Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
March 2, 2015
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
FEMA
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
TMI SMS
Articles
News
Notifications
Central Excise
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No. 1/2015-Clean Energy Cess - dated
1-3-2015
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CE
Exemption to all goods leviable to the Clean Energy Cess from levy of Clean Energy Cess, as is in excess of the amount calculated at ₹ 200 per tonne
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17/2015 - dated
1-3-2015
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CE
Rescinding of certain notifications
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16/2015 - dated
1-3-2015
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CE
Amendment to Notification No. 23/2003- Central Excise, dated the 31st March, 2003 - EOUs/EHTP/STP Units – Excise Exemption on Goods Cleared to DTA - Substitution and Omission to certain entries
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15/2015 - dated
1-3-2015
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CE
Exemption to all goods falling within the First Schedule to the Central Excise Tariff Act, 1985, from the levy of Secondary and Higher Education Cess
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14/2015 - dated
1-3-2015
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CE
Exemption to all goods falling within the First Schedule to the Central Excise Tariff Act, 1985, from the levy of Education Cess
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13/2015 - dated
1-3-2015
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CE
Amendment in Notification No. 10/96-Central Excise, dated the 23rd July, 1996 - Exemption to goods within the factory of their production in the manufacture of specified goods - Full exemption from excise duty to all goods consumed within the factory of production in the manufacture of Agarbattis
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12/2015 - dated
1-3-2015
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CE
Amendment to Notification No. 12/2012-Central Excise-Tariff, dated 17-03-2012 - Prescribes effective rate of duty on goods falling under chapter 1 to 96 - Substitution, insertion and Deletion of certain entries
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11/2015 - dated
1-3-2015
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CE
Exemption to high speed diesel oil from levy of additional duty of excise in excess of ₹ 6 per litre.
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10/2015 - dated
1-3-2015
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CE
Exemption to motor spirit commonly known as petrol from levy of additional duty of excise in excess of ₹ 6 per litre.
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09/2015 - dated
1-3-2015
-
CE
Amendment to Notification No. 6/2005-Central Excise, dated the 1st March, 2005 - Exemption from Additional Duty of Excise levible under section 85 of the Finance Act, 2005 - Exemption of Additional Excise Duty of 5% leviable on waters including mineral waters and aerated waters containing added sugar
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08/2015 - dated
1-3-2015
-
CE
Amendment to Notification No. 2/2011-Central Excise, dated the 1st March, 2011 - Option to pay duty at 6% (earlier 5%) with cenvat credit on which exemption has been withdrawn - Insertion of serial number and entry
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07/2015 - dated
1-3-2015
-
CE
Amendment to Notification No. 1/2011-Central Excise, dated the 1st March, 2011 - Effective rate of duty = 2% (earlier 1%) on certain items on which exemption has been withdrawn, without availing cenvat credit - Insertion of serial number and entry
-
06/2015 - dated
1-3-2015
-
CE
Seeks to amend Notification No. 42/2008 - CE, dated the 1st July, 2008 so as to prescribe new rate of duty to Pan Masala and Gutkha
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05/2015 - dated
1-3-2015
-
CE
Amendment to Notification No. 16/2010-CE, dated the 27th February, 2010 so as to prescribe new rate of duty to unmanufactured tobacco and chewing tobacco
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01/2015-M & TP - dated
1-3-2015
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CE
Amendment in Notification No. 2/2003-M&TP, dated the 1st March, 2003 - increase in applicable rate of excise duty from 12% to 12.5%
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11/2015 - dated
1-3-2015
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CE (NT)
Resident firm specified as class of person for the purpose of Advance Ruling
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10/2015 - dated
1-3-2015
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CE (NT)
Amendment to Central Excise (Removal of Goods at Concessional Rates of Duty for Manufacture of Excisable Goods) Rules, 2001 to allow submission of Letter of Undertaking in lieu of bond with surety and security by a manufacturer with clean track record
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09/2015 - dated
1-3-2015
-
CE (NT)
Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001 notified vide notification No. 34/2001-Central Excise (N.T), dated the 21st June, 2001 - Various changes
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08/2015 - dated
1-3-2015
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CE (NT)
Central Excise Rules, 2002 notified vide notification number 04/2002- Central Excise (N.T.), dated the 1st March, 2002 - Various changes
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07/2015 - dated
1-3-2015
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CE (NT)
Amendment in Notification No. 035/2001 - Central Excise - Non Tariff dated - 26-06-2001 - This notification specifies the conditions, safeguards and procedures for registration of a person and exemptions from registration in specified cases - Substitution of certain clauses
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06/2015 - dated
1-3-2015
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CE (NT)
Seeks to amend Cenvat Credit Rules, 2004
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05/2015 - dated
1-3-2015
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CE (NT)
Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008 notified vide Notification No. 30/2008-Central Excise (N.T.), dated the 1st July, 2008- Various changes
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04/2015 - dated
1-3-2015
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CE (NT)
Chewing Tobacco and Unmanufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty) Rules, 2010 notified vide by notification No. 11/2010-Central Excise (N.T.), dated the 27th February, 2010 - Various changes
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03/2015 - dated
1-3-2015
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CE (NT)
Amendments in Notification No. 49/2008 - Central Excise(N.T.), dated 24-12-2008 - MRP based duty of Excise - Prescribes rate of abatement - Insertion of certain serial numbers and entries
Customs
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11/2015 - dated
1-3-2015
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Cus
Amendments in Notification no. 21/2012 Cus dated 17.3.2012 - Exempts import of goods from additional duty leviable u/s 3(5) - Insertion of certain serial numbers and entries
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10/2015 - dated
1-3-2015
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Cus
Effective Rate of Duty - Amends Notification no. 12/2012 Cus dated 17-3-2012
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09/2015 - dated
1-3-2015
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Cus
Rescinding of certain notifications
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08/2015 - dated
1-3-2015
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Cus
Amendments in Notification No.27/2011-Customs, dated the 1st March, 2011 - Effective rate of export duty on Manganese ore
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07/2015 - dated
1-3-2015
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Cus
Exemption to high speed diesel oil from levy of additional duty of customs in excess of ₹ 6 per litre.
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06/2015 - dated
1-3-2015
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Cus
Exemption to motor spirit commonly known as petrol from levy of additional duty of customs in excess of ₹ 6 per litre
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27/2015 - dated
1-3-2015
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Cus (NT)
Resident firm specified as class of person for the purpose of Advance Ruling
Service Tax
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09/2015 - dated
1-3-2015
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ST
Resident firm specified as class of person for the purpose of Advance Ruling
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08/2015 - dated
1-3-2015
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ST
Amendment in Notification No. 26/2012-Service Tax, dated 20-06-2012 - Abatement notification - Substitution and Omission of certain entries
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07/2015 - dated
1-3-2015
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ST
Amendment in Notification No. 30/2012-Service Tax, dated the 20th June, 2012 - Notification under sub-section (2) of section 68 - Reverse Charge - Insertion of certain sub-clauses and substitution of certain entries
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06/2015 - dated
1-3-2015
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ST
Amendment in Notification No. 25/2012-Service Tax, dated 20-06-2012 - Mega exemption notification - Omission and substitution of certain entries
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05/2015 - dated
1-3-2015
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ST
Service Tax Rules, 1994 - Various changes
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04/2015 - dated
1-3-2015
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ST
Amendment in Notification No. 31/2012-Service Tax, dated - 20-06-2012 - Exemption to specified services received by exporter of goods - Substitution of words “port or airport with the words “port, airport or land customs station”
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03/2015 - dated
1-3-2015
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ST
Seeks to rescind the redundant notification No. 42/2012 - Service Tax, dated 29th June 2012
SEZ
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S.O. 554 (E) - dated
5-2-2015
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SEZ
To set up a sector specific Special Economic Zone for information technology and information technology enabled services including software and hardware manufacturing at Village Kalwara, Tehsil Sanganer, District Jaipur in the State of Rajasthan.
