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TMI Tax Updates - e-Newsletter
January 9, 2016
Case Laws in this Newsletter:
Income Tax
Customs
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
Income Tax
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MAT computation - deferred revenue expenditure - it is nothing but a window dressing and the authority should not be mislead or guided by this balance sheet which is prepared to satisfy the shareholders. . It is the P & L account prepared on the basis of the books of accounts as contemplated in Part-II of Schedule VI which should form and assist to find out what is the profit earned and on that profit, tax is levied.
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Claiming deduction under Section 80 P(2) (a) (i) - The view expressed by this court as to the assessee being a co-operative society and not a co-operative bank in terms of Section 80P(4) of the IT Act, shall hold the field and shall bind the authorities unless held otherwise by the Reserve Bank of India - HC
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Exemption u/s 11 & 12 - the dominant motive in this case is not earning profit but to do charity in the form of public service by providing accommodation to the common man at affordable rates - proviso to section 2(15) is not attracted - exemption allowed - AT
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Addition under the head income from house property - A.O is directed to reduce the expenses incurred by the assessee for rendering additional services to the tenants for arriving at annual rental value and thereafter, on such annual rental value, deduction u/s 24 of the Act @ 30% is to be allowed. - AT
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Power of the CIT(A) to enhance the assessment u/s 251 - In absence of show cause notice to the assessee stating the defects , allegation and the manner of determining the amount of enhancement and then fixing the date of hearing after affording reasonable time to the assessee to rebut the allegations and then passing a speaking order making enhancement of income is mandatory. - AT
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Disallowance of interest under section 24(b) - assessee had submitted that it had requested the builder to complete their share of constructed area for which the assessee shall reimburse the expenses incurred for providing all the amenities and that the availing of the loan was to reimburse the developer for such finishing works - deduction allowed - AT
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Addition on receipt of on-money - alleged cash having been paid after the date of execution of sale deed, no reliance could be placed on the aforesaid addition to hold that the assessee was in receipt of on-money. - AT
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Exemption in terms of section 11(1)(a) - entitlement for carry forward of excess application of income - the claim of the assessee for carry forward of excess application is in accordance with the judicial precedents - AT
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Addition as unrecorded profit on sale of flats - there was no factual or legal basis to contemplate any notional or hypothetical sale consideration in the absence of any specific evidence or material in the possession of the AO to counter the stand of the assessee - AT
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Advances collected from customers towards flat bookings in cash and later returned to the customers by way of account payee cheques cannot be at any stretch of imagination considered as assessee's income from undisclosed source - AT
Customs
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Imposition of anti-dumping duty on Acrylonitrile Butadiene Rubber (NBR) imported from Korea RP. - Levy of anti-dumping duty on imports of Phenol. - Method and procedure - Period of review - Central Government has the power to grant an extension of 6 months for concluding a review. - HC
Indian Laws
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Validity of proceedings under SARFAESI Act - petitioner claims to be a bona fide purchaser of the property without knowledge of the prior alleged mortgage by the borrower in favour of respondent No.1 - petitioner to raise all his objections before the DRT - petition dismissed - HC
Service Tax
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Erection, Commissioning or Installation Services - receipt of labour charges for installation and commissioning of GRP Pipes for various customers - The pipes that the respondent/assessee had to lay were not plant, machinery or equipment - demand was rightly set aside - HC
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Valuation - Steamer agent services - reimbursement of expenses - inclusion of additional expenditure towards arranging drinking water, garbage clearance - expenses incurred by them for supply of mobile phones, and airtime charges, crew medical etc. - value not to be included - demand set aside - AT
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Cenvat Credit - the benefit of cenvat credit on the service tax paid by the service provider cannot be denied, only on the ground that the invoices are in the name of branch offices which were not separately registered - AT
Central Excise
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Valuation of goods - charges on account of training customer's staff being purely optional has no nexus with the manufacturing and marketing of goods and therefore, not includable in the assessable value - AT
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Reversal of CENVAT Credit - electricity is sold outside for consideration - proceedings have been initiated only after the decision by the Hon'ble Supreme Court in appellants case. This much has been stated in the notice as well as the impugned order. Hence, we find invoking extended period of demand alleging fraud and suppression etc on the part of the appellant is not sustainable - AT
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Cenvat Credit in respect of outward GTA used for removal of intermediate goods either to job worker or to their own other units - GTA in the present case being used up to the place of removal covered under the definition of input service and hence admissible for Cenvat Credit. - AT
Case Laws:
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Income Tax
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2016 (1) TMI 321
MAT computation - deferred revenue expenditure - SC uphold the Order of H.C. [2015 (1) TMI 1023 - KARNATAKA HIGH COURT] wherein it was held that, it is nothing but a window dressing and the authority should not be mislead or guided by this balance sheet which is prepared to satisfy the shareholders. It is the P & L account prepared on the basis of the books of accounts as contemplated in Part-II of Schedule VI which should form and assist to find out what is the profit earned and on that profit, tax is levied. - Revenue appeal dismissed.
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2016 (1) TMI 320
Addition made by the AO on account of surrender originally made during the survey proceedings to cover discrepancies found in cash in hand, stock and unexplained expenditure on construction of building - addition on account of low GP rate - ITAT deleted the addition - Held that:- The Tribunal being final fact finding authority was required to discuss the entire evidence before arriving at the conclusion. The order passed by the Tribunal is violative of principles of natural justice and does not satisfy the requirements of a reasoned order. Consequently, the substantial questions of law are answered accordingly. The impugned order passed by the Tribunal dated 21.11.2013, Annexure A.3 is set aside and the matter is remanded back to the Tribunal to decide it afresh after hearing learned counsel for the parties in accordance with law. - Decided in favour of revenue for statistical purposes.
