Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
October 28, 2016
Case Laws in this Newsletter:
Income Tax
Customs
Service Tax
Central Excise
CST, VAT & Sales Tax
TMI SMS
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
Income Tax
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Where a valid return-of-income having 'claim of refund' for AY 2014-2015, 2013-2014 and 2012-2013 was filed, such returns-of-income shall now be processed by 31.03.2017
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Benami Transactions(Prohibition) Act, 1988 as amended
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Amendment to Benami Transaction (Prohibition) Act, 1988 shall come into force w.e.f. 1.11.2016 - Notification
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Central Government notifies the Adjudicating Authority and Appellate Tribunal for the purpose of the Prohibition of Benami Property Transactions Act, 1988 (45 of 1988).
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Eligibility of deduction u/s 80G - it is not open to the Authorities to refuse approval by imposing conditions which are not mentioned in Section 80G of the Act. - HC
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Accrual of interest income - There is nothing on record to indicate that the borrower had refused to pay either the interest or return the loan. Therefore, on facts, there has been an accrual of interest and following the mercantile system of accounting, the same is real income, liable to tax. - HC
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Addition u/s 68 - AIR information - AO before making such addition on the basis of ITS information from the office of Sub Registrar should have issued a notice u/s. 133(6) of the Act. The AO has not exercised his power u/s. 133(6) - No additions - AT
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Revision u/s 263 - an order prejudicial and erroneous to the revenue - though the order passed by the A.O. is prejudicial to the interest of the revenue but it is not erroneous, therefore, the CIT cannot assume jurisdiction to revise the assessment order passed by the A.O. u/s 143(3) - AT
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Disallowance of 5% paddy purchases - once the expenditure has been accepted as genuine, there is no reason for the A.O. to doubt the same for the purpose of allowing deduction against business income. - AT
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Rejection of the books - claim of expenditure on the basis of self-made vouchers - CIT(A) instead of pointing out any incidence as to how this expenditure are to be termed as rightly debited by the assessee, simply observed that books of accounts cannot be rejected on ground that labour payments made by the assessee on self-made vouchers - rejection of books of accounts sustained - AT
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Addition u/s 68 - cash credit - genuineness and creditworthiness of creditors - Once they are alleging that they have advanced money to the assessee, then, merely on surmises it cannot be inferred that they were not having any means. - AT
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Deemed dividends u/s. 2(22)(e) - loans and advances - The assessee blows hot and cold in the same breath. On the one hand it is claiming the impugned amount as share application money and when this story is demolished, it is taking an alternative plea on Inter-Corporate Deposits (ICD) - Additions confirmed - AT
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Addition u/s 68 - unexplained cash credits - Share premium - the amount of share capital at ₹ 10 was not doubted. Only amount of premium was doubted - genuineness and credit worthiness of those companies is not in dispute - no addition can be made - AT
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Penalty u/s 271AAA - A.O has not identified which of the conditions have been violated by the assessee, that invite the levy of penalty u/s 271AAA of the Act in the case on hand; Nor has any reason has been rendered for the levy thereof - No penalty - AT
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Penalty u/s 271(1)(1) - validity of notice - there is no mention in the SCN, whether the assessee was guilty of having “furnished inaccurate particulars of income” or of having “concealed particulars of such income” - No penalty can be levied on the basis of defective notice - AT
FEMA
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A wholly owned subsidiary set up in India by a non-resident entity, operating in a sector where 100% FDI is allowed in the automatic route and there are no FDI linked conditionalities, may issue equity shares or preference shares or convertible debentures or warrants to the said non-resident entity - subject to certain conditions and restrictions
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Permission to a person resident outside India to enter into exchange traded currency derivatives
Service Tax
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Refund of service tax / cenvat credit - export of goods - Notification No. 41 of 2007 dated 6th October, 2007 - the Revenue in this case can raise a plea that the merchant exporter was not entitled to seek refund - HC
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Refund claim - export of services - merchant exporter of Mobile Phone - CHA services - refund denied for non-fulfilling the conditions of the notification and period of limitation - AT
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Cable operator services - there was no suppression or mis-statement on the part of the assessee and such reflection of only commission as the value of the taxable value of the services was on account of confusion in the arena - extended period of limitation not applicable - demand set aside - AT
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Refund of cenvat credit - Quantum of refund - wrong calculation adopted by original authority - The eligible refund will therefore required to be re-calculated after considering all the input services availed by the appellant as eligible input services and also adopting total credit taken to compute refund credit as per the formula - AT
Central Excise
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Reversal of CENVAT - whether the denial of CENVAT credit on the ground that capital goods was found defective and were re-exported by the appellant under bond without payment of duty justified? - Held No - AT
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Exemption to pipes supplied for water treatment plant - the Notification merely talks about the storage facilities and there is no restriction that the water should be delivered only to the first storage point – benefit of exemption available. - AT
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Valuation - Retail Sale Price u/s 4A or transaction value u/s 4 - supply of Superfine Spray Plaster in bulk from NCC-Maytas for their consumption in construction - construction activity is being treated as service Industry - provision of MRP based valuation not applicable - AT
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CENVAT credit - packing materials and insulating materials are used for thermal insulation of the pipes and fittings in order to avoid heat loss - credit allowed - AT
VAT
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Validity of assessment order - mere fact that the demand notice was sent in the year 2016 will not be enough to raise presumption that the order has been ante-dated. - HC
Case Laws:
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Income Tax
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2016 (10) TMI 937
Validity of block assessment - period of limitation - Held that:- the date of conclusion of search can not be taken as 14.02.2000 and has to be either 17.12.1999 or 23.12.1999 especially when nothing was found and seized on 14.2.2000. Moreover it is also clearly mentioned in the punchnama dated 17.12.1999 and dated 23.12.1999 that the search was finally concluded and not on 14.2.2000. - limitation shall not extend to the date of passing order u/s 132(3) of the Act. The facts of the assessee’s case are squarely covered by the decision of Mrs.Sandhya B. Nayak & Others (2000 (12) TMI 21 - BOMBAY High Court ). The decisions relied by the revenue in its support are distinguishable on facts and therefore the ratio decendi of same is not applicable to the facts of the present case .In view of the above facts we set aside the order of AO and hold the block assessment as barred by limitation as discussed above
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2016 (10) TMI 936
Applicability of section 50C - sale of development rights - power of the AO to refer the valuation to DVO after completion of assessment - AO adopted the valuation determined by the DVO - Held that:- The provisions of section 50C are deeming provisions. It is settled law and well accepted rule of interpretation that deeming provisions are to be construed strictly. Thus, while interpreting deeming provisions neither any words can be added nor deleted from language used expressly. We should apply the ‘Rule of Strict Interpretation’ as well as ‘Rule of Literal Construction’ while understanding the meaning and scope of deeming provisions. In our opinion, under the given facts and circumstances, Ld. Counsel has rightly contended that since the impugned capital asset transferred by the assessee upon which long term capital gain has been computed by the AO is on account of transfer of Development Rights in the land of the assessee. The land itself has not been transferred by the assessee. Thus, in our opinion provisions of section 50C have been wrongly applied upon the impugned transaction. Thus, we reverse the action of lower authorities in applying the provisions of section 50C and in substituting any value other than the amount of actual sales consideration received by the assessee. It is also noted by us that for the assessment year under consideration there is no other provisions on the statute which permit the AO to substitute any other value with the full amount of consideration actually received by the assessee, while computing income under the head of capital gains. - Decided in favour of assessee Trade guarantee provision made for expenses to be incurred during the warranty period as business expenditure allowed.
