TMI Tax Updates - e-Newsletter
December 8, 2015

Case Laws in this Newsletter:

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

TMI SMS

• Cenvat Credit - if separate records for inputs maintained & proportionate credit for input services reversed, Rule 6(3) not applicable - Tri

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Articles

1. CEA led Panel recommends RNR at 15-15.5% and eliminating Additional Tax of 1% on inter-state supply of goods

   By: Bimal jain

2. USE OF SWACHH BHARAT CESS (SBC)

   By: Dr. Sanjiv Agarwal

News

1. Press Release regarding date of extention of payment for Central Excise Duty and Service Tax, Tamil Nadu

2. Coal Mines Auctioned

3. Investments by CIL to Increase Coal Production

4. Central Board of Direct Taxes (CBDT) issues directions for expediting pending refunds below ₹ 50,000/ for Assessment Year(s) 2013-14 and 2014-15 in all cases except those selected for scrutiny

5. Extension of due date for deposit of tax deducted at source and tax collected at source for the State of Tamil Nadu – regarding

Circulars / Instructions / Orders

Customs

1. 30/2015 - dated 4-12-2015

Amendment to Board Circular No. 18/2015-Cus dated 9.06.2015

Highlights / Catch Notes

Income Tax

• Court Rules Inland Container Depots Qualify as "Inland Ports" for Tax Benefits u/s 80IA(4) of Income Tax Act.

  Case-Laws - AT : Disallowance u/s 80IA(4) - the object of including “inland port” as an infrastructure facility and also that customs clearance also takes place in the inland container depot, the assessee’s claim that the inland container depots were inland ports under Explanation (d) to sec. 80IA(4) required to be upheld - AT
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• No Deemed Dividends if Accumulated Profits Lack; Security Premium Reserves Not Enough: Section 2(22)(e) Explained.

  Case-Laws - AT : Deemed dividend - When there is no accumulated profits in the books of the assessee, then merely because the reserve and surplus having the balance on account of premium on security would not lead to the conclusion that the assessee was having sufficient accumulated profits u/s 2(22)(e) - AT
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• Court Imposes 30% Disallowance on Labor Charges Due to Incomplete Vouchers Lacking Payee Addresses.

  Case-Laws - AT : Disallowance of 30% of labour charges - was made for a reason that selfmade vouchers did not carry the addresses of the payees - assessee failed to discharged its onus for supporting its claim - AT
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• Section 45(2) Permits Capital Asset to Stock-in-Trade Conversion Anytime, Irrespective of Business Activity Status.

  Case-Laws - AT : Sec.45(2) of the Act provides the assessee to convert the capital asset into stock-in-trade at any time during the year. There is no prohibition under the Act, whether or not the business activities carried on by assessee-company during the relevant AY - AT
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• Rental Advance Write-Off Not Allowed as Bad Debt: Classified as Capital, Not Revenue Loss.

  Case-Laws - AT : Disallowance of bad debts relating to write off of rental advance - It is clear that this advance payment was not for the normal course of business/trade. Since the capital asset is created, the same cannot be treated as revenue loss but capital loss. - AT
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• Section 54 Deduction Denied: Sale Deed Lacks Reference to Residential Property Transfer or Construction, Claim Unsubstantiated.

  Case-Laws - AT : Disallowance of deduction claimed u/s 54 - sale deed which is an important document for transfer of property and the basis of transfer of property u/s 2(47) does not contain any reference to sell / transfer of any residential house or construction - assessee failed to prove its case - AT
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• CIT(A) Overturns AO's Decision, Allows Previously Disallowed Expenses Due to Unverifiable GEB Records.

  Case-Laws - AT : Addition on account of income not shown in the P&L account - AO made disallowance on the basis that the expenditure could not be verified from the Gujarat Electricity Board [GEB] - CIT(A) delted the addition - claim of expenses allowed - AT
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Customs

• Court Rules Secondary Allegations Dismissed if Primary Violation of Customs House Agents Regulation 13(a) Fails.

  Case-Laws - HC : Violation of Regulation 13(a) of the Customs House Agents Licensing Regulations, 2004 - Once the principal violation of other regulations cannot be sustained, then, the incidental and ancillary allegations of violation of the regulations must also fall to the ground - HC
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• Court Evaluates Genuine Intent of Belated Export to Fulfill Obligation and Achieve Duty Remission Incentives Goals.

  Case-Laws - HC : Failure to fulfil export obligation - it is important whether the belated export which he proposes to make is genuine or not. If the belated export is genuine, the purpose of the policy of generating more export earnings, by granting duty remission incentives would be fulfilled. - HC
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• Penalty Imposed for Forged Claims Under Vishesh Krishi Upaj Yojana; Section 114AA Applied Without Goods Movement Requirement.

  Case-Laws - AT : Imposition of Penalty - benefit of Vishesh Krishi Upaj Yojana - Benifit on the basis of forged bills - for the purpose of Section 114AA movement or existence of goods is not necessary - levy of penalty confirmed - AT
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Indian Laws

• High Court Rules Certified RTI Documents Can Be Used as Secondary Evidence Under Right to Information Act, 2005.

  Case-Laws - HC : Whether the certified copy of documents obtained under Right to Information Act, 2005 can be admitted as secondary evidence - Held Yes - HC
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Service Tax

• Court Rules Service Not 'Cargo Handling'; No Service Tax Due for Contract Work.

  Case-Laws - AT : Classification of service - Cargo Handling Service - The appellant is as individual engaged in providing contract for various jobs and in the circumstances the activity of the appellant does not come under the purview of 'Cargo Handling Service'. - AT
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• Notification No. 14/2004-S.T. Exemption Denied for Garments, Mosquito Nets, and Tents; Not Classified as Textiles.

  Case-Laws - AT : Benefit of Notification No. 14/2004-S.T. - garments, mosquito nets and tents etc. by no stretch of imagination can be called textiles. Indeed they are clearly articles of textiles and apparels. They have separate classification under the Central Excise Tariff - Benefit of exemption denied - AT
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• Rule 6(3) Not Applicable if Separate Accounts Maintained and Proportionate Cenvat Credit for Input Services Reversed.

  Case-Laws - AT : Cenvat Credit - if the appellant has maintained separate accounts for the inputs and has reversed the proportionate Cenvat credit in respect of input services, the provisions of Rule 6(3) do not get attracted. - AT
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Central Excise

• Legal Interpretation of Marketability for Captive Consumption of Rubber Products Under Central Excise Laws.

  Case-Laws - AT : Marketability - Captive consumption - rubberized tyre cord fabric and rubber tread compound - merely if movement of goods from one factory to another factory has taken place and the goods were used for captively the said reason can not be material factor to hold that the goods is marketable. - AT
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Case Laws:

• Income Tax

• 2015 (12) TMI 368
  Additions in the block assessment - CIT(A) deleted the addition confirmed by ITAT - Held that:- Factually, the Revenue has not been able to dispute that the additions sought to be made by the AO were not on account of any material unearthed during the search but as a result of enquiry made subsequently. In the circumstances, the Court finds no legal infirmity in the order of the ITAT deleting the additions in question. - Decided in favour of the Assessee.

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• 2015 (12) TMI 367
  Computation of income as FTS (Fees for Technical Services) - Assessment of income - whether the income of the assessee is taxable u/s 44BB of the Act, or is u/s 44DA as held by the AO - Held that:- For the relevant assessment year i.e. AY 2010-11 the assessee is entitled to declare its income under the provision of section 44BB of the Act. The next question whether the Amendment in section 44BB and 44DA should be read as retrospective is also no longer Res-Integra as pointed out by the Ld. AR. In B J service company middle East Ltd vs DCIT [2011 (8) TMI 477 - UTTARAKHAND HIGH COURT] has held as under: “55. As stated earlier, the combined effect of the provisions of s. 44BB, 44DA and 115A of the Act will not have a bearing to the cases in hand in as much as the Explanatory Note to the Finance Bill, 2010 clearly indicates that the amendments proposed in s. 44BB and 44DA of the Act would take effect from 1st April, 2011 and would apply in relation to the asst. yr. 2011-12 and subsequent years. The amendment is prospective in nature and would not apply to the cases in hand which is of the earlier assessment years.” Thus the question of retrospectivty cannot be accepted and is being repelled and so this ground of Revenue fails.

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• 2015 (12) TMI 366
  Estimation of income - Rejection of books of accounts - addition made on account of undervaluation of work-in-progress in the closing stock - CIT(A) deleted the addition made on account of estimation of GP by holding that AO was not justified in rejecting the books of accounts but sustained the addition made on account of undervaluation of work-in-progress in the closing stock - Held that:- The law is well settled that the insignificant defects in the books of accounts should not be the basis of rejection of the entire books of accounts. In the present case, we find that the ld.CIT(A) has explained point-wise as to how the reasoning of the AO for rejection of books is not tenable in law. We are in agreement with the reasoning of the ld.CIT(A), as the finding is based on uncontroverted facts. The judicial pronouncements as relied by the ld.CIT-DR would not apply on the facts of the present case, as the facts are distinguishable. The ld.CIT-DR has relied on the judgement of Hon’ble High Court of Kerala in the case of S.Murugappa Chettiar vs. CIT (1987 (5) TMI 7 - KERALA High Court) in support of contention that difference in statement of stock to the bank and that disclosed to Revenue is a justified ground for rejection of books of accounts. The ld.CIT(A) has also given finding after verifying the facts in respect of objections of the AO regarding sundry debtor, which has been duly reconciled. Difference in work-in-progress is added back by the ld.CIT(A). Taking a holistic view of the entire matter, we do not see any reason to disturb the finding of the ld.CIT(A). Accordingly, same is upheld. Moreover, in our considered view, the AO has not given any basis for estimation of net profit @ 5% of turnover. - Decided against revenue.

