Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
January 30, 2016
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Service Tax
Central Excise
CST, VAT & Sales Tax
Wealth tax
Indian Laws
TMI SMS
Articles
News
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First Revised Estimates of National Income, Consumption Expenditure, Saving and Capital Formation, 2014-15
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NITI sorts out the pending issues of Telanganawith the Ministries of Union Government
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Change In Tariff Value of Crude Palm Oil, Rbd Palm Oil, Others – Palm Oil, Crude Palmolein, Rbd Palmolein, Others – Palmolein, Crude Soyabean Oil, Brass Scrap (All Grades), Poppy Seeds, Areca Nuts, Gold and Silver Notified
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Integrated Central Excise and Service Tax Audit Manual 2015 (CESTAM-2015)
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RBI Reference Rate for US $
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RBI to announce Sixth Bi-monthly Monetary Policy Review, 2015-16 On Tuesday, February 02, 2016
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To mark the completion of two years of statutory status of PFRDA, National Pension System (NPS) Service Week will be observed from 1st February to 6th February, 2016 dedicated to service-orientation towards the subscribers and building awareness and improved information dissemination
Notifications
Customs
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4/2016 - dated
29-1-2016
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ADD
Seeks to amend notification No. 133/2008- Customs dated 12.12.2008
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3/2016 - dated
28-1-2016
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ADD
Seeks to rescind notification No. 10/2010 - Customs dated 19th February, 2010
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2/2016 - dated
28-1-2016
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ADD
Seeks to levy definitive anti-dumping duty on Melamine, originating in, or exported from the People’s Republic of China, for a period of five years
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1/2016 - dated
28-1-2016
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ADD
Seeks to levy definitive anti-dumping duty on Mulberry Raw Silk (not thrown) of grade 3A and below, originating in, or exported from the People’s Republic of China, for a period of five years.
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6/2016 - dated
28-1-2016
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Cus
Seeks to further amend notification No. 12/2012- Customs dated 17.03.2012
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16/2016 - dated
29-1-2016
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Cus (NT)
Tariff Value Notification in respect of fixation of Tariff Value of Edible Oil, Brass, Poppy Seed, Areca Nut, Gold and Sliver
DGFT
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34/2015-2020 - dated
29-1-2016
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FTP
Amendment in para 2.05 (c) of Foreign Trade Policy (2015-20)
Income Tax
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S.O. 3457(E) - dated
17-12-2015
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IT
U/s. 35AC, IT ACT, 1961 - Eligible Projects or Schemes, Expenditure On - Dr. Ambedkar Vanvasi Kalyan Trust, Surat, Gujarat
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S.O. 3456(E) - dated
17-12-2015
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IT
U/s. 35AC, IT ACT, 1961 - Eligible Projects or Schemes, Expenditure On - Medical Research Foundation, Chennai
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S.O. 3455(E) - dated
17-12-2015
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IT
U/s. 35AC, IT ACT, 1961 - Eligible Projects or Schemes, Expenditure On - Blind Persons Association, Kolkata
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S.O. 3454(E) - dated
17-12-2015
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IT
U/s. 35AC, IT ACT, 1961 - Eligible Projects or Schemes, Expenditure On - Gandhigram Trust, Dindigul, Tamilnadu
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S.O. 3453(E) - dated
17-12-2015
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IT
U/s. 35AC, IT ACT, 1961 - Eligible Projects or Schemes, Expenditure On – The Banyan, Chennai
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S.O. 3452(E) - dated
17-12-2015
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IT
U/s. 35AC, IT ACT, 1961 - Eligible Projects or Schemes, Expenditure On – Sevalaya, Sevalaya Campus, Thiruninravur
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S.O. 3451(E) - dated
17-12-2015
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IT
U/s. 35AC, IT ACT, 1961 - Eligible Projects or Schemes, Expenditure On – The Bombay Community Public Trust, Mumbai
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S.O. 3450(E) - dated
17-12-2015
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IT
U/s. 35AC, IT ACT, 1961 - Eligible Projects or Schemes, Expenditure On – Society for Education of the Crippled (Child and Adult), Bombay
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S.O. 3449(E) - dated
17-12-2015
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IT
U/s. 35AC, IT ACT, 1961 - Eligible Projects or Schemes, Expenditure On – Tara Sansthan, Udaipur, Rajasthan
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S.O. 3448(E) - dated
17-12-2015
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IT
U/s. 35AC, IT ACT, 1961 - Eligible Projects or Schemes, Expenditure On – Manavseva Lokkalyan Mahasangh, Nagpur, Maharashtra
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S.O. 3447(E) - dated
17-12-2015
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IT
U/s. 35AC, IT ACT, 1961 - Eligible Projects or Schemes, Expenditure On – The Spastics Society of Tamil Nadu, Chennai, Tamil Nadu
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S.O. 3446(E) - dated
17-12-2015
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IT
U/s. 35AC, IT ACT, 1961 - Eligible Projects or Schemes, Expenditure On – Freedom Fighter Maulana Hussain Ahmad Madani Educational Trust, Saharanpur, Uttar Pradesh
Circulars / Instructions / Orders
Highlights / Catch Notes
Income Tax
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Reopening of assessment - allotment of shares at high premium - Prima facie, the facts appear to be glaring - We are not inclined to terminate the assessment proceedings at this stage on the grounds pressed in service by the petitioners. - HC
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Short deduction of tds - It is settled position of law that a short deduction of tax at source, by itself does not result in a legally sustainable demand under sec. 201(1) and 201(1A). - AT
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Non deducting of TDS on payment to non-media entity - The payment in which there is an income element only in the commission of 1% which is part of the payment made by the assessee to the Radiant Media. - disallowance made by the AO was rightly restricted by the CIT(A) - AT
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Receipts for transfer of trademark - the amount of ₹ 1 crore received by the assessee on transfer of rights in trademark is a ‘capital receipt’ not liable for tax u/s. 45 under the provisions of section 55(2) - AT
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Addition u/s 69B as unexplained investment - arguments on behalf of the Assessee is that the document found in the course of search namely ‘Sanchakar Patrika’ is unsigned by the Assessee and thus just a mundane and extraneous piece of paper not intended to be acted upon - arguments rejected - additions confirmed - AT
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Disallowance u/s 14A - the expenditure relatable to making the investment and taking steps for its redemption and reinvestment involved an element of expenditure and in view of the provisions of Rule 8D(2)(iii) of the Rules, such expenditure is disallowable in the hands of the assessee. - AT
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Registration u/s 12A cancelled - since the amendment to section 12AA(3) of the Act has been specifically provided to be applicable to assessment year 2011-12 and onwards, the learned Commissioner of Income Tax cannot assume jurisdiction to cancel the registration from assessment year 2009-10 onwards - AT
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Succession of the firm - revaluation of assets - claim of depreciation - AO has not disputed the valuation adopted by the assessee, this rules out the applicability of Explanation-3 to Sec. 43 - depreciation on revalued assets allowed - AT
Customs
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Jurisdiction to sanction Refund - Customs authorities or SEZ authorities - Refund of additional duty - SEZ unit - The refund application shall be decided by the competent officer under the Customs Commissionerate, Surat - HC
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Refund claim - SEZ unit - Additional Commissioner, Customs, Surat returned the refund application of the petitioner on the ground that he has no authority to decide the same. - the competent authority under the Customs Commissionerate, Surat, is directed to decide the refund application upon being represented by the petitioner. - HC