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2016 (10) TMI 935
Penalty u/s 271(1)(1) - validity of notice - there is no mention in the SCN, whether the assessee was guilty of having “furnished inaccurate particulars of income” or of having “concealed particulars of such income” - Held that:- The show-cause notices issued by the Assessing Officer under section 274 for the years under consideration not being in accordance with law, the penalty orders passed by the Assessing Officer in pursuance thereof are liable to be cancelled being invalid. We accordingly cancel the orders passed by the Assessing Officer imposing penalties under section 271(1)(c) for the years under consideration and allow the appeals of the assessee.
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2016 (10) TMI 934
Penalty u/s 271AAA - undisclosed cash credit - Held that- We concur with the Ld. CIT(A)’s observation that the undisclosed income of ₹ 3.55 crores representing various items as cited therein are liable to be considered in terms of the provisions of Explanation (a)(ii) to Section 271AAA of the Act. As per the material on record and as observed by the Ld. CIT(A), we find that it is an undisputed fact that the assessee has, during the course of search proceedings, apart from declaring the undisclosed income; has also given the detailed break up of the same, item wise and giving the proximate manner in which and source the same have been earned/derived from. This is therefore, in our view, substantiated. The above facts find mention by the A.O in the order of assessment at 2 to 4 thereof, inter alia giving the dates on which these cash credit are credited in the books of accounts. It is not a requirements on the part of the assessee that all evidences in respect of the undisclosed income have to be produced to substantiate the source of income; a proximate nature of acquisition would be sufficient. We too, agree with the finding of the Ld. CIT(A) that the A.O has not identified which of the conditions have been violated by the assessee, that invite the levy of penalty u/s 271AAA of the Act in the case on hand; Nor has any reason has been rendered for the levy thereof - Decided in favour of assessee
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2016 (10) TMI 933
Deemed dividend addition u/s 2(22) - nature of substantial part of the business - Held that:- Where the substantial part of the business is of a financial nature, the exception clause (ii) of Section 2(22) (e) of the Act would apply. See Ravi Agarwal Versus Assistant Commissioner of Income Tax, Circle-II, Bareilly [2015 (10) TMI 755 - ALLAHABAD HIGH COURT ] - Decided in favour of assessee
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2016 (10) TMI 932
Unexplained investment in the residential house at Vapi - wife of the assessee after search and seizure opted for the Voluntary Disclosure of Income Scheme, 1997 - Held that:- VDIS was accepted as correct and genuine, the income could not have been added once again in the hands of the assessee. - Decided in favour of the assessee and against the Department.
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2016 (10) TMI 931
G.P.rate determination - Held that:- When the Tribunal have itself recorded the value of the dollar and have come down in the given year then the G.P rate too should have been calculated on the basis of the rate which had come down. When exact rates were available then while making a calculation on an application under Section 145 (3) conclusion should have been taken by the Tribunal to reach at a correct G.P. rate and that alone in the interest of justice, equity and good conscience. The application in that way is not justified in the facts and circumstances of this case as the exact figures were available to make an exact decision. The matter is, therefore, remanded back to the Tribunal with a direction to re-decide in the G.P. rate, which is to be applied for the assessment year in question, within a period of three months. The impugned rate of 15.5%, which has been fixed by the Tribunal, shall be kept in abeyance for the aforesaid period of three months or till the decision is taken by the Tribunal, whichever is earlier.
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2016 (10) TMI 930
Release of jewellery seized in the course of search proceedings under Section 132 - Held that:- The obdurate refusal of the respondents to release the jewellery constitutes deprivation of property without lawful authority and is contrary to Article 300-A of the Constitution of India. The petition has to succeed; a direction is issued to the respondents to release the jewellery within two weeks and in that regard intimate to the petitioner the time and place where she (or her representative) can receive it. The respondents shall also pay costs quantified at ₹ 30,000/- to the petitioner, within four weeks, directly. The writ petition is allowed in terms of these directions.
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2016 (10) TMI 929
Eligibility of deduction u/s 80G - ITAT allowed the claim - Held that:- Impugned order of the Tribunal has on the basis of the clear provision of Section 80G of the Act recorded that the respondent assessee completely satisfies / fulfills all the conditions specified in Section 80G(5) of the Act for the purposes of availing benefit under Section 80G of the Act. This coupled with the fact that the Revenue itself has also not taken any proceedings to have the registration cancelled, would itself imply that the Revenue does consider the Trust to be a genuine trust. It is an undisputed position before us that the respondent assessee satisfies all conditions for approval of the trust under Section 80G of the Act. Therefore, it is not open to the Authorities to refuse approval by imposing conditions which are not mentioned in Section 80G of the Act. In the above circumstances, the impugned order of the Tribunal is unexceptional. - Decided against revenue
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2016 (10) TMI 928
Accrual of income - inclusion of interest income - Held that:- We find that the order of Assessment records that the suit between the parties is with regard to recovery of property. Therefore, there is no suit in respect of the loan given by the Appellant or interest thereon. There is nothing on record to indicate that the borrower had refused to pay either the interest or return the loan. Therefore, on facts, there has been an accrual of interest and following the mercantile system of accounting, the same is real income, liable to tax. In the above view, the fact that all the authorities have come to a finding of fact that income has accrued and nothing was provided by the Appellant before the authorities to establish the impossibility of the recovery of interest from the parties to whom loan was advanced, the orders could not be faulted.