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S. O. 223 (E) - dated
22-1-2015
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SEZ
To set up a Multi Product Special Economic Zone at Jamnagar, in the State of Gujarat
Circulars / Instructions / Orders
Highlights / Catch Notes
Income Tax
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Setting off of brought forward business loss and unabsorbed depreciation - There is no evidence on record to prove that amalgamating company was engaged in business in which the accumulated loss occurred or depreciation remains unabsorbed for three or more years as on the date of amalgamation. - AT
Customs
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Union Budget 2015 - Education cess of 1% and 2% on imported goods shall continue to be levied
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Invocation of extended period of limitation - the doubtful legal position and which is required to be cleared by the higher Courts is something for which we cannot hold either the Assessee or the Revenue responsible - HC
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The correctness of findings and founded on the conclusion that menthol BP / USP and menthol crystals BP / USP can be assessed as spice ought to have been considered by the Tribunal in appropriate details. - HC
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Validity of mandatory pre-deposit of 7.5% of demand - right of appeal granted by the statute is a conditional one and the conditions are not so onerous as to deprive the petitioner of an effective right of appeal.
- HC
Corporate Law
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Jurisdiction of Company Law Board (CLB) - criminal case involving Forged and fabricated document - CLB was not barred from entertaining the application under section 340 CrPC and has thus erred in refusing to entertain the application filed by the Appellant. - HC
Indian Laws
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Finance Bill, 2015 - service tax - Substantial overall in levy of penalty u/s 76 and 78
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Valuation of taxable services - all reimbursable expenditure or cost incurred and charged by the
service provider to be included - Section 67 being amended
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Budget 2015 - Effective Rate of Service Tax will be 16% i.e. 14% service tax plus 2% as Swachh Bharat Cess from the date to be notified on all or some of the services
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Swachh Bharat Cess on all or any of the taxable services at a rate of 2% on the value of such taxable services shall be levied from the date to be notified after enactment of Finance Bill, 2015
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Revised rate of Service Tax from 12.36% to 14% will be effective from date to be notified after enactment of Finance Bill, 2015
Service Tax
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Prescribed ST-3 returns were filed - correct calculations of service tax were not shown and differential tax payable was apparent - However Extended period of limitation cannot be invoked since appellant cannot be held to have suppressed any information with intention to evade service tax - AT
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Waiver of penalty on revenue neutral aspect - assessee was to pay tax as a receiver of service and not as a provider - provisions of Section 80 of the Finance Act has been rightly invoked - AT
Central Excise
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Union Budget 2015 - Rate of Excise duty revised from 12.36% to 12.5% - Levy of education cess of 1% and 2% on duty of excise removed
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Manufacture of rice bucket elevator and rice conveyor - prima facie classifiable as milling machinery under heading 8437 - AT
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Successor's liability - Recovery of dues from successor company - Since, there is nothing in this proviso to indicate that this amendment has retrospective effect, the same cannot be applied retrospectively - AT
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Valuation of goods - As and when appellant gets the order, they direct transporter/warehouse owner to deliver the said goods to the customer's place - charges for loading, unloading, transportation and warehousing are to be included - AT
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Valuation of goods - differential amount not includible in the assessable value since the duty of excise is on manufacture and not on profit made by the dealer on transportation. - AT
VAT
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Input tax credit - KVAT - a cubicle or a work station does not fall within the meaning of the word 'Furniture' and therefore -benefit of input tax paid for acquiring computer work stations allowed - HC
Case Laws:
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Income Tax
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2015 (2) TMI 1041
Entitlement to claim deduction under section 80-IA - Held that:- All the business undertakings are wind mills and they have claimed the benefit of deduction under Section 80IA of the Income Tax Act for the assessment years in question and for the subsequent years as well. Having exercised their option and their losses have been set off already against other income of the business enterprise, the assessee in this appeal falls within the parameters of Section 80IA of the Income Tax Act. In the decision of Velayudhaswamy Spinning Mills V. Asst. CIT reported in (2010 (3) TMI 860 - Madras High Court), there appears to be no distinction on facts. - Decided in favour of the assessee
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2015 (2) TMI 1040
Entitlement to claim deduction under section 80-IA - Held that:- All the business undertakings are wind mills and they have claimed the benefit of deduction under Section 80IA of the Income Tax Act for the assessment years in question and for the subsequent years as well. Having exercised their option and their losses have been set off already against other income of the business enterprise, the assessee in this appeal falls within the parameters of Section 80IA of the Income Tax Act. In the decision of Velayudhaswamy Spinning Mills V. Asst. CIT reported in (2010 (3) TMI 860 - Madras High Court), there appears to be no distinction on facts. - Decided in favour of the assessee
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2015 (2) TMI 1039
Set off the brought forward depreciation loss against capital gains - whether unabsorbed depreciation loss of earlier years cannot be adjusted against short term capital gains arising on sale of business assets? - Held that:- In the present case, the Tribunal came to hold that the depreciation for set off relates to the assessment year 1997-1998 and the business is still continuing. In such a situation, the Tribunal went on to hold that Section 32(2) (i) and 32(2) (ii) do not get attracted. This is not the case of the appellant/assessee. The only plea is that if Section 32(2) (iii) provides that unabsorbed depreciation allowance cannot be wholly set off under clause (i) and clause (ii), the amount of allowance not so set off shall be carried forward to the following assessment year and it shall be set off against profit and gains, if any, of any business or profession carried on by him and assessable for that assessment year in terms of Section 32(2)(iii)(a) of the Income Tax Act. The following assessment year in this case is 1999-2000. Unfortunately, the Tribunal has not addressed the issue in the light of the said provision Section 32(2)(iii)(a) of the Income Tax Act. Tribunal says in paragraph 9 of the order is that, though it is abundantly clear that Section 32(2)(iii) is operational in the case of the assessee, it only says that unabsorbed depreciation can be carried forward to the successive years. That is not the issue raised in the appeal. Furthermore, the decisions of the Supreme Court in the case of CIT Vs Cocanada reported in [1965 (4) TMI 11 - SUPREME Court] raised in the grounds of appeal by the assessee have also not been adverted to. Thus remand the matter back to the Tribunal to consider and pass orders on the entire issues raised by the assessee. - Decided in favour of assessee for statistical purposes
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2015 (2) TMI 1038
Reopening of assessment - Tribunal concluded that the reopening proceedings have been initiated on a mere change of opinion and thus impermissible - Held that:- The impugned order of the Tribunal has recorded a finding of fact that all the issues which form the basis of the reopening notice, was a subject matter of consideration during the regular assessment proceedings. On the above facts the impugned order records that reconsideration of the same material would amount to a review of an assessment order which is not permissible. The Apex Court in CIT Vs. Kelvinator of India Ltd. reported in [2010 (1) TMI 11 - SUPREME COURT OF INDIA ] has held that jurisdiction to reopen an assessment is not jurisdiction to review the assessment order. The contention urged by the revenue that it was wrong application of law by the Assessing Officer while passing original assessment order does not detract from the fact that there was an opinion formed during the regular assessment proceedings. The Assessing Officer has to at the very outset satisfy the condition precedent under Section 147 and 148 of the Act before he can exercise the jurisdiction to reopen an assessment. In the present facts, the reopening notice is based on a change of opinion as all the grounds were admittedly a subject matter of inquiry during regular assessment proceedings. In view of the above, we find that the impugned order of the Tribunal has merely applied the well settled position in law that power to reopen an assessment is not the power to review an assessment and that reopening of an assessment cannot be taken place on a mere change of opinion. Decided in favour of assessee.
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2015 (2) TMI 1037
Addition u/s 68 - ITAT confirming the order of the CIT (Appeals) who had reversed the AO's decision to disallow share application money of ₹ 1.65 crores under Section 68 - Held that:- AO’s suspicions formed the basis of including the amounts under Section 68 of the Act; whilst suspicion can be the basis for further enquiry, it can never be the ground for a conclusion. In the present instance, the AO apparently had the books and all the relevant information pertaining to the share applicants. n the present case, the course of proceedings indicates that the CIT(Appeals) had called for the Remand Report. That Remand Report clearly pointed to the three share applicants not only being genuine business concerns but also having substantial business activities and further having reasonably sized turnovers. In these circumstances, to establish implausibility on the part of the share applicants to have possessed the means when they applied, the AO ought to have probed further. He did not do so as is evident from the Remand Report where the AO did not offer any comments upon the materials taken into account by the CIT (Appeals). Consequently, the ITAT’s order cannot be faulted. - Decided in fvaour of assessee. Unaccounted cash deposits - ITAT deleted addition - Held that:- AO did not comment adversely in respect of the assessee’s explanation pertaining to the cash deposits in the bank accounts even in the remand report, the inference drawn by the CIT (A) that when the balance matches with the balance sheet and cash book, no addition u/s 68 of the Act is sustainable and later the ITAT cannot be held unreasonable - Decided in fvaour of assessee.
