TMI Tax Updates - e-Newsletter
December 18, 2017

Case Laws in this Newsletter:

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

TMI SMS

• GST Council decides that Inter-State e-way Bill to be made compulsory from 1st of February, 2018

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News

1. The 24th GST Council Meeting held today through video conferencing decides that Inter-State e-way Bill to be made compulsory from 1st of February, 2018;

2. Frequently Asked Questions - GST

3. The Union Minister of Finance and Corporate Affairs, Shri Arun Jaitley holds his 7th Pre-Budget Consultation Meeting with the representatives of the Banks and Financial Institutions (FIs) in national capital;

4. CAFRAL Conference on “Financial System and the Macroeconomy” (Opening remarks by Dr. Urjit R. Patel, Governor- December 7, 2017 – Mumbai)

5. Doubling farm income to make farming sustainable: Jaitley

6. Sovereign Gold Bond Scheme 2017-18 Issue Price

7. India’s Foreign Trade: November 2017

Notifications

GST - States

1. 132/ST-2 - dated 22-11-2017 - Haryana SGST

Notification to exempt all taxpayers from payment of tax on advances received in case of supply of Goods

2. 131/ST-2 - dated 22-11-2017 - Haryana SGST

Notification to exempt suppliers of services through E-Commerce platform from obtaining compulsory registration

3. 130/ST-2 - dated 22-11-2017 - Haryana SGST

Notification to limit the maximum late fee payable for delayed filing of return in FORM GSTR-3B from October, 2017 onwards

4. 129/ST-2 - dated 22-11-2017 - Haryana SGST

Notification to prescribe quarterly furnishing of FORM GSTR-1 for those taxpayers with aggregate turnover of upto ₹ 1.5 Crore

5. 127/ST-2 - dated 17-11-2017 - Haryana SGST

Notification to mandate the furnishing of return in FORM GSTR-3B till March, 2018 by the 20th of the succeeding month under HGST Act, 2017

6. 125/ST-2 - dated 14-11-2017 - Haryana SGST

Notification regarding prescribing 2.5% concessional HGST rates on certain goods supplied to a specific public funded research institutes and subject to specified condition

7. 124/ST-2 - dated 14-11-2017 - Haryana SGST

Amendment in Notification No. 47/ST-2 dated 30.06.2017 under HGST Act, 2017

8. 123/ST-2 - dated 14-11-2017 - Haryana SGST

Amendment in Notification No. 46/ST-2 dated 30.06.2017 under HGST Act, 2017

9. 122/ST-2 - dated 14-11-2017 - Haryana SGST

Amendment in Notification No. 39/ST-2 dated 30.06.2017 under HGST Act, 2017

10. 121/ST-2 - dated 14-11-2017 - Haryana SGST

Amendment in Notification No. 38/ST-2 dated 30.06.2017 under HGST Act, 2017

11. 120/ST-2 - dated 14-11-2017 - Haryana SGST

Amendment in Notification No. 36/ST-2 dated 30.06.2017 under HGST Act, 2017

12. 118/ST-2 - dated 27-10-2017 - Haryana SGST

Notification under section 128 of the HGST Act, 2017 for waiver of penalty under section 47 or late filing of GSTR-3B for the months of August and September, 2017

13. F. 17 (131) ACCT/GST/2017-2857 - dated 15-11-2017 - Rajasthan SGST

Last date regarding return in FORM GSTR-3B

14. F. 17 (131) ACCT/GST/2017-2856 - dated 15-11-2017 - Rajasthan SGST

Seeks to extend the due date for revision for declaration in FORM GST TRAN-1

15. F. 17 (131) ACCT/GST/2017-2855 - dated 15-11-2017 - Rajasthan SGST

Seeks to extend the due date for submitting the declaration in FORM GST TRAN-1

16. F. 17 (131) ACCT/GST/2017-2800 - dated 28-10-2017 - Rajasthan SGST

Amendment in notification Number 2668, dated 13th October 2017

17. F. 17 (131) ACCT/GST/2017-2788 - dated 28-10-2017 - Rajasthan SGST

Extend the period for submitting the declaration in FORM GST TRAN-1

18. F. 17 (131) ACCT/GST/2017-2776 - dated 28-10-2017 - Rajasthan SGST

Extend the period for intimation of details of stock (Exercised in FORM GST CMP-03)

19. F. 17 (131) ACCT/GST/2017-2767 - dated 28-10-2017 - Rajasthan SGST

Extend the period for submitting the declaration in FORM GST TRAN-1 (rule 117)

20. F. 17 (131) ACCT/GST/2017-2752 - dated 28-10-2017 - Rajasthan SGST

Extend the period for submitting electronically the application in the FORM GST REG-26

21. NO.F.1-11(91)-TAX/GST/2017(Part-VII)-44/2017-State Tax (Rate) - dated 14-11-2017 - Tripura SGST

seeks to amend Notification No. 5/2017-State Tax (Rate), dated the 29th June, 2017

22. No.F.1-11(91)-TAX/GST/2017(Part-VII)-42/2017-State Tax (Rate) - dated 14-11-2017 - Tripura SGST

Seeks to Amend Notification No. 2/2017-State Tax (Rate), dated the 29th June, 2017

23. NO.F.1-11(91)-TAX/GST/2017(Part-VII)-41/2017-State Tax (Rate) - dated 14-11-2017 - Tripura SGST

Seeks to Amend Notification No. 1/2017-State Tax (Rate), dated 29th June, 2017

24. NO.F.1-11(91)-TAX/GST/2017(Part-VII)- 43/2017-State Tax (Rate) - dated 14-11-2017 - Tripura SGST

Seek to Amend Notification No. 4/2017-State Tax (Rate), dated the 29th June, 2017

25. NO.F.1-11(91)-TAX/GST/2017(Part) - dated 14-11-2017 - Tripura SGST

Notification regarding evidences required to be produced by the supplier of deemed export supplies for claiming refund

26. NO.F.1-11(91)-TAX/GST/2017(Part-X) - dated 9-11-2017 - Tripura SGST

Notification on the TSGST (Eleventh Amendment) Rules, 2017

27. NO.F.1-11(91)-TAX/GST/2017(Part) - dated 9-11-2017 - Tripura SGST

Notification on the TSGST (Tenth Amendment) Rules, 2017

28. NO.F.1-11(91)-TAX/GST/2017(Part) - dated 9-11-2017 - Tripura SGST

Notification No.39/2017-State Tax (Rate), dated 09.11.2017

29. NO.F.1-11(91)-TAX/GST/2017(Part) - dated 9-11-2017 - Tripura SGST

Notification regarding deemed export

30. F.1-11(98)-TAX/GST/2017 - dated 4-11-2017 - Tripura SGST

Notification regarding Tripura Authority for Advance Ruling

31. NO.F.1-11(91)-TAX/GST/2017(Part-VII) - dated 2-11-2017 - Tripura SGST

Notification regarding specifying that the officers appointed under the CGST Act, 2017 (12 of 2017) who are authorized to the proper officers for the purposes of section 54 0r section 55 of the CGST Act

Circulars / Instructions / Orders

GST - States

1. 04/2017 - dated 12-12-2017

Manual filing and processing of refund claims in respect of zero-rated supplies

2. Order No. 01/2017 - dated 17-11-2017

Division of Taxpayer base between the Central Government (Jaipur Zone) and the State Government of Rajasthan -reg.

3. F. 16(60)172/167/RIPS/(GST)/Tax/CCT/16-17/4004 - dated 6-11-2017

DC(minor taxes) HQ as the CSDO for the purpose of disbursement of Investment Subsidy and Employment Generation Subsidy

4. 03/2017 - dated 26-10-2017

Clarification on issues wherein the goods are moved within the State or from the State of registration to another State for supply on approval basis

Customs

5. 156/2017 - dated 15-12-2017

Subject: - Procedure for execution / monitoring of “No Use Bond” in respect of clearance of import FCL containers involving NOC from Participating Government Agencies (PGAs) -Reg.

Highlights / Catch Notes

GST

• Inter-State e-way Bill Mandatory from February 1, 2018, as per GST Council Decision.

  News : GST Council decides that Inter-State e-way Bill to be made compulsory from 1st of February, 2018
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Income Tax

• Entertainment Duty Exemption for Multiplex Theatres is Capital Receipt, Non-Taxable Under Subsidy Scheme.

  Case-Laws - SC : Nature of receipt under the subsidy scheme - Multiplex Theatre Complexes - exemption of entertainment duty - the receipt is in the nature of capital receive - not taxable - SC
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• Court Rules: Company Not Public Limited u/s 2(22)(e) Due to 38.31% Shareholding by Assessee.

  Case-Laws - HC : Deemed dividend u/s 2(22)(e) - the finding that the company was recipient company could not be held to be public limited company on the basis that the assessee had 38.31% shares cannot be accepted. - HC
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• TPO and DRP failed to benchmark taxpayer prices with comparable entities, violating rule 10B(1)(a) in transfer pricing case.

  Case-Laws - AT : Transfer pricing adjustment - In the entire episode, there is no reference to the price paid by the comparables as a yardstick for comparing with the price paid by the assessee. The approach adopted by the TPO, as approved by the DRP, does not conform to the prescription of rule 10B(1)(a) - AT
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• Share Transaction Losses Are Capital Losses, Not Bad Debts u/s 36(i)(vii) of Income Tax Law.

  Case-Laws - AT : The loss on account of share transactions is a capital loss. The loss arising from "investments" in shares cannot be claimed as bad debt under the provisions of section 36(i)(vii) r.w.s. 36(2)(i) - AT
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• Section 142A of the Income Tax Act is not retroactive; applies only from October 1, 2014.

  Case-Laws - AT : Reference of matter to the Valuation Cell u/s 142A - There is no merit in the Department’s contention that the extant section 142A is applicable retrospectively. The section has specifically been made applicable, by the legislature itself, w.e.f. 1.10.2014 and so, it cannot be said to operate retrospectively. - AT
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• Penalty Not Imposed: AO's Unclear Basis u/s 271(1)(c) on Concealment or Inaccurate Income Details.

  Case-Laws - AT : Penalty u/s 271(1)(c) - recording of satisfaction - AO was not clear at all as to the fact whether penalty was being levied on the concealment of income or furnishing of inaccurate particulars of income by the assessee - No penalty - AT
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• 10% Vehicle Expense Disallowance for Personal Use Deemed Reasonable Without Logbook Documentation.

  Case-Laws - AT : Disallowance on account of personal use of vehicle maintenance - 10% of vehicle running and maintenance expenses is a reasonable estimate and in absence of log book - AT
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• Substantive addition in AHRPL case makes protective addition in ADIPL case unjustified due to double taxation risk.

  Case-Laws - AT : Addition on protective basis - when substantive addition qua the same amount has already been made in case of AHRPL, there is no question confirming the protective addition in case of ADIPL because one income cannot be taxed twice. - AT
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• MAT Credit Dispute: Court Rules Against Exclusion of Surcharge and Cess in Tax Credit u/s 115JAA.

  Case-Laws - AT : Determining the MAT credit u/s 115JAA - Non granting credit for surcharge and cess while computing the tax credit u/s 115JAA - department cannot be unjustly enriched with the surcharge and cess portion of the amounts actually paid by the assessee - AT
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Customs

• Court Rules No Extension Beyond Six Months for Unmet Export Obligations, Even in Hardship Cases.

  Case-Laws - HC : Non-fulfillment of export obligations within time - even if it is assumed that the petitioner had made out a genuine case of hardship – which this Court finds that the petitioner has not – no extension beyond a period of six months for completion of the export obligation could be granted. - HC
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Indian Laws

• Apex Court's Original Jurisdiction Requires Legal Vesting to Maintain Legislative Intent and Preserve Separation of Powers.

  Case-Laws - SC : Original Jurisdiction of Apex Court - Original jurisdiction in this Court has to be vested in law. Unless it is so vested and the Court assumes, the court really scuttles the forum that has been provided by the legislature to a litigant.
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Service Tax

• Ex-Servicemen Welfare Resettlement Activities Liable for Service Tax as Security Agency Services Without Profit Motive Requirement.

  Case-Laws - AT : Levy of service tax - security agency service - appellant are mainly involved in resettlement activities related to welfare of ex-servicement - There is no warrant for reading therein requirement of profit motive - the service rendered by appellant is liable to tax - AT
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Central Excise

• CENVAT Credit Denial for Vehicles Overturned Due to Lack of Evidence on Unsuitability for Goods Transport.

  Case-Laws - AT : CENVAT credit - vehicles - the receipt of inputs has been denied only on the ground of the vehicles were not capable of transportation of goods - revenue failed to prove its case beyond doubt, demand set aside - AT
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Case Laws:

• Income Tax

• 2017 (12) TMI 816
  Nature of receipt under the subsidy scheme - whether was not in the nature of a helping hand to the trade but was capital in nature - subsidy scheme of the State Government took the form of an exemption of entertainment duty in Multiplex Theatre Complexes newly set up, for a period of three years, and thereafter payment of entertainment duty @ 25% for the subsequent two years Held that:- As stated in the statement of objects and reasons, of the amendment ordinance was that since the average occupancy in cinema theatres has fallen considerably and hardly any new theatres have been started in the recent past, the concept of a Complete Family Entertainment Centre, more popularly known as Multiplex Theatre Complex, has emerged. These complexes offer various entertainment facilities for the entire family as a whole. It was noticed that these complexes are highly capital intensive and their gestation period is quite long and therefore, they need Government support in the form of incentives qua entertainment duty. It was also added that government with a view to commemorate the birth centenary of late Shri V. Shantaram decided to grant concession in entertainment duty to Multiplex Theatre Complexes to promote construction of new cinema houses in the State. The aforesaid object is clear and unequivocal. The object of the grant of the subsidy was in order that persons come forward to construct Multiplex Theatre Complexes, the idea being that exemption from entertainment duty for a period of three years and partial remission for a period of two years should go towards helping the industry to set up such highly capital intensive entertainment centers. This being the case, it is difficult to accept Mr. Narasimha s argument that it is only the immediate object and not the larger object which must be kept in mind in that the subsidy scheme kicks in only post construction, that is when cinema tickets are actually sold. We hasten to add that the object of the scheme is only one -there is no larger or immediate object. That the object is carried out in a particular manner is irrelevant, as has been held in both Ponni Sugar [2008 (9) TMI 14 - SUPREME COURT ]and Sahney Steel [1997 (9) TMI 3 - SUPREME Court]. Since the subsidy scheme in the West Bengal case is similar to the scheme in the Maharashtra case being to encourage development of Multiplex Theatre Complexes which are capital intensive in nature, and since the subsidy scheme in that case is also similar to the Maharashtra cases, in that the amount of entertainment tax collected was to be retained by the new Multiplex Theatre Complexes for a period not exceeding four years, we are of the view that West Bengal cases must follow the judgment that has been just delivered in the Maharashtra case. - Decided against revenue

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• 2017 (12) TMI 815
  Penalty u/s 271(1)(c) - addition u/s 68 - Held that:- This Court is of the opinion that given the finality to the quantum proceedings which fixed the liability upon the income of Rs. 1,34,584/- and the nature of the addition, the imposition of penalty in the circumstances could not be faulted. The citing of past instance or the lack of absence of cross-examination in no way, in the opinion of the Court, vitiates the initiation and culmination of penalty proceedings. No substantial question of law arises.

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• 2017 (12) TMI 814
  Disallowance on account of fluctuation in rates on foreign exchange, from the deduction under section 10B - Held that:- Section 10B of the Act provides for deduction of such profits and gains as are derived by a hundred per cent export oriented undertaking from the export of articles or things or computer software for the period and subject to the conditions stipulated there under. Therefore, the deduction is permissible if such profits and gains as are derived from the export of articles and things. As held exact remittance in connection with such export would depend on the precise exchange rate at the time when the amount is remitted. The receipt would be on account of the export made and therefore, the fluctuation thereof must also be said to arise out of the export business. Merely because of fluctuation in the international currencies, the income does not get divested of the character of income from export business. The Tribunal, therefore, did not commit any error in deleting the addition made on account of fluctuation in foreign exchange rates from the deduction under section 10B of the Act.

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• 2017 (12) TMI 813
  Validity order passed under sections 206C(6) and 206C(7) - requisite details of the tax collected at source from the buyers - Held that:- This was not a case of non-collection of tax at source and that the assessee had already filed requisite details to establish the TCS collected from its buyers, no infirmity can be found in the impugned order passed by the Tribunal in upholding the deletion of the demand raised by the Assessing Officer under sections 206C (6) and 206C (7) of the Act. No substantial question of law, warranting interference. The appeals, therefore, fail and are, accordingly, summarily dismissed.

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• 2017 (12) TMI 812
  Estimation of income - bogus purchases - substantial question of law or fact - Commissioner (Appeals) has estimated the same at 25% whereas the Tribunal has estimated the same at 5% - Held that:- Under the circumstances, whether the addition on account of bogus purchases should be estimated at 25% or at 5% cannot be said to be an issue of law giving rise to any question of law. Unexplained cash deposits in the bank accounts - Held that:- The assessee had submitted cash book after properly recording the entries and submitted the same with the paper book. However, the Assessing Officer has not been able to pinpoint any defect in the complete cash book furnished by the assessee. Under the circumstances, when no defects could be pointed out by the AO in the cash book furnished by the assessee, no infirmity can be found in the reasoning adopted by the Tribunal while deleting such addition. Resultantly, the second question, as proposed by the revenue, also does not merit acceptance.

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• 2017 (12) TMI 811
  Addition u/s 14A - Held that:- If the assessee has not earned any taxfree income, the corresponding expenditure incurred cannot be taken into consideration for disallowance. See Commissioner of Income Tax v. Shivam Motors (P) Ltd. [2014 (5) TMI 592 - ALLAHABAD HIGH COURT] - Decided in favour of assessee.

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• 2017 (12) TMI 810
  Deemed dividend u/s 2(22)(e) - assessee had obtained a loan from M/s. Dewas Soya Ltd. in which assessee held 38.31% shares - proof that the lending company was the one of which public was substantially interested - Held that:- Assessing Officer's observation to the effect that the assesse has procured funds from M/s.Dewas Soya Ltd in which the assessee had 38.31% shares was without basis and therefore, the amount of Rs. 1,00,00,000/- could not have been treated as deemed dividend under Section 2(22)(e) of the Act. The Tribunal did not find any infirmity with the order of CIT (A) which it found was a well reasoned order. Accordingly, the provisions of Section 2(22)(e) were not attracted. We find nothing wrong in the order passed by the Tribunal on this aspect. Even otherwise the finding that the company was recipient company could not be held to be public limited company on the basis that the assessee had 38.31% shares cannot be accepted. The assessee of a limited company was entitled to hold shares of other corporate entities and holding of 38.31% shares of M/s. Dewas Soya Ltd will not by itself constitute reason enough to hold that the company is not a public limited company or the company in which public are not substantially interested in. The company M/s. Dewas Soya Ltd. and the assessee were apparently part of the same group. There is nothing on record to suggest that the company was privately held merely because the assessee held 38.31% shares. The Tribunal as the last fact finding Court has clearly opined that the company was one in which the public was substantially interested. In the circumstances the question nos.1 and 2 as proposed will not construe substantial questions of law that requires consideration by the Court. Addition made on account of employees' contribution as the provident fund - Held that:- The assessee was found to have deposited the amount within grace period and hence there is no substance in the grievance of the Revenue. Thus even the third question does not require any further consideration.

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• 2017 (12) TMI 809
  TPA - MAM selection - TNMM application - Held that:- TNMM can be correctly applied on entity level if the international transactions are on sale by the taxpayer to its foreign AE and there is no other international transaction of sale to any outsider and also there is no other international transaction. In the instant case, undisputedly, there is no other international transaction. The taxpayer has only minuscule transaction with non-AE, the bifurcation of which has been given. Detail available includes inter alia the name of the employees, the month-wise payment for the work exclusively done for non-AE/domestic enterprises. All these details were available before ld. TPO who has not raised any query. This detail was also available before the DRP but has not been considered in the right perspective. AO/TPO/DRP have erred in disregarding the segmental result of the taxpayer by proceeding to consider the margin of the taxpayer at the entity level for the transfer pricing analysis. So, by accepting the TNMM as the most appropriate method and in the face of the fact that the taxpayer was having separate international transaction with its AE, the ALP of the same is to be determined whereas ALP of the other transactions of the taxpayer with non-AE is not to be considered. Even otherwise, TP adjustment is not possible without taking into account the segmental result. As such, TPO/DRP cannot unilaterally adopt entity level result in determining the ALP of international transaction. So, in these circumstances, TP adjustment made by the AO/TPO/DRP by taking the margin of the taxpayer at entry level for TP adjustment is not sustainable, so we hereby remand back the case to the TPO to decide afresh after considering segmental result of the taxpayer for TP analysis.

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• 2017 (12) TMI 808
  Addition u/s 14A - Held that:- Disallowance as contemplated u/s 14A of the Act cannot exceed exempt income. Therefore, we direct the A.O. to restrict the disallowance worked out under Rule 8D(2)(iii) to the extent of exempt income earned by the assessee for the relevant period. Disallowance of amortization of software development expenses - assessee filed a rectification application u/s 154 seeking rectification of deletion made by the A.O. towards disallowance of amortization of software expenses as the CIT(A) has allowed the claim of the assessee with regard to depreciation on total block of assets - Held that:- We find that the issue of amortization of software development expenses and depreciation on capital expenditure has been dealt by the CIT(A) in his appellate order and allowed relief to the assessee on both the counts. We further noted that the CIT(A) in his rectification order dated 09.12.2016 rectifying the said mistake had allowed relief only in respect of claim of depreciation on software expenditure and confirmed the addition made by the A.O. towards disallowance of amortization of software expenditure. Therefore, we are of the view that the ground raised by the Revenue challenging deletion made by the CIT(A) becomes infructuous and hence the same is dismissed.

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• 2017 (12) TMI 807
  Disallowance under section 14A - no exempt income has been earned or received by the assessee - Held that:- We find that the Hon’ble Delhi High Court in the case of Cheminvest Ltd (2015 (9) TMI 238 - DELHI HIGH COURT) has clearly held that no disallowance under section 14A of the Act can be made in a year in which no exempt income has been earned or received by the assessee. In our considered opinion, the learned CIT(A) has followed the binding precedents of the Hon’ble Delhi High Court on the issue in dispute and we do not find any error in the said finding of the learned CIT(A)- Decided in favour of assessee.

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• 2017 (12) TMI 806
  Revision u/s 263 - Belated payment of employees’ contribution to PF - Held that:- We find that the issue of belated payment of employees’ contribution to PF has been examined by the A.O. in assessment proceedings by issuing a specific questionnaire dated 13.01.2015 for which the assessee has filed a letter dated 16.02.2015 explaining the reason for delay in payment of PF. The assessee has also explained in the light of the decision of the Hon’ble Kerala High Court in the case of Kerala State Warehousing Corporation Limited (2009 (12) TMI 1010 - KERALA HIGH COURT) and argued that the employees’ contribution remitted after due date prescribed under respective Acts, but before the date of filing of return of income as per section 139(1) of the Incometax Act, 1961, cannot be disallowed in view of the amended provisions of section 43B. The A.O. after considering the explanation of the assessee has taken one of the possible views with which the CIT does not agree, it cannot be treated as an erroneous order prejudicial to the interest of the revenue, unless the view taken by the A.O. is unsustainable in law. We are of the view that the assessment order passed by the A.O. is neither erroneous nor prejudicial to the interests of the revenue. Therefore, we set aside the order passed by the CIT u/s 263 and restore the assessment order passed by the A.O. u/s 143(3) of the Act. - Decided in favour of assessee

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• 2017 (12) TMI 805
  Validity of reopening of assessment u/s 147/148 - unexplained cash deposited in the joint account of the assessee and his wife - Held that:- The wife of the assessee stated that the entire cash in the account was deposited by the assessee. Therefore, in the absence of showing this amount in the return of income the AO on the basis of an enquiry conducted during the assessment proceedings of the wife of the assessee found that this transaction pertains to the assessee which constitutes a tangible material to belief that the income assessable to tax as escaped assessment. Further, there is no assessment and the return of income was processed only u/s 143(1) of the Act, therefore, it is not a case of change of opinion. Only during the course of assessment proceedings the AO came to know that the assessee sold the house. Accordingly no error or illegality in the action of the AO to reopen the assessment u/s 147/148 of the IT Act Assessment made u/s 144 - Held that:- The assessee did not response to the notice issued u/s 148 and further, the assessee has also not filed the return of income in response to the notice issued u/s 148 of the Act. However, the assessee requested the AO consider the original return of income as return filed in response to the notice issued u/s 148 of the IT Act. Thereafter, the assesse did not appear before the Assessing Officer. Accordingly, when the assessee has chosen not to participate in the assessment proceedings then the AO was left with no option but to complete the assessment u/s 144 of the Act. Addition u/s 69A - Held that:- The payment made for the purchase of new house has gone from the bank account in which the cash was deposited. Even otherwise if the contention of the assessee is accepted that he has received part of sale consideration in cash then applying the same analogy the purchase consideration paid in cash for purchase of new house is also required to be explained by the assessee and at least in the same ratio the purchase consideration in cash has not been explained by the assessee. Thus, it is clear that cash consideration if any received by the assessee, the same has been paid for purchase of the new house and therefore, the source of cash deposit in the back account remained unexplained. The assessee has relied upon various decisions however, in those decisions there are some documents to support the receipt of cash consideration. Hence, the assessee has failed to explain the source of Rs. 20,54,500/- cash deposit in the bank. Claim of the assessee u/s 54 - Held that:- Accordingly when the entire investment for the purchase of new house has gone through the assessee’s account then the benefit u/s 54 of the Income Tax Act cannot be denied on the ground the new house was purchased in the name of wife. Hence, the claim of the assessee u/s 54 of the Income Tax Act is allowed.

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• 2017 (12) TMI 804
  Addition u/s 14A - Held that:- The assessee has not earned any exempt income during the impugned AY. It is well settled legal proposition that no disallowance u/s 14A is warranted for in case no exempt income is earned by the assessee. - Decided against revenue

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• 2017 (12) TMI 803
  Bogus purchases - addition on inflated purchases - Held that:- AO has assessed five assessment years and found discrepancies only in two AYs relevant to AY 2008-09 and 2013-14 and none of the regular suppliers have denied that they have sold material to assessee nor have they accepted to have issued any accommodation entries. By considering the above discussion, in our considered view, there is no cogent material in support of the findings of AO that assessee has in fact recorded any bogus purchases and it is clear from the submission of the assessee that these are actual wastages incurred by the assessee in its business and also assessee has declared ‘scrap sale’ for the value of wastage to the extent of Rs. 90,63,070/-, which is much higher than the alleged value of inflated invoices. Hence, we are in agreement with the findings of the CIT(A) in deleting the addition made by the AO on this count and accordingly, we uphold the order of CIT(A) and dismiss the grounds raised by the revenue.

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• 2017 (12) TMI 802
  Depreciation claim of assessee trust - double deduction - Held that:- The assessee is not into business and its profits are exempt. The assets acquired are out of application of capital funds and the depreciation is calculated to determine the actual income over expenditure. The allowability of deduction of depreciation in the case of a charitable / religious trust is supported by a number of other legal precedents by Hon’ble Courts. Thus a charitable / religious trust is entitled to deduction of depreciation allowance and such a deduction does not amount to double benefit or double deduction. Accordingly, we delete the disallowance made on this count and ground is accordingly allowed.

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• 2017 (12) TMI 801
  Transfer pricing adjustment - mechanism adopted by the TPO of applying the CUP method - CUP v/s TNMM - aggregation and application of the correct methods - Held that:- TPO has simply computed ratio of the expenses of Royalty and Technical services fees to Sales of the comparables at 0.28% and, then, proceeded to apply such benchmark for determining the ALP of the two international transactions under consideration. In the entire episode, there is no reference to the price paid by the comparables as a yardstick for comparing with the price paid by the assessee. The approach adopted by the TPO, as approved by the DRP, does not conform to the prescription of rule 10B(1)(a) inasmuch as he sought to compare percentage of expenses to sales rather than the price paid under a comparable uncontrolled situation. Ergo, we cannot countenance the mechanism applied under the CUP method, which is not in consonance with the procedure prescribed under the relevant rule. Similar view has been taken by the Delhi Tribunal in the case of Gruner India Pvt. Ltd. vs. DCIT [2016 (6) TMI 1005 - ITAT DELHI ]. HC of the same case [2017 (1) TMI 389 - DELHI HIGH COURT] did not disturb the overturning by the Tribunal of the similar mechanism adopted by the TPO of applying the CUP method and working out the transfer pricing adjustment by considering the Royalty and Technical services fee to Sales ratio of that assessee as well as the comparables. It is, therefore, held that the TPO did not correctly compute the ALP of the international transactions of Royalty and Technical Services fee under the CUP method. Thus set aside the impugned order and remit the matter to the file of Assessing Officer/TPO for a fresh adjudication in the light of the guidance provided in the case of Gruner India Pvt. Ltd. (supra).

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• 2017 (12) TMI 800
  TPA - selection of comparable criteria - Held that:- Companies functionally dissimilar with that of Market Support Service segment of assessee need to be deselected from final list of comparable.

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• 2017 (12) TMI 799
  TPA - comparable selection - Held that:- The assessee is an entity which was part of Lehman Brothers group and had offered financing and advisory salutations to its clients in India in the field of Investment Banking Division. It is claimed that the Investment Banking Division (IBD) serve Corporate, Institutional and Government clients. It claimed to serve the clients capital-raising needs through specialized product groups in underwriting, private placements, leveraged finance and other activities associated with debt and equity products, thus companies functionally dissimilar with that of assessee need to deselected from final list.

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• 2017 (12) TMI 798
  Disallowance of vehicle expenses - ingenuity of claim - Held that:- The assessee has not produced the supporting evidence in respect of the vehicle expenses and further expenses were incurred in cash and no log books regarding the use of the vehicle was maintained by the assessee. Accordingly in the facts and circumstances of the case the disallowance restricted by the ld. CIT(A) to 10% of the vehicle expenses is just and proper and does not require any interference. Hence, this ground of the assessee’s appeal is dismissed. Disallowance of interest on advance given to the sister concern - Held that:- Though the assessee has availed the cash credit facility as well as overdraft facility from ICICI Bank on which interest of Rs. 8,24,998/- was paid during the year under consideration however, neither the Assessing Officer nor the ld. CIT(A) has verified this fact that when the assessee is having its own sufficient funds to give advance to the sister concern then without establishing a direct nexus between the borrowed fund and advance no disallowance on account of interest is called for. It is not in dispute that the assessee’s own fund is more sufficient to met the requirement of advance to sister concern. If the assessee’s capital and profit during the year is taken into consideration the same is more than the loan given to the sister concern. Therefore, having regard to the fact that the assessee’s own capital and profit during the year amounting more than Rs. 25,00,000/- then, a presumption can be raised that the advance given the assessee of Rs. 5,61,000/- is from its own fund and not from borrowed fund. Accordingly the disallowance made by the AO is deleted.

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• 2017 (12) TMI 797
  Disallowance of bogus purchase - Held that:- The Sales Tax Department in its enquiry has found the parties to be providing bogus accommodation entries. The assessing officer also issued notices to these parties at the addresses provided by the assessee. All these notices have returned unserved. Assessee has not been able to produce any of the parties. Neither the assessee has been able to produce any confirmation from these parties. In such circumstances, there is no doubt that these parties are non-existent. We find it further strange that assessee wants the Revenue to produce assessee’s own vendors, whom the assessee could not produce. The purchase bills from these non-existent/bogus parties cannot be taken as cogent evidence of purchases. In light of the overwhelming evidence, the Revenue authorities cannot put upon blinkers and accept these purchases as genuine. This proposition is duly supported by Hon’ble Apex Court decision in the case of Sumati Dayal vs. CIT [1995 (3) TMI 3 - SUPREME Court] and CIT vs. Durga Prasad More [1971 (8) TMI 17 - SUPREME Court]. In the present case, the assessee wants that the unassailable fact that the suppliers are non-existent and, thus, bogus should be ignored and only the documents being produced should be considered. This proposition is totally unsustainable in light of Hon’ble Apex Court decisions. - Decided against assessee. For A.Y. 2011-12 we direct that 6.5% disallowance for bogus purchase by the ld. Commissioner of Income Tax (Appeals) serves the interest of justice. The Hon'ble jurisdictional High Court in the case of Nikunj Eximp Enterprises (2013 (1) TMI 88 - BOMBAY HIGH COURT ) has also expounded that when sales are not doubted, 100% disallowance of purchase is not feasible. Although fact of the case were a little different as referred above. As regards the ground raised by the assessee that only 2% disallowance should be done following the Tribunal’s decision we are of the considered opinion that in our order we have followed Hon’ble High Court decision. In the hierarchy of judicial precedence, the decision of the higher court prevail over the tribunal decision. Hence, we dismiss these grounds raised by the assessee.

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• 2017 (12) TMI 796
  Disallowance made u/s. 14A read with Rule 8D - Held that:- No infirmity in the proposition that when no exempt income is earned, no disallowance u/s. 14A should be made. However, this aspect as to whether the assessee has earned exempt income or not, remains to be examined at the level of the Assessing Officer. Hence, we remit the issue to the file of the Assessing Officer to examine as to whether the assessee has earned exempt income or not. If the assessee has not earned any exempt income, then as per the ratio emanating from the above, the Hon'ble jurisdictional High Court decisions, no disallowance u/s. 14A is required. Needless to add, the assessee should be granted adequate opportunity of being heard Addition of bogus accommodation entry - Held that:- We find that this Tribunal in the case of M/s. JSW Steel (Salav) Limited vs. DCIT [2017 (2) TMI 444 - ITAT MUMBAI] for the same assessment year has decided the identical issue against the assessee

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• 2017 (12) TMI 795
  Addition u/s 41 - “remission” or “cessation” of liabilities - Held that:- In the case in hand, we observe that in first instance receipt of share application money does not result in generation of creditors or trade liabilities. Secondly, the assessee throughout reflected share application money in its Balance Sheet acknowledging receipt of such amount, therefore, “remission” or “cessation” of liabilities by flux of time does not arise. Thus, in view of the facts of the case and judgments referred above, we hold that share application money received by assessee and duly reflected in the Balance Sheet against which the shares have been allotted by following due procedure of law in the succeeding assessment year cannot be treated as remission/cessation of liability. The provisions of section 41(1)(a) were wrongly invoked by the Assessing Officer to tax share application money. Accordingly, the impugned order is set aside and the appeal of assessee is allowed.

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• 2017 (12) TMI 794
  Disallowance of Bad Debts written off - loss on account of share transactions - the amount was advanced by the assessee for purchase of shares for investment purpose - Held that:- Commissioner of Income Tax (Appeals) has given a categoric finding that the assessee had shown Short Term Capital Gain arising from sale of shares in the return of income for assessment year 2006-07. It is assessee's own case that he was having running account with Jashnani Leasing s balance in Capital Account Rs. 65,00,000/-. The Hon ble Bombay High Court in the case of Commissioner of Income Tax Vs. Reliance Utilities & Power Ltd. (2009 (1) TMI 4 - BOMBAY HIGH COURT) has held that where both interest free funds and interest bearing funds are available and the interest free funds are more than the investment made, the presumption is that the investments are made out of interest free funds available with the assessee. Thus, in view of undisputed fact that own funds of assessee are sufficient to cover the loan advanced, no disallowance u/s. 36(1)(iii) is called for. Advances to employees - Held that:- We are of the considered view that the Assessing Officer cannot step into the shoes of assessee to determine the quantum of advance to be given to the employees and mode and time of recovery of same. It is the discretion of assessee to decide the quantum of advance, period of advance and the mode of recovery of advance from an employee. The only factor that has to be established is that the persons to whom advances are made are the employees of assessee. As pointed earlier this fact has not been disputed. Accordingly, we are of considered view that in the facts of present case, no disallowance of interest is to be made in respect of advance made to three employees of assessee. Accordingly, ground No. 3 raised in the appeal by assessee is partly allowed in the manner aforesaid. Ad hoc disallowance in respect of various expenses which inter alia include Carriage Inward, Packing Material, Printing & Stationary, Travelling Expenses, Vehicle Repairs, Insurance, Depreciation and Telephone Expenses etc. - Held that:- After perusal of the orders of authorities below and taking into consideration totality of facts, we are of considered view that disallowance in respect of various office expenditure, if restricted to Rs. 1,00,000/- would be suffice to cover omissions and commissions. Accordingly, ground No. 4 raised in the appeal by assessee is partly allowed.

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• 2017 (12) TMI 793
  Grant of registration u/s 12A denied - appellant is not running the educational institution - Held that:- The income and expenditure account of the school shows excess of expenditure over income, of Rs. 4,92,417/-. As per the balance sheet (APB 19-22), the investment in fixed assets has been shown at Rs. 9.20 crore. The investment in purchase of land was of Rs. 22,15,200/- in A.Y. 2011-12. The investment over construction of school building was shown at Rs. 9.98 crore. The returns filed by the assessee have attracted no adverse remark from the Department. In fact, the ld. CIT has himself observed the assessee to have made expenditure after obtaining unsecured loans of more than Rs. 10 crore. This itself goes to show that the expenditure in establishing and running the school was laid out by the assessee Society. The ld. CIT has not made any observation that any expenditure was made by G.D. Goenka. Nothing has been brought on record to show that the assessee Society is working/is to work under G.D. Goenka, or that there is any interference of G.D. Goenka in the affairs of the school run by the assessee Society. There is nothing on record to show that any part of the fund has been utilized by the assessee Society for any profit/gain. Nothing has also been brought on record to show that funds were diverted to either the trustees, or their relatives. There is no violation of section 13 of the I.T. Act, as such. In ‘S.R.M. M. CT. M. Tiruppani Trust vs. CIT’(1998 (2) TMI 3 - SUPREME Court ), it has been held that money having been spent on acquisition of assets for educational institution amounts to application of funds for charitable purposes. - Decided in favour of assessee.

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• 2017 (12) TMI 792
  Reference of matter to the Valuation Cell u/s 142A - rejection of books of accounts - Held that:- Reference made by the AO u/s 142A of the Act without rejection of the assessee’s books of account is invalid. The Additional Grounds are are, accordingly, accepted. This issue was raised by the assessee before the ld. CIT(A) by way of written submissions, as reproduced in the impugned order. However, the ld. CIT(A) has not decided this issue. There is no merit in the Department’s contention that the extant section 142A is applicable retrospectively. The section has specifically been made applicable, by the legislature itself, w.e.f. 1.10.2014 and so, it cannot be said to operate retrospectively.

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• 2017 (12) TMI 791
  Registration granted u/s 12AA cancelled - proof of charitable services - assessee has paid donations for charity outside India - Held that:- In the present case that the Respondent has found that the assessee has paid donations for charity outside India contrary to the provisions of Section’s 11(1)(a) and 11(1)(c) of the Act. In our opinion, this may become point for consideration for disallowance during the course of assessment proceedings and it is the duty of AO to take note of all facts, while considering the same u/s 11 of the Act and thus, the ratio enunciated by the Hon’ble High Court of Madras in the case of M/s Tamil Nadu Cricket Association Vs. DCIT(Exemptions) & others reported in [2013 (12) TMI 833 - MADRAS HIGH COURT] is applicable to the issue on hand. In our opinion, the Respondent having exercising powers u/s 12AA of the Act has to satisfy that the activities of such trust or institution are genuine or not being carried out in accordance with the objects of the trust or institution and the Respondent is empowered to examine all the details of the trust or institution which has got registration u/s 12A in terms of exercising its power under sub-Section 3 of Section 12AA of the Act. We find no adverse remark made by the Respondent regarding the activities of the assessee are not in accordance with the objects and its activies are not genuine. Therefore, in our opinion, exercising jurisdiction under sub-Section 3 of Section 12AA of the Act in cancelling the registration by the Respondent is not maintainable - Decided in favour of assessee.

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• 2017 (12) TMI 790
  Penalty u/s 271(1)(c) - recording of satisfaction - AO was not clear at all as to the fact whether penalty was being levied on the concealment of income or furnishing of inaccurate particulars of income by the assessee - Held that:- It is settled law that penalty cannot be levied for twin charges. Penalty cannot be levied for two mutually exclusive situations. The default for concealment of particulars of income or furnishing of inaccurate particulars are two mutually exclusive situations. The position of law in this is well settled and reference in this regard may be made to judgments of Hon’ble Gujarat High Court in the case of New Sorathia Engg Co. vs. CIT [2006 (1) TMI 71 - GUJARAT High Court], CIT vs. Manu Engg. Works [1978 (9) TMI 18 - GUJARAT High Court] and CIT vs. Lakhdhir Lalji [1971 (9) TMI 33 - GUJARAT High Court]. This view has been again reiterated also by Hon’ble Andhra Pradesh High Court in the case of Pr. CIT vs. Smt. Baisetty Revathi (2017 (7) TMI 776 - ANDHRA PRADESH HIGH COURT). Thus viewed from any angle we find that levy of penalty in this case is not justified and the impugned penalty order is illegal. Therefore, we have no other option but to delete the same. Thus, the penalty is hereby directed to deleted. Since, penalty is deleted on jurisdictional ground, we are not deciding other issues raised by assessee. As a result, the grounds of appeal raised by the assessee are allowed.

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• 2017 (12) TMI 789
  Addition on account of lease rental income - whether the assessee is the legal owner of the property in line with section 60? - addition on protective basis - nature of income - business income or house property - arrangement of transferring of shops and retail space by AHRPL to ADIPL - Held that:- When we peruse the recitals of the Agreement (supra) reproduced above particularly clause 4, it goes to unequivocally prove that the second party to the Agreement (supra), namely, ADIPL is entitled to receive the rent or the charges from the tenants/occupants during the currency of this agreement. When ADIPL has got rights and interest in the property in question by virtue of the Agreement (supra) w.e.f. 31.03.2008 then it is estopped by its own act and conduct from showing the income from the rental of the shops and rental space in its hands for the earlier period prior to 31.03.2008. In the given circumstances, the ld. CIT (A) has rightly upheld the addition in the hands of AHRPL under the head income from house property When substantive addition qua the same amount of Rs. 6,27,84,240/- has already been made in case of AHRPL, there is no question confirming the protective addition of Rs. 6,27,84,240/- in case of ADIPL by the ld. CIT (A) because one income cannot be taxed twice.- Decided against revenue

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• 2017 (12) TMI 788
  TDS credit - Held that:- Commissioner of Income Tax(A), while directing the Assessing Officer to allow the credit of TDS, has noted that orders of ITAT Delhi Bench in DCIT vs M/s Lloyd Insulation (India) Ltd. (2013 (1) TMI 35 - ITAT NEW DELHI), ITO vs Sikka International Freight Services Pvt. Ltd. [2010 (2) TMI 930 - ITAT DELHI ] have directed that the credit be allowed. We have also perused the orders cited before the Ld. Commissioner of Income Tax (A) and duly noted by him in his appellate order while allowing relief to the assessee. Addition on account of repairs and maintenance, general and office expenses - Held that:- Similar disallowance has been made in assessment year 2007-08 against which the assessee had not filed any appeal. A perusal of the assessment order shows that the Ld. Commissioner of Income Tax (A) is absolutely correct in observing that the disallowance has been made on an estimate and we are also in agreement with the adjudication of the Ld. Commissioner of Income Tax (A) that ad hoc disallowance without pointing out any specific defect or lacuna is not sustainable. Therefore, we uphold the adjudication of the Ld. Commissioner of Income Tax (A) on this issue also and dismiss ground no. 3 of the department’s appeal. Disallowance on account of personal use of vehicle maintenance - Held that:- Although the Ld. Commissioner of Income Tax(A) has deleted the disallowance, it is an admitted fact that the assessee has not been maintaining any log book and, therefore, while we uphold the action of the Ld. Commissioner of Income Tax(A) in deleting the disallowance on account of depreciation, we are of the considered opinion that 10% of vehicle running and maintenance expenses is a reasonable estimate and in absence of log book, we set aside the order of the Ld. Commissioner of Income Tax(A) on this issue and restore the disallowance. Thus, ground no. 4 is partly allowed. Disallowance of 10% out of telephone expenses - Held that:- We are of the considered opinion that in absence of details, this disallowance also needs to be upheld. Hence, we set aside the order of the Ld. Commissioner of Income Tax (A) on this issue and restore the disallowance.

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• 2017 (12) TMI 787
  Revision u/s 263 - benefit of deduction u/s 80IA - Held that:- In the present case, the local authority is HUDA. Therefore, it is our considered opinion that the assessment order cannot be held erroneous on this count also because the Ld. Pr.CIT had a different view on this issue. Thus, the said assessment orders are not erroneous even if they might be prejudicial to the interest of the revenue and, therefore, they cannot be made a subject matter of revision u/s 263 of the Act. We are of the view that the assessment orders in question on the issue were neither erroneous nor prejudicial to the interest of the revenue and, therefore, the Ld. Pr. CIT was not justified in setting aside the same. Accordingly, we deem it fit to quash the orders passed u/s 263 of the Act by the Ld. Pr. CIT and restore the assessment orders initially framed by the Assessing Officer. - Decided in favour of assessee.

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• 2017 (12) TMI 786
  Determining the MAT credit u/s 115JAA - Non granting credit for surcharge and cess while computing the tax credit u/s 115JAA - Held that:- It is not in dispute that the surcharge and cess portion was not paid by the assessee along with the tax portion. The bifurcation of the total payment of taxes by way of tax, surcharge and cess is only for the administrative convenience of the Union of India in order to know the purpose for which the said portion of amounts are to be utilized for their intended purposes. Hence the bifurcation is only for utilization aspect and does not change the character of payment in the form of taxes from the angle of the assessee. As far as assessee is concerned, it had simply discharged the statutory dues comprising of tax, surcharge and cess to the Union of India and hence if paid in excess, would be eligible for either refund or adjustment as contemplated u/s 115JAA of the Act. If the version of the ld CITA is to be accepted, then it would result in an situation wherein if the assessee is entitled for refund, he would not be entitled for refund on the surcharge and cess portion. This cannot be the intention of the legislature and it is already well settled that the tax is to be collected only to the extent as authorized by law in terms of Article 265 of the Constitution and the department cannot be unjustly enriched with the surcharge and cess portion of the amounts actually paid by the assessee. - Decided in favour of assessee.

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• 2017 (12) TMI 785
  Bogus purchases - Held that:- The Hon’ble Gujrat High Court in CIT vs. Simit P. Seth (2013 (10) TMI 1028 - GUJARAT HIGH COURT) upheld the decision of the Tribunal and sustained the addition 12.5% of the total bogus purchases holding that only profit element embedded in such purchases can be added to income of the assessee. Hence, following the principles law laid down by the Hon’ble High Courts of Bombay and Gujarat, discussed above, we uphold the order of the Ld. CIT(A) and dismiss all the grounds of appeal of the assessee and direct the AO to make addition @ 12.5% of the total amount of bogus purchases made by the assessee to the income of the assessee.

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• 2017 (12) TMI 784
  Deduction u/s 54F - capital gain earned on sale of Indrapuram plot - investment within stipulated period - Held that:- The assessee invested in the residential plot which as per the referred to Circular No. 667 dated 18.10.1993 of the CBDT should be considered towards the cost of construction of a residential house and the aggregate cost should be considered for determining the deduction u/s 54F of the Act. In the present case, the assessee purchased the plot for a sum of Rs. 57,30,000/- and as per the report of the approved valuer invested Rs. 8,25,000/- alongwith the coowner in the construction. Therefore, the combined cost of plot and the construction was much more then the sale consideration received by the assessee for Plot No. 76, Niti Khand-II, Indirapuram, Ghaziabad at Rs. 44,89,000/-. Therefore, the assessee was entitled for the deduction u/s 54F of the Act - Decided in favour of assessee.

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• 2017 (12) TMI 754
  Validity of assessment against non existent company - assessment in the name of a company which had been amalgamated and had been dissolved with the said amalgamating company - Held that:- No reason to interfere with the impugned judgment(s) passed by the High Court. In view of this, we find no merit in the appeals and special leave petitions. HC has held [2011 (8) TMI 544 - DELHI HIGH COURT] provisions of Section 292B of the Act are not applicable in such a case. The framing of assessment against a non-existing entity/person goes to the root of the matter which is not a procedural irregularity but a jurisdictional defect as there cannot be any assessment against a dead person. - Decided in favour of assessee.

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• Customs

• 2017 (12) TMI 783
  Non-fulfillment of export obligations within time - extension of export obligation period - the stocks of white sugar produced by the petitioner were placed under the control of the District Magistrate and the petitioner was unable to export the same - Held that: - this Court is not persuaded to accept that the petitioner was entitled to any extension of the export obligation period and this Court finds no infirmity in the decision of the respondents to reject such request - it is not necessary to consider the petitioner's contention regarding the applicability of HoP/FTP 2015-20 to the Advance Authorisation in question. However, for the sake of completeness, it would be apposite to consider the said question as well. The petitioner has no vested right for grant of extension of the export obligation period and thus its application for extension would necessarily have to be considered as per the policy in force. Undisputedly, as per the policy applicable on 23.06.2015, an extension for purpose of discharging the export obligation in respect of import of raw sugar could not be granted beyond a period of six months. Thus, even if it is assumed that the petitioner had made out a genuine case of hardship – which this Court finds that the petitioner has not – no extension beyond a period of six months for completion of the export obligation could be granted. Petition dismissed.

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• 2017 (12) TMI 782
  Amendment of bill of entry - Time limitation - refund of excess duty paid by mistake - Held that: - I have perused the invoice which is on record as well as the previous Bill of Entry wherein the identical product was cleared under actual price whereas in the present case, the price was wrongly quoted, as a result of which excess duty was paid - the Revenue has wrongly rejected the application on the ground of delay whereas the delay has been properly explained and moreover no time limit is prescribed under Section 149 For seeking amendment in the Bill of Entry - appeal allowed - decided in favor of appellant.

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• Service Tax

• 2017 (12) TMI 775
  CENVAT credit - Call centre services - non-registered premises - duty paying invoices - invoices containing name of the petitioner prior to its merger - case of the department is that since the invoices were raised in the name of unregistered premises, therefore, the petitioner's company is not eligible to claim the CENVAT Credit - according to petitioner, there is no provision under the CENVAT Credit Rules, 2004 nor in Service Tax Rules, 1994 which mandates/provides that the registered address of the recipient is mandatory and has to be mentioned in the invoices for the availment of the credit - Section 69 of the Finance Act, 1994 - invoice issued prior to registration. Held that: - the adjudicating authority namely Commissioner himself has held that in regard to the issue no.(a) of Rs. 18.35 crores the Commissioner has dropped the demand for recovering of CENVAT Credit on the similar set of facts where the Commissioner has held under Rule 4(A) of Service Tax Rules, 1994, the requirement is only to "the name and address of the person receiving the taxable service" and there is no requirement that the name and registered address of the person receiving the taxable service are appeared on the invoice for taking input service credit and this has been repeatedly laid down by the various CESTAT Tribunals - Admittedly, against the order of the Commissioner dated 30.11.2015 no appeal has been preferred by the Department, therefore, in similar set of fact, the denial of the CENVAT Credit is appears to be prima facie wrong which requires consideration by the CESTAT. CENVAT credit - invoice containing old name of company - invoice issued prior to registration - Held that: - The aforesaid two issue involving a dispute and approximate denial of CENVAT Credit of Rs. 89.10 lakhs + 98.19 lakhs total sum of Rs. 187.29 lakhs (approximately) is yet to be decided by the CESTAT for which we refuse to accept the claim of the petitioner. Pre-deposit - Section 3F of the Central Excise Act, 1944 - Held that: - petitioner be dispensed with the condition of pre-deposit of 7.5% for entertainment of the appeal by the appellate Tribunal with respect of issue of non-registered premises - pre-deposit for other two issues upheld. Petition allowed in part.

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• 2017 (12) TMI 774
  Levy of service tax - security agency service - appellant are mainly involved in resettlement activities related to welfare of ex-servicement - It is the claim of the appellant that since their organization is a charitable society, the same does not have the character of a commercial concern and hence, they are not liable to pay service tax - Held that: - services provided in relation to the security of any property or person becomes a taxable service under law - a similar issue came up before the Hon’ble Punjab and Haryana High Court in the case of Punjab Ex-servicemen Corporation [2010 (9) TMI 871 - PUNJAB & HARYANA HIGH COURT], where it was held that As per definition of security agency under Section 65(94) service provider should be engaged in the business rendering specified service. There is no warrant for reading therein requirement of profit motive - the service rendered by appellant is liable to tax - appeal dismissed - decided against appellant.

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• 2017 (12) TMI 773
  Valuation - includibility - certain expenses towards rent, loading and unloading etc. incurred by the appellant during the course of their service to the client - C&F Agent service - Held that: - any expenses incurred by such agent and reimbursed as per contractual agreement, on actual basis cannot form part of the taxable value on C & F agent service - The Original Authority categorically recorded that all these expenses are incurred and reimbursed on actual basis and we find no reason to vary the finding recorded by the Original Authority - appeal allowed - decided in favor of appellant.

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• 2017 (12) TMI 772
  100% EOU - Refund of unutilized CENVAT credit - denial on the ground that the services are intermediary services - Held that: - the appellant is a subsidiary of its holding company and is providing services under the Master Services Agreement and the same Master Services Agreement does not provide that the appellant will facilitate or will arrange the purchase and sale on behalf of the AMD entities outside India - the services rendered by the appellant do not fall under the definition of intermediary and it satisfies all the conditions prescribed under rule 6A of the Service Tax Rules, 1994 because the services recipient is located outside India and the place of provision of service is outside India and the consideration has also been received in convertible foreign for exchange. The services rendered by the assessee is in the nature of export of service and does not fall in the definition of intermediary service. Appeal allowed - decided in favor of appellant.

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• 2017 (12) TMI 771
  Change of classification of services - Held that: - there cannot be different classification for the same services at the end of service provider and at the end of service recipient - in the case of M/s. Piem Hotels Ltd, [2016 (4) TMI 290 - CESTAT MUMBAI], the Tribunal has held that it is well settled proposition of law that jurisdictional officer at recipient end are not empowered to question or change the classification or valuation at supplier's end - appeal allowed - decided in favor of appellant.

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• 2017 (12) TMI 770
  Penalty u/s 78 - it was alleged that assesse had not paid service tax on reimbursement charges and have availed ineligible CENVAT credit - Held that: - I find no infirmity in the impugned order whereby the Commissioner (A) has observed that there is no mens rea in the present case to suppress the facts and therefore, the Commissioner (A) has rightly observed that there is a reasonable cause for waiver of penalty by extending the benefit of Section 80 of the Finance Act, 1994, which was prevalent during the material point of time - appeal dismissed - decided against Revenue.

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• 2017 (12) TMI 769
  Refund of service tax paid, which was not liable to be paid - denial on the ground of unjust enrichment - Held that: - the appellants are not liable to pay service tax in view of the Circular No.108/02/2009-ST dt. 29/01/2009 - the appellant has produced a certificate from the Chartered Accountant which has categorically certified that incidence of duty has been borne by the appellant and its incidence has not been passed to any other person. The Commissioner has not discussed the certificate issued by the Chartered Accountant at all and has also not disputed its authenticity. Therefore Chartered Accountant certificate is a valid proof for the determination of an issue of unjust enrichment. The appellant has proved that the incidence of duty has not been passed on to any other person and has been borne by him alone and therefore the refund claim is not hit by unjust enrichment - appeal allowed - decided in favor of appellant.

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• 2017 (12) TMI 768
  100% EOU - Refund of unutilized CENVAT credit - various input services - denial on account of nexus - export of services - Held that: - all the impugned services on which refund has been denied fall in the definition of ‘input service’ as held in various decisions - most of the services have been held to be input services in appellant’s own case - with regard to wrong quantification of refund amount has observed that the original authority shall examine this aspect in de novo proceedings and shall apply the formula correctly while computing the refund claim amount - appeal allowed by way of remand.

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• Central Excise

• 2017 (12) TMI 817
  CENVAT credit - various input services - Security Service - Professional Service - Security Service - Sales Promotion Service - Employee Training - Employee Group Insurance - Rent-a-cab Service - Food expenses for employee - Sodexho coupons - Rent of marketing office - Interior service for marketing office - Manpower recruitment for marketing office - Held that: - all these services fall in the definition of ‘input service’ and the appellant has rightly taken the CENVAT credit on these impugned service - appeal allowed - decided in favor of appellant.

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• 2017 (12) TMI 767
  Maintainability of appeal - time limitation - jurisdiction - Held that: - question as to whether action was taken within the time provided under Section 73(1) of the Finance Act, or under the extended period and violation of natural justice, also can be urged before the appellate authority - we are not inclined to entertain the appeal - Appellant/Writ petitioner is permitted to move the appellate forum - appeal dismissed being not maintainable.

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• 2017 (12) TMI 766
  Clandestine removal - it was alleged in the show-cause notice that total quantity of 3440.500 MT ingots was clandestinely cleared - Held that: - It is settled position of law that quantification of alleged clandestine clearance only on the basis of theoretical estimation of production cannot be sustained in the case of R A Castings Pvt. Ltd. vs. Commissioner [2015 (7) TMI 29 - CESTAT NEW DELHI]. The Tribunal observed that duty demand made on basis of theoretical calculations of production is not sustainable. The main evidence on the basis of which the adjudicating authority has upheld the duty demand of Rs. 7,52,843/- is the private documents in the form of scribbling pads recovered from the factory premises of the assessee. Such scribbling pads are said to contain the details of the goods removed without payment of duty by the assessee - The invoice number, quantities and date pertaining to invoice No.181 tallied in respect of the entries found in scribbling pads, gate register as well as regenerated invoices. This clearly establishes the charge of removal of ingots without payment of duty and confirms the practice of multiple transportation under the same invoice. Cross-examination of witnesses - Held that: - We find that only one of the statements recorded from Shri Jawahar has been retracted subsequent to the date of recording. However, Shri Jawahar has confirmed the facts in his subsequent statements nullifying the retraction. In the absence of retraction by any of the other witnesses, the denial of cross-examination does not vitiate the proceedings. The adjudicating authority has confirmed the demand of duty of about Rs. Rs. 7,52,843/- on the basis of documents recovered from such proceedings and whose veracity has been proved from the corroborative evidences like regenerated invoice and gate register evidencing the clandestine removal of the ingots by the assessee - demand upheld. Penalty u/r 26 of CER, 2002 on Shri Paramasivam, Managing Director - Held that: - Shri Paramasivam, Managing Director has admitted the clearance of excisable goods without payment of duty as is evident from his letter dated 29.7.2003 admitting the duty liability. He has concerned himself with the production and removal of excisable goods which were liable to confiscation - penalty upheld. Appeal dismissed - decided against appellant.

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• 2017 (12) TMI 765
  CENVAT credit - appellant have received copper, free of charge, from M/s. Enercon (I) Ltd. and manufactured certain components and cleared the same without payment of excise duty by availing the exemption under N/N. 6/2002 dated 1.3.2002 - case of Revenue is that CENVAT credit of about Rs. 95 lakhs availed by them was irregular inasmuch as the copper was meant to be used exclusively in the manufacture of exempted goods - Held that: - CENVAT credit has been availed on copper which has been received by the assessee and meant exclusively for use in the manufacture of exempted products. Since this fact has not been specifically brought to the notice of the Department - demand upheld - appeal allowed - decided in favor of Revenue.

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• 2017 (12) TMI 764
  CENVAT credit - vehicles - the receipt of inputs has been denied only on the ground of the vehicles were not capable of transportation of goods - case of assessee is that in absence of any knowledge and investigation from the author of the computer data relied upon by the Revenue, no demand can be made - Held that: - The cross examination of transporters were rejected. The records of the assessee-appellant showed the receipt of inputs and their consumption, which has not been disputed by the Department. The final products which have been cleared on payment of duty are not in dispute. The Revenue has also failed to prove flow back of money for non-receipt of the goods. In the absence of any contrary evidence, the Cenvat credit cannot be denied to the assessee. Appeal allowed - decided in favor of appellant.

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• 2017 (12) TMI 763
  CENVAT credit - capital goods not installed in factory - crusher unit is installed at the quarry of the appellant - Rule 3(1) of CCR, 2004 - denial of credit on the ground that capital goods / spares which have not been installed in their factory but elsewhere - Held that: - crusher unit is located 25 km away from the factory - the geographical distance does not make much difference as has been held in the case of National Aluminium Co. Ltd. Vs. CCE, Madras [1997 (6) TMI 95 - CEGAT, NEW DELHI] - but since in this case, the appellant has supplied surplus quantity to others and therefore they have indulged in trading activity also, therefore with regard to input service tax credit proportionate to the credit in regard to trading, case remanded back to the original authority to determine proportionate cenvat credit relating to trading which is ineligible and with regard to the remaining quantity which is consumed as captive consumption, the appellants are entitled to input service tax credit - matter on remand. Penalty u/r 15 of CCR read with Section 11AC of CEA - Held that: - appellants have informed the audit party that they have informed the Department vide their letter dt. 25/05/2010 and 04/06/2010 that they are owning the crusher unit which is functioning away from the manufacturing unit - also, availing and utilising cenvat credit was truly and fully reported in the monthly ER1 returns. In view of this, suppression cannot be invoked and penalty cannot be imposed - penalty set aside. Appeal allowed in part and part matter on remand for quantification.

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• 2017 (12) TMI 762
  CENVAT credit - dolachar, charcoal dust and fly ash (waste and residue) - time limitation - Held that: - the Order-in-Original is dated 12.3.2014 and the same was received by the appellant on 15.3.2014 as per the endorsement on the Order-in-Original and thereafter, the appeal was filed within two months as provided under Section 35 of the Central Excise Act. The Commissioner (A) has wrongly observed that the order was received by the appellant on 12.3.2014 and therefore, the appeal is time barred, more so when no condonation application was filed with the appeal - the appeal was very much within time - appeal allowed by way of remand.

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• 2017 (12) TMI 761
  CENVAT credit - input services - foreign exchange broking service - AMC for cooler machines - audio & video conference - Export-DEPB service - Held that: - all these services on which CENVAT credit has been denied fall under the definition of input service as the same relates to the business of the appellant and it is very difficult for the appellant to run the business in the absence of all these services - credit allowed - appeal allowed - decided in favor of appellant.

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• 2017 (12) TMI 760
  Refund of unutilized CENVAT credit - CBEC Circular No.828/5/2006-CX dated 20.4.2006 - place of removal - Held that: - in case of export of goods, the place of removal is the port of export and therefore, the appellant is entitled to the CENVAT credit on GTA up to the port - appeal allowed - decided in favor of appellant.

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• 2017 (12) TMI 759
  100% EOU - Refund claim - cleaning service - insurance auxiliary service - scope of SCN - inclusion of value of the deemed exports in calculating the amount of refund - Held that: - the supplies to EOU during the relevant time was considered as deemed exports which is equal to physical exports and the assessee is entitled to CENVAT credit under Rule 5 and also eligible for refund - the CENVAT credit with regard to input services of cleaning and insurance auxiliary service, which was availed against office equipments, burglary, money in safe, employee fidelity has nexus with the manufacturing activities, and refund is allowed - appeal dismissed - decided against Revenue.

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• 2017 (12) TMI 758
  Refund of excess duty paid - unjust enrichment - denial on the ground that the appellant has failed to prove that incidence of duty has not been passed on to the buyer - Held that: - the appellant by way of documentary evidence on record has proved that incidence of duty has not been passed on to the buyer - at the end of customer also there has been verification by the Superintendent of Central Excise and he has issued a certificate stating that they have taken credit of only Rs. 27,118/- which corresponds to the excise duty payable had there been no error in computation - the presumption of unjust enrichment stands rebutted by the appellant - appeal allowed - decided in favor of appellant.

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• 2017 (12) TMI 757
  Refund claim - unjust enrichment - Section 11B(2) of the Central Excise Act, 1944 - Held that: - bar of unjust enrichment is not applicable since the duty has been paid much after the clearance of the goods - appeal allowed - decided in favor of appellant.

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• 2017 (12) TMI 756
  Demand of interest and penalty - reversal of CENVAT credit - Held that: - the appellants have not utilised the cenvat credit availed and they had sufficient credit balance in their CENVAT credit account during the relevant period. The appellant has also produced copies of CENVAT Credit account which shows that sufficient credit was available during the relevant period and further that they have had availed the credit but not utilised the same - reliance placed in the case of COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX LARGE TAXPAYER UNIT, BANGALORE Versus M/s BILL FORGE PVT LTD, BANGALORE [2011 (4) TMI 969 - KARNATAKA HIGH COURT], where it was held that Without the liability to pay duty, the liability to pay interest would not arise - appellant not liable to pay interest - appeal allowed - decided in favor of appellant.

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• 2017 (12) TMI 753
  CENVAT credit - HR sheets, MS plates, Channels, Joists, Beams, etc., used in fabrication / support structure for bunkers, columns and pollution control equipment for enhancement of chimney height which were embedded to earth - denial on the premise that these becomes immovable property - Held that: - all the steel items have been used by the appellant for fabrication of support structures for bunkers, columns and pollution control equipment for enhancement of chimney height which are integrally part of the machinery for manufacturing of their final product - reliance placed in the case of M/s. India Cements Ltd. Versus The Custom, Excise and Service Tax & The Commissioner of Central Excise [2015 (3) TMI 661 - MADRAS HIGH COURT], where it was held that the steel items which has been used for fabrication of support structures on which machinery has been affixed, although these support structures are embedded to earth, the assessee is entitled to avail CENVAT credit as without these support structures, the machinery cannot function - appeal allowed - decided in favor of appellant.

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• CST, VAT & Sales Tax

• 2017 (12) TMI 755
  Revision of assessment - Section 27 of the TNVAT Act - Held that: - the petitioner is directed to pay 15% of the disputed tax within a period of four weeks from the date of receipt of a copy of this order. If the petitioner complies with the condition, then, along with the payment, the petitioner is entitled to submit his objections by treating the impugned proceedings as a SCN - the respondent shall afford an opportunity of personal hearing to the petitioner and redo the assessment in accordance with law, after considering all issues pointed out by the petitioner - petition allowed by way of remand.

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• Indian Laws

• 2017 (12) TMI 781
  Interim releif - The primary submission of the petitioners is that in terms of the interim order of the Constitution Bench: (i) Aadhaar Cards could permissibly be utilized only for six schemes (two of them provided for in the order dated 11 August 2015 and four in the order dated 15 October 2015); (ii) the Union Government was directed to strictly follow the earlier orders of this Court commencing from 23 September 2013; and (iii) the Aadhaar card scheme was to be purely voluntary and could not be made mandatory until the matter is finally decided by this Court. Held that: - As regards Aadhaar based E-KYC for mobile phone subscribers, the process of completing the E-KYC process is to be completed by 6 February 2018. The Union government informs the Court, that consistent with the extension of the deadline to 31 March 2018 in other cases, this Court may consider passing appropriate orders - we accept the statement of the learned Attorney General for India and order accordingly. With regard to third issue, subject to the submission of the details in regard to the filing of an application for an Aadhaar card and the furnishing of the application number to the account opening bank, we likewise extend the last date for the completion of the process of Aadhaar linking of new bank accounts to 31 March 2018. We extend the date for the completion of the E-KYC process in respect of mobile phone subscribers until 31 March 2018 - petition disposed off.

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• 2017 (12) TMI 780
  Whether this Court can entertain an application for making the award as Rule of the Court, even if it retains seisin over arbitral proceedings? - whether this Court by using the expression “keep controls over the arbitral proceeding” can assume original jurisdiction? Held that: - the superior court is not expected in law to assume jurisdiction on the foundation that it is a higher court and further opining that all contentions are open. The legislature, in its wisdom, has provided an appeal under Section 39 of the Act. Solely because a superior court appoints the arbitrator or issues directions or has retained some control over the arbitrator by requiring him to file the award in this Court, it cannot be regarded as a court of first instance as that would go contrary to the definition of the term ‘court’ as used in the dictionary clause as well as in Section 31(4). Simply put, the principle is not acceptable because this Court cannot curtail the right of a litigant to prefer an appeal by stating that the doors are open to this Court and to consider it as if it is an original court. Original jurisdiction in this Court has to be vested in law. Unless it is so vested and the Court assumes, the court really scuttles the forum that has been provided by the legislature to a litigant. When arbitrator is not appointed under the Act and the matter is challenged before the High Court or, for that matter, the Supreme Court and, eventually, an arbitrator is appointed and some directions are issued, it will be inappropriate and inapposite to say that the superior court has the jurisdiction to deal with the objections filed under Sections 30 and 33 of the Act. The jurisdiction of a Court conferred under a statute cannot be allowed to shift or become flexible because of a superior court’s interference in the matter in a different manner. Appeal disposed off.

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• 2017 (12) TMI 779
  Denatured alcohol - whether the State has power to regulate denatured alcohol viz. rectified alcohol after its denatured? Held that: - It is clear from the various judgments of the Supreme Court commencing from Synthetics and Chemicals [1989 (10) TMI 214 - SUPREME COURT OF INDIA] that the State has the power to regulate so as to prevent the conversion of alcoholic liquors for industrial use to one for human consumption and for that purpose regulatory fees imposed by the State are justified. It is clearly held that the intoxicating liquor in Entry 8 List II does not cover denatured alcohol which is incapable of human consumption. The Supreme Court in the case of BIHAR DISTILLERY AND ANR. Versus UNION OF INDIA AND ORS. [1997 (1) TMI 519 - SUPREME COURT OF INDIA], has thus drawn a distinction between rectified spirit meant exclusively for supply to industries whether after denaturing it or without denaturing it and the rectified spirit in the process of manufacture or after manufacture being diverted or misused for potable purpose. The Supreme Court has held that the State Government has no power to regulate the former i.e. rectified spirit which is exclusively for supply to industries other than for potable purposes. The Bombay Denatured Spirit Rules, 1959 to the extent that they regulate the possession, use, sale, import, export and transport of denatured spirit viz. Rules 23 to 62 are ultra vires and unconstitutional and are struck down - There shall be no licence required under the Maharashtra Prohibition Act for sale, purchase, transport, possession, storage, dehydration, import and export of denatured spirit - petition disposed off.

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• 2017 (12) TMI 778
  Supervisory jurisdiction - failure to follow mandatory provisions of Section 202 of the Code of Criminal Procedure - Held that: - in accordance with scheme of the said Act, the enquiry contemplated under Section 202 of the Code of Criminal Procedure is not mandatory in proceeding under Section 138 of the Negotiable Instrument Act - petition dismissed.

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• 2017 (12) TMI 777
  Offence punishable under Sections 20 (b), 8 (c) read with Section 29 of NDPS Act - equal weightage given to the defence witness and that of prosecution witness - Held that:- The manner in which investigation has taken place and deposition of defence witness, DW-2 clearly reveal that accused no.1 was falsely implicated. It has come on record that reasonable doubt having been created of striking of deal of replacing one man with another and that identity of accused no.1 as the tenant and the only possessor of the impugned flat since two years is not established and proved and learned trial Judge has rightly given benefit of doubt. Apart from failure to comply with procedure mandatory in nature under Section 42 of the NDPS Act, even as per law laid down by the Constitution Bench in the case of Karnail Singh (2009 (7) TMI 1144 - SUPREME COURT) at this stage of deciding the appeal finally, we find that there was a breach of above provision, and when there was a specific allegation by the informant himself that the information given to SP, Mr.Bhatti, was in respect of contraband article possessed by one Punjabi and such information if were sent in a sealed envelop to the superior officer, there would not have arisen any doubt at all. Besides no warrant was obtained from learned Metropolitan Magistrate nor there was any authorization given by SP, Mr.Bhatti and PW-2 relied on resolution under Section 42 before entering the premises. Even serious doubt is created about handing over muddamal to the PSO, as PW-4, who was a part of the raiding party himself has prepared muddamal receipt and he had registered the offence in the station diary. He continued to retain the muddamal and that samples prepared from it till the same were handed over to Mr.Polra on 12.6.2001 in the morning. No mention is made in the register maintained. Thus, according to learned trial Judge the prosecution has failed to prove its case beyond reasonable doubt and, on the contrary, the manner in which investigation made an attempt to implicate the accused, clearly emerging from the deposition of DW-2 and DW-3 is rightly believed by learned trial Judge. We are in agreement with the law laid down by the Apex Court in the case of Sanjeev Kumar (2006 (11) TMI 679 - SUPREME COURT) and Aadam Ajmeri (2014 (5) TMI 1161 - SUPREME COURT) that equal weightage shall have to be given to the defence witness and that of prosecution witness. That collective and cumulative effect of the discussion, as above, result into dismissal of the appeal filed by the State of Gujarat warranting no interference in exercise of powers under Section 378 read with Section 386 of the Code of Criminal Procedure and the appeal is hereby rejected. The impugned judgment and order of acquittal dated 21st April 2005 of the respondents herein for the offence punishable under Sections 20 (b), 8 (c) read with Section 29 of the NDPS Act passed by the learned Additional Sessions Judge, Court No.7, Ahmedabad in Sessions Caseis hereby confirmed. Bail bond, if any, of the accused stands discharged. Record and Proceedings be sent back to the concerned trial Court forthwith.

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• 2017 (12) TMI 776
  Construction and interpretation of essentially two provisions of the Code - Section 372 - Section 378 - whether the complainant in a complaint case for an offence punishable under Section 138 of the Act of 1881 is a victim as defined under Section 2(wa) of the Code, as amended by Act No.5 of 2009? - Held that: - Such a complainant is not a victim within the meaning of Section 2(wa) of the Code and would stand excluded therefrom, by virtue of the fact that the accused in such a case is not subjected to a charge. - the question is answered in the negative. Whether such a complainant would be entitled to file an appeal under the proviso to Section 372 of the Code before the Court to which an appeal lies against conviction - Held that: - As such a complainant does not come within the ambit of a victim under Section 2(wa) of the Code, his only remedy is to prefer an appeal under Section 378(4) of the Code, with special leave - answered in negative. Whether the complainant in a complaint case for the offence punishable under Section 138 of Negotiable Instruments Act or for any other offence either bailable or non-bailable is required to file an appeal against acquittal in a complaint case seeking special leave of the Court under Section 378 (4) of Cr. P.C.? - Held that: - a complainant in a complaint case relating to an offence under Section 138 of the Act of 1881 would be required to file an appeal against acquittal in such case only under Section 378(4) of the Code, after seeking special leave. In all other complaint cases relating to offences, either bailable or non-bailable, even if the accused therein is charged, the complainant therein would not have the right of preferring an appeal under the proviso to Section 372 of the Code and he would have to continue to avail the special remedy of appeal provided to him under Section 378(4) of the Code, duly seeking special leave - the appeal filed under the proviso to Section 372 of the Code by the first respondent herein, the complainant in a complaint case under Section 138 of the Act of 1881, is not maintainable. It is not a sound principle of construction to brush aside words in a statute as being inapposite surplusage, if they can have appropriate application in circumstances conceivably within the contemplation of the statute. Petition disposed off.

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