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2016 (10) TMI 927
Addition u/s 68 - AO has made the addition u/s 68 crores as undisclosed cash credit in the hands of assessee on the ground that assessee has made the sale of the impugned property without recording the same in its books of account - CIT(A) deleted the addition made by AO by observing that assessee in the instant case was a confirming party and it has not made any sale - Held that:- The assessee initially advanced the money to MAESL which was returned back to assessee and MNI. Now the question before us arise so as to whether assessee has made any sale of the impugned property without recording the impugned sale in its books of account. From the facts, we find that provision of Sec. 68 of the Act are attracted only in a case where any credit entry found in the books of account of assessee which is not explained by assessee. In the instant case, no such entry was detected by AO. In our considered view, the provisions of Sec. 68 are not applicable in the present case. Similarly, from the details submitted by assessee, we find that assessee has given advanced money for the purchase of impugned property and same money was returned. In this point, Ld. DR has not brought anything on record to the finding of Ld. CIT(A). We also find that AO before making such addition on the basis of ITS information from the office of Sub Registrar should have issued a notice u/s. 133(6) of the Act. The AO has not exercised his power u/s. 133(6) of the Act. In this view of the matter, we find no reason to interfere with the findings arrived by the Ld. CIT(A). Addition u/s 36 - Held that:- We find that assessee in the instant case, has incurred interest expenditure on the money borrowed for an amount of ₹ 2,47,91,689/- and assessee claimed the interest expenditure as revenue expenditure. However, the AO disallowed the same by holding that assessee has no experience of property business, therefore, it should have been treated as investment in assessee’s business. Therefore, the interest expenditure incurred on the borrowed fund utilized for the purpose of investment cannot be allowed as deduction. However, Ld. CIT(A) deleted the addition made by AO by observing that assessee has treated the same as stock-in-trade in its books of account. Now the issue before us arise so as to whether the interest expenditure is business expenditure or part of investment. From the facts, we find that the activities for the property business are duly covered in the Memorandum & Articles of Association of the assessee in terms of its clause-4. Besides, we also find that assessee during the year has earned a sum of ₹ 40,500/- by way of storage charges which has been offered as income under the head “business & profession”. We further also find that assessee has shown the property as stock-intrade in its books of account. From the facts, we find that assessee has shown the impugned property as stock-in-trade and AO cannot step in the shoes of assessee to decide whether it is capital asset or stock-in-trade.
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2016 (10) TMI 926
Allowability of expenditure for routine maintenance and for procuring license for SAP and M.S. Office - revenue v/s capital expenditure - Held that:- The expenditure incurred towards for routine maintenance and for procuring license of software cannot be treated as capital in nature as it would not create a new asset and accordingly, we hold the assessee is entitled to claim such expenditure as revenue in nature.
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2016 (10) TMI 925
Revision u/s 263 - an order prejudicial and erroneous to the revenue - Held that:- It is a general presumption of law that the A.O. has considered all the details before completion of assessment and the CIT cannot presume that the enquiries conducted by the A.O. is insufficient and also the A.O. has not applied his mind, unless CIT categorically proves that the assessment order passed by the A.O. is erroneous. Though, the A.O. made further disallowance in the consequential proceedings towards cash expenditure under the head “contract work expenses” which earns more revenue to the department which is only disallowed on estimation basis for want of further bills and vouchers. To this extent, the order passed by the A.O. may be prejudicial to the interest of the revenue, but it is not erroneous, because the A.O. has examined the above issues at the time of completion of assessment u/s 143(3) of the Act, which is evident from the assessment order, wherein the A.O. has specifically discussed about the work contract expenditure. Under the provisions of section 263 of the Act, the CIT can assume jurisdiction once the assessment order passed by the A.O. is erroneous and also it is prejudicial to the interest of the revenue. In the present case on hand, though the order passed by the A.O. is prejudicial to the interest of the revenue but it is not erroneous, therefore, the CIT cannot assume jurisdiction to revise the assessment order passed by the A.O. u/s 143(3) of the Act. The assessment order passed by the A.O. u/s 143(3) of the Act dated 9.1.2013 is not erroneous in so far as it is prejudicial to the interest of the revenue. Therefore, we quash the order passed by the CIT u/s 263 of the Act and restore the order passed by the A.O. u/s 143(3) of the Act. - Decided in favour of assessee
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2016 (10) TMI 924
Disallowance of 5% paddy purchases - AO made the additions for the reasons that gate passes maintained by the assessee are not giving true and correct position of purchases - Held that:- As during the course of appellate proceedings, the assessee has furnished copy of order passed by agricultural marketing committee and reconciled the quantity of paddy purchases with MSP to its books of accounts. The CIT(A) has recorded categorical finding of facts that the purchases recorded by the assessee and purchases as per the AMC reports are matched. The revenue failed to prove the finding of facts recorded by the CIT(A) is incorrect. Therefore, we are of the view that the CIT(A) has rightly deleted additions made towards disallowance of paddy purchases. - Decided in faour of assessee. Disallowance of certain expenditure on adhoc basis - Held that:- Considering huge volume of business of the assessee, the expenditure incurred by the assessee under freight charges and other expenditure is meager in nature. We further observed that all the expenditure is covered under fringe benefit tax. The A.O., while assessing the fringe benefit tax has accepted the expenditure claimed by the assessee as genuine in nature. Therefore, we are of the view that once the expenditure has been accepted as genuine, there is no reason for the A.O. to doubt the same for the purpose of allowing deduction against business income. The CIT(A) after considering the relevant facts, has rightly sustained part of the additions and directed the A.O. to delete the remaining additions. Disallowance of expenditure incurred under the head ‘exchange loss’ - Held that:- We do not find merits in the findings of the A.O., for the reason that in the present case on hand, the A.O. himself has accepted that the loss claimed by the assessee are on account of cancellation/renewal of forward exchange contracts, which has been debited by the bankers. The assessee has filed details of forward exchange contracts and bank accounts. On perusal of the bank statements, we find that the losses incurred by the assessee is on account of cancellation/renewal of forward exchange contracts, which is crystallized and debited by the bankers. Considering facts and circumstances of this case, we are of the view that foreign exchange loss incurred by the assessee on account of entering into forward contracts with banks for the purpose of hedging loss in connection with its import/export business has to be regarded as business loss. The CIT(A) after considering the relevant explanations rightly deleted the additions made by the A.O. We do not see any reasons to interfere with the order of CIT(A). Hence, we inclined to uphold the CIT(A) order and reject the ground raised by the revenue
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2016 (10) TMI 923
Eligibility of deduction under section 80IB(10) - requirement of ownership of the land to qualify for deduction u/s 80IB(10) - Held that:- As decided in in the case of CIT Vs. Radhe Developers [2011 (12) TMI 248 - GUJARAT HIGH COURT ] for developing housing project, it is not necessary that the assessee to be owner of the land. Similarly, it was not necessary that approval should be in the name of assessee. If assessee has borne risk and reward of the contract, then, it will be a project of the assessee. We find that ld.AO, in the reasons extracted supra, has primarily rejected the claim of the assessee that it was not owner of the land, and it has not conceptualized the projects. Both these conditions have been considered by the Hon’ble Court and decided against the Revenue. Therefore, in our opinion, the issue on merit is directly covered by the decision of the Hon’ble High Court, and the assessee is entitled for deduction under section 80IB(10) of the Act. We allow appeal of the assessee, and direct the AO to grant deduction under section 80IB(10) of the Act. - Decided in favour of assessee
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2016 (10) TMI 922
Rejection of the books - claim of expenditure on the basis of self-made vouchers - receipt of on-money - Held that:- When the AO has verified the primary details showing the incurrence of expenditure, then the assessee failed to submit those details and failed to reconcile the expenditure. The moment the assessee has accepted receipt of on-money of more than ₹ 2.13 crors then, factually it would have been inferred by the AO that expenditure might have been incurred out of books. He was required to examine the details of expenditure. In this exercise, he found that the details relating to the expenditure were not maintained methodologically and scientifically. Therefore, he made reference about these labour register, other details and other expenditure. The CIT(A) instead of pointing out any incidence as to how this expenditure are to be termed as rightly debited by the assessee, simply observed that books of accounts cannot be rejected on ground that labour payments made by the assessee on self-made vouchers. This is an inference of fact in a particular situation. It is not a ratio of law. The ld.CIT(A) miserably failed to appreciate the facts in right perspective. Therefore, on detailed analysis of the facts considered by the AO, and the manner in which ld.CIT(A) has appreciated them in the finding recorded in para.43, we are of the view that the ld.CIT(A) has failed to appreciate the facts in right perspective and erred in upholding the book results of the assessee. Ground no.1 is allowed and rejection of the books at the end of the AO is restored. Quantification of the GP - Held that:- Exercise made by the AO was not correct. The ld.CIT(A) has rightly pointed out actual difference of fall in the GP should be ₹ 69,90,011/-, and this is the reason, the Revenue has also taken this amount in its ground of appeal.