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2016 (1) TMI 319
Penalty under Section 271 (1) (c) - Held that:- In the instant case, the assessee has disclosed all the income and claimed certain deductions, which was disallowed. The mere fact that certain deductions were disallowed does not mean that the assessee has furnished inaccurate particulars. It does not mean that assessee has concealed the particulars of his income. Further, we find that the assessee had given an explanation on the additions and deductions sought, which were found to be genuine and bonafide. Such appreciation of the assessee's statement makes it apparently clear that there had been no occasion for the assessing officer to impose penalty. - Decided in favour of assessee
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2016 (1) TMI 318
Revision u/s 263 - Held that:- In the case in hand, as we find, the Income Tax Officer, pursuant to the directions of DRP, had adopted one of the courses permissible in law and as we find that the factors relevant for exercise of power under section 263 were absent and the order passed by the Commissioner does not deal with the contentions of the assessee and does not record how and in what manner the assessment order passed by the Assessing Officer was erroneous and prejudicial to the interests of the Revenue, which the Tribunal had taken note of, we are of the view that the impugned order passed by the Tribunal calls for no interference. Hence the application is dismissed. Accordingly, the appeal is not admitted
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2016 (1) TMI 317
Claiming deduction under Section 80 P(2) (a) (i) - Whether the benefit of deduction, under Section 80P(2)(a)(i) of the IT Act, could be denied to the assessee on the footing that, though the appellant was said to be a Co-operative Society, it was in fact a co-operative bank, within the meaning as assigned to such bank under Part V of the BR Act? - Held that:- There is a seriously disputed question of fact which the Authorities under the IT Act have taken upon themselves to interpret in the face of the BR Act prescribing that in the event of a dispute as to the primary object or principal business of any co-operative society referred to in clauses (cciv), (ccv) and (ccvi) of Section 56 of the BR Act, a determination thereof by the Reserve Bank shall be final, would require the dispute to be resolved by the Reserve Bank of India, before the authorities could term the assessee as a co-operative bank, for purposes of Section 80P of the IT Act. Any opinion expressed therefore is tentative and is not final. The view expressed by this court, however, as to the assessee being a co-operative society and not a co-operative bank in terms of Section 80P(4) of the IT Act, shall hold the field and shall bind the authorities unless held otherwise by the Reserve Bank of India. - Decided in favour of the assessee
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2016 (1) TMI 316
Entitlement to exemption u/s 11 & 12 - activity of running a Dharamshala and receipt of rent - whether assessee trust is involved in commercial activities, hit by first proviso to section 2(15) r.w.s. 13(8)? - Held that:- There does not appear to be any profit motive in the case of the assessee as the excess of income over expenditure cannot be distributed amongst its members either in the course of its activity or in the event of its dissolution. Therefore, one of the important ingredients for treating the activity of the appellant as business i.e., profit motive is missing in this case. Since there is no profit motive involve, the activities carried out by the appellant cannot be described as business. In such a situation, as explained by CBDT vide its Circular no. 11 of 2008 dated 19.12.2008 there would be no application of proviso to section 2(15). Moreover, as held by the Apex Court in the case of Surat Arts Silk (1979 (11) TMI 1 - SUPREME Court ), what is important in the case of trust or institution is the primary or dominant purpose. If the dominant purpose is charitable, another object which by itself may not be charitable, would not prevent the trust or institution from being a valid charity. It is noted in this case that the charges for the room are very nominal, starting from a mere ₹ 40/-. This also indicates that there is no profit motive involved in this case. Considering all the legal and factual position, it is apparent that the dominant motive in this case is not earning profit but to do charity in the form of public service by providing accommodation to the common man at affordable rates. The activities of the assessee, therefore, cannot be characterized as business activities. Hence, proviso to section 2(15) is not attracted in this case and, therefore, the disallowance of exemption u/s 11 & 12 is unjustified. The AO is, accordingly, directed to assess the society as per the provisions of section 11 & 12, and grant the requisite exemption - Decided in favour of assessee
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2016 (1) TMI 315
TDS u/s 194J - non deduction of TDS on the rebates and incenties - CIT(A) deleted the disallowance - Held that:- There should be an agency among the parties for the payment of commission and brokerage to bring the parties within the ambit of section 194H. There is no dispute that the law relied by the counsel of the parties but the crux of the said law is that in the case of incentives and rebates where there is no element of Agency the provision u/s. 194H of the Act is not applicable. The facts and circumstances of the present case is similar of the law settled in CIT Vs. Intervet India Pvt. Ltd. [2014 (4) TMI 353 - BOMBAY HIGH COURT ] In view of the said circumstances we are of the view that the learned CIT(A) has passed the order judiciously and correctly which does not require to interference with this appeal at this stage. - Decided in favour of assessee
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2016 (1) TMI 314
Addition under the head income from house property - whether the rental income declared by the assessee is composite income including charges for these services also and hence the expenses incurred on these additional services has to be reduced form such composite rental income to arrive at the annual value.Held that:- As decided in assessee's own case for A.Y 2006-07 [2010 (4) TMI 1066 - ITAT DELHI] for the purpose of computing income from house property, rental income in connection with user of house property only is assessable and when charges for other services stand included in such rental income, such additional charges should be reduced from rental income if the quantification of the same is availablethe issue is covered in favour of the assessee in principle and thus we follow the same. However, some recalculation is required at the end of the A.O, therefore the A.O is directed to reduce the expenses incurred by the assessee for rendering additional services to the tenants for arriving at annual rental value and thereafter, on such annual rental value, deduction u/s 24 of the Act @ 30% is to be allowed. The issue is restored to the file of the A.O to recompute the income from house property on the same line as directed by the Tribunal order for A.Y 2006-07. Allowing of set off of loss - Held that:- As decided in assessee's own case for A.Y 2006-07 [2010 (4) TMI 1066 - ITAT DELHI] find that these expenses incurred by the assessee are such which are necessary for the purpose of maintaining registered office of a company to continue its existence and also to comply with the statutory obligations and hence the same is allowable as business expenditure and the resulting loss from business is rightly claimed for set off against income from house property by the assessee and hence we find no reason to interfere in the order of the CIT(A) on this aspect also - Decided in favour of the assessee Addition u/s 14A - Held that:- Since the assessee has not earned any income during the relevant period, hence, no disallowance can be made u/s 14A of the Act. See CIT vs. Holcin [2014 (9) TMI 434 - DELHI HIGH COURT] - Decided in favour of the assessee
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2016 (1) TMI 313
Power of the CIT(A) to enhance the assessment u/s 251 - disallowances as well as enhancement of income done by CIT(A) - DR stated that the assessee has agreed before the learned Commissioner of Income-tax (Appeals) for enhancement there is no reason in the appeal now to be filed before ITAT - Held that:- According to provisions of sub-section 2 of section 251 of the Income Tax Act, the learned Commissioner of Income-tax (Appeals) shall not enhance the assessment unless the appellant had a reasonable opportunity of showing cause against any such enhancement. On reading the order of the learned Commissioner of Income-tax (Appeals) we did not find any mention about the show cause notice issued by him giving the reasons for enhancement and the manner of determining the amount of enhancement. There is no opportunity granted to the assessee at all. According to the order of the learned Commissioner of Income-tax (Appeals), on 25.03.2015 the appellant was confronted with the remand report and learned Commissioner of Income-tax (Appeals) has passed the order on the same day. Therefore it is apparent that on 25.03.2015 the assessee was shown remand report and on the same day the appellate order was passed by the learned Commissioner of Income-tax (Appeals) enhancing the income of the assessee by ₹ 2 lacs. We also could not gather from the order of the learned Commissioner of Income-tax (Appeals) that how the sum of ₹ 2 lac was arrived at. We are not at all concerned with whether the assessee agreed with the enhancement or not. In absence of show cause notice to the assessee stating the defects , allegation and the manner of determining the amount of enhancement and then fixing the date of hearing after affording reasonable time to the assessee to rebut the allegations and then passing a speaking order making enhancement of income is mandatory. Further on the grounds raised before CIT (A) there is no finding given by him whether confirming or deleting disallowance . We are not in a position to sustain the order of CIT (A) confirming other additions as well as the amount of enhancement of ₹ 2 lac. Therefore, in the interest of justice we set aside the matter back to the file of Commissioner of Income-tax (Appeals) with a direction to pass a speaking order on each of the grounds raised following the procedure prescribed u/s 251 of the Act - Decided in favour of assessee for statistical purposes.
