Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
October 6, 2016
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
TMI SMS
Articles
News
Notifications
Highlights / Catch Notes
Income Tax
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Allowability of revenue expenditure being the amount written off - no new business was set up, but towers in addition to which were already set up were proposed at site, which project was later on abandoned - claim of expenditure allowed - HC
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Belated claim of exemption u/s 54F - The relaxation u/s 119(2)(c) can be sought by the assessee at the time of claiming deduction and such claim can be made only within the time period, as prescribed under the Act for making such claim - HC
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TDS u/s 195 - Branding Expenses - The recipient being a foreign company, having no PE in India, registered under the UK laws, cannot be held to have any business connections in India, though they are carrying out the service for some of the group concerns - AT
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TDS u/s 195 - Non-deduction of TDS on AMC contract - It is not the case of AO that the non-resident payee had any PE in India and, therefore, the business income in the hands of non-resident payee could not be taxed in India. - AT
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Claim of deduction in response to notice issued u/s 153A even if such claim was not made in the original return allowed - AT
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Chargeability of capital gains - share certificates were not delivered to the transferee during the previous year relevant to assessment year 2007-08, it cannot be said that transfer of shares is complete during the previous year - AT
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Un-reconciled entries on account of non-reconciliation of AIR information - Entries in the 26AS form not accepted by the assessee - Addition on the basis of AIR information and revised form 26AS was wrong the assessee has no business transactions with those parties appearing in AIR/form 26AS - AT
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Exemption u/s 11 - making profit - activity of training of cadets - section 2(15) - All the courses may not be approved by the Director General of Shipping but that by itself is no ground to hold that the purpose is not charitable - AT
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Disallowanece of interest u/s 40A(2)(b) - related parties - the assessee as well as the relatives, to whom assessee has paid interest are being taxed higher rates, the entire exercise undertaken by the AO is neutral exercise - AT
Customs
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Whether the appellate tribunal is right in passing the order after five months twenty days from the date of hearing - Once the manner in which the tribunal has dealt with the appeals is not agreed, then, no alternative exists, but to quash and set aside the impugned order - HC
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Served from India Scheme (SFIS) - DGFT rejected the application - whether the claim included for foreign rebate, freight discount, peak season surcharge and services tax are classified as services or not - Matter remanded back for reconsideration - HC
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Withdrawal of Anti Dumping Duty - retrospective effect or prospective effect - The Designated Authority has followed the procedure as mandated by the Rules in respect of all the proceedings - absence of legal provisions for supporting the plea of the appellants - appeals dismissed - AT
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An exemption notification is to be interpreted in line with the words employed by it and not on any other basis; and that a person who claims exemption or concession, must establish clearly that he is covered by the provisions contained therein. - AT
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Condonation of delay - TRAs used for clearance of goods duty free - when the fraud is apparent from the record, limitation should not be a barrier to give a burial death to such fraud. Therefore, delay was condoned - AT
Service Tax
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Manpower Recruitment services - the service tax liability discharged on the amount equivalent to 3% amount received as commission is the correct discharge of service tax liability as there is nothing on record to indicate that M/s. Paranjape Auto Cast had paid the amount of wages/salaries of the recruits to appellant - AT
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Activities of the appellants fall under the category of ‘construction of residential complex service’ and such services become taxable only after 1-7-2010 - AT
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Conducting vocational trainings on international travel and tourism under the guidance and authorization of International Air Transport Association (IATA), Canada - Benefit of exemption from service tax allowed - AT
Central Excise
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Cenvat Credit - Service Tax paid in connection with the service of erection of Kachaha shed for storage of input material during monsoon allowed as cenvat credit - AT
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100% EOU - Refund claim - for the purpose of regulating the exemption to the EOU, the definition of “manufacture” as appearing in para 3.31 of the Exim Policy is relevant and not section 2(f) of the Central Excise Act 1944 - AT
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CENVAT credit - various input service - the decision of the case of Maruti Suzuki India ltd. cannot be relied upon as the Hon'ble Apex Court has held that cenvat credit on input is available if these inputs is used in manufacturing of final product. Admittedly, in the case in hand no input is involved - AT
Case Laws:
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Income Tax
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2016 (10) TMI 181
Allowability of revenue expenditure being the amount written off by the assessee in respect of expenses incurred on projects originally set up to put up cell sites, but later abandoned - expenses were disallowed by the assessing officer as that was spent by the assessee on sites to bring into existence a new asset and new source of income and therefore, such expenditure was in the nature of capital expenditure. Held that:- A cellular tower can be a new independent source of income, if it is erected exclusively for leasing out to the other operators. However, on facts, this was not the position and the tribunal, therefore, rightly concluded that in series of decisions, the High Courts and the Hon'ble Supreme Court of India has laid down the principle that if an expenditure is incurred for doing the business in a more convenient and profitable manner and has not resulted in bringing any new asset into existence, then, such expenditure is allowable business expenditure. In the present case, no new business was set up, but towers in addition to which were already set up were proposed at site, which project was later on abandoned.
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2016 (10) TMI 180
Grant of extension of time to comply with the requirements of Section 54-F - year in which such deduction is claimed - failure to demonstrate compliance of Section 119 (2)(c)(ii) - Held that:- The submission is based on the erroneous presumption that the words “year in which such deduction is claimed” mean the year in which the assessee seeks and is granted extension. The words in fact mean the year in which the assessee is eligible to tax, which in the case before us, is the Assessment Year 2012-13 as the sale was on 28.06.2011. A view to the contrary would entitle an assessee to postpone the payment of capital gain tax indefinitely by making the application at any time and even repeatedly, if required. The words mean the year in which the assessee may claim the benefit and not the year in which he chooses to claim the same. The relaxation in terms of Section 119 (2) (c) can be sought by the assessee at the time of claiming deduction and such claim can be made only within the time period, as prescribed under the Act for making such claim. There is nothing in Section 119 (2) of the Act which gives any power to the Board to extend the time to claim the deduction. While applying the afore principle, to the facts of the present case, the petitioner could have applied for relaxation for claiming the benefit under Section 54-F only within the time prescribed under that Section and that too, if before making such claim, he had complied with the required conditions to claim such deduction. That not being there in the present case, we are of the opinion that the Board rightly rejected the petitioner's application. Learned counsel for the Revenue has stated that the petitioner is a Hindu Undivided Family, whereas the revenue record appended with the petition shows that the owner of the land in question is a Karta of the Hindu Undivided Family in his individual capacity. In view of what we have held above, even if we assume the owner of the land to be the petitioner Hindu Undivided Family, no relief can be granted. On the issue of the petitioner having two houses, Mr. Mittal, learned counsel for the petitioner has explained that the petitioner does not own any house as alleged by the Revenue. However, we express no opinion on the same. - Decided against assessee.
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2016 (10) TMI 179
Disallowance under the head Branding Expenses - liability to deduct tax on the payment made u/s 195 - whether expenses paid to a company established in the United Kingdom and having no permanent establishment in India, and are in the nature of reimbursement of expenses? - Held that:- No doubt the branding expense has been incurred outside India and as is evident from various records available and also the application made under the FEMA regulation in Form 15CA. It is also not the case of the Assessing Officer that this has been incurred in India. The recipient Muthoot Global Transfers Pvt. Ltd. being a foreign company registered under the UK laws, cannot be held to have any business connections in India, though they are carrying out the service for some of the group concerns. it is also not the case of the Department that they are having any permanent establishment in India. As stated by the Ld. Counsel if at all they are taxable it will be under the UK laws. Therefore, in our considered view, the assessee company is not liable to deduct tax on the payment made. The assessee company has also been earning income and incurring expense which would establish that the expenses have been laid out and expended in the course of carrying on of the business. - Decided in favour of assessee Disallowance u/s 14A r.w.r. 8D - Held that:- It is a fact that assessee has not earned any exempt income during the year. These investments have been exclusively in the shares of foreign companies as evidenced by Schedule 5 of the audited Balance Sheet produced. Thus e investments are made in foreign companies, we hold that section 14A r.w.r. 8D has no applicability to the facts of this case. See Kariali Steels and Alloys (P) Ltd. vs. JCIT [2016 (2) TMI 79 - ITAT COCHIN] - Decided in favour of assessee
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2016 (10) TMI 178
Un-reconciled entries on account of non-reconciliation of AIR information - Entries in the 26AS form not accepted by the assessee - Held that:- We find that the addition has been made qua unreconciled entries appearing in the AIR information/Form No.26AS which was totally denied by the assessee that it had never any business transactions with these parties during the year. We further find that the AO has not bothered to investigate the matter further and simply added the amount of un-reconciled entries in the income of the assessee. - Decided in favour of assessee
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2016 (10) TMI 177
Denial of exemption u/s 11 - whether the assessee is engaged in the business of activities not covered within the meaning charitable as defined in section 2(15) and that the activity of training of cadets was not qualified to be education and also that the assessee has been making profit on continuous basis and without any charitable object as provided under section 2(15)? - Held that:- All the courses may not be approved by the Director General of Shipping but that by itself is no ground to hold that the purpose is not charitable. The assessee trust was set up to administer and maintain technical training institution at various places in India for pre-sea and post-sea training for the ships and maritime industry and was engaged to provide on-board and offshore training and also seems to be education and accordingly, held that there is no substantial question of law and dismissed the appeal of the revenue. We find that the case of assessee is squarely covered by the ratio laid down by the jurisdictional High Court in the case of Samudra Institute of Maritime Studies Trust, (2014 (9) TMI 575 - BOMBAY HIGH COURT ). Respectfully following the above mentioned judgment of Hon’ble High Court we set aside the order of the ld.CIT(A) and direct the AO to allow the benefit an enumerated under section 11 of the Act by deleting the addition. - Decided in favour of assessee