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2016 (10) TMI 921
Disallowance of trading losses - non maintenance of day to day stock register - Held that:- Being the first year of operation, there are certain inherent challenges in terms of procurement and supply of milk and related products as well as pricing thereof given the market dynamics which have been encountered by the assessee and duly explained in the instant year which has resulted in manufacturing/ trading losses which have been reduced in the subsequent years once the operations have been stabilized. Further the assessee has submitted quantitative details of milk procured and the subsequent sale of milk and milk products and the AO should have considered the revised quantitative tally duly submitted by the assessee during the course of assessment proceedings. Further the processing and handling loss is as per the industry standard and other direct expenses not challenged by the AO are duly supported by the books of accounts. In light of above, we are of the view that the AO was not right in rejecting the books of accounts and disallowing the whole of the manufacturing/trading loss - Decided in favour of assessee Disallowance of Telephone expenses and staff welfare expenses and travelling expenses - Held that:- Considering the submission of assessee that it has paid FBT on telephone, staff welfare and travelling expenses and when the same have been considered for the purposes of Fringe Benefit Tax (FBT), the same are provided by the employer to its employees as part of its employment/contractual relationship and the same have been incurred wholly and exclusively for the purpose of business and has relied on the CBDT Circular No.8/2005 dated 29/8/2005 we agree with the contention of the assessee and in any case, these are adhoc disallowances.- Decided in favour of assessee
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2016 (10) TMI 920
Addition u/s 68 - unexplained cash credits - genuineness and creditworthiness of the party giving premium - Held that:- Share premium cannot be brought to tax invoking the provisions of Section 68, unless there is a link with either quid pro quo transaction or investing by assessee-company in their accounts so as to receive it back as share capital. No such evidence was brought on record. On the given facts of the case, and on the basis of the confirmation filed by the companies, we cannot hold that this amount can be brought to tax invoking the provisions of Section 68. The genuineness and credit worthiness of those companies is not in dispute. What AO disputed was the amount of premium. Moreover, if the amounts are doubted from those companies, the amount of share capital at ₹ 10 was not doubted. Only amount of premium was doubted. Therefore the companies transactions with assessee are partly accepted as genuine. On facts of the case provisions of Sec. 68 can not be invoked.
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2016 (10) TMI 919
Addition u/s 68 - cash credit - genuineness and creditworthiness of creditors - disallowance of interest expenses in respect of alleged cash credit - Held that:- The assessee has produced their statement of accounts, confirmation, bank statements, and PANs. In other words, the assessee has proved their identities. She has also proved genuineness of the transactions, because amounts have been taken through account payee cheques. The ld.CIT(A) has doubted the credit-worthiness of the creditors, but the assessee has alleged that out of 15 creditors, 9 creditors are assessed to tax. Therefore, inquiry in their hands could be made about the source of funds. Once they are alleging that they have advanced money to the assessee, then, merely on surmises it cannot be inferred that they were not having any means. Some of the creditors appeared before the AO and have re-affirmed the transaction. Thus, flaw pointed out by the ld.Revenue authorities is based on an inference drawn according to their understanding. The assessee has submitted sufficient evidences on the record which demonstrated that these amounts are genuine loans. In some of the cases, amounts were swollen to this figure on account of accumulation of interest from the past. Delete the additions made by the AO with the aid of section 68 of the Act. - Decided in favour of assessee
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2016 (10) TMI 918
Deemed dividends u/s. 2(22)(e) - loans and advances - claim of the assessee is that it is an Inter-Corporate Deposits - Held that:- The authorized share capital of ₹ 2 crores is fully paid up. When the authorized capital has been fully subscribed and paid up, we fail to understand how can the assessee accept share application money of ₹ 1,55,20,000/- when it cannot allot shares of even one rupee to anyone. There is no documentary evidence on record to suggest that the assessee has applied for the increase in its authorized share capital. When the subscribed and paid up share capital has fully exhausted, the authorized share capital of the assessee company claiming to have received share application money of ₹ 1.55 crores is nothing but eyewash and afterthought just to manipulate the facts. The theory of share application money can be demolished simply by these facts on record. The assessee blows hot and cold in the same breath. On the one hand it is claiming the impugned amount as share application money and when this story is demolished, it is taking an alternative plea on Inter-Corporate Deposits (ICD). There is nothing on record to suggest that the two companies are authorized for Inter-Corporate Deposits. Since there is no demonstrative evidence on record by which it can be proved that the impugned amount is Inter-Corporate Deposits, the claim of the assessee cannot be accepted. - Decided against assessee. Disallowance of Insurance Premium - Held that:- There is no denying that the Insurance Premium has been paid on the life of the Directors of the Company. The claim of the assessee that such Insurance Premium is nothing but perquisite is not acceptable. Since there is nothing on record which could suggest that such perquisite is part of the service agreement with the Directors. Moreover, there is no commercial expediency to take Insurance on the life of Directors unless the premium is paid towards Keyman Insurance Policy. The assessee has also failed to produce any documentary evidence to prove that the said amount has been treated as a perquisite in the hands of the Directors. Considering all these facts in totality, we decline to interfere with the findings of the ld. CIT(A). The second grievance of the assessee is also dismissed. Disallowance made u/s. 14A read with Rule 8D - Held that:- There is no denying that during the year under consideration the assessee has earned exempt income in the form of dividends and Long Term Capital Gains. It is also an admitted fact that the assessee has engaged a Portfolio Manager for doing transaction on its behalf. The Portfolio Management Fees, Demat charges and Security Transaction Tax have already been disallowed by the assessee. It is also an admitted fact that the assessee has paid substantial interest on its borrowings. The Assessee must have also incurred some administrative expenses. Provisions of Section 14A read with Rule 8D squarely apply on the facts of the case. The disallowance computed by the A.O. are as per the provisions of the Act; therefore, calls for no interference with the findings of the ld. CIT(A)
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Customs
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2016 (10) TMI 903
Enhancement of value - import of rough marble blocks from Italy - valid import license to cover the consignment - Held that: - appellants imported goods which are restricted item for which the import license is required. As admittedly, the appellant had not produced any license to cover the present imports, there is admittedly contravention of law. The appellants have explained that they are regular importer for which purpose they have the license and the present import has taken place without the license on account of calculation of quantity mistake. However, the fact remains that there are no valid license covering the present import. As such, we hold that confiscation on the said count is valid. In view of the peculiar facts and circumstances of the case leading to imports being without license, the appellants are given an option to redeem the same on payment of Redemption Fine of ₹ 8 lakhs. Similarly, for the above reason, penalty is also reduced to ₹ 5,00,000/- - appeal disposed off - decided against appellant.
