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TMI Tax Updates - e-Newsletter
October 24, 2018
Case Laws in this Newsletter:
GST
Income Tax
Customs
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
TMI SMS
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
GST
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Govt. Exempts a person making inter-State taxable supplies of handicraft goods from the requirement to obtain registration - But e-way bill will be required.
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Invocation of Bank guarantee by respondents before prosecuting the appeal by petitioner - petitioner's case is that if the respondents invoke the bank guarantee, the petitioner's right to statutory remedy becomes illusory - Revenue directed to not to invoke the bank guarantee for three months.
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Detention of vehicle with goods - e-way bill had expired - After generating that bill, it had the goods loaded into a transport vehicle. But it could not transport them during night hours. The next day, 2nd October, was a holiday. So it could transport the goods only on 3.10.2018 at 10.40 am. - ASTO directed to reexamine the issue.
Income Tax
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Disallowing expenditure on account of contribution to cricket academy by holding it as capital expenditure - nature of expenditure - it is clear that the terms of contract, the expenditure are directly related to business interest of the assessee. - Allowed as revenue expenditure.
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Exemption u/s 11 - instead of rejection of Registration granted u/s 12A/12AA, AO has to examine whether the assessee is carrying on its activities in accordance with the object clause of the Trust and whether there is any violation u/s. 13, and thereafter, he has to decide granting of exemption u/s. 11
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Denial of deduction u/s 44A - denial of exemption u/s 11 - mutual association - AO erred in invoking proviso to Sec. 2(15) to treat the activities of the assessee as being non-charitable specifically considering the fact that no material or evidence has been led to show that there was any profit motive in carrying out such activities
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Deemed dividend - the sale consideration received on transfer of rights in the property and, thus, it is not in the nature of advance or deposits, which could be held as liable for deemed dividend in terms of section 2(22)(e)
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Redemption of units of mutual funds - capital gain or business income - the intention for purchase of mutual funds was only for the purpose of investment and held for benefits accruing thereon - Though the mutual funds are for a period less than 12 months, redemption of units of mutual funds is to be taxed as capital gains and not as business.
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Reopening of assessment u/s 148 - Appointment of special auditor - the reasons which have been assigned for reopening the assessment, are based on factual aspects which can be objected to or rebutted at the time of assessment.
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Reopening of assessment u/s 147 - no notice u/s 143(2) of the Act was issued - Furnishing of the return is a sine qua non for issuance of notice under Section 143(2) of the Act. If no return is furnished by the assessee, there can be no reason for issuance of notice under Section 143(2) of the Act
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Levy of penalty u/s.271AAB - filing of return declaring undisclosed income - Specified date is the due date for furnishing returned income u/s.139(1). Assessee had filed returned income after such date. Hence, assessee cannot take advantage of clause (a) of Sub Section(1) of Section 271AAB. - Levy of penalty confirmed.
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TDS u/s 194H - non-deduction of TDS - sale promotion expenses - a trip to Thailand offered to one person on achieving sale of 75 boxes or 2700 pieces - it is not a commission and is additional benefit given to the C&F agents - No TDS liability.
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TDS u/s 195 - expenses incurred for the purpose of business of the PE - no TDS has been deducted on the salary paid to the employees - India Mauritius DTAA - all the expenses incurred for the purpose of the business of the PE are to be allowed.
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TDS liability - It cannot be a reason for non-deduction of tax at source that recipient of the income have onward distributed the work to the sub contractors and recipient of the income have in turn deducted the tax at source on payment made by them to those sub- contractors.
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The presumption of Ld. CIT(A), that the assessee did not wish to pursue the appeal, stands demolished and the impugned order of Ld. CIT(A) based on this presumption has no legs to stand.
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TPA - receivables forming a part of international transaction - TPO is not justified in concluding that the figure of receivables beyond 180 days constitutes an international transaction by itself.
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Nature and genuineness of purchase - AO directged to estimate 30% profit on alleged bogus purchase of capital goods and the balance amount shall be treated as purchase of capital assets and accordingly, depreciation shall be allowed at the prescribed rates on capitalized portion.
Customs
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Valuation of imported goods - enhancement of value based on NIDB data - LME prices are, at best only indicative and are not final and conclusive, to enable relying upon the same for enhancement of value.
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Demand of pre-deposit - other parties got stay on similar issue - Only Indus faced the problem of precondition. Equity may demand that Indus may have its case adjudicated on merits. But judicial discipline demands scrupulous compliance with the precedential dictate.
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Import of Ethylene Di-chloride (EDC) - Restricted item or not - The mere prescription of a proforma for issuance of an import permit by the RC under the Insecticides Act cannot be termed to be a requirement under the statute.
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Smuggling - Gold - if a person in possession of the stolen gold is able to establish that it had come into India after a proper declaration and compliance of the Act, no confiscation under the Act, can arise. Proceedings under the Indian Penal Code may be initiated by the police for theft, but it would not by reason of theft become smuggled goods.
IBC
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Insolvency and Bankruptcy Board of India (Liquidation Process) (Second Amendment) Regulations, 2018
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Insolvency and Bankruptcy Board of India (Mechanism for Issuing Regulations) Regulations, 2018
Central Excise
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CENVAT Credit - by-product/waste - bagasse & press-mud arising out of manufacture - irrespective of the amendment, there arises no liability upon the appellant to pay the duty as demanded for the period w.e.f. September, 2014 to February, 2015, nor for the reversal of the credit as demanded for the period June, 2015 to March, 2016
VAT
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Central Sale or not - production of Form-C - merely because, the petitioner transported the goods outside the State will not bring the transaction within the ambit of the inter state sale
Case Laws:
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GST
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2018 (10) TMI 1190
Detention of vehicle with goods - e-way bill had expired - Section 129 of the SGST Act - After generating that bill, it had the goods loaded into a transport vehicle. But it could not transport them during night hours. The next day, 2nd October, was a holiday. So it could transport the goods only on 3.10.2018 at 10.40 am. - Held that:- The writ petition disposed off settting aside the Ext. P10 - the petitioner can approach the ASTO tomorrow - On the petitioners' approach, the authority will reexamine the issue, keeping in view the petitioner's Ext.P9 explanation and the other materials, and pass orders on the same day - petition disposed off.
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2018 (10) TMI 1189
Invocation of Bank guarantee by respondents before prosecuting the appeal by petitioner - petitioner's case is that if the respondents invoke the bank guarantee, the petitioner's right to statutory remedy becomes illusory - Held that:- Indeed, in terms of Section 107 of the Act, read with Rule 108 of the Goods and Services Tax Rules; to appeal, the petitioner has three months' time from the date of Ext.P7 impugned order. But it may be inequitable for the respondent authorities to invoke the bank guarantee before the limitation to appeal ends. Petition disposed off by holding that the respondent will not invoke the bank guarantee for three months - petition disposed off.
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2018 (10) TMI 1188
Request for withdrawal of petition - alternate remedy - petitioner concedes that in the face of an alternate remedy, the petitioner cannot persist with this writ petition - Held that:- The petitioner can approach the Appellate Authority by filing a statutory appeal against the Ext.P8. As the order was passed on 06.02.2018, indeed the appeal may face the problem of limitation - petition disposed off.
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Income Tax
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2018 (10) TMI 1187
Reopening of assessment u/s 147 - no notice under Section 143(2) of the Act was issued by the Assessing Officer - Return filed after prescribed time - Held that:- Admittedly in the instant case, the return was filed by the assessee after the time prescribed for filing return under Sections 139(1) and 139(4) had expired. Therefore, the return filed by the assessee has to be treated as non-est. The proceedings under Section 147 of the Act were initiated on the ground that the return for the assessment year 2005-06 was the first ever return filed by the assessee and was filed on 13.02.2008. The Assessing Officer asked to explain the opening capital and source of advances through notices on various dates from December 2012 to February 2013. No response was made by the assessee. Subsequently, AO vide draft letter dated 28.02.2013 asked to comply and give response to the draft assessment order on 11.03.2013. The assessee did not respond to the draft assessment order where certain additions were proposed on account of unexplained opening capital balances of partner, unexplained loan extended to Mr. and Mrs. Shah and disallowance of interest. In absence of any explanation, the AO made the additions. Notice under Section 143(2) is required to be given only when return is furnished. Furnishing of the return is a sine qua non for issuance of notice under Section 143(2) of the Act. If no return is furnished by the assessee, there can be no reason for issuance of notice under Section 143(2) of the Act - Decided in favour of revenue.
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2018 (10) TMI 1186
Entitlement to deduction u/s 80IA in respect of windmill unit - Held that:- Substantial Questions of Law were considered by the Division Bench of this Court in the assessee's own case for the earlier Assessment Year in Prasad Productions P.Ltd. vs. Deputy Commissioner of Income Tax [2015 (3) TMI 158 - MADRAS HIGH COURT] as held having exercised their option and their losses have been set off already against other income of the business enterprise, the assessee in this appeal falls within the parameters of Section 80IA of the Income Tax Act - decided in favour of the assessee.
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2018 (10) TMI 1185
Appointment of special auditor - Denial of natural justice - no fair opportunity of hearing before passing of the order under Section 142 (2A) - Held that:- Taking note of the reply filed by the petitioner, decision was taken by the Assistant Commissioner on 22.12.2017 appointing special auditor under Section 142 (2A). After having satisfied himself that considering the nature in complexity of accounts multiply all transactions in the accounts of the assessee and in the interest of revenue, special auditor was required to be appointed. Thus, the argument of the petitioner’s counsel cannot be accepted that there was no opportunity given to the petitioner or that there was contravention of principle of natural justice while appointing the special auditor and on that count so far as the appointment of special auditor is concerned, is rejected. Reopening of assessment u/s 148 - validity of “reason to believe”- ‘pakki rokad bahi’ foundin survey by the special auditor - Held that:- Objections were submitted by the petitioner before the concerned Assessing Authority who has noted that said objections as have been argued before this Court and has reached to the conclusion that the reasons which have been assigned for reopening the assessment, are based on factual aspects which can be objected to or rebutted at the time of assessment. It has also been noted that as special auditor has already been appointed for the assessment year 2010-2011, the assessee would have a fair opportunity to rebut the reasons. Even otherwise prima facie there were sufficient reasons for reopening. - decided against assessee.
