TMI Tax Updates - e-Newsletter
November 15, 2014

Case Laws in this Newsletter:

Income Tax Customs Service Tax Central Excise CST, VAT & Sales Tax

Articles

1. SPECIAL AUDIT UNDER DELHI VALUE ADDED TAX ACT, 2004 – WHETHER SHOW CAUSE NOTICE IS TO BE ISSUED?

   By: DR.MARIAPPAN GOVINDARAJAN

2. Punjab & Haryana High Court stays passing of final orders in assessment cases of year 06-07, 07-08 and 08-09

   By: AMIT BAJAJ ADVOCATE

News

1. RBI Reference Rate for US $

2. Banks Asked to Undertake Information and Education Campaign (IEC) to Disseminate Information & Awareness Among the Masses About PMJDY: Secretry (DFS);

Notifications

Income Tax

1. 70/2014 - dated 13-11-2014 - IT

Jurisdiction of Income tax Authorities u/s 120(1) and (2) of IT Act - Supersession of Notification No. S.O.822(E), dated the 23rd August, 2001.

2. 69/2014 - dated 13-11-2014 - IT

Section 120(1) and (2) of the Income-Tax Act, 1961 - Jurisdiction of Income tax Authorities Supersession of Notification No. S.O.1189(E), dated the 3rd December, 2001 and S.O.734 (E), dated the 31st July, 2001.

3. 68/2014 - dated 13-11-2014 - IT

Seeks to Amend Notification No. S.O. 359, dated the 30th March, 1988.

4. 67/2014 - dated 13-11-2014 - IT

Seeks to Amend Notification No. S.O. 2816(E), dated the 3rd November, 2014.

5. 65/2014 - dated 13-11-2014 - IT

Corrigendum - Notification Number S.O. 2754(E) dated the 22nd October, 2014

6. 64/2014 - dated 13-11-2014 - IT

Section 120(1) and (2) of the Income-Tax Act, 1961 - Jurisdiction of Income tax Authorities Supersession of Notification No. S.O. 889(E), dated 17-9-2001

Circulars / Instructions / Orders

Service Tax

1. Office Order 10/2014 - dated 12-11-2014

Corrigendum to Office Orders No. 3/2014-CUS Dated 15.10.2014, 4/2014-ST Dated 15.10.2014, 5/2014-C.E. Dated 22.10.2014, 6/2014-ST Dated 22.10.2014, 7/2014-CUS Dated 22.10.2014 and 8/2014-CUS Dated 22.10.2014

Customs

2. Office Order 10/2014 - dated 12-11-2014

Corrigendum to Office Orders No. 3/2014-CUS Dated 15.10.2014, 4/2014-ST Dated 15.10.2014, 5/2014-C.E. Dated 22.10.2014, 6/2014-ST Dated 22.10.2014, 7/2014-CUS Dated 22.10.2014 and 8/2014-CUS Dated 22.10.2014

Companies Law

3. 43/2014 - dated 13-11-2014

Issue of Foreign Currency Convertible Bonds (FCCBs) and Foreign Currency Bonds (FCBs) - Clarification regarding applicability of provisions of Chapter III of the Companies Act, 2013.

Central Excise

4. Office Order 10/2014 - dated 12-11-2014

Corrigendum to Office Orders No. 3/2014-CUS Dated 15.10.2014, 4/2014-ST Dated 15.10.2014, 5/2014-C.E. Dated 22.10.2014, 6/2014-ST Dated 22.10.2014, 7/2014-CUS Dated 22.10.2014 and 8/2014-CUS Dated 22.10.2014

5. F. No. 17/02/2009-CX.1 (Pt) - dated 12-11-2014

Judgment of the Larger Bench of Tribunal on Aluminum dross and skimming – reg.

Highlights / Catch Notes

Income Tax

• High Court Rules TDS Not Required on FDR Interest Payable to Registrar General u/s 194A of Income Tax Act.

  Case-Laws - HC : Requirement to deduct TDS on Interest payable on FDRs - FD is made in the name of the Registrar General - Registrar General cannot be considered as a “payee” for the purposes of Section 194A - HC
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• Clarification on "Before Due Date" for Depreciation on Energy-Saving Devices in Tax Filings: Full Day Utilization Allowed.

  Case-Laws - AT : Excess rate of depreciation - energy saving devices – scope the term 'before due date' - When the time of filing the return is available to the assessee till the last moment of the due date then the whole of that day is available to the assessee and due date expires only when the last day is expired - AT
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• Cash Deposits Not Entire Income: Only Peak Credit in Bank Accounts Considered Unexplained Income of Assessee.

  Case-Laws - AT : Estimation of GP - the entire cash deposits made during the year cannot be treated as income of assessee - the peak credit appearing in the bank accounts can be considered as unexplained income of assessee - AT
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• Netherlands firm's pre-clinical research payments taxable as technical service fees under Indo-US DTAA.

  Case-Laws - AT : Indo-US DTAA - payment made to Netherlands Company M/s. NDDO Oncology BV for conducting pre-clinical research studies - The payments made are taxable as fee for technical services. - AT
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• Books of Accounts Rejection Unjustified: Prepared Post-Accounting Year, Cannot Be Dismissed for Being Unaudited.

  Case-Laws - AT : Rejecting the books of accounts on this ground is not justified because the books have actually been prepared much after the close of the accounting year - the books cannot be rejected merely because they are unaudited - AT
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• Depreciation on Roads and Bridges Upheld by CIT(A): Full Project Cost Deductible for Assessee as Amortized or Depreciation.

  Case-Laws - AT : Since the CIT(A) allowed depreciation on roads/bridges there is no reason to interfere with the order of CIT(A) as the entire cost incurred on the project is to be allowed as deduction to assessee either as amortized revenue expenditure or as depreciation - AT
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• Audit Finds Minor Record-Keeping Issues; No Rejection of Books u/s 145(3) of Income Tax Act.

  Case-Laws - AT : Audit report shows that record maintained by the assessee is not in proper manner as explained to them - but these defects are not sufficient to reject the books result u/s 145(3) - AT
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• Charitable Society Property Sale: Section 11(1A) Governs Capital Gains Tax, Overriding Section 50C for Trusts.

  Case-Laws - AT : Capital gain on sale of property in the hands of charitable society – Section 11(1A) in itself is a separate specific section which governs the overall taxability of capital gains in a trust and being a specific section it shall prevail over section 50C - AT
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Service Tax

• CENVAT Credit Denied: Selling Agents Not Equivalent to Sales Promotion Agents for Credit Eligibility.