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2016 (10) TMI 902
Imposition of ADD - SDH Transmission Equipments - import from China - sunset review - N/N. 125/2010 dated 16.12.2010 - while analysing the material injury, the DA has erred in considering undumped import also in such calculation - Held that: - the dispute relates to the finding of the DA that there is no dumping of subject goods from Israel. However, we note that the DA recorded that as per the practice the data of entire import volume from Israel has been considered to assess the total demand and to assess injury. The import volume is an important parameter while deciding the material injury to the DI. We note that the appellants could not demonstrate regarding impact of such exclusion of imports in injury analysis. We also note that as regards the volume effect, Annexure-II to the Rules read with Rule 14 makes it clear that volume effect is to be examined in respect of a country after cumulative assessment of imports and not for an individual exporter. Reference can be made to the decision of the Tribunal in Marino Panel Products Ltd. vs. DA [2015 (12) TMI 243 - CESTAT NEW DELHI (LB)]. It has not been substantiated before us that ECI Israel is the only exporter of subject goods. As the export volume from a particular country is considered together the DA has taken the total volume of exports from Israel - We do not find any violation as adequate opportunity during all stages of investigation has been given to the appellants. The DA is well within its powers to arrive at the Final Finding based on post disclosure comments received from individual interested parties. The AD Rules do not contemplate another round of exchange of all data, post disclosure, among all the interested parties. In this context, we find no merit in the appellant's plea. Violation of principles of natural justice - Held that: - the basis of arriving at the conclusion on the volume effect and price effect has been disclosed to all the interested parties in terms of AD Rules. Transactionwise details of DGCI containing confidential information were not disclosed. We find this has not materially affected the effectiveness of defence by the interested parties. Tariff classification - the main equipment has been correctly categorised and there is no dispute on the same. Regarding parts, the Id. Counsel for the appellant conceded that there is no separate heading for parts of subject goods. However, heading 851770 covers such parts but not exclusive to the subject goods. Hence, he pleaded that the volume data is erroneous with reference to parts. We have noted that apart from tariff heading the data has been analysed based on description of the product also. The data has been accordingly segregated and used for analysis. Extension of AD duty after the expiry of initial notification. The AD duty levied originally expired on 07.12.2014. The extension of duty was made by Notification dated 05.01.2015, after a gap of 29 days - Held that: - The appeals are directed against Final Findings dated 05.02.2016 and Customs Notification No. 15/2016-Cus. ADD dated 26.04.2016 and not against the extension notification. Hence, our decision is on impugned Findings and Notification only. Appeal dismissed - ADD rightly imposed - decided against appellant.
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2016 (10) TMI 901
Imposition of ADD - n/n. 4/2015 dated 13.02.2015 of Ministry of Finance - graphite electrodes of all diameters - import from China PR - normal value has not been properly arrived at to fix correct dumping margin - Held that: - the argument of the DA against the impugned findings are mostly generic in nature with no specific data based objection. They have contested the findings on various vague assertions like excessive confidentiality for providing data, non-consideration of certain points raised by DI, certain error in data analysis. We have carefully perused the impugned findings by the DA. Each one of the points raised by the interested party has been examined by the DA, who recorded his comments and decisions in respect of the views expressed by them. We find that while determining the export price from China, the DA conducted on site verifications in four units. The DA circulated the report of verification. The export price of sampled exporting producers and their exporters have been done after detailed analysis. It is also pertinent to note that there is no claim for individual normal value for any exporter from China. The normal value constructed for all exporters in China has been compared with ex-works net export price to arrive at the dumping margin for various exporters. The DA also examined the dumping margin for the goods sampled exporters. Articles 6.10 of the Agreement on Antidumping provides that in cases where the number of exporters, producers involved so large as to make such a determination impracticable, the authorities may limit their examination to reasonable number of interested parties. Excessive confidentiality has been accepted in the proceedings - Held that: - there is no specific instance brought to our notice, which will have adverse impact on the rights of any of the interested parties. We note that the Domestic Industry as well as the importer/consumer were given ample opportunity to defend their case in terms of AD Rules. The procedure set out therein has been followed by the DA - The impact of import of subject goods on the Domestic Industry has been considered with reference to the state of industry, production, capacity utilization, sales quantum, stock, profitability, net sales realization, the magnitude and margin of dumping in accordance with the standards prescribed in Annexure-II of AD Rules. We also note that wherever the errors in data computation in respect of a few injury parameters were pointed out, the same has been corrected in the Final Findings. The DA examined the data provided by the interested parties and also obtained from DGCI. We find that while DGCI data is also considered but the Final Finding is based on the analysis of large number of parameters as stipulated under Annexure-II of AD Rules. We note that before Final Findings, the DA has made disclosure statements and all the interested parties have furnished their comments, which were also examined and Final Findings were arrived at. The points raised in the present appeal are not supported with material evidence and are devoid of merit. On careful perusal of the Final Findings, we find no reason to interfere with the same - appeal dismissed - decided against appellant.
