown, the certificate speaks of the renovation work having been carried out during the years 1997-98 and 2001-02, implying the relevant financial years. How could renovation be carried out in f.y. 1997-98, whereat the house was, by own admission, purchased? - AT
Customs
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Valuation - technical knowhow, drawing and design fee and engineering services fee, are not includable in the transaction value of the imported goods - AT
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Misdeclaration of Retail Sale Price (R.S.P) in order to avoid payment of actual Customs duty / CVD - valuation of import of cellular phones - Once the adjudicating authority disputes the R.S.P, the burden is on the Revenue to establish at what price such goods were sold by the appellants to the ultimate consumer. - AT
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Over-valuation of rough diamonds imported from Dubai/Hong Kong - in the entire investigation, not a tip of evidence in support of this allegation was adduced. There is no evidence of laundering of money, parking or to cover the differential cost of other imports or any unlawful activities unearthed on the part of appellants - Confiscation and penalty set aside - AT
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Under valuation and mis-declaration of the goods - even if there is difference between import price and sale price of the said goods in the domestic market, the difference cannot be made the basis for holding that the price of the imported goods has been undervalued - AT
Service Tax
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Commission agent for ginned cotton - Scope of exemption - agricultural produce or not - ginned cotton would be covered within the scope of "raw vegetable fibres such as cotton" and hence qualify to be called "agricultural produce" - AT
Central Excise
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Cenvat Credit - Duty paying documents - credit was availed on the attested photocopy of the invoice and the bill of entry which, presumably must not have been submitted along with the returns filed with the authorities. In view of this extended period which has been invoked seems to be correct - AT
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Classification of printed labels - articles of “paper and paper board” - classification under 4821.00 or 4823.90 of CETA - the goods continue to conform to the description of “paper board labels of all kinds” within the meaning of Sub-Heading 4821.00 of the Central Excise Tariff Act - AT
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During the process of manufacture some wastage of packaging material occurs which is not useful and rejected. This being only charge against the appellant and there being no 'manufacture' we hold that the demand is not sustainable - AT
VAT
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The petitioner having chosen not to produce his books of accounts for perusal -, cannot be heard to complain of a violation of the Rules of Natural Justice - Value Added Tax - VAT and CST
Case Laws:
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Income Tax
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2016 (1) TMI 583
Penalty u/s 271C - Penalty for failure to deduct tax at source - reasonable cause - ITAT and HC deleted the penalty levy - Held that:- In the present appeals we are concerned with levy of penalty u/s 271-C for which it is necessary to establish that there was contumacious conduct on the part of the assessee. We find that on similar facts Hon'ble Delhi High Court have deleted levy of penalty u/s 271-C in the cae of M/s. Itochu Corporation (2004 (5) TMI 53 - DELHI High Court) and CIT Vs. Mitsui & Company Ltd. reported in [2004 (5) TMI 17 - DELHI High Court] wherein held as reasonable cause as shown by the assessee-company has not been properly appreciated and deliberated by the lower authorities penalty cannot be confirmed . Thus allow the assessee's appeal and cancel the penalty as levied u/s 271-C - Decided against revenue
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2016 (1) TMI 582
Carry forward accumulated business losses - change in shareholding - Held that:- As there was indeed a change of ownership of 100% shares of Yum India from Yum Asia to Yum Singapore, both of which were distinct entities. Although they might be AEs of Yum USA, there is nothing to show that there was any agreement or arrangement that the beneficial owner of such shares would be the holding company, Yum USA. The question of 'piercing the veil' at the instance of Yum India does not arise. In the circumstances, it was rightly concluded by the ITAT that in terms of Section 79 of the Act, Yum India cannot be permitted to set off the carry forward accumulated business losses of the earlier years. AMP expenses - TPA - Held that:- Remands the issue concerning the determination of the existence of an international transaction between the Assessee and its AE involving AMP expenses and the further question of determination of its ALP to the AO/TPO for a fresh decision in light of the judgment of this Court in Sony Ericsson Mobile Communication India P. Ltd. (2015 (3) TMI 580 - DELHI HIGH COURT ).
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2016 (1) TMI 581
Sale of business of firm as a going concern to the company for a consideration of paid up share capital whether does not amount to transfer liable to tax as capital gains? - Held that:- In the facts of the present case, capital gains tax is sought to be levied in respect of immovable property being land and building. Insofar as the building being Sarita Shopping Centre is concerned the same was for the first time brought into the books of account after revaluation only in the year under consideration. Evidently, therefore, no depreciation had been claimed in respect thereof. Under the circumstances, the question of invoking section 41(2) of the Act would not arise in the present case. For the purpose of attracting sub-section (1) of section 45 of the Act profit or gain should have arisen from the transfer of a capital asset. Sub-section (2) of section 45 of the Act provides that the profits or gains arising from the transfer by way of conversion by the owner of a capital asset into, or its treatment by him as stock-in-trade of a business carried on by him shall be chargeable to income tax as his income of the previous year in which such stock-in-trade is sold or otherwise transferred by him and, for the purposes of section 48, the fair market value of the asset on the date of such conversion or treatment shall be deemed to be the full value of the consideration received or accruing as a result of the transfer of the capital asset. Insofar as invocation of subsection (2) of section 45 of the Act is concerned, while the Assessing Officer has briefly referred to the said provision in paragraph 5.7 of his order, no factual foundation has been laid down in that regard to establish that the said properties had been brought into the books as stock-in-trade. On the contrary the learned counsel for the assessee has maintained that the said properties were always treated as capital assets and were never converted into stock in trade. Under the circumstances, in the absence of any factual foundation having been laid in that regard, the question of invoking sub-section (2) to section 45 of the Act would not arise. Thus the provisions of section 45(4) of the Act would not be attracted in the present case as the provisions of section 45(1) and section 45(4) of the Act would not be attracted in the present case - Decided in favour of the assessee
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2016 (1) TMI 580
TDS u/s 194J or 192 - whether relation with Guest Faculty (professional teaching staff) is equivalent in nature to an employer/employee relationship? - Held that:- This Court in M/s Ivy Health Life Services Pvt. Ltd.'s case (2015 (12) TMI 1063 - PUNJAB AND HARYANA HIGH COURT) held that it was required to be seen whether the agreement between the assessee and the concerned doctors was a 'contract for service' or a 'contract of service'. In case, it is 'contract for service', the income of the doctors would fall under the head 'income from business or profession' whereas under 'contract of service, it would partake the character of salary which is dependent upon masterservant relationship. It is always a vexed question to determine whether employer-employee relationship exists between the parties or not. There is no strait jacket formula prescribed under any statute or by any pronouncement on the basis of which it could be said that in a given eventuality, it would be characterized as employer-employee relationship. Such relationship depends upon several factors taken together. Even the Apex Court in Workmen of Nilgiri Coop. Market Society Limited v. State of Tamil Nadu and others, (2004 (2) TMI 688 - SUPREME COURT) observed that the question whether the relationship between the parties is one of the employer and employee is a pure question of fact. The control test and the organization test are not the only factors whereas several other factors viz. who is the appointing authority; who is pay master; who can dismiss; how long alternative service lasts; the extent of control and supervision; the nature of the job e.g. Whether it is professional or skilled work; nature of establishment and the right to reject, are also required to be scanned before arriving at the conclusion of the employer-employee relations. Accordingly, the impugned orders are set aside and the matter is remanded to the Tribunal to decide the same afresh keeping in view the principles laid down by this Court in M/s Ivy Health Life Sciences Pvt. Ltd., Mohali, Punjab's case (supra) and after hearing the parties and by passing a speaking order in accordance with law.