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Validity of Complete and overall cap on the duty credit scrip - Incremental Export Incentivisation Scheme (“IEIS”) - misuse of the scheme - the 2013 Notification places no cap or restriction on the value of the IEIS scrip. - HC
Wealth-tax
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Inclusion of rented premises into wealth tax assessment - revenue yielding asset - section 2(ea)(i) nowhere requires that a commercial establishment or a complex could not be established in a house property but only provides that any property in the nature of commercial establishment or complex shall be excluded from deemed asset - AT
Service Tax
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Classification of service - Business Auxiliary Service (BAS) or Clearing and Forwarding agent (C&F) service - the taxing entry most specifically attracts an activity shall bring that service into the same class and no other class by any remote construction - AT
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Classification of Import of services from M/s. Society for Worldwide Interbank Financial Telecommunication (SWIFT) which is a non-resident entity, not having an office in India - reverse charge - demand of service tax confirmed - penalties set aside - AT
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Business Auxiliary service or not - activity of collection/dispatch of Speed Post/Export Delivery Letter etc. on behalf of the Post Office - Demand is dropped on the ground of Revenue neutral exercise - AT
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Cenvat Credit - demand of 8% on value of Exempted services - Rule 6 cannot be used as tool of oppression to extract the amount which is much beyond the remedial measure and what cannot be collected directly, cannot be collected indirectly, as well - AT
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Nature of activity - collection of octroi on behalf of the Municipal Corporation - cash management activity or not - Not covered by Banking and other Financial Services - revenue's appeal rejected - AT
Central Excise
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Valuation - captive consumption - Since the transaction value of the excisable goods is available and not all the excisable goods are captively consumed, the provisions of Rule 8 as prevailing during the relevant time will not apply to the assesses. - AT
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Valuation of Ceramic/ Glazed Tiles - Department is of the view that the clearances made by the appellant to customers like contractors schools, colleges, hospitals, hotels, builders, etc. are sales to the institutional buyers. Hence, these goods are assessable u/s 4 - Valuation was rightly done u/s 4A - AT
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Clandestine manufacture and removal of Aluminum Alloy ingots and Zinc Alloy ingots - the whole case is built up on data contained in the pen drive and certain statements of persons - it is necessary for the Revenue to support their interpretation by clear corroborative evidences and not by inferences and assumptions. - demand set aside - AT
VAT
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Maintenance of records for 5 years - The five year period to be reckoned from the last day of the financial year concerned or not - Revision proceedings based of records on the file is valid - HC
Case Laws:
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Income Tax
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2016 (1) TMI 992
Reopening of assessment - allotment of shares at high premium - reason to believe or tangible material to form an opinion - Held that:- The assessee company had issued share capital of ₹ 2.66 crores (rounded off) during the Financial Year 2010-11. The assessee had issued 60,000/- shares at a face value of ₹ 10 per share with a premium of ₹ 990/- per share. The Assessing Officer, on the basis of assets and liabilities furnished by the assessee company in its balance sheet, after computing the net worth of the company, noted that the share valuation of the assessee company would come to ₹ 33/-, whereas shares have been allotted at ₹ 1,000/- per share, i.e. at a premium of ₹ 967/- per share. On the basis of such working out, he recorded his reason to believe that income to the extent of Rs. ₹ 5.80 crores had escaped assessment. We do not find that the reasons are perverse or so untenable as to terminate the assessment at this stage on the ground that the Assessing Officer cannot be stated to have any reason to believe or tangible material to form such an opinion that income chargeable to tax had escaped assessment. Prima facie, the facts appear to be glaring. Whether the assessee will be able to discharge the minimal burden of establishing identity, source and creditworthiness of the depositors is a question not possible to answer without scrutiny. Whether the assessee had started its manufacturing activity and consequently its business operations so as to earn income or not are the issues which cannot be gone into at this stage and must be made part of the reopened assessment to be judged on the basis of evidence which may be brought on record. It is always open for the assessee company to contend before the assessing authority that there has not been over valuation of the allotted shares or that for any legal reasons, in any case, addition cannot be made in the hands of the assessee, despite such glaring facts. These are the issues in the realm of assessment, once it is allowed to be reopened. We are not inclined to terminate the assessment proceedings at this stage on the grounds pressed in service by the petitioners. Decided against the assessee.
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2016 (1) TMI 991
Disallowance of loss from purchase and sale of shares - CIT(A) treating it as speculation loss as assessed by Assessing Officer and not covering the case of the applicant within the Explanation to the provisions of section 73 - Held that:- From going through the main objects of the company we find that assessee’s main business is of dealing in shares, stocks, bonds etc. whereas under head of objects incidental or ancillary to the main object there are 41 types of activities and similarly under the head of other objects there are 43 types of activities which can be carried on by the assessee. The second condition of the explanation to section 73 refers to the principal business which is carried on by the assessee and in the case under appeal the principal business of the assessee is of purchase and sale of shares and the business of earning interest on loans and advances is covered under the ancillary and other objects and more so ever in the computation of income assessee is showing the interest income under the head income from other sources and not under the head income from business or profession because assessee is not running a non-banking financial company (NBFC) nor its main object was of finance and earning of income from giving loans else interest income from such loans and advances should have figured under the head profits and gains of business. Therefore, assessee’s business does not fulfill the condition no.2 of explanation to sec.73 of the Act. Further there has been an amendment made by Finance Act, 2015 w.e.f. 1.4.2015 where at the place of “principal business” fo which is banking has been substituted by “principal business of which the business is of trading in shares or banking”. This amendment itself conveys that business of trading in shares was not included in the explanation to sec.73 of the Act and assessee’s business is mainly of trading in shares as reflected from the main objects of the Memorandum of association and the audited financial statements. We are, therefore, of the view that assessee’s business is not covered under the explanation to section 73 of the Act and we find no reason to interfere with the order of ld. CIT(A) and we uphold the same. - Decided against assessee
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2016 (1) TMI 990
Short deduction of tds - demand under sec. 201(1) and 201(1A) - Held that:- The assessee being a public sector undertaking has deducted TDS at the rates prescribed under the Act and filed the necessary eTDS returns. The CPC –TDS, processed the return and computed the short deduction of tax by applying the 20% flat rate specified under sec. 206AA, merely based on the statements filed by the assessee, without being applying the higher of the three rates prescribed under sec. 206AA. It is settled position of law that a short deduction of tax at source, by itself does not result in a legally sustainable demand under sec. 201(1) and 201(1A). The taxes cannot be recovered once again from the assessee in a situation where the recipient of income has already paid the due taxes on such income. Unless, the A.O. verified himself that the recipient of income has not paid the tax on such income and also demonstrate that the rate applied by him was in accordance with the provisions of sec. 206AA, the assessee cannot be hold as assessee in default under sec. 201(1) and 201(1A). Therefore, we are of the opinion that the A.O./TDS officer was not correct in computing the short deduction of tax and interest, by applying flat rate of 20% tax. The CIT(A), without appreciating the facts, simply upheld the action of A.O./TDS officer. Therefore, we deem it appropriate to remit the issue back to the file of the A.O./TDS officer and direct the A.O. to examine the issue in the light of the discussions above, after affording an opportunity of hearing to the assessee. - Decided in favour of assessee for statistical purpose.