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2016 (10) TMI 900
Imposition of ADD - N/N. 7/2012 -Cus (ADD) dated 7.1.2012 - Sunset review - Saccharin - the period of investigation, for the purpose of sunset review was adopted as 15 months instead of 12 months normally adopted by the Designated authority - Held that: - Sunset review, which is mandatory in nature is undertaken by the authorities to adjudge as to whether the Anti Dumping duties imposed, shall unless revoked earlier ceased to have effect on expiry of 5 years from the date of such imposition and whether expiry of duty is likely to lead to continuation or reoccurrence of the dumping and injury. In normal circumstances, in terms of provisions of section 9A(5) of the Customs Tariff Act, 1975, the Anti Dumping duty imposed ceased to have effect on expiry of 5 years - It stand recorded in the impugned Final Findings of the Designated Authority that as per consistent practice, period of investigation ranging from 6 months to 18 months is usually fixed. In the absence of any period of investigation prescribed in the law, for the sunset review, we do not find any merits in the contention of the learned advocate that the period of 15 months for sunset review, adopted by the Designated Authority, was unjustified. In case of doubt of export price during POI, DA is free to look into the other corroborative evidence and to arrive at a finding. During the course of sunset review, the rate of duty cannot be enhanced - Held that: - We have perused the provisions of Rule 23 of the Anti Dumping Rules, which relates to Midterm review and sunset review. It is the contention of the assessee that only rate of duty can be enhanced in Mid term review and not during sunset review. By drawing our attention to the said Rule 23 of the Rules, it stands contended that sub-rule 1A, which provides for variation in the Anti Dumping duty applies to only mid-term review and Rule sub section 1 (B) which relates to sunset review does not provides any variation in the rate of duty and only relates to the extension of period. Reliance placed on the decision of Indian Graphite Manufacturers Association vs. Designated Authority [2006 (4) TMI 274 - CESTAT, NEW DELHI ] where it was held that a cumulative reading of the section 9A(1), 9 A(5) and 9AA, read together, empowers the Designated Authority for recommending the amount of Anti Dumping Duty different from the amount of duty imposed at the time of initial imposition of definitive Anti Dumping duty. The purpose of review will be frustrated if the Designated Authority cannot recommend higher or lower Anti dumping duty than the original definitive Anti Dumping duty. Appeal dismissed - decided against appellant.
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Service Tax
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2016 (10) TMI 917
Refund of service tax - export of goods - Notification No. 41 of 2007 dated 6th October, 2007 - assessee is “merchant exporter” and not “manufacturer exporter” - the claim pertains to the warehousing charges paid for storage of export goods - Held that:- There was insurance cover taken. Therefore, it is not a claim based on no material or a claim which does not fulfill the conditions under the notification. It does not mean that the tribunal's order every time mandates the Department to produce the proof in negative and blindly relies on the version of the assessee. It is in the above circumstances that the tribunal faulted the Revenue for not being able to produce a contrary evidence. Secondly, we do not think that the Revenue in this case can raise a plea that the merchant exporter was not entitled to seek refund. - Decided against the revenue - Appeal dismissed
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2016 (10) TMI 916
Refund claim - export of services - merchant exporter of Mobile Phone - CHA services - Held that: - The para 3 of the notification clearly lays down that the refund shall be filed within one year from the date of export of the goods and explanation attached to the said condition clearly lays down that the date of export shall be the date on which the proper officer of the Customs makes an order permitting clearance of the goods - As regards the condition prescribed in para 3(j) of the notification no. 52/2011, the same is to the effect that for the purpose of claiming refund the exporter is required to be registered with the Export Promotion Council sponsored by Ministry of Commerce or Ministry of Textile. The said condition is a substantive condition for allowing refund claim and being a part of the notification cannot be ignored. Reliance placed on the decision of Golden Dew Tea Factory Vs. CCE Coimbatore [2006 (11) TMI 530 - CESTAT, CHENNAI] where it was held that while interpreting a notification number 41/99-CE that conditions of the notification are mandatory and not mere procedural and hence non fulfillment of the same is not condonable. There is no rule for any intendment while interpreting the notification and regard must be had to the clear meaning of the words used therein. I find that appellant have not admittedly fulfilled the condition 3(j) of the notification which is unambiguous and clear in language. Further, the appellant have not adhered to the time factor which is a part of notification itself and cannot be given a go by. Refund cannot be allowed - appeal disposed off - decided against appellant.
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2016 (10) TMI 915
Classification of services - composite services - activities connected with power distribution such as setting up of sub-stations including transformers and other electrical equipments, civil construction work, etc. - classified under Erection, Commissioning or Installation Services or under Works Contract service - N/N.45/2010-ST, dated 20.07.2010 - reference made to the decision of the case CCE, Kerala Vs. Larsen & Toubro Ltd. [2015 (8) TMI 749 - SUPREME COURT] and arguement placed that orders executed by them would not be leviable to service tax for the period upto 31.05.2007. Held that: - The apex court has categorically held that in respect of composite contract, these are to be necessarily classified under Works Contract services and such contracts are leviable when work contract services included in the statute book - various Work Contracts executed by the appellant will need to be examined individually to see whether they are in the nature of services relatable to transmission or distribution of electricity. Matter remanded to the original adjudicating authority to examine each work contract and record the finding and give the exemption benefit in respect of those instances except which are not covered by the Notification - appeal disposed off by way of remand.
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2016 (10) TMI 914
Cable operator services - extended period of limitation - whether appellant is also liable to tax for the gross amount received from subscriber and paid to MSO apart from commission received? - Held that: - the appellant was admittedly only showing the commission amount as the value of services, which was being duly reflected by him in the returns so filed with the Revenue. No objection was ever raised by the Revenue. Infact, we find that the adoption of reflecting commission only in the ST-3 returns was a pattern adopted by most of cable operator service providers. In the absence of any positive evidence to reflect malafide on the part of assessee, we are of the view that imposition of penalty may not be justifiable - appeal allowed - decided in favor of appellant.
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2016 (10) TMI 913
Cable operator services - extended period of limitation - whether the gross amount received including the amount paid to MSO required to be taxed apart from the amount of commission on which tax is already discharged? - correct value as per ST-3 returns - Held that: - The appellate authority has relied upon the fact that the assessee was continuously filing the return with the department only reflecting the commission as value of the services, which fact leads to inevitable conclusion that there was no suppression or mis statement on the part of the assessee and such reflection of only commission as the value of the taxable value of the services was on account of confusion in the arena - In the absence of positive evidence, in our view, he has rightly held to be barred by limitation - demand against the assessee not sustainable - appeal disposed off - decided against Revenue.
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2016 (10) TMI 912
Imposition of penalties u/s 76 - revised return filed - payment of duty and interest voluntarily - invocation of section 80 - service tax on Clearing and Forwarding Services - Held that: - It is not disputed that appellant has paid up their duty liability voluntarily, albeit beyond the due date. They have also subsequently discharged that interest liability thereon. Keeping in mind these facts, I am of the considered opinion that imposition of penalty under Section 76 in this case is unjust and unfair. In view of the extenciating circumstances, the original or lower appellate authority should have permitted waiver of penalties by invokation of Section 80 of the Finance Act, 1994. Reliance placed on the decision of M/s Bas Engineering Pvt. Ltd. Versus CST, Delhi [2013 (12) TMI 918 - CESTAT NEW DELHI] where it was held that appellants paid the entire amount before issue of Show Cause Notice - provision of section 80 are invokable. Appeal allowed - decided in favor of appellant.