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2016 (10) TMI 176
Disallowanece of interest under the provisions of section 40A(2)(b) - Held that:- As decided in assessee's own earlier years since the assessee as well as the relatives, to whom assessee has paid interest are being taxed higher rates, the entire exercise undertaken by the Assessing Officer is neutral exercise as far as the payment of tax is concerned and there is no question of evading of payment of tax by any of the parties - Decided in favour of assessee
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2016 (10) TMI 175
TDS u/s 195 - Non-deduction of TDS on AMC contract - existence of PE in India - CIT(A) held that the same was not taxable in the hands of non-resident payee, because that was business income of the non-residents and since they had no PE in India - DTAA - Held that:- CIT(DR) has referred to the various services, covenants and pointed out that services had been rendered by communication only in India. Ld. CIT(DR)’s contention cannot be accepted in view of specific covenant contained in the agreement, which, inter alia, includes covenant no. 2.6, which deals with product replacement and repair as per which Gillette shall repair or replace any failed or defective part or parts of the hub station equipment in accordance with the provisions of sub para 2.6.1 to 2.6.4. Therefore, it is not correct to say that the entire services were rendered in India. As a matter of fact the replacement could be effected only by Gillette. It is not the case of AO that the non-resident payee had any PE in India and, therefore, the business income in the hands of non-resident payee could not be taxed in India. Further, we are in agreement with the detailed analysis carried out by ld. CIT(A) in holding that no technical services were provided to the assessee and the services were in the nature of normal maintenance/ repairs/ replacement etc., performed outside India. Therefore, such payments did not fall within the purview of Explanation 2 to section 9(1)(vii) of the Act. Further, we are in agreement with ld. CIT(A)’s conclusion regarding taxability under the provisions of relevant tax treaty/ DTAA, wherein after elaborate discussion he has concluded that no technical knowledge was made available to assessee. From the above it is clear that the amount paid by the assessee to non-resident was not chargeable to tax in terms of the provisions of the Act or DTAA. - Decided in favour of assessee. Revision u/s 263 - justification for writing off of stock as per the books of a/c - Held that:- It cannot be said that by adopting an ad hoc method of arriving at net realizable value by impairing the value of service stock by 25%, in the absence of any detailed technical estimate, the assessee had resorted to correct method of valuation. Under such circumstances, the assessment order was prejudicial to the interests of revenue. Ld. CIT(A) completely overlooked the fact that true profits of an year could not be deduced without resorting to proper technical estimate of net realizable value. He failed to appreciate that spares had no shelved life of 4/5 years inasmuch as assessee itself had written back considerable sum by way of write back. It is true that in the long run this exercise will be revenue neutral keeping in view the concept of going concern of an organization but the main object of employing correct method of accounting is to determine the true profits of an year. We, accordingly, uphold the order passed by ld. CIT u/s 263. Writing down of inventories - Held that:- We have discussed in detail the decisions relied upon by ld. counsel for the assessee, from which it is evident that the claim was advanced in both th cases on the basis of proper estimation on technical basis resorted by assessee and not on ad hoc basis as has been done in the present case. We are in agreement with the contention of ld. counsel for the assessee that the AO’s conclusion that there was no fall at all in the value of spares also is not correct because it cannot be held that there was no decline in the net realizable value of spares. However, estimation should have proper technical backing. In view of section 145(3), the AO is required to examine the correctness of method employed by assessee in preparation of its accounts. The method employed by assessee should be such from which true profits of an year can be deduced. However, in the present case since the assessee has debited the P&L a/c merely on presumptive basis, therefore, we restore the matter to the file of AO for providing the assessee an opportunity to furnish the details of net realizable value of spares backed with proper evidence in order to substantiate its claim. Disallowance made u/s 14A - whether no investment was made out of interest bearing funds? - Held that:- As observed that the interest of ₹ 274.68 lakhs was paid for the loans taken from Cisco Systems and HSBC for utilization of the same for NSE project and for business purposes. The assessee also paid interest of ₹ 3.20 lakhs for vehicles taken on lease. Apart from the above, the assessee had paid ₹ 147.47 lakhs on account of bank charges during the period. He pointed out that none of the financial charges were related to the investment made by the assessee and investment in dividend yielding assets was made out of assessee’s own funds or funds borrowed from the holding company and no part of the interest expenditure could be held as incurred for earning exempt income. This specific finding of ld. CIT(A) has not at all been controverted by the department by bringing any evidence on record and, therefore, we confirm the findings of ld. CIT(A) in deleting the disallowance of ₹ 79,18,827/- made on account of interest expenditure relatable to earning of exempt income by AO. In the result this ground is dismissed.
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2016 (10) TMI 174
Assesment of proceedings u/s153A - claim of deduction in response to notice issued under section 153A of the Act even if such claim was not made in the original return - Held that:- Once return of income is filed under section 153A of the Act, it has to be considered as a return of income filed under section 139 of the Act and all other provisions would apply as though it is a return of income filed under section 139 which includes reconsideration of any deduction permissible under the law. It is also not in dispute that the assessee has placed all the facts on record even in the original return but did not claim set off of the expenditure and while declaring additional income, in response to the notice issued under section 153A of the Act, though he stuck to the income declared, set off was claimed as per law which should not be denied, overlooking the fact that the return of income filed under section 153A of the Act should be deemed to be the return filed under section 139 of the Act; irrespective of the question as to whether it is for the benefit of the assessee or department, the assessee is entitled to claim deduction of interest expenditure, particularly when the facts are already on record. Section 147 of the Act, should not be imported into the proceedings under section 153A of the Act, more particularly when the claim of the assessee is not a fresh claim un-connected to the income declared but the claim was linked with the income declared. Having regard to the circumstances of the case, we are of the view that the Assessing Officer as well as the Ld. CIT(A) were not justified in disallowing the claim of deduction of ₹ 24,57,965. We direct the Assessing Officer to allow the claim of deduction and re-compute the income accordingly. - Decided in favour of assessee
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2016 (10) TMI 173
Chargeability of capital gains arising on sale of shares - assessment year selection - Held that:- The AO as well as the CIT(A) were driven by the fact that there was a change in the management and control of the company pursuant to share transfer of agreement between assessee and Shri G.Somashekara Reddy & others and also full consideration was received during the financial year relevant to assessment year under consideration. In our considered opinion, these are not conclusive to determine whether transfer of shares has taken place or not. The underlying purpose of share transfer agreement was only to transfer shares in the company STPPL. It is not the case of the AO that relevant share transfer Forms duly signed by the assessee were handed over to the buyer during the previous year relevant to assessment year under consideration. Needless to say shares are movable assets and therefore transfer thereof is guided by the Sale of Goods Act. The transfer took place as and when possession was handed over to the transferee and consideration was received. In this case, substantial amount of consideration was received during the previous year relevant to assessment year under consideration. But it is nobody’s case that possession of share certificates was handed over to the transferee. As in the present case since it is undisputed fact that share certificates were not delivered to the transferee during the previous year relevant to assessment year 2007-08, it cannot be said that transfer of shares is complete during the previous year. Accordingly, we hold that no capital gains are chargeable to tax on account of sale of shares in the company STPPL during the previous year relevant to assessment year under consideration. Therefore, we direct AO to delete the addition on account of sale of shares in STPPL. As regards other addition on account of interest-free loans given, the AO, though made a bald statement that the assessee incurred interest on borrowings, he has not rendered any categorical finding that the assessee has diverted interest-bearing funds to non-business purpose. As a matter of record, it is during the relevant assessment year the assessee has received a sum of ₹ 13.50 crores as advance for sale of shares. Therefore, presumption has to be drawn that the assessee has advanced loans to others out of his own fund and therefore, the question of any addition does not arise. Hence, we direct the AO to delete the addition made on account of interest free loan. Assessee appeal allowed.
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2016 (10) TMI 172
Disallowance of certain advertisement expenses under Section 37 (3A) - whether the limit of ₹ 40,000/provided under Subsection (3A) ought to be increased proportionately.? - Held that:- The amendment introduced by the Finance Act in terms of the tenth schedule indicates two things. Firstly, any increase in the previous year (over twelve months) would result into a hardship or anamoly if the amounts or limits specified in the provisions of the Act were not proportionately increased. Secondly, proportionate increase in the amounts was a legitimate relief in such cases. There is no reason why we should not adopt the same approach in dealing with the hardship or anamoly we are faced with in a case like the present. The hardships or anamolies which we have referred to above in relation to the interpretation of Section 37 (3A) of the Act, would require us to depart from a literal construction and adopt a reasonable and purposive construction requiring alteration of the limit of ₹ 40,000/provided in Subsection (3A) in proportion to the increase in the previous year. Such interpretation accords with the object and purpose of the provision and does away with the anamoly or hardship without really doing any violence to the words of the provision. We hold that there is a clear warrant for proportionately increasing the limit laid down in Section 37 (3A) as a result of increase in the previous year of the Applicant-Assessee from 12 months to 17 months. Question (a) is, accordingly, answered in the negative, i.e. in favour of the Applicant-tAssessee and against the Revenue. Disallowance of the amount deducted from the sale proceeds of alcohol and transferred out of the profit & loss account to storage fund for molasses and alcohol account under the Ethyl Alcohol (Price Control) Amendment Order, 1971. This question is already decided by a Division Bench of our Court in Somaiya Organo Chemicals Ltd. vs. CIT (1993 (12) TMI 3 - BOMBAY High Court) in favour of the Assessee Disallowance of interest paid to the current account of the director under Section 40A(8) - Held that:- This question, it is accepted by the Assessee, is decided by our Court in CIT vs. Jhaveri Bros. & Co. Pvt.Ltd. [1994 (11) TMI 56 - BOMBAY High Court] against the Assessee and in favour of the Revenue Treatment of the insurance claim received from the insurance company on account of loss of stocks-in-trade and other goods due to fire as business income of the Assessee - Held that:- This question has been decided by our Court in CIT vs. Pfizer Ltd. (2010 (6) TMI 433 - Bombay High Court ) wherein our Court has held that an insurance claim is an indemnification and must stand on the same footing as the income that would have been realized by the assessee on the sale of the stock-in-trade. We, accordingly, answer Question in favour of the Revenue and against the Assessee.