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2016 (1) TMI 989
Monetary limit - appeal filing before the ITAT - Held that:- It is noticed that the CBDT has issued Circular No.21 of 2015 dated 10.12.2015, vide which it has revised the monetary limit to ₹ 10,00,000/- for not filing the appeal before the Tribunal. From Clause 10 of the above circular it is clear that these instructions are applicable to the pending appeals also and there is clear cut instruction to the department to withdraw or not to press the appeals filed before the ITAT wherein tax effect is less than ₹ 10,00,000/-. These instructions are operative retrospectively to the pending appeals. Keeping in view the CBDT Circular No.21 of 2015 dated 10.12.2015 and also the provisions of Section 268A of Income Tax Act, 1961, we are of the view that the Revenue should not have filed the instant appeal before the Tribunal.
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2016 (1) TMI 988
Validity of the jurisdiction u/s 153C - Held that:- In the present case no incriminating material was unearthed during the course of search or requisition of document or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment. We, therefore, by keeping in view the ratio laid down by the Hon’ble Jurisdictional High Court in the aforesaid referred to case of CIT Vs Kabul Chawla ( 2015 (9) TMI 80 - DELHI HIGH COURT ) decide the case in favour of the assessee and against the revenue and hold that since no incriminating material was unearthed during the course of search, no addition could have been made to the income already assessed. Accordingly, the impugned order is set aside and the addition made by the AO is deleted. The facts related to the other years are similar as were involved in the assessment year 2004-05, the only difference is in the amount of addition made by the AO. - Decided in favour of assessee.
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2016 (1) TMI 987
Assessment u/s 153A - Deduction u/s 80IB denied - Held that:- It is an admitted fact that no incriminating materials were found during the course of search by the revenue in order to disturb the claim of deduction u/s 80IB of the Act which is given by way of a categorical finding by the Learned CIT(A) in his appellate order and which is also not controverted by the revenue before us. In the instant case, no incriminating materials are found relating to Asst Years 2003-04 and 2004-05 and hence the action of the Learned AO in disturbing the claim of deduction u/s 80IB of the Act cannot be appreciated. Denial of deduction u/s 80IB of the Act in the assessments framed u/s 153A of the Act for the Asst Years 2003-04 and 2004-05 without any incriminating materials found during the course of search with respect to those assessment years is not warranted and held as not in accordance with law. Accordingly, the grounds raised by the revenue in this regard for the assessment years 2003-04 and 2004-05 are dismissed. - Decided in favour of assessee. Also no disallowance u/s 14A of the Act could be made for the Asst Year 2004-05 by the Learned AO in the assessment framed u/s 153A of the Act in the absence of any incriminating materials found during the course of search with regard to the relevant assessment year and with regard to the relevant issue.- Decided in favour of assessee.
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2016 (1) TMI 986
Non deducting of TDS on payment to non-media entity - CIT(A) deleted the addition - Held that:- In the payment which the assessee is making to Radiant Media, the profit element is only in 1% of the payment and if at all the tax is to be deducted it should be deducted on that amount. The assessee has given the details of all the bills filed before the CIT(A) which show that out of the payment of ₹ 8,64,572/- paid by the assessee to the Radiant Media, the Radiant Media earned profit of ₹ 46,266/-. Therefore the assessee should have deducted tax on the amount which has the element of income, which worked out. The Assessing Officer action in treating the whole amount which was paid by the assessee to Radiant Media was not justified as it has already been subjected to deduction of tax at first level by the client and now it is in the form of reimbursement of payment to Radiant Media. The payment in which there is an income element only in the commission of 1% which is part of the payment made by the assessee to the Radiant Media. Accordingly, the disallowance made by the Assessing Officer was rightly restricted by the CIT(A). Therefore, the CIT(A) was justified in deleting the amount made on account of non-deduction of TDS on payment to non-media entity. This reasoned findings of the CIT(A) need no interference from our side. - Decided in favour of assessee.
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2016 (1) TMI 985
Rejection of books of accounts u/s 145(3) - addition on account of low net profit - CIT(A) deleted addition - Held that:- CIT(A) was fully justified in observing that the Assessing Officer was not justified in rejecting the assessee’s books result u/s 145(3) of the Act. The CIT(A) has also rightly observed that the action of Assessing Officer was also not justified in applying the provisions of Section 44AD since the assessee’s total turnover was ₹ 3.36 crores; accordingly, the CIT(A) has rightly deleted the addition. This reasoned factual finding needs no interference from our side. We uphold the same. - Decided in favour of assessee.
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2016 (1) TMI 984
Rejection of books of accounts - applicability of section 145 - CIT(A) deleting the application u/s145 - Held that:- AO has nowhere rejected the sales or purchase of assessee vis-ŕ-vis other manufacturing expenses incurred by assessee during the year. We find that AO, after rejecting the books of accounts, had presumed that no prudent business man would sell the goods less than the manufacturing cost. However, there is no restriction under any law that assessee cannot sale the product less than its manufacturing cost. Moreover, it was the first year of its business of the assessee and assessee was not having expert knowledge of its business intricacies. We further find that AO has disallowed the loss incurred by assessee without any rational ground. Whereas the AO had not pointed out any material defect in the books of accounts of the assessee, the mere fact that for certain reason, the assessee could not earn better margin of profit, cannot be the reason to believe that the assessee returned less profit than what it actually earned. Possibility of unstable market condition cannot be ruled out. The Tribunal, therefore, deleted the trading additions. We do not find any additional evidence having been admitted by the Ld. CIT(A) except comparative chart of expenses. The Ld. DR was unable to point out as to what was the fresh evidence on the basis of which the Ld. CIT(A) allowed relief to the assessee. Even the ground of appeal of the Revenue in this regard is very vague. - Decided in favour of assessee.
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2016 (1) TMI 983
Levy of penalty u/s. 271(1)(c) - addition made on the basis of DVO’s report - Held that:- The DVO’s report is merely an expression of opinion. Thus, on the basis of opinion and assumption no penalty u/s. 271(1)(c) is leviable. Offence of concealment is not proved in such situation which is the co-requirement for levy of penalty u/s. 271(1)(c) of the Act. Similarly, in the case of Sathe Biscuits Vs. DCIT (2012 (3) TMI 468 - ITAT PUNE) the Co-ordinate Bench has held that no penalty can be levied on the addition made on the basis of DVO’s report. - Decided in favour of assessee.
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2016 (1) TMI 982
Receipts for transfer of trademark - assessed as capital receipt or business income - Held that:- The assessee has acquired rights in trademarks/brands through family arrangement and settlement.It is a well settled law that goodwill and the trademarks are intangible assets and are shown as Assets in the balance sheet. Thus, any income generated on transfer of rights attached to capital assets is a capital receipt. The Commissioner of Income Tax (Appeals) has rightly rejected the findings of Assessing Officer in holding that the receipt of ₹ 1 crore by the assessee on transfer of trademarks is taxable u/s. 28(iv) as business income. As corollary to above findings we hold that the income generated from transfer of rights in trademarks to M/s. Thakur V. S. Bidi Works is a capital receipt. Whether the capital receipt is taxable u/s. 45 r.w.s. 55(2)(a)? - Held that:- In the case of CIT Vs. B. C. Srinivasa Setty (1981 (2) TMI 1 - SUPREME Court ) the Hon'ble Supreme Court of India has held that where goodwill is generated in a newly commenced business, it cannot be described as “asset” within the meaning of section 45 of the Act and thus, the transfer of goodwill initially generated in a business does not give rise to a capital gain for the purposes of income-tax. Thus, ratio laid down in the case of ‘goodwill’ squarely applies on ‘trademarks’ also, as both are intangible assets and are generated in similar manner over the period of time. In view of the facts of the case and the decisions referred above, we hold that the amount of ₹ 1 crore received by the assessee on transfer of rights in trademark is a ‘capital receipt’ not liable for tax u/s. 45 under the provisions of section 55(2) of the Act.