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2016 (1) TMI 579
DEPB income - whether eligible as a deduction u/s 80HHC being an export incentive granted for promotion of export? - Whether the Taxation Amendment Act, 2005 introduced with effect from 1.4.1998 can be used to deny a benefit accruing to the assessee on account of incentives earlier granted and whether the amendment would be hit by the principle of Promissory estoppel? - Held that:- The Tribunal held that as per clause (iiid) and (iiie) of Section 28 of the Act, any profit on transfer of DEPB scheme was to be considered as profits and gains of business or profession. It was further noticed that an assessee having export turnover exceeding ₹ 10 crores, the profits computed under sub-section (3) of Section 80HHC of the Act shall be further increased by amount which bears to 90% of the sum referred in clause (iiid) and (iiie) of Section 28 of the Act, the same proportion as the export turnover bears to the total turnover. Accordingly, the Assessing Officer was directed to re-compute the deduction under Section 80HHC as amended by Taxation Laws (Amendment) Act, 2005 with retrospective effect from 1.4.1998. Since, the matter has been remitted back to the Assessing Officer for recomputation, therefore, question Nos. do not survive for consideration. Exclusion of FDR interest from the business income under section 80HHC - Held that:- Tribunal had concluded that interest on Fixed Deposits had accrued on the fixed deposits pledged with FCI and also with the Sales Tax Department. The interest on FDRs did not have an immediate nexus with the export business and, therefore, had to be necessarily treated as income from other sources and not business income derived from export business activity. Once that was so, question is decided against the assessee.
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2016 (1) TMI 578
Principle of mutuality - whether the ITAT was right in law in treating the charges received from non-member/guests as not liable to tax? - Held that:- The conditions for invoking the principle of mutuality have been recently enumerated by the Apex Court in Bangalore Club's case (2013 (1) TMI 343 - SUPREME COURT) wherein after considering various other pronouncements of the Supreme Court and the High Court on the subject, it has been laid down that principle of mutuality relates to the notion that a person cannot make a profit from himself. The concept of mutuality has been extended to defined groups of people who contribute to a common fund, controlled by the group, for a common benefit. Any surplus amount to that needed to pursue the common purpose is said to be simply an increase of the common fund and as such neither considered income nor taxable. We find that the Tribunal had not recorded any definite finding of fact on the basis of legal enunciations on the issue. Therefore, in such a situation, the issue being considered to be primarily a question of fact relating to applicability of doctrine of mutuality, it would be appropriate to set aside the order of the Tribunal and remand the case back to the Tribunal to adjudicate the same and pass a speaking order after hearing both the sides.
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2016 (1) TMI 577
Eligibility for section 10B deduction - Held that:- The assessee has converted its undertaking to that from DTA to 100% export oriented undertaking. This crucial fact has gone unrebutted. There is further no dispute that the Board Circular No.1/2005 dated 06.01.2005 already treats such an undertaking to be eligible for section 10B deduction on getting approval as 100% export oriented undertaking. We draw support from all of the above stated facts and case law as well as the Board’s Circular to conclude that the CIT(A) has rightly held assessee’s section 10B deduction claim allowable as per law. - Decided in favour of assessee
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2016 (1) TMI 576
Addition u/s 69A - excess cash found during the Survey operations - whether the said excess cash was duly explained by late Shri Ramautar Prasad Verma and his son by filing proper cash-flow statements? - Held that:- Plea of the asessee is duly substantiated by the cash flow statement of Shri Arun Kumar Verma, assessee's son and personal cash book of the assessee. The fact that such an explanation was not given at the time of survey cannot be the basis for rejecting the claim of the assessee. Accordingly direct the AO to delete the addition made in this regard. - Decided against revenue Unexplained jewellery found during Survey - Held that:- One plea of the assessee that the difference being very minor should be ignored. Another plea of the assessee was that there would be human erred in taking the weight from the weighing machine. These are general explanation and cannot be the basis on which addition can be deleted. It is also do not find the item-wise tally of the stock as per physical verification at the time of survey on the stock as per the stock register of the assessee. It is therefore not possible to come to a conclusion that the difference is only due to incorrect weighing of the items of jewellery. Therefore, confirm the order of CIT(A) in this regard. - Decided against assessee Addition made out of payments of Commission - Held that:- The evidence on record in the form of bills raised by Shri Ashok Kr. Gupta and Shri Sunil Verma are placed at pages 22 to 27 of the assessee's paper book. The bills merely refer to commission on sales and making charges for a particular period. The evidences filed by the assesse cannot be accepted by the AO as it is and therefore AO thought it fit to summon the persons to whom the commission was paid. The AO could not succeed to procure the persons of the recipients of the commission. The assessee also did not make any efforts to produce these person before the AO for examination. In such circumstances disallowance of commission was rightly made by the revenue authorities - Decided against assessee Disallowance towards Travelling and Conveyance expenses and repairs and maintenance expenses - Held that:- The AO made the impugned disallowances on the ground that the same were supported by self made vouchers. Disallowance in question was a paltry sum compared to the expenditure claimed by the assessee. It is of the view that the disallowance is reasonable and does not call for any interference. - Decided against assessee
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2016 (1) TMI 575
Bad debts - Disallowance of deduction being excess receipt of interest shown by the appellant and assessed in earlier years - Held that:- Claim of the assessee for deduction on the ground that the claim for deduction has to be allowed as bad debt or as loss incidental to the business. We are of the view that since the claim is not being allowed on the ground that the debt in question is a non-performing assets, the decision cited by the learned DR is not relevant. Thus we hold that the claim of the assessee for deduction should be allowed. - Decided in favour of assessee Disallowance of the contribution to the recognized provident fund - Held that:- We are of the view that addition sustained deserves to be deleted. The Hon'ble Supreme Court in the case of Alom Extrusions Ltd. [2009 (11) TMI 27 - SUPREME COURT] held that deletion of the second proviso below Sec.43-B of the Act w.e.f. 0-1-4-2004 was clarificatory in nature and therefore will have to be applied retrospectively. Admittedly the payment of employer's contribution had been made by the Assessee on or before the due date for filing return of income. Therefore the payment made on or before the due date for filing return of income has to be allowed as deduction as per the first proviso to Sec.43B of the Act. In view of the aforesaid decision, we direct that the addition sustained by the CIT(A) should be deleted. - Decided in favour of assessee