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2016 (10) TMI 171
Application for grant of exemption made under Section 10 (23C) rejected - time limit of filling application - Held that:- It is the unrebutted case of the petitioner that the quoted columns were the same even prior to the said amendment made in the year 2009. At that time, applications for seeking exemption could be made only prior to 31st March of the relevant Financial Year, for which the exemption was being sought. The information supplied by the applicant against these columns at that time was considered adequate by the Department. Even otherwise, if an application under the 14th proviso, as it stands today, is filed prior to 1st April of the relevant Assessment Year, for which exemption is sought for and after the filing thereof, any further information is still needed by the respondent Authorities, before taking a final decision thereupon, that information can be sought for from the applicant. As observed earlier, this was done in the case in hand, in which all the accounts for the year ending 31.03.2014, when asked for, were duly provided by the petitioner much before the passing of the order impugned before us. Note 1(a) to Form No. 56-D provides that an application can be filed before the specified date and Note 3 clearly provides that after filing of the application, an applicant shall furnish any other documents or information as required by the Chief Commissioner or any other Authority authorised by the Chief Commissioner, as the case may be. These Notes clearly indicate that the application can be filed even prior to 1st April of the relevant Assessment Year, from which the exemption is sought. In view of the above, the impugned order dated 03.03.2015 passed by the Chief Commissioner is set aside with a direction to the Chief Commissioner to consider the application filed by the petitioner for grant of exemption under Section 10 (23C) of the Act, on merits.
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2016 (10) TMI 170
Reopening of assessment - applicability of Section 115JB on assessee - Held that:- As the reopening of notice itself has been held to be without jurisdiction on account of first proviso to Section 147 of the Act and as there was no failure on the part of the Respondent Assessee to disclose fully and truly all material facts necessary for Assessment. The reopening notice itself was issued by the Revenue on the basis that Section 115JB of the Act was applicable to the Respondent Assessee and yet in view of the first proviso to Section 147 of the Act, the notice was bad. Therefore, for the purpose of present Appeal, there is no need to examine the applicability of Section 115JB of the Act in respect of the Respondent as it is Banking Company. This question would have only assumed importance if the reopening notice was within jurisdiction. In the above facts, we have not examined the applicability of Section 115JB of the Act to Banking Companies.
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2016 (10) TMI 169
Disallowance u/s 40(a)(ia) - tax deducted at source not deposited within the time allowed - assessee preferred a revision petition before the Commissioner under Section 264 wherein he did not grant the benefit of the deduction to the assessee during such assessment year provided directed the Assessing Officer to make necessary rectification in exercise of powers under Section 154 of the Act for the relevant years and give effect to the expenses so disallowed in the earlier year. Held that:- The assessee having deducted tax at source deposited in the government only after the end of the year under consideration but before the due date for filing of the return. In view of the amended provision of Section 40(a)(ia) of the Act by virtue of amendment dated 01.04.2010, such expenditure would also be deductible during the same year. This provision was held to have retrospective effect by the judgement of the High Court in case of Omprakash R Chaudhary (2015 (2) TMI 150 - GUJARAT HIGH COURT). On the basis of such statutory change and the judgement of the High Court, the assessee was, as held by the Supreme Court in case of Assistant Commissioner of Income Tax vs. Saurashtra Kutch Stock Exchange Limited reported in [2008 (9) TMI 11 - SUPREME COURT ], entitled to seek rectification. The Tribunal correctly granted such a relief which was denied by the Assessing Officer and Commissioner (Appeals). The Commissioner (Appeals) was not correct in holding that no appeal against the order passed by the Assessing Officer under Section 154 of the Act would be maintainable. The order of the Assessing Officer was passed dealing with the assessee's application for rectification under Section 154 of the Act in which, a specific prayer of the assessee was that the expenditure be recognized during the financial year in which the same was made. The anxiety of the counsel for the Revenue that the assessee may claim double deduction cannot be shared. The Tribunal, as noted in the impugned judgement, has made sufficient provision for withdrawal of the benefit of the expenditure in the later years if by virtue of the order of the Commissioner under Section 264 of the Act the same was already granted to the assessee. This direction the assessee has not challenged. Before us also no such request is made. The direction of the Tribunal, therefore, binds the assessee.
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2016 (10) TMI 168
Revision u/s 263 - ITAT setting aside the order passed by the Commissioner under Section 263 - whether the Foreign Currency Convertible Bonds (FCCB) expenses of ₹ 2,35,78,000/not allowable as revenue expenditure as these FCCBs are convertible into equity shares at the option of the bond holders at a future date and hence the said expenses ought to have been treated as capital expenditure by the Assessing Officer in original assessment proceedings? - Held that:- the impugned order of the Tribunal has followed its order in Mahindra & Mahindra (2013 (9) TMI 522 - ITAT, MUMBAI) which on merits held that the claim as made by the Respondent is allowable. Therefore, it concludes that the order of the Assessing Officer was not erroneous or prejudicial to the interest of the Revenue. The order of the Tribunal in Mahindra & Mahindra (supra) is not shown to be challenged before a higher forum. In the above view, it must follow that the order of the Tribunal in Mahindra & Mahindra (supra) has been accepted by the Revenue. Therefore, as no reasons are forthcoming from the Revenue about distinguishing features in this case from that in Mahindra & Mahindra (supra), which had been accepted by the Revenue, we see no reason to entertain this appeal.
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2016 (10) TMI 167
Reopening of assessment - Charge of fringe benefit tax - double taxation - employer ONGC had reimbursed Conveyance Maintenance and Repair Expenditure ('CMRE') and uniform allowance to the petitioner, which was not reflected in the salary certificate issued by the employer, nor ONGC had deducted tax at source on such amounts - Held that:- Once a certain benefit is held to be a fringe benefit and the employer is taxed accordingly under chapter XIIH of the Act, the same benefit cannot be included in the income of the employee treating it as a perquisite. Revenue has accepted the ONGC's treatment to this payment as fringe benefit and accepted tax from the employer on such basis in terms of chapterXIIH of the Act, Revenue now cannot change its stand and seek to tax the same amount in the hands of the employees which would be a clear case of double taxation. The last of the contentions of Shri Parikh that the petitioner having agreed before the Assessing Officer to a certain disallowance, cannot challenge the order by way of revision and is, therefore, must be turned down. Thus impugned order passed by the Commissioner is set aside. The disallowance of 20% of the CMRE benefit and 100% of the uniform allowance made in case of the petitioner by the Assessing Officer is reversed. The Assessing Officer shall pass a consequential order giving effect to this judgment. The petition is disposed of.
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2016 (10) TMI 166
Reopening of assessment - Assessee was unaware of the reasons for reassessment - Held that:- The only basis for the submission made by the Revenue before the Tribunal that the Respondent Assessee is a public sector institution who was aware that search action has been initiated on certain lessees in respect of transactions with IDBI i.e. RespondentAssessee. On the basis of the above, it is to be inferred that the reason for reassessment was known to the Respondent Assessee. The supply of reason in support of the notice for reopening of an assessment is a jurisdictional requirement. The reasons recorded form the basis to examine whether the Assessing Officer had at all applied his mind to the facts and had reasons to believe that taxable income has escaped reassessment. It is these reasons, which have to be made available to the Assessee and it could give rise to a challenge to the reopening notice. It is undisputed that the reasons recorded for issuing reopening notice were never communicated to the Respondent Assessee in spite of its repeated requests. Thus, the grievance of the Revenue on the above count is unsustainable. - Decided in favour of assessee
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2016 (10) TMI 165
Reopening of assessment - determination of Agriculture income u/s.10(1) - whether the Tribunal was right in deleting the disallowance made on agricultural income on the ground that the same was exempt under Section 10(1) of the Income Tax Act? - Held that:- It is not the case of the Assessing Officer, at the first instance that the assessee has not produced any details of the expenditure incurred in raising flowers and petals in pots. As rightly pointed out by the learned counsel for the respondent, had the issue of expenditure been pointed out at the time of assessment, the assessee was bound to explain. Assessment order does not disclose that because of the fact that the assessee did not prove expenditure, income from flowers and petals was added. He has only said without performing basic operations, income generated cannot be termed as agricultural income. Even during the appeal, the revenue has not raised such issue. Such contentions are made for the first time, before this Court. The assessment order has to fall or succeed on the contents of the order. A fact which was never raised in the assessment proceedings cannot be introduced for the first time, in an appeal under Section 260A, for an answer. Needless to state that questions of law arise on the facts considered by the authorities with reference to the provisions and for the above reasons, we are of the view that the revenue cannot raise the said issue at this stage. - Decided against the revenue
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2016 (10) TMI 164
Revision u/s 263 - Deduction u/s. 36(1)(viii)eligibility - Held that:- No material indicating any query – that being the ground on which jurisdiction stands assumed by the ld. CIT in the instant case, was also led during hearing. We, accordingly, uphold the same; it being the settled law that absence or lack of enquiry, in-as-much as it exhibits non application of mind, would result in the result order being erroneous.We, accordingly, uphold the invocation of section 263 qua the relevant issues. Deduction u/s. 36(1)(viii) – Eligibility - Held that:- We are not inclined to be in agreement with the assessee, but with the Revenue, so that the assessee-bank cannot be considered as an eligible entity u/s.36(1)(viii) of the Act, placing reliance on the decision in the case of The Federal Bank Ltd. (2011 (1) TMI 1184 - Kerala High Court ). We may before parting also add that the assessee is not, as contended, a Government company, which is only a company in which the Central Government’s share holding is 51% or more. This is as the assessee is not a company in the first place. Both the terms ‘public company’ and ‘Government company’ are defined under the Companies Act, 1956 (refer sections 2(10), 2(18), 3 and 617 thereof). It is not necessary to go into those definitions, and suffice to state that the term stands defined per section 2(10) of the Companies Act, 1956 to mean a company as defined u/s. 3 thereof, i.e., a company formed and registered under the said Act, including existing companies, which stand specified therein, so that the assessee is not a company. The holding of it’s share capital by the Central Government in excess of 51% would therefore be of little consequence. Deduction u/s. 36(1)(viii) – Quantification - The Revenue’s concern is for eliminating the influence of the ‘other income’ in computing the deduction u/s. 36(1)(viii) - Held that:- The concern is valid. In our view the appropriate ratio would be the proportion of taxable business income (stated at ₹ 5509.44 cr. – at net of all deductions, save u/s. 36(1)(viii), i.e., prior to deductions under Chapter VI-A), to the gross business income (refer: CIT vs. Kerala State Industrial Development Corporation [1998 (2) TMI 6 - SUPREME Court ] . This ratio is to be applied to the gross income from the eligible activity – providing of long-term finance to industry and agriculture. This would yield the taxable income from this activity/s, 40% of which, subject to the creation of the special reserve, would be the amount exigible to deduction u/s. 36(1)(viii). Further, the word used is ‘derived’, which has to be assigned a restrictive meaning as compared to the word ‘attributable’. As such, to the extent possible, all direct costs are to be identified and adjusted, and the proportion applied only for the indirect costs (refer: Power Finance Corporation Ltd. (2006 (8) TMI 332 - ITAT DELHI). Provision for bad and doubtful debts u/s. 36(1)(viia) - Held that:- The parameters of the deduction stand provided in the section itself, i.e., for a sum not exceeding 7.5% of the total income (before allowing any deduction under this clause and Chapter VI-A) and an amount not exceeding 10% of the aggregate average advances made by the rural branches of the bank computed in the prescribed manner. The deduction, it may be appreciated, is qua a provision, general in nature, toward the loss that may arise to the bank on account of its rural advances being not realized in whole or in part. The upper limit of the deduction stands specified in the provision itself. As long as, therefore, the provision itself does not exceed the total advances, i.e., by the rural branches of the bank as at the year-end, qua which the provision is created, we see no reason to impose any restriction thereto with reference to the assessment of all advances under the prudential norms provided by the RBI. The cap suggested by us is as the provision is provided on a yearly basis, and upon considering that a provision for risk of loss of an asset cannot exceed the value of the asset under risk itself. We may here also clarify that the provision is to be adjusted against the actual write off on the debt becoming irrecoverable – and accordingly claimed u/s. 36(1)(vii), applicable to all the assessees, including Scheduled Banks as the assessee falling under section 36(1)(viia)(a).