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2016 (1) TMI 312
Sale of the building - capital gains v/s income from business - Held that:- No doubt as contented by the learned Counsel for the assessee, a business asset can always be converted into an investment and retained by the assessee. The assessee, in support of its contention that the above property was held as an investment, is relying upon the entries in its balance sheet for the year 2007-08 wherein the asset is reflected as an investment. Further, it is also the argument of the assessee that the assessee has never claimed depreciation on the said asset, which proves that the assessee has never treated the asset as a business asset. Further argument is that the assessee, if it had any intention to sell the property as a business asset, could have sold any part of the building as a unit as and when the demand had arisen but has sold the property as a single unit and all these facts go in favour of the assessee that the intention of the assessee was always to retain the asset. We find that the CIT(A) has considered these facts in addition to the longevity of the period of holding to hold the income from transfer of the property is capital gains exigible to tax. The Revenue has not been able to controvert any of these contentions of the assessee or the finding of the CIT(A) with any evidence to the contrary. In view of the same, we do not see any reason to interfere with the order of the CIT(A). - Decided against revenue
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2016 (1) TMI 311
Disallowance of interest under section 24(b) - whether amount paid by the assessee to its sister concern Salivahana Associates, is not for the purpose of acquisition of property? - Held that:- From the details of the property, it is clear that the very same building ‘Bhuvana Towers’ was mortgaged with the Oriental Bank of Commerce. Thus, though the assessee has taken the loan from UCO Bank after construction of the building, we find that the same has been taken to repay the loan taken from Oriental Bank of Commerce by its associate concern Shalivahana Associates (the developer). The details of the purpose of loan from Oriental Bank of Commerce are not filed before us. Therefore, the exact purpose of the said loan is not known to us. However, the fact that the title deeds of Bhuvana Towers have been mortgaged with the Oriental Bank of Commerce raises the presumption that the loan must have been taken by the developer in relation to the said property. Since the construction of the property was completed in 2004 and the lease deeds were entered into on 01.01.2005, the contention of the assessee that the loan had been obtained by the developer for construction of the building is probable as no Bank would probably give a loan on a building which is not yet completed for any other purpose. However, the loan from Oriental Bank of Commerce was taken by the developer and the reason for the assessee to repay the same is stated to be for the purpose of acquiring the property. If the assessee has agreed to pay the developer for the works outside the development agreement for making it fit for letting out the property with all amenities, it is the expenditure incurred by the assessee for acquisition or improvement of the property. The mode or time of payment would not determine the nature of the expenditure. Therefore, all these facts need verification by the A.O. which has not been carried out by the A.O. for the assessment years before us. But the first year of the claim is A.Y. 2005-06 wherein the claim of the assessee was allowed in the assessment proceedings under section 143(3) of the Act and this fact has been taken note of by the Coordinate Bench of this Tribunal while quashing the revision order under section 263 of the Act. As rightly held by the CIT(A), the observations of ITAT in the 263 proceedings may not be entirely relevant for the proceedings under section 144 read with section 147 of the Act but as seen from the copy of the assessee’s submissions before the A.O. for the A.Y. 2005-06, we find that the assessee had submitted that it had requested the builder to complete their share of constructed area for which the assessee shall reimburse the expenses incurred for providing all the amenities and that the availing of the loan was to reimburse the developer for such finishing works. Since the assessment for A.Y. 2005-06 was completed under section 143(3) of the Act after calling for various details and scrutiny of the same, it is to be presumed that the A.O. has verified the details and accepted the assessee’s contentions after being satisfied about their acceptability. There has to be consistency and uniformity in the approach of the Revenue in the assessee’s own case in the subsequent assessment years on the same set of facts. Since the A.O. has accepted the assessee’s claim after verification and the revenue has not taken any steps to revise or reopen the assessment for A.Y. 2005-06, the assessee cannot be asked to prove the same set of facts from year to year. Therefore, we are of the opinion that the disallowance of the claim of interest on the loan borrowed by the assessee from UCO Bank under section 24(b) of the Act is not sustainable. - Decided in favour of assessee
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2016 (1) TMI 310
Allowability of depreciation at the rate of 100% on the temporary structure - CIT(A) disallowed claim - Held that:- The assessee has not filed the lease deed document, though the assessee has filed copy of the tax invoice and other bills towards purchase of materials for the above partition/false ceiling works. On perusal of para 4.1 of the order of the ld. CIT(A) and para 2 of the assessment order, we find that there is no clarity on the nature of the asset, on which depreciation at the rate of 100% is claimed. The copy of the Invoice No. DA/63 dated 16.10.2006 relied upon by the ld. Counsel for the assessee only describes the list of items of raw materials purchased by the assessee. It does not describe the nature of fixed asset. Therefore, there is need for basic facts relating to the assets in question, if there are partitions, ceiling, etc. or otherwise. In view of the above facts and circumstances, we set aside the order passed by the ld. CIT(A) and remit the matter back to the Assessing Officer to verify the lease deed and other documents as may be filed by the assessee and decide the issue afresh in accordance with law after allowing sufficient opportunity of hearing to the assessee by keeping in view of the ratio laid down by the Hon'ble Jurisdictional High Court in the case of Thiru Arooran Sugars Ltd. v. DCIT (2013 (2) TMI 450 - Madras High Court ). - Decided in favour of assessee for statistical purposes.