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2016 (1) TMI 574
Disallowance u/s 14A - whether presence of exempt income is necessary for disallowance of expenditure u/s 14A? - Held that:- As far as the exemption for the years under consideration were concerned, it was an admitted factual position that the AO has not mentioned any such amount. Meaning thereby, there was no exempt income earned by the assessee for the years under consideration. In reply to one of our questions, the learned AR, Mr. K. P. Dewani has also made a statement at Bar that no dividend was declared, hence, there was no earning of exempted dividend income. He has also clarified that for the purpose of invocation of the provisions of section 14A of the IT Act, the AO has applied the formula only in respect of disallowance of proportionate interest expenditure. There was no allegation of the AO that the exempt income was earned by the assessee. Thus Section 14A will not apply if no exempt income is received or receivable during the relevant previous year as decided in Cheminvest Limited Versus Commissioner of Income Tax-VI [2015 (9) TMI 238 - DELHI HIGH COURT] - Decided in favour of assessee
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2016 (1) TMI 573
Deduction u/s 80P - CIT(A) allowed the claim even thought the assessee carries on banking business/other business in the name of credit co-operative society - Held that:- Commissioner of Income Tax (Appeals) has already examined the expenditure account of the assessee. The assessee received interest of ₹ 16,74,584/- on fixed deposits and no other interest income from FDs was credited. In the balance sheet, the accrued interest, as on 31/03/2010, on FDs, was shown at ₹ 30,46,494/- whereas as on 31/03/2009, it was ₹ 23,90,648/-. The interest has been received either from a schedule bank or a cooperative bank. No interest income has been received by the assessee from its investment in a cooperative society. In the present appeal, the assessee has invested statutory reserved funds in fixed deposits with schedule banks/cooperative banks. Such reserves funds are either surplus funds or which cannot be utilized or appropriated by the assessee for its day to day activities including granting of loan to its members, meaning thereby, such reserve funds has to be invested only for the highly restricted purposed as mentioned in the bye laws of the assessee society. - Decided against revenue
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2016 (1) TMI 572
Addition on account of collection towards Area Development Fund - Held that:- The amount collected under the Area Development Fund is not a trading receipt in the hands of the assessee. The AO is accordingly directed to delete the addition. See Loknete Balasaheb Desai Sahakari Sakhar Karkhana Ltd. Vs. DCIT [2014 (9) TMI 264 - ITAT PUNE] - Decided in favour of assessee.
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2016 (1) TMI 571
Invocation of provisions of section 73 - Loss on sale of investment - whether business loss or speculation loss - whether the profit on sale of shares constitutes business income or capital gains in order to ascertain as to whether the shares were purchased by the assessee as investment or stock in trade? - Held that:- The intention of the assessee becomes relevant which can be gathered from the facts available on record. Admittedly, it is not the only criteria, which can be adopted as a conclusive test and has to be analyzed on the touch scale of various judicial pronouncements/circulars issued from time to time by the CBDT. The treatment given to such purchases in its books of accounts by the assessee is also one of the relevant factor, whether it is treated as investment or stock in trade and also whether shown opening/closing stock or shown separately as investment or non-trading asset. Also whether the assessee borrowed money for purchasing such shares and paid interest thereupon. The frequency of transactions, the dates of purchase and sale holding period also indicative of the intention of the assessee. It is not worthy that in earlier years, the department had been accepting to the stand of the assessee as investment in shares, therefore, unless and until contrary facts are brought on record, a different view is not expected, on the principle of consistency. So far as, invocation of section 73 of the Act is concerned, the case of the assessee, is covered by the ratio laid down by Hon’ble Delhi High Court in Bhagwan Das Rameshwar Dayal (1984 (5) TMI 35 - DELHI High Court ). No wise businessman will suffer loss neither there is intention to suffer loss rather the investment is gainfully made for earning income, thus, treating the business transaction as speculative in nature is the subjective approach of the Assessing Officer. We find no infirmity in the conclusion of the ld. Commissioner of Income Tax (Appeals) setting aside the invocation of provisions of section 73 treating the loss on sale of investment as business loss and not speculation loss - Decided in favour of assessee So far as, allocating expenses towards speculative transaction are concerned, since, the above grounds have been decided in favour of the assessee, by holding that it was not a speculative business transaction, therefore, we find no merit in the ground of the assessee. The total turnover of the assessee is ₹ 7,76,72,915 and loss is about 1% of the total turnover. Thus, we find no infirmity in upholding the addition to the extent of ₹ 10,08,268/- and deleting the addition of ₹ 46,50,365/-. This ground of the Revenue is therefore, dismissed. Addition u/s 36 - payment of provident fund contribution was made beyond the prescribed due date - CIT(A) deleted the addition - Held that:- We note that assessee made payment of ₹ 1,94,268/-, being the employees contribution, of the month of September 2008 to the provident fund account beyond the due date i.e. 15/10/2008. The assessee made the payment within the grace period of five days, thus, there is no delay of payment the amount. The case of the assessee is covered by the decision from Hon’ble Delhi High Court in CIT vs P. M. Electronics (2008 (11) TMI 3 - DELHI HIGH COURT) wherein, it was held that if the payment in PF and ESI account are made before the due date of filing of return u/s 139 of the Act then no disallowance of such payment is to be made u/s 43B of the Act. Thus, we find no infirmity in the conclusion of the ld. Commissioner of Income Tax (Appeals) - Decided in favour of assessee
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2016 (1) TMI 570
Exemption u/s 11A denied - assessee is not maintaining separate books of accounts as required under provision of section 11(4A) - Held that:- We note that the facts and the issue are uncontrovertedly identical to the A.Y. 2007-08. No contrary decision was brought to our notice by either side and more specifically the Revenue. We further note that the benefit u/s 80G of the Act was granted by the Department to the assessee and the assessee is a registered with the Charity Commissioner along with the benefit of section 12A of the Act to the assessee. The only grievance of the Department is that the assessee trust is not maintaining separate books of accounts of its activities, therefore, he termed the assessee trust as AOP and assessed the income as business income, resultantly, denied exemption u/s 11A of the Act. The Tribunal has already placed reliance upon the decision from Hon’ble Apex Court and the ratio laid down therein in the case of Thanthi Trust (2001 (1) TMI 80 - SUPREME Court ). We find no infirmity in the conclusion drawn in the respective appeal by the ld. First Appellate Authority, therefore, the appeals of the Revenue are having no merit, resultantly, dismissed. - Decided in favour of assessee.