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2016 (1) TMI 981
Addition u/s 69B as unexplained investment - validity of assessment u/s 158BC(c) - arguments on behalf of the Assessee is that the document found in the course of search namely ‘Sanchakar Patrika’ is unsigned by the Assessee and thus just a mundane and extraneous piece of paper not intended to be acted upon - as per assessee the statement recorded under S. 132(4) during the course of search has been retracted. Notwithstanding, the evidentiary value of the statement stands rebutted by the valuation report of the deptt. valuer itself - Held that:- We do not find force in any of the arguments canvassed by assessee. We notice that impugned Sanchakar Patrika/ Agreement of sale/ MOU for sale/ Karar Patra; as may be called, is handwritten with rate @ 65 per sq.ft. is written in unequivocal terms in figure and words. The contents are handwritten in unambiguous terms. The impugned document is also signed by the sellers and witnessed. It is true that the Assessee has not signed the impugned document. But this fact can not be seen to be overriding. The overwhelming fact is that document itself has been found in the custody of the Assessee at the time of search. Thus, the Assessee is deemed to be a party to such deal on stipulated terms unless shown otherwise. There is another aspect of the matter. The same plot which is subject matter of impugned agreement was finally sold to the Assessee albeit in the name of minor son purportedly through a regular agreement. Thus, the deal understandably entered into by this MOU finally went through albeit with a lower price. Thus in our considered view, the evidentiary value of impugned MOU cannot be ignored as irrelevant or extraneous. We also notice that the statement was recorded on oath under S. 132(4) in the course of search wherein undisputedly, the contents of the MOU were endorsed. As a corollary, the statement is presumably true and voluntary since the statement was not withdrawn till the block assessment was taken up. No evidence has been placed before us to demonstrate that statement under section 132(4) given during the course of search has been successfully withdrawn. We do not find any material on record to show that there was any kind of duress or intimidation or coercion which forced the assessee to give any untrue declaration of such kind. The provision of S. 132(4) is plain and simple. The authorized Income Tax official is entitled to examine any person on oath who is found to be in possession or control of such documents etc. and any statement made by such person during such examination may thereafter be used in ‘evidence’ in any proceeding under the Act. We do not find anything to show that the Assessee had successfully withdrawn the original statement and in view of the seized document noted above there is no merit in the stand of the assessee. The question of adoption of rate estimated by an approved valuer or department valuer will come into play only when the valuation of a given asset is not discernible or determinable from the underlying documents. When the plot was agreed to have been purchased at a given rate, it is for nobody else to estimate a different rate dehors the mutually consented document. It is common knowledge that there is rampant deployment of unaccounted money in land transactions. Coupled with this, there is no whisper about the occasion as to why the parties prepared such allegedly weird document at the allegedly exorbitant and non prevalent rate. Once, the confessional statement under S. 132(4) itself has been found to be admissible on facts and raised estoppel against the assessee and consequent burden not found to have been discharged by the Assessee, the subsequent valuation indicating plausible and rational price is of no relevance. There is no scope for assumption and presumption when speaking evidence for a given price has been found in search proceedings. Hence, the question of applicability of S. 142A with retrospective effect or otherwise is only academic in the present case. We have also weighed the fact that the sellers in its Statement in survey proceedings under S. 133A of the Act have endorsed the version of the Assessee. The statement of seller is not before us. Nevertheless, we do not find any substance in such purported statement which is contrary to written document signed by them. Also, the statement recorded under S. 133A does not have the same legal sanctity qua the statement recorded under S. 132(4). - Decided against assessee Addition towards estimated 25% initial investments by AO on unaccounted sales as per seized diary - Held that:- We find that there is no cogent evidence available to support estimation @ 25% of sale as initial investment. On consideration and facts and circumstances and in the light of the decision of the coordinate bench, We are of the view that estimation @ 10% as pleaded by the Assessee would balance equities and would be a fair estimate. Addition towards sale proceeds received on sale of silver articles and estimated 5% commission thereon treated as unexplained receipt and thus undisclosed income - Held that:- It is admitted position that no incriminating document showing any unaccounted sale or investment has been found. The entries already recorded in the books cannot be source of addition / disallowance in block assessment. Some flippant or sweeping statement covering such larger block period by other members of the family without anything more cannot, in our view, override tangible book entry and grant jurisdiction to the AO under block assessment. The addition made on this score by the AO is therefore not sustainable. Estimation @ 10% of the unaccounted sale towards purchases as proper and justified. Addition towards unaccounted household expenses - Held that:- Estimation confirmed by the CIT(A) is on the basis of seized material only for Nov. 1993 to March 1994. Since, there is no incriminating documents are available on record in respect of balance period, no liability arises to the Assessee for estimation in respect of the rest of the period. Therefore, AO is directed to restrict the disallowance amount in conformity with seized material only. Addition on treating M/s D.R. Textiles, a partnership firm as benami firm of the Assessee - Held that:- It is admitted position that wife of the Assessee has contributed initial capital and the firm is backed by partnership deed in writing. The return of income of the partnership firm has been filed and has been assessed. Mere absence of personal knowledge of the business in which a person is a partner cannot make him or her a benami of the person doing the business for the firm. There is nothing to prevent a person to contribute capital and carry on business with the help of others. In our view, the finding of benami is based on irrelevant considerations and thus vitiated.
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2016 (1) TMI 980
Penalty under section 271(1)(c) - Held that:- The assessment was completed by the Assessing Officer, who had not recorded any satisfaction for initiating the penalty for concealment under section 271(1)(c) of the Act, with regard to the additional income offered. Thereafter, in the order levying penalty also, the Assessing Officer had not levied any penalty. The CIT(A) while deciding the appeal against the order levying penalty under section 271(1)(c) of the Act was only abrest of the penalty order passed by the Assessing Officer and while deciding the said appeal, he had no jurisdiction to initiate and levy penalty under section 271(1)(c) of the Act on an issue against which, the assessment was made by the Assessing Officer. - Decided in favour of assessee.