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2016 (10) TMI 911
Refund claim - Rule 5 of the CENVAT Credit Rules, 2004 as amended read with Notification No. 05/2006-CE (NT) - export of information technology - compliance with Rule 5 (ibid) - Held that: - In respect of the eligible services I find that the matter has been covered in favour of the appellants in the decision of M/s Virtusa (India) Pvt. Ltd. Versus The Commissioner C,C.E & ST, Hyderabad [2016 (6) TMI 676 - CESTAT HYDERABAD]. With respect to security agency services and air travel agent services, these also have been held as eligible input services in a number of decisions and in any case, it cannot be disputed that these are essential services required by the appellant. Quantum of refund - wrong calculation adopted by original authority - The eligible refund will therefore required to be re-calculated after considering all the input services availed by the appellant as eligible input services and also adopting total credit taken to compute refund credit as per the formula. For this limited purpose both the appealls are being remanded to the original authority for re-calculation. Appeal allowed - matter remanded.
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Central Excise
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2016 (10) TMI 910
Denial of CENVAT credit - imposition of penalties - correctness of documents covering the import and local procurement of various capital goods for availing credits - manufacture of Iron Ore Concentrates - Held that: - there is no dispute about the receipt and utilization of the capital goods at the appellant s plant. As the documents contain full details of the product, duty paid on the same and the full address of the appellant/supplies issuing the invoice, the credit cannot be denied to the appellants - reliance placed on the decision of case LARSEN & TOUBRE LIMITED Versus COLLECTOR OF C. EXCISE, BHUBANESWAR [1994 (4) TMI 146 - CEGAT, CALCUTTA] where the case was decided in favor of appellant. The credit of ₹ 1,52,422/- rightly denied - invoices consigned to Essar Steel India Ltd., Chitrakonda - There is no indication that they have a registered manufacturing unit of Chitrakonda. Time bar - Held that: - the appellants have filed monthly ER-1 statements indicating the credits taken along with copies of the duty paying documents. As the photocopies of the duty paying documents were filed along with ER-1 Return, full details were in the knowledge of the department regarding various credits availed by the appellants. As such, we find that invoking extended period of demand in the present case is not legally sustainable. The impugned order not justifiable on merits as well as substantially on time bar also - appeal allowed.
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2016 (10) TMI 909
Constitutional validity of Rule 8(3A) of the Central Excise Rules 2002 - Prohibition on assessee from utilising cenvat credit for payment of excise duty for default in payment of duty - discharge of part duty by making use of PLA - a part of the duty payable for the month of August 2008 was not paid by the appellant within the time limit allowed but was paid alongwith interest after delay in the month of November 2008 - whether the duty amount to the tune of about ₹ 12 lakhs already paid by the appellant by making use of Cenvat Credit needs to be demanded to be paid in cash/PLA? - Held that: - reliance placed on the decision of the case Indsur Global Ltd. vs. Union of India [2014 (12) TMI 585 - GUJARAT HIGH COURT] where it was held that Condition contained in sub-rule (3A) of rule 8 for payment of duty without utilizing the cenvat credit till an assessee pays the outstanding amount including interest is declared unconstitutional. Therefore, the portion "without utilizing the cenvat credit" of sub-rule (3A) of rule 8 of the Central Excise Rules, 2002, shall be rendered invalid. I find that there is no justification to proceed with the demand made under Rule 8 (3A) by the authorities below in as much as the Rule itself has been stuck down as unconstitutional - appeal allowed - facility of using Cenvat credit for making payment of excise duty cannot be denied - decided in favor of appellant.
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2016 (10) TMI 908
Reversal of CENVAT credit of CVD - manufacture of Insulated Wires and Cables falling under Chapter 8544 of the Central Excise Tariff Act - credit of the CVD paid, availed on imported capital goods - whether the denial of CENVAT credit on the ground that capital goods was found defective and were re-exported by the appellant under bond without payment of duty justified? - qualification as capital goods as defined in Rule 2 (a) of the Cenvat Credit Rules, 2004 - Held that: - It is not in dispute that the appellants have re-exported the defective capital goods without putting them to use. They have cleaned these goods "as such" under bond and export the goods without payment of duty. Para 3.4 of Chapter 5 of CBEC Central Excise Manual reads as follows - "3.4 There is no bar for a manufacturer to remove the inputs or capital goods "as such" for export under bond". - Therefore, the respondent cannot be faulted for removing the goods without payment of duty for export. Reliance placed on the decision of case of Glass and Ceramic Decorators vs. CCE, Mumbai - I [2014 (9) TMI 864 - CESTAT MUMBAI] where it was held that In respect of the goods on which credit has been taken, Circular issued by Board in 1996 as well as in 2000, clearly says that the manufacturer assessee is entitled to clear the inputs or capital goods for export (on which credit has been taken) under bond without payment of duty. The CBEC has also in the clarified Circular dated 29/8/2000 that there is no bar for manufacturer to export inputs and capital goods under bond. In any case if the capital goods would have been cleared for export on payment of duty the same would have been allowed as rebate to the respondent as per the provisions of Rule 19 of the Central Excise Rules, 2002. Demand of reversal of the Cenvat credit not justified - appeal dismissed - decided against Revenue.
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2016 (10) TMI 907
Benefit of exemption under N/N. 6/2002 CE dated 01.03.2002 as amended by Notfn No. 47/2002-CE dated 06.09.2002 - contract of construction of pipeline - whether the department's view that in the assessee's contract there is no element of 'water treatment plant' hence they are not eligible for exemption justified? - Held that: - the decision in the case of CCE., C. & ST. (A-III), HYDERABAD Versus IVRCL INFRASTRUCTURES & PROJECTS LTD. [2008 (12) TMI 198 - CESTAT, BANGALORE] relied upon where it was held that pipes needed for delivery of water from its source to the plant and from there to the storage facilities have been exempted subject to the requirement of obtaining a certificate from the Collector, District Magistrate, Deputy Commissioner of the District in which the plant is located. We find that the Notification merely talks about the storage facilities and there is no restriction that the water should be delivered only to the first storage point – benefit of exemption available. Benefit under the exemption notification available - appeal dismissed - decided against Revenue.
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2016 (10) TMI 906
Valuation - Superfine Spray Plaster - Retail Sale Price in terms of Section 4A or transaction value in terms of Section 4 of the CEA, 1944 - supply of Superfine Spray Plaster in bulk from NCC-Maytas for their consumption in construction - Held that: - decision in the case of CCE, Bangalore Vs. Mysore Cements Ltd. [2010 (8) TMI 246 - KARNATAKA HIGH COURT] relied upon where it was held that construction activity has been considered as a service industry by the Finance Ministry - general construction work for building, general construction work for civil engineering installation and assembly work building, completion and finishing work and assessee is treated as a service industry. The clearances of surface coating material supplied by the appellant in 25 kg PP bags to NCC-Maytas will fall under the ambit of exemption from affixation of MRP as envisaged in Rule 34/amended Rule 2A of SWM (PC) Rules - valuation to be done u/s 4 as transaction value - appeal allowed - decided in favor of appellant.