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2016 (1) TMI 569
Refusal to allow accumulation under Section 11(1)(a) - Held that:- Following the decision of the co-ordinate bench of this Tribunal in Jyothi Charitable Trust (2015 (11) TMI 1295 - ITAT BANGALORE), we hold and direct the Assessing Officer to allow the accumulation of income at 15% of the gross receipts as claimed by the assessee and not on the basis of net income as held by him and accordingly set aside the orders of the authorities below.
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2016 (1) TMI 568
Addition towards unsecured loans - CIT(A) deleted the addition - Held that:- The Revenue has assailed the amount of ₹ 1,11,111/- received by the assessee from Smt. Bharti B. Pawar and ₹ 4,78,000/- received from Shri Uttamrao Jadhav, HUF. We do not find any infirmity in the order of Commissioner of Income-tax (Appeals) in deleting these amounts as the assessee has been able to prove the source as well as creditworthiness of the persons for advancing the said loan amounts. The ld. DR has not been able to controvert the findings of Commissioner of Income Tax (Appeals) in deleting the aforesaid amounts. - Decided in favour of assessee Addition on Unaccounted Advances - Held that:- We find that the affidavits filed by the assessee were without corroborative evidence and the assessee has not been able to prove the identity, creditworthiness and genuineness of the transactions. The assessee has not been able to show from records the genuineness of the transactions even before us. In the absence of corroborative evidence, we do not find any infirmity in the findings of Commissioner of Income Tax (Appeals) in confirming the addition - Decided against assessee Difference in Gold Stock - Held that:- We are of the considered view that some allowance has to be given for variation in stock of gold on account of use of gold in manufacturing of diamond studded jewellery. Accordingly, we delete 40% of the addition on account of variation caused by use of gold in manufacturing of diamond studded jewellery. Accordingly, we confirm the addition to the extent of 60% made by the Commissioner of Income Tax (Appeals). - Decided partly in favour of assessee Difference in stock of Silver - Held that:- AR has raised similar plea as was raised in case of difference in stock of gold. For the similar reasons, we restrict the addition to the extent of 60% made by the authorities below - Decided partly in favour of assessee Addition of 50% of donations - Held that:- Assessing Officer made addition of 50% of donations made. Before the Commissioner of Income Tax (Appeals) it was submitted that during the year, the assessee has given donation of ₹ 5,000/- to the School. Inadvertently advertising expenses of ₹ 3,000/- paid to Manthan Publications was included under the head ‘Donations’. Thus, the actual donation is only ₹ 5,000/-. The Commissioner of Income Tax (Appeals) made addition of the entire donation amount. We are of the considered view that the donation has been made by the assessee to a school for education, which is a charitable activity. Accordingly, we delete the addition of ₹ 5,000/- and allow this ground of appeal. Addition on account of cash purchases - Held that:- The Assessing Officer has taken the yearend total of cash purchases as ₹ 7,06,070/- once again as a separate item of cash purchase. The silver ingots purchased at Kalbadevi by cash amounting to ₹ 1,89,343/- on 14.08.2002 stands repeated at least thrice instead of as a single transaction. Similarly, silver tukda payments made in cash amounting to ₹ 1,95,270/- paid on 17.08.2002 have been duplicated in Annexure 3 as well as 6. The last 4 items in annexure 3 (R. Nos. 250, 321, 335 & 441) have been supposedly taken as cash purchases, but the appellant has clarified that the amounts represent cash deposited into the Karad Urban Co-operative Bank account and are not cash purchases. This has been verified to be correct from the copy of the Karad Urban Co-operative Bank account filed before me. Consequently, taking into my factual findings and the remand report of the Assessing Officer, the addition that stands confirmed is ₹ 1,11,583/- (20% of 9,57,913). - Decided in favour of assessee in part Addition u/s. 40A(3) - CIT(A) deleted part addition - Held that:- Commissioner of Income Tax (Appeals) has observed in his order that the assessee has not been able to show compelling reasons for making cash payments vide receipt no. 247 dated 21.10.2002 for ₹ 23,855/-, receipt no. 232 dated 20.11.2002 for ₹ 21,375/- and receipt no. 452 dated 31.03.2002 for ₹ 62,500/- aggregating to ₹ 1,07,730/-. The Commissioner of Income Tax (Appeals) disallowed 20% of the said amount under the provisions of section 40A(3) of the Act. The ld. AR has not been able to justify cash payments of ₹ 1,07,730/-. Accordingly, we uphold the findings of Commissioner of Income Tax (Appeals) on this ground and dismiss this ground of appeal of the assessee. - Decided against assessee Addition of cash deposit - CIT(A) deleted part addition - Held that:- the total cash deposits found representing sale proceeds of jewellery inclusive of this amount in ₹ 4,27,100/-, which is found to be accounted for in the bifurcation submitted to the Assessing Officer regarding cash sales of jewellery, amounting to ₹ 11,24,308/-. So far as cash deposits relating to sale of agricultural produce is concerned, ever if we consider the amount of ₹ 7,45,630/- as cash received on this account as per para 19.2 supra, the total cash deposits from sale of agriculture produce (inclusive of ₹ 3,85,000/- above) comes to ₹ 11,30,630/- Since the gross agricultural income, as per the appellant's books, and as accepted by the Assessing Officer is ₹ 11,00,000/-, what survives for addition is a sum of ₹ 30,630/-. - Decided partly in favour of assessee Unexplained Investment in flat at Dadar, Mumbai - Held that:- Commissioner of Income Tax (Appeals) deleted the remaining amount of ₹ 13,00,000/- on the presumption that the Assessing Officer has not brought anything on record to show that the assessee was not having sufficient own funds to pay the balance purchase consideration. We do not find any error in the findings of Commissioner of Income Tax (Appeals) in deleting the remaining amount of ₹ 13,00,000/-. The assessee is engaged in the business of manufacturing diamond studded jewellery since 1993. The assessee must be having some savings and own funds for investment in flat. - Decided against revenue Addition made on account of commission paid to selling agents - CIT(A) deleted the addition - Held that:- Assessing Officer disallowed the claim of