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2016 (1) TMI 309
Disallowance of expenses on account of exempted income - Held that:- We find that assessee has earned income from source of dividend which is exempted under income tax Act. We understand that a company cannot earn dividend without its existence and management. Investment decisions are very complex in nature. It requires substantial market research day-to-day analysis of market trends and decisions with regard to acquisition, retention and sale of shares, mutual funds etc., at the most, appropriate time. The investment requires availability of funds and consequential blocking of funds. It is well known that capital has cost and the element of cost is represented by interest. Besides investment decisions are generally taken in the meeting of Board of Directors for which administrative expenses are incurred. It is therefore, not correct to say that income can be earned by incurring no or nominal expenditure. We further observed that originally at the time of assessment order, assessee did not offer any disallowance at its own but disallowed the expenses to the tune of ₹ 2,74,150/- at its own during the appellate stage. However, we find that the rule 8D is applicable w.e.f 24th day of March 2008 i.e. from the assessment year 2008-09. Hence the provisions of Rule 8D does not apply to the relevant year under consideration i.e. Assessment year 2007-08. So prior to the applicability of Rule 8D, different ITAT benches has considered 1% of dividend income as reasonable disallowance under section 14A of the Act. However, we are finding from the CIT(A) order that the assessee has offered the disallowance of ₹ 274150.00 which is more than 1% of the exempted income. Therefore we are inclined to restrict the disallowance at the same amount. - Decided in favour of assessee
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2016 (1) TMI 308
Addition on receipt of on-money - Notice issued under section 158BD - CIT(A) deleted the addition - Held that:- No merit in the ground of appeal raised by the Revenue in this regard, in the absence of any evidence found of cash payment made to the assessee and in view of the other evidence i.e. Affidavit of Shri Y.P. Trivedi and Shri J.M. Jhala and the narration of alleged cash having been paid after the date of execution of sale deed, no reliance could be placed on the aforesaid addition to hold that the assessee was in receipt of on-money. In view of our upholding the order of CIT(A) in deleting the addition on merit, we do not find it necessary to adjudicate jurisdictional issue of notice under section 158BD of the Act and completion of assessment under section 158BD r.w.s. 143(3) of the Act. - Decided against revenue. Interest charged under section 158BFA(1) - CIT(A) deleted the addition - Held that:- The assessee has successfully demonstrated that the delay in furnishing of the block period return occurred for valid reason. Admittedly, in absence of PAN, it was impossible for the assessee to submit block period return in the capacity of legal heir. In fact the delay has occurred due to delay on the part of A.O. to allot the assessee a PAN. Thus, there was a reasonable cause and the assessee cannot be expected to do impossibility. Hence, under the facts and circumstances of the case and by relying on the ITAT decisions reported at Manoj Aggarwal and others Versus Deputy Commissioner Of Income-tax, Central Circle - 3, New Delhi [2008 (7) TMI 446 - ITAT DELHI-A ] and Bachubhai S. Antrolia. Versus Assistant Commissioner Of Income-tax, Circle - 1, Junagadh.[2006 (3) TMI 288 - ITAT RAJKOT ] it is held that the assessee is not liable to interest u/s 158BFA(1).- Decided against revenue.
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2016 (1) TMI 307
Exemption in terms of section 11(1)(a) - entitlement for carry forward of excess application of income - Held that:- The income of charitable trusts is required to be computed on commercial principles. The concept of application of the income for the year in which the income has arisen is not found in Section 11(1)(a) of the Act. No limitation to the above effect is found in the language of the section. It merely requires application of the income that has arisen from the property held under trust. In this view of the matter, the principles relating to set off of losses, etc. is not of any relevance and therefore any excess application of income during the year can be regarded as application of the income of future years and can be adjusted. Therefore, in our view, the claim of the assessee for carry forward of excess application is in accordance with the judicial precedents on the issue and the same is allowable. See The Jyothi Seva Society of Bangalore Versus Asst. Director of Income Tax (Exemption) , Circle 17 (2) , Bangalore [2015 (11) TMI 1270 - ITAT BANGALORE] - Decided in favour of assessee.
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2016 (1) TMI 306
Transfer pricing adjustment - whether the transactions of the assessee need to be benchmarked as KPO? - Held that:- The assessee claims itself to be a Software Development Service Provider whereas the TPO has treated the assessee as engaged in providing contract Research & Development Services. This dispute gets strength from the nomenclature used by the assessee in Form No. 3CEB and also in its Transfer Pricing Study Report. However, the documentary evidences filed in the form of copies of Softex Forms and the order of the STPI authorities paint an altogether different picture. In our considered opinion, these documents have not been properly appreciated by the Revenue authorities. Had these documents been examined qua the nature of business of the assessee, the resultant product would have been different. Therefore, in the interest of justice and fair play, we restore this issue to the file of the TPO. The TPO is directed to re-examine the entire issue by denovo assessment. The TPO is directed to decide the issue on the basis of Softex Form filed with the STPI authorities and related orders of the STPI authorities. The assessee is directed to furnish necessary details and the TPO is directed to examine the same after giving reasonable opportunity of being heard to the assessee. Needless to mention, the TPO shall also decide all other related issues with the TP adjustments relating to working capital adjustments and differences in the risks.- Decided in favour of assessee for statistical purpose.
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2016 (1) TMI 305
Addition as unrecorded profit on sale of flats - AO made the addition on the ground that assessee had sold flats to different parties at different rates - CIT(A) deleted the addition - Held that:- CIT (A) has rightly observed that as per contents of sale document, there was reference to sale of fully furnished flat to Dr. Rajnish Juneja, but in the case of other parties, there was specific reference to sale of flat in semi-finished condition and as such, the flat in the case of Dr. Rajnish Juneja and other parties are not comparable. We find that the ld. CIT (A) further observed that the AO has not made any verification or enquiry with the parties to whom flats were sold from ₹ 7,50,000/- to ₹ 9,00,000/- and no information has been brought on record that the assessee has taken any extra sale considerations from these parties which was not recorded in the books of the assessee. We further take note of the fact that the ld. CIT (A) has recorded a finding of fact that there was no material in the possession of AO to support the allegation of unrecorded profit in the hands of the assessee and the Ld. DR could not controvert the said fact before us which is material to decide this issue. Further, the ld. CIT (A) has recorded a finding of fact that as per the sale deed, the assessee has disclosed full value of sale consideration and the said fact also could not be controverted by the Ld. DR before us, as such, we agree with the Ld. CIT(A) that there was no factual or legal basis to contemplate any notional or hypothetical sale consideration in the absence of any specific evidence or material in the possession of the AO to counter the stand of the assessee. Thus the addition is based only on presumption and surmises and so the addition made by the AO was rightly deleted by the Ld. CIT(A) - Decided against revenue.