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• 2015 (12) TMI 365
  Disallowance u/s 80IA(4) - Held that:- As far as the contention that there is no agreement with any Government or statutory authority, we find that the assessee has placed on record letter of intent. In fact the Ministry of Commerce and Industry, vide letter dated 10/02/2005, written to the Managing Director of the assessee company regarding setting up of a CFS at Visakhapatnam apropos the assessee’s case. Thus we hold that the contention of the AO that there is no agreement and hence the assessee is not eligible for exemption is not the correct position of law. As decided in in the case of Container Corporation Ltd. [2012 (5) TMI 260 - DELHI HIGH COURT] out of the total 45 inland container depots operated by the assessee, except two all others were notified by the Central Board of Direct Taxes for the purpose of sec. 80IA(12)(ca). Having regard to the provisions of the Customs Act, the communication issued by the Central Board of Excise and Customs as well as the Ministry of Commerce and Industry, the object of including “inland port” as an infrastructure facility and also that customs clearance also takes place in the inland container depot, the assessee’s claim that the inland container depots were inland ports under Explanation (d) to sec. 80IA(4) required to be upheld - Decided in favour of assessee.

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• 2015 (12) TMI 364
  Assessment u/s 153A - CIT(A) deleted the addition - Held that:- We find that the ld.CIT(A) has given a finding that papers were found in the premises of Shri H.S.Sarna and not in the company’s premises or in Shri S.S.Sarna, Director of the company. Further, the papers were not related to the assessee-company as these were related to Shri H.S.Sarna, hence no addition is called for in the assessee’s hands. Undisputedly, the impugned addition has been made on the basis of the statement of Shri S.S.Sarna. The ld.CIT(A) has also given a finding that this disclosure was not related to the assessee-company. Since the finding is not controverted by the Revenue by placing any contrary material on record, therefore, we do not see any reason to interfere with the order of the ld.CIT(A), same is hereby upheld. - Decided in favour of assessee. Penalty u/s.271(1)(c) - CIT(A) confirmed the addition on the basis that the Director of the assessee-company has made voluntary disclosure of Rs. 44.40 lacs during the course of survey which includes stock discrepancy - Held that:- The contention of the ld.counsel for the assessee is that the entire addition is based upon the statement of Shri S.S.Sarna. The Revenue has not brought any corroborative material on recorded. Admittedly, the auditors have not recorded any adverse remarks. Under these facts, the penalty ought not to have been levied. We find merit into the contention of the ld.counsel for the assessee as the addition is solely based upon the statement of Shri S.S.Sarna and there is no corroborative material available on record demonstrating that the assessee has deliberately not furnished the material before the Revenue Authorities. Undisputedly, the AO made addition by estimating gross profit @ 15.89% on which penalty has been sustained. Therefore, under these facts, in our view, the AO was not justified in imposing the penalty.- Decided in favour of assessee. Excess stock of raw material - Held that:- The appellant’s submission in respect of excess stock of raw material that these are in the form of liquid and the exact measurement is not possible as they are lying in the tanks is acceptable. The explanation that they are liquid and exact measurement is not possible, was accepted by the Assessing Officer in respect of oleum and diesel wherein the deficit stock was found but the appellant’s explanation for minor difference in stock due to being liquid was accepted. Accordingly, the appellant is allowed relief for Rs. 2,73,811/-.- Decided against revenue.

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• 2015 (12) TMI 363
  Disallowance of deduction u/s. 80IB(10) in respect to profit derived from housing project (luxury) - CIT(A) deleted the addition - Held that:- As decided in in the case of Shriram Properties (P) Ltd [2013 (9) TMI 446 - ITAT CHENNAI] for determining the amount which qualifies for deduction u/s 80IB(1), one has to compute the income from eligible business as if the eligible business was the only source of income of the assessee. In other words, the income or loss from other business or other activities are to be ignored for the purpose of determining the amount which is eligible for deduction u/s 80IB(1) of the Act - gross total income of the assessee is Rs. 2,56,37,975/- after adjusting losses suffered by the assessee in the other two 'projects viz. 'Shreyas' and 'Coimbatore'. There are no brought forward losses or unabsorbed depreciation. The claim of deduction u/s 80IB in respect of the two eligible units viz. 'Spandhana' and 'Samruddhi' of Rs. 2,23,22,237/- is obviously less than the gross total income. Thus the Assessing Officer as well as the ld. CIT(A) erred in interpreting the relevant provisions when they held that the losses suffered by the assessee from two projects, viz. 'Shreyas' and 'Coimbatore' be reduced from the profits of the other two units viz. 'Spandhana' and 'Samruddhi' for granting deduction u/s 80IB. Accordingly, the impugned orders of the lower authorities are set aside. The Assessing Officer is directed to allow deduction u/s 80IB on the profits derived by the assessee from two projects viz. 'Spandhana' and 'Samruddhi' of Rs. 2,23,22,237 - Following decision of CIT v. Canara Workshop (P.) Ltd. [1986 (7) TMI 5 - SUPREME Court] - Decided in favour of assessee.

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• 2015 (12) TMI 362
  Eligibility for deduction u/s 10B - Held that:- As decided in assessee s own case for the assessment year 2007-08 there was no prohibition in the use of the business premises of FFIPL by the assessee and also of the employees and customers of FFIPL and further that the transfer of employees and customers of the assessee was only a small percentage of the total employees and customers of the assessee respectively. Thus holding, the CIT(A) set aside the finding of the AO and allowed the deduction u/s 10B of the Act. We find that the CIT(A) has given elaborate reasons for coming to the conclusion and that the learned Departmental Representative has not been able to rebut any of the findings of the CIT(A) with any evidence to the contrary. Since the findings of the CIT(A) are based upon the evidence produced by the assessee which has not been rebutted by the revenue, we do not see any reason to interfere with the order of the CIT(A) - Decided in favour of assessee. Addition u/s 2(22)(e) on account of deemed dividend - Held that:- When there is no accumulated profits in the books of the assessee, then merely because the reserve and surplus having the balance on account of premium on security would not lead to the conclusion that the assessee was having sufficient accumulated profits to invoke the provisions of sec.2(22)(e). - Decided in favour of assessee.

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• 2015 (12) TMI 361
  Transfer pricing adjustment - selection of comparables - Held that:- A company cannot be considered as comparable because of exceptional financial results due to mergers/demergers. See Petro Araldite (P) Ltd. Vs. DCIT [2015 (3) TMI 1010 - ITAT MUMBAI]. In view of the fact that there was a merger by way of amalgamation during the year itself, we hold that Nucleus Netsoft and GIS (India) Ltd. cannot be considered as comparable due to this extraordinary financial event. Vishal Information Technology Ltd. - the assessee’s outsourcing cost is roughly 8%. This is an important factor which has its impact on the overall profitability of a company. Several Benches of the Tribunal across the board have unanimously held this factor to be a relevant one in deciding the question of exclusion of a particular company from the list of comparables. Copies of some of such orders expunging companies on this score have been placed by the ld. AR on record. In view of this different business model adopted by Vishal Information Technology Ltd. (now known as Coral Hub Ltd.) vis-à-vis the assessee, we order for the omission of this company from the list of comparables. Kirloskar Computer Services Limited (Seg.) and Mercury Outsourcing Management Ltd. - TPO is directed to include the operating profit/operating costs of the ITES segment of these companies in the final set of comparables, after due verification of the necessary figures for determination of their operating profit margin etc. benefit of deduction u/s 10A - Held that:- In the absence of any distinguishing feature having been brought to our notice by the ld. DR, respectfully following the precedent, we grant the benefit of deduction u/s 10A in respect of profits of AEGSC unit. Treating interest on short-term deposits as ‘Income from other sources’ and thereby denying the benefit of deduction u/s 10A/10B - Held that:- Tribunal has decided this issue in the assessee’s favour in earlier years by holding such interest on short-term deposits to be in the nature of `Business income’ and thereby eligible for the benefit of deduction u/s 10A/10B.

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• 2015 (12) TMI 360
  Deduction u/s.80IB(10) disallowed - according to revenue DVO’s report clearly mentioned that assessee had deviated from the original approved plan - Held that:- Once a plot of land has more than one acre, the number of housing projects therein would not matter. There is no case for the Revenue that assessee had violated any conditions or not satisfied any other conditions set out u/s.80IB(10) of the Act. Though DVO has pointed out deviation from the approved project he has not stated what such deviation was and how it violated any condition set out in Section 80IB(10) of the Act. This being the case, we are of the opinion that assessee was eligible for the claim of deduction u/s.80IB(10) of the Act. Nevertheless, we find from the orders of lower authorities that no verification has been done with regard to the quantum of the claim. Denial of the claim has been made for the sole reason that area of the land where the project was being executed was less than one acre. Though we hold that assessee is eligible for deduction u/s.80IB(10) of the Act, for quantification of such claim, we remand the issue back to the file of the AO. - Decided in favour of assessee for statistical purpose. Disallowance of 30% of labour charges - Held that:- Disallowance of 30% of labour charges was made for a reason that selfmade vouchers did not carry the addresses of the payees. May be it is true that only self-made vouchers can be maintained in support of labour expenditure. However nothing can stop the assessee from giving full address of the recipients. Having failed to do we cannot say that assessee had discharged its onus for supporting its claim. We are of the opinion that lower authorities were justified in making a disallowance of 30% - Decided against assessee. Disallowance u/s.40(a)(ia) - CIT(A) deleted the disaaalowance considering that Finance Act, 2010, amendment toSection 40(a)(ia) of the Act, through Finance Act, 2010 had to be construed retrospectively - Held that:- There is no dispute that tax was deducted by the assessee and remitted by it before the due date of filing the return of income. We find that this issue had come up before the Hon’ble jurisdictional High Court in the case of Anil Kumar & Co (2013 (7) TMI 231 - KARNATAKA HIGH COURT ) as held by the Finance Act, 2008, which is given retrospective effect from April 1, 2005, the benefit of that provision had been extended to the assessee, though the assessment order passed initially cannot be found fault. With the change of law, when the effect of the amendment is to give benefit to the assessee, the appellate authority and the Tribunal were justified in extending the said benefit. - Decided in favour of assessee.

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• 2015 (12) TMI 359
  Disallowance of interest claim by assessee u/s 24(b) - CIT(A) deleted the addition made by AO by observing that interest paid on any fresh loan taken to repay the earlier loan is fully covered u/s 24(b) - Held that:- The subsequent loan taken by assessee to repay his original loan is very much covered for claim the deduction u/s. 24(b) of the Act. It is also important to note that assessee has taken a loan from SBM and same loan from the same bank was enhanced as a result of restructuring of the existing loan. Therefore, in this case no third loan was obtained by assessee. Therefore, we do not find any good and justifiable reason to interfere in the order of Ld. CIT(A). - Decided against revenue. Addition on account of treating Long Term Capital Loss (LTCG for short) as Short Term Capital Gains (STCG for short) as business loss - AO has disallowed the conversion of the capital asset into stock-in-trade on the ground that there was no business activities carried on by assessee-company - CIT(A) allowed claim - Held that:- AO has disallowed the conversion of the capital asset into stock-in-trade on the ground that there was no business activities carried on by assessee-company during the relevant previous year and Ld. CIT(A) has rejected the claim of the AO on the ground that Sec.45(2) of the Act provides the assessee to convert the capital asset into stock-in-trade at any time during the year. There is no prohibition under the Act, therefore the act of the assessee for converting the capital asset into stock-in-trade is within the ambit of law. From the aforesaid Section 45, it is very clear that action done by assessee for converting the investment into stock-in-trade is within the purview of the law. - Decided against revenue.

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• 2015 (12) TMI 358
  Deduction u/s.10B disallowed - CIT(A) confirmed disallowance - Held that:- The assessee would be entitled to claim for deduction u/s.10B of the Act, for a period of 10 consecutive years from the date of commencement of its manufacture as envisaged in the section. In the case in hand, the assessee has not demonstrated the actual date of commencement of the commercial production. However, the AO and the ld.CIT(A) have given finding that the commercial production was commenced even prior to the period claimed by the assessee. Under these facts, we do not see any reason to interfere with the order of the ld.CIT(A) as the first requirement is the commencement of manufacturing or production of undertaking - Decided against assessee. Disallowance of depreciation on goodwill - Held that:- Since the facts of the case are identical to that of AY 2006-07 in assessee’s own case, taking a consistent view wherein held as erlier in the case of B. Raveendran Pillai, (2010 (9) TMI 434 - Kerala High Court), the Hon'ble High Court has also held that the goodwill is certainly comparable with trade mark, franchisee, copy right, etc., hence, entitled for the depreciation.- Decided in favour of assessee.

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• 2015 (12) TMI 357
  Validity of service of notice u/s 143(2) - Whether notice was not within the limitation period? - Held that:- This case, the notice was admittedly issued by the AO within the prescribed period of 12 months from the end of the month in which the return was filed by the assessee, which fact has been confirmed by the Postal Authorities as well, the ld. DR contended that it should be considered as duly ‘served’ on the assessee within the meaning of proviso to section 143(2). Albeit, this contention was earlier resisted, but during the course of hearing, the ld. AR did not oppose this argument advanced on behalf of the Revenue. He candidly, admitted that this issue may be decided in favour of the Revenue. Without going into the legal aspects of the arguments on this issue, we allow this ground of appeal on the concession made by the ld. AR. - Decided againt assessee. Addition on account of transfer pricing adjustment - application of the most appropriate method to the international transactions - CIT(A) deleted the addition - Held that:- Application of the CUP as the most appropriate method becomes more imminent in a case where comparable uncontrolled transactions are internal. Adverting to the facts of the instant case, we find that the assessee itself admitted before the AO that the services provided to the AEs and non-AEs are similar. Since the internally uncontrolled comparable transactions of rendering similar services as provided to the AEs are available, we hold that the decision of the AO to apply CUP as the most appropriate method does not warrant any interference. We, therefore, approve the view taken by the AO in determining the ALP of the international transaction of `Service’ revenue from its AE on the basis of CUP method as against TNMM applied by the assessee. Here, it is pertinent to mention that the AO has confined himself only to the determination of ALP in respect of 'Service’ revenue by impliedly accepting the international transaction of 'Equipment supply’ revenue at ALP. Out of seven invoices raised on India Glycols Ltd., three invoices for Rs. 24,000/- each represent `Site visit’ to M/s India Glycols Ltd., for discussions about the work undertaken to be done by the assessee for them. These invoices represent site visiting charges by the assessee’s employees for which there is a charge of Rs. 24,000/-, which rate on hourly basis, comes to Rs. 1,500/-. In so far as the rendering of actual service is concerned, the invoices are for sum of Rs. 2,80,000/-, Rs. 2lac, Rs. 1,22,000/- and Rs. 90,000/- on India Glycols Ltd., and Rs. 44,550/- on M/s Petron Engineering Construction Ltd. These five invoices represent service charges for the actual work done by the assessee to these unrelated parties. The AO has ignored these five invoices and picked up only three invoices of Rs. 24,000/- each for determining the benchmark rate of Rs. 1,500/- per hour, which, in fact, represented merely site visiting charges undertaken by the assessee’s employees. If all the eight invoices are considered, the average hourly rate comes to Rs. 717/- per hour which was placed before the AO, who chose to ignore the same. If we ignore the three invoices of Rs. 24,000/- each from both the sides, namely, revenue as well as the number of hours, the average hourly rate charged comes to Rs. 682/-. Viewed from any angle, the price charged by the assessee from its AEs at Rs. 1135/- per hour is definitely at arm’s length in comparison with the average price of Rs. 717/- or Rs. 682/-, as the case may be. In view of the foregoing discussion, we are of the considered opinion that the ld. CIT(A) was justified in deleting the addition on merits - Decided in favour of assessee.

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• 2015 (12) TMI 356
  Validity of assessment u/s 153A - whether the assessment is barred by limitation under Section 153(1B) - Held that:- In the present case, there was no evidence on record suggesting that the assesse sought suo motu extension of time for submission of audit report under Section 142(2A) of the Act. It is clear from the record that the Assessing Officer had suo motu extended time for furnishing the audit report under Section 142A of the Act. Respectfully following the ratio laid down in case of BISHAN SAROOP RAM KISHAN AGRO PVT. LTD. [2011 (5) TMI 540 - DELHI HIGH COURT], we hold that the assessment framed in this case is also barred by limitation and does not survive in the eye of law. Accordingly, the assessment order is quashed, as such. - Decided in favour of assessee.

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• 2015 (12) TMI 355
  Unexplained source of cash deposit in bank and money used for purchase of FDR - Held that:- The surplus of cash withdrawal from bank during financial year 97-98 over cash deposit in bank in that year, amounts to Rs. 13,59,000/- out of cash in hand shown by the assessee as on 01/04/98 at Rs. 14,16,946/-. The difference being excess opening balance of cash in hand as on 01/04/98 over and above extra cash withdrawal from bank during financial year 97-98 Rs. 13.59 Lacs was only Rs. 57,946/-. In our considered opinion, this much cash in hand is very much possible in the beginning of F.Y. 1997 – 98 for a lady who was 63 years old during the relevant time. Since the excess of cash withdrawal over and above cash deposit in the bank during financial year 97-98 is supported by independent evidence being Bank Account, it cannot be said that this cash was not available with the assessee during assessment year 97-98 and therefore, even if the assessee is not in a position to explain the source of such cash in hand or in bank during financial year 97-98, addition may be made as per law in assessment year 98-99 but the same cannot be considered for making any addition in assessment year 99-2000 and the cash in hand shown by the assessee in present year over and above the surplus of cash withdrawal over cash deposit in bank of Rs. 57,946/- deserves to be accepted being cash in hand with this lady of 63 years old at the beginning of F.Y. 1997 – 98 and therefore,no part of addition made by the A.O. and confirmed by CIT(A) including the enhancement by him is sustainable. We, therefore, delete the same. - Decided in favour of assessee.

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• 2015 (12) TMI 354
  Revision u/s 263 - as per CIT(A) section 54F of the Act could not be allowed since assessee had returned capital gains after the detection - Held that:- CIT in his order mentions that assessee has sold two sites on 24.07.2008, whereas the first property against which exemption u/s.54F of the Act was purchased on 13.03.2008 and the second property was purchased on 06.08.2008. Obviously the first property was purchased prior to the sale of the sites on 24.07.2008. Disabling clauses (ii) and (iii) above only mentions purchase or construction within a period of one year / three years after the date of transfer. It does not deal with a case where the purchase is prior to the date of transfer. Even from this angle we cannot say that the AO’s decision to allow the claim u/s.54F of the Act was based on a view which was unlawful or illegal or not possible. In our opinion effort of the CIT was to substitute his view in place of a possible and lawful view taken by the AO, that too after enquiries. In other words, we are of the opinion that the order of AO did not have any error which was prejudicial to the interests of Revenue. Order of CIT u/s.263 of the Act is set aside. - Decided in favour of assessee.

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• 2015 (12) TMI 353
  Disallowance of bad debts relating to write off of rental advance - whether the rental advance given by assessee whether a capital asset or revenue asset? - Held that:- The admitted facts of the case are that as the rental advance given by the assessee as security deposit to the lessor M/s Chettipunyam Properties Pvt. Ltd. for taking their premises on lease vide lease agreement dated 24th June, 2005 for manufacturing of garments, no doubt, it is for the business of the assessee. The assessee get a right to occupy and run the business uninterruptedly. As per the ratio laid down in the case of Triveni Engg. (2010 (9) TMI 26 - DELHI HIGH COURT), capital asset is created, not the revenue asset. In the case of Badri Dass Daga (1958 (4) TMI 2 - SUPREME Court) held as the result is that when a claim is made for a deduction for which there is no specific provision in section 10(2), whether it is admissible or not will depend on whether, having regard to accepted commercial practice and trading principles, it can be said to arise out of the carrying on of the business and to be incidental to it. If that is established, then the deduction must be allowed, provided of course there is no prohibition against it, express or implied, in the Act. It is clear that this advance payment was not for the normal course of business/trade. Since the capital asset is created, the same cannot be treated as revenue loss but capital loss. - In the other cases raised by assessee, the bad debts arose in the normal course of business and are revenue in nature, but, in the present case, advance written off was in the nature of capital asset - Decided against assessee. ‘Other income’ not considered for allowing deduction u/s 80IB - Held that:- The assessee is eligible to claim income from scrap sales. The scrap is part and parcel of any industrial undertaking, without which, there is no manufacturing activity. Hence, entitled to claim benefit u/s 80IB. Coming to the income from insurance, the undertaking claimed loss from insurance company, it is nothing but compensation for the finished goods lost after manufacturing in the undertaking and during transit. It is similar to the scrap sales income derived as part of the industrial process. Similarly, the insurance income derived due to loss of manufactured finished goods. Hence, it is entitled to claim benefit u/s 80IB. With respect to other income like interest, which is not part of industrial activities or manufacturing, hence, it is not entitled for the benefit u/s 80IB. In the result, assessee is allowed to claim benefit on scrap sales and insurance income, rest are dismissed. - Decided partly in favour of assessee.

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• 2015 (12) TMI 352
  Disallowance of deduction claimed u/s 54 - CIT(A) confirming disallowance of the cost of construction claimed in the computation of capital gains - Held that:- It is clear from the facts on records that sale deed which is an important document for transfer of property and the basis of transfer of property u/s 2(47) does not contain any reference to sell / transfer of any residential house or construction. Therefore, no legal inference can be drawn in favour of the assessee on this issue. Despite the AO s insistence, assessee neither produced the contractor nor the supervisor to substantiate his version. Consequently, the assessee failed to discharge the burden cast on him to lead any credible evidence to support his plea about the plot and transfer of the same. Non-discharging of the burden to prove the eligibility of any claim will disentitle the assessee from availing the same. Apropos claim of cross examination, find merit in the arguments of the ld. DR that there is no universal rule to provide cross-examination in each and every case, more so when evidence on record is palpable against the assessee. Even if the evidence of Surendra Kumar Sen is excluded, the evidence on record is clinched against the assessee. In view thereof, the cross examination of Shri Surendra Kumar Sen becomes irrelevant as sufficient material is on record even if the statement of vendee is ignored. In view thereof uphold the order of the lower authorities and reject the claim of the assessee for construction cost and deduction u/s 54F of the Act. - Decided against assessee.

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• 2015 (12) TMI 351
  Deemed dividend under section 2(22)(e) - CIT(A) deleted the addition - whether the interest free amount of Rs. 10,00,000/- advanced to the assessee by the company, in which the assessee is 50% shareholder, was neither a trade advance in normal commercial expediency, because no supporting documents exists, nor the premises were given to the said company on leave and licence - Held that:- We have observed that the assessee has received Rs. 10 Lac during the assessment year as advance from M/s Mahavir Dwellers Pvt. Ltd towards the leave and license deposit for office premises of the assessee and the statement has been made before us by the Ld AR of the assessee that these amounts were further received in connection with the same agreement for office premises in assessment years 2008-09 and 2009-10. The issue has already been considered at length by the CIT(A) and also by Mumbai Bench of Tribunal for assessment year 2008-09 [2015 (7) TMI 734 - ITAT AHMEDABAD] whereby the matter is decided in favour of the assessee. Even remand report has been called from the assessing officer by CIT(A) for assessment year 2008-09 whereby the assessing officer has considered at length supporting evidence such as copies of agreement, ledger accounts, bank statements , ledger account in the books of Mahavir Dwellers Private Limited and the assessing officer found it to be correct and arrived at conclusion in favour of the assessee. We uphold the decision of the CIT(A) who has deleted the addition made by the assessing officer - Decided in favour of assessee.

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• 2015 (12) TMI 350
  Disallowance of amount claimed as accumulation and amount claimed as set apart for the assessment years 2008-09 and 2009-10 respectively u/s.11(2) - Held that:- In the present case, though the assessee filed Form-10 during the time of assessment, setting apart amount, the period etc. are not shown and the columns in the form to be filled are left blank. The contention of the ld. AR is that though there were discrepancies in Form-10, it should be considered rectified in view of resolution passed. The resolution passed does not show the name of the assessee as well as the period. Thus, the resolution is also defective and it is not having all the information required. There is no dispute that it is mandate of sec.11 of the Act to specify the purpose and period for which accumulation is sought for and he assessee has not complied with the provisions of sec.11(5) of the Act. Considering the totality of facts and circumstances of the case, in our opinion, the orders of the lower authorities are justified in dismissing the appeal of the assessee. - Decided against assessee

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• 2015 (12) TMI 349
  Set off of loss in purchase and sale of shares against business income - CIT(A) allowed the set off of speculative loss disallowed by the AO u/s 73 (1)- Held that:- We find from the records that the AO has not taken into consideration that the assessee company was a non-banking financial company as per the certificate of registration granted by the Reserve Bank of India. It is also held by Hon'ble Gujarat High Court in the case of Barkha Investment & Trading Company vs. CIT (2005 (4) TMI 21 - GUJARAT High Court) that once the assessee company was registered with the Reserve Bank of India and kept the registration alive as Non-Banking Financial Company, the assessee company was to be considered as a company, the principal business of which was granting of loans and advances and Chapter III-B of RBI Act will have an over riding effect. It is observed that if the assessee company has principal business of granting loans and advances then explanation to Section 73 is not applicable as held in the case of Narain Properties Ltd. vs. ACIT (2013 (4) TMI 189 - ALLAHABAD HIGH COURT ) and ACIT vs. Tanna Electro Mechanics (P) Ltd. (2005 (10) TMI 425 - ITAT MUMBAI ). Thus the AO was not justified in treating the loss in the purchase and sale of shares as speculation loss. Hence, considering the order of the ld. CIT(A) and our deliberations on the issue, we find no reason to interfere in the order of the ld. CIT(A) which is sustained. - Decided against revenue

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• 2015 (12) TMI 348
  Disallowance on account of non-payment of service tax liability u/s 43B - CIT(A) deleted the addition - Held that:- CIT(A) has given a categorical finding of fact that the assessee had not claimed the amount of Service Tax Liability in the profit and loss account and hence there was no question of making disallowance and Secondly, the assessee had collected the Service Tax and paid later, on the dates as incorporated above. Thus, no disallowance u/s 43B can be sustained under these facts and circumstances. Accordingly, the finding of CIT(A) is upheld. Regarding disallowance of Employee’s contribution to PF also, we uphold the order of the CIT(A) as it is not disputed before us that the PF dues though have been paid beyond the due date of Provident Fund Act, but much before the due date of filing of return of income u/s 139(1) which is allowable in view of the decision of Hon’ble Supreme Court in the case of CIT vs Alom Extrusions Limited, reported in [2009 (11) TMI 27 - SUPREME COURT ]. Thus, the order of the CIT(A) on this score also is upheld. - Decided in favour of assessee

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• 2015 (12) TMI 347
  Disallowance of Licensing/registration fee & ISO registration fees - CIT(A) deleted the addition - revenue v/s capital in nature - Held that:- CIT(A) granted relief by holding that the AO could not understand the business activity of the assessee properly. He further observed that the assessee company was doing business of giving card to customers of different business entities and impugned expenditure incurred towards plant registration and licensing and registration fee for different places all over India. He also observed that these expenses were allowed to the assessee in other preceding and succeeding assessment years except A.Y. 2004-05 which is the period under consideration. It is not the case of the AO that these expenses incurred by the assessee brought any asset or benefit of enduring nature for the assessee and these are one time expenditure, capital in nature, hence, the view taken by the CIT(A) is correct and sustainable and we approve the same. - Decided against revenue

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• 2015 (12) TMI 346
  Unexplained cash credit - assessee failed to discharge the onus to prove the source of the source to establish the genuineness of the gift and creditworthiness of the donor - Held that:- The opening balance on 12/09/2003 in the bank account of the donor was Rs. 8.05 lacs, which was much more than the amount of cheque issued by donor in favour of the assessee as gift. Simply because there is a cash deposit of Rs. 50,000/- on 12/09/2003, creditworthiness of the donor cannot be doubted when there are sufficient balance in the bank account of the donor, which has come out of clearing and not out of cash deposit. Hence, we find that the identity of the donor is admittedly established even as per CIT (A) and source of gift is also established from the bank account of the donor in which there are sufficient deposits by way of clearing in addition to a small deposit of Rs. 50,000/- in cash. It is also seen that the donor is having relation with the donnee because it is observed by learned CIT(A) in Para 4.1.1 of his order that it was submitted before him that the gift was given by uncle and grandmother of the assessee and this contention of the assessee is not controverted by learned CIT(A) or by Learned D.R. of the Revenue. Under these facts, we are of the considered opinion that the addition made by the Assessing Officer and confirmed by CIT(A) is not justified. - Decided in favour of assessee. Addition on account of low withdrawals for house hold expenses - Held that:- The house hold expenses of Rs. 3,000/- i.e. Rs. 250/- per month is low, even by standard of pocket money during the period. Also note that the assessee herself has declared income of Rs. 6,20,689/- during the present year. The learned CIT(A) has estimated the additional house hold expenses at Rs. 9,000/- as against Rs. 12,000/- estimated by the Assessing Officer. Considering these facts, we are of the considered opinion that there is no infirmity in the order of learned CIT(A) on this issue. - Decided against assessee.

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• 2015 (12) TMI 345
  Validity of search conduced in the hands of the assessee under section 132 - Held that:- We notice that the only reason on which the assessee is questioning the validity of search is that the search action has not resulted in unearthing of any incriminating material or undisclosed income. Validity of search could not be questioned on the above said ground. It is not necessary that the search action should always result in unearthing of any incriminating material or undisclosed income. Even if no incriminating material or undisclosed income was unearthed, the search would be valid, if one of the three conditions prescribed u/s 132(1) was complied with. Under these set of facts, the view that there is no merit in the contentions of the assessee on this issue and hence, the same is liable to be dismissed. Validity of accepting the additional income disclosed by the assessee in the return of income filed u/s 153A - Held that:- In the instant case, the assessee has voluntarily offered certain credits found in his bank account as additional income, since he felt that the source of those credits could not be explained by him. Hence, the basis of offer of additional income is the bank account of the assessee. There should not be any dispute that the availability of undisclosed income, if any, will be within the personal knowledge of the assessee, even if no incriminating material was found during the course of search. The provisions of section 153A nowhere states that the assessee is precluded from offering such kind of undisclosed income in the return of income from out of his bank account and voluntarily offered the same for taxation u/s 153A of the Act. Hence, in my view, the assessee was not entitled to contend for exclusion of the same, since the undisclosed income has been identified by the assessee himself. The filing of return of income and payment of tax is called “self assessment” and hence the tax paid u/s 140A of the Act is called self assessment tax. The assessee, herein, has voluntarily identified the “undisclosed income” from out of his bank account, though the same has not come to the notice of the search officials. Accordingly, after having identified the undisclosed income and voluntarily offered the same, the assessee is precluded from putting a claim for exclusion of the same. The basis for offering the additional income is the bank account of the assessee and hence it is not correct to say that there is no basis or material for the additional income so offered. Accordingly, no merit on the second ground also.

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• 2015 (12) TMI 344
  Rejection of deduction claimed u/s 54F - Held that:- On a careful perusal of the orders passed by the tax authorities, we notice that the assessee as well as the tax authorities has not properly applied the provisions of sec. 54 and 54F. The deduction allowed u/s 54 and 54F is property specific. Hence, we are unable to understand as to how the assessee and AO could deduct the amount of Rs. 5.00 lakhs on the reasoning that the deduction to that extent was allowed in the immediately preceding year. We are unable to understand as to the provisions under which such kind of reduction is allowed. The deduction u/s 54 should be allowed against the long term capital gain. However, the AO has not computed the long term capital gain, but allowed the same against the sale value. Thus the deduction claimed by the assessee u/s 54/54F requires fresh examination at the end of the assessing officer. - Decided in favour of assessee for statistical purposes. Assessment of rental income under the head Income from house property instead of assessing the same as Business income - Held that:- Ld A.R placed reliance on the recent decision rendered by the Hon’ble Supreme Court in the case of Chennai Properties & Investments Ltd.[2015 (5) TMI 46 - SUPREME COURT] Hence, we are of the view that this issue also requires fresh examination in the light of the decision of Hon’ble Apex Court, referred above. Accordingly, we set aside the order of Ld CIT(A) on this issue also and restore the same to the file of the AO for fresh consideration. - Decided in favour of assessee for statistical purposes.

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• 2015 (12) TMI 343
  Addition on account of income not shown in the P&L account - AO made disallowance on the basis that the expenditure could not be verified from the Gujarat Electricity Board [GEB] - CIT(A) delted the addition - Held that:- There is no dispute with regard to the fact that GEB has confirmed the recovery of the expenses. However, the AO did not allow the expenses on the ground that GEB failed to correlate the expenses with the year under appeal. We do not find any merit into the contention of the ld.counsel for the assessee that the subject disallowance is not sustainable as the direction of the Tribunal in the earlier round of litigation was clear that the AO would verify from the books of account of the assessee about the expenditure. There is no dispute with regard to the fact that the GEB had made recovery out of the contract payment. Therefore, there is no doubt about the fact that the recovery relates to the business of the assessee. The assessee has submitted that recovery is in respect of the payments made by the GEB on behalf of the assessee. The AO has not brought any material on record suggesting that the recovery were not related to the contract payments. Under these facts, we are of the considered view that the ld.CIT(A) was justified in granting the deduction. - Decided against revenue.

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• Customs

• 2015 (12) TMI 321
  Violation of Regulation 13(a) of the Customs House Agents Licensing Regulations, 2004 - Held that:- Commissioner refers to the entire materials, including the statements under section 108 of the Customs Act, 1962. These statements were relied upon. However, as held by the Tribunal, the core issue has been missed by the Commissioner. In para 19 of his order, the Commissioner refers to the admission in cross-examination by one Alpesh Bhanushali. He admits that the original authorisation letter from M/s. Bombay Traders authorising the Respondent to act as Customs House Agent along with import documents like bill of lading, invoices etc. were given by the said Bhanushali to the Respondent. The original authority letter is dated 23rd September, 2011. In these circumstances, by terming the authorisation as so called and faulting the identity of the importer, the Commissioner could not have proceeded against the Customs House Agent. He could not have been held guilty of violation of Regulation 13(a) of the said Regulations. Tribunal holds that the absence of any finding by the Commissioner on such a vital aspect vitiates his order. Once there was a proper authorisation for clearance of the impugned consignment, then, Regulation 13(a) is not violated. This is a finding of fact based on factual material produced. It cannot be termed as perverse or vitiated by any error of law apparent on the face of the record. Once the principal violation of other regulations cannot be sustained, then, the incidental and ancillary allegations of violation of the regulations must also fall to the ground - Decided against Revenue.

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• 2015 (12) TMI 320
  Exemption to import capital goods at concessional rates of customs duty under the EPCG Scheme - Held that:- Writ Petition can be disposed of in terms of the statements and undertakings of the Petitioner. We find that if the Petitioner is approaching for exercising an option as propounded and placed before us by the Director General of Foreign Trade itself, then, the request to enable them to avail of the same on the terms proposed by Mr. Nankani can be accepted. Meaning thereby, while granting liberty to the Petitioner to avail of the option in terms of para 5.11 of the Handbook of Procedure, 2009-14, we accept the undertakings of the Petitioner that it would furnish fresh bank guarantees in the sum demanded by the Customs in terms of the document/communication dated 31st August, 2015 addressed to the Chief Manager of State Bank of India, Industrial Finance Branch, 5 Sai Complex, Bharat Nagar, Nagpur and keep these bank guarantees alive till it obtains the Export Obligation Discharge Certificate within the extended time. The Petitioner would submit these bank guarantees for verification and scrutiny. Needless to clarify that the exporter would obtain the Export Obligation Discharge Certificate and submit the same to the Customs/Competent Commissionerate and avail of such benefits as are permissible in law. - Petition disposed of.

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• 2015 (12) TMI 319
  Validity of order of settlement commission - Assessee made importation contrary to the provisions of Customs Act, 1962 as also the Foreign Trade Development & Regulation Act, 1992 - misuse of IEC Code - Held that:- Satish Aggarwala appearing for the petitioner/Directorate of Revenue Intelligence contends that the Settlement Commission has taken a very lenient view in imposing the fines and penalties. According to him, in a case of this nature, the fines should have been much higher as also the penalty amount. We have also heard the learned counsel for the respondents - It is well settled that the proceedings before the Settlement Commission are not adjudicatory but are by way of settlement. This Court does not sit in appeal over the settlement orders passed by the Settlement Commission. It is, therefore, not open to a party to make a grievance with regard to an adjudicatory process when the same is foreign to the proceedings before the Settlement Commission. - Decided against Revenue.

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• 2015 (12) TMI 317
  Condonation of delay - delay of 33 days - Held that:- Tribunal had simply said the Revenue could not explain the delay between 18.11.2010 and 22.02.2011. It appears the appeal was made ready on 21st March, 2011 and there was delay of 33 days as aforesaid. Explanation of such delay was offered in paragraph 4 of the application but no reason given as to why the same was not accepted. The learned Tribunal did not say why such explanation was no explanation at all or could not be the explanation for the period between 18.11.2011 and 22.02.2011. - Matter remanded back - Decided in favour of Revenue.

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• 2015 (12) TMI 316
  Failure to fulfil export obligation - Extension of validity of license - License expired within the period that the overseas buyer had renewed its order to import the subject goods from the petitioner - Held that:- The petitioner was permitted to import yarn duty free on their undertaking to export the stipulated quantity of goods within a specified period of time. The whole purpose of issuance of the advance licences was to promote export with the incentive of duty remission if the export obligation was fulfilled. If for any bona fide reason an importer/exporter has been unable to fulfil his export obligation within the stipulated time, his case for extension of the validity period of the licence or licences should be reasonably considered. In order to reasonably consider such extension, it is important whether the belated export which he proposes to make is genuine or not. If the belated export is genuine, the purpose of the policy of generating more export earnings, by granting duty remission incentives would be fulfilled. This has to be ascertained. Only the circumstances will bear this out. - petitioner is allowed to fulfil its export obligation against advance licences at serial nos.8 and 9 of page 50 of the writ petition on the basis of the expired licences, without prejudice to the rights and contentions of the parties.

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• 2015 (12) TMI 315
  Request to stop the test of goods under Section 25 of the Food Safety and Standards Act, 2006. - Import of duty free foreign manufactured branded liquor for sale in the duty-free outlets in our international airports - Held that:- If the Customs and Food Safety authorities have been clearing the self-same branded alcoholic beverages brought into this country by the writ petitioner company in the past without testing there is no reason to believe that the present consignment may be contaminated or poisonous. They will clear the consignments covered by the above bills of entry, if they conform to those earlier brands and description going by the label, without in any manner opening the seal or breaking any bottle for testing. Such clearance order with short reasons, should be passed within two weeks from the date of communication of this order. - As no affidavit was invited, the allegations contained in the writ petition are deemed not to be admitted. - Petition disposed of.

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• 2015 (12) TMI 314
  DEPB Benefit - Opportunity of hearing not granted - Violation of principle of natural justice - Held that:- Even otherwise, on a perusal of the order of the Commissioner it does not appear that this is such a case which should be dealt with by the High Court in exercise of its Article 226 jurisdiction. Particularly so, because intricate questions of facts are involved. The case against the petitioner is that through various machinations he tried to inflate the purchase price, fabricate documents etc. for the purpose of getting extra DEPB benefit. - The matter should be tried before the Tribunal. - Matter remanded back - Petition disposed of.

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• 2015 (12) TMI 313
  Revocation of CHA license - forfeiture of the entire security deposit - sub-letting of CHA licence - contravention of Regulation 13 (b) by employing somebody else for undertaking the customs clearance work other than an employee - contravention of Regulation 13 (k) regarding non-maintenance of records properly - contravention of regulation 13(n) by delayed submission of BIS certificate in respect of the goods imported - contravention of regulation 13 (o) relating to non-verification of the antecedents of the importer - Held that:- no evidence has been adduced by the Revenue to show that any consideration has been received by the appellant CHA for sub-letting the licence either from Sri. Nirav Goradia or from M/s Emkay Freight Services. Further we notice that though Sri. Nirav Goradia has been issued with a G card, in the transaction relating to Jayem Impex, he has not attended to any clearance work. In this factual scenario, the charge against the CHA of sub-letting the licence has no basis whatsoever. The Inquiry officer has examined at length this issue in his inquiry report and has also come to the same conclusion. Clearance work relating to the transactions was undertaken by Sri. Satish Tole, an employee of the CHA and not by Sri. Nirav Goradia. Therefore, the finding of the inquiry officer that this charge is not proved cannot be faulted at all and there was no other material available with the adjudicating authority to come to a different conclusion. In the article of charge issued to the appellant there is no specific allegation of contravention of Regulation 18. The only charge is that the muster roll of the employees has not been properly maintained and non-maintenance of cash register. However, in respect of Mr. Nirav Goradia, this allegation does not sustain because his name figures both in the muster rolls and the salary vouchers. There is no allegation whatsoever that the transactions undertaken in respect of Jayem Impex or other customers were not reflected in the records maintained by the appellant. If that be so, the infractions, if any, are only minor or technical in nature. The appellant has explained that there was a delay on the part of the importer in furnishing the same and hence the delay on his part. It is not evident from the records that the delayed submission of BIS certificate had any adverse impact on the payment of customs duty. In fact no action has been initiated either against the CHA or against the importer under the provisions of the Customs Act. Thus there is no material evidence available on record to prove this charge. Appellant has produced a copy of the authorisation issued by Jayem Impex for undertaking the transactions. It is not the case of the revenue that M/s Jayem Impex was a fictitious or bogus firm - Decided in favour of appellant.

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• 2015 (12) TMI 312
  Imposition of Penalty - benefit of Vishesh Krishi Upaj Yojana - Benifit on the basis of forged bills - Held that:- It can be seen that in cases were movement of goods into and outside the country is involved there are separate sections dealing with the legal provisions. Section 114AA specifically deals with cases where documentation, which is incorrect or false. There may been cases where documents are made and there no movement of goods either way and benefits are claimed. Section 114AA is intended to cover those cases. In this respect, the term of "penalty not exceeding five times of the value of the goods" needs to be read as "penalty not exceeding five times of the value of the goods declared in the said declaration or statements or documents". The appellants relies on the case law with reference to the Section 114 is not relevant that in so far as Section 114 deals with violation in respect of actual movement of goods outside the country. Thus for invocation of Section 114 the actual movement of goods is necessary, however for the purpose of Section 114AA movement or existence of goods is not necessary. In view of the above, I am of the opinion that penalty under Section 114AA can be legally imposed in the present circumstances. - Decided against assessee.

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• Corporate Laws

• 2015 (12) TMI 307
  Scheme of Arrangement - directions of this court to dispense with the requirement of convening the meetings of the equity shareholders of both the companies - Held that:- The transferor company has 11 equity shareholders. All the equity shareholders have given their consents/no objections in writing to the proposed Scheme of Arrangement. Their consents/no objections have been placed on record. They have been examined and found in order. In view thereof, the requirement of convening the meeting of the equity shareholders of the transferor company to consider and, if thought fit, approve, with or without modification, the proposed Scheme of Arrangement is dispensed with. The transferee company has 02 equity shareholders and 01 unsecured creditor. Both the equity shareholders and the sole unsecured creditor have given their consents/no objections in writing to the proposed Scheme of Arrangement. Their consents/no objections have been placed on record. The meeting of the secured creditors of the transferor company shall be held on 26th December, 2015 at 11:00 a.m. at A-11, Meerut Road Industrial Area, Ghaziabad, Uttar Pradesh. Mr.Ankur Arora, Advocate, (Mobile No. 9811929774) is appointed as the Chairperson and Mr. Hari Om Gautam, Advocate, (Mobile No. 9810057143) is appointed as the Alternate Chairperson to conduct the said meeting. The Quorum of the meeting of the secured creditors of the transferor company shall be 03 in number and more than 25% in value of the total secured debt. The meeting of the unsecured creditors of the transferor company shall be held on 26th December, 2015 at 12:30 p.m. at A-11, Meerut Road Industrial Area, Ghaziabad, Uttar Pradesh. Mr.Sunil Sharma, Advocate, (Mobile No. 9811383958) is appointed as the Chairperson and Ms. Shrishti Sharma, Advocate, (Mobile No. 9582249534) is appointed as the Alternate Chairperson to conduct the said meeting. The Quorum of the meeting of the unsecured creditors of the transferor company shall be 20 in number and more than 25% in value of the total unsecured debt. The Chairpersons and Alternate Chairpersons shall ensure that notices for convening the aforesaid meetings of the secured and unsecured creditors of the transferor company, along with copies of the Scheme of Arrangement and the statement under Section 393 of the Companies Act, 1956, shall be sent to the secured and unsecured creditors of the transferor company by ordinary post at their registered or last known addresses at least 21 days before the date appointed for the meetings, in their presence or in the presence of their authorized representatives. Notice of the meetings shall also be published in the Delhi editions of the newspapers “Business Standard” (English) and (Hindi) Delhi editions in terms of the Companies (Court) Rules, 1959 at least 21 days before the date appointed for the meetings.

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• Service Tax

• 2015 (12) TMI 342
  Denial of CENVAT Credit - Various services - Nexus with manufacturing activity - Held that:- Services envisaged in the inclusive part of the definition is very broad and a narrow interpretation cannot be placed to conclude that the services used only in the manufacture of final product will qualify as 'input service' for the purpose of taking CENVAT credit. Therefore, considering the scope and spirit of the definition of 'input service', I am of the considered view that the stand of Revenue that "usages of the services 'in or in relation to manufacture' alone determines its qualification to be an input service" is not in harmony with the statutory provisions. - if the services have been utilised either directly or indirectly, in or in relation to the manufacture of the final product or used in relation to activities relating to business, then such services fall within the definition of input service and the manufacturer is eligible to avail CENVAT credit of the service tax paid on such services. - there is no infirmity in the order passed by the Commissioner (Appeals) and accordingly the same is upheld - Decided against Revenue.

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• 2015 (12) TMI 341
  Waiver of pre deposit - franchisee service - Invocation of extended period of limitation - Held that:- There is nothing on record to indicate whether limb 4 of the definition of franchise as it stood prior to 16.6.2005 is satisfied and therefore demands up to the period 15.6.2005 prima facie may not be sustainable. As regards the period from 16.6.2005, the ld. Advocate has made out an arguable case that Media was not granted any representational right to provide service or undertake any process identified with franchisee. On the other hand, ld. DR has also made arguable case by pointing out that the service rendered fell in the scope of franchisee service inasmuch as Media got the advertisement in the name of Swagat magazine which is clearly identified by the appellant and thus Media had representational right to collect advertisement for Swagat magazine which is identified with the appellant. Clearly the issue involved is interpretational and therefore the appellant s contention that there was no wilful mis-statement or suppression of fact on their part and they genuinely believed that the amount was not taxable has some merit and as a consequent prima facie extended period may not be invocable. - entire demand prior to 16.6.2005 is prima facie not sustainable, the extended period may also not be invocable and issue is interpretational, we grant stay against recovery subject to pre-deposit - Partial stay granted.

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• 2015 (12) TMI 340
  Rectification of mistake - no finding was given on the ground dealing with nexus of Certain services such as General Insurance of Group, Medical policies and Outdoor Catering of export of services, therefore there is apparent mistake on record of the impugned order. - Held that:- General Insurance for group and Medical policies are in respect of employees of the Respondent as per the statutory provisions under Factory Act, and Industrial law. As regard outdoor catering, in various judgments, allowed Cenvat on outdoor catering services considering it as input services. As regard the issue that certain policies are in personal name and not of the assessee, I am of the view that though the certain bills were issued in the name of individual but the same was accounted for in the books of accounts of the appellant, merely because bills in personal name, it cannot be said that services not used by the respondent. Expenditure towards that bill was booked in the respondent's account, therefore in my considered view, the Cenvat credit is rightly admissible in respect of aforesaid services and therefore it has nexus with export services. In view of my above observations the Cenvat credit is admissible on the services and refund on the export services is adversely affected - Decided against Revenue.

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• 2015 (12) TMI 339
  Denial of CENVAT Credit - address on the document of the office on which credit has been taken are not mentioning Assessee's address - Held that:- whereas there is no dispute regarding availment of Cenvat Credit by the assessee in their other locations, Cenvat Credit is entitled to take at their registered office. Therefore, following the judicial pronouncement [2013 (2) TMI 312 - CESTAT MUMBAI], [2009 (10) TMI 434 - CESTAT, BANGALORE], [2014 (5) TMI 1012 - CESTAT NEW DELHI], [2010 (7) TMI 319 - CESTAT, AHMEDABAD] & [2012 (12) TMI 612 - CESTAT NEW DELHI] I hold that appellant has correctly taken Cenvat Credit at their registered office at New Delhi. Therefore, impugned proceedings were not required against the appellant.

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• 2015 (12) TMI 338
  Condonation of delay - Held that:- There is sufficient cause shown by the appellant for the delay in filing the appeal before Commissioner (Appeals). The due date of filing appeal is 17.11.2011 whereas they have filed the appeal on 20.1.2012. The only ground mentioned in the order for dismissing the appeal is that appellants failed to file COD application before the Commissioner (Appeals). Otherwise the appeal is within the powers of Commissioner (Appeals) for condonation. Accordingly, the delay in filing of appeal before Commissioner (Appeals) is condoned. Appeal is remanded to Commissioner (Appeals) for deciding the case on merits after affording a reasonable opportunity to the appellant. Stay application is disposed. Impugned order is set aside - Matter remanded back - Decided in favour of assessee.

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• 2015 (12) TMI 337
  Denial of refund claim - service tax paid under Technical Testing and Analysis service - Held that:- It is not in dispute that the service was rendered by technical agencies engaged in providing service in relation to technical testing and analysis thus satisfying the definition given in Section 65 (107) ibid. In the present case, for determination of the specifications of protein, fat moisture etc. samples were required to be drawn mixed and then analysed. Indeed, we find that the service providers issued proper certificates certifying weighing, packing and stuffing and the specification of protein, fat, moisture etc. - refund of the aforesaid amounts was correctly sanctioned as per the provisions of Notification No. 41/2007-ST dated 06.10.2007 as amended. Thus, the impugned order does not suffer from any infirmity - Decided against Revenue.

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• 2015 (12) TMI 336
  Imposition of penalty - Evasion of tax - Maintenance and Repair Service - Held that:- Cooperative attitude shown by the appellant does not throw any light on malafides of the appellant. When the appellant has cooperated to discharge the liability and that to such liability based on income tax returns, it would not be proper to penalize the appellant for the reasonable cause stated and permitted by section 80 of Finance Act, 1994 to immune the bonafide cases from levy of penalty. However, delay in seeking registration shall call for penalty as that has been imposed by learned adjudicating authority under section 77 of Finance Act, 1994. That penalty of Rs. 5,000/- is confirmed. There shall be no penalty under sections 76 & 78 of Finance Act, 1994 - Decided partly in favour of assessee.

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• 2015 (12) TMI 335
  Penalty imposed under Section 76 and 77 & 78 - rent a cab service - Held that:- The service tax liability has not been contested by the appellant and they have paid service tax alongwith interest before adjudication order was passed. It is fact on record that appellant had collected the service tax, therefore it cannot be said that they were unaware of the service tax service tax liability and payment thereof, therefore in my considered view appellant could not show any reasonable cause by which penalty can be waived invoking Section 80 of the Finance Act, 1994. I therefore upheld the impugned order - Decided against assessee.

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• 2015 (12) TMI 334
  Manpower Recruitment Agency service - penalty under Section 76, 77 and 78 - Benefit of Section 80 - Held that:- The service tax liability has not contested by the appellant as they have paid service tax alongwith interest before adjudication order has passed. It is fact on record that appellant have collected the service tax therefore it could not be said that they were unaware of the service tax liability and payment thereof therefore in my considered view appellant could not showed any reasonable cause by which penalty can be waived invoking Section 80 of the Finance Act, 1994. I therefore upheld the impugned order and dismissed the appeal. - Decided against assessee.

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• 2015 (12) TMI 333
  Cenvat Credit of Service Tax - C.H.A. Services - Held that:- It can be seen that show cause notice to deny Cenvat Credit only on the ground that C.H. A. Services for post removal Activities C.H.A. Services are engaged by the appellant assessee is for removal of goods for export is an undisputed fact. - The issue of eligibility to avail Cenvat Credit of Service Tax paid on C.H. A. Services is settled in the favour of the appellant assessee by the judgment of the Tribunal in the case of Adani Pharma. P. Ltd. - [2008 (7) TMI 102 - CESTAT AHMEDABAD] and Modern Petrofils - [2010 (2) TMI 328 - CESTAT, AHMEDABAD]. - impugned order is incorrect and liable to be set aside - Decided in favour of assessee.

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• 2015 (12) TMI 332
  Waiver of pre deposit - Demand for Service Tax with interest, penalties - construction of shopping complex for Municipalities - Held that:- we cannot say that the purpose is not commercial at all even though it is meant for Municipality. Learned Counsel vehemently argued that the Municipality may not rent out for shopping but may rent out for the Government organization also and in any case, the Municipality is not a commercial organization. We are not convinced with all these arguments. The question is not whether the service provider is a commercial organization or not; the question is whether the objective of the service is commercial or industrial. When a shopping complex is constructed with an intention to rent out the shops, the objective is for income and therefore, it is for commercial purpose. Therefore, we find that the appellant has not made out a prima facie case in this regard also. - Partials stay granted.

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• 2015 (12) TMI 331
  Business Auxiliary Service, Site Formation and Mining of Mineral Service - demand has been confirmed without giving service wise breakup and based on the total amount received for the services rendered in their Ledger and Balance Sheet - Held that:- Merely going by the Balance Sheet and Ledger figures to arrive at the service amount received is not correct. More so because many times we have found that Balance Sheet is prepared on accrual basis whereas Service Tax is levied on receipt basis. In any case for demand of Service Tax, first of all the nature of services rendered has to be considered, thereafter it has to be examined whether the service is covered by definition of services in the Finance Act, 1994 and classified under a particular service category, thereafter it has to be seen what is rate of tax and consideration received and the tax has to be calculated. This is the process to be followed for assessment of tax and in the absence of any assessment by the assessee when the Commissioner proceeds for adjudication this process has to be followed. In the absence of such a process it would not be possible to apply any law and decide the matter. - Matter remanded back - Decided in favour of assessee.

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• 2015 (12) TMI 330
  Demand of service tax - penalty imposed under Section 77 and 78 - service of man power recruitment and supply agency - Held that:- Respondent has deposited tax liability alongwith interest admittedly. The respondent is small labour contractor and he born the tax liability by himself which he has not recovered from the service recipients. These are the sufficient cause to invoke Section 80 for waiver of penalty imposed under Section 77 and 78 of the Finance Act, 1994. In my considered view the Ld. Commissioner (Appeals) correctly held that the respondent is not liable for any penalty. I do not find any infirmity in the findings of the Ld. Commissioner(Appeals) in dropping the penalty under Section 77 and 78 of the Finance Act, 1944, I therefore uphold the impugned order. - Decided against Revenue.

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• 2015 (12) TMI 329
  Power of Commissioner to remand the case - Held that:- under Section 85(4) the language is used in a wider context, it does not restrict the type of order which the Commissioner (Appeals) may pass. Rather it states that the Commissioner (Appeals) may pass such order as he thinks fit. Thus, scope of remand is included in the provision of laid down in the Section 85(4). Accordingly the Commissioner (Appeals) has the power to remand the case under Section 85(4). Reliance is placed on the case of CST, Delhi v. World Vision - [2009 (11) TMI 452 - CESTAT, NEW DELHI]. - Decided against Revenue.

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• 2015 (12) TMI 328
  Imposition of penalty under Section 78 of Finance Act, 1994 and under Rule 15(3) of the Cenvat Credit Rules, 2004 read with Section 77 of the Finance Act, 1994 and penalty under Rule 15A of Cenvat Credit Rules, 2004 - Held that:- appellants in some cases made the excess payment in some cases and in some cases paid short payment. It might be on account of calculation errors but same is not coming out from the facts but it is a fact that excess Service Tax has been paid and in some cases, short Service Tax has been made, therefore, I hold that it is inadvertent mistake committed by the appellant. In these circumstances, the benefit of Section 80 of the Finance Act is to be given to the appellant and therefore, penalty on this count for Rs. 7,18,001/- is set aside. Further, for availment of inadmissible Cenvat credit of Rs. 23,71,100/-, I find that appellant is entitled to take Cenvat credit only up to 20% of Cenvat credit. In the case of Service Tax for outward exempted service, it is the admission of the appellant that they are not maintaining separate accounts. Therefore, they are not entitled to take Cenvat credit more than 20%. Further I find that if the audit had not been conducted in the premise of the appellant, this fact would not have come in the knowledge of the department, therefore, I hold that on these count, appellant is liable to be penalized - Penalty is reduced - Decided partly in favour of assessee.

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• 2015 (12) TMI 327
  Classification of service - Cargo Handling Service - imposition of penalty under section 75A, 76, 77 and 78 - Held that:- Appellant in this case is a small contractor who hires labour and provides the same to Shreyans and his service may not be equated with activities covered under the definition of Cargo Handling Service. The Commissioner (Appeals) in his order stated that the appellant that have not brought on records to prove conclusively that they are merely supplying the labour. But we find that the Revenue has not established beyond doubt that a contract was entered into between the appellant and M/s.Shreyans Industries Ltd. for Cargo Handling. We find that the activities undertaken are akin to labour jobs. The labour is not employed by the appellant but only hired and used in the factory of Shreyans. - activity undertaken by the appellant is not covered under the category of Cargo Handling Service. The appellant is as individual engaged in providing contract for various jobs and in the circumstances the activity of the appellant does not come under the purview of Cargo Handling Service. - Decided in favour of assessee.

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• 2015 (12) TMI 326
  Denial of CENVAT Credit - management, maintenance and repair service - Held that:- Services were rendered by the appellant to National Highways Authority of India for the maintenance or repairs of the roads. We find that the issue is no more res integra inasmuch as vide Finance Act of 2012, retrospective exemption was granted under Section 97 and Section 98 - first appellate authority while setting aside such demands has also not given any reasoning which could be appreciated by us. In the absence of any reasoning by the lower authorities, we find that this particular issue of eligibility to avail Cenvat credit on the various services, which are consumed by the appellant for providing taxable output services, needs reconsideration by the adjudicating authority. We, without expressing any opinion on the merits on this point, set aside the impugned order to that extent and remand the matter back to the adjudicating authority to consider this issue afresh. The adjudicating authority, needless to say, will follow the principles of natural justice before coming to any conclusion. - Appeal disposed of.

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• 2015 (12) TMI 325
  Benefit of Notification No. 14/2004-S.T., dated 10-9-2004 - whether the service rendered in relation to supervision of making of tents, mosquito net, trousers and shorts can be covered in the scope of service provided in relation to textile processing - Held that:- The textile processing as commonly understood is to cover processes like singeing, bleaching, dyeing etc. of textiles. That apart, at a more fundamental level, if textiles and textile articles are to be treated as synonymous, then there was no need to mention them separately. Further garments, mosquito nets and tents etc. by no stretch of imagination can be called textiles. Indeed they are clearly articles of textiles and apparels. They have separate classification under the Central Excise Tariff. The observation of the Commissioner (Appeals) that textile and textile articles cannot be segregated in the context of providing service relating to textile is devoid of any basis whatsoever. - Decided in favour of Revenue.

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• 2015 (12) TMI 324
  Cenvat Credit - Demand of service tax at the rate of 5/8/10% of the value of the exempted final products, in terms of the provisions of Rule 6(3) of the Cenvat Credit Rules - simultaneous maintenance of separate accounts for inputs and a common cenvatable account for input services - Held that:- Admittedly the provisions of Rule 6, nowhere lay down that such a simultaneous procedure followed by an assessee in respect of inputs and input services cannot be followed. In the absence of the same, to read so in the said Rule would amount to introducing a condition in the Rule, which is not permissible. As such we are of the view that if the appellant has maintained separate accounts for the inputs and has reversed the proportionate Cenvat credit in respect of input services, the provisions of Rule 6(3) do not get attracted. - Impugned order is set aside - Matter remanded back - Decided in favour of assessee.

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• 2015 (12) TMI 323
  Denial of CENVAT Credit - outward freight charges - Place of removal - Held that:- Observations would show that the original claim made by the appellants that they had cleared the goods to job workers was not verified before issue of show cause notice and was subsequently held to be incorrect because the appellant did not prove. This is an offence case and departmental officers seem to think that appellant should anticipate the requirements of the department and produce evidence at every stage. The audit party nor the Range Officer nor the original authority insist on verification of the documents or ask for the documents to check the claim of the appellant whether it is correct. In my opinion the claim of the appellant which has not been contradicted on the basis of evidence in the form of statement, mahazar or transportation documents, etc., no case has been made out by the Revenue. - Decided in favour of assessee.

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• Central Excise

• 2015 (12) TMI 322
  Marketability - Captive consumption - whether the goods namely rubberized tyre cord fabric and rubber tread compound manufactured and consumed captively are marketable and consequently dutiable or otherwise - Held that:- As regard rubberized tyre cord fabric, it is observed that demand was raised classifying the said product under Chapter heading 59.02 whereas it s correct classification is under Chapter heading 50.06, as held by Hon ble Supreme Court in the case of MRF Ltd (2008 (9) TMI 673 - CESTAT, BANGALORE) as well as in the appellant s own case of this Tribunal order [2013 (4) TMI 504 - CESTAT MUMBAI] therefore admittedly the demand was confirmed under wrong classification. - department has not produced any evidence to prove that goods in question are marketable. For this reason also the contention of the Revenue regarding marketability is not acceptable. As regard the product namely rubberized tread compound the department has failed to bring any evidence to prove that the subject goods manufactured and consumed captively by the respondent is marketable and therefore the burden of proving that goods is marketable has not been discharged by the Revenue. - under similar facts, in the case of Metro Tyres Ltd [2002 (11) TMI 384 - CEGAT, NEW DELHI] and Cipla Ltd.(2008 (3) TMI 330 - SUPREME COURT OF INDIA) this issue has been considered and was held that merely if movement of goods from one factory to another factory has taken place and the goods were used for captively the said reason can not be material factor to hold that the goods is marketable. - Decided against Revenue.

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• CST, VAT & Sales Tax

• 2015 (12) TMI 311
  Validity of reassessment proceedings - Section 21 - Evasion of duty - Held that:- Assessing Authority has in its possession certain informations on the basis on which he prima facie has reason to believe that certain turnover of the petitioner has escaped assessment. The grounds on which the proceedings have been initiated are neither irrational nor extraneous in character. - Division Bench of this Court in M/s. Parmarth Steel and Alloys Pvt. Ltd. (2013 (5) TMI 285 - ALLAHABAD HIGH COURT), considered the validity of proceedings under Section 21 of the Act and following the law laid down by the Hon'ble Supreme Court in the case of M/s. Bhagwan Industries(P) Ltd. (1972 (10) TMI 90 - SUPREME COURT OF INDIA) held the proceedings to be valid. - No illegality in the impugned notices/authorisation under Section 21 of the Act for the Assessment Years 2004-05 (U.P. and Central) and 2005-06 (U.P. and Central). So far as the submission of learned counsel for the petitioner that the goods are exempt, suffice is to say that this question along with all other points that may be raised by the petitioner shall be considered by the Assessing Authority in the reassessment proceedings while passing reassessment order. - Decided against assessee.

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• 2015 (12) TMI 310
  Condonation of delay - Delay of 823 days - Held that:- Even if it were to be assumed that the appellant was not aware of the passing of the impugned order and it became aware of the order from the application of the respondent seeking refund, there is still no sufficient explanation for delay. It is mentioned in the application that on 29.07.2013, the case was put up for further course of action. The application does not mention as to when the department allegedly became aware of the judgment from the application of the respondent claiming refund. The condonation application is silent about the date when the refund claim was made by the respondent. - Thereafter between 05.11.2013 to 02.12.2013, second legal opinion was obtained from another counsel. On 05.12.2013, approval of Commissioner (VAT) was obtained for filing the petition in the High Court. On 24.12.2013, documents were delivered to the Advocate for preparation and filing of the appeal. On 23.05.2014, the counsel who was entrusted with the filing of the appeal, returned the file and the same was entrusted to another counsel. On 28.08.2014, the file was sent to the Lt. Governor for approval of appointment of the Special Counsel. On 03.01.2015, the Special Counsel was requested to prepare and file the appeal in the High Court. - department proceeded in a very casual manner in the filing of the present appeal. The explanation tendered by the department, in our view, does not show any sufficient cause. The department does not appear to have acted in a bonafide and reasonable manner. - Condonation denied.

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• 2015 (12) TMI 309
  Benefit under Rule 28B of the Haryana General Sales Tax Rules, 1975 - Disallowance of adjustment of purchase tax against notional tax liability - Entitlement to produce STDIV declaration and ST-14B Forms, even before the appellate authority - Held that:- Petitioner is entitled to produce the STD-IV declaration and ST-14B Forms before the Assessing Authority who shall thereafter examine the tax liability and decide the matter by passing a fresh order, in accordance with law. Exemption from purchase tax - Held that:- beneficiary unit is entitled to exemption from payment of sales tax on the sale of finished products and not exemption from the payment of purchase tax. In other words, the unit is entitled to exemption from the payment of sales tax only on the sale of goods manufactured by it and any purchase tax leviable was recoverable from the said unit. Thus, the Tribunal was right in holding that the notional tax liability calculated for the purposes of setting off against the tax exemption limit shall be the amount of tax payable on the sale of furnished products under the Local Sales Tax Law and the Central Sales Tax Act, 1956 which does not include purchase tax and, therefore, the amount of purchase tax levied was recoverable from the appellant. - No illegality or perversity could be demonstrated in the aforesaid findings recorded by the Tribunal which may call for interference by this Court on this question. - Decided against the assessee.

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• 2015 (12) TMI 308
  Enhancement of turnover - Adjustment of tax - petitioner has not maintained stock account - whether in absence of any appeal or cross objection filed by the Revenue, the learned Sales Tax Tribunal is justified to restore assessment order disallowing the relief granted by the first appellate authority to the dealer-petitioner while adjudicating the appeal filed at the instance of the dealer-petitioner - Held that:- in absence of any appeal or cross-appeal by the Revenue, the Tribunal ought not to travel beyond the dispute raised by the petitioner in its appeal. Therefore, the Tribunal should not have disallowed the relief granted to the petitioner by the first appellate authority by restoring the assessment order when the Revenue has no grievance against grant of such relief to the petitioner by the first appellate authority. - Impugned order is unsustainable - Decided in favour of assessee.

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• Indian Laws

• 2015 (12) TMI 318
  Whether the certified copy of documents obtained under Right to Information Act, 2005 can be admitted as secondary evidence - Held that:- Clause (f) of Section 65 of Evidence Act makes it crystal clear that a certified copy permitted under the Evidence Act or by any other law in force can be treated as secondary evidence. Right to Information Act, in my view, falls within the ambit of “by any other law in force in India”. The definition of “right to information” makes it clear that certified copies of documents are given to the citizens under their right to obtain information. In my view, the court below has rightly opined that the documents can be admitted as secondary evidence. I do not see any merit in the contention that the documents obtained under the Act of 2005 are either true copies or attested copies. - no legal error in the order of the court below, which warrants interference under Article 227 of the Constitution. The court below has taken a plausible view, which is in accordance with law - Since the documents are covered under section 65 of the Evidence Act, there was no need to compare the same with the originals. - Decided against assessee.

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