assessee on the ground that it is supported by self made vouchers. The Commissioner of Income Tax (Appeals) in his order has given a categoric finding that on 03.01.2006 the assessee had furnished commission credit memos in the form of Paper Book before the Assessing Officer. Since the assessee is not maintaining any show room, payment of commission on sales made through agent is justified. The ld. DR has not been able to controvert the findings of Commissioner of Income Tax (Appeals). We do not find any error in the findings of Commissioner of Income Tax (Appeals) in deleting the addition on account of payment of commission to selling agent. - Decided against revenue Addition made on account of unexplained investment in purchase of NSC - CIT(A) deleted the addition - Held that:- During the proceedings before the Commissioner of Income Tax (Appeals), the assessee explained that the interest income of ₹ 25,375/- includes interest on investment in ICICI deposits of ₹ 10,000/-, ICICI Safety Bonds of ₹ 20,000/-, NSC of ₹ 10,000/- and PPF account ₹ 1,51,835/-. In the Profit & Loss Account, it was inadvertently mentioned as interest on NSCs, whereas the interest was from aforesaid various deposits. The explanation furnished by the assessee was found genuine by the Commissioner of Income Tax (Appeals) and accordingly, the addition of ₹ 2,50,000/- was deleted. The Commissioner of Income Tax (Appeals) has deleted the addition after examination of documents on record. We do not find any error in deleting the aforesaid addition by Commissioner of Income Tax (Appeals). The ld. DR has not been able to controvert the findings of Commissioner of Income Tax (Appeals) - Decided against revenue Unexplained cash credit in the bank accounts - CIT(A) deleted the addition - Held that:- Commissioner of Income Tax (Appeals) has deleted the additions after verification of the bank account and the transactions. The Assessing Officer had made addition in an arbitrary and unjustified manner without verifying the bank accounts of the assessee. The Commissioner of Income Tax (Appeals) has observed in his order that the Assessing Officer has deliberately ignored the information furnished by the assessee. The exercise which Assessing Officer has failed to perform has been done by the Commissioner of Income Tax (Appeals). Thus, in view of factual findings given by the Commissioner of Income Tax (Appeals) after examination of bank accounts and other relevant documents, we do not find any infirmity in the order of Commissioner of Income Tax (Appeals) in deleting the additions in respect of unexplained cash credit in the bank accounts of the assessee.- Decided against revenue
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2016 (1) TMI 567
TDS u/s 194C - Disallowance u/s 40(a)(ia) - non deduction of tds on payment to sub-contractors as the amount of payment exceeded ₹ 20,000/- on each - whether the provision of section 40(a)(ia) is attracted only in respect of payments which is actually payable as at the end of the year and not which is paid during the year? - CIT(A) rejected additional evidence presented - Held that:- As for assessee argument that the liability u/s.40(a)(ia) is restricted to the amount outstanding at the end of the year is concerned, the Pune Benches of the Tribunal in the case of Vinay Ashwinikumar Joneja Vs. ITO [2013 (11) TMI 1243 - ITAT PUNE ] following the decision of Hon’ble Calcutta High Court and Hon’ble Gujarat High Court are consistently taking the view that provisions of section 40(a)(ia) are attracted to the whole amount incurred as expenditure during the year on which no tax has been deducted. The same is not restricted to only the amount payable at the end of the year. Therefore, the first limb of the argument by the Ld. Counsel for the assessee is rejected. So far as the second limb of the argument of the Ld. Counsel for the assessee that the sub contractors have furnished Form 15G and therefore there is no liability to deduct tax is concerned, we find the Ld.CIT(A) did not accept the additional evidences filed before him on the ground that assessee had not explained the reasons for non furnishing of the same before the AO. CIT(A) should not have rejected the additional evidences filed before him. Under these circumstances, we restore this issue to the file of the AO with a direction to examine the 15G forms submitted by the concerned sub-contractors and decide the issue as per fact and law after giving due opportunity of being heard to the assessee So far as the observation of Ld.CIT(A) that the assessee is not entitled to prefer an appeal before him since the assessee has admitted before the AO for such addition u/s.40(a)(ia) is concerned, we find the Hon’ble Bombay High Court in the case of Nirmala L. Mehta (2004 (4) TMI 43 - BOMBAY High Court) following the decision of the Hon’ble Supreme Court in the case of The Amalgamated Coalfield Ltd. Vs. The Janapada Sabha, Chhindwara [1962 (9) TMI 60 - SUPREME COURT OF INDIA ] has held that acquiescence to an illegal tax for a long time is not a ground for denying the party the relief that he is entitled to. Thus we restore this issue to the file of the AO with a direction to decide the issue afresh in the light of the 15G forms submitted by the sub-contractors to whom the assessee has made payments exceeding ₹ 20,000/- without deduction of tax. The AO shall decide the issue afresh - Decided partly in favour of assessee for statistical purposes.
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2016 (1) TMI 566
TDS u/s 194I - non deduction of TDS on the amount paid to the lessor towards lease premium - whether the said amount paid was not in nature of rent covered u/s 194I? - CIT(A) delted the addition - Held that:- We have observed that the assessee company has made payment to CIDCO towards lease premium for plot no 166 in Sector 27 of Belapuron on 5.5.2009 which is leased to the assessee company by CIDCO for 60 years , which in our considered opinion is for acquisition of capital asset being long term holding rights in the afore-stated plot. The Mumbai Tribunal in DCIT v. Paradise Infra-con Private Limited (2014 (7) TMI 386 - ITAT MUMBAI ) on identical facts has held that the lease premium to CIDCO is capital expenditure to acquire land with substantial right to construct and could not be considered as rent to be covered u/s 194I of the Act and hence no TDS is to be deducted on the same which we Respectfully follow in the instant appeal as the facts are identical. We hereby affirm the orders of the CIT(A) deleting the additions made by the AO on accounts of defaults u/s 201(1) and 201(1A) of the Act. - Decided in favour of assessee.