  Case-Laws - AT : CENVAT Credit - Commission agent's services - mere selling agent of goods cannot be equated with the agent providing sales promotion activities - credit denied - AT
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Central Excise

• Tribunal Rules Aluminum Dross and Skimming Not Excisable Under Central Excise Regulations, Clarifying Tax Obligations for Manufacturers.

  Circulars : Judgment of the Larger Bench of Tribunal on Aluminum dross and skimming – reg. - Order-Instruction
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Case Laws:

• Income Tax

• 2014 (11) TMI 414
  Validity of warrant of authorization issued u/s 132(1)(b) - Held that:- assessee is allowed to raise the contentions insofar as whether the Income Tax Authorities can proceed to issue a warrant of authorization u/s 132(1) of the Act against the firm, dissolved "as on the date of the issuance of authorization" before the Tribunal, if already not raised in the memorandum of appeal so filed – Tribunal may consider the said question, independently, in accordance with law.

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• 2014 (11) TMI 413
  Allowability of deduction u/s 80M and 80K – Dividend income reduced or not as permissible u/s 36(1)(viii) – Held that:- The assessee had not challenged reduction of deduction u/s 80K and the CIT(A) had not dealt with the issue – the Tribunal fell in error in treating the deduction u/s 80K and disallowance made u/s 36(1)(viii) as a ground raised by the Revenue in appeal - Section 80M in the opening words refers to the expression “gross total income of an assessee” and thereafter stipulates that where gross total income of the assessee includes income by way of dividends etc., the deductions would be allowed - The expression “gross total income” for the purpose of Chapter VI-A as defined in Section 80B(5) meant total income computed in accordance with the provisions of this Act but before making any deductions under Chapter VI-A - the Section postulated that the gross total income meant total income computed under Chapter III of the Act - the total income computed u/s 28 of the Act after allowing deductions u/s 36(1)(viii), plus other income of the assessee, as computed, would constitute the gross total income on which deduction u/s 80M could be allowed - The deduction allowed u/s 36(1)(viii) of the Act got excluded and did not partake income included in gross total income on which deduction u/s 80M was to be allowed - The amounts deducted u/s 36(1)(viii) ceased to be part of the gross total income as stipulated in Section 80B(5). Section 80M stood enacted with the object to provide relief on inter-corporate dividends for the said income had already suffered incidence of tax in the hands of paying company and, therefore, should not be subjected to tax twice - where the dividend would not have otherwise suffered tax, the said amount of dividend should not be allowed the deduction - The assessee had received dividend - The total income before deduction under VI-A, necessarily would be much higher - the dividend income was a miniscule and a fraction of the total income - The total (taxable) income was computed after allowing deduction u/s 36(1)(viii) of Rs. 17.75 crores, an amount if not subtracted would have further increased the quantum the total income – it would not be correct to treat dividend income as a part of Rs. 17.75 crores, deposited and transferred to the special reserve - The dividend income could well be treated and regarded as a part of and included in the total income, subjected to tax of Rs. 25.35 crores/ Rs. 25.96 crores. There is therefore a basic fallacy and flaw in the argument raised by the Revenue. Section 36(1)(viii) required creation of a special reserve by a finance corporation engaged in long-term finance for industrial or agricultural development in India - Deduction could not exceed 40% of the total income computed before making any deduction under the clauses of section 36(1) or Chapter VI A - An amount not exceeding 40% of the total income could be allowed as a deduction under the headings “profits and gains” of business or profession. Reference was thereafter made to the heading “income from other sources”, under Chapter III of the Act - Sections 36(1)(viii) and 80M read with Section 80AA operated in altogether different fields and in the absence of any provision, prohibiting benefit, appellate authorities were justified in deciding the issue in favour of the assessee – Decided partly in favour of Partly.

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• 2014 (11) TMI 412
  Requirement to deduct TDS – Interest payable on FDRs - Whether the provisions of Chapter XVII of the Act would be applicable in respect of interest which is payable on the fixed deposits maintained by this Court with the petitioner bank, in the name of the Registrar General – Held that:- Although the collection of tax by deduction at source may precede the assessment, it is clear that it does not affect the basis of the levy of tax - The provisions for collection of tax, under Part B of Chapter XVII of the Act, by way of tax deduction at source are provisions for recovering tax payable by assessees and do not in any manner affect the levy or the charge of tax - in absence of an assessee, the machinery of provisions for deduction of tax to his credit are ineffective - The expression “payee” under Section 194A of the Act would mean the recipient of the income whose account is maintained by the person paying interest. Although the FD is made in the name of the Registrar General, the account represents funds and the Registrar General is neither the recipient of the amount credited to that account nor the interest accruing - the Registrar General cannot be considered as a “payee” for the purposes of Section 194A of the Act - The credit by the petitioner bank in the name of the Registrar General would, thus, not attract the provisions of Section 194A of the Act - Section 190(1) of the Act clarifies that deduction of tax can be made prior to the assessment year of regular assessment, nonetheless the same would not imply that deduction of tax is mandatory even where it is known that the payee is not the assessee and there is no other assessee. Deducting tax in the name of the litigant who deposits the funds with this Court would also create another anomaly because the amount deducted would necessarily lie to his credit with the income tax authorities - the tax deducted at source would reflect as a tax paid by that litigant/depositor – He would be entitled to claim credit in his return of income – thus, the notice is to be set aside – Decided in favour of assessee.

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• 2014 (11) TMI 411
  Rejection of renewal of recognition u/s 10(23C)(vi) – Held that:- It has been held in Sri Ranganatha Enterprises v. CIT [1998 (1) TMI 52 - KARNATAKA High Court] that in respect of any exemption claimed under any of the provisions in Chapter-III, the burden of proof that the income falls under the Sections in the said chapter is on the assessee - the prescribed competent authority, while considering the application for approval and examining the eligibility criteria, ought to take into consideration the real purpose of the Trust - assessee submitted its application for renewal in the proper format, namely, Form 56D, and stated that the main objects of the Trust are relief to poor, education, medical relief and advancement of any other objects of public utility. The Trust is running Polytechnic and Industrial Training Institute - under Chapter-III, more particularly, Sections 10 to 13A of the Act, the Act brings certain categories of exemption and incomes falling within those categories are completely exempt from the purview of the Act, as they are not at all to be included in the total income of the assessee - such type of exemption/s has/have to be distinguished from certain types of income, which are included in the total income of the assessee, but in respect of which statute provides relief by way of deduction in computing the total income, by granting rebate of tax and by granting certain other reliefs from the tax-payers - the opportunity afforded to the petitioner was inadequate, inasmuch as the order appears to be solely on the basis of the report of the DIT (E), without any opportunity to the assessee to place materials to rebut the findings contained in the report and that the tests required to be applied while examining the issue, having not been rightly applied - the order is set-aside and the matter is remanded back for fresh consideration – Decided in favour of assessee.