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2016 (10) TMI 163
Assessment u/s 153A pursuant to search - abatement of pending assessments - Held that:- making of an addition in an assessment under section 153A of the Act, without the backing of incriminating material, is unsustainable even in a case where the original assessment on the date of search stood completed under section 143(1) of the Act, thereby resulting in non-abatement of such assessment in terms of the Second Proviso to section 153A(1) of the Act. Trading addition - The addition to the trading results made by the CIT(A) is based on conjectures and surmises, in as much as, the statement of Mrs. Mehrunisa Husseini, relied upon by him is not relevant for the instant year. Secondly, even out of eight creditors, whose maximum balance was considered unexplained, the statement of only one party i.e. M/s. Nisha Enterprises was out of the statement of seven parties recorded by the Assessing Officer. Even on this aspect, we find that the said concern retracted it’s initial statement and in the remand proceedings before the Assessing Officer, the said party admitted transactions with the assessee. The addition made on similar basis in connection with transactions with M/s. Nisha Enterprises in the hands of the sister concern for assessment year 2006-07 has been deleted by the Tribunal. Considered in this light, in our view, so far as trading results for the instant assessment year are concerned, the same cannot be treated as unreliable on the basis of the verification exercise of the creditors carried out by the Assessing Officer. Furthermore, the unsustainability of the addition made by the CIT(A) can be seen from the fact that he has applied adhoc gross profit rate of 6.5% on the entire sales made by the assessee instead of confining it to any particular transactions which were unproved, as per him. In fact, once the CIT(A) did not find the inadequacy brought out by the Assessing Officer with respect to sundry creditors as being justified, he had no plausible evidence, apart from mere doubts, to treat the trading result as unreliable. Therefore, the addition sustained by the CIT(A) is unwarranted and is hereby directed to deleted. In the result, appeal of the assessee allowed.
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2016 (10) TMI 162
Share transactions - nature of income - business income or capital gain - Held that:- First we come to Assessing Officer’s reasoning that profits arising from sale of shares having less than a month holding period are to be treated as business income as per this tribunal decision in Sugamchand C. Shah vs. ACIT [2010 (1) TMI 942 - ITAT, Ahmedabad]. It is evident to us that yet another co-ordinate bench has already expressed disagreement with the earlier tribunal’s decision. The Assessing Officer’s view is held as to be not sustainable in this factual and legal backdrop. We come to the CIT(A)’s order to notice that he has enhanced Assessing Officer’s action in treating Short Term Capital Gain as business income from ₹ 29,07,962 to ₹ 40,26,576/- (supra). We do not find any such enhance notice under section 251(2) of the Act to have been issued to the assessee at the instance of the lower appellate authority. Learned Departmental Representative fails to rebut this factual position. We observe in these peculiar facts and circumstances that this issue required to be examined afresh by the Assessing Officer as per law after affording adequate opportunity of hearing to the assessee. Ordered accordingly. - Decided in favour of assessee for statistical purposes.
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2016 (10) TMI 161
Revision u/s 263 - section 14A disallowance - Held that:- This assessee had declared exempt income from dividends amounting to ₹ 1,77,47,783/-. The AO invoked rule 8D to disallow proportionate interest and administrative expense of ₹ 16,49,33,648/- and ₹ 3,78,60,000/- aggregating to ₹ 20,27,93,648/- in question. There is no dispute that the CIT(A) confirmed the same in principle in his order dated 10.10.2014 falling much before section 263 show cause notice issued on 20.07.2015. Section 263 explanation (C) makes it very clear that this revision jurisdiction extends to such matters as had not been considered and decided in an appeal. It has come on record that the CIT(A) order dated 10.10.2014 considered as well as decided the issue in question. The Revenue at this stage supports CIT’s order that the impugned disallowance ought to have been computed by adopting net instead of actual disallowable sum of ₹ 32,84,78,040/- in the nature of interest. We notice that hon’ble jurisdictional high court in Nirma Industries vs. DCIT (2006 (2) TMI 92 - GUJARAT High Court ) rejects such a contention to invoke merger principle by holding that an assessment order does not have any independent existence after the same is subjected to appeal and it stands adjudicated. Our view in this backdrop of facts is that the assessment order in question sought to be revised does not have any independent existence. Even the issue on merit is rendered academic in view of CIT’s order directing the Assessing Officer to compute sec 80IAB deduction. The Revenue fails to point any distinction on facts or law. We accept assessee’s first argument in challenging the CIT’s order in question. Depreciation claim - Held that:- As far as the claim of depreciation on office equipments @ 15% is concerned, it is Assessee’s submission that the claim of depreciation at 15% on the office equipment which comprises of similar items as are in the present year, has been allowed by the A.O in earlier years in the assessment order passed u/s. 143(3) and those orders have attained finality. Claim of deduction u/s. 35D - Held that:- As far as the claim of deduction u/s. 35D is concerned it is not the case of the Revenue that the expenses have been incurred in the year under consideration but on the contrary it is assessee’s submission that the same have been incurred in earlier years and the deduction u/s. 35D has also been allowed in earlier years. It is also not a case of the Revenue that on the issue of deduction under 35D, deduction for earlier years has been withdrawn by Revenue. In such a situation, without disturbing the earlier years, it cannot be said that the claim of deduction u/s. 35D was not allowable to the Assessee. The aforesaid submissions of ld. A.R has also not been controverted by Revenue. Further, before us Revenue has not brought any material on record to demonstrate that the view taken by the A.O was impermissible view and was contrary to law or was upon erroneous application of legal principles initiating the exercising of revisionary powers u/s. 263. In view of the aforesaid facts, we are of the view that ld.CIT was not justified in resorting to revisionary powers u/s. 263 of the Act Assessee appeal allowed.
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2016 (10) TMI 160
Assessment u/s 153A - absence of satisfaction note - Held that:- Entries in the name of the assessee as contained in the books of accounts of Sh. B.M. Gupta, are not the books of accounts of the assessee and, therefore, the books of accounts does not belong to the assessee and, thus we approve the action taken by the learned Commissioner of Income-tax (Appeals) in annulling the assessment. The documents on the basis of which proceedings under section 153C of the Act had been initiated, did not belong to the assessee. - Decided in favour of assessee
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2016 (10) TMI 159
Allowability of deduction on account of ‘write off’ of bad debts - Held that:- Section 36(2)(i) of the Act allows deduction on account of satisfaction of any of one of the two conditions; namely (a) bad debts or part thereof taken into account in computing the income of the assessee for an earlier assessment year before such date or part thereof is ‘written off’ or (b) the debts represents money lend in the ordinary course of business of bank or money lending which is carried on by the assessee. Therefore even if one of the two conditions of section 36(2)(i) is satisfied, then bad debts claimed u/s.36(1)(vii) has to be allowed. So far as first part of section 36(2)(i) of the Act is concerned, in the present case it is assessee’s submission that the amount of ₹ 5,13,088/- represents the sale of waste and scrap which was credited to the P&L A/c. in the year of sale. We find that no details of the year of sale has been furnished by the assessee either before AO or ld.CIT(A) or before us. Assessee has merely made a submission that the amount represents sale. Similarly, as far as the assessee’s claim of having given advance payment for purchase of raw-material of ₹ 11,56,495/- is concerned, no details of the same have been furnished by the assessee. Further, in the present case, assessee has not furnished details in support of its contention of having fulfilled the conditions specified u/s.36 of the Act for claiming deduction. We find that Hon’ble Supreme Court in the case of TRF Ltd.(2010 (2) TMI 211 - SUPREME COURT ), has observed that after the amendment of section 36(1)(vii) w.e.f. 01/04/1989 in order to obtain a deduction in relation to bad debts, it is not necessary for the assessee to establish that the debt in fact has become irrecoverable and it is enough if the bad debts ‘written off’ as irrecoverable in the accounts of the assessee In the present case, we are of the view that in the interest of justice, the assessee be granted one more opportunity to place on record about the satisfaction of the required conditions for claiming deduction of “write off”. We therefore restore the issue to the file of AO to decide the issue afresh - Decided in favour of assessee for statistical purposes.