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2016 (1) TMI 979
Disallowance u/s 14A - satisfaction formed by the Assessing Officer before working out the disallowance - Held that:- Working of disallowance as per Rule 8D of the Rules was furnished along with letter dated 09.10.2011. In view of the above said findings of the Assessing Officer, wherein the Assessing Officer had noted that the assessee had declared Nil amount as the amount to be disallowed in terms of section 14A of the Act and thereafter, issued show cause notice to the assessee to explain as to why no disallowance should be made under section 14A of the Act establishes the case of the Department that the Assessing Officer had recorded implicit satisfaction before working out the disallowance under section 14A of the Act. In terms of section 14A(2), we find merit in the claim of the Revenue in this regard and dismiss the contention of the assessee that no satisfaction was formed by the Assessing Officer before working out the disallowance under section 14A of the Act. In view of the business funds available with the assessee and the business assets created by the assessee, we find no merit in the claim of assessee that the amount due to the Sundry Creditors was the interest free funds available with the assessee for making the investments and hence, no disallowance could be made out of interest expenditure. Admittedly, the funds available with the assessee were out of common pool i.e. on account of capital investment by the partners, on which the assessee firm was paying interest and other business funds in the form of Sundry Creditors and advances from customers since the investment was made out of common pool of investments, then the provisions of section 14A of the Act were clearly attracted and the disallowance made under Rule 8D(2)(ii) of the Rules is to be upheld. The said disallowance is to be made in line with the formula provided under the said sub-rule. However, claim of the assessee before us that in view of the ratio laid down by the Hon’ble High Court of Karnataka in Canara Bank Vs. ACIT (2014 (6) TMI 929 - KARNATAKA HIGH COURT), where the assessee has not incurred any expenditure since the dividend was re-invested in the mutual funds itself, no expenditure was attributable to earn the said income. Admittedly, the assessee has not incurred any direct expenses for making the aforesaid investments. However, some part of the administrative expenses is attributable for making the aforesaid investments in funds, income from which is not includable in the total income of the assessee. The dividend earned by the assessee may have been reinvested by the fund manager itself. However, the expenditure relatable to making the investment and taking steps for its redemption and reinvestment involved an element of expenditure and in view of the provisions of Rule 8D(2)(iii) of the Rules, such expenditure is disallowable in the hands of the assessee. - Decided against assessee.
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2016 (1) TMI 978
Registration under section 12A cancelled - Held that:- On perusal of the order of the learned Commissioner of Income Tax for cancelling the registration, we see that at the beginning of the order as well as at every place while concluding his finding, the learned Commissioner of Income Tax has referred to cancellation of registration w.e.f. assessment year 2009-10 onwards. However, since the amendment to section 12AA(3) of the Act has been specifically provided to be applicable to assessment year 2011-12 and onwards, the learned Commissioner of Income Tax cannot assume jurisdiction to cancel the registration from assessment year 2009-10 onwards. In view of this, the order of the learned Commissioner of Income Tax in cancelling the registration under section 12A of the Act is held to be not as per law. We hold that the amendment to section 2(15) of the Act cannot be the basis for cancellation of registration granted earlier under section 12A of the Act. Two basic requirements for cancellation of registration as provided under section 12AA(3) viz, the findings of the CIT to the effect that the activities of the assessee are not genuine or the activities are not being carried out in accordance with the objects on the basis of which registration under section 12A of the Act was granted to it, have also not been fulfilled in this case. CIT(A) has nowhere given a finding in this regard. It is not the case of the Commissioner of Income Tax that the activities of the assessee are not genuine or not being carried out in consonance with the objects of the assessee. The action of the CIT(A) in cancelling the registration is not as per law. - Decided in favour of assessee.
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2016 (1) TMI 977
Succession of the firm - revaluation of assets - claim of depreciation by the assessee allowed by CIT(A) - cost of acquisition - AO was of the firm belief that the transaction does not constitute transfer in terms of Sec. 2(47) of the Act. According to the AO, the revaluation of the assets was only an increase in the value on paper and depreciation on the revalued assets cannot be allowed as per the provisions of the Act. - Not to be treated as transfer u/s 47(xiii) Held that:- A perusal of the assessment order shows that the AO has heavily relied upon Explanation-1 to Sec. 43(6) of the Act. The relevance of the applicability of Explanation-1 to Sec. 43(6) of the Act is highly questionable in the hands of the present assessee inasmuch as the said explanation refers to the provisions of Sec. 170(2) of the Act which is relevant when the predecessor cannot be found then the assessment of the income of the previous year in which the succession took place upto the date of succession and of the previous year preceding that year shall be made on the successor in like manner and to the same extent as it would have been made on the predecessor. The facts of the case in hand do not warrant any relevance to the aforesaid provision of the Act. It would not be out of place to mention here that the revaluation of the assets is supported by the certificate of a registered valuor and the AO has not appointed his own valuor for valuation of disputed assets nor the AO has disputed the valuation adopted by the assessee, this rules out the applicability of Explanation-3 to Sec. 43 of the Act. The partners of the firm should not receive any consideration or benefit directly or indirectly in any form or manner other than by way of allotment of shares in the company. Considering the entire facts in totality in the light of the judicial decisions referred to above, we could not find any reason to interfere with the findings of the Ld. CIT(A).- Decided against revenue
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Customs
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2016 (1) TMI 960
Condonation of delay in filing an appeal before tribunal - Export of prohibited goods - The goods were declared as Indian Artistic Wooden Handicrafts , but on interception by Intelligence, the container was found to contain red sander wood logs - Held that:- The fact remains that the summons from the Criminal Court could not be served on the appellant, as he left the services of the erstwhile employer, and only after issuance of the Non-Bailable Warrant (NBW), the appellant has appeared before the Court. It is unlikely that the appellant should have taken his personal liberty so lightly in not appearing on summons, when he was functioning in a responsible position, as a Branch Manager. Therefore, the contention that he was not aware of the adjudication proceedings and that is why, there is a delay in filing the application for condonation of delay must be true. In any event, the delay is only 217 days, and the reasons for the delay have been convincingly explained before this Court. Therefore, the CESTAT should have condoned the delay and should have given an opportunity to the appellant, to contest the case, on merits - Matter remanded back to tribunal.
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2016 (1) TMI 959
Jurisdiction to sanction Refund - Customs authorities or SEZ authorities - Refund of additional duty - SEZ unit - According to the petitioner, the respondents collected a sum of ₹ 18,66,985/- by way of countervailing duty, though it was not payable by the petitioner. - Held that:- As long as the duty in the nature of customs duty has been collected, the refund would be payable only in terms of Section 27 of the Customs Act. Since the statute also prescribes the authority competent to entertain such an application, refund applications would be maintainable before such authority. Unless there is amendment in law, the respondents cannot prevent the competent officer from exercising his statutory powers, in fact, duties. In the result, impugned communication dated 30.11.2015 is quashed. The refund application shall be decided by the competent officer under the Customs Commissionerate, Surat as expeditiously as possible and preferably before 30.04.2016.
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2016 (1) TMI 958
Refund claim - SEZ unit - Additional Commissioner, Customs, Surat returned the refund application of the petitioner on the ground that he has no authority to decide the same. - In the process of removal of its drugs, the petitioner had paid customs duty of ₹ 25,18,342/ as applicable. However, owing to delay in supply of drugs, order was cancelled by the DTA buyer. On account of such development, the petitioner filed a request before the SEZ authority for cancellation of bill of entry as goods were not removed out of SEZ. Resultantly, according to the petitioner such custom duty of ₹ 25,18,342/became refundable. Held that:- the competent authority under the Customs Commissionerate, Surat, is directed to decide the refund application upon being represented by the petitioner. If so done latest by 30.1.2016, decision will be taken expeditiously and preferably before 30.4.2016.