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2018 (10) TMI 1184
Reopening of assessment u/s 147 - arbitrary power upon the Assessing Officer to reopen the proceedings - validity of reasons to believe - advertisement expenses disallowance - Held that:- AO during the course of original assessment proceedings, had made specific queries to which the assessee not only gave specific replies, but the reply of the assessee was well supported by the evidences/details. If the action of the AO is accepted, then it would confer arbitrary power upon the Assessing Officer to reopen the proceedings on the slightest pretext. Mere change in the opinion would not confer jurisdiction upon the Assessing Officer to initiate a proceeding u/s 147. A perusal of the reasons for reopening shows that there was no new tangible material evidence which prompted the AO to issue notice for reopening of the assessment. Kelvinator of India Ltd [2010 (1) TMI 11 - SUPREME COURT OF INDIA] to be followed. In his reasons for reopening the assessment AO had observed that the assessee had claimed and allowed advertisement expenses of ₹ 23.31 crores out of which the assessee was reimbursed ₹ 10.97 crores and balance of ₹ 11.50 crores has been shown under the head “Loan and Advance” recovered towards reimbursement. This observation of the AO for reopening the assessment is factually incorrect. Advertisement and Publicity expenses are at ₹ 10.66 crores and selling and distribution expenses are at ₹ 24.76 crores. The balance of advertisement and publicity expenses is covered by financial support of ₹ 10.97 crores received from AE Yamaha Motor Company, Japan. It appears that the AO has taken the figure from the balance sheet. Exhibit 56, Schedules to the Accounts Schedule 5 “Loans and Advances” showing ₹ 1339.90 lakhs, the details of the same and in the bifurcation, the assessee has to receive ₹ 11.50 crores from Yamaha Motor Company, Japan as amount recovered towards reimbursement of advertisement expenses and other financial support provided by Yamaha Motor Company, Japan. This amount has never been claimed as expenditure by the assessee. Thus, it can be seen that the Assessing Officer had proceeded to reopen the assessment on wrong assumption of facts in so far as claim of advertisement expenditure are concerned and wrong assumption of law in so far as claim of depreciation is concerned. Thus reopening is bad in law. - Decided in favour of assessee.
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2018 (10) TMI 1183
TPA - If transactions are both with the AE and Non-AE, whether it is correct to adopt Entity level approach - MAM selection - TNMM application - Held that:- Similar issues involved in the present appeal were considered by the Tribunal in assessee’s own case [2017 (12) TMI 809 - ITAT DELHI]TNMM can be correctly applied on entity level if the international transactions are on sale by the taxpayer to its foreign AE and there is no other international transaction of sale to any outsider and also there is no other international transaction. AO/TPO/DRP have erred in disregarding the segmental result of the taxpayer by proceeding to consider the margin of the taxpayer at the entity level for the transfer pricing analysis. So, by accepting the TNMM as the most appropriate method and in the face of the fact that the taxpayer was having separate international transaction with its AE, the ALP of the same is to be determined whereas ALP of the other transactions of the taxpayer with non-AE is not to be considered. Respectfully, following the findings of the coordinate bench, we direct the TPO to decide the issue afresh after considering the directions of the coordinate bench [supra]. - Appeal of assessee allowed for statistical purposes.
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2018 (10) TMI 1182
Penalty u/s 271(1)(c) - legality and quantum of penalty levied - disallowance of deduction claimed u/s 80IB(10) - "substantial question of law” - Held that:- Respectfully following the decisions of Principal Commissioner of Income Tax V Surabhi Homes Pvt. Ltd [2017 (3) TMI 1714 - MADHYA PRADESH HIGH COURT] and also looking to the fact that “substantial question of law” is pending before the Hon'ble Apex Court in the case of the assessee, we are of the considered view that the lower authorities erred in levying the penalty u/s 271(1)(c) of the Act for disallowance of deduction u/s 80IB(10) merely on a technical ground. We therefore allow the relevant ground No.3 for all the three appeals challenging the penalty confirmed by Ld.CIT(A) u/s 271(1)(c ) of the Act. Decided in favour of assessee.
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2018 (10) TMI 1181
Rectification of mistake - error in cause title - directing the AO to estimate 30% net profit on alleged bogus purchases - Held that:- No enquiries were made by the AO from the suppliers either u/s 133(6) or otherwise to establish the fact that the purchases were in the nature of accommodation bills. Merely because the assessee has voluntarily offered the said purchases to tax does not absolve the AO from his responsibility of proving that the purchases were in fact taxed particularly when the disclosure was impliedly retracted by contesting the addition during assessment and appellate proceedings. AO has not brought out any evidence on record by conclusively proving that the purchases were not genuine and merely relied upon the sales-tax department’s list coupled with assesse’s own admission on the said purchases during survey action u/s 133A, to make the addition. Under similar facts and circumstances, the co-ordinate bench of ITAT, Kolkata Bench in assessee’s sister concern case in DCIT vs Laboratories Griffon Pvt Ltd [2018 (4) TMI 709 - ITAT KOLKATA] for AY 2011-12 has restricted the disallowance @30% of the alleged bogus purchases. Therefore, we direct the AO to restrict addition @30% of alleged bogus purchases. Addition made towards capital goods from the alleged suspicious dealers - Held that:- We find that the ITAT, Mumbai Bench in the case of New Consolidated Construction Co Ltd vs DCIT [2017 (12) TMI 928 - ITAT MUMBAI] has considered similar issue and held that findings given in respect of purchases of raw materials shall apply to purchases of capital goods in case of alleged bogus purchases and accordingly direct the AO to estimate 12.5% profit on alleged bogus purchases of capital goods and balance amount shall be treated as capital asset and depreciation shall be allowed at the prescribed rates. Thus we direct the AO to estimate 30% profit on alleged bogus purchase of capital goods and the balance amount shall be treated as purchase of capital assets and accordingly, depreciation shall be allowed at the prescribed rates on capitalized portion - Decided partly in favour of assessee.
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2018 (10) TMI 1180
TPA - receivables forming a part of international transaction - international transaction - ALP determination - receivables beyond 180 days - Held that:- As relying on case of Kusum Healthcare Pvt. Ltd. Vs. ACIT [2017 (4) TMI 1254 - DELHI HIGH COURT], there has to be a proper inquiry by the TPO by analysing the statistics over a period of time to discern a pattern which would indicate that vis-à-vis the receivables for the supplies made to an AE, the arrangement reflects an international transaction intended to benefit the AE in some way. The Court finds that the entire focus of the AO was on just one AY and the figure of receivables in relation to that AY can hardly reflect a pattern that would justify a TPO concluding that the figure of receivables beyond 180 days constitutes an international transaction by itself. With the Assessee having already factored in the impact of the receivables on the working capital and thereby on its pricing/profitability vis-à-vis that of its comparables, any further adjustment only on the basis of the outstanding receivables would have distorted the picture and re-characterised the transaction. This was clearly impermissible in law as explained by this Court in CIT v. EKL Appliances Ltd. (2012 (4) TMI 346 - DELHI HIGH COURT). - Decided in favour of assessee.
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2018 (10) TMI 1179
Redemption of units of mutual funds - capital gain or business income - period of holding - number of transactions - Held that:- Here it is not a case where the mutual funds have been rotated again and again to purchase and sell the same which is a typical feature in a business, albeit here in this case as pointed out earlier, only 15 transactions have been undertaken for redemption of mutual funds and investment in the same mutual funds have not been made and redeemed again and again. The purchase of mutual funds has been classified as ‘investment’ in the books of account and in the balance sheets and such a treatment is continuing in the subsequent periods also and at no point of time, they have been treated as ‘stock in trade’ in the books of accounts. Thus, the intention of the assessee right from the day one was to make investment in the form of mutual fund and not for the trading. This is also fortified by the fact that no borrowed funds have been utilised in such an investment. The computation and the details of short-term capital shows that mutual funds were held and redeemed mainly on maturity date which again indicates that the intention for purchase of mutual funds was only for the purpose of investment and held for benefits accruing thereon. Further on perusal of the profit and loss account it is seen that there is no expenditure debited which can be said to be incidental for the business purpose. Though here in this case redemption of mutual funds are for a period less than 12 months, but it is quite clear from the CBDT circular that intention of the assessee and the treatment given by the assessee in the books has been given paramount importance. CIT (A) has rightly held that redemption of units of mutual funds is to be taxed as capital gains and not as business. - Decided against revenue. Deemed dividend addition u/s 2(22)(e) - CIT(A) has deleted the said deemed dividend in the hands of the assessee firm on the ground that firstly, such a capital contribution is not a loan or advance, because no one gets right to share the profit of the firm merely by giving loan and advance; and secondly, the assessee firm not being the registered or beneficial shareholders in these two companies, therefore, provision of deemed dividend cannot be attracted - Held that:- Such a conclusion of CIT-A is based on well settled proposition of law, therefore, same is affirmed. However, CIT(A) has given direction to the AO to examine the issue of deemed dividend in the hands of individual persons. In so far as the direction of the Ld. CIT(A) to delete the addition of deemed dividend in the hands of the firm the same is affirmed, but in so far as direction given to the AO, we are not interfering in such a direction, because that issue if at all could be examined if only any such action is taken in the hands of the individuals and not otherwise. Accordingly, the grounds raised by the revenue on this score are dismissed.