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2016 (10) TMI 158
Allowance of depreciation - rectification of mistake - whether Ld.CIT(A) is justified in granting relief to the assessee by allowing the depreciation without appreciating that the issue involved is debatable in nature and therefore cannot be considered in the proceedings u/s.154 of the IT Act? - Held that:- We note that the impugned order has been passed by the CIT (Appeals) in the appeal filed on 27.1.2010 against the assessment order dt.23.12.2009. Therefore proceedings before the CIT (Appeals) were against the assessment order and not against the rectification order passed under Section 154 of the Act however, the CIT (Appeals) has considered the claim of the assessee which was raised in the rectification petition filed under Section 154. Without going into the issue of the scope of section 154 of the Act, we are of the view that when the CIT (Appeals) has the jurisdiction to entertain the said claim raised by the assessee in the petition under Section 154 in the appellate proceedings against the assessment order then the issue can be looked into only from the angle of the allowability of the claim on merits. We find that both these claims were covered by the various decisions of Hon'ble High Courts including the Hon'ble jurisdictional High Court and therefore there was no error or illegality in the order of the CIT (Appeals) in entertaining such claims of the assessee which are covered by binding precedence As it is clear from the findings of the CIT (Appeals) that both the claims of the earlier year expenditure adjusted against the current year’s income as well as depreciation on fixed assets are covered by the decision of the Hon'ble jurisdictional High Court as well as the decision of this Tribunal. Accordingly, in view of the facts and circumstances of the case when the CIT (Appeals) has entertained and allowed the claims of the assessee in the appeal filed against the assessment order then the issue of scope of section 154 becomes irrelevant and academic in nature. Hence we do not find any reason to interfere with the impugned order of the CIT (Appeals). - Decided against revenue
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Customs
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2016 (10) TMI 157
Admission and disposal of appeal - substantial question of law - Whether in the facts and circumstances of the case, the appellate tribunal is right in passing the order after five months twenty days from the date of hearing contrary to the judgment of this court in the case of Shivsagar Veg. Restaurant vs. Assistant Commissioner of Income Tax, Mumbai [2008 (11) TMI 64 - HIGH COURT BOMBAY]? Held that: - If detailed contentions is noted and in the earlier paragraphs with the reliance by parties on case law, the appeals emphasising the prejudice by refusal of the adjudicating authority to allow a cross examination of the official who carried out the test and parties rely on the tribunal's interim orders, whether all of them have an impact and to what extent has not been satisfactorily concluded. The tribunal has not, beyond one paragraph, adverted to the factual exercise and which was permitted by the tribunal by its interim orders. By consent, certain directions were issued and what has resulted therefrom and whether that aids and assists the tribunal in arriving at the final conclusion has not been adverted to. No reference to these aspects found. What facts and circumstances have been carefully examined has not been clarified. Once the manner in which the tribunal has dealt with the appeals is not agreed, then, no alternative exists, but to quash and set aside the impugned order. Appeals stand restored to the file of the tribunal to be disposed of finally and on merits. The tribunal need not waste its time in passing any interim orders. Both sides concede that the appeals can be disposed of finally and none of them is interested in placing additional documents or facts on record. The only document that the tribunal can refer is a brief synopsis of the written submissions, if at all required and brought forward by the parties. The tribunal, however must pass a detailed order uninfluenced by the impugned order - the tribunal to take up the appeals for expeditious disposal and endeavour to dispose of the same preferably by 31st December, 2016.
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2016 (10) TMI 156
Served from India Scheme (SFIS) - DGFT rejected the application - whether the claim included for foreign rebate, freight discount, peak season surcharge and services tax are classified as services or not - Foreign exchange earnings credited in to EEFC Account - Held that:- this Court finds it appropriate to set aside the impugned orders of the second respondent, dated 29.10.2015, and to direct the first respondent to consider the applications of the petitioner, dated 13.10.2015, for the grant of benefits, under the "Served from India Scheme", as claimed by the petitioner, for the years 2013-14 and 2014-15, and pass reasoned orders thereon, after giving an opportunity of hearing to the petitioner, within a period of eight weeks from the date of receipt of a copy of this order. The petitioner shall furnish a copy of the applications, dated 13.10.2015, to the first respondent, along with a copy of this order. However, it is made clear that this Court has not expressed any opinion on the merits of the matter, by passing this order. - Writ petition allowed
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2016 (10) TMI 155
Withdrawal of Anti Dumping Duty - retrospective effect or prospective effect - Sodium Tri Poly Phosphate - import from China PR - closure of STPP plant and no domestic industry for STPP in India - withdrawal of anti dumping duty vide notification no. 13/2012-Cus dated 22.02.2012 which rescinded the earlier notification no.58/201 1-Cus dated 8.7.2011. - Held that: - submission sought from Id. Counsel for the appellants as to provision under which the relief is sought by them, with retrospective effect. No pointed submission on such legal provision could be made by the Id. Counsel for the appellants. The Designated Authority has followed the procedure as mandated by the Rules in respect of all the proceedings - absence of legal provisions for supporting the plea of the appellants - appeals dismissed - decided against appellant.
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2016 (10) TMI 154
Confiscation of goods under section 111 of the Customs Act, 1962 - imposition of penalty - import of goods under ATA Carnet Registration No. 1036 dated 16/12/2011 and ATA Carnet Imp. Registration No. 1037 dated 16/12/2011 - ATA Carnets were valid upto 06/12/2012 - failure to export goods within the stipulated period - Held that: - The exemption contained in the said notification is available to the importer, subject to fulfillment of the condition namely, that the goods shall be exported within six months from the date of importation or within a further period of six months as may be extended by the Proper officer. The law is well settled that an exemption notification was to be interpreted in line with the words employed by it and not on any other basis; and that a person who claims exemption or concession, must establish clearly that he is covered by the provisions contained therein. In absence of fulfillment of the conditions mentioned in the notification dated 28/3/1990, the duty exemption provided therein is not available to the respondent importer - The Department at liberty to proceed against the concerned person for recovery of the adjudged dues - appeal disposed off - decided in favor of Revenue.
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2016 (10) TMI 153
Condonation of delay - TRAs used for clearance of goods duty free - applicability of section 28 of the Customs Act, 1962 - levy of duty, interest and penalty - Held that: - the decision in the case of CC Vs. candid Enterprises [2001 (3) TMI 101 - SUPREME COURT OF INDIA] has been relied upon. It was held that when the fraud is apparent from the record, limitation should not be a barrier to give a burial death to such fraud. Therefore, delay was condoned. It is elementary principle of juris prudence that fraud and justice are sworn enemies do not dwell together. The fraudulent instrument used in import of goods having been discovered in 2010 upon investigation that debars the imports from the exemption benefit. It is needless to mention that fraud has no legacy to sustain further. Delay condoned - appeal dismissed - decided partly in favor of appellant.
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2016 (10) TMI 149
Admissibility of appeal - substantial question of law - Held that: - similar appeals admitted by a Division Bench of the court as held in the case of J.M. Baxi & Co. & Another [-------]. The appeal admitted on the same substantial question of law - Appeal admitted.
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2016 (10) TMI 141
Refund - proper officer - Designation of Authority before whom refund application can be filed - absence of the definition of jurisdictional customs officer and section 27 having used the term “Assistant Commissioner /Deputy Commissioner of Customs” to entertain the refund application - Held that: - in absence of proper jurisdiction being notified and proper clarification to the assessee, the authority should not have caused confusion to him for consideration of the refund application. The decision in the case of M/s Medsource Ozone Biomedicals Pvt Ltd Versus The Commissioner of Customs, The Assistant Commissioner of Customs [2015 (10) TMI 2263 - MADRAS HIGH COURT] relied upon. Appellant entitled to be dealt due process of law before the authority who shall dispose their application in accordance with law, applying section 27 of the Customs Act, 1962, the notifications above as well as the decisions of the Hon’ble High Court of Madras within the time stipulated - matter remanded to learned Commissioner (Appeals) - appeal disposed off.
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2016 (10) TMI 140
License to import - non-existence of license at the time of clearance of goods - irrelevant considerations and extraneous circumstances by Commissioner (Appeals) and grant of relief - Held that: - the appellate orders should not have irrelevant considerations and irrelevant remarks but should demonstrate the application of the legal mind to reduce the litigation and resolve the controversy. The decision in the case of Joint Commissioner of Income Tax, Surat Vs Saheli Leasing & Industries Ltd. [2010 (5) TMI 9 - SUPREME COURT OF INDIA] relied upon. - matter remitted to the learned Commissioner (Appeals) to decide the controversy on the face of law and evidence without any unwarranted remarks and granting reasonable opportunity of hearing.
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Corporate Laws
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2016 (10) TMI 150
Scheme of Amalgamation - Held that:- Having heard Mr. Navin K. Pahwa, learned Counsel for the petitioner companies, Mr. Kshitij Amin for Mr. Devang Vyas, Learned Assistant Solicitor General of India for the Regional Director and upon perusal of the reports of the Official Liquidator and the Regional Director, the affidavit filed by the petitioner transferee company in response to the report of Regional Director and having considered the Scheme of Amalgamation together with relevant documents on record, the Court finds it appropriate to grant sanction to the present Scheme of Amalgamation. In view of the above, the Scheme of Amalgamation is sanctioned. It is, however, directed that the petitioner transferor company shall preserve its books of accounts, papers and record and shall not dispose of the records without the prior permission of the Central Government under Section 396 A of the Companies Act, 1956. It is further observed that the sanction of this Scheme shall not absolve the Transferor Company from any statutory liability, if any.