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2016 (1) TMI 565
Unexplained cash credit - assessee has failed to prove that how he received such share application money and has booked the same only by way book entry - CIT(A) deleted the addition - Held that:- CIT(A) agreed with the plea of assessee that since said sums were credited in the books of account of assessee in A.Ys. 2006-07. In 2008-09, these cannot be treated as unexplained cash credits u/s. 68 in A.Y. under consideration. Assessee is at liberty to take legal argument at any stage in support of his case even if he has admitted the same before Assessing Officer as discussed above. In view of above, the addition of said amounts aggregating to ₹ 1,30,20,026/- could not be held as unexplained under the provisions of Section 68 of the Act and same were rightly deleted by CIT(A) with a direction to Assessing Officer to initiate necessary steps to bring the relevant amounts to tax u/s. 68 in respective assessment years - Decided against revenue
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2016 (1) TMI 564
Denial of deduction being interest on a housing loan, in the computation of his income u/s.22 - Held that:- A.R. during hearing, would take us through the interest certificate issued by the concerned bank, which clearly reflects the assessee’s name as among the names of the borrowers and, in fact, in the first place (PB pg. 5), i.e., along with that of his spouse as the second borrower. Further, in first appeal, the ld. CIT(A) specifically asked the assessee if his case was that the investment in the house was made by him in the name of his wife, and to which he categorically denied. We see no reason for the disallowance in the circumstances and, accordingly, direct its deletion. Denial of the cost of improvement - Held that:- Any addition and/or alteration to the house, enhancing its functional utility, so as to qualify as an improvement, would also require being notified to the housing society or even approval of the relevant authorities. In fact, apart from nonspecification of the work, so that the very basis of the assessee’s claim remains unknown, the certificate speaks of the renovation work having been carried out during the years 1997-98 and 2001-02, implying the relevant financial years. How could renovation be carried out in f.y. 1997-98, whereat the house was, by own admission, purchased? The additional loan of ₹ 2 lacs from the bank was sanctioned on 06/9/2001 (PB pg. 8), which is claimed to be the source of the investment, with even the assessee claiming the improvement to have been carried out in the year 2001, contradicting the said certificate. For the reasons afore-stated, we are inclined to be in agreement with the Revenue of the assessee as having been unable to establish its claim of having undertaken improvement of its house in 2001. Deduction u/s.54 on the capital gains denied - Held that:- Assessee being not eligible for deduction u/s.54 in view of the non-satisfaction of the primary condition of acquisition of house property within the time period stipulated u/s.54(1). The investment of the capital gains therein, naturally, is to be within this time period, for which a mechanism is provided. This represents the second limb of the provision; the return of income for the relevant year being, it may be appreciated, required by law to be filed by the due date u/s. 139(1). The assessee’s claim for deduction u/s. 54, which extends up to the entire LTCG, accordingly, fails.
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Customs
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2016 (1) TMI 555
'Conversion' of Shipping Bill from one scheme to another - High Court [2007 (3) TMI 272 - BOMBAY HIGH COURT] has sustain the order of Tribunal allowing the amendment in the shipping Bil from one scheme of another - SC dismissed the revenue appeal after condoning the delay.
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2016 (1) TMI 554
Valuation - inclusion of payment of lumpsum fee towards technical knowhow fee, drawing and design fee and engineering services - Held that:- The adjudicating authority itself in his order clearly says that the relationship of the joint venture company where the relationship between the supplier and the appellant has not influenced the price of import and in fact accepted the transaction value except for loading the technical knowhow fee, drawing and design fee and engineering services fee. However, we find that the Hon’ble Supreme Court LB decision in the case of Commissioner of Customs, Mumbai Vs. Can Pack India Pvt. Ltd. [2015 (9) TMI 457 - SUPREME COURT] has upheld the Tribunal’s order and dismissed the Revenue appeal. By respectfully following the Apex Court decision and also maintaining this Tribunal’s decision referred above, we hold that the technical knowhow, drawing and design fee and engineering services fee, are not includable in the transaction value of the imported goods. - Decided in favor of assessee.
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2016 (1) TMI 553
Misdeclaration of Retail Sale Price (R.S.P) in order to avoid payment of actual Customs duty / CVD - valuation of import of cellular phones - Since the goods are packaged commodity, in terms of Section 3 (2) of Customs Tariff Act read with Section 4A of Central Excise Act, on importation of the said goods these are liable to be affixed with M.R.P and assessed accordingly for determining the CVD, after allowing abatement as per the notification issued under Section 4A of Central Excise Act. Held that:- It is peculiar case where there is no valuation dispute on the price paid or payable on the imported goods for determining transaction value under Section 14 but the revenue has only disputed RSP declared on the imported goods. When the Customs authorities disputed the RSP declared by the appellants, the adjudicating authority assumed the role of Central Excise authority and any redetermination of RSP has to be strictly in accordance with Section 4A of Central Excise Act read with RSP Rules 2008 and SWM Act. The entire proceedings of redetermining the R.S.P. on the imported goods carried out by the Customs is purely based on the contemporaneous RSP noticed as per the NIDB data and stray market enquiry of other cell phones importers. - adjudicating authority in his findings at para-33 held that he is not concerned on what price the importer have ultimately sold their goods in retail but concerned only with correct R.S.P and alleged that appellants have not declared the correct R.S.P. Once the adjudicating authority disputes the R.S.P, the burden is on the Revenue to establish at what price such goods were sold by the appellants to the ultimate consumer. We find voluminous records were submitted by the appellant before the adjudicating authority in support of retail sale price of their goods. We direct the adjudicating authority to verify the details of R.S.P of the imported goods cleared by the appellants and see whether the appellants have sold the goods as per the declared RSP or whether they have altered the RSP or sold it at higher price than what was declared on RSP of such goods and also to verify whether any flow back received for the retail supplier and determine the R.S.P strictly in accordance with Section 4A read with Rule 4 of RSP Rules 2008 read with SWM Act. We hold that no contemporaneous RSP is applicable under Section 4A. The present remand is only for limited purpose as indicated above. If the adjudicating authority is not able to establish any of the conditions specified in Section 4A/RSP Rules then the declared RSP shall be accepted. Matter remanded back - Decided partly in favor of assessee.
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2016 (1) TMI 552
Over-valuation of rough diamonds imported from Dubai/Hong Kong - consignments were cleared at 'nil' rate of duty under Notification No. 21/2002-Cus. dated 1.3.2002 as amended. - Allegation that the said consignments were meant for laundering money and money remitted overseas against such consignments were hawala payments either to cover the differential cost of the other imports or to park money abroad for other unlawful activities. Held that:- Initially in the show cause notice the DRI has alleged that the overvaluation of the rough diamonds is for the purpose of money laundering, remittance of money overseas to cover the differential cost of other imports or to park money abroad for other unlawful activities. However in the entire investigation, not a tip of evidence in support of this allegation was adduced. There is no evidence of laundering of money, parking or to cover the differential cost of other imports or any unlawful activities unearthed on the part of appellants. This also makes the case of the appellant strong that the value declared by them is solely for the purpose of remittance towards the import of rough diamonds. There is no mis-declaration of the value of the rough diamonds in question - since mis-declaration of value is not established. It is not required to consider whether the mis-declaration of value would render the goods as 'prohibited goods'. - Confiscation and penalty set aside - Decided in favor of appellants.