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• 2014 (11) TMI 410
  Undisclosed capital introduction – Provisions of section 132(4A) not considered – Held that:- In the audited balance-sheet, there is no land and building whereas in the seized BDM/18, there is an item of land and building - if there is a land and building, such an asset cannot be hidden - even the search did not unearth any such land and building - the cash and bank balance show an amount as per the seized BDM/18 and as per the audited balance-sheet is Rs. 15,88,517.60 - the Revenue has not been able to identify any bank account, which is having a balance of Rs. 1,13,774.43 as shown in BDM/18 - the sundry debtors show an amount of Rs. 13,119/- as per BDM/18 whereas as per the audited balance-sheet, the figure is Rs. 11,36,148/-, which is a higher figure in the audited balance-sheet. On the liabilities side, the sundry creditors shown, as per BDM/18, is Rs. 1,95,965.43 whereas as per the audited balance-sheet, the figure is Rs. 35,84,244.42, which is again a higher figure and this includes an amount of Rs. 28,48,604/- in respect of Dutta Automobiles, which are on the basis of contemporaneous document and evidence - There is also a loan from Union Bank, which is shown in the audited balance-sheet at Rs. 4,01,437/- but does not find place in BDM/18 - All these figures clearly show that BDM/18 is clearly not a true and fair document for the purpose of making an addition much less a presumption of undisclosed income - revenue has been able to show any corroboration regarding the discrepancy arising from the document seized to show that the source of undisclosed document was attributable to the assessee – thus, the order of the Tribunal is upheld – Decided against revenue.

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• 2014 (11) TMI 409
  Undisclosed income on loans to creditors - Creditworthiness of the creditors and genuineness of transactions proved or not – Held that:- A person can still be held to be the owner of a sum of money even though the explanation furnished by him regarding the source of that money is found to be not correct and from the simple fact that the explanation regarding the source of money furnished by him, in whose name the money is lying in deposit, has been found to be false, it would be a remote and far-fetched conclusion to hold that the money belongs to some other person - if no further explanation could be obtained by the revenue upon the creditors failure to present themselves in enquiry, from such simple fact of omission on part of the creditors, it would be remote and farfetched conclusion that the creditors lack identity. The revenue could not contradict the explanation furnished by the assessee - The omission on part of the creditors to subject themselves to enquiry being initiated by the revenue or non-furnishing of accounts by them would, not lead to the conclusion that the creditors lacked identity without any other contradiction of facts and particulars of the transactions between them furnished by the assessee being uncontroverted - Tribunal had discussed seven instances of loan threadbare and deleted the addition had held in substance with regard to each of those loan transactions, that the revenue had failed to bring any other material on record to show that the amounts advanced by the creditors was in reality and in fact, money belonging to the assessee – Decided against revenue. Payment made to sundry creditors - Whether the order of the Tribunal is sustainable inasmuch as per the rules of Stock Exchange Shares can be delivered strictly against payment – Held that:- The payment has been made to share broker after the expiry of the accounting year, relevant to the AY under consideration, that is it has been paid in the month of April, 1995 - There is no material on record to show that the amount had actually been paid by the assessee to the share broker the end of the current year - The subsequent payment made in April, 1995 has not been found to be bogus or non-genuine - It is clear that there was an outstanding liability on account of amount payable against the purchase of shares – thus, the order of the Tribunal is upheld – Decided against revenue.

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• 2014 (11) TMI 408
  Rejection of Form No. 10 in course of reassessment proceeding - Whether the Form No. 10 filed by assessee is not filed during reassessment proceeding – Held that:- Assessee itself in the return of income has computed the excess income accumulated/set apart and AO has allowed exemption to assessee while completing the original assessment after examining the same - exemption claimed by assessee, in fact, was allowed by AO and it was never pointed by AO to assessee that due to non filing of Form No. 10 assessee’s claim of exemption will not be accepted - when the assessment was reopened for disallowing assessee’s claim of exemption u/s 11 in respect of excess income accumulated/set apart for non-furnishing of Form No. 10, assessee became aware of it and furnished Form No. 10 before AO in course of reassessment proceeding - assessment was not reopened on the basis of information subsequently filed by assessee claiming benefit of section 11 after completion of original assessment. Assessee has claimed accumulation/setting apart excess income in the return of income filed originally and AO also accepted such claim of assessee while completing the original assessment - AO never raised the issue of non-filing of Form No. 10 nor he rejected assessee’s claim of exemption u/s 11 in respect of accumulated income - Therefore, there was no occasion for assessee earlier to file Form No. 10 - when assessment was reopened for assessing escaped income on account of non furnishing of Form No. 10, it can be said that furnishing of Form No. 10 is relatable to escaped income sought to be assessed - Accumulation/setting apart of excess income is already disclosed/shown by assessee in the return of income originally filed and was also examined and allowed by AO while completing the assessment. Neither it is a fresh claim made by assessee which was not before AO during the original assessment nor it is a claim rejected by AO during original assessment, and reagitated by assessee during the assessment proceeding - assessee did not furnish form No. 10 along with the return of income, but, were furnished during proceeding initiated u/s 147 of the Act- Following the decision in ASSOCIATION OF CORPORATION & APEX SOCIETIES OF HANDLOOMS Versus ASSISTANT DIRECTOR OF INCOME TAX [2013 (1) TMI 317 - DELHI HIGH COURT] - the AO is directed to accept Form No. 10 filed by assessee and allow the benefit in terms of section 11(2) read with Rule 17 – Decided in favour of assessee.

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• 2014 (11) TMI 407
  Excess rate of depreciation - energy saving devices – scope the term 'before due date' - according to the AO was assessee has not exercised its option under second proviso to Rule 5(1A) for claiming depreciation under Rule 5(1) and Appendix – 1 before filing the return of income u/s 139(1) - Held that:- The meaning of the term ‘before due date’ shall be understood as it is understood by a man of ordinary prudence - Before due date simply refers and means that not after the expiry of due date - If the requisite act is done before the last day expires then it will simply be said that before due date - When the time of filing the return is available to the assessee till the last moment of the due date then the whole of that day is available to the assessee and due date expires only when the last day is expired - the option exercised on the due date is nothing but before the due date as the same is not after the due date – revenue is not consistent with regard to assessee’s claim of depreciation - Be that as it may, as depreciation claimed by assessee is in terms with the statutory provisions, AO was not justified in interfering with the same – thus, the order of the CIT(A) is upheld – Decided against revenue.