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2016 (1) TMI 957
Validity of Complete and overall cap on the duty credit scrip - Incremental Export Incentivisation Scheme (“IEIS”) - misuse of the scheme - Held that:- We find it difficult to accept the proposition that where there was no cap or limit in the 2012 Notification or in any of its surrounding or contemporaneous documents such as public speeches, policy documents, changes in the Handbook of Procedures and so on, such a restriction could be said to have been brought in by the 2013 Notification. We are mindful of the purpose and intent of the 2013 Notification. It is entirely salutary. None should receive unintended benefit from the 2012 Notification. Certain checks and measures are undoubtedly essential and the Department quite wisely has chosen the course of specifying a greater scrutiny for high value claims. There is nothing objectionable about any of this. Indeed, the Petitioners do not object to this. But this a far cry from an insistence that irrespective of the value of the incremental exports, those incentives must be restricted to a paltry ₹ 20 lakhs. - There is no such restriction to be found in the 2012 Notification or in the 2013 Notification. We certainly cannot read it into 2013 Notification. None can claim any benefit or incentive as an absolute right. However, a definite policy is enunciated in the present case. That policy extends an incentive for a demonstrated increase in exports. Its purpose is also clear, viz., to encourage more exports. The policy’s terms must, therefore, receive an interpretation as would advance its stated purpose, viz., to promote and encourage exports. That this is also one of the avowed objects of the Foreign Trade (Development and Regulation) Act, 1992 is also not doubted. Where the policy did not itself place any such cap - and plainly it did not, for we find no words of limitation in it, other than those in the eligibility criteria, and these are accepted - any interpretation of the 2013 Notification, therefore, that restricts the incentives in their entirety would therefore be arbitrary, violating the policy’s objective and the mandate of Article 14 of the Constitution of India. All four Petitions succeed in part. We hold that the 2013 Notification places no cap or restriction on the value of the IEIS scrip. The Authorities concerned will consider the Petitioners’ applications on merits bearing in mind our findings and this order, and without any regard to the impugned Clarification of 23rd September 2014. - Decided in favor of appellant and against the revenue.
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2016 (1) TMI 956
Valuation - Comparison - “identical goods” or “similar goods”. - The Customs, Excise and Service Tax Appellate Tribunal [2005 (8) TMI 501 - CESTAT, MUMBAI] has, in these circumstances, rightly held that the goods manufactured and coming from China were not comparable with the similar goods in Italy and were not covered by the definition of “identical goods” or “similar goods”. - Apex Court dismissed the revenue appeal.
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2016 (1) TMI 955
Conversion of free Shipping Bills converted into DFRC Shipping Bills. - Revenue appeal against the decision of tribunal [2003 (11) TMI 121 - CESTAT, NEW DELHI] - Apex Court dismissed the appeal on the ground that, that no substantial question of law arises for consideration and the entire issue is factual.
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Corporate Laws
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2016 (1) TMI 952
Territorial jurisdiction - Seeking permanent injunction restraining the infringement of trade mark, passing off and damages etc. - Held that:- no doubt law entitles a plaintiff to file a suit where a cause of action arises in whole or in part in Delhi and even if neither the plaintiff nor the defendant resides or carries on business at Delhi, however, I find it very peculiar for the plaintiff/Company in the present suit which has its office at Mumbai i.e not at Delhi, that such a plaintiff/Company is suing defendants not by filing a suit in Mumbai and that it is suing defendants who are residing and/or carrying on business not at Delhi but at Bengaluru in Karnataka or Gurgaon in Haryana. Putting it in other words, there is lack of convenience as regards the place of suing, both to the plaintiff and the defendants. In fact, Sections 22 and 23 of CPC deal with the situations which emerge in cases such as the present where in spite of a court having territorial jurisdiction where a suit is instituted, yet, if the court where the suit is filed finds that the suit can be well tried more conveniently at other place which also has the territorial jurisdiction, then in such cases the appropriate High Court is entitled to transfer the suit to other convenient place which otherwise has jurisdiction and where the suit would be more appropriately tried i.e the principle of forum conveniens so far as the parties to the suit are concerned. Plaints returned.
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Service Tax
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2016 (1) TMI 975
Classification of service - Business Auxiliary Service (BAS) or Clearing and Forwarding agent (C&F) service - appellant had promoted the business of the Principal. He was contributory to the growth of the business of the principal procuring orders for him and also exploring potential customers and channelized the purchase orders. - Held that:- Law is well settled that the scope of taxing entry is to be strictly construed and there is no intendment about tax. The facts and circumstances of the case warrant to bring the activity carried out by the appellant as per agreement to the scope of “Business Auxiliary Service” (BAS). This satisfies the principle of classification laid down in Section 66 of the Finance Act, 1994, excludes the other category of classification claimed by Revenue for the reason that the taxing entry most specifically attracts an activity shall bring that service into the same class and no other class by any remote construction - Decided in favor of assessee.
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2016 (1) TMI 974
Classification of Import of services from M/s. Society for Worldwide Interbank Financial Telecommunication (SWIFT) which is a non-resident entity, not having an office in India - reverse charge - service involved is transfer of information and also includes data processing - Banking and Other Financial Services or not - Held that:- We find that the very same issue has been decided by this Tribunal in the case of Bank of Baroda vs. Commissioner of Service Tax, Mumbai [2016 (1) TMI 767 - CESTAT MUMBAI] - the Assessees' these appeals are partly allowed
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2016 (1) TMI 973
Business Auxiliary service or not - activity of collection/dispatch of Speed Post/Export Delivery Letter etc. on behalf of the Post Office - Revenue neutral exercise - Held that:- Before going into the merit whether the services is taxable or otherwise and also on the limitation, we find that the fact is not under dispute that the services provided by the assessee is at the most considered as input services for the postal department. The postal department is admittedly paying the service tax on the total value of the services which obviously includes service value of the assessee. In this situation, if service tax is paid by the assessee, the assessee's services is an input service for the postal department and postal department is entitled for Cenvat credit, thus in our view the present case is of Revenue neutral as the postal department is entitled for CENVAT credit of the service tax if at all payable by the assessee. This Tribunal, time and again held that in case of revenue neutral the demand does not exist. In view of the various judgments, it is clear that if service tax is paid by the assessee, same shall be available as Cenvat credit to the postal department and to that extent net liability of service tax shall stand reduced while paying the service tax by the postal department. Therefore, it is an exercise of revenue neutral for this reason demand does not exist. We, therefore, drop the demand on the point of revenue neutrality without addressing the issues of taxability of service tax and limitation. - Decided in favor of assessee.
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2016 (1) TMI 972
Cenvat Credit - demand of 8% on value of Exempted services - Rule 6(3)(i) of the Cenvat Credit Rules, 2004 - appellants had not filed a declaration under Rule 6(3A) - It is urged that unreasonable result cannot be intended by the legislature - The appellants have already reversed the CEnvat credit of ₹ 5,06,736/- attributable to input services used in providing exempted services during the financial year 2008-09 along with the interest of ₹ 21,658/-. - Reversal was not on monthly basis. Held that:- It is evident that the condition of filing the declaration is only directory and not mandatory. Further, most of the requirements under Rule 6(3A) like, name, address and registration no. of the assessee, description of taxable services and exempted services, CENVAT Credit of inputs and input services lying in balance as on the date of exercising option, are already available in the records of the Revenue. We further find it is an admitted fact that the assessee herein have calculated the CENVAT Credit in terms of clause (c) read with clause (h) and have deposited the amount so determined, by 30 th June in the succeeding financial year as prescribed. There is no dispute with regard to the CENVAT Credit reworked by the assessee which is attributable to the exempted output services. Further, there is merit in the contention of the assessee that Rule 6 cannot be used as tool of oppression to extract the amount which is much beyond the remedial measure and what cannot be collected directly, cannot be collected indirectly, as well. In case of substantive compliance made by the assessee i.e. calculation of the amount of CENVAT Credit reversible on annual basis and payment of the amount before the prescribed date, the substantial benefit cannot be denied. We also hold that in the garb of Rule 6, the provisions of Section 93 of the Finance Act, 1994 cannot be overridden and/or the exemption provided under the Section 93 of the Finance Act, 1994 cannot be negated by the Cenvat Credit Rules, which is a delegated legislation and subservient to the main Act. Demand set aside - Decided in favor of assessee.