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2016 (1) TMI 551
Under valuation and mis-declaration of the goods namely 'AB King Pro, 5 in 1 Air-O-Space Sofa, Slim-N-Lift (Female Shorts), Magic Bullet (Food Processors), Sauna Belt (Fat Reduce Belt), Tool Kits' - In one of the statement undervaluation was admitted by Shri Narendra Mehta, proprietor of importer firm. However, the said statement was retracted. Undervaluation was further supported by the difference in the value declared to the Custom, sale price of importer to M/s. Telebrand and sale price of the Telebrand to their ultimate customers, the difference thereof was also considered for alleging the undervaluation. Held that:- at the time of assessment and clearance of the goods, the customs officers have already enhanced the value considering the contemporaneous value of the identical goods. As per Rule 5 and 6 of the Customs Valuations Rules, 1988 where there are two or more values of contemporaneous imports are available the lowest of such value has to be adopted. - herefore even though it is assumed that price of the M/s. Shreenath and M/s. GNG & Co. are correct, the price of contemporaneous goods adopted at the time of assessment and clearance of the goods which is lowest between the two contemporaneous value, the further enhancement cannot be done. In this legal position, the adjudicating authority has erred in applying the alleged value of M/s. Shreenath and M/s. GNG & Co. for enhancement of the value. In the case of present appellant, this legal position has been reinforced by the case of SRK enterprises [2012 (11) TMI 735 - CESTAT, MUMBAI] The impugned order has given much weightage to the fact that there is substantial difference in price declared to the customs, price at which goods sold to M/s. Telebrand India and price at which imported goods were sold by M/s. Telebrand to the ultimate customers. On this basis Ld. Commissioner observed that this difference in price shows that prices of the imported goods were undervalued. In this regard, it is our observation that firstly even if there is difference between import price and sale price of the said goods in the domestic market, the difference cannot be made the basis for holding that the price of the imported goods has been undervalued. In the present case there is no material evidence on record to show that there is flow back of amount over and above the sale value between importer and M/s. Telebrand India. Demand set aside - Decided in favor of appellants.
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Corporate Laws
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2016 (1) TMI 548
Sanction of Amalgamation and Arrangement - composite scheme - Held that:- In terms of provisions of Section 394 of the Act, there could be amalgamation of any number of companies in one company but not that part of business of one company 'A' is to be merged in company 'B' and other companies are sought to be merged with Company-A. Both the schemes independently have no connection whatsoever as these are independent schemes. Balance-sheets, figures and financial of all the companies would be different. The shareholders sitting in the Board rooms may approve or disapprove anything but it is ultimately for the Company Court to see as to whether the process followed can be approved or not. Section 392 of the Act authorises to the Company Court to pass any order at the time or any time after sanction of the scheme to monitor as to whether the scheme is being properly implemented or not. In case the object is not achieved, the company can even be ordered to be wound up. If a composite scheme involving different companies with different objects is presented before the Court, it will not be possible for the Court to examine as to whether the object sought to be achieved by the first part in the scheme has, in fact, been achieved or not. After the implementation of part one of the scheme, shareholding pattern, the business, the profits etc. of the transferor and the transferee company will certainly have a change. Those figures are required to be presented before the members and shareholders of the resultant company and the other companies, which are sought to be merged or demerged with the resultant company. Merely because, as is sought to be claimed by learned counsel for the petitioners that, there may be some delay in the process of sanctioning the scheme will not be a good ground to approve a composite scheme involving different companies and different aspects having no relations inter-se. If a composite petition is to be filed, it should be arrangement between two or more companies not different arrangements involving different companies. No doubt, the Court will not examine the business principles or commercial wisdom of the members of the companies at the time of sanctioning of scheme, but still compliance of procedural requirement is within the domain and this would fall in that. It is the duty of the Company Court to ensure presentation of correct facts, numbers, figures before the members and the creditors of the company. The companies have different causes of actions and may have to approach the Court independently. Hence, the petitions seeking approval of kind of Scheme presented before the Court, cannot be entertained.
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2016 (1) TMI 547
Sanction of Amalgamation and Arrangement - Scheme of Amalgamation and Arrangement is hereby sanctioned with the direction to follow all the procedural formalities.
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Service Tax
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2016 (1) TMI 563
Works contract service for pipeline laying for water supply - erection, commissioning or installation of plant etc. - Held that:- Prima-facie, the works executed by the appellant cannot be covered under the category of (a) of works contract service, namely, errection, commissioning or installation of plant and machinery etc.. Considering the detailed findings by the Larger Bench of this Tribunal in the case of M/s Lanco Infratech Ltd, [2015 (5) TMI 37 - CESTAT BANGALORE (LB)], we find that the appellant has made out a case for full waiver of adjudicated demand. - Stay granted.
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2016 (1) TMI 562
Commission agent for ginned cotton - Scope of exemption - agricultural produce or not - Notification No. 13/2003-ST dated 20.06.2003 - business auxiliary services - Held that:- Cotton fibre obtained by ginning cotton plucked from cotton plants is nothing but raw cotton fibre because there cannot be "rawer" form of cotton fibre obtained from "cotton-with-seeds" plucked from cotton plants. We also take note of the exclusionary part of the definition of agricultural produce which states that it "does not include manufactured products such as sugar, edible oils, processed food and processed tobacco" as also of the no-further-processing requirement contained in the said definition and are of the view that holistic, harmonious and fair construction of the definition of agricultural produce leads to the inescapable conclusion that while ginned cotton would be covered within the scope of "raw vegetable fibres such as cotton" and hence qualify to be called "agricultural produce", ginned cotton if subjected to any further processes like carding etc. would get out of the purview of "agricultural produce". As appellant is a commission agent of ginned cotton, it is eligible for the benefit of Notification No. 13/2003-ST. - Decided in favor of assessee.