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• 2014 (11) TMI 406
  Estimation of GP - Whether the cash deposits made into bank account constitutes the income directly or it constitutes the trade receipts of the assessee, on which percentage of the profits needs to be estimated – Held that:- Assessee in course of assessment proceeding neither appeared nor furnished any information with regard to the cash deposits made into the bank account for whatever may be the reason - total cash deposits made by assessee in his bank accounts - assessee has not maintained any books of account, bills and vouchers, etc. in respect of the business carried on by him - assessee himself has stated that he is engaged in wholesale fruit business - assessee’s claim that he is only acting as a facilitator between purchasers and sellers of fruits in fruit markets is not acceptable in absence of any supporting evidence - assessee’s claim that cash deposits made in the bank accounts represent monies given by buyers and does not belong to him and further fact that he is only earning commission is also not acceptable in absence of any corroborative evidence - the cash deposits made into bank accounts have to be considered as receipts from fruit business carried on by assessee - the deposits made into the bank accounts as receipts from the business of assessee. CIT(A) has observed that minimum profit rate in this line of business is 10%, ultimately, he adopted net profit rate of 15% - the net profit adopted at 15% is high - assessee has not maintained any books of account, therefore, profit of assessee in any way has to be estimated on a reasonable basis - As no comparable case in similar line of business has been brought on record, profit has to be estimated by adopting some principle - it would be appropriate to consider toadopt the net profit rate at 5%. There are not only cash deposits, but there are cash withdrawals also - Therefore, the entire cash deposits made during the year cannot be treated as income of assessee - the peak credit appearing in the bank accounts can be considered as unexplained income of assessee – the AO is directed to verify bank accounts and also examine peak credits worked out by assessee and thereafter make the addition on the basis of peak credit worked out – Decided partly in favour of assessee.

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• 2014 (11) TMI 405
  Interest and administrative expenses disallowed u/s 14A r.w Rule 8D – Held that:- Both the revenue authorities have made inconsistent observations to come to a finding that the interest and expenses have to be disallowed - the application of Rule 8D has retrospective effect, relying upon ITO vs Daga Capital Management (P) Ltd [2008 (10) TMI 383 - ITAT MUMBAI] - Rule 8D shall be applicable with effect from 2008-09 and onwards - a reasonable disallowance out of tax free income would suffice – thus, the order of the CIT(A) is set aside and the matter is remitted back to the AO – Decided in favour of assessee. Advance Written off as bad debt written off – Held that:- The AO has disallowed the claim mainly on the ground that the assessee did not comply with the conditions prescribed u/s 36(2) of the Act for allowing the deduction of bad debt claimed u/s 36(1)(vii), and further the assessee did not prove its bona fides in making this claim - the CIT(A) has taken an altogether different view of the matter and held that "Controlling of group companies" cannot be regarded as business of the assessee, since mere controlling will not generate any profit or loss, which is sine qua non of any business activity - M/s Dytek was already a subsidiary of the assessee company and in order to revive the operations of M/s Dytek, the assessee had infused funds in the form of ICDs - the assessee has put in new claim before the CIT(A) that it categorized itself as "Non Banking Financial Company" duly registered by the Reserve Bank of India and accordingly it is engaged in the business of lending and borrowing as well as investment - the provisions of section 36(1)(vii) r.w.s 36(2)(i) provide for allowing deduction of bad debt, if the same represents money lent in the ordinary course of the business of banking or money lending, which is carried on by the assessee - Since the assessee claims that it is a NBFC and since the revenue authorities have not examined the claim of the assessee from the angle of NBFC, the matter required examination by AO to determine whether the ICD, made by the assessee would at all fall in the category of money lent in the ordinary course of business – thus, the order of the CIT(A) is set aside and remitted back to the AO for fresh examination – Decided in favour of assessee.

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• 2014 (11) TMI 404
  Fees for technical services – Indo-US DTAA - payment made to Netherlands Company M/s. NDDO Oncology BV for conducting pre-clinical research studies - Whether the payments are to be treated as fees for technical services under Article 12 of the DTAA or as business profits in terms of Article 7 of DTAA with USA and considered in those cases that the payments are in the nature of business receipts to be considered under Article 7 of the DTAA – Held that:- as rightly pointed out by the Ld. CIT(A), the DTAA between USA and India, Canada and India are entirely different with DTAAs of UK and Netherlands. These issues were clearly analysed by Ld. CIT(A) in the order. Assessee company is also silent on the enquiry made by Ld. CIT(A) with reference to transfer of knowledge as detailed in paras 26 and 28 of the order. Nothing was brought on record by assessee to counter the findings of Ld. CIT(A) and simply relied on the Coordinate Bench decision in the case of Dr. Reddy Laboratories [2013 (11) TMI 304 - ITAT HYDERABAD], which we notice that the facts are different. The payments made are taxable as fee for technical services. Since assessee has not deducted tax on the said payments, AO is correct in raising the demands u/s 201 and 201(1A). - Decided against assessee.

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• 2014 (11) TMI 403
  Rejection of books of accounts – Principle of natural justice – Counsel of the assessee contended that the books of accounts are not properly examined – Reasons for rejection of books of accounts valid or not - Held that:- Following the decision in Late Shri Harshad S. Mehta Through L/H Smt. Jyoti H. Mehta Versus The DCIT, Central. Cir. 23, Mumbai 2014 (10) TMI 795 - ITAT MUMBAI] - The first reason for rejection of books is that the books of accounts are not contemporaneous - there is no denial that the books of accounts are not contemporaneous - the books of accounts have been prepared much after the close of the accounting year - rejecting the books of accounts on this ground is not justified because the books have actually been prepared much after the close of the accounting year - the books cannot be rejected merely because they are unaudited - All that has to be seen is that whether the books of accounts give a true and fair view or not. If the books of accounts have never been examined how can the revenue authorities say that the books are not complete - The revenue authorities should have specifically pointed out which part of the books is not complete - Without pointing out any specific/direct mistake, a general statement stating that the books are not complete would not do any justice - CIT(A) observed that most of the entries in the books of accounts are in the form of journal entries in the names of related person – it could not be understood as to how can this be a reason for rejecting the books of accounts - When a person is maintaining books of accounts on mercantile system of accounting, obviously, most of the entries would be in the form of journal entries - the books of accounts have been prepared on the basis of the evidences which are seized by the authorities which mean that they are still in the possession of the department/custodian - There is no specific instance pointed out which is not backed by any primary documentary evidence - It is also not clear whether the assessee was ever called for to explain any of the transactions recorded in the books of accounts - In the absence of the verification of primary document vis-à-vis entries in the books, assessee’s accounts cannot be treated as unreliable - The books were rejected by the Revenue authorities - the books have been rejected by the department on flimsy grounds without independently examining each and every entry and confronting specific discrepancy, if any, to the assessee - the AO is directed to verify/examine each and every entry in the books of accounts – Decided in favour of assessee.