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2015 (2) TMI 1036
Addition made u/s 68 - assessee claimed that the amounts were repaid through its sister concerns - Held that:- In the absence of any documentary evidence to prove the genuineness of transaction and creditworthiness of the creditors, the explanation of the assessee does not inspire confidence. The assessee’s contention before us that what is being doubted is the ‘repayment’ and not the ‘credit’ itself, again, only needs to be stated to be rejected. Section 68 applies only to a credit appearing in the books of account of the assessee, so that the fact or the existence of the credit is a condition precedent for the application of section. The several doubts, which we have held as valid, qua repayment, only exhibit that the genuineness of the credit/s, i.e., of it representing a genuine liability of the assessee, is in serious doubt, much less proved, as required, i.e., if it is not to be considered as the assessee’s income in view of section 68 of the Act, the case law on which is legion. Accordingly, in the facts and circumstances of the case except in the case of Textile Product Marketing Agency where there is actual transaction of supply of goods, in all other cases we do not find any error or illegality in the orders of authority below. Hence the addition under section 68 in respect of 21 parties is confirmed. - Decided against assessee. Adhoc disallowance of motor car expenses, depreciation and telephone expenses - AO has disallowed 20% of the expenditure debited on account of motor car, depreciation and telephone on the ground of personal use of car and telephone - Held that:- Disallowance was made by AO because the assessee has not produced the log book for running the car to verify the exclusive use of car for business purposes. Similarly the personal use of telephone was not ruled out because the assessee has not furnished the details. Thus as the assessee being a partnership firm the personal use of car and telephone cannot be ruled out. However, the disallowance of 20% in our view is excessive and we find that 10% of the disallowance on account of personal use will be just and proper. Accordingly we restrict the disallowance of expenses on account of car depreciation and telephone to 10%. - Decided partly in favour of assessee.
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2015 (2) TMI 1035
Entitlement to deduction u/s 80P(2)(a)(i) - whether the society being a co-operative bank providing banking facilities to members is not eligible to claim deduction u/s 80P(2)(a)(i) after the introduction of sub-section (4) to section 80P? - Held that:- Assessee has not to be regarded to be a primary co-operative bank as all the three basic conditions are not complied with, therefore, it is not a co-operative bank and the provisions of Sec. 80P(4) are not applicable in the case of the Assessee and Assessee is entitled for deduction u/s 80P(2)(a)(i). We, therefore direct the assessing officer to allow deduction to the assessee u/s 80P(2)(a)(i) on the income generated for providing banking or credit facilities to its members. - Decided in favour of assessee.
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2015 (2) TMI 1034
Penalty u/s 275(1)(c) - late filing of AIR returns - main contention of the assessee he was ignorant of law i.e. about the provisions of section 285BA of the I.T. Act - Held that:- Provisions of section 285BA of the Act was introduced by the Finance (No. 2) Act, 2004 w.e.f. 1.4.2005, it is not the case that this section has been introduced for the first time by Finance (No. 2) Act, 2004. The plea taken by the assessee for ignorance of law is not sustainable in the eyes of law, because the ignorance of law is not an excuse, as per the decision in the case of UOI & Ors. vs. Dharmendra Textile Processor [2007 (7) TMI 307 - SUPREME COURT OF INDIA], Patan Nagrik Sarkari Bank Ltd. vs. DIT (2011 (3) TMI 719 - Gujarat High Court ) and Moti Lal Padampat Sugar Mills Co. Ltd. vs. State of Uttar Pradesh & Ors. reported in (1978 (12) TMI 45 - SUPREME Court). Assessee has not established any reasonable cause for not filing the Annual Information Return (AIR) within time. Secondly, assessee has also failed to file any documentary evidence supporting the version submitted before the Revenue Authority as well before us. Assessee has also failed to establish any bonafide in not filing the AIR within time, inspite of the fact that assessee is holding a very responsible post and discharging very important duties which directly affect the exchequer of the country. Since the AIR to be filed by the assessee is very much essential for further cause of action on the same for which the assessee has failed to submit within time. Therefore, the penalty in dispute has rightly be levied by the Revenue Authorities, hence, we uphold the penalty in dispute by dismissing all the Appeals filed by the Assessee. - Decided against assessee.
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2015 (2) TMI 1033
Write off of bad debts in respect of export sales disallowed - CIT(A) giving relief of ₹ 24,57,522/- on account of bad debts - Held that:- Disallowance of bad debts is to be allowed in the present year because it is not in dispute that debits were written off in the present year. Regarding the objection of the Assessing Officer that these bad debts are in respect of export sales, we are of the considered opinion that in consequence to the claim of the assessee regarding write off of bad debts in respect of export sales, it has to be seen as to whether such sale was considered for the purpose of allowing deduction u/s 80HHC in the year of sale. Normally export sales are reduced by the amount of sale, which was not realized within the prescribed period. Still we feel that in the interest of justice, the Assessing Officer should look into this aspect and examine the details of the year of sale for which debts were created and now written off. The assessee should furnish these details before the Assessing Officer and Assessing Officer should thereafter allow deduction to the assessee in the present year in respect of write off of bad debts but consequently, he should examine the assessment of the concerned year in which the sale took place and for that year, the assessee should establish that these unrealized sales were not included in the export sales for the purpose of computing deduction u/s 80HH- Decided in favour of revenue for statistical purposes. Disallowance u/s 14A - CIT(A) deleted the addition - Held that:- Disallowance of interest expenditure of ₹ 7,57,380/- does not survive and in respect of disallowance out of administrative expenses, we feel that the disallowance was worked out by the Assessing Officer under Rule 8D to the extent of 0.5% of the average investments. As per the judgment of Hon'ble Bombay High Court rendered in the case of Godrej & Boyce Mfg. Co. Ltd. (2010 (8) TMI 77 - BOMBAY HIGH COURT), reasonable disallowance can be made before insertion of Rule 8D and in our considered opinion, disallowance of ₹ 50,000/- is reasonable in the facts of the present case. We, therefore, uphold the disallowance u/s 14A to the extent of ₹ 50,000/- and balance disallowance is deleted. - Decided partly in favour of revenue. Non serving of notice u/s 143(2)on the assessee within the prescribed time - Held that:- We find that prior to 01/04/2008, the time available for serving notice u/s 143(2) was 12 months from the end of the month in which return is furnished. In the present case, return was filed on 31/10/2005 and therefore, time was available upto 30th September, 2006 for serving notice u/s 143(2). As per the assessment order, such notice u/s 143(2) was issued on 13/09/2006 and the same was duly served on the assessee. - Decided against assessee. Disallowance of vehicle running expenses - Held that:- As relying on Sayaji Iron and Engg. Co. vs. CIT [2001 (7) TMI 70 - GUJARAT High Court] no disallowance is called for in the case of a company on the basis that there was personal user of vehicles. Even if there is personal use of vehicles by the Directors of the company then the value thereof can be added in the perquisites of the concerned director but no disallowance can be made in the hands of the company. - Decided in favour of assessee. Exclusion of "Duty Draw Back" from the computation of eligible profit for the purposes of relief under section 80IB - Held that:- This issue is now squarely covered against the assessee by the judgment of Hon'ble Apex Court rendered in the case of Liberty India vs. CIT [2009 (8) TMI 63 - SUPREME COURT ] wherein held Duty drawback receipt/DEPB benefits do not form part of the net profits of eligible industrial undertaking for the purposes of Sections 80I/80-IA/80-IB of the 1961 Act - Decided against assessee. Short deduction allowed by the Assessing Officer u/s 80G - Held that:- As per the assessment order, we find that it is noted by the Assessing Officer that regarding the claim of ₹ 15 lac related to Shyam Behari Mishra Memorial Charitable Trust, no details have been filed by the assessee and therefore, the Assessing Officer has not allowed the claim of the assessee for deduction u/s 80G in respect of this amount of ₹ 15 lac. Neither before CIT(A) nor before us, any detail has been furnished by the assessee and therefore, on this issue, we do not find any merit in the grounds raised by the assessee - Decided against assessee.
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2015 (2) TMI 1032
Unaccounted share application money - CIT(A) confirmed addition u/s. 68. - Held that:- By considering the relevant record produced by the assessee, we find that the assessee has discharged its onus to prove that the payment in question on account of refund of share application money to these three parties have been made by Nath Industrial Chemical Ltd. and Nath Paper & Pulp. Though the CIT(A) has raised a question about the takeover agreement to verify whether liability of repayment was part of the takeover agreement or not however, it is pertinent to note that when the assessee has produced the relevant record to establish that the payment was made by Nath Group of Companies then the takeover agreement will not change the fact of payment made by these companies. Accordingly, in the facts and circumstances of the case, we hold that the assessee has proved the fact that the repayment of application money of ₹ 51,20,000/- was made to these three companies through Nath Group of companies and therefore, addition made by the AO of this account is not sustainable and accordingly deleted. - Decided in favour of assessee.
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2015 (2) TMI 1031
Deduction u/s 80IB - AO has disallowed claim on the premise that the assessee was qualified to get deduction u/s.80IB only in AY 2003-04 and not in AY 2002-03 i.e. the FY 2001-02 - CIT(A) allowed the deduction accepting that the old unit engaged in production since F.Y. 2000-01 - Held that:- Assessing officer was not correct in denying claim of deduction u/s. 80IB(3) to the appellant merely because the trade license for the new premise and provisional registration by Directorate of Cottage & Small Scale Industries of state Government was after 01.04.2002, when there was clear evidence before him that the appellant was engaged in manufacturing activity from FY 2000-01 onwards. Here is no dispute that the appellant satisfies all other eligibility conditions prescribed u/s. 80IB. The assessee has been allowed deduction u/s 80IB of the Act for and from AY 2004-05 to 2008-09 and now in AY 2009-10 the claim is declined. For the sake of consistency the claim of deduction u/s. 80IB of the Act cannot be disallowed. Therefore, the assessing officer was correctly directed to allow deduction u/s. 80IB(3) of I.T. Act, 1961, as computed in accordance with the provisions of law after going through the audit report and other relevant material. - Decided in favour of assessee.
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2015 (2) TMI 1030
Eligibility for exemption u/s.10(23C)(iiiad) - assessee is conducting only coaching classes for students for appearing in civil services examination - CIT(A) allowed the claim - Held that:- there is no justification on the part of the A.O. to observe that the assessee cannot be treated as a charitable institution. Therefore, keeping in view the fact that assessee is registered as a charitable institution under section 12A of the Act, it can alternatively also claim exemption under section 11 of the Act. The A.O. while completing the assessment has totally ignored this aspect and has failed to examine whether the assessee is eligible for exemption under section 11 of the Act. For the aforestated reasons, we cannot therefore, accept the conclusion drawn by the A.O. while disallowing the claim of exemption. In the aforesaid view of the matter, we hold that Ld. CIT(A) was correct in allowing assessee's claim of of exemption under section 10(23C)(iiiad). - Decided in favour of assessee. Disallowance of depreciation - CIT(A) deleted the addition - Held that:- As can be seen Ld. CIT(A) has deleted the addition having found that assessee has neither written off the cost of acquisition nor has treated it as application of income. As the learned D.R. has not brought any material to controvert the aforesaid finding of the Ld. CIT(A), we do not find any infirmity in the order of the Ld. CIT(A). - Decided against revenue.
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2015 (2) TMI 1029
Validity of proceedings under section 153C non recording of satisfaction by the Assessing Officer in the case of "person subjected to search" - Held that:- Satisfaction by the Assessing Officer of the searched person was not recorded before initiating proceedings under section 153C of the Act against the assessee and the impugned issue is squarely covered by judgment of the jurisdictional High Court in CIT Vs. Classic Enterprises [2013 (4) TMI 520 - ALLAHABAD HIGH COURT]. We, therefore, have no hesitation in holding that since the assessment was framed consequent to the proceedings initiated under section 153C of the Act, without recording satisfaction by the Assessing Officer of the searched person, the assessment is bad in law and deserves to be quashed. We accordingly set aside the order of the ld. CIT(A) and quash the assessment framed under section 153C read with 143(3) of the Act. - Decided in favour of assessee.
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2015 (2) TMI 1028
Deduction under section 80-IA on power generation receipts - CIT(A) allowed the deduction - Held that:- The assessee during the year under consideration had claimed deduction under section 80-IA(5) of the Act. The Assessing Officer had tabulated the notional losses from year. However, the said losses were being adjusted against the other income arising to the assessee from time to time. Where the losses have already been adjusted against assessable income in the preceding year, the said losses cannot be said to be available to be adjusted against the income of the assessee arising in the year under consideration. As held by the Tribunal in the case of Shri Sangram Patil v. ITO [2015 (2) TMI 936 - ITAT PUNE] that, where the assessee exercised the option of the ten consecutive years as contained in section 80-IA of the Act, only the losses beginning from such initial assessment year are to be brought forward and setoff while applying the provisions of section 80-IA(5) of the Act and not the losses of the earlier years, which have already been set-off against the other income of the assessee. Accordingly, we hold that the assessee is entitled to claim of deduction under section 80-IA(5) of the Act. - Decided against revenue.
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2015 (2) TMI 1027
Unaccounted parking charges - AO made the addition of ₹ 1.25 lakhs on the basis that the assessee has been realising parking charges which has not been declared in the books of account - CIT(A) deleted addition following his own order for the assessment year 2005-06 - Held that:- Since the basis of addition is survey carried out under section 133A of the Act on September 19, 2007 no such addition is justified in earlier years, i.e., assessment years 2006-07 and 200708. We also find that the Assessing Officer has referred to a letter dated January 13, 2006 written to ICICI Bank which was found in the course of survey but when the Assessing Officer made enquiry from ICICI Bank, it was replied by ICICI Bank that they had not received any such letter and they have not made any such payment to the assessee. Thereafter, the Assessing Officer has made assumptions that the assessee has started realising parking charges directly from the customers but this assumption of the Assessing Officer is without any basis and considering all these facts, we feel that no interference is called for in the order of the Commissioner of Income-tax (Appeals) on this issue because no case has been made out by the Assessing Officer for making addition in the present year. - Decided against revenue. Deduction under section 80-IA of the Act in respect of captive power consumption - CIT(A) allowed the deduction - as per AO assessee-firm was not set up for the generation or distribution of powers but the firm was formed specifically for constructing and running a commercial complex - Held that:- As per partnership deed the assessee-firm is authorised to carry on business of real estate and business of similar nature and/or other business as the partners may mutually decide and agree from time to time. In our considered opinion, the objects clause of the assessee-firm are so wide that it includes any sort of activity being carried on by the assessee as authorised by the said partnership firm and therefore, we do not find any merit in the first objection of the Assessing Officer that the assessee-firm was not set up for the generation of electricity. Higher profit shown for the purpose of claiming extra deduction under section 80-IA - Commissioner of Income- tax (Appeals) has reproduced the detailed working regarding rate per unit of electricity along with the meter reading, etc., and a clear finding is given that rate per unit charged is same as that being charged from other tenants of the building. This finding of the Commissioner of Income-tax (Appeals) could not be controverted by the learned Departmental representative of the Revenue and therefore, in the facts of the present case and as per various judgments cited by the learned authorised representative of the assessee, it cannot be said that there is any merit in this allegation that extra profit has been shown by the assessee in the electricity generation and distribution unit by transferring extra profit from air conditioning unit to generation unit. Non obtaining of permission or approval from the Central Government or the State Government - Enough material has been brought on record by the learned authorised representative of the assessee showing that in respect of generation of power by using diesel generating set and its captive consumption and supply to tenants, no approval or permission from any Government authority is required. Regarding the argument of Revenue that a power generation unit cannot have profit of more than 16 per cent. on the capital invested as per the Electricity Regulatory Act, no such copy of any Act by highlighting such provision has been brought on record and moreover, even if such restriction is there regarding profit of electricity generating company, then such restriction is on account of restricting the rate of electricity to be charged by electricity generating company to common public by holding that such electricity company should not earn higher profit. In the present case, as against supply of power to the tenants and captive power consumption of ₹ 130.83 lakhs, the assessee is showing profit of ₹ 17.54 lakhs whereas in respect of air conditioning undertaking against total receipt of ₹ 135 lakhs, the assessee is showing net profit of ₹ 27.68 lakhs and considering these facts, we are of the considered opinion that in the facts of the present case, the profit reported by the assessee in respect of power generation cannot be said to be excessive or unreasonable particularly when the same rate of power per unit is being charged by the assessee from tenants. Deduction under section 80-IA allowed - Decided in favour of assessee.
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2015 (2) TMI 1026
Applicability of amended provision of Section 36(1)(III) - CIT(A) held that amended provision of Section 36(1)(III) was not applicable in the case of the assessee as no new assets were acquired and the disallowance of interest was not proper - CIT(A) directing the Assessing Officer to verify the facts regarding the fixed assets related to the term loans from MTIL and IOB as on 31.03.2003 & to verify the contentions of the A.R of the appellant from records to ensure that the same business activity had been continued after renovation - CIT(A) restricting the addition of ₹ 95,100/- to ₹ 19,020/- which was made by AO by invoking provisions of section 14A - Held that:- A perusal of the impugned order shows that the CIT(A) after the submissions of the assessee has further summed up these submissions alongwith arguments and after re-addressing the facts has given the directions to the AO to verify the factual assertions. On a consideration of the directions contained which have been reproduced in the earlier part of this order, we find no infirmity in the direction given. However considering the fact that the CIT(A) as per section 251(1)(a) of the Act has the powers only to confirm, reduce, enhance or anull the assessment and specifically does not have the power to set aside as per the Finance Act, 2001 w.e.f 01.06.2001. Accordingly finding ourselves in agreement with the directions given, we substitute the same by our similar direction to the AO as the Statute bars the CIT(A) to set aside the issue to the AO. The impugned order is modified to this extent. Decided in favour of revenue for statistical purposes.
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2015 (2) TMI 1025
Applicability of provisions of section 161(1A) or section 164 - the income is chargeable to tax in the hands of the appellant amounting to ₹ 7,95,15,873/- as the maximum marginal rate as held by CIT(A) - assessee trust was created by indenture of trust dated 01/02/2008 by its Settlor M/s. Infrastructure Licence & Financial Services Ltd. - Held that:- It is pertinent to note that when the CIT(A) has held that the provisions of section 164 are applicable then the issue of treating the assessee as AOP under section 161(1A) is no more exist and accordingly, the decision of the Bangalore Bench of this Tribunal in India Advantage Fund-VII [2014 (10) TMI 614 - ITAT BANGALORE] to the extent, of finding on the point of treating the trust as AOP, becomes irrelevant. As far as the question of applicability of section 164(1) is concerned, the CIT(A) has proceeded on the basis of fact that the name of IL & FS Financial Services is not appearing either in the deed of trust or in the supplementary deed of the trust. Further, there was also confusion about the fact that the Settlor and beneficiary are one and the same. This is a crucial factual aspect of the case and requires a proper verification by considering the relevant evidences as well as contentions of the assessee. Another crucial confusion as emerging from the records is regarding income arising from sale of shares by the assessee trust and distributed to the beneficiaries was offered to tax by IL & FS Financial Services Ltd. and assessed accordingly. Since these two factual aspects requires a clear and proper verification and examination as well as a clear finding, therefore in the facts and circumstances of the case we set aside this issue to the record of CIT(A) for deciding the same denovo after verification of the facts, consideration of the contentions as well as decisions relied upon by the assessee. Needless to say the assessee may be given appropriate opportunity of hearing before passing the fresh order. - Decided in favour of assessee for for statistical purposes.
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2015 (2) TMI 1024
Setting off of brought forward business loss and unabsorbed depreciation - CIT(A) allowed setoff in the assessee of the amalgamated company for assessment year 2006-07, even the amalgamation was effective with effect from 01.04.2004 as per the order of the Hon’ble Calcutta High Court and the date of amalgamation thus falls within a period less than three years from the date of incorporation of the amalgamating company - Held that:- There is no evidence on record to prove that amalgamating company was engaged in business in which the accumulated loss occurred or depreciation remains unabsorbed for three or more years as on the date of amalgamation. Hence the order of ld. CIT(A) on this account is not sustainable since the assessee has not complied with the provision of section 72A(2)(a)(i) of the Act. - Decided in favour of revenue. Disallowance regarding employees’ contribution to PF and ESI - CIT(A) deleted addition - Held that:- The proposition law in this regard is settled in the case of CIT vs Vinay Cement Limited ( 2007 (3) TMI 346 - Supreme Court of India). If the contributions are made before the due date of filing the return no disallowance is to be made. In this case we note that the actual dates of payment are not available on record. Hence we remit this issue to the file of AO. AO shall examine the actual date of payments and allow the payments if the same are done before the due date of filing the return. - Decided in favour of revenue for statistical purposes.
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2015 (2) TMI 1023
Revision u/s 263 by DIT(E) - Benefit of mutuality given to the assessee - assessee charged only interest income instead of taxing the whole excess of income over expenditure and this mistake resulted in under assessment of income of ₹ 1,06,10,312/- as held by CIT(A)- Assessee Society is registered under section 12A - Held that:- AO has made the detailed enquiries on the issue of ‘principle of mutuality’ and passed the order dated 13.12.2011 u/s. 143(3) of the I.T. Act. Therefore, the assessment order dated 13.12.2011 passed u/s. 143(3) is not erroneous at all and the Ld. DIT(E) has passed the impugned order dated 28.3.2014 contrary to the law and facts on record, which is not sustainable in the eyes of law. The Audit Officer raised the objection on 2.5.2012 on the benefit of mutuality to the assessee and charging only interest income instead of taxing the whole income and in response to the audit objection, the AO vide his reply dated 18.12.2012 to the Sr. Audit Officer regarding the ‘principle of mutuality’ and supported the assessment order dated 13.12.2011 by stating that all received of money from members should go for the maintenance of super-structure, the surplus arising after meeting the administrative expenses has naturally be transferred to the account of the Institution Members, because it belongs to the Members. He further replied that it is the Institution Members who had contributed towards the cost of the assessee or any service or some time deficit will also be to the account of the members. This is a settled principle behind the mutuality concept and lastly Dy. DIT(E) Circle-1, New Delhi vide his reply dated 10.1.2014 to the Director of Income Tax (E), Delhi. The reply to the DIT(E) establish that the revenue authority itself supported the order of the AO dated 13.1.22011 passed u/s. 143(3) of the I.T. Act. In our considered opinion, when two views are possible and the AO has taken one of the possible view, then the provisions of section 263 of the I.T. Act will not apply. Therefore, in the present case the same facts and circumstances are applicable. We are of the view that ld. DIT(E) has passed the impugned order by taking his own view which is contrary to the various decision rendered by the Hon’ble Supreme Court of India in the case of Malabar Industrial Co. Ltd. vs. CIT (2000 (2) TMI 10 - SUPREME Court) and CIT vs. Max India Ltd.(2007 (11) TMI 12 - Supreme Court of India). - Decided in favour of assessee.
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2015 (2) TMI 1022
Entitlement to deduction u/s 80P(2)(a)(i) - Held that:- As it is apparent that if the co-operative society complied with all the three conditions; firstly that the primary object or principle business transacted by it is a banking business, secondly, the paid up share capital and reserve of which are 1 lakh or more and thirdly, by laws of the co-operative society do not permit admission of any other co-operative society as a member, it will be regarded to be primary co-operative bank. If co-operative society does not fulfil any of the conditions, it cannot be regarded to be a primary co-operative bank. Therefore, in the case of the Assessee we have to examine on the basis of the facts and materials on record whether the Assessee co-operative society complies with all the three conditions. In case, it does not comply with all the three conditions, it cannot be regarded to be a co-operative bank and the provisions of Sec. 80P(4), in our opinion, will not be applicable in the case of the Assessee. Since the Assessee cannot be regarded to be a primary co-operative bank, therefore, it cannot be a co-operative bank and therefore the provisions of Sec. 80P(4) are not applicable in the case of the Assessee and Assessee shall be entitled for deduction u/s 80P(2)(a)(i). We, therefore, set aside the order of CIT(A) and allow deduction to the Assessee u/s 80P(2)(a)(i). - Decided in favour of assessee.
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Customs
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2015 (2) TMI 1050
Invocation of extended period of limitation - Whether the CESTAT , after holding by majority that royalties/ licence fees paid on import of beta/ digibeta tapes containing films are includable in the assessable value of the tapes, is right in law in holding that the extended period of limitation is not invokable and consequently setting aside the demand of duty, interest and penalty as time barred - Held that:- The Tribunal may not have referred to all the decisions, the Assessee also has been faulted in this case for not abiding by the provisions of law in the teeth of some clear judicial pronouncements, however, the question was, when the consignment or goods were imported, was the Assessee guilty of not complying with the provisions of law and willfully. That there were certain orders and the decisions of the Tribunal against the Revenue being an undisputed fact, the Tribunal concluded that the extended period could not have been invoked. If the Assessee cannot be faulted for taking advantage of the unclear or doubtful legal position, then, the demand rightly fails. The Tribunal has, by majority, held that during the period when the goods were imported in India, there were certain decisions against the Revenue. The allegation of suppression with intent to evade payment of duty, therefore, is not established and proved. In the circumstances, the third Member agreed with the Member Judicial that the order confirming the demand, confiscation of the goods and imposition of penalty is not sustainable and must be set aside. While we can appreciate the anxiety of the Revenue, when the Assessee succeeded on technical ground, but, the doubtful legal position and which is required to be cleared by the higher Courts is something for which we cannot hold either the Assessee or the Revenue responsible. In the circumstances, we do not think that the Appeal raises any substantial question of law. - Decided against Revenue.
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2015 (2) TMI 1049
Classification of goods - Export of Menthol Crystals - Whether in the facts and circumstances of the case the Appellate Tribunal is right in holding that Menthol Crystals are spices within the meaning of Section 2(n) of the Spices Board Act, 1986 - Held that:- If one peruses the show cause notice, it is apparent that the allegations therein proceed on the footing that the appellants are exporting what is styled as "spice". However if the show cause notice allegations are perused they would reveal that the assessee has exported various consignments of the product described as menthol BP / USP and as menthol crystals BP / USP in the shipping bills. The Ministry of Commerce Notification is relied upon so as to claim the export cess. That is on the footing that the goods mint are one of the spices on which export cess is leviable. All types of menthols are covered within the expression "mint" and export cess leviable has also been paid on the export of the goods by the exporters . The show cause notice proceeds on the footing that the assessee does not seem to dispute this position because it made several representations to the Ministry. However, we do not find that the matter has proceeded on any admitted position and particularly by the assessee . Had it been the position, there was no need for the adjudicating authority to have rendered a specific finding and which is to be found in the order in original. There are extensive conclusions and which have been rendered. In the circumstances, the correctness of these findings and founded on the conclusion that menthol BP / USP and menthol crystals BP / USP can be assessed as spice ought to have been considered by the Tribunal in appropriate details. In the circumstances instead of this Court being required to go into all the details and depriving parties of a valuable right of appeal, that we are of the opinion that the impugned order deserves to be quashed and set aside and the matter remitted and restored to the file of the Tribunal for a decision afresh on merits and in accordance with law. - Decided in favour of assessee.
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2015 (2) TMI 1048
Clearance of goods - provisional assessment - Held that:- In the light of the allegations in the writ petition and the reply thereof it would not be proper for us to make any observations on merits of the controversy. We keep all contentions of the petitioner open for being raised during such proceedings as are contemplated in law and in the affidavit-in-reply. We would highly appreciate if the investigations stated to be ongoing and continuing are concluded expeditiously and further steps are taken by the Revenue and in accordance with law. - Petition disposed of.
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2015 (2) TMI 1047
Waiver of pre deposit - notice requiring the petitioner to pre-deposit 7.5% of the duty confirmed against him - Held that:- The requirement of pre-deposit of 7.5% of the duty or penalty, in cases where both have been imposed, as a pre-condition for maintaining the appeal before the Appellate Tribunal, is one that was introduced under the Customs Act with effect from 06.08.2014. As per the said condition, if an assessee pre-deposits the said amount, then the appeal itself is taken up for hearing by the Appellate Tribunal and there is no requirement of filing a further application for waiver of pre-deposit and stay pending disposal of the appeal. This has been clarified by the CBEC Circular No.984/08/2014 CX dated 16.09.2014. On a consideration of the statutory provisions therefore, I am of the view that the right of appeal granted by the statute is a conditional one and the conditions are not so onerous as to deprive the petitioner of an effective right of appeal. What is required to be deposited by the petitioner, as a condition for maintaining the appeal, is only a small percentage of the duty/penalty amount confirmed against him, and the said amount has to be refunded to the petitioner in the event of his succeeding in the appeal before the Appellate Tribunal. In that view of the matter, I am not inclined to interfere with the direction in Ext.P10 notice requiring the petitioner to pre-deposit 7.5% of the duty confirmed against him by Ext.P8 order, as a condition for maintaining the appeal before the Appellate Tribunal. - however, time period to make pre deposit is extended. - Decided in favour of assessee.
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Corporate Laws
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2015 (2) TMI 1046
Power to publish the Photographs of default borrowers/guarantors in newspapers/magazines etc. under SARFAESI Act - Held that:- It is well settled principle of law that when a stature requires a thing to be done in a particular manner, it should be done in that manner alone or not at all. I proceed to hold on the said principle that a secured creditor is not free to take any action it wishes for enforcing its security interest; it is empowered and authorized to take such action that the statute permits it. There is absolute lack of legislative sanction in relation to publication of photographs of defaulting borrower(s)/guarantor(s). The SARFAESI Act and the rules framed thereunder not having conferred any power on the secured creditors to publish their photographs, they cannot resort to such action on the ground that publication of photograph is not prohibited. For the secured creditors, the test is not as to whether publication is prohibited by the statute but whether such publication is permitted by it. Prohibition has to be inferred in the absence of express authorization For the reasons aforesaid, the petitioners challenge restricted to the threat of publication of their photographs is upheld. Publication of photographs in newspapers, magazines etc. neither being permissible in terms of the SARFAESI Act or the rules framed thereunder nor under any other rule/notification/guideline having binding effect, I further hold that the threat to publish photographs borders on extra-legal means to recover the dues. The secured creditors are, accordingly, restrained by a prohibitory order from taking such recourse. - Decided in favour of appellants.
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2015 (2) TMI 1045
Jurisdiction of Company Law Board (CLB) - Jurisdictional bar in entertaining application under Section 340 of Code of Criminal Procedure, 1973 - Forged and fabricated document - Succession of Shares - Held that:- The Company Law Board in the present case has not been approached with an application under section 340 CrPC as a Second Court but as the First Court before which a forged and fabricated document has been filed and made the basis of the petition. In the case of Kuldeep kapoor [2005 (12) TMI 553 - DELHI HIGH COURT], held that a document, which is tampered or forged and is produced during the Court proceedings, the Court would have jurisdiction to conduct an inquiry under Section 340 of the Code and decide whether the bar contained under Section 195 partially or in its entirety is attracted in the facts and circumstances of the case or not. An offender cannot take advantage of its own offence and wrongs committed, and give an interpretation of the provisions of law, which is destructive of the legislative intent and spirit of the statute. This Court has thus held that even if a document was tampered/forged prior to institution of the legal proceedings, the Court will have jurisdiction to entertain an application under section 340 of the Code if the document has been produced in Court proceedings. Further it is laid down that making of false averment in the pleading pollutes the stream of justice. It is an attempt at inviting the Court into passing a wrong judgment and that is why it must be treated as an offence. Where a verification is specific and deliberately false, there is nothing in law to prevent a person from being proceeded for contempt. The Company Law Board was not barred from entertaining the application under section 340 CrPC and has thus erred in refusing to entertain the application filed by the Appellant.The impugned order is accordingly set aside. - Decided in favour of appellant.
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FEMA
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2015 (2) TMI 1044
Contravention of Section 9 (1) (b) and (d) of the Foreign Exchange Regulation Act, 1973 - Whether in a case where an offence was punishable with a mandatory sentence of imprisonment, a company incorporated under the Companies Act, can be prosecuted, as the sentence of imprisonment cannot be imposed on the company? - Held that:- In view of the decision of the Supreme Court in Standard Chartered Bank's case (2006 (2) TMI 272 - SUPREME COURT OF INDIA), which has also been rendered under the provisions of the Foreign Exchange Regulations Act, the plea of the appellant that on his acquittal in the criminal case, no penalty is imposable on him, does not merit consideration, since the Supreme Court has categorically held that adjudication and prosecution are two independent proceedings and the finding in one is not conclusive in the other. In view of the above decision of the Supreme Court, this Court finds no reason to interfere with the order passed by the Appellate Tribunal. - Decided against appellant.
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Service Tax
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2015 (2) TMI 1064
Extended period of limitation - discrepancy in filing of return - Held that:- correct service tax liability was indicated in the ST-3 returns filed with the Department. Short payment of service tax, if, any was apparent from the figures shown in the ST-3 returns. That once correct calculations have been shown by the appellant then, there cannot be any intention to evade payment of service tax, therefore, extended period cannot be invoked and that show cause notice was time barred. It is observed from the relied upon case laws that the issue involved is no more res-Integra. In the case of Commissioner vs. Megnmani Dyes & Intermediate Ltd. (2013 (6) TMI 141 - GUJARAT HIGH COURT) it has been observed by jurisdictional Gujarat High Court that if, prescribed returns are filed by an appellant giving correct information then extended period cannot be invoked. In the present proceedings also prescribed ST-3 returns were filed by the appellant and it is not disputed that correct calculations of service tax were not shown and differential tax payable was apparent from the figures furnished by the appellant. Under the above factual matrix available on record appellant cannot be held to have suppressed any information with intention to evade service tax. Accordingly, it is held that extended period cannot be invoked in the present proceedings and appeal filed by the appellant is required to be allowed on time bar, as demand is for the period 2005-06 dt 2006-07 and show cause notice was issued on 1/2/2010 - Decided in favour of assessee.
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2015 (2) TMI 1063
Intellectual Property Services - Taking a view that the assessee should have paid service tax and the amount paid to the Group Companies abroad as a receiver of service as Group Companies did not have office in India, proceedings were initiated culminating confirmation of demand of service tax of ₹ 46,70,785/- with interest and imposition of penalty equal to the tax - Commissioner (Appeals) took the view that waiver of penalty can be granted under Section 80 of the Finance Act, 1994 in view of the fact that the situation was one of revenue neutrality and the assessee had paid the entire amount of tax with interest - Held that:- This is a case where the assessee could have taken Cenvat credit of service tax paid by them and therefore, there was no reason for the assessee to suppress the fact or resort to mis-declaration and therefore, we find ourselves in agreement with the view taken by the Commissioner (Appeals) that extended period could have been invoked in this case. We have taken note of the fact that the respondent-assessee was to pay tax as a receiver of service and not as a provider. Further, we also find that the Commissioner (Appeals) was right in waiving penalty under Section 80 of the Finance Act, 1994 and the provisions of Section 73(3) of the Finance Act, 1994 as it existed prior to 1.4.2011 would be applicable is also correct. Learned C.A. on behalf of the assessee submitted that even though the Commissioner (Appeals) has held that the appellant is liable to pay tax only within the normal period, the assessee would not claim any refund of tax or interest already paid by them. It is his only request to uphold waiver of penalty. We also find that the assessee paid tax with interest and did not propose to claim refund in spite of having order in their favour would show that the respondent-assessee had no such intention to avoid tax or want to avoid by law. Such being the position, we consider that the provisions of Section 80 of the Finance Act has been rightly invoked. In view of above position, we confirm the demand of service tax and interest as not contested and set aside the penalty. - Decided partly in favour of Revenue.
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2015 (2) TMI 1062
Erection, Commissioning or Installation Service- Construction of transmission tower and related services- exemption under Notification No. 45/2010 dated 20.07.2010 - Held that:- Contract is relating to the services such as earth work excavation, stub setting, concreting tower erection, stringing power conductor etc. Prima facie, in our considered view, the construction of transmission tower and related services could be covered by the exemption Notification No. 45/2010. It is noted that the applicant has already paid an amount of ₹ 7,16,205/-, which is sufficient for hearing of the appeal. We also find force in the submission of the Ld. AR that the exemption Notification would not apply in the case of construction of control room - Matter remanded back - Petition disposed of.
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2015 (2) TMI 1061
Commercial or Industrial Construction and Construction of Complex Services - Free Material supplied by service recipients - Notification Nos. 15/2004-ST, dated 10.9.2004 - Notification nos. 18/2005-ST dated 7.6.2005.- Held that:- It is contended on behalf of the appellant that this issue, including entitlement to benefits under Notification Nos.15/2004-ST, dated 10.9.2004 and 18/2005-ST dated 7.6.2005 is covered by the decision of the Larger Bench of this Tribunal in Bhayana Builders (P) Ltd. [2013 (9) TMI 294 - CESTAT NEW DELHI (LB)]. No other issue arises for consideration. Decided in favour of appellant.
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Central Excise
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2015 (2) TMI 1058
Waiver of pre deposit - manufacture of rice bucket elevator and rice conveyor - Classification of goods - Classification under heading 8437 or heading 8428 - classification as as other lifting, handling, loading or unloading machinery (for example Lifts, escalators, conveyors, Teleferice) - Held that:- The Commissioner has given a finding that the goods, in question, are basically conveyors and elevators which are used for transportation of rice in a rice mill from one stage to another, and that the same are integral part of the machinery to achieve the desired production in a particular time frame. However, having given this finding, the Commissioner has gone on to say that these items are not essential part of the machinery in absence of which the whole machinery would come to stand still and that the same can be utilized to transport not only rice but anything else also. However, it is seen that the appellant have produced opinion from technical experts - College of Engineering, Pune and St. Lango Institute of Engineering and Technology wherein it has been opined that these machines are specially designed for handling and processing of food grains and that as per the characteristics of the raw material used, component and fabrication techniques used for manufacture of grain dischargers and grain feeders, these are not fit for handling heavy and abrasive type material like sand, coal lime etc. It is also seen that same machinery when imported into India are being classifiable by different Customs Houses as milling machinery under heading 8437. - prima facie classifiable as milling machinery under heading 8437 - Stay granted.
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2015 (2) TMI 1057
Maintainability of appeal - Refund claim - Cash refund of accumulated CENVAT Credit - Asstt. Commissioner rejected the refund claim on the ground that this refund claim is in respect of the exports under Bond made against under advance licence scheme and that grant of cash refund of the cenvat credit would result in double benefit - Held that:- Appeal is not maintainable as the authorisation by the Committee of Commissioners is not in terms of provisions of rule 35 B (2), as the same person holding the charge of Commissioner, Central Excise, Jaipur-I as well as Commissioner Central Excise, Jaipur-II has signed the authorization. The committee of Commissioners mentioned in Section 35 B (2) must necessarily consist of two Commissioners. Even on merits also, the issue stands decided against the Department by detailed order of the Tribunal in the respondents own case reported in [2011 (2) TMI 584 - CESTAT, NEW DELHI]. In view of this, we do not find any merit in the appeal of the Revenue - Decided against Revenue.
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2015 (2) TMI 1056
Successor's liability - Recovery of dues from successor company - Held that:- The undisputed facts are that the factory premises alongwith all the plant and machineries were taken over by the respondent from its previous owner M/s. Unistar Polymers (P) Ltd. on 31.07.2003 and the Central Excise Registration Certificate was issued to the respondent on 03.12.2003. There was a confirmed duty demand and penalty totalling to ₹ 9,73,676/- pending recovery against M/s. Unistar Polymers (P) Ltd. However, at the time of purchase of business of M/s.Unistar with plant and machinery by the respondent, there was no Provision in Section 11 of the Central Excise Act for recovery of dues pending against a manufacturer- defaulter from the person who purchased his business alongwith his factory. Such a provision was made by inserting proviso to section 11 with effect from 10.09.2004 and by this proviso to section 11, the arrears of Revenue pending recovery from the predecessor could be recovered even after change of ownership of the factory by attaching the machinery, vessels, utensils, implements and articles in possession of the successor of business. Since, there is nothing in this proviso to indicate that this amendment has retrospective effect, the same cannot be applied retrospectively and therefore the Department invoking Proviso to Section 11 could not recover from the respondent the arrears of Revenue of M/s. Unistar Polymers (P) Ltd. We find that same view has been taken by the Tribunal in the case of Eklinggji Finance Pvt. Ltd. (2012 (1) TMI 120 - CESTAT NEW DELHI) and also by Hon ble Karnataka High Court in the case of CCE, Bamgalore-I vs. Press Fab Precision Components Pvt. Ltd. reported in [2006 (8) TMI 206 - HIGH COURT OF KARNATAKA AT BANGALORE]. In view of this, we do not find any infirmity in the impugned order. - Decided against Revenue.
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2015 (2) TMI 1055
Demand of duty on clearance of excess quantity found on molasses found during the course of investigation - Held that:- The allegation of excess unaccounted production of sugar is based on the alleged excess production of molasses and the quantity stored of molasses in the tanks has been determined by dip reading method. The method of dip reading is not full proof method as the volume of molasses may indicate the varying facts due to temperature. Therefore on the basis of excess molasses reported in their during stock taking it was not alleged that there was excess production of sugar. In the case of Oudh Sugar Mills vs. Union of India reported in [1962 (3) TMI 75 - SUPREME COURT OF INDIA] it was held that allegation of clandestine production and clearance based upon the calculation of raw material fed into process are vitiated by error of law being based only on inferences involving unwarranted assumptions apart from the fact of excess quantity of molasses, there was virtually no other evidence to indicate clandestine removal of sugar. Admittedly apart from measurement of molasses by way of dip reading method, no other evidence has been brought on record for clandestine removal of sugar, Therefore, allegation against the appellant is not sustainable - Decided in favour of assessee.
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2015 (2) TMI 1054
Waiver of pre deposit - Demand of duty - principal manufacturer is coating HDPE on the fabrics processed by job worker - Held that:- Tribunal in the case of another job worker in the case of SSM Processing Mills Vs CCE Salem - [2015 (2) TMI 1020 - CESTAT CHENNAI] granted unconditional stay. - Following this decision we waive pre-deposit of entire amount of duty along with interest and penalty and stay its recovery till disposal of appeal. - Stay granted.
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2015 (2) TMI 1053
Imposition of redemption fine and penalty - clandestine removal of the finished goods - Held that:- With regard to imposition of redemption fine, I find that the issue has been settled by the Larger Bench of this Tribunal in the case of Shiv Kripa Ispat Pvt. Ltd. (2009 (1) TMI 124 - CESTAT MUMBAI) wherein it was held that when goods neither available for confiscation nor cleared under bond/undertaking, redemption fine is not imposable. Admittedly, in this case neither the goods were available nor the goods were cleared under any bond therefore, redemption fine is not imposable. In this term, the order of imposition of redemption fine is set aside. Tribunal in various judicial pronouncements held that when duty, interest and 25% of duty as penalty has been paid by the main assessee therefore, issuance of show-cause notice and imposition of penalty on the co-appellant does not arise. In this case as the main appellant has paid duty, interest and 25% of duty as penalty therefore, question of imposition of penalty on co-noticee does not arise as held by this Tribunal in the case of Tikam P. Bhojwani (2011 (3) TMI 893 - CESTAT, AHEMDABAD). Therefore, imposition of penalty on the co-appellant is also set aside. - Decided in favour of assessee.
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2015 (2) TMI 1052
Valuation of goods - Inclusion of charges for loading, unloading, transportation and warehousing - Held that:- The goods are not sold and these are cleared from the factory, but these are transported and stored in Hyderabad in transporter's warehouse. As and when appellant gets the order, they direct transporter/warehouse owner to deliver the said goods to the customer's place. Thus, the act of sale takes place on premises of the customer and for this purpose appellant is charging ₹ 65 per drum, as freight, loading, unloading charges. - Following decision of Hard Castle Petrofer Pvt. Ltd. (2014 (4) TMI 336 - CESTAT NEW DELHI) - No merit in appeal - Decided against assessee.
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2015 (2) TMI 1051
Valuation of goods - Inclusion of excess amount collected as freight charges - Held that:- differential amount not includible in the assessable value since the duty of excise is on manufacture and not on profit made by the dealer on transportation. - Following decision of Baroda Electric Meters Vs. Commissioner of Central Excise - [1997 (7) TMI 126 - SUPREME COURT OF INDIA] - Decided in favour of assessee.
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2015 (2) TMI 1020
Waiver of pre deposit - Denial of the benefit of Rule 96D - Held that:- Sub-rule (5) of Rule 96D provides that if cotton fabrics after being processed are removed without payment of duty to one or more factories for further processing or to the originating factory, such removal shall be subject to and in accordance with the provisions of sub-rule (3). It is seen that sub-rule (3) of Rule 96D provides that when cotton fabris are removed from the factory from where they are manufactured to another factory including a processing factory, the consignor shall follow the procedure as required under Rule 156A and Rule 156B as modified by Rule 173N of the said Rules. In the instant case, the learned Counsel submitted that there is no dispute that the applicant followed the procedure as provided under sub-rule (3) of Rule 96D. On a perusal of the impugned Adjudication order, we find that the Adjudicating authority proceeded on the basis that the fully processed cotton fabrics removed for further processing of LDPE/HDPE coating, it ceases to retain its identity as cotton fabrics and a new distinct commodity emerges of such coating/lamination. Prima facie, we find that there is no change of identity of the processed fabrics at the hand of the processor. In any event, the process of LDPE/HDPE was undertaken at the hands of the principal CVIL. Hence, we find that the applicant made out a strong prima facie case for waiver of pre-deposit of the entire amount of duty along with interest and penalty - Stay granted.
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CST, VAT & Sales Tax
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2015 (2) TMI 1060
Imposition of penalty - Default in payment of tax - According to the petitioner, there was no wilful evasion of tax. The default in payment of ₹ 10,09,712.00 was on account of mistake in application of rates of tax, which was a bonafide error, the said figure being the differential amount. Subsequently, petitioner deposited the said amount of ₹ 10,09,712.00 to the State respondents - Held that:- A careful reading of the Section 90 would indicate that in case of contravention or failure to comply with any provision of the VAT Act or the Rules framed thereunder, if no other penalty is provided under the VAT Act for such contravention or failure, penalty of an amount not exceeding twice the amount of tax evaded or sought to be evaded or involved, may be imposed. As per the proviso, no penalty under the said section shall be imposed unless the person concerned is given a reasonable opportunity of being heard. Therefore, in the event of any contravention or failure to comply with any provision of the VAT Act or any order or direction made thereunder, penalty may be imposed which may extend to an amount not exceeding twice the amount involved or tax evaded or sought to be evaded. However, before imposition of penalty, the affected person is required to be given a reasonable opportunity of being heard. The fact that the section itself mandates providing of reasonable opportunity of hearing before imposition of penalty is a clear pointer to the legislative intent that imposition of penalty in the event of any contravention or failure to comply in terms of section 90 would not be automatic. Discretion is vested in the authority whether to impose penalty at all or not or in the event of the need to impose penalty, the quantum of penalty that should be imposed. This would require application of mind to all the relevant factors including the response of the affected person. Imposition of penalty is a coercive measure and, therefore, the order of penalty should be a speaking order. Therefore, from the order imposing penalty, the reasons for imposition of penalty as well as the quantum of penalty must be discernible. This will reflect application of mind by the authority imposing the penalty and also allow the higher authorities to examine the reasons assigned for imposition of penalty in the event of appeal or revision. The order of penalty must indicate that all relevant factors were taken into consideration before imposing penalty. The discretionary power to impose penalty must be exercised in a reasonable and rational manner, otherwise it would be arbitrary and capricious. - it has been stated by respondent No. 2 in his affidavit that demand notice has been issued not under section 75 (12) (b) (v) of the VAT Act, but under section 90 thereof. A bare perusal of the impugned demand notice would indicate that no reasons have been assigned as to why the penalty of ₹ 10,00,000.00 has been imposed on the petitioner. The order clearly reflects non-application of mind, firstly, either to the justification for imposition of penalty or not and secondly, the quantum of the penalty. Impugned demand notice is, therefore, clearly arbitrary and cannot be sustained in the eye of law. It is, accordingly set aside and quashed. Since penalty has been quashed, it goes without saying that the bakijai proceeding for recovery of the penalty cannot also survive. - Following decision of HINDUSTAN STEEL LTD. VS. STATE OF ORISSA [1969 (8) TMI 31 - SUPREME Court] - Decided in favour of assessee.
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2015 (2) TMI 1059
Denial of Input tax credit - Utilization of credit under the nomenclature of work stations - assessing authority disallowed such input tax on work stations considering them as input tax restricted goods falling under Entry No.5 of the V Schedule read with Section 11(a)(2) of the Karnataka Value Added Tax, 2003 - Tribunal allowed all the appeals of the assessee holding that work stations are accessories of technical goods viz., of computer/computer peripherals falling under Entry No.3 of V Schedule read with Section 11(a)(2) of the KVAT Act, 2003 - Whether work stations purchased by the assessee which is in the business of development and sale of computer software would fall within the definition of furniture in Entry No.5 of V Schedule and is not entitled to the benefit of Input Tax Deduction. Held that:- The word 'furniture' has not been defined under the Act. In Chambers 20th Century Dictionary 'furniture' is defined as movables either for use or ornament with which a house is equipped. In the Webster Dictionary II edition, it is defined to mean articles of convenience or decoration used to furnish the house. Insofar as the word 'furnished' is concerned, the Shorter Oxford English Dictionary defines the word 'furniture' has to fit up with all that is requisite including moveable furniture which is now predominant notion. Shorter Oxford English dictionary gives the meaning of the word 'furniture' as movable articles in a dwelling house, place of business or a public building. Therefore, insofar as the dictionary meaning is concerned, it means all articles of convenience or decoration used