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2016 (1) TMI 971
Nature of activity - collection of octroi on behalf of the Municipal Corporation - cash management activity or not - Banking and other Financial Services - Rectification of mistake for disposal - appeal was dismissed because of low tax effect - Held that:- we find that by our final order dated 11.08.2015 we have disposed of the appeal recording therein that the amount involved in this case is less than ₹ 5 lakhs, factually it is incorrect. Accordingly, we recall our final order No. A/2637/15/STB dated 11.08.2015 and restore the appeal to its original numbers and take up the same for disposal. The amount collected excess of contracted amount and retained by the assessee in respect of transit fees is not covered under the category of "banking and other financial services'. Since the issue is decided in favour of the respondent-assessee in this appeal, we find no merit in the appeal filed by the Revenue and hold that the impugned order is correct and legal and does not suffer from ay infirmity. - Decided against the revenue.
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Central Excise
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2016 (1) TMI 970
Valuation - captive consumption - stock transfer - Determination of applicability of Rule 8 of Central Excise Valuation (Determination on Price of Excisable Goods) Rules, 2000 in respect of internally transferred goods for consumption in assessee's various project work - Held that:- Reasoning given by the original authority in his order dated 30/1/2006 regarding the applicability of Rule 8 in the present case of captive consumption is misconceived. Since the transaction value of the excisable goods is available and not all the excisable goods are captively consumed, the provisions of Rule 8 as prevailing during the relevant time will not apply to the assesses. On the second issue regarding valuation of steel items cleared on stock transfer to other plants of the assessee, we find that the concept of related person has no relevance.All the units are part of one company. There is no sale of goods in this stock transfer. The assesses have paid duty based on cost of production which is higher than the cost of production adopted uniformly by the department. We find that assessee paid duty on cost plus 15 per cent on the entire quantity of stock transferred to their other unit in Selam. The said amount was availed as credit by the Selam Steel Plant. The value adopted by them (Rs. 10,457/- per MT) is much more than value on which duty is being demanded (Rs. 9,489/-).Considering the above factual position, we find the impugned order dated 31/1/2006 is not sustainable on this ground. Regarding the two department's appeals against the impugned orders we find that the only ground taken is that the costing of goods as per CAS-4 standards will be effective only from the date of issue of circular dated 13/2/2003 by the Board. We find the applicability of CAS-4 standards for all the cases even pending at the time of issue of circular has been upheld by Tribunal in the case of National Aluminum Company Limited ( 2005 (3) TMI 186 - CESTAT, NEW DELHI ). On the SLP filed, the Hon'ble Supreme Court refused the grant of the stay order. No further developments have been informed. - Decided against revenue.
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2016 (1) TMI 969
Valuation of Ceramic/ Glazed Tiles - Transaction value u/s 4 or MRP based value u/s 4A - The Department is of the view that the clearances made by the appellant to customers like contractors schools, colleges, hospitals, hotels, builders, etc. are sales to the institutional buyers. Hence, these goods are assessable under Section 4 of the Central Excise Act, 1944. - Held that:- As the issue is no more res integra in the light of the decisions of this Tribunal in the case of H & R Johnson (India ) Ltd. (2014 (6) TMI 453 - CESTAT MUMBAI) and NITCO Tiles Vs. CCE, Raigad (2014 (11) TMI 117 - CESTAT MUMBAI), therefore, we hold that the appellant has correctly discharged their duty liability under Section 4A of the Central Excise Act, 1944. Consequently, they are not liable to pay duty as per Section 4 of the Central Excise Act. - Decided in favor of assessee.
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2016 (1) TMI 968
Eligibility to avail CENVAT credit on the amount of Central Excise Duty paid on moulds and dies - Moulds sent to job worker - period involved in this appeal is pre 21/07/1995 and post 21/07/1995 - Held that:- As regards the case prior to 21/07/1995, we find that the show cause notice, and the adjudication order indicated how many moulds were sent to job worker prior to 21/07/1995, provisions of rules definitely indicate that the said moulds and dies, needs to be used in the factory of the manufacturer; on the specific query from the bench, Learned departmental representative was not able show from the records, how many moulds were received and sent out. On the specific query from the bench, learned counsel from the respondent submits that the moulds which were received prior to 21.07.1995 were sent out after 21.07.1995, but unable to produce any evidence; submits that out of 52 molds, 10 molds were received prior to 21.07.1995. In our considered view, the claim of the appellant that these 10 molds were received prior to 21.07.1995, was sent to job worker after being installed in factory premises and used, for the processing of plastic items is not evidenced. It is the submission that the respondent may be given an opportunity to do so. If respondent is able to justify their claim that these 10 moulds were installed in their factory and put to use and subsequently sent to job worker, they may have a case. For this limited purpose, we hold that the matter needs reconsideration by the adjudicating authority. Accordingly as has been directed by us, in respect of duty liability of 10 molds which were received prior to 21.07.1995, we remand the matter back to the adjudicating authority, to consider the issue afresh and arrive at a conclusion, after following the principles of natural justice and respondent may produce evidence if any, in support of their claim.
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2016 (1) TMI 967
Clandestine manufacture and removal of Aluminum Alloy ingots and Zinc Alloy ingots - validity and genuineness of information, records and documents - onus to prove - The raw material used were aluminum scrap and aluminum ingots and they availed CENVAT Credit on these raw materials being inputs. - Availing Cenvat Credit without receipt of inputs - sale of abnormal quantity of Ash and Residue and burning loss amounting to more than 15% of the total consumption of raw material. Held that:- the whole case is built up on data contained in the pen drive and certain statements of persons. Admittedly, the data contained in pen drive is not disputed by the appellant. The whole dispute evolve on the interpretation of the data contained therein. In such a situation, it is necessary for the Revenue to support their interpretation by clear corroborative evidences and not by inferences and assumptions. Even in interpreting the data in the pen drive and taking some support from the select statements of persons, we find that the data applicable to a particular period was extrapolated for the whole period of demand by presuming a standard projection. This apparently is not legally sustainable. When the allegation of unaccounted clearances and substitutions of inputs of huge quantities were made, the minimum requirement is to have independent support of such allegation by way of evidence of transport, cash transaction, third party documents or affirmations etc. Here in this case, corroborations are lacking. We are aware that in the case of clandestine removal it is not required for the Revenue to prove precise and comprehensive details of each such clearances with 100 per cent accuracy. However, this does not mean that even in the total absence of corroborative evidence without at least establishing a preponderance of probability the case for confirmation of demands can be made. Large number of statements were recorded and also relied upon; but these statements were not put to test by way of cross-examination and analysis or supported by documentary evidence. The statements could be of help if they support evidences which exist and which requires re-affirmation. In the present case, the statements which deal with interpretation of data in pen drive have not thrown any substantial ground to the case built up by the Revenue. Revenue failed to prove its case - demand set aside - Decided in favor of assessee.