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2016 (1) TMI 304
Penalty u/s.271AAA - undisclosed income under the head 'business' - Held that:- The assessees in search statement had already claimed the impugned undisclosed income to have been earned from their business activities. He concludes that the same was never rebutted at any stage right from search till assessment. We find that a coordinate bench in DCIT vs. Bharat L. Shah [2015 (8) TMI 874 - ITAT AHMEDABAD ] arising from the very search dated 20.01.2009 upholds similar order of CIT(A) deleting identical Section 271AAA penalties on the very aspect of non satisfaction of first two conditions under sub-section 2 thereof. The Revenue neither point out any distinction on facts nor does it file any evidence disputing the lower appellate findings on factual aspects that the assessees had declared their undisclosed income under the head 'business'. We affirm the CIT(A)'s order deleting the impugned penalties accordingly. - Decided in favour of assessee.
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2016 (1) TMI 303
Unexplained cash credit u/s 68 - Held that:- In the instant case, the assessee has filed the necessary details regarding names and addresses of the persons. It is an admitted fact that all the persons were summoned by the assessing officer and their statements were recorded. The alleged subscribers to the share capital, deposed before the assessing officer that they have subscribed to the share capital of the company and also they have source for the above investment and filed necessary documents regarding sources for investment in the form of proof of agricultural properties and also filed affidavits. Therefore, in our opinion the assessee has discharged initial burden cast upon it u/s 68 of the Act by furnishing the names and addresses of the persons. Once identity is proved, then the onus shifts to the assessing officer to prove otherwise. Therefore, the A.O. is not right in making additions to the share application money in the hands of the assessee company.- Decided in favour of assessee Additions towards flat advances received in cash from the customers - Held that:- The A.O. made the additions without conducting any further enquiry about the genuineness of the transactions by summoning the concerned customers. The CIT(A), without appreciating the fact that these advances were returned to the customers, held that the assesse introduced its own unaccounted money under the guise of advance from customers. In our opinion, both the authorities failed to appreciate the fact that the so called advance was repaid to the customers by way of cheques. In view of the above factual position, we are of the opinion that the advances collected from customers towards flat bookings and later returned to the customers by way of account payee cheques cannot be at any stretch of imagination considered as assessee's income from undisclosed source. Therefore, we reverse the order of CIT(A) and direct the A.O. to delete the additions made on account of advance from customers. - Decided in favour of assessee
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2016 (1) TMI 302
Accrual of income in India - AO held that a part of the direct sales made in India by SJMHK and the assessee was attributable to the Indian Branch of SJMHK and accordingly taxable in India. The AO made an adhoc estimate of 20% of the direct sales made in India by SJMHK and the assessee and the same was attributed to the PE/business connection and taxed accordingly. - Computation of returned income on receipts related to services provided to both SJMH and SJMI - Management fee for work done for the Hongkong company as well as for the US company inclusion Held that:- It is held that even if any amount is to be taxed in the hands of SJMI (the appellant) by virtue of having a Permanent Establishment in India or otherwise, the amount that can be taxed is Rs. Nil, as the Permanent Establishment has been compensated at arm’s length and has offered the said compensation for tax in India which satisfies any charge in view of inter alia the decision of the Supreme Court in the case of DIT Vs Morgan Stanley & Co. (2007 (7) TMI 201 - SUPREME Court) and the order of the TPO. Decided in favour of the assessee.
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Customs
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2016 (1) TMI 287
Imposition of anti-dumping duty on Acrylonitrile Butadiene Rubber (NBR) imported from Korea RP. - Levy of anti-dumping duty on imports of Phenol. - Method and procedure - Period of review - Held that:- India is a signatory to Article VI of GATT and the said Agreement of 1994. In pursuance of the same, amendments were made in the said Act (customs Tariff Act, 1975) in 1995 and, inter alia, new section 9A was inserted. The said rules have been framed in exercise of powers conferred by section 9A(6) of the said Act. Therefore, when we consider, inter alia, section 9A of the said Act and the provisions of the said Rules, the conclusions outlined in G.M. Exports (2015 (9) TMI 1162 - SUPREME COURT) would come into play. It follows that if any of the said rules are vague or ambiguous then recourse could be had to the said Agreement as a legitimate aid to construction and any such ambiguity could be resolved in favour of a meaning that is consistent with the provisions of the said Agreement. Furthermore,if there be any difference between the language employed in the said rule and a corresponding provision of the said Agreement, the former is to be construed in the same sense as that of the said Agreement. Now, Article 11.4 of the said Agreement inter alia stipulates that the review contemplated under Article 11 shall be carried out expeditiously and shall “normally” be concluded within 12 months of the date of initiation of the review. Rule 23(2) of the said rules is modelled on Article 11.4 of the said Agreement. Thus, while construing rule 23(2) if any ambiguity is noticed, the same can be resolved by having recourse to Article 11.4. The use of the word “normally” in Article 11.4 is of great significance. It means that the review under Article 11 is to be completed expeditiously and “normally” within 12 months but that is not an inflexible period. Considered in this light, and to bring the provisions of rule 23(2) in harmony with Article 11.4, rule 23(2) would have to be read as – any review initiated under sub-rule (1) shall “normally” be concluded within a period not exceeding twelve months from the date of initiation of such review. And, when the first proviso of rule 17(1) is applied (with necessary changes) to the case of a review it becomes immediately clear that the period of 12 months can be further extended by the Central Government in its discretion by 6 months but only if special circumstances exist. Such a construction would be in keeping with the conclusions enumerated in G.M. Exports (supra). That being the case, we hold that the Central Government has the power to grant an extension of 6 months for concluding a review. We, however, are making it clear once again that we have not examined and were not called upon to examine whether this power has been exercised legitimately. The provision of extension of time contained in the first proviso to rule 17(1) can be pressed into service for extending the time of 12 months for concluding a review under rule 23(2) because of the mutatis mutandis prescription in rule 23(3). As such, the writ petitions are liable to be dismissed and they are dismissed - Decided against the appellants.