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Service Tax
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2016 (10) TMI 191
Condonation of delay - 300 days - petitioner pointed out that the Tribunal's order was passed on 29-3-2014 and received by him on 8-5-2014. Also his business was in the nature of proprietary concern, and was struggling financially on account of various reasons including his personal misfortune when his daughter has committed suicide in the year 2011 - Held that:- the delay being explained as above, ought to have been condoned. Usually, the Courts prefer substantial justice when pitted against technical requirements. In this context, the question of condonation is approached and the same would be seen liberally. Unless if it is found that the delay is inordinate or not explained at all or that the same is caused deliberately, mala fide or on account of total neglect and lethargy on the part of the applicant, the same is as far as possible, condoned. In the present case, the petitioner had pointed out that on account of his daughter’s suicide followed by virtual standstill of his business on account of financial differences, there was scarcity of staff. These reasons combined together prevented the petitioner from preferring appeal in time. Therefore, the delay should have been condoned even after putting the petitioner to some terms. - Appeal disposed of
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2016 (10) TMI 190
Constitutionality of proviso to Section 68 of the Finance Act, 1994, as amended in 2003 and Rule 7A of the Service Tax Rules, 1994 - GTA services - Held that:- the Hon’ble Apex Court has considered the submission that as body of the Section 68 did not cover the subject matter, there was no question of creating an exception in respect thereto by any proviso. The contention was thus by adding proviso (i) and (ii), the scope of original Section 68 could not have been enlarged. In Paragraph 38, the Hon’ble Apex Court has held that Section 68 is a machinery section which provides for incidence of tax while charging section is Section 66. 2000 Amendment to Section 66 changed the point of collection of tax from provider of service to “such manner as may be prescribed”. It has been found that the Service Tax Rules, 1994 provided for collection and recovery of tax from users or payers for the services and proviso to Section 68 prescribes the procedure for collection with reference to services of goods transport operators and clearing agents. In Para 39 the Hon’ble Apex Court has concluded that the proviso do not in any manner expand the subsection and in fact it gives effect to it. In the light of this later judgment delivered by the Hon’ble Apex Court, it is apparent that the communication dated 7-11-2003 is in consonance with the amended provisions after the Finance Act, 2003. The validity of this procedure is already upheld by the later judgment of the Hon’ble Apex i.e. Gujarat Ambuja Cements Ltd. & Anr. v. Union of India & Anr. [2005 (3) TMI 492 - SUPREME COURT]. - Decided against the appellant
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2016 (10) TMI 189
Service tax liability - Manpower Recruitment or Supply Agency Services - appellant used to receive as commission an amount equivalent to 3% of the total salary paid by Paranjape Auto Cast - whether the tax liability arises on the appellant-assessee on the entire amount paid as wages by Paranjape Auto Cast or otherwise - Held that:- the service tax liability discharged by the appellant on the amount equivalent to 3% paid by Paranjape Auto Cast is the correct discharge of service tax liability as there is nothing on record to indicate that M/s. Paranjape Auto Cast had paid the amount of wages/salaries of the recruits to appellant and appellant had paid the same to the individuals. In the absence of any such evidence, we hold that service tax liability as discharged by the appellant is correct and the impugned order holding that the appellant is required to include the amount of wages for discharging service tax liability is incorrect and liable to be set aside and we do so. Since we have disposed of the appeal on merits, in the favour of the appellant we do not find any reason to record any findings on the appeal filed by the revenue. - Decided in favour of appellant with consequential relief
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2016 (10) TMI 188
Recovery of service tax - Works Contract Service - Construction of Residential Complex - period involved is from January, 2009 to March, 2009 - appellants had paid VAT under the category of ‘works contract’ on the value of materials used for such services - Held that:- the appellants were rendering ‘construction of complex service’ as they were designing, planning, developing and clearing site on their own land for construction activities for buyers/clients and were not doing any execution of ‘works contract’ and elements of definition of ‘works contract’, therefore, are not found present. It is made clear that the activities of the appellants fall under the category of ‘construction of residential complex service’ and such services for the period of January, 2009 to March, 2009 were not liable to service tax which is clear by virtue of the paragraph 3 of C.B.E. & C. Circular No. 108/2/2009-S.T., dated 29-1-2009. It is however, made clear that such services become taxable only after 1-7-2010 when the Explanation was added by the Finance Act, 2010 dated 8-5-2010 in definition of ‘construction of complex service’ to the provisions of Section 65(105)(zzzh) of the Finance Act, 1994. - Decided in favour of appellant
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2016 (10) TMI 187
Conducting vocational trainings on international travel and tourism under the guidance and authorization of International Air Transport Association (IATA), Canada - Benefit of Notifications No. 9/2003-S.T., dated 20-6-2003 and No. 24/2004-S.T., dated 10-9-2004 - Held that:- the contents of the Notifications namely 9/2003-S.T., dated 20-6-2003 and 24/2004-S.T., dated 10-9-2004 clearly cover the training course (commercial training/coaching) being conducted by the appellant, who are a vocational training institute as mentioned in the Explanation given in the subject notification. There cannot be any other interpretation of these notifications and the contents of these notifications clearly favour the appellant in case of the course (training/coaching) in question being conducted by them. - Decided in favour of appellant
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2016 (10) TMI 135
Refund claim - whether the respondent-assessee is correct in claiming the refund of the Service Tax paid on various input services which are utilized by them for rendering output services that are exported or whether these services are not integrally connected with the respondent-assessee as claimed by the Revenue - export of Business Auxiliary Services - availed CENVAT credit of Service Tax paid on various input services used for providing such output services. Held that:- the input services are in relation to the business activity undertaken by the respondent-assessee which cannot be disputed, as casual perusal of the services on which CENVAT credit was availed and for the purpose of which have been utilised as mentioned in the Order-in-Original would clearly indicate that these services were in relation to the business activity of the respondent-assessee. In our view, the first appellate authority has come to a correct conclusion that respondent-assessee is eligible to CENVAT credit and claim of the refund claim needs to be allowed. The claim of Revenue that input services do not have direct nexus to the business activity of respondent-asessee is a hollow claim. By applying the decision of Hon'ble High Court of Bombay in the case of Commissioner of Central Excise, Nagpur Vs. Ultratech Cement Ltd. [2010 (10) TMI 13 - BOMBAY HIGH COURT], the first appellate authority was correct in allowing the refund claims on inputs services as they are utilized for activity of the business. - Decided against the Revenue
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Central Excise
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2016 (10) TMI 186
Recovery of inadmissible Cenvat Credit - Service Tax paid in connection with the service of erection of Kachaha shed for storage of input material during monsoon - Held that:- I do not see any reason for not allowing the benefit of credit as the services received by them as the said service is definitely related to the manufacturing activities and covered by the definition of input service as contained in Rule 2 (l) of Cenvat Credit Rules 2004. - Decided in favour of appellant
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2016 (10) TMI 185
100% EOU - Refund claim - Rule 5 of Cenvat Credit Rules, 2004 - accumulated credit on input services - whether the appellant's activity of converting blocks into slabs or tiles amounts to manufacture or not - appellants submitted that the process undertaken by the appellant amounts to manufacture in terms of Exim Policy, which has got wider notification than Section 2 (f) of the Central Excise Act, 1944 - Held that:- The activity of the EOU should be decided based on the definition and scope as given in the Exim Policy when the same is different from Section 2 (f) of the Central Excise Act, 1944 and the refund of cenvat credit taken on inputs, where for the same reason, the same could not be utilized for clearing final products, refund under Rule 5 may be granted. Further, it is clear from the CBEC's circular that for the purpose of regulating the exemption to the EOU, the definition of “manufacture” as appearing in para 3.31 of the Exim Policy is relevant and not section 2 (f) of the Central Excise Act. Therefore, the impugned orders are not sustainable and are set aside. - Decided in favour of appellant
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2016 (10) TMI 184
Denial of CENVAT credit - input service as per Rule 2(l) of the Cenvat Credit Rules, 2004 - Rent - ISO Service - Software Service - Advertising Service - CPA Service - consultancy Service - Courier service - House keeping service - Commissioner, catering and Security on the premises - whether the CENVAT credit on these services can be denied on the ground that these services are not input services as per Rule 2(l) of the Cenvat Credit Rules, 2004? - reference made on the case of Maruti Suzuki India Ltd. vs. Commissioner [2009 (8) TMI 14 - SUPREME COURT] - Held that: - the decision of the case of Maruti Suzuki India ltd. cannot be relied upon as the Hon'ble Apex Court has held that cenvat credit on input is available if these inputs is used in manufacturing of final product. Admittedly, in the case in hand no input is involved. The distinction between input and input service is not clearly understood. The decision in the case of CCE, Nagpur Versus Ultratech Cement Ltd. [2010 (10) TMI 13 - BOMBAY HIGH COURT] relied upon where it was held that any services availed by the manufacturer of excisable goods is entitled for cenvat credit. The services is availed by the respondent in the course of their business of manufacturing - CENVAT credit cannot be denied - appeal dismissed - decided against Revenue.