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2018 (10) TMI 1178
Validity of order of CIT(A) in dismissing the appeal - Absence of proof of service of notice of hearing on the assessee - Denial of natural justice - Disallowance of the 2% of Total expenses - dismissing the appeal of the Assessee in limine for non-prosecution of appeal - Held that:- There is nothing in the subsequent conduct of the assessee, after the assessee received the impugned order dated 29.12.2017 of Ld. CIT(A), to validate the presumption of Ld. CIT(A) that the assessee did not wish to pursue the appeal. The order of Ld. CIT(A) does not make any mention of actual service of notices of hearing on the assessee; and that the DR failed to bring any evidence for our consideration to prove actual service of notices of hearing on the assessee. In the absence of proof of service of notice of hearing on the assessee, requirements U/s 250(1) and (2) in procedure in appeal prescribed U/s 250 of I.T. Act cannot be said to have been fulfilled. Unless the hearing notice is served on the assessee, the assessee’s right to be heard at the hearing cannot be exercised by the Assessee. Commissioner (Appeals) is duty bound to provide reasonable opportunity of being heard to the assessee. Valid service of notice of hearing is part of that duty. On cumulative consideration of these facts and circumstances, and the legal position, the presumption of Ld. CIT(A), that the assessee did not wish to pursue the appeal, stands demolished and the impugned order of Ld. CIT(A) based on this presumption has no legs to stand. In any case, when the requirement U/s 250(1) and (2) of I.T. Act are not complied with at the end of Ld. CIT(A), the appellate order passed U/s 250(6) of I.T. Act by Ld. CIT(A) suffers from infirmity and cannot be upheld. CIT(A) erred in dismissing the appeal of the Assessee in limine for non-prosecution of appeal by assessee. We set aside the impugned order of the Ld. CIT(A) and we direct the Ld. CIT(A) to pass denovo order as per law, in accordance with Sections 250 and 251 - Appeal of the Assessee is treated as partly allowed for statistical purposes.
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2018 (10) TMI 1177
Disallowance of commission paid on sales affected during the year - eligible expense in the hands of the payer - Held that:- Mere fact that the recipient has offered the amount as his income doesn’t necessarily lead to a conclusion that the same will be allowed as an eligible expense in the hands of the payer. Merely crediting the account of Shri Sanjay Gupta at the year end and in absence of commensurate withdrawal or the payment by the assessee and where the same facts hold good even for past and the subsequent years, the instant transaction is in essence a transaction of share in profits though termed and reflected as commission for services. Similarly, we note that similar fact pattern emerges in respect of Smt. Annu Gupta for the instant year. As noted and examined the facts only for the instant year and it is important to examine whether similar fact pattern emerges for the other years where there is involvement of these two individuals in assessee’s business and in absence of that, the matter cannot be decided conclusively. Various other contentions so raised by the ld AR are therefore not commented upon and are thus kept open. We deem it appropriate to remand these two matters relating to commission back to the file of the Assessing Officer who shall examine the matter a fresh taking into consideration the above discussion after giving reasonable opportunity to the assessee. - decided in favour of assessee for statistical purposes.
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2018 (10) TMI 1176
Exemption u/s 11 - assessee is engaged in charitable activity or not - Registration granted u/s. 12A/12AA denied - AO jurisdiction to deny the renewal of registration - Held that:- AO has no jurisdiction to question the continuation of registration u/s. 12A of the Act and thereby deny the claim of the assessee u/s. 11 of the I.T. Act and tax the amount set apart in earlier years on the reason that the assessee is not eligible for continuation of registration u/s. 12A of the Act. To that extent, the CIT(A) is justified in his finding that the Assessing Officer has no jurisdiction to question the same in view of the decision of this Tribunal in the case of Kuttukaran Foundation [2012 (4) TMI 78 - ITAT COCHIN]. CIT(A) could have directed the Assessing Officer to examine whether the activities carried on by the assessee is in accordance with the object clause of the Trust. Neither the CIT(A) nor the Assessing Officer have examined this issue. AO in this case, at the threshold, rejected the claim of the assessee under section 11 of the Act by observing that since the Trust has not obtained the approval of the Commissioner of Income-tax for amendments made by it in the memorandum and rules and regulations, and also not obtained prior approval for expanding its operations beyond the limits of the country, the Trust is not eligible for continuation of the registration granted u/s. 12A of the Act. Being so, the assessee was treated as having no registration u/s. 12A of the Act. Hence, The Assessing Officer has not examined and satisfied himself whether the asessee-Trust has carried on the operations in accordance with provisions of section 11 of the Act so as to grant exemption u/s. 11 of the Act. Since we have observed that the assessee-Trust is entitled for continuation of registration u/s. 12A of the Act and it cannot be questioned by the Assessing Officer unless it is cancelled by the CIT(Exemptions), the Assessing Officer has to examine whether the assessee is carrying on its activities in accordance with the object clause of the Trust and whether there is any violation u/s. 13 of the Act, and thereafter, he has to decide granting of exemption u/s. 11 of the Act. Hence, we remit this issue to the file of the Assessing Officer to examine the issue - Appeal of revenue partly allowed.
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2018 (10) TMI 1175
Revision u/s 263 - AO had not examined that the assessee has collected employees' share of EPF and ESI, but the payment towards the fund has not been made within the period prescribed for the purpose by Government of India - Held that:- As referring to the judgment of CIT vs. Merchem Ltd. [2015 (9) TMI 560 - KERALA HIGH COURT] assessee is entitled to get the benefit of deduction u/s. 43B(b) as provided under the proviso thereto only with regard to the portion of the amount paid by the employer to the contributory fund. Held, allowing the appeal, that since the assessee had admittedly not paid the remittance of the employees’ contribution to the provident fund and ESIC within the dates prescribed under the respective Acts, the assessee was not entitled to deduction under section 43B of the amounts deducted thereunder for an on behalf of the employees. This judgment was delivered on 8th September, 2015. The assessment order was passed on 19/12/2016. At the time of passing of the assessment order, the judgment was available to the Assessing Officer and he should have considered the same and disallowed the employee’s contribution towards ESIC and EPF after the prescribed date under the respective Act. The Assessing Officer failed to take note of the judgment of the Jurisdictional High court cited supra. In view of the above judgment, the assessment order is erroneous in so far as it is prejudicial to the interest of the revenue. Non consideration of TPA provision applicability - Held that:- Regarding referring the matter to the Transfer Pricing Officer u/s. 92CA(1) when the specified transactions with the sister concerns exceeded ₹ 15 crores, as per the provisions of the Act, the Assessing Officer should have examined whether the assessee’s case is fit to refer to the TPO or not. However, there was no whisper in the assessment order regarding the applicability of section 92CA(1) of the Act. The failure on the part of the Assessing Officer to make necessary enquiry in this matter, renders the assessment erroneous which also resulted in loss to the revenue, hence, it is prejudicial to the interests of the Revenue. Therefore, the CIT correctly exercised the power conferred under section 263 in setting aside the assessment order and remanded the case back to the file of the Assessing Officer to make necessary enquiry into the applicability of TP provisions and decide thereupon - Assessee appeal dismissed.
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2018 (10) TMI 1174
Short deduction of tax u/s 201(1) and Interest u/s 201 (1A) - Penalty u/s 271C - assessee is not required to deduct tax at source of payment made to foreign companies’ u/s 195 but u/s 194C - short deduction of tax u/s 201(1) and Interest u/s 201 (1A) - Held that:- The assessee has received the funds as sponsorship and grants but the responsibility is on the assessee to execute the entire infrastructure for the games. Though the contractor may be identified and engaged by the other organization, however, the implementation and utilization is the sole responsibility of the assessee. Otherwise, there is no other reason for the formation of the above society. The society itself was registered on 06.02.2008. Further, the payments to above companies/ PSu have been made by the assessee. Therefore, it is clear that assessee is the person responsible for payments of sums to those PSUs. In view of this it is apparent that the contract is between the recipient of the income and the assessee. Hence, according to us the assessee is responsible for TDS u/s 194C of the act on payment made to these parties. Merely because the assessee is provided grant for onward distribution to these parties does not exclude the assessee from the liability for deduction of tax at source u/s 194 C of the act, as the assessee is responsible for making payments to these parties and in fact, undeniably assessee has made the payments and obtained utilization certificates. It cannot be a reason for non-deduction of tax at source that recipient of the income have onward distributed the work to the sub contractors and recipient of the income have in turn deducted the tax at source on payment made by them to those sub- contractors. According to the provision of 194C of the Act even, the contractor is also required to deduct tax at source on payment made to their sub contractors. Thus we hold that payment made to the above parties are subject to tax deduction at source u/s 194C of the Act and assessee is liable to deduct tax at source u/s 194C of the Act. Therefore, to this extent we uphold the order of lower authorities. We set aside the order u/s 201 of the Act with a direction that assessee may submit the requisite prescribed detail in specified manner before the ld Assessing Officer and then ld AO may decide the issue and, if found in accordance with the law, shall not treat the assessee in default u/s 201 of the Act. With respect to the interest u/s 201(1A) of the Act similar proviso is also added and AO may work out, based on the details furnished by the assessee, appropriate interest in accordance with law. Payment of the State Trading corporation (STC) - TDS U/S 194C - Held that:- On careful consideration of the orders of the lower authorities, the STC had undertaken to import and supply the equipment as per the requirement of the assessee. For the purpose of import of these goods, the STC incurred certain expenditure such as installation commissioning charges, handling charges, insurance, and other payments. In this case, it is not the claim of the assessee that STC has supplied the goods. In fact, STC has arranged for the import of the goods as per requirement of the assessee. In view of this, it is apparent that assessee has given work to the STC for import of the material. Hence, according to us it is apparent that such payment falls under the provisions of section 194C(3) of the Act and tax is required to be deducted on the basis of the invoice value stated therein. The invoices are not place before us. Set aside this matter back to the file of the ld Assessing Officer with a direction to assessee to produce the bills of STC etc before ld AO who will examine them. Penalty u/s 271C - contumacious conduct on the part of the assessee - Held that:- We find that the belief of the assessee is bonafide and failure to deduct tax at source u/s 194C of the Act is for a reasonable cause. The ld Assessing Officer could not show any contemptuous conduct on part of the assessee for non-deduction of tax at source. There could also not be any reason for non-deduction as assessee has made most of the payments to the public sector undertaking. The Hon'ble Supreme Court in the case of CIT Vs. Bank of Nova Scotia [2016 (1) TMI 583 - SUPREME COURT] as held that it is necessary to establish ‘contumacious conduct’ on the part of the assessee for failure to deduct tax at source for levy of penalty u/s 271C. In the present case, all the recipients have also furnished a certificate that they have received the payment. We reverse the order of the ld CIT (A) confirming the levy of the penalty u/s 271C of the Act in absence of any finding to show contumacious conduct on the part of the assessee - Decided in favour of assessee.
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2018 (10) TMI 1173
Income from house property - Addition to the Annual Letting Value on account of notional interest on interest free security received by the assessee - how to determine a reasonable/fair rent for the purpose of income from house property? - Held that:- As decided in assessee's own case in [2011 (3) TMI 497 - DELHI HIGH COURT] after considering the decisions in the case of Mrs. Sheila Kaushish (1981 (8) TMI 1 - SUPREME COURT) and Satya Co. Ltd. (1993 (8) TMI 293 - CALCUTTA HIGH COURT) upheld the finding of the Tribunal in setting aside the Annual lettable Value determined by the Assessing Officer and laid guidelines for determining Annual Letting Value. Under Section (23)(1)(a), the Assessing Officer has to decide the fair rent of the property. While deciding the fair rent, various factors could be taken into account. In such cases various methods like the contractors method could be taken into account. If on comparison of the fair rent with the actual rent received, the Assessing Officer finds that the actual rent received is more than the fair rent determinable as above, then the actual rent shall constitute the annual value under Section (23)(1)(b) of the Act. Now, applying the above test to the facts of this case, we find a categorical finding of fact recorded by the Tribunal that the actual rent received by the assessee was more than the fair rent. Under the above circumstances, in view of the said finding of fact, we do not see any reason to interfere. - decided in favour of assessee. Addition of long-term capital gain and short-term capital gain arising from transfer of leasing rights of the land located at Silliguri and Darjeeling - CIT(A) held the leasing of the land as in the nature of ‘transfer’ in terms of provisions of section 2(47) of the Act and treated the prevailing market value of the property (deemed consideration under section 50C of the Act) as ‘consideration’ liable to capital gain tax - substantial interest - transfer of rights of enjoyment in property - Held that:- In the instant case, though the initial period of lease has been mentioned for 30 years but same is further extendable. The company to whom, the properties have been leased, has borrowed funds from financial institutions and has constructed hotel buildings. The financial institutions have been given right to sale the land in case of default in payment by the company. In such circumstances, it can safely be said that the assessee has transferred all his rights of enjoyment in property to the company. No infirmity in the finding of the CIT(A) of holding the transaction as transfer liable for capital gains under section 45 of the Act. Amount of sale consideration liable for capital gains - According to AO the amount of security deposit received of ₹ 35 crore is sale consideration received and he apportioned the sale consideration for computation of short-term capital gain and long-term capital gain - According to CIT(A), the apparent consideration for transferring the right over and above the normal lease was nil and, therefore, he invoked provisions of section 50C of the Act and held that value as per the stamp duty valuation should be the sale consideration for transfer of properties - Held that:- We find that during the relevant period, section 50C of the Act could be invoked only, if the property was registered before the Stamp Duty Authorities and in that case amount adopted by the Stamp Valuation Authority could be treated as full value consideration received. The amendment to include assessable value as full value consideration was inserted w.e.f. 01/10/2009 and, thus, the value assessable as per stamp value authority cannot be applied for taking full value consideration of the property. Once, we have held that provisions of section 50C are not applicable in the instant case, the question of referring the matter to the Valuation Officer in terms of section 50C(2) also does not arise. In the instant case, the assessee has received so-called security deposits as interest-free amount for the properties leased. This is the amount, which is actually received by the assessee for transfer of rights in the property. In our opinion, in the given circumstances of the case, for the purpose of computation of the capital gain as laid down in section 48 of the Act, the security deposit received has been rightly treated by the Assessing Officer as full value consideration received as a result of transfer of the capital asset. We, accordingly, set aside the capital gain worked out by the Ld. CIT(A) and restore that of the Assessing Officer. - decided in favour of Revenue. Addition u/s 2(22)(e) for deemed dividend - beneficial owner of the shares - Held that:- According to the provisions of the law the assessee must be the beneficial owner of the shares of 10% or more. In this case ld AO has not established whether the assessee is holding shares as the beneficial shareholder of 10% or more. No such finding in the assessment order. Merely because the shares are held by the minor son of the assessee and the loan is received by the assessee it cannot be established that assessee is the beneficial shareholder of 10% or more and therefore such loan amount is not chargeable to tax in the hands of the assessee. AO has also not categorically stated that this amount is not advance rent and not adjusted subsequently against the rent payable by the company to the assessee. According to us if it is an advance rent then it becomes a business transaction and the provisions of deemed dividend cannot apply to such transactions. The deposits received by the assessee has already been held by us as sale consideration received on transfer of rights in the property and, thus, in our opinion, it is not in the nature of advance or deposits, which could be held as liable for deemed dividend in terms of section 2(22)(e) of the Act. - Decided against revenue
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2018 (10) TMI 1172
Denial of deduction u/s 44A - denial of exemption u/s 11 - special provision for deduction in case of trade, professional or similar association” to the assessee, a Trade Association registered u/s 12A of the Income-tax Act, 1961 - as per AO it is an association of members existing for its members only and, therefore, it was a mutual association and assessee was carrying out activities in the nature of trade, business or commerce and/or providing services in relation thereto - proof of charitable activities - Held that:- A perusal of the objects does lead to an inference that it is formed with the objects of promoting or protecting the interests of Rubber industry. Notably, assessee continues to be registered u/s 12A of the Act, and in that regard, its objects can be stated to be in the realm of ‘advancement of objects of general public utility’. The Assessing Officer has made out a case that since the objects are not for the benefit of general public at large, but are for a section of public inasmuch as the benefits are limited to the members of the assessee-association, therefore, the same is not charitable. In our view, the aforesaid approach of the Assessing Officer is contrary to the accepted legal position on this subject, and more so, considering that in assessee’s own case for Assessment Year 1997-98 wherein held the expression “object of general public utility” in sec. 2(15) prima facie includes all objects which permits the welfare of the general public. It cannot be said that a purpose would cease to be charitable if it includes taking of steps for the promotion of trade, commerce or manufacture. An object beneficial to a section of the public is an object of general public utility. To serve a charitable purpose, it is not necessary that the object must benefit the whole of mankind. It is sufficient if the intention is to benefit a section of the public. Thus no justification for the Assessing Officer to hold that since the objects of the assessee seek to promote and protect the interests of a particular trade, industry, the same loses the character of being charitable. A portion of the submissions furnished by the assessee have been reproduced wherein assessee specifically asserted that dissemination of information and publication of magazine relating to Rubber industry in India and developments abroad was a substantive activity carried out, which was for the charitable purpose of promoting the interests of Rubber industry and trade. Therefore, in view of the aforesaid discussion, in our view, the Assessing Officer erred in invoking proviso to Sec. 2(15) to treat the activities of the assessee as being non-charitable specifically considering the fact that no material or evidence has been led to show that there was any profit motive in carrying out such activities. Pertinently, there is no rebuttal at any stage to the assertions of the assessee that its activities in the instant years are similar to the activities in the past years. We set-aside the order of CIT(A) and direct the Assessing Officer to allow the exemption u/s 12A. Assessee's contribution towards the capital of a concern which is a Sec. 25 registered company under the Companies Act, 1956 - held that:- No doubt, investment in shares of another concern is not a mode of investment prescribed in Sec. 11(5) of the Act; so however, the case set-up by the assessee herein is that it has made a contribution towards the corpus of the investee institution which is also a Sec. 25 company under the Companies Act, 1956. Notably, such companies are prohibited from declaring any dividend on its Share Capital and, therefore, in that sense, a person holding Share Capital in such a concern is not entitled to any return. Secondly, it is also clearly brought out that Rubber Sector Skill Council has been funded by the assessee along with ATMA as approved by the National Skill Development Corporation, i.e. Government of India in terms of a Memorandum of Understanding dated 16.03.2012, as noted by the Assessing Officer in para 6.1 of his order. It is also evident from the material on record that the said concern also holds registration u/s 12A of the Act. Considering all these aspects, in our view, it is not a case of investment of funds as envisaged u/s 11(5) r.w.s. 13(1)(d) of the Act, and rather it is a case where the money has been contributed towards promotion of the objects of the assessee-association itself. Thus, same cannot be treated as a violation falling within the purview of Sec. 13(1)(d) r.w.s. 11(5) - decided in favour of assessee
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2018 (10) TMI 1171
Addition u/s 68 - Share application money as unexplained cash credit - discharge of primary onus to prove the identity, capacity and genuineness of transactions - Held that:- We find from the facts of the case that the assessee has furnished the Name, Address, PAN no and Share Application Form to prove that the shares were allotted to the applicants. The assessee has also furnished its bank statement to show that the money was received through banking channels and there were no immediate withdrawals from the banks which shows that the share application amounts have not been returned back to these parties in cash. Thus, the assessee has discharged the primary onus cast upon it to prove the identity, capacity and genuineness of transactions. CIT(A) provided opportunity to assessee to cross examine Shri Mukesh Choksi by sending the matter to AO for remand report. During remand proceeding, the AO provided opportunity to assessee to cross examine Shri Mukesh Choksi and who in turn during cross examination admitted having invested in assessee company by these two concerns namely Buniyad Chemicals Ltd. & Talent Infoway Ltd. in assessee as share application and premium amounting to ₹ 35 lacs. During cross examination the AO could not further examine Shri Mukesh Choksi that why he is now admitting that why these two concerns admitted in the assessee company as share application money and share premium. The AO could not controvert the same. CIT(A) also could not give any finding on this aspect. We have gone through the statement of Shri Mukesh Choksi i.e. cross examination by the assessee on 30.10.2013, wherein, he vide question admitted investing by Buniyad Chemicals Ltd. & Talent Infoway Ltd. in assessee as share application and premium. As relying on THE COMMISSIONER OF INCOME TAX VERSUS M/S. ORCHID INDUSTRIES PVT. LTD. [2017 (7) TMI 613 - BOMBAY HIGH COURT] we delete the addition made by AO and confirmed by CIT(A) on account of share application money and share premium and allow the appeal of the assessee on this issue. - Decided in favour of assessee.
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2018 (10) TMI 1170
TDS u/s 194A - liability of TDS on Co-operative Society, carrying on banking business with approval of the Reserve Bank of India on interest paid to its members - distinction between a cooperative bank and a co-operative society carrying on banking business - Held that:- The issue raised before us is the same as the substantial question of law considered by the Hon’ble Jurisdictional High Court in the case of The Coimbatore District Central Co-operative Bank Ltd[2016 (1) TMI 370 - MADRAS HIGH COURT] and it stands answered in favour of the assessee. Having answered the question raised, in the normal course the appeals should have been reverted to the division Bench for disposal. However the only issue raised by the assessee in the impugned appeals having been answered, no useful purpose will be served in following such process. We therefore hold that the assessee was not obliged to deduct tax at source on the interest payments made to its members for the impugned assessment years. - Decided in favour of assessee.
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2018 (10) TMI 1169
Addition on account of ALP adjustment - Comparable selection - functional comparability - Held that:- The Assessee Company is primarily engaged in the business of distribution of subscription rights of satellite channels of Cartoon Network, WB, CNN POGO and HBO (collectively referred as ‘V’ Channels’) and advertisement inventory to be telecasted on TV Channels. The activities of the assessee are primarily driven towards promoting the channels and associated proprietary intangible assets on the return of income, thus companies functionally dissimilar with that of assessee need to be deselected from final list.
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2018 (10) TMI 1168
TDS u/s 195 - expenses incurred for the purpose of business of the PE - no TDS has been deducted on the salary paid to the employees - reason given by the AO for making disallowance was that the assessee could not substantiate, whether these expenses were related to the business of the PE or were incurred wholly and exclusively for the purpose of business - India Mauritius DTAA - Held that:- Para 3 of Article 7 provides the determination of profits of PE by allowing the deduction of expenses which are incurred for the purpose of business of the PE including executive and general administrative expenses so incurred in which the PE is situated. Accordingly, all the expenses incurred for the purpose of the business of the PE are to be allowed. There is no restriction on the allowability of such expenses subject to any limitation of the taxation laws of the contracting state (India). The phraseology used in Article 7 (3) is different from other treaties, for instance Article 7(3) of Indo US Treaty DTAA provides that deduction of expenses which are incurred for the purpose of business of the PE would be in accordance with provisions subject to the limitation of the taxation laws of that State. Similar phraseology has been used in India UAE DTAA after the protocol. Once in a treaty no such restriction has been provided for applying the limitation of the domestic taxation laws, then such limitation given under the Indian Income Tax cannot be imported in such an Article. If the expenditure has been incurred on the payment of salary or reimbursement of salary of the employees, then same has to be allowed while computing the profit and loss of the PE in full and without any restriction of deductibility as per the provision of Income Tax Act. No infirmity in the order of the Ld. CIT(A) that restriction in allowing the expenditure invoking provision of section 40(a)(i) of the Income Tax Act cannot be read Indo Mauritius DTAA and accordingly, disallowance by invoking the provision of section 40(a)(i) cannot be made. Hence disallowance of salary paid to the employees has rightly been deleted by the Ld. CIT(A). Consequently ground No. 1 as raised by the revenue is dismissed. Operating contract expenditure with the payment made to the non resident - TDS has not been deducted and therefore same are to be disallowed u/s 40(a)(i) - Held that:- Nowhere it has been brought on record that the payment made to these non-residents were income in the hands of such non-residents which is to be taxed in terms of section 195(2); secondly, the provision of section 40(a)(i) cannot be invoked while allowing the expenditure in terms of Article 7(3) in Indo Mauritius DTAA as held in the earlier part of the order. Thus, there is no infirmity in the order of the CIT(A) while deleting the said disallowance. Disallowance of expenditure relating to travel and entertainment - Held that:- Once AO has not disputed the fact that assessee has been carrying out its various activities through various projects in India, then any such expenditure relating to the project cannot be disallowed. One of the allegations of the CIT DR that assessee has filed additional evidence before the Ld. CIT(A) and therefore, same cannot be entertained, but we are unable to appreciate such a contention raised because apparently there is no additional evidence which has been filed during the course of first appellate proceedings and all the requisite details have been filed before the AO alongwith letters addressed to him, the copies of which have been placed on the paper book. Once the details of expenditure have been given and no defect or error has been pointed out by the AO, then same is to be held as allowable expenditure. Accordingly, the order of the Ld. CIT(A) in deleting the said addition is upheld. Revenue appeal dismissed.
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2018 (10) TMI 1167
Reopening of assessment u/s 147 - no notice under section 143(2) of the Act was issued - pending return of income - Return was filed by the assessee in response to notice under section 148 - Held that:- Notice under section 148 dated 1.04.2013 was issued and AO before filing of return by assessee in response to this notice, a notice under section 143(2) of the Act dated 03.05.2013 requiring the assessee to attend the office on 13.05.2013 was also issued. Up to this date i.e. 13.05.2013 no return of income was filed by the assessee in response to notice under section 148 of the Act. In the absence of pending return of income, the provisions of section 143(2) is clear that notice can be issued only when a valid return is pending for assessment. Accordingly, this notice has no meaning. The assessee filed return of income under section 148 of the Act vide letter dated 23.05.2013 stating that the original return of income can be treated as return filed in response to notice u/s 148. It means that the assessee has filed return of income only on 23.05.2013. No notice u/s 143(2) of the Act was issued by the Department on or after 23.05.2013. According to us the assessment framed without issuing a notice under section 143(2) when the return was filed by the assessee in response to notice under section 148 the assessment framed is bad in law. Accordingly, assessment is quashed. - Decided in favour of assessee.
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2018 (10) TMI 1166
Addition on low gross profit earned - fall in GP ratio over the last three years - inventory at substantially lower valuation - assessee is in the business of manufacturing & trading of tobacco products and raw tobacco - Held that:- The assessee did not presented any cogent evidences to corroborate its contention as to bumper crop of tobacco and its prices crashing owing to bumper crop. None of the authorities below have also verified the claim of the assessee as to bumper crop and crash in prices and there is no evidence on record to justify such contention except quotations all dated 02-04-2010 from three traders/ agents proposing to buy different varieties of tobacco from the assessee at a particular price which is claimed by the assessee to be substantially lower prices due to bumper crop of tobacco. These quotations in the absence of corroborative evidence does not inspire confidence. The bonafide of change in method of valuation of raw material from "cost" basis to "cost or market value whichever is lower" has not been explained by the assessee. The method adopted by the assessee for valuing raw material held as closing stock is in variance to what is stated by tax-auditor to be method of valuation of stock. None of the authorities below have made any enquiry or verifications as to contentions/ evidences filed by the assessee and no verification of the claim of the assessee was undertaken. In the immediately preceding year i.e. AY 2009-10, the assessment was framed by Revenue u/s 143(3) r.w.s. 153A vide assessment orders dated 31.12.2010 pursuant to search conducted by Revenue on 29.04.2008 against the assessee u/s 132(1) wherein additions have been made towards discrepancies in the stock wherein at different locations/ premises belonging to the assessee excess physical stock was found to the tune of ₹ 13.01 lacs while at the same time, in some of the locations/premises belonging to the assessee, excess book stock to the tune of ₹ 55.76 lacs was found. The rollover impact of such addition made by the AO in assessment of the AY 2009-10 to the year under consideration as was done by the assessee is not looked into by authorities below nor the authorities below looked into as to how the assessee adjusted said discrepancies in stock in its books of accounts which found itself manifested in AO making additions for said discrepancies in stock while framing assessment u/s 143(3) r.w.s. 153A. Thus we are of the considered view that the issue arising in this matter need to be set aside and restored to the file of the AO for fresh denovo determination of the issue on merits in accordance with law - Decided in favour of revenue for statistical purposes. Payment made to "Hanifa" School which is being run by a Trust - allowable business expenditure - Held that:- On being asked by the Bench about the details of the employees children who were studying in the school during the relevant period and other details concerning the school such as location of the school and other school in the vicinity, total children studying in the school, details of children of employees who were studying in the said school etc. so as to justify and prove direct nexus of these expenses with business of the assessee so as to prove that these expenses were wholly and exclusively incurred for the business and the assessee. Assessee submitted that presently these details are not readily available on record but if an opportunity is granted by setting aside and restoring the matter to the file of the AO for framing denovo fresh assessment, the assessee will produce all the records before the AO which AO can verify - Thus set aside and restore this issue back to file of the AO to enable assessee to prove with cogent evidences that these expenses were incurred wholly and exclusively for the purposes of business of the assessee. Thus is emerging from records with a view to render complete justice to both the rival parties, we are of the considered view that the matter need to be set aside and restored to the file of the AO for framig denovo fresh assessment. - Decided in favour of assessee for statistical purposes.
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2018 (10) TMI 1165
TDS u/s 194H - non-deduction of TDS on credit notes on account of sales promotion expenses - free or concessional foreign trips - addiional benefit scheme - addition invoking provisions u/s 40(a)(ia) - CIT(A) found the entire impugned amount is in the nature of reimbursement or incentive and held that the AO is wrong treating the entire expenditure as commission - principal and agent relationship - Held that:- As observed from sample copies of schemes which shows that the scheme of Annual Purchase Bonanza-2011 is being operated by the C&F agents/stockist of M/s Creative Technotex Pvt. Ltd. of respective region and they are responsible for timely distribution of scheme awards. It is seen wherein the names of CNF agents are provided and amounts of their contribution is reflected against their names. Total contribution of C&F agents towards the above said scheme was ₹ 31,51,713/- as pointed out by the CIT(A) in his order at page No.7. Ld. AR pointed to the page No.26 as it is a LPG distributor scheme reimbursement form of AP Traders of Kanpur placed at Sl.No.1 in the list at page No.25 containing the names of oil companies, schemes entitled, quantity & cost of gift, total value scheme and their respective contributions. The said form shows total value of scheme is ₹ 1,05,000/- and half of it i.e. 50% is ₹ 52,500/- was born by the assessee and its contribution of ₹ 52,500/- was credited to ledger account of C & F agent under the sales promotion vide credit note. Therefore, we find force in the arguments of ld.AR that it is not a commission and there is no principal and agent relationship. It is a sales promotion to grow simultaneously. It is a benefit to the distributor and assessee has no relationship with the distributor. We find from page No.88 of Paper Book that the assessee incurred foreign trip expenses to an extent of ₹ 11,18,000/- and the credit notes. As discussed above regarding the sample we note that a trip to Thailand offered to one person on achieving sale of 75 boxes or 2700 pieces and in our opinion, it is not a commission and is additional benefit given to the C&F agents. Case of COMMISSIONER OF INCOME-TAX (TDS) VERSUS UNITED BREWERIES LTD. (SUCCESSOR TO UNITED MILLENIUM BREWERIES) [2016 (11) TMI 718 - TELANGANA AND ANDHRA PRADESH HIGH COURT] followed. - Decided in favour of assessee.
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2018 (10) TMI 1164
Levy of penalty u/s.271AAB - filing of return declaring undisclosed income - Delay in filing return income - Held that:- For an income to be undisclosed, it should be represented either wholly or partly, by any money, bullion, jewellery or other valuable article or thing or any entry in the books, which was not recorded in the books before the date of search. Here admittedly, assessee was not maintaining any books. There was thus no question of recording any money, bullion, jewellery or any entry in any books. It is not disputed that assessee had not disclosed any receipts from bill trading before the date of search to the Revenue. Assessee had in the statement recorded u/s.132(4) of the Act accepted accommodation bill trading done by it with M/s. BGR Energy Systems Ltd and earning of 0.25% commission. Claim of the assessee is that such commission was accepted for purchasing peace from Department. This claim, in our opinion cannot be accepted since there is no alleviating clause in Section 273AAB of the Act. That apart, assessee has not filed its return within the time allowed u/s.139(1) of the Act but only after issue of notice u/s.142(1). Thus what was returned by the assessee fell within the definition of the term "undisclosed income" coming under Explanation (c) to Section 271AAB. As to the contention of the assessee that, if at all penalty is levied u/s. 271AAB then such levy should be under clause (a) of Sub Section (1), what we find is that for applying the said clause, it is a necessary pre-condition that assessee should have furnished the return of income before the specified date. Specified date is the due date for furnishing returned income u/s.139(1). Assessee had filed returned income after such date. Hence, assessee cannot take advantage of clause (a) of Sub Section(1) of Section 271AAB. Penalty was rightly levied and confirmed by the CIT (Appeals). - Decided against assessee.
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2018 (10) TMI 1163
Disallowing expenditure on account of contribution to cricket academy by holding it as capital expenditure - nature of expenditure - allowable business expenditure - Held that:- It is stated that at the time of admission of player to the Academy, the (KSCA) shall ensure that the player shall sign a contract giving the appellant first right to offer an uncapped player contract to recruit the player to play for the appellant. Thus it is clear that the terms of contract are directly related to business interest of the assessee. Therefore, the contribution made for creation of Cricket Academy can be held to be in business interest and the same is allowable as deduction. Accordingly, we allow this ground of appeal. Ticketing expenses allowance - Held that:- There is neither doubt about genuineness of the expenditure nor that the expenditure incurred was for business purpose. Undoubtedly, this expenditure incurred by the assessee was to promote goodwill and enhance the business interest and therefore, the same is allowable as a business deduction in the light of the decision of CIT vs. Avery Cycle Inds. Ltd. [2006 (9) TMI 96 - PUNJAB AND HARYANA HIGH COURT] and Karjan Co-operative Cotton Sales Ginning & Pressing Society vs. CIT [1992 (1) TMI 39 - GUJARAT HIGH COURT] - Assessee appeal allowed.
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2018 (10) TMI 1162
Rejection of books of accounts - Addition invoking the provision of section 145(3) - G.P. addition - Held that:- The books of accounts have rightly been rejected u/s 145(3) of the Act for reasons stated by the AO and the ld CIT(A).However, mere rejection of books of accounts cannot be a basis for making the addition as has been held by the Courts from time to time. In the instant case, the declared gross profit is better than last two years as available on records. In the result, the addition of ₹ 25,000 is hereby deleted. - Decided in favour of assessee. Addition u/s 68 r.w.s 115BBE - Held that:- We find that the assessee has submitted copy of confirmation, ITR and computation of income of Smt Santosh Devi Jangir assessed under Income Tax Officer, Ward - 7(3), Jaipur. In the return of income, she has disclosed diary income of ₹ 2,65,200 and agricultural income of ₹ 3,10,200 which reasonably explains the source of cash deposit in her bank account of ₹ 2,50,000. In the result, necessary onus in terms of creditworthiness which has been challenged by the Revenue is satisfied in the instant case. The decisions relied upon by the ld DR are distinguishable on facts - Decided in favour of assessee. Addition u/s 56(2)(vii)(b)(ii) - adopting the valuation of property taken by the registering authority - scope of amendment - Held tat:- The provision of section 56(2)(vii)(b)(ii) are amended, by the Finance Act, 2013 with effect from 1-4-2014, so as to provide that where any immovable property is received by an individual or a HUF for a consideration which is less than the stamp duty value of the property by an amount exceeding ₹ 50,000, the stamp duty value of such property as exceeds such consideration, shall be chargeable to tax in the hands of the individual or the HUF as income from other sources In the instant case, the assessee has entered into a registered sale deed on 1.11.2013 which effectively means he has lawfully received the immovable property in terms of title and possession though for an inadequate consideration on 01.11.2013 which falls during the financial year 2013-14 relevant to assessment year 2014-15. The provisions of section 56(vii)(b)(ii) are thus clearly applicable in the instant case. We affirm the order of the ld CIT(A) and the ground of appeal is dismissed. - decided against assessee.
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Customs
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2018 (10) TMI 1161
Smuggling - Gold - setting aside of Confiscation by totally discarding the confessional statements - section 108 of the Customs Act, 1962 - burden/ onus cast on respondent in terms of the provisions of section 123 of the Customs Act, 1962. Whether the Tribunal is justified in allowing the Appeal of the Respondents herein and setting aside the order of confiscation of the seized gold, by totally discarding the confessional statements given by the Respondents under the provisions of section 108 of the Customs Act, 1962, which are in the nature of admissible legal evidence, as clearly mandated by the Hon'ble Supreme Court in the case of K. I. Pavunny v/s. The Assistant Collector (HQ), [1997 (2) TMI 97 - SUPREME COURT OF INDIA]? - Held that:- This question essentially proceeds on the basis that as the Respondent had made a confessional statement under Section 108 of the Act, it is admissible as evidence and warrants, confirming the show cause notice. This particularly, in the absence of the party being able to explain away the confession made - We specifically called upon the learned Additional Solicitor General to show us any confessional statement made by Respondent No.1 and/or other Respondents i.e. Driver, Employees/ Agents to the effect that, the seized confiscated gold is a smuggled gold. However, he was unable to show us any confessional statements in respect of gold made either by Respondent No.1 and/or his Drivers/ Employee/ Agents - the occasion to apply the Supreme Court's decision in the case of K. I. Pavunny V. Asst. Collector would not arise in the present facts - this substantial question of law is answered in the affirmative i.e. in favour of the Respondent-Assessee and against the Appellant-Revenue. Whether the Tribunal is justified in holding that the Respondents have discharged their burden/ onus cast on them in terms of the provisions of section 123 of the Customs Act, 1962 to prove and/or establish that the huge quantity of 575 gold bars seized from their custody is not the smuggled one, inspite of the fact that no legal evidence, such as maintenance of any basic Books of Accounts whatsoever, Registration details under the provisions of Sales Tax, Payment of Purchase Price of the gold, Payment of Government Levies, like Income Tax, Sales Tax etc., duly supported by the Annual Returns, etc has been produced/ brought on record by the Respondents? - Held that:- In the absence of evidence in the form of regular Books of Account, Registration under the Income Tax and Sales Tax, etc., cannot ispofacto lead to the conclusion that the seized gold bars, are smuggled gold bars. These may lead to proceedings for breaches of other Acts but it does not follow from it that the gold bars are smuggled goods. In fact, if a person in possession of the stolen gold is able to establish that it had come into India after a proper declaration and compliance of the Act, no confiscation under the Act, can arise. Proceedings under the Indian Penal Code may be initiated by the police for theft, but it would not by reason of theft become smuggled goods. Section 123 of the Act, statutorily imposes a reverse burden of proof i.e. not upon the person (Revenue) who assert that the gold in possession of the Respondent No.1 is smuggled gold but on the person (Respondent No.1) who is found in possession of goods notified under Section 123 of the Act. However, this reverse burden of proof does not do away with the manner of discharging the burden of proof. Thus, the manner of discharging the burden of proof by shifting of the onuswould be as applicable to all other civil proceedings. The impugned order of the Tribunal has on appreciation of facts, come to a conclusion that the Respondent No.1 herein has discharged his burden under Section 123 of the Act, that the 575 gold bars seized on 8th March, 2000 were not smuggled gold. This finding of fact has not been shown to us, to be perverse. Thus, it is a possible view on the available facts and the evidence produced by Respondent No.1 - question is answered in the affirmative i.e. in favour of the Respondent and against the Appellant. Appeal dismissed.
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2018 (10) TMI 1160
Import of Ethylene Di-chloride (EDC) - Restricted item or not - exemption under Section 38 of the Insecticides Act - whether for the import of EDC for the purpose of manufacturing Poly Vinyl Chloride (PVC), an import permit is required, from the Central Insecticides Board (CIB) and Registration Committee (RC) constituted under the Insecticides Act, 1968? Held that:- There is absolutely no provision under the Act or prescription under the Rules for issuance of an import permit or an application in that respect wherein import is made of a substance, included under the Schedule to the Act, for non-insecticidal purpose. The mere prescription of a proforma for issuance of an import permit by the RC under the Insecticides Act cannot be termed to be a requirement under the statute. Neither the Act nor the Rules provide for any import permit under the Insecticides Act for the purpose of import of insecticides included in the Schedule under the Act; when such import is for non-insecticidal purposes. The exemption under Section 38 takes any goods imported for non-insecticidal purposes even if included in the Schedule to the Act, out of the coverage of the Act and Rules prescribed thereunder. In Maliakkal Industrial Enterprises [2015 (11) TMI 1027 - KERALA HIGH COURT] the issue dealt with was import of Boric Acid, admittedly an insecticide, requiring a permit even if it is for non-insecticidal purposes. However there a notification was issued by the Central Government under the Foreign Trade Act insisting on an import permit from the RC constituted under the Insecticides Act - The requirement for an import permit in Maliakkal Industrial Enterprises was upheld only in the context of a statutory requirement having been made under the Foreign Trade Act, which is absent in the present case. The object of the Insecticides Act though salutary, there is not enough safeguards provided by the Act or power conferred on the executive government to deal with substances coming under the Schedule of the Insecticides Act; used for non-insecticidal purposes. Any import of the subject substance for non-insecticidal purpose shall be released as per the procedure prescribed by the Customs Authorities, by trade notices without insisting for registration under the Insecticides Act or an import permit - appeal dismissed - decided against Revenue.
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2018 (10) TMI 1159
Demand of pre-deposit - other parties got stay on similar issue - But appellant could not - Review of order - alternative remedy - conditional order of stay - dismissal order of restoration - Does an alternative remedy affect this Court’s power of judicial review? - . Does the Ext.P4 sustain itself on its demanding pre-deposit? Does a writ petition lie against the Exts.P4 and P12 interlocutory orders, just because the petitioner could not treat them as giving rise to substantial questions of law? Held that:- To maintain an appeal the appellant must satisfy the High Court that impugned order raises a substantial question of law. Then, the High Court formulates an issue, as it does under section 100 of CPC, and adjudicates. Now, the question is, can an interlocutory order, too, give rise to a substantial question of law? Alternatively, should we treat section 130 of the Act as not an efficacious alternative remedy vis-à-vis an interim order the Appellate Tribunal passes? In M/s Punalur Paper Mill Ltd. V Commissioner of Central Excise and Customs [2014 (2) TMI 1250 - KERALA HIGH COURT], the Court considered writ petitions on interlocutory orders. The issue was the restoration of appeal. This Court, per learned Single Judges, has held that even as for restoring the appeals (that is, interlocutory orders), the petitioners could have the remedy of statutory appeal under section 130., but not the writ petition. What has Indus impugned? - Held that:- Ext.P3 is the order-in-original. Indus questioned this order in appeal, CA No.C/21292 of 2014, before the CESTAT. Ext.P4 is the order the Tribunal passed on Indus’s stay petition: it directed Indus to deposit ten crore rupees as a precondition to have the appeal entertained. Indus could not comply with the direction; that is, depositing ten crore rupees in 12 weeks. So the Tribunal dismissed the appeal for non-compliance. Then, Indus filed a restoration petition before the Tribunal, which dismissed it, too, through the Ext.P12 order, dt.05.02.2018 - I reckon Indus made a common cause with eleven other courier agencies; they all seem to have a similar grievance. Of the 12 courier services, two approached this Court at the stage of show cause, filed writ petitions, and obtained a stay. Others approached the CESTAT. Eight had their cases remanded to the primary authority. One courier agency has still got its case pending before the Tribunal but seems to have suffered no conditional order of pre-deposit. It is said to enjoy a stay, too. Only Indus faced the problem of precondition. Equity may demand that Indus may have its case adjudicated on merits. But judicial discipline demands scrupulous compliance with the precedential dictate. Petition dismissed.
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2018 (10) TMI 1158
Valuation of imported goods - enhancement of value based on NIDB data - mis-declaration of imported goods - It appeared to revenue that description and quantity of Iron and Copper scrap was different than declared and they were found to be in mixed form. Valuation - Held that:- In the case of Aarti Impex [2013 (9) TMI 29 - CESTAT NEW DELHI] no issue related to reliance to be placed on NIDB data for enhancement of value under the provisions of Section 14 of Customs Act, 1962, was made - Further this Tribunal in the case of M/s Shiva Alloys Pvt. Ltd. [2005 (12) TMI 322 - CESTAT, NEW DELHI] has held that LME prices are, at best only indicative and are not final and conclusive, to enable relying upon the same for enhancement of value. Appellant’s appeal is allowed in so far as valuation aspect is concern - the value declared by the appellant through the said Bill of Entry No.5634075 dated 28.05.2014 is restored. In so far as declaration about goods was concerned, the appellant declared that they imported 1.68 MTs of Copper Scrap whereas it was found that 2.1304 MTs Copper Scrap was imported and Copper and Iron Scrap were mixed, as found during examination - this impugned order is not interfered with, in so far as the same is concerned about mis-declaration, confiscation, imposition of redemption fine and penalty. The appeal is allowed on the issue of valuation and rest of the appeal is rejected.
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2018 (10) TMI 1157
Facility available in the laboratories to test the samples of imported goods - Natural Ground Calcium Carbonate - some samples of the imported consignment of similar product were sent by the Customs Authorities, ICD Loni, vide Test Memo Nos.208 dated 04.06.2013, 210 dated 12.06.2013 and 211 dated 12.06.2013 to CRCL, New Delhi. However, the samples were returned back by the CRCL with their covering letter where in they admitted that they do not possess the facility to conduct the test of Natural Calcium Carbonate and returned the samples to the Custom Authorities. Revenue has filed the appeal on the ground that CRCL is fully equipped to test the goods. Held that:- The appellant has referred to Circular No.43/2017. Customs dated 16.11.2017, clarifying that CRCL has shortlisted the items whose samples cannot be tested in their Laboratories at present and also identified the Lab, where such samples could be tested. Natural Calcite Powder is one of the specified products which CRCL Lab is unable to test. There is no merit in Revenue's appeal - appeal dismissed.
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2018 (10) TMI 1147
Maintainability of petition - principles of natural justice - Department disputes the nature of the substance imported - Held that:- This is a fit case for granting early hearing and accordingly, we allow the early hearing application and direct the Registry to list this case on 09.10.2018.
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Service Tax
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2018 (10) TMI 1155
Valuation - Banking and other Financial Services - includibility of out of pocket expenses - contention in the show-cause notice was that the postal and telegram and swift charges collected by the bank as out of pocket expenses during the period from April 2005 to March 2010 were liable for service tax - whether the reimbursement of expenses is to be included in the value of taxable service or not during the relevant period? Held that:- This issue was examined by the Hon’ble Supreme Court elaborately in the case of Intercontinental Consultants and Technocrats Pvt. Ltd. [2018 (3) TMI 357 - SUPREME COURT OF INDIA] and the Hon’ble Supreme Court has held that reimbursable expenses are not to be included in the value of taxable service for the purpose of service tax. The impugned order is not sustainable in law - appeal allowed - decided in favor of appellant.
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Central Excise
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2018 (10) TMI 1154
Review of order - case of petitioners is that the appeals preferred by the Commissioner, Customs, Central Excise and Service Tax were dismissed on account of letter dated 5-6.12.2005, which was not in existence at all and the same was withdrawn in the year 2006 - Held that:- This Court has certainly taken into account the letter dated 5-6.12.2005. The aforesaid letter was not in existence and this fact was brought to the knowledge of Commissioner of Central Excise by the Development Commissioner, Noida Special Economic Zone. The fact remains, whether the respondents were informed or not, the letter dated 5-6.12.2005 was not in existence based upon which the judgment has been delivered. Resultantly, as there is an error apparent on the face of the record, warranting review, the judgment delivered by this Court dated 31.1.2018 is hereby recalled - All these appeals are restored to their original number and be listed before this Court on 26th November, 2018 - review petition allowed.
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2018 (10) TMI 1153
CENVAT credit - During the course of manufacture of dutiable Sugar & Molasses, “Bagasse” emerges as a waste/by-product, which was being cleared by the Appellant at ‘Nil’ rate of duty - non-maintenance of separate records for the dutiable product and exempted product as required under Rule 6(2) of the CENVAT Credit Rules, 2004, nor followed the procedural under Rule 6(3A) of the CENVAT Credit Rules, 2004 - Circular No. 1027/15/2016-CX dated 25.04.2016. Held that:- The Hon'ble Supreme Court’s decision in the matter of DSCL Sugar Ltd. [2015 (10) TMI 566 - SUPREME COURT] has clearly laid down that bagasse is agricultural waste of sugarcane and the waste and residue of agricultural products, during the process of manufacture of goods cannot be said to be result of any process. There is no manufacturing process involved in Bagasse’s production. “Bagasse” is not ‘goods’ but merely a waste or by-product, therefore Rule 6 of CENVAT Credit Rules, 2004 is not applicable in the present case - “Bagasse” is bound to come into existence during the crushing of the sugarcanes and is an unavoidable agricultural waste. For two reasons the Board’s Circular dated 25.04.2016 has no application on the facts of the instant case, firstly no Circular can override the Rules as well as the law laid down by the Hon'ble Supreme Court and the orders of this Tribunal, and secondly the said Circular was issued on 25.04.2016 i.e. on a later date, whereas the period in dispute is March, 2015 to June, 2015. Almost all the decisions cited by Learned Counsel for the appellant are on identical issue and in all the decisions, this Tribunal has taken a consistent view that Rule 6 of CENVAT Credit Rules, 2004 has no application in given facts. Appeal allowed - decided in favor of appellant.
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2018 (10) TMI 1152
Clandestine production and removal - no corroborative evidences - case of appellant is that demand raised on the basis of the discrepancies noticed between the private records and the daily stock Register - whether they have been rightly fastened with duty of ₹ 1,09,39,523/- along with equal amount of penalty for alleged suppression of production and clandestine clearance of the finished goods? - penalties on directors. Held that:- As per Panchanama, during search, on physical verification of goods by the officers of central excise, no excess or shortage of either finished goods or raw materials were found. Further, on some of the occasions the production of sponge iron is more recorded in daily stock account (RG-1) as compared to the private records, relied upon by the department. This raises serious doubt about the actual production of sponge iron mentioned in private record - the private record does not show actual figure of production. With respect to demand of ₹ 85,77,991/- - Held that:- There is neither allegation nor evidence of removal of goods, without payment of duty. It is well settled law that duty of excise is to be paid at the time of removal of goods as held by the Hon’ble High Court of Gujarat in the case of Asstt. ACIT Vs. Narmada Chematurpetrochem Ltd., [2010 (8) TMI 263 - GUJARAT HIGH COURT], wherein it was held that mere production or manufacturing of goods by itself is not sufficient to demand duty of excise. The Hon’ble Court has held that liability to pay excise duty arise only when both events namely manufacturing of excisable goods and removal of such goods, takes place. With respect to demand of ₹ 23,61,452/- - Held that:- There is no corroborative evidence relied upon by the department. Despite the name of the customers, truck no. & other details mentioned in the private records, no attempt has been made to investigate the matter at the end of the buyers, transporters, etc. In the present case, there is no evidence of excess purchase of raw material, transportation thereof, sale of finished goods, realization of sale proceeds, excess power consumption, transportation of finished goods - during search no goods were found in excess or short - Hon’ble High Court of Patna in the case of CCE Vs Brims Products [2008 (9) TMI 603 - PATNA HIGH COURT] relied upon, where the Hon’ble High Court held that assumptions and presumptions cannot take place of positive legal evidence which is required for proving the charge. The allegation of clandestine manufacture and removal are vague and liable to be set aside - appeal allowed - decided in favor of appellant.
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2018 (10) TMI 1151
CENVAT Credit - by-product/waste - bagasse & press-mud arising out of manufacture of V P Sugar & molasses - Rule 6 (3) of CCR - whether the impugned waste invites the payment of excise duty in accordance of Rule 6 (3) of CCR, 2004? Held that:- The Hon’ble Apex Court in the case of Union of India vs. DSCL Sugar Ltd [2015 (10) TMI 566 - SUPREME COURT] has held that products like bagasse and press-mud do not qualify the definition of Section 2F of CEA and as such are not being a manufacture. These are only an agricultural waste and residue which itself is not the result of any process and in the absence of manufacture, there cannot be any excise duty. The Hon’ble Apex Court further clarified that since it is not a manufacture, Rule 6 of the Cenvat Credit Rules shall have no application. This rule was amended w.e.f. 01.03.2015 - however, since the main condition for Rule 6 is still, “obligation of a manufacturer or producer of final products”, it doesn’t extend to by- products released during the process of manufacture of main product that too without involvement of any such activity, which may be called as manufacture. Thus, irrespective of the amendment, there arises no liability upon the appellant to pay the duty as demanded for the period w.e.f. September, 2014 to February, 2015, nor for the reversal of the credit as demanded for the period June, 2015 to March, 2016 - appeal allowed - decided in favor of appellant.
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CST, VAT & Sales Tax
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2018 (10) TMI 1150
Validity of assessment order - credit of tax paid - petitioner did not produce books of accounts when asked for - Held that:- It only serves the ends of justice if the petitioner suffers any order after a full opportunity. The opportunity he earlier had may have not been utilised for the petitioner laboured under an impression that Ext.P2 appellate order is conclusive and the assessment authority's demand for production of records travels beyond his remit as fixed in the appellate order. There is an element of ambiguity in the appellate order. In one breath, it accepts the petitioner's entire contention. In the other breath, it allows the assessing authority to examine the petitioner's plea. Thus, whether that examination includes summoning of the records afresh is a question that has no easy answer. The petitioner's initial refusal is condonable - the Ext.P5 assessment order is set aside and the matter remanded to the assessing officer.
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2018 (10) TMI 1149
Principles of natural justice - Validity of assessment order - case of petitioner is that without considering this report, the same authority has now passed the present impugned order, raising demands - Held that:- Admittedly, there is no whisper as to the objections of the petitioner, production of records, its perusal, earlier deviation report or anything. It is just like a one line order, objections received; perused; and not satisfied - Though the Hon'ble Supreme Court and this Court time and again insisted on the requirement of recording reasons and the quasi judicial authorities to pass a speaking order, the same is not scrupulously followed by the authorities. The matter is remitted back to the respondent for fresh consideration - petition allowed by way of remand.
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2018 (10) TMI 1148
Levy of Sales Tax - Central Sale or not - sandalwood purchase made by the petitioners, in the course of inter state trade within the meaning of Section 3 of the Central Sales Tax Act - production of Form-C - Held that:- The Division Bench in the case of KARNATAKA SOAPS AND DETERGENTS LTD. VERSUS DISTRICT FOREST OFFICER, SATHYAMANGALAM AND OTHERS [2012 (11) TMI 1054 - MADRAS HIGH COURT], on remand, considered the matter afresh and held that, the sale turnover will determine whether it is local or interstate sale and the auction conducted by the Forest Department, being within the State of Tamil Nadu, the transaction is local. Merely because, the petitioner transported the goods outside the State will not bring the transaction within the ambit of the inter state sale - petition dismissed.
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Indian Laws
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2018 (10) TMI 1156
Levy of Urban Transport and Parking Development Fee from petitioner/dealer - demand of service tax - recovery of parking fee at different rates on the vehicle sold and registered within the municipal limits of Indore - petitioner argued that vide Resolution dated 23.03.2013, the Municipal Corporation has not authorized the petitioner or any dealer to recovery the parking fee from the customers unless such authorization is made, the dealers are not suppose to charge any amount from the customers over and above the price of vehicle. By Resolution dated 22.03.2013, the Municipal Corporation has decided to setup a counter in RTO Office and appoint Officer / employee to recover the parking fee, therefore, now the Corporation cannot compel the petitioner to deposit amount, which was not recovered. Held that:- Vide Resolution dated 22.03.2013, the Municipal Corporation has imposed the parking fee, which is one time payable by the purchasers of the vehicles at the time of purchase of the vehicle / registration of the vehicle. Vide Resolution dated 22.03.2013, if the dealers are supplying the vehicles to sub-dealers, situated out side the city of Indore, then no fee is chargeable. The Municipal Corporation has decided to setup the counter at RTO Office for those vehicles, which are coming to RTO for its registration. The parking fee is also liable to be recovered from the purchasers whose addresses are within the Municipal Corporation. The setting up of counter at RTO Office is an additional arrangement for recovery of such tax for those who brought before the Registering Authority for registration if the dealers escaped to charge the parking fee as it is one time payable fee. If the dealer has recovered the amount then the purchaser is not liable to pay the same at the time of registration, therefore, the learned Commissioner vide order dated 21.03.2017 has rightly directed the petitioner to produce the details about the sale and the documents to establish that the parking fee has not been recovered during the said period, for which petitioner ought not to have any grievance. If the petitioner did not recover or collect then, the material can be produced before the Commissioner for its satisfaction. The petitioner is required to submit the details of the purchasers who purchased the vehicles during the said period, so that the Municipal Corporation can recover the parking fee, as per condition No.3 of Resolution dated 22.03.2013. Petition dismissed.
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