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2016 (1) TMI 286
Claim of duty drawback - The grievance of the petitioner is that the petitioner's draw back claim on completed exports have not been processed and cleared by the department - The petitioner imports certain raw materials and after value addition re-exports - Held that:- If in the present case, therefore, the department found that in subsequent imports there were alleged irregularities, it may also be open for the department to, for a reasonable period, delay the consideration of draw back claims pending such investigation. However, by no means this so called pending investigation can be the basis for indefinitely refusing to process draw back claims. As pointed out by the counsel for the petitioner even in cases where the alleged irregularities were noticed by the department at the outset at the time of import, till date no show cause notices have been issued and presumably therefore, the investigation is not completed. In cases of export consignments, which are the basis of draw back claims, the department has not stated the stage of investigation and the nature of materials so far collected. May be at this stage, the department would not like to reveal such facts nor we insist making the same part of record. In any case, the department cannot indefinitely delay the consideration of rebate claims of the petitioner. All the petitions are disposed of with the direction that if by 31.3.2016, the DRI investigation is not over and show cause notices for adjudication is not issued against the petitioners with respect to import and export in question, the respondents shall process the rebate claims in accordance with law.
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2016 (1) TMI 285
Waiver of pre-deposit - Differential custom duty on the goods imported i.e. Steam Coal - Held that:- We have no hesitation in following the decision in case of Ganesh Yadav vs. UOI & 30 others [2015 (7) TMI 304 - ALLAHABAD HIGH COURT] holding that amendment in Section 129E requiring mandatory deposit of 7.5% for hearing the appeal is applicable only to those appeals which are filed after 6/8/2014 i.e. date on which amendment of Section come into force. Moreover the issue has been referred to the Larger Bench in the case of Tamil Nadu Generation and Distribution Corporation Ltd. [2015 (1) TMI 366 - CESTAT CHENNAI] - Stay granted.
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Service Tax
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2016 (1) TMI 301
Erection, Commissioning or Installation Services - receipt of labour charges for installation and commissioning of GRP Pipes for various customers - period from 01.07.2003 to 31.10.2004. - Held that:- It could be seen from the amendment to Section 65(39a), introduced under Finance Act, 2005, that the definition of "erection, commissioning or installation" was extended so widely as to include (i) electrical and electronics devices, (ii)plumbing, (iii)heating, ventilation or air-conditioning, (iv) thermal insulation, (v) lift and escalator, and (vi) such other similar services. The pipes that the respondent/assessee had to lay were not plant, machinery or equipment. Therefore, the learned Judge [2011 (8) TMI 698 - MADRAS HIGH COURT] was right in allowing the writ petition. - Decided against the revenue.
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2016 (1) TMI 300
Valuation - Steamer agent services - reimbursement of expenses - inclusion of additional expenditure towards arranging drinking water, garbage clearance - expenses incurred by them for supply of mobile phones, and airtime charges, crew medical etc. - Held that:- the type of expenses involved in the present dispute will not definitely fall within the ambit of the taxable service vis-`-vis a steamer agency. They are only courtesy services or assistance rendered by the appellants to shipping lines, beyond the scope of their contractual obligations. Obviously, the Appellant is the ship’s conduit in the port of call for contracted steamer agency service. There would sometimes also arise requests for assistance for the ship or her officers, on issues not related to ship’s husbandry or booking etc. of cargo of the genre billed in this case. The Steamer Agent, by virtue of their ongoing relationship with the shipping line, inevitably extends any such assistance requested for. Items that may be required for the ship or her officers for personal use are thus very often procured from the market and supplied by steamer agent. In my view, the billings made by the Appellant for expenses incurred by them for supply of mobile phones, and airtime charges, crew medical etc. would fall in this category of other/ additional assistance rendered and the value thereof is not required to be added to value of taxable services and hence no tax liability will arise on such value. In the case of Sangamitra Services Agency [2013 (7) TMI 862 - MADRAS HIGH COURT], Hon’ble High Cout has held that if a receipt is for reimbursing the expenditure incurred for the purpose, the mere act of reimbursement, per se, would not justify the contention of Revenue that the same, having the character of the remuneration or commission deserves to be included in the sum amount of remuneration/commission. Appeal filed by the Revenue gets rejected - Decided in favor of assessee.
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2016 (1) TMI 299
Cenvat Credit - duty paying document / invoice were issued to the non registered unit - supply of goods ( natural gas) through pipeline to local consumers and others - appellant had obtained Centralised Registration on 25.2.2010 which included Vaghodia compressor station - Held that:- Decisions of this Tribunal in Manipal Advertising Services Pvt. Ltd. Vs. C.C.E.,Mangalore - [2009 (10) TMI 434 - CESTAT, BANGALORE] and Well Known Polyesters Ltd. Vs. C.C.E., Vapi - [2011 (1) TMI 664 - CESTAT, AHMEDABAD], have clearly declared the principle that if a person is discharging service tax liability from his registered premises, the benefit of cenvat credit on the service tax paid by the service provider cannot be denied, only on the ground that the invoices are in the name of branch offices which were not separately registered. - Benefit of credit allowed - Decided in favor ofassessee.
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2016 (1) TMI 298
Levy of penalty u/s 76 in a review passed by the Commissioner of Central Excise, Customs and Service Tax u/s 84 - Held that:- Since the issue involved in this appeal is before the adjudicating authority on remand from the Tribunal [2010 (12) TMI 89 - CESTAT, MUMBAI], we find that the impugned order in review which imposes penalty under Section 76, also needs to be set aside, as it does not survive when the order in original dated 31/10/2010 is already set aside by doctrine of merger.
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Central Excise
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2016 (1) TMI 297
Excisability of the product “custom pack” - Whether the process carried out by the assessee will amount to manufacture or not? - Apex Court dismissed the revenue appeal against the decision of HC order [2015 (3) TMI 733 - GUJARAT HIGH COURT] wherein HC upheld the order of tribunal as, "Tribunal has recorded its finding of fact that the product is only `pack' and no new product is manufactured by the respondent assessee and therefore no excise duty could be levied." - - Decided against the revenue.
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2016 (1) TMI 296
Scope of the term Manufacturer - Valuation - Job worker - Manufacture of medicaments - Not only the tax effect is low but also the issue involved is squarely covered by the judgment of this Court in ‘Commissioner of Central Excise v. Cosme Farma Laboratories Limited’ [2015 (4) TMI 355 - SUPREME COURT] wherein held that the term ‘manufacturer’ or the loan licensee used under the provisions of the Drugs and Cosmetics Act, 1940 has nothing to do with the manufacturing activity or term ‘manufacture’ under the provisions of the Central Excise Act, 1944. - Once the Tribunal, after appreciating relevant evidence, has come to a conclusion that the job workers were the manufacturers and the respondent - the loan licensee, was not the manufacturer - Decided against Revenue.