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2016 (10) TMI 183
Demand and imposition of penalty - utilisation of Cenvat Credit instead of making payment by cash or payment through PLA in discharging Service Tax on GTA service - recovery of Service Tax paid during the period of July 2006 to Sept. 2006 - Held that:- the issue is no more res integra and settled by the Gujarat High Court in the case of CCE&C Vs Panchmahal Steel Ltd. [2014 (12) TMI 876 - GUJARAT HIGH COURT]. Therefore, in view of the same, I do not find any merit in the impugned order and is set aside. - Decided in favour of appellant
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2016 (10) TMI 182
Appropriation of amount - clearance of inputs 'as such' on payment of duty on the transaction value rather than reversing the Cenvat Credit availed on such Inputs - duty short paid - differential duty paid before issuance of SCN - Held that:- it is the contention of the appellant that the Dept., has not adjusted the excess payment made by them while discharging the duty on the transaction value. However, neither they have established the said claim of excess payment before the authorities below nor they have filed any refund claim in this regard. There cannot be any dispute on the principle that when the Input is cleared ‘as such’ Cenvat Credit availed on the Inputs is required to be reversed as per Rule 3(5) of Cenvat Credit Rules 2004. Therefore, the differential credit is recoverable from the appellant and there is no discrepancy in the order by the authority below. Invokation of extended period of limitation - imposition of penalty - Held that:- However, I find that the Appellant had cleared the inputs on payment of duty on the transaction value and the differential duty was discharged within one year of the initial payment by debiting their CENVAT account in Feb.2009. Also, there is no suppression of fact. Thus, the show cause notice issued after two years of payment for appropriation of the amount cannot lead to an inference that facts had been suppressed and longer period of limitation is attracted. In UOI Vs. Rajastan Spinning & Weaving Mills Ltd. [2009 (5) TMI 15 - SUPREME COURT OF INDIA], it is held that every short payment of duty cannot invite penalty under Section 11AC, in absence of any of the ingredients of Section 11AC of the Central Excise Act,1944. Therefore, penalty under the said provision cannot be sustained in the present case. - Decided partly in favour of appellant
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2016 (10) TMI 139
Confiscation of cash seized - seizure of unaccounted cash and various documents - Section 121 of the Customs Act, 1962 readwith Section 12 of the Central Excise Act - seized cash to be treated as sale proceeds of clandestinely removed excisable goods - Held that:- the seizure was made on the reasonable belief that this cash pertains to the sale proceeds of clandestinely removed goods. I also find that the Directors have admitted in their voluntarily statements that the seized cash was the sale proceeds of clandestinely cleared goods. It is seen that in addition to proceedings for confiscation of cash, detailed investigation into the alleged clandestine clearances by the appellant has been undertaken which has culminated into a separate proceeding resulting in demand of duty and imposition of penalty. I also find that this matter stands remanded to the original Adjudicating Authority for denovo decision in the light of the directions by this Tribunal in appellant's own case reported in [2015 (10) TMI 2351 - CESTAT NEW DELHI]. Clandestine clearance of cement - Demand and imposition of penalty - Held that:- it would be appropriate and necessary that the above and this appeal are considered and decided together. For this purpose, I consider it necessary to remand the present matter also to the original Adjudicating Authority who is directed to decide this matter alongwith the above matter. The learned original Adjudicating Authority is also being directed to give an opportunity to the appellant to represent his case. - Appeals allowed by way of remand
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2016 (10) TMI 138
Reversal of Cenvat credit and payment of interest - availed CENVAT Credit on inputs for the year ended 31.03.2008 - provision is made only for partial write off of inputs - Held that:- the appellant is not liable to reverse CENVAT credit when the value of inputs has been written off partially and the provision of Rule 3(5B) of CENVAT Credit Rules 2004 is applicable where the provision of write off fully is made. It is also pertinent to note that for the subsequent period, the Additional Commissioner vide his order dated 01.12.2011 has given the benefit to the appellant. Therefore keeping in view the aforesaid situation, the impugned order is not sustainable in law and is set aside. Further when the credit itself is not liable to be reversed, the question of payment of interest does not arise at all. - Decided in favour of appellant
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2016 (10) TMI 137
Refund of CENVAT credit in terms of Rule 5 of Cenvat Credit Rules, 2004 - SEZ - goods cleared to SEZ and availed Cenvat credit in respect of input used thereunder on the closure of the unit - whether the original authority was justified in holding that supplies made to SEZ is not exports and the refund is not admissible for the period prior to issue of amendment notification No. 50/08-CE(N.T.) dated 31/12/2008? - Held that: - the decision in the case of B.J. Services Company Middle East Ltd. Versus C.C. (IMPORTS), Mumbai [2013 (11) TMI 793 - CESTAT MUMBAI] relied upon. The supplies made to SEZ either prior to 2008 or thereafter has been considered as exports and consequently assessee is entitle for all the benefits and incentives which otherwise available to physical export of goods out of India including refund under Rule 5 of Cenvat Credit Rules, 2004 or Rule 18 of Central Excise Rules, 2002. Period of limitation - Held that: - the refund is in respect of accumulated credit therefore limitation of one year shall not apply. Appellant entitled for the refund - appeal allowed - decided in favor of appellant.
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2016 (10) TMI 136
SSI Exemption - Denial of - use of brand name or logo of another person - extended period of limitation - Cum-duty benefit - Held that:- we find certain force in the submissions made on behalf of the appellants that they have not used the brand name or logo of anybody else and the brand name quality used by them on their products, in the manner and style, is their own brand name, which is different from the brand name/logo used by M/s. Pure Ice Cream Co. for their Ice Cream. This is also clear from a visual inspection of the labels produced before us by the learned Counsel. We find that the Hon’ble Apex Courts judgment in Rukhmani Pakkwel Traders [2004 (2) TMI 69 - SUPREME COURT OF INDIA] relied upon by the Dept. has been considered by the Hon’ble Apex Court in the case of Bhalla Enterprises [2004 (9) TMI 109 - SUPREME COURT OF INDIA] and held that if the use of others brand name was entirely fortuitous and could not on a fair appraisal of the marks indicate any such connection, then the benefit of exemption would be available. We also find that the Hon’ble Supreme Court in Meghraj Biscuits [2007 (3) TMI 5 - SUPREME COURT OF INDIA] also has held that registration with the trade mark registry cannot be the sole criteria for allowing or denying SSI exemption. We find that the Hon’ble Apex Court in the case of Stingen Immuno Diagnostics [2015 (6) TMI 155 - SUPREME COURT OF INDIA] has held that there should be a connection/nexus between the brand name, the product, the person and the use of same/similar brand name belonging to someone else, for denying the SSI benefit. On a careful consideration of the aforesaid judgments of Hon’ble Apex Court, one has to come to a conclusion that if someone is manufacturing any product bearing a brand name of another person, benefit of SSI exemption is not available to such person, which emphasis that there should be a connection/nexus between the brand name, the product, the person and the use of brand name belonging to someone else, for denying the SSI benefit. In the present case, the Dept. has proceeded mainly based on the Hon’ble Apex Court judgment in Rukhmini Packkwell (supra) and there was no occasion for the Adjudicating Authority to examine other judgments of Hon’ble Apex Court cited by the appellants and come to a proper conclusion. We find that the ratio of the judgment in M/s. Stangen Immuno Diagnostics (supra) goes to the root of the case and the present case also has to be looked into based on the said ratio, as the facts and circumstances are somewhat identical. We are of the considered view that the Adjudicating Authority has not looked into the issue of brand name. Therefore, the matter needs to go back to the Adjudicating Authority for reconsideration of the issue of brand name and availability of SSI exemption under relevant Notifications in the light of our observations and the ratio judgments of Hon’ble Apex Court discussed above. Invokation of extended period of limitation - eligibility for SSI exemption - Demand - appellant contended that the brand name quality belongs to them because of their continued and uninterrupted use for long period of time and, therefore, they were not expected to inform the Dept. that they are using somebody else brand name on their products. Till the proceedings initiated by the Dept. they were not aware that the brand name quality used by them on their products was registered in the name of someone else, including M/s. Pure Ice Cream Co. - Held that:- the Adjudicating Authority’s findings in Para 34 of the impugned Order dated 31.7.2006 that the appellants had suppressed from the Department their manufacture of quality branded products, despite the fact that this brand did not belong to them, lacks credence and the Dept. have not brought any evidence to support such an allegation. We find that even today the Appellants are claiming that the brand name quality, in the manner & style used by them, belongs to them alone and nobody else. We also find that the demand covered in Appeal No. E/1236/09, beyond the normal period one year also cannot sustain, as the fact of using the disputed brand name quality on Cakes & Pastries was well within the knowledge of the Department when first SCN dated 3.5.2005. Therefore, the Dept. cannot allege suppression to invoke extended in subsequent SCN pertaining to appeal No. E/1236/09, which is supported by catena of judgments of Hon’ble Supreme Court cited by the appellants. We also note that there had been confusion with regard to brand name issue and consequential availability of SSI exemption in view of differing views expressed by Hon’ble Apex Court at different point of time and, therefore, the benefit of doubt should go to the Appellants. Therefore, we are of the view that it cannot be held that there was an attempt on the part of the Appellants to suppress any facts and they have acted on a bona fide belief that the brand name quality is owned by them; therefore, they are eligible for SSI exemption under relevant Notification. We, therefore, hold that the entire demand covered under Appeal No. E/3158/2006 and demand beyond normal period of one year in Appeal No. E/1236/2009 is barred by limitation and, therefore, not sustainable. Cum-duty benefit - Held that:- since the Adjudicating Authority has already granted the benefit of cum-duty in the Order impugned in the first appeal (E/3158/2006) and the same has not been challenged by the Dept. Therefore, we are of the view that the benefit of cum-duty should be extended to the appellants in remaining matters also. This issue also needs to be looked into by the Adjudicating Authority in the denovo proceedings. Imposition of penalty - appellants were under a firm belief that they are the owners of brand name quality in the form in which it is used on their products no malafides can be attributed to their claim of SSI exemption for the products - Held that:- the issue in dispute relates to interpretation of law and there can be a possibility of differing interpretations of the same. Considering overall facts and circumstances of the case, holistically we are of the view that there was no willful suppression of facts or mis-statement on the part of the appellants. Therefore, the penalties imposed on them are not sustainable. Accordingly, we set aside the same. - Appeals disposed of
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CST, VAT & Sales Tax
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2016 (10) TMI 148
Imposition of penalty under section 54(1)(11)(i) of U.P. VAT Act - Form C and Form E-1 under the provisions of section 6 (2) of the C.S.T. Act - Held that: - The Forms supplied by the revisionist were clearly not under the U.P. VAT Act. The allegation is not that any form under the U.P. VAT Act was wrongly or falsely supplied. If any doubt was there with regard to the forms under the C.S.T. Act then the provisions of section 10(a) of the Act would apply and recourse could be had to the remedies under that provision - The tribunal being the last fact finding authority should have passed necessary orders having recorded the findings that the forms were under the C.S.T. and also having not recorded any finding that there was any form under the U.P. VAT Act which was false or wrongful - penalty wrongly imposed. No useful purpose would be served in remanding the matter to the tribunal - remand order bad - imposition of penalty also bad - revision allowed - decided in favor of revisionist.