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• 2014 (11) TMI 402
  Unexplained investment from undisclosed/out of books income/receipts - Reference made to DVO – Held that:- The revenue should adopt some mode to educate their AO to act in accordance with law and whenever any judgment of the Hon’ble Apex Court is rendered on a particular issue, they should follow the same - Since reference has been made without even calling for the books of account, what to say about the rejection of the books of account, the reference to the DVO is bad and invalid in the eyes of law and any valuation made on the basis of invalid reference cannot be used as a piece of evidence for estimating the cost of construction in the immovable property - the addition made by the AO u/s 69 of the Act for unexplained investment in the property deserves to be deleted and the order of the CIT(A) is to be set aside. Estimation of NP @ 10% - Receipts of hospital – Held that:- Revenue could not point out any specific defect in the order of the CIT(A) - the assessee has contended that the AO has applied the net profit rate at 10% on the receipts of hospital without pointing out any defect in the maintenance of the books of account - No doubt, net profit rate can be re-estimated by the AO but it can only be done where the defects are pointed out in the maintenance of the books of account - Without pointing out any defect, re-estimation of net profit rate is not permissible – Decided against revenue. Receipts of school of nursing and paramedical – Held that:- CIT(A) has called for assessment record and verified himself the difference in fees of School of Nursing & Institute of Paramedical Science and noted that the AO has worked out the difference in fees of School of Nursing & Institute of Paramedical Science at Rs. 22,86,300/- as against Rs. 22,08,000/- shown by the assessee on the basis of documents impounded during the course of survey under section 133A of the Act on 7.3.2009 – the order of the CIT(A) is upheld – Decided against assessee.

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• 2014 (11) TMI 401
  Allowability of depreciation on roads/bridges constructed by assessee as part of National High-ways project – Held that:- Depreciation cannot be allowed and relied on the Board circular No.9 of 2014 dated 23.04.2014 - the Board is aware that there were disputes as to whether the expenditure incurred on development and construction of infrastructural facilities like roads/high ways on BOT basis with right to collect toll, is entitled for deduction under section 32(1)(ii) or the same can be amortized by treating it as an allowable business expenditure under relevant provisions of the I.T. Act - The Circular went on to clarify that the amount can be amortized over the period of toll construction concessionaire agreement - the Board in fact has accepted that the cost incurred towards development of road/highways is revenue expenditure and relying upon Madras Industrial Investment Corporation Ltd., vs. CIT [1997 (4) TMI 5 - SUPREME Court] allowed spreading over the liabilities over number of years - Since the amount is allowable as an expenditure that too as revenue expenditure, the Board circular is in fact advantageous to the assessee who are in development of infrastructure facilities but not owning the property which was constructed - assessee has initially treated the entire cost as building and claimed 10% depreciation in A.Y. 2009-10 - Since the CIT(A) allowed depreciation as claimed by assessee there is no reason to interfere with the order of CIT(A) as the entire cost incurred on the project is to be allowed as deduction to assessee either as amortized revenue expenditure or as depreciation – Decided against Revenue.

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• 2014 (11) TMI 400
  Labour/Carting Charges disallowed u/s 40(a)(ia) – Failure to deduct TDS u/s 194C – Held that:- Out of the total amount, Assessee had deposited the TDS on 23.04.2007 which though was beyond the prescribed date but was before the filing of return of income - in the case of Commissioner of Income Tax-I Versus Royal Builders [2014 (1) TMI 136 - GUJARAT HIGH COURT] it has been held that when Assessee has deducted tax at source on or before due dates specified in Section 139(1), provisions of Section 40(a)(ia) would not apply - the issue where the Assessee has not deducted TDS but the payee has paid the taxes needs to be re-examined by the AO – thus, the matter is remitted back to the AO for Examination – Decided partly in favour of assessee. JCB rent disallowed – Held that:- Section 40(a)(ia) cannot be seen as intended to be a penal provision to punish the lapses of non deduction of tax at source from payments for expenditure- particularly when the recipients have taken into account income embedded in the payments, paid due taxes and filed income tax returns in accordance with the law - assessee has not placed any material on record to demonstrate that the payee has offered the amounts received from Assessee as its income and has paid taxes on the same – thus, the matter is remitted back to the AO for fresh adjudication – Decided in favour of assessee.

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• 2014 (11) TMI 399
  Trading addition deleted on the ground of non-maintenance of stock register – Any defect in books of accounts or not – Held that:- The assessee’s business is for exporting of readymade garments - It requires various stages to produce finished products i.e. from grey fabric to printing, designing, stitching etc., it goes under various processes before final product of the readymade garments - It is difficult for the assessee to maintain stage wise stock register - The assessee was maintaining regular books of account with sales, purchase vouchers and books were audited but the audit report shows that record maintained by the assessee is not in proper manner as explained to them - The assessee changed the strategy of exporting the readymade garments by purchasing the grey fabric and printing it but these defects are not sufficient to reject the books result u/s 145(3) of the Act as held by the various courts and estimate the profit by the AO - CIT(A) has thoroughly examined all the aspects of all the defects pointed out by the Assessing Officer in his order, which has not been controverted by the revenue – Decided against revenue. Validity of assessment u/s 147 - Claim of deduction U/s 80IB on Duty drawback - Held that:- The assessee’s return was only processed u/s 143(1) of the Act and there was no scrutiny assessment - in Assistant Commissioner of Income-Tax Versus Rajesh Jhaveri Stock Brokers P. Limited [2007 (5) TMI 197 - SUPREME Court] it has been held that in such case there being no assessment, no opinion has formed by the AO - if a 148 notice is issued, it does not amount to any change of opinion since there was no opinion in existence at all - the AO is duty bound to take due notice of the judgment and give remedial effect in accordance with law - Since there was no opinion, the AO rightly reopened the assessment u/s 147 of the Act - the AO has acted within the parameters of law and reopening of the assessment has been rightly initiated - the validity of the reopening assessment is upheld - the deduction U/s 80IB of the Act is also not allowable to the assessee – Decided against assessee.

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• 2014 (11) TMI 398
  Adhoc disallowance of expenditure – Held that:- Assessee is able to furnish necessary purchases, sales details and books of accounts were not rejected - in the absence of any incriminating material, general disallowance of expenditure at 50% as was done by AO cannot be sustained - no disallowance can be made in those years as assessee has filed regular returns earlier and those were accepted - there was a scrutiny assessment for AY 2004-05 in which assessee’s books of accounts were accepted without any disallowance - there is justification in assessee’s additional ground and the grounds raised at disallowance of 25% of claim in these assessment years – Decided in favour of assessee. Considering assessee’s turnover and nature of expenditure involved, the disallowance can be restricted to 10% of the expenditure claimed, being personal in nature as assessee’s business is done in a proprietary concern – the order of the CIT(A) is modified that from disallowance of 25% on expenditure 10% of the expenditure is allowed – Decided partly in favour of assessee. Cash credits – Held that:- Credit in the case of Mr. K. Panduranga Reddy who is an income tax assessee with PAN AOWPK1766P required re- examination – thus, the matter is restored to the file of AO for examination – Decided in favour of assessee. Loss on trading – Held that:- CIT(A) was rightly of the opinion that there was nothing wrong on the part of assessee to enter into forward contract transaction to protect his business interests - assessee has entered into forward contract transactions as assessee is dealing with bullion market where the fluctuations are on a daily basis - Since Ld. CIT(A) examined the transactions and also gave a finding that these are forward contract transactions to care against loss through the price fluctuations, the same is eligible to be treated as business loss and is covered by the proviso to section 43(5) – Decided against revenue. Addition of GP – Held that:- Revenue could not justify why gross profit addition has to be resorted without rejecting books of accounts - In fact, it is a search case and all the books of accounts and data were also impounded/seized by Revenue - In the absence of any incriminating material or in the absence of any other details, there is no justification for resorting to gross profit addition – the order of the CIT(A) is upheld – Decided against revenue.

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• 2014 (11) TMI 397
  Validity of proceedings u/s 147 –Treatment of transactions in shares - Whether CIT(A) was justified in treating the transactions in shares by assessee as investment only and thereby treating the gain there from as capital gain in stead of business income – Held that:- Assessee is transacting in shares and units from the inception itself - Income shown by assessee from transactions in shares and units as capital gain was also accepted by the AO till the AY 2006-07 - Assessment completed for AY 2006-07 was revised by CIT u/s 263 by holding that income from share transactions to be assessed as business income of assessee - assessments for the impugned AY was reopened after expiry of four years from the end of relevant AY - Therefore, as per the proviso u/s 147(1) in a case where assessment is completed u/s 143(3) reopening of assessment can be made after expiry of four years if the escapement of income is on account of failure on the part of assessee to disclose fully and truly all material facts necessary for his assessment. There was no failure in furnishing material facts truly and fully is either visible or evident from the reasons recorded - It is clearly evident the assessment has been reopened primarily on the basis of the order passed by CIT u/s 263 for AY 2006-07, which was upheld by ITAT and only for the purpose of assessing the gain derived from share transaction as profits and gains of business or profession in stead of capital gain as claimed by assessee and accepted in the original assessment - as there is no failure on the part of assessee to disclose fully and truly all material facts necessary for its assessment, the reopening of assessment beyond a period of four years is in violation of statutory provision, hence, invalid in law - there are no fresh and tangible material before the AO on the basis of which AO could have formed belief that income has escaped assessment - the foundation on which assessment was reopened do not survive - the finding of the CIT(A) with regard to the validity of reopening u/s 147 has to be sustained - thus, the order of the CIT(A) is set aside – Decided against revenue. Capital gains on sale of shares - STCG or business income - Held that:- CIT(A) was of the view that the income derived from sale of shares and units of mutual funds is to be treated as ‘income from capital gains’ - the transactions in sale of shares and units of mutual funds in the impugned assessment year is any way different from AY 2006-07 - income derived from sales of shares and units of mutual funds has to be assessed ‘as income from capital gains’ as they are in the nature of investment only - in the latest assessment order for the AY 2011-12, the AO himself while completing assessment u/s 143(3) vide order dated 26/03/2014 has accepted assessee’s transaction in shares and units of mutual fund as investment activity and assessed the gain derived therefrom as capital gain – Decided in favour of assessee.

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• 2014 (11) TMI 396
  Revision u/s 263 - Allowability of deduction u/s 80G – Expenses incurred for the welfare of general public, which included the employees, suppliers and buyers - The donation was made under the company’s policy on corporate social responsibility - Held that:- The assessee had submitted letter issued by the M/s Rajasthan Medical Relief Society, S.M.S. Hospital, Jaipur dated 24/3/2009 before the AO during the assessment proceedings vide its letter dated 30/6/2011 – AO had applied her mind and allowed the deduction u/s 80G of the Act as claimed by the assessee in computation of income - The facts that the assessee had made payment to the supplier directly on behalf of M/s Rajasthan Medical Relief Society, S.M.S. Hospital, Jaipur, were before the AO - No new facts were furnished before the CIT - CIT had different opinion on deduction u/s 80G of the Act - CIT is not empowered to set aside the order of the AO u/s 263 of the Act - the genuineness of this donation has not been doubted by the Revenue - The payments was made on behalf of the donee to make available equipment without going to the technical formalities of the State Government for purchasing the equipments, had made available these equipments directly - It has been certified by the Medical superintendent of M/s Rajasthan Medical Relief Society, S.M.S. Hospital, Jaipur, that the appellant had made payment on behalf of the society – following the decision in Saurashtra Cement and Chemical Industries Ltd. Vs. CIT [1979 (2) TMI 21 - GUJARAT High Court] - the order of the CIT-I, Jaipur passed U/s 263 of the Act is upheld – Decided in favour of assessee.

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• 2014 (11) TMI 395
  Capital gain on sale of property in the hands of charitable society – Application of provisions of section 50C – Held that:- The assessee is a charitable society and is registered u/s 12A of the Act – CIT(A) was rightly of the view that section 11(1A) of the Act which lays down a complete system of taxability of capital gains in respect of an institution approved by the CIT u/s 12A of the Act is a complete code - The provisions of section 50C create a limited fiction to the effect that the full Value of consideration shall be substituted in the provisions of section 48 by the amount taken by the sub-registrar for registration purposes - the fiction contained in section 50C could be applied only for the purpose of computation of capital gains u/s 48 and not beyond the provision – it cannot be applied for the purpose of calculating the gain u/s 11(1A) - what is relevant for the purpose of section 11(1A) is the reinvestment of the net amount actually realized and not any notional amount as may be adopted by virtue of sec. 50C. Heads of income u/s 14 have no relevance and question of allowing statutory deductions will not arise - The 'income' contemplated by the provisions of section 11 is the real income and not the income as assessed or assessable in view of the above judgments - Assessment of Trusts is a separate code in itself once an institution has been granted registration u/s 12A - the 'income' occurring in the Act for the purpose of a Trust should be considered what is available in the hands of the assessee i.e. TRUST subject to an adjustment of any expenses extraneous to the trust - Section 11(1A) in itself is a separate specific section which governs the overall taxability of capital gains in a trust and being a specific section it shall prevail over section 50C which is a general section and does not start with a non-obstante clause - In the case of a Trust and for the purpose of Sec. 54F where question of utilization of the funds in case of sale of an asset arises it would be the available funds with the assessee and not the deemed income - This is on the ground that what is, not available with the assessee can never be invested - assessee has rightly computed income of the year and Sec. 50C of the Act has no application to the facts of the case – thus, the order of the CIT(A) is upheld – Decided against revenue.

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• Customs

• 2014 (11) TMI 418
  Seizure of goods u/s 110A - Provisional release of 12 kgs of gold seized by the fifth respondent - Held that:- At this stage, the only prayer which can be considered by the Court is the alternate prayer for a direction that an order may be passed in accordance with law on an application for provisional release under Section 110A of the Act. Since a specific objection has been raised on behalf of the Customs Department that no formal application has been filed for provisional release under Section 110A of the Act, we permit the petitioner to move the competent authority by filing an application for provisional release under Section 110A of the Act - Petition disposed of.

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• 2014 (11) TMI 417
  Revocation of permission granted under Regulation 9(2) of the Customs House Agents Licensing Regulations, 2004 - Held that:- Board's power to make regulations would not be limited to the specific clauses but also such regulations for the purpose of carrying out the provisions of Section 146 of the Act. The same would include all facets of carrying on business as an agent. I see no lack of competence /or authority with the Board to provide /or appeals - as has been done under Regulations 21 of CBLR, 2013 - against all orders of the Commissioner passed under the said regulations including under Regulation 23 of CBLR, 2013 - Following decision of Academy of Nutrition Improvement v. Union of India [2011 (7) TMI 1083 - SUPREME COURT OF INDIA] - Decided against the appellant.

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• 2014 (11) TMI 416
  Rectification of mistake - error of classification of goods - Held that:- Admittedly, the Bill of Entry was filed by the petitioner and therefore, it is their document and if any error was committed by the petitioner, then the petitioner cannot approach the authority to invoke Section 154 of the Act effecting correction of their bill of entry. If according to the petitioner, the correct classification was accepted by the department in the subsequent import, then it is a good ground for the petitioner to file an appeal before the appellate authority. In fact, the Assistant Commissioner of Customs, in their communication, advised the petitioner to approach the appellate authority - Decided against Assessee.

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• 2014 (11) TMI 415
  Violation of regulations 13(a) and 13(j) by courier agency - Revocation of license - Power of Commissioner to suspend license - Held that:- inquiry that is contemplated by the further proviso is not to justify issuance of notice but for establishment of the grounds to enable the concerned to record a finding as to whether the revocation could be visited or not. When that inquiry is contemplated by the second proviso and an inquiry has to be held, only if the Commissioner is satisfied that the grounds cannot be established without such inquiry, then, he may hold an inquiry and in the meanwhile, he has discretion to suspend the registration of the authorised courier. If the Commissioner is to be prima facie satisfied and in terms of this further proviso, then, he is empowered to hold an inquiry and has also the further discretionary power. The suspension cannot be said to be arbitrary due to the seriousness of the allegations and to ensure that the petitioner is not committing acts which would result in further violations of the regulations. In such circumstances, it cannot be said that there is no power to suspend the registration - Decided against the appellant.

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• Service Tax

• 2014 (11) TMI 428
  CENVAT Credit - scope of input services - eligibility of post sale services as input services - C & F agent service - Receipt of commission - liaison work pertaining to sales tax - scope of the term 'place of removal' - Held that:- the services in relation to the activities of removing goods from factory, storing at the depot or C & F agent’s premises and delivering the same to the customer are falling within the scope and ambit of the said definition clause. - the activities of the C & F agent are confirming to the definition of 'input service', and as such, the respondent is eligible to take Cenvat credit of service tax amount paid on the C & F commission. Credit on Liaison work pertaining to sales tax - Held that:- such activities are incidental and ancillary to the depot operations, where the main function is to dispatch the goods to the customers. - credit allowed. Commission agent's services - Held that:- mere selling agent of goods cannot be equated with the agent providing sales promotion activities - in the case in hand, the activities of M/s JAS Marketing as indicated in the show cause notice, clearly exhibit that it is the selling agent acting on behalf of the respondent. - Credit not allowed. - Decided partly in favour of Revenue.

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• 2014 (11) TMI 421
  Simultaneous penalty u/s 76 & 78 - Re calculation of demand - Held that:- While passing Ext. P3, found it necessary to have recalculation to appropriate extent, based on the contentions taken from the part of the assessee, which admittedly is not done so far. To what extent the said quantification is necessary or will it absolve the petitioner from the liability, is the next point to be considered. The total liability to be satisfied by the petitioner as per the relevant provision is the actual extent of tax, plus penalty under Section 76 which is an equal amount, besides penalty under Section 78, which is of another equal extent. By virtue of the nature of dispute and even going by the admission from the part of the petitioner, the liability to be satisfied by the petitioner is Rs. 14,88,486/-. The total liability to be cleared by the petitioner is three times, less the amount if any, satisfied. - Petition disposed of.

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• Central Excise

• 2014 (11) TMI 427
  Denial of Central Excise Registration - registration of the erstwhile owner has not been cancelled in view of its outstanding dues - Central Excise authorities informed the petitioners that such application cannot be granted till the registration of the erstwhile owner stands and have requested the petitioners to provide indemnity bond for such dues - Held that:- Following decision of Surat Metallics Ltd. & One v. Commissioner of Central Excise, Division-V, & one [2011 (2) TMI 1343 - GUJARAT HIGH COURT] - respondents are not justified in refusing to grant registration to the petitioners under section 6 of the Central Excise Act on the ground that the registration of the erstwhile owner has not yet been cancelled. - Decided in favour of assessee.

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• 2014 (11) TMI 426
  Power of tribunal to grant stay beyond the total period of 365 days - extension of stay granted earlier - extension order should be speaking or not - Held that:- In view of the decision in case of Commissioner vs. Small Industries Development Bank of India (2014 (7) TMI 738 - GUJARAT HIGH COURT) it can be concluded that the Tribunal did not lack the power to extend stay beyond 365 days from the initial date of granting stay. However, if the stand of the revenue is that such extension was without recording reasons or without passing speaking order as required by the decision of this Court in case of Commissioner vs. Small Industries Development Bank of India (2014 (7) TMI 738 - GUJARAT HIGH COURT) it would be open for the Department to move a rectification application before the Tribunal - Appeal disposed of.

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• 2014 (11) TMI 425
  MODVAT credit - Validity of Tribunal's order - tribunal rejected the appeal without addressing the specific plea of the assessee - Held that:- Even though a specific plea has been raised by the appellant in this regard, in paragraph (3) of the grounds of appeal, the Tribunal has simply brushed aside the plea saying that the assessee's appeal does not contain any challenge on this ground. Therefore, there is a clear non application of mind by the Tribunal in this regard. Though the notification is referred to by the Tribunal as Notification No.67/97, dated 16.3.1997, the actual notification is bearing No.67/95, dated 16.3.1995. The Tribunal discarded the above said legal plea stating that none of these contentions has been substantiated by them. We find no reason is given by the Tribunal on the legal plea raised by the appellant. The Tribunal has merely stated that there is no merit in the assessee's case. We find that the order of the Tribunal is bereft of reasons and there is no analysis of the question of law raised before them. In our considered opinion, on this score also the order of the Tribunal cannot be countenanced. - Matter remanded back - Decided in favour of assessee.

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• 2014 (11) TMI 424
  Restoration of appeal - Appeal dismissed for non compliance with pre deposit order - Benefit of exemption - Bogus receipts - Evasion of payment of duty - abetting the accounting of bogus receipts - Held that:- Appellant in this case has complied with the direction of this Court. The delay in filing this appeal and the payment of pre-deposit has already been condoned by this Court by order dated 18.9.2014. Hence, we find that there is enough justification for the appellant to pursue the appeal before the Tribunal, which came to be dismissed on 13.12.2012. Accordingly, we are inclined to allow the appeal setting aside the order passed by the Tribunal dated 13.12.2012 for non-compliance of the order directing pre-deposit - Decided in favour of assessee.

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• 2014 (11) TMI 423
  Waiver of pre deposit - Revenue appeal - Confiscation of certain seized raw material - Provisional release of goods - Redemption fine - Clandestine removal of goods - Suppression of production of goods - Held that:- Assessee had not obtained central excise registration. The principal manufacturers, from whom the assessee had obtained the poly film allegedly on job work basis, were not registered for the purposes of central excise and were not found to be paying central excise duty on the goods received from the assessee nor were they found to be using the goods in the manufacture of dutiable goods. The Managing Director of the assessee admitted during the course of his statement that the assessee was undertaking manufacturing activity without obtaining central excise registration and was clearing the goods without payment of excise duty. These facts cannot simply be brushed aside particularly at the prima facie stage while considering an application for waiver of pre-deposit. On these facts, it cannot be held that the assessee had made out a prima facie case either for a waiver of pre-deposit in totality or for an order to the effect that a further amount of Rs. 20 lacs, as stated on behalf of the assessee, would amount to a fair order on the application for waiver of pre-deposit. Having due regard to the quantum of duty demand of Rs. 3.85 crores, an order for the deposit of Rs. 20 lacs over and above the amount of Rs. 40 lacs, which has already been deposited by the assessee, cannot be regarded as amounting to a proper exercise of the discretion in law by the Tribunal. We are of the view that the ends of justice would be met if the assessee is directed to deposit a total amount of Rs. 1 crore after giving due credit for the amount of Rs. 40 lacs, which has already been deposited by the assessee. - Stay order of the tribunal modified - Decided in favor of revenue.

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• 2014 (11) TMI 422
  Waiver of pre deposit - Delay in payment of duty - Violation of provisions of Rule 8(3A) of Central Excise Rules, 2002 - Penalty u/s 11AC – Availment of CENVAT Credit - Held that:- out of the total duty demand of Rs. 88.80 lacs, an amount of Rs. 16.70 lacs was deposited from the cenvat credit, which was not permissible in view of the provisions of Rule 8(3A) of the Rules. Moreover, it is also necessary to note that this is not a case where there was a default simpliciter. The assessee furnished details of 32 cheques, out of which, it is an admitted position that only one cheque of Rs. 92,700/- was honoured; 18 cheques for the payment of duty in the amount of Rs. 34.37 lacs were not honoured due to insufficiency of funds. But, what reflects on the willful misstatement of the assessee is that, in the case of the balance 13 cheques, the assessee produced counterfoils of the Bank with stamps and it was, on enquiry, found that the cheques were never presented with the Bank at all for the payment of duty. Provisions of Rule 25 of the Rules were attracted since there was an intent to evade the payment of duty. For these reasons, prima facie, we are of the view that no substantial question of law would arise in the appeal. However, in order to facilitate compliance with the order of the Tribunal, we extend time for making deposit by further period of two months from date of this order - Decided against the assessee.

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• 2014 (11) TMI 419
  Power of Tribunal to extend stay beyond the period of 365 days - extension of stay granted earlier - Held that:- In view of the decision in case of Commissioner vs. Small Industries Development Bank of India (2014 (7) TMI 738 - GUJARAT HIGH COURT) it can be concluded that the Tribunal did not lack the power to extend stay beyond 365 days from the initial date of granting stay. However, if the stand of the revenue is that such extension was without recording reasons or without passing speaking order as required by the decision of this Court in case of Commissioner vs. Small Industries Development Bank of India (2014 (7) TMI 738 - GUJARAT HIGH COURT) it would be open for the Department to move a rectification application before the Tribunal.

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• CST, VAT & Sales Tax

• 2014 (11) TMI 420
  Abkari offence - Recovery of dues under Kerala Revenue Recovery Act - The main contention urged by the petitioner is that there is no necessity to attach his property as he is willing to pay an amount of Rs. 1,75,000/- in lieu of confiscation - appellant claims that, but he has no obligation to pay any interest on the said amount - Held that:- liability to pay the security amount arises when there is default on the part of the petitioner in not producing the vehicle before the competent authority. Apparently,the revisional order was passed by the Excise Commissioner on 5.11.2011. Admittedly, the vehicle was not produced after the order was passed in terms of Ext.P1. Therefore, the petitioner will have the liability to pay the security amount as well as interest on the amount due atleast from the date from which Ext.P1 was passed. Petitioner cannot contend that he is not liable to pay interest on the security amount after having failed to surrender the vehicle as per the directions issued in Ext.P1. In such circumstances, it was open for the Excise Department to demand security amount with interest which they have done and it is in the said circumstances that Exts.P2, P3 and P4 has been issued - Decided against assessee.

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