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2016 (1) TMI 295
Denial of refund claim - rebate under Rule 18 of Central Excise Rules 2002 - Bar of limitation - the notification of the year 1994 prescribed a time limit for filing claim. But, the 2004 notification did not contain the prescription regarding limitation. - Apex Court dismissed the revenue appeal against the decision of High Court [2015 (4) TMI 118 - MADRAS HIGH COURT] wherein it was held that, in the absence of any prescription in the scheme, the rejection of the application for refund as time barred, is unjustified. - Order of HC upheld - Decided against the revenue.
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2016 (1) TMI 294
Waiver of pre deposit - Mandatory pre deposit - Held that:- After reproducing the provisions of section 35F, Board Circular dated 16.09.2014, categorically held that the amount deposited by the appellant was not reversed during the course of investigation, was paid by the appellant themselves and are matter of dispute with reference the duty demand confirmed. In the case in hand, we find that the impugned order is passed in adjudication proceedings in pursuance to the show cause notice issued for the demand of Central Excise duty, hence the duty amount deposited by the appellants needs to be considered as in compliance of the provisions of section 35F of the Central Excise Act, 1944 - legislative intent in framing the provisions of section 35F of Central Excise Act, 1944, was to ensure that the right of appeal of an assesse is never exhausted, but subject to the conditions that the assessee deposits an amount equivalent to 7.5% or 10% as the case may be, of the duty confirmed by lower authorities - Appeal disposed of.
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2016 (1) TMI 293
Area based Exemption under Notification No. 50/2003-CE - commencement of commercial production on or before 31.3.2010 - Whether or not the respondent had commenced commercial production on or before 31.3.2010, in order to be eligible for exemption under notification No. 50/03-CE - Held that:- Concession under notification No. 50/03-CE is in pursuance of industrial policy notified through office memo No. 1(10)/2001-NER dated 7.1.2003. In pursuance of the said Central Government Policy, the State Government also commenced Industrial Policy 2004 to extend concession and facility for the industries in Himachal Pradesh. In terms of the said Policy "commencement of commercial production" means the date on which industrial enterprise actually commenced the commercial production as certified by Director etc. In the present case, the State authorities have certified commencement of commercial production as 31.3.2010. The respondents were also given the benefit under Income Tax Act and Sales Tax Act on the ground that they commenced production before 31.3.2010. AH these issues are apparently operational under the same Industrial Policy. It is apparent if the clearances made from 1.4.2010 are to be charged to duty as they are manufactured by the respondent, the commercial production would have certainly commenced prior to that date. Regarding non-availability of certain raw material with the respondent they have clarified that while most of the raw materials were procured by them some essential raw materials in small quantities were either taken from the samples given by the vendors and also supplied by vendors of capital machines as sales promotion - Revenue has not made out a case to interfere with the said findings - Decided against revenue.
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2016 (1) TMI 292
Valuation of goods - whether the charges towards training provided to the customer's staff is includable in the assessable value or not - Held that:- The customer is at liberty to get their staff trained from the appellant or not. The appellant produced both copies of invoices where charges on account of training are recovered by the appellant and also invoices where it is not so recovered. The charges on account of training the customer's staff is separately shown in the invoices wherever charged and recovered. The arguments of the learned Counsel for the appellant that the activity of training has no nexus with the activity of manufacturing, sale or marketing of the product and the same does not enrich the product has force. The Hon'ble Apex Court in the case of PSI Data Systems Ltd. (1996 (12) TMI 47 - SUPREME COURT OF INDIA) held that the charges for installation of computers and training of customer's personnel to operate and maintain it was not includable in the assessable value of the computers. Similarly, in the case of Kirloskar Electric Co Ltd. [2004 (8) TMI 293 - CESTAT, BANGALORE], National Radio & Electronics Co. Ltd. [1998 (2) TMI 297 - CEGAT, MUMBAI], Minicomp Ltd. (2002 (6) TMI 146 - CEGAT, MUMBAI), it has been held that the amounts collected for training are not includable in the assessable value - charges on account of training customer's staff being purely optional has no nexus with the manufacturing and marketing of goods and therefore, not includable in the assessable value. Therefore, we are of the considered view that the appellant is entitled to the refund - Matter remanded back - Decided in favour of assessee.
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2016 (1) TMI 291
Reversal of CENVAT Credit - some part of electricity / power is sold outside for consideration. - Invocation of extended period of limitation - Held that:- the 'inputs' and 'input services' which are used in the production of such electricity sold outside will not be eligible for credit as they fall outside the ambit of 'input and input services' as defined by Cenvat Credit Rules 2004. Here the service tax is paid on the inward transportation of gas used for power generation and there is no physical separation of supply lines or accounts to show which quantum of service tax is attributable to that gas used for electricity sold outside. Hence, it follows that proportionate to service tax attributable to the transportation of gas used for production of electricity sold outside has to be reversed - This is clearly in terms of provisions of Cenvat Credit Rules 2004 interpreted and decided by the Hon'ble Supreme Court in the appellants own case (2009 (8) TMI 14 - SUPREME COURT ). In the present case the proceedings have been initiated only after the decision by the Hon'ble Supreme Court in appellants case. This much has been stated in the notice as well as the impugned order. Hence, we find invoking extended period of demand alleging fraud and suppression etc on the part of the appellant is not sustainable. Accordingly we hold that while the demand of reversal of proportionate credit is sustainable for the normal period the demand for extended period along with penalty is to be set aside. - Appeal disposed of
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2016 (1) TMI 290
Denial of refund claim - Rule 5 of the Cenvat Credit Rules - statement shows lot wise utilization of inputs for export of goods - Held that:- It is not possible for the appellant to utilise the credit of duty available on the goods cleared in the domestic market. Moreover, after 2004, alternate schemes are available and goods being cleared in domestic market are duty free. We, therefore, direct that under the circumstances, the appellant will be entitled to get the refund of the unutilized credit of duty as inputs used in the goods exported under bond. As far as the second point is concerned, the learned Counsel for the appellant submitted that it is possible for them to give ARE-1 wise details of the input used and their corresponding invoices. It will therefore, be possible to compute the credit of duty on inputs. However, the said exercise cannot be done at Tribunal stage and in view of this position, the matter is remanded to the original authority - Matter remanded back - Decided in favour of assessee.
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2016 (1) TMI 289
Claim of interest on delayed refund - finalization of provisional assessment - period of limitation - appellant filed the refund claim on 11.8.1998 “without prejudice” basis under Rule 9B(5) of the Central Excise Rules, 1944 on the ground that appellant is not required to file refund claim under Rule 9B(5) of the Rules as per various judicial pronouncements. - Held that:- Admittedly, in this case, the order dated 7.7.98 of finalization of provisional assessment was challenged by the Revenue before learned Commissioner (Appeals) which attained finality on 30.5.2001, therefore, refund claim is governed by section 11B of the Central Excise Act, 1944. At this stage, the learned Counsel for the appellant have conceded their claim of interest for the period prior to 30.5.2001. We have held that the refund claim is governed by section 11B of the Central Excise Act, 1944 as discussed hereinabove, in that circumstances, the appellant is entitled for interest on delayed refund after three months from the date i.e. 30.5.2001 when the claim of refund has attained finality till the refund claim was given to the appellant. - Decided in favor of assessee.
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2016 (1) TMI 288
Cenvat Credit in respect of outward GTA used for removal of intermediate goods either to job worker or to their own other units - place of removal - Held that:- In the instant case though the goods were cleared on payment of duty from the factory of the appellant but not sold from the factory. In case of job work goods the sale of the finished goods took place from the appellant factory and in case of removal of goods to their own other unit the sale took place from that other unit. Therefore in the present case transportation (GTA) service is used up to the place of removal and hence qualified as input service. GTA in the present case being used up to the place of removal covered under the definition of input service and hence admissible for Cenvat Credit. - Decided in favor of assessee.
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CST, VAT & Sales Tax
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2016 (1) TMI 284
Claim of exemption from sales tax against Sale of goods through duty free shop to in-transit passengers located at Sahar International Airport - Held that:- The operative order and while remanding the case for the period 1993-94 and 1994-95 to the assessing authority directs that authority to verify whether the sale of goods from dutyfree shops located at Sahar International Airport in the Arrival Lounge are made to in-transit passengers and, therefore, entitled to exemption or all sales from that shop should be exempted because they are necessarily made to in-transit passengers. That verification and scrutiny will have to be done in terms of the operative order. However, it is clear that if the sale is to in-transit passengers and all the terms and conditions of the exemption notification are fulfilled, then, such sales are exempt from tax. Therefore, we do not see any confusion nor would the assessing officer deal with all sales as if they are made to in-transit passengers necessarily. - The transactions with such passengers who are termed as in-transit passengers and within the meaning of the said exemption notification have been referred to by the Tribunal. It is on the understanding that the Tribunal has interpreted the words “in-transit passengers”. That is neither stretching the definition so as to extend the benefit of the exemption notification to any passenger or customer nor does it take away the benefit of the same by reading it as narrowly as was suggested before it. In such circumstances, the Tribunal's understanding of the exemption notification and reflected in its judgment does not raise any question of law. - Decided against Revenue.
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2016 (1) TMI 283
Reversal of ITC for non production of declaration forms and non issuance of notice before imposing tax under other category - Held that:- Admittedly, challenging the assessment order for the year 2011-12, the petitioner preferred an appeal and the same was returned for rectifying certain mistakes and for production of proof for payment of 25% of disputed tax. Accordingly, the petitioner, complying those defects, re-submitted the papers, but, till date, the appeal has not been taken up for consideration. In the meanwhile, the petitioner came to understand by letter dated 11.09.2015 of the 3rd respondent Bank stating that their Bank account was attached pursuant to the order dated 10.08.2015 enclosing Form U for attachment of the balance amount in their account. - petitioner is directed to pay 25% of the disputed tax other than the amount of 25% already deposited and on production of proof of such payment - Petition disposed of.
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2016 (1) TMI 282
Works contractor service - Benefit of composition scheme - Validity of SCN - Issued beyond jurisdiction - Held that:- Petitioner(s) had neither filed any objection/reply to the said notice nor raised the pleas as have been raised in the instant writ petitions before the competent authority. - Proper course of action for the noticee is to file detailed and comprehensive objection/reply and to raise all the pleas as have been raised in the writ petitions. In case any objection/reply is filed by the petitioner(s) within a period of two weeks from the date of receipt of the certified copy of the order, the revisional authority shall decide the same within a period of six weeks from the date of receipt of the objection/reply in accordance with law after affording an opportunity of hearing to the petitioner(s) and by passing a speaking order before proceeding further in the matter. - Petition disposed of.
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Indian Laws
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2016 (1) TMI 281
Validity of proceedings under SARFAESI Act - taking possession or interfering with the rights and ownership of the petitioner in property - It is averred that the petitioner was shocked to see the said notice as the petitioner had not taken any loan on the said property in question nor mortgaged the property to respondent No.1 Federal Bank Limited. It is urged that the petitioner is not an overnight inductee, inducted by the borrower to defeat the rights of respondent No.1. Held that:- The facts of the present case are that the petitioner claims to be a bona fide purchaser of the property without knowledge of the prior alleged mortgage by the borrower in favour of respondent No.1. The contentions of the petitioner would necessarily have to be adjudicated upon under Section 17 of the SARFAESI Act by the DRT. It would not be for the CMM to adjudicate on the rights of the petitioner. Hence, there is no merit in the submission of the petitioner about illegality of the order of CMM dated 6.7.2015. The petitioner has an alternative remedy which he has availed. Hence, this Writ Petition would not be maintainable [(Re: Kanaiyalal Lalchand Sachdev & Ors. v. State of Maharashtra & Ors. (2011 (2) TMI 1277 - SUPREME COURT OF INDIA)]. It would be open for the petitioner to raise all his objections before the DRT in the petition under Section 17(1) which is pending being SA 43/2015. The concerned Tribunal may deal with the said petition of the petitioner in accordance with law. Keeping in view the above facts it would be in the interest of justice that adjudication takes place on the contentions of the petitioner before any adverse steps are taken against the property. We accordingly direct that parties will continue to maintain status quo as on 4.8.2015 when interim orders were passed by this Court till adjudication of S.A.43/2015 filed under section 17 of the Act by the petitioner which is pending before DRT. However, respondent No. 1 is given liberty to approach DRT with an appropriate application for vacation/modification of the present directions passed by us in case it so desires.
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