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Central Excise
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2016 (1) TMI 561
Cenvat credit - input services - CHA services, Courier Services and C & F services. - export of goods and sale of goods through depot - credit upto the place of removal - Held that:- in a recent Board's circular No.999/6/2015-CX dt. 28.2.2015 clarified that in the case of export, place of removal is the port and also categorically clarified that eligibility of cenvat credit shall be determined accordingly. Therefore, the appellants are eligible for input service credit on CHA & Courier services availed on export of final products. As regards denial of credit on C&F Agents services - Held that:- appellants are manufacturer of specified goods and have paid excise duty on the price at which the goods are sold through their depots and C&F agents. As per Section 4 (3) (c) (ii), the 'place of removal' includes depot as well as premises of "consignment agents". By virtue of statutory provisions under Section 4, appellants are eligible for C&F Agents services and availed input credit on the commission paid to C&F agents. Appellants are eligible for cenvat credit on the input services viz. CHA services, Courier Services and the C&F Agents services. The demand is liable to be set aside. Since the demands are set aside, the question of imposing penalty does not arise. - Decided in favor of assessee.
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2016 (1) TMI 560
Clandestine manufacturing and clearing of the said M.S. Ingots - shortage of raw materials and excess of finished goods - the case of the revenue is that appellant had not recorded the production in their factory premises and clandestinely removed the goods. To come to such conclusion they relied upon the electricity consumption and the statements of various transporters. - Held that:- there is no evidence which indicated that appellant had procured raw materials which were unaccounted. There is an addendum issued to the show-cause notice which indicates that appellant had procured additional raw material from M/s. Sidhbali which was unaccounted but we find that the said allegation is not supporting the case when various personnel of the main appellant were confronted with such statement of M/s. Sidhbali, stated that they have not received the goods from M/s. Sidhbali. Further, we find that sponge iron is not the only input required for the manufacture of M.S .Ingots, Revenue has not brought on records to show that various other inputs which are required for manufacturing of M.S. Ingots were also procured clandestinely and were unaccounted. Secondly, the allegations of clandestine removal of manufactured goods is very serious allegation and needs to be substantiated by Revenue authorities with tenable evidence to show that there was large scale manufacturing of commodities. As regards the demands confirmed by the adjudicating authority in respect of shortage of goods, learned Counsel fairly submits that they are not contesting the issue but submits that penalty imposed be set aside. In view of the foregoing, we hold that except for the confirmation of demand on the shortages as noticed by the adjudicating authority we set aside the impugned order confirming the demands raised on the appellant as regards clandestine removal of finished goods. As we have set aside the demands raised, we find that there is no reason to visit the appellants with any penalty. Decided substantially in favor of assessee.
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2016 (1) TMI 559
Cenvat Credit - Duty paying documents - certified copies of Central Excise invoices and bill of entry, which are attested photocopies of the originals. - Held that:- during the material period in this appeal, there were no provisions for relaxation and availment of cenvat credit on attested photocopies of the invoice or bill of entry, as the case may be. Extended period of limitation - Held that:- the cenvat credit was availed on the attested photocopy of the invoice and the bill of entry which, presumably must not have been submitted along with the returns filed with the authorities. In view of this extended period which has been invoked seems to be correct. Demand confirmed - Decided against the assessee.
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2016 (1) TMI 558
Classification of printed labels - articles of “paper and paper board” - classification under 4821.00 or 4823.90 of CETA - Undisputedly the activities carried out by the Munger factory was limited to cutting of big size labels manufactured in their other unit at Tiruvottiyur. Also, it is not in controversy that further processes were carried out on the said cut/sized labels at the factory of M/s.Surya Tobacco Co.Ltd., Nepal so as to convert into packing material. The authorities below, considering the processes carried out at Munger Unit as well as at the Nepal unit arrived at the conclusion that the resultant product is dutiable under Sub-Heading 4823.00 of CETA, 1985 Held that:- on similar issue, for the subsequent period, the ld. Commissioner(Appeals) has accepted their stand and decided the issue in their favour after taking into consideration the meaning of labels as per the HSN. - Technically, it is also noted that the goods continue to conform to the description of “paper board labels of all kinds” within the meaning of Sub-Heading 4821.00 of the Central Excise Tariff Act - Revenue has accepted the aforesaid Order-in-Appeal and consequential refund was sanctioned/allowed to the appellant. - Demand set aside - Decided against the assessee.
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2016 (1) TMI 557
Condonation of Delay in filing the appeals by the revenue - The delay is for the reason that the Review Committee of Commissioners accepted the impugned orders. However, thereafter the Review Committee reviewed its own decision and ordered to file appeal in terms of Section 35E(1) of the Central Excise Act, 1944. - The question to be considered is whether the decision of review in terms of Section 35E(1) is an administrative function exercised by the Committee and which can be changed/reviewed by the Committee. Held that:- the High Court of Karnataka held that the review of its earlier decision of the Committee of Commissioners at the instance of Chief Commissioner is one without the authority of law. - the law only provides for review the order by a Committee of Commissioners. The law does not provide that the Chief Commissioner can sit over the order of the Committee of Commissioners and given further directions to file appeal or to reconsider the matter. Whereas in the case of Madura Coats, the Hon'ble High Court found that there is no explicit provision in law to prevent from constituting a fresh review committee for deciding the matter which has already been decided. A fresh decision by the same committee is valid in law. - Considering the circumstances, we allow the delay in the present case. - Delay condoned - Decided in favor of assessee.
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2016 (1) TMI 556
Demand of duty on waste of packages and container cleared as scrap - Held that:- During the process of manufacture some wastage of packaging material occurs which is not useful and rejected. This being only charge against the appellant and there being no 'manufacture' we hold that the demand is not sustainable. - Demand set aside.
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CST, VAT & Sales Tax
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2016 (1) TMI 550
Detention of trucks on the premise that the trucks were carrying beetlenuts which the authorities believed was for sale in the State of Gujarat. Since no tax was paid, the goods alongwith trucks have been seized. - petitioner submitted that the goods were in transit through the State for sale at Div and that, therefore, would not invite any duty. - Held that:- Upon the petitioner depositing the sum of ₹ 65,000/- lacs for each truck and further providing security to the extent of 25% thereof, the trucks and the goods shall be released. The respondents shall initiate the proceedings for assessment of tax as early as possible and complete the same preferably by 31.03.2016.
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2016 (1) TMI 549
Validity of order passed where the petitioner did not produce the books of accounts - revenue submitted that while issuing notices dated 17.07.2015, the first respondent specifically directed the petitioner to produce the books of accounts. However, without complying with the said direction, the petitioner requested an opportunity of personal hearing. Hence, finding no other option, the first respondent passed the impugned assessment orders for the years in question. Held that:- since the petitioner is involved in the business of works contract, it is necessary for the Assessing Officer to verify all the books of accounts before finalising the assessment. After elaborate contentions, learned counsel for the petitioner submitted that the petitioner is ready and willing to submit the entire records as required to the authority concerned within the time frame fixed by this court. - in order to provide yet another opportunity to the petitioner, the impugned assessment orders set aside - matter remanded back.
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