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2016 (10) TMI 147
Restoration of appeal - Doctrine of merger - manufacturer of finished leathers, cotton yarn and shoe uppers - TNVAT Act, 2006 - rectification of mistake under Section 84 of the TNVAT Act - whether the petitioner has made out any grounds to interfere with the rectified assessment order, only with regard to the points which have been held against the petitioner? - the revenue did not prefer any appeal against the order passed by the Assessing Officer entertaining the petition under Section 84 of the TNVAT Act and rectifying the mistakes in the assessment order dated 10.2.2015. - the exercise adopted by the second respondent was uncalled for. Maintainability - whether the second respondent was justified in rejecting the appeal as not entertainable? - Held that: - the decision in the case of The State of Tamil Nadu rep. by the Deputy Commissioner (CT) Versus Sabarigiri Industries [2014 (3) TMI 193 - MADRAS HIGH COURT] has been relied upon. The order passed by the Assessing Officer under Section 84 of the TNVAT Act stood merged with the order of assessment dated 10.02.2015. Thus, in effect, the order of assessment passed against the petitioner is a modified order or rectified order passed pursuant to the exercise of powers under Section 84 of the TNVAT Act - appeal entertain-able. Appeal restored - writ petition allowed - decided in favor of petitioner.
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2016 (10) TMI 146
Refund claim of excess tax paid - TNGST Act, 1959 - Held that: - in the absence of any record to show that the Appeal has been preferred by the Revenue as against the order passed in Tax Case Revisions, the Court is inclined to accept the submission of the learned counsel for the petitioner that there is no Appeal preferred. The Assessing Officer given a letter, dated 26.04.2016, discharging two bank guarantees, which were furnished by the petitioner, for a sum of ₹ 70,08,501/- and ₹ 1,44,59 676/-. The said letters have been addressed to the Branch Manager, Royal Bank of Scotland, New Delhi Branch, New Delhi, and the letter is termed as "Discharge Letter. In the said letter, the Assessing Officer confirmed to the Bank that they do not have any claims in respect of the aforesaid two bank guarantees, and requested that the said communication may be treated as Discharge Letter, for the purpose of the records of the Bank. Thus, if the Revenue thought fit to re-agitate the matter, obviously, the Assessing Officer would not have given such letters, discharging the bank guarantees. Direction given to the respondent to consider the petitioner's representations, dated 03.11.2015, 06.11.2015, 27.01.2016, 29.02.2016 and 05.04.2016, and effect refund of the admissible amount in accordance with law within a period of six weeks - petition dismissed - decided in favor of petitioner.
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2016 (10) TMI 145
Opportunity of personal hearing - reversal of the process loss - reversal of the alleged stock transfer - validity of assessment - TNVAT Act, 2006 - jewellery of gold, silver and other special metal - inspection by Enforcement Wing in the premises of petitioner - Held that: - the decision in the case of M/s. Interfit Techno Products Ltd. Versus The Principal Secretary/Commissioner of Commercial Taxes, The Assistant Commissioner (CT) (FAC) [2015 (4) TMI 935 - MADRAS HIGH COURT] relied upon. It was pointed out that whether a loss was an invisible loss or whether it was a destructive loss or whether it would fall within any one of the parameters specified in sub-section 9 to section 19, all being questions of fact, have to be established by the dealer when called upon by the authority. However, to decide the question, first of all the respondent should have called upon the dealer to explain their process and furnish all their books of accounts. Thus, the assessment proceedings having been made in a very summary manner, the same calls for interference. The impugned assessment orders made in a very summary manner without affording reasonable opportunity to the petitioner to put forth their submission and explain the nature of transactions - matters remanded to the respondent to re-do the assessment afresh after affording an opportunity of personal hearing, calling for further details, examining the books of accounts and records placed by them and thereafter, pass a speaking order on merits - petition allowed - decided in favor of petitioner.
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2016 (10) TMI 144
Validity of order of assessment passed under the TNVAT Act for the year 2013-14 - principles of natural justice - Held that: - It is not a case where the petitioner failed to utilize the opportunity, but it is a case where the petitioner was not furnished with full details. Therefore, the respondent has to necessarily redo the Assessment in accordance with law - writ petition allowed - matter remanded to respondent for fresh consideration after providing opportunity of being heard to petitioner - decided in favor of petitioner.
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2016 (10) TMI 143
Principles of natural justice - validity of assessment order - opportunity of personal hearing - inability to submit effective objection in the absence of details - Held that: - emphasis given in the need for giving an opportunity of personal hearing, since the order of assessment to be passed by a process of dialogue and discussions. Matter remanded - the assessment to be redone, after giving details of the Web Report and giving an opportunity to the petitioner to submit additional objections - finalise the assessment, after affording the opportunity of personal hearing to the petitioner - writ petition allowed - decided in favor of petitioner.
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Indian Laws
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2016 (10) TMI 152
Court fees and valuation of suits - Levy of additional court fee in respect of each appeal or revision at the rate of 0.5% of the amount involved in the dispute in cases where it is capable of valuation, and at the rate of ₹ 50 in other cases - Held that:- The argument of the appellants ignores that as per Section 76(3) of the CF Act, one of the purposes for which the Fund is to be utilised is for providing efficient legal services for the people of the State. It clearly amounts to quid pro quo. Other purpose is also for the benefit of the public at large. When we talk of sound and stable system of administration of justice, all the stakeholders in the said legal system need to be taken care of. Legal community and advocates are inseparable and important part of robust legal system and they not only aid in seeking access to justice but also promote justice. Judges cannot perform their task of dispensing justice effectively without the able support of advocates. In that sense, advocates play an important role in the administration of justice. It is wisely said that for any society governed by Rule of Law, effective judicial system is a necessary concomitant. The Rule of Law reflects man's sense of order and justice. There can be no Government without order; there can be no order without law; and there can be no administration of law without lawyers. It is no small service to be called upon to prosecute and enforce the rights of a litigant through the court of law and in that sense the legal profession is treated as service to the justice seekers. It is, therefore, by contributing an essential aid to the process of the administration of justice that the advocate discharges a public duty of the highest utility. When the subject matter of the instant cases is examined in the aforesaid hue, it becomes apparent that providing social security to the legal profession becomes an essential part of any legal system which has to be effective, efficient and robust to enable it to provide necessary service to the consumers of justice. Section 76 of the CF Act and the impugned notification vide which additional court fee is imposed have a direct nexus to the objective sought to be achieved in relation to the service available to the appellants or others who approached the courts/tribunals for redressal of their grievances.
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2016 (10) TMI 151
Bouncing of cheques given by the petitioner to the respondent herein in lieu of friendly loan - Held that:- This Court appreciate with the submission of the petitioner herein that it is a settled proposition of law that the admission made by a party need not be proved. The settled proposition of law cannot be applied only for a particular party, rather it applies to all. What this Court observes from the perusal of the Undertaking dated 15.02.2013, sought to be brought on record by the respondent in his case, which is duly signed by the petitioner herein. There is admission on the part of the petitioner with regard to receipt of dasti loan of ₹ 18 lacs in cash from Harash Suri (respondent herein) and ₹ 20 lacs from Smt. Vinika Suri (Rs.11 lacs through bank transaction and balance of ₹ 9 lacs in cash). Before allowing the application under Section 311 of Cr.P.C. it is the duty of the Court to determine the relevance of any document for being brought on record and from the perusal of the impugned order, this Court observes that the learned Metropolitan Magistrate has exercised his discretion under Section 311 of Cr.P.C. while discussing the settled law that no party should suffer loss and the best possible evidence should be brought before the Court by respective parties to prove their points of contention. This Court does not find any irregularity or infirmity in the said order. It is also a settled principle that the Trial Court has been given an undoubted discretion in the matter and the discretion has to be judiciously exercised by it. In the considered opinion of this Court, once the Trial Court has exercised its discretion, it is not for this Court, to substitute its own discretion for that of the learned Metropolitan Magistrate or to examine the case on merits with a view to find out whether or not the document sought to be placed on record is relevant or not for the proper adjudication of the case. Moreover, the petitioner is already vested with a right to cross-examine the respondent in the case, therefore no question of any prejudice seems to be caused to the petitioner herein.
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2016 (10) TMI 142
Seeking release on permanent parole on the ground that he has completed 14 years of sentence awarded to him including remission - offense under NDPS act - Held that:- The case of the petitioner is required to considered by the Central Government and the reasons which have been incorporated for denial of permanent parole that the convict has not deposited the fine amount of ₹ 1,00,000/-, is also not sustainable in law as on account of non-payment of fine, the convict served the additional sentence imposed by the trial court. Accordingly the petitioner’s case is required to be considered for the purpose of grant permanent parole. In view of above, the order passed by State Level Parole Committee, qua the present petitioner/convict, is hereby quashed and it is ordered that the petitioner’s case may be forwarded to the Central Government for consideration and it is further directed that at the time of considering the case of the petitioner for grant of permanent parole, the directions issued by Division Bench of this Court in the case of Shambhu Dayal (2012 (3) TMI 564 - RAJASTHAN HIGH COURT) shall be taken into consideration and thereafter the prayer of the petitioner for grant of permanent parole may be decided strictly in accordance with Rules within a period of one month from the date of receipt of application from the respondent-State.
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