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2016 (1) TMI 966
Cenvat / Modvat Credit of duty paid by the 100% EOU - tribunal in [2007 (8) TMI 524 - CESTAT, CHENNAI] allowed the credit following its decision in the case of VIKRAM ISPAT [2000 (8) TMI 111 - CEGAT, NEW DELHI] - Held that:- it has been stated that the main issue relating to the interpretation of Rule 57AB of the Central Excise Rules, 1944, had not been gone into by the Tribunal, while passing its impugned order - matter remanded back to the Tribunal to reconsider the issue relating to the applicability of Rule 57AB of the Central Excise Rules, 1944, by taking into consideration the notification No.27/2000-CE (NT), dated 31.3.2000.
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2016 (1) TMI 965
Whether penalty is sustainable upon a dealer when demand of duty stands dropped? - Whether penalty can be imposed for abetment when main party is held not guilty? - Held that:- In view of the fact that the order demanding duty and penalty in the case of the main assessee has been set aside and this fact was brought to the notice of the Tribunal and the same has not been dealt with, it would be appropriate to remand the matter back to the Tribunal.
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2016 (1) TMI 964
Duty demand - Manufacture - repacking of lubricating oil into smaller pack - Revenue appeal against the decision of tribunal in [2006 (9) TMI 541 - CESTAT KOLKATA] - The instant appeal is covered by our decision [2015 (10) TMI 2280 - SUPREME COURT] between the same parties. The appeal is, accordingly, dismissed.
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2016 (1) TMI 963
DTA clearance by 100% EOU - Interpretation of statutes - EXIM Policy - Revenue appeal against the decision of tribunal in [2006 (7) TMI 365 - CESTAT, CHENNAI] - Since the tax effect involved in the present appeal is negligible, leaving the question of law open, the appeal is dismissed on this ground alone.
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2016 (1) TMI 962
CENVAT Credit - Credit in respect of generation of electricity - Revenue appeal against the decision of tribunal in [2014 (7) TMI 531 - CESTAT NEW DELHI] - Appeal dismissed.
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2016 (1) TMI 961
Levy of duty - Clandestine manufacture and removal of goods - Whether the Revenue was justified in determining the duty on the ground of clandestine removal of goods - Revenue appeal against the decision of HC in [2014 (9) TMI 982 - KARNATAKA HIGH COURT] - Appeal dismissed - However, revenue permitted to approach this Court by way of filing appropriate appeal.
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CST, VAT & Sales Tax
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2016 (1) TMI 954
Maintenance of records for 5 years - The five year period to be reckoned from the last day of the financial year concerned or not - Revision proceedings - Rate of tax on zinc oxide - 10% or 4% - In order to set right these mistakes, a revision was proposed. That was to revise the assessment order under section 57 of the BST Act. That is how Notice in Form 40 was issued and served upon the dealer on 7th December, 1998, calling upon him to remain present on 28th December, 1998. However, on that date the dealer did not remain present. That is why the matter was adjourned. On 6th December, 2000, in the absence of the dealer and his representative, the file was closed and the subject order dated 7th December, 2000, came to be passed. Held that:- This is not a case where any order to the prejudice of the applicant-dealer has been passed because of non availability or non production of the records. The Second Appellate Order initially passed on 23rd June, 2010, recites the facts. The Revisional Authority passed the order ex-parte on scrutiny of the case records underlying the assessment order dated 30th November, 1995. Thus, the records before the Assessing Authority were taken into consideration. The dealer was called upon on the basis thereof to satisfy the Revisional Authority as to why the assessment order should not be revised. There was absolutely no prejudice, therefore, to the dealer and he could have, on the basis of the order of assessment, opposed the exercise of the Revisional power. - Decided against the assessee.
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2016 (1) TMI 953
Recovery proceedings - purchasers of the property over which Sales Tax Department has created charge for unpaid tax dues of the seller - In the revenue records, attachment of the Sales Tax Department was duly records - petitioners would be willing to deposit before this Court the total amount of sales tax dues of the seller, which comes to ₹ 55,00,000/- (approximately) within reasonable time. - Held that:- In view of the fact that the Sales Tax Department has fixed auction of the property in question today, let there be stay against such auction on the condition that the petitioners deposit a sum of ₹ 55,00,000/- (Rupees fifty five lacs only) with this Court in three equal monthly installments starting from 01.02.2016. In case there is failure to deposit any one of the installments it would be open for the respondents to re-schedule the auction.
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Wealth tax
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2016 (1) TMI 976
Inclusion of rented premises into wealth tax assessment - revenue yielding asset - power of revision u/s 25 of the CIT - Held that:- section 2(ea)(i) nowhere requires that a commercial establishment or a complex could not be established in a house property but only provides that any property in the nature of commercial establishment or complex shall be excluded from deemed asset as defined in clause 1 of section 2(ea). Further, it nowhere provides that only commercial establishment or complex is occupied by owner, then, only the exception shall take effect”. In view of the above, we are of the opinion that the impugned property is not covered by the definition of ‘asset’ so as to bring to tax under the WT Act. Further, the order of the AO cannot be considered as ‘erroneous and prejudicial to the interests of revenue’ as the AO has examined the taxability of the impugned property by issuing show cause notice and the assessee has explained the nature of the property in detail as extracted above. Therefore, it can be safely concluded that the AO formed an opinion in not bringing the property to tax and the same cannot be substituted by the CIT in the proceedings u/s 25(2) of the Act - Decided in favor of assessee.
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Indian Laws
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2016 (1) TMI 951
Dishonor of cheque / Promissory Note - Conviction of respondent u/s 138 of the Negotiable Instruments Act, 1881 and dismissed Criminal Appeal No.10 of 2012 filed by the Complainant/Appellant. - It is not in dispute that the execution of the Promissory Note and the endorsement made by the Respondent has been satisfactorily proved at the trial. Concurrent findings recorded by the trial court and the first appellate court to that effect conclude the factual part of the controversy. The only question that survives in the above background is whether the cheques issued by the Respondent were meant to discharge, in whole or part, “any debt or other liability” within the meaning of Section 138 of the Negotiable Instruments Act, 1881. Held that:- It was acknowledged and a promise was made to liquidate the same within one month. Failure on the part of the debtor to do so could lead to only one result, viz. presentation of the cheques for payment and in the event of dishonour, launch of prosecution as has indeed happened in the case at hand. The argument that the respondent had no liability to liquidate the debt owed by Nazimul Islam, has not impressed us. What is important is whether the cheques were supported by consideration. Besides the fact that there is a presumption that a negotiable instrument is supported by consideration there was no dispute that such a consideration existed in as much as the cheques were issued in connection with the discharge of the outstanding liability against Nazimul Islam. At any rate the endorsement made by the respondent on the promissory note that the cheques can be presented for encashment after 25-09-2007 clearly shows that the cheques issued by him were not ornamental but were meant to be presented if the amount in question was not paid within the extended period. The High Court in our view fell in error in upsetting the conviction recorded by the Courts below who had correctly analysed the factual situation and applied the law applicable to the same. Conviction upheld - Decided in favor of appellant.
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