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2016 (10) TMI 905
CENVAT credit - items falling under chapter 76, 83,68, 69 of CETA - capital goods in terms of Sub-Clauses of Rule 2(a)(A) of CCR, 2004 or inputs - components/spares/accessories of capital goods - packing materials and insulating materials are used for thermal insulation of the pipes and fittings in order to avoid heat loss - Held that: - the definition of inputs in Rule 2(k) of CCR means and includes all goods used in the factory by the manufacturer of the final product. It also includes any goods including accessories, cleared with the final product, the value of which is included in such final product - the definition of 'inputs' during the relevant period under explanation 2 in Rule 2(k) includes goods used in manufacture of capital goods which are further used in the factory of the manufacturer. Further, clause (i) of Rule 2(k) provides 'input' means all goods used in or in relation to manufacture of final products which directly or indirectly and whether contained in final product or not and includes items like lubricating oils, grease, cutting oils etc., in relation to manufacture of final product or for any other purpose within factory of production. I find that most of the items in question have been indisputably utilized in the factory of production of excisable goods and without the use of which the appellant could not have manufactured excisable goods - CENVAT credit allowed - appeal allowed - decided in favor of appellant.
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2016 (10) TMI 904
Clandestine removal of goods - manufacture of Pan Masala and Gutkha - Held that: - the contentions of Revenue in the grounds of appeal are more or less repetition of show cause notice. We find that the show cause notice and earlier Order-in-Original dated 27.05.2005, have merged into the final order dated 12.08.2011 passed by this Tribunal, as per the doctrine of merger. The issue for our consideration is present appeals before us is whether the impugned order in original is sustainable with reference to the directions that were given by this Tribunal in its said final order dated 12.08.2011. The grounds of appeal by Revenue & M/s Durga Trading Company are stated is foregoing paras. In none of the grounds, either Revenue or M/s Durga Trading Company would establish that any of the direction given by this Tribunal while remanding the matter to Original Authority have been violated while passing the impugned Order-in-Original. We therefore, hold that present Order-in-Original is sustainable in respect of all the above stated appeals. Therefore, all the above stated appeals are dismissed.
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CST, VAT & Sales Tax
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2016 (10) TMI 899
Validity of order of assessment - principles of natural justice - TNVAT Act, 2006 - CST Act, 1956 - application for revision of assessment u/s 84 of the State Act - Held that: - this Court is of the view that the application under Section 84 of the State Act having been filed before the respondent, it is but appropriate for the respondent to dispose of the same on merits and in accordance with law and not merely reject it by a single line order stating that the order of assessment has been validly passed. The respondent shall take note of the petitioner's case that the notice proposing revision itself is based on the audit conducted by the office of the Accountant General and the assessment was completed ex parte upon failure of the petitioner to submit their objections. In such circumstances, the respondent shall consider the petitioner's application under Section 84 of the State Act effectively, peruse the documents, ascertain the genuineness of the transaction and then pass an order giving reasons. Petition allowed - decided in favor of petitioner by way of giving them one more opportunity of being heard and accepting the application u/s 84 of the act.
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2016 (10) TMI 898
Validity of assessment order - Section 26 of the BVAT Act, 2005 - no notice served upon the petitioner - Held that: - A registered notice sent on the proper address carries presumption of delivery in terms of Section 27 of the General Clauses Act although it gets returned. Period of limitation - the order is beyond the period prescribed for completing the assessment - Held that: - The order of assessment itself stipulates that none has put in appearance on behalf of the petitioner even though notice under registered post was sent. A registered notice sent on the proper address carries presumption of delivery in terms of Section 27 of the General Clauses Act. Still further, merely because demand notice was sent after three years will not raise a presumption of ante-dating the order as it is categorically mentioned in the counter affidavit that the demand notice was prepared on the same date, but due to clerical mistake it could not be sent. Therefore, mere fact that the demand notice was sent in the year 2016 will not be enough to raise presumption that the order has been ante-dated. The case of State of Andhra Pradesh Versus Khetmal Parekh & M. Ramakishtaiah and Co. [1994 (2) TMI 260 - SUPREME COURT OF INDIA] referred by petitioner do not apply to the present case as in the case the Department could not offer any explanation as to why there was delay in sending demand notice, but a perusal of the demand notice in the present case shows that it bears the same date as the date of order, but it has been delivered to the appellant only thereafter. Therefore, the explanation of the Department in the counter affidavit cannot be said to be unreliable. No reason exist to doubt that the order of re-assessment was passed on the same date which bears the date, i.e. 20th June, 2013 - it is open to petitioner to avail statutory remedy under the Act in accordance with law - petition dismissed.
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2016 (10) TMI 897
Demand of tax - Section 3-F of the U.P. Trade Tax Act 1948 - works contract entered between NHAI and CDS - purchase of plant, equipments and other material from revisionist for carrying out the works contract - goods supplied to CDS to be treated as inter-state sales or intra-state sales? - Held that: - the Court finds that the findings in respect of taxability have come to be recorded by the authorities without due consideration being conferred upon the contract which was entered into between the parties as well as material in the shape of purchase orders and invoices which were already on record. This Court therefore is of the opinion that , the present revision which pertains to the Assessment Year 2001-02 would commend a remit to the assessing authority. Revision allowed - matter remanded to the assessing authority for a decision afresh.
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2016 (10) TMI 896
Jurisdiction of action taken after 20 years without providing opportunity of being heard - TNVAT Act, 2006 - order of assessment or any notice not served to petitioner - action taken after 20 years - whether the impugned order of demand tenable? - Held that: - this impugned proceeding was without proper opportunity to the petitioner, and it is also barred by limitation. Above all, it has to be pointed out that the respondent would be entitled to effect recovery of the tax arrears, even assuming it is due only within a reasonable time, and considering somewhat similar provisions under the TNGST Act, the Hon'ble Supreme Court in the case of State of Punjab and others Vs. Bhatinda District Cooperative Milk Producers Union Ltd. [2007 (10) TMI 300 - SUPREME COURT OF INDIA] observed that, 'The Revisional Authority, being a creature of the statute, while exercising its revisional jurisdiction, would not be able to determine as to what would be the reasonable period for exercising the revisional jurisdiction in terms of Section 21 (1) of the Act'. Court has no hesitation to hold that the impugned order is barred by limitation, and the action initiated for recovery of dues after about 20 years is highly unreasonable, rendering the impugned demand as unsustainable in the eye of law - petition allowed - decided in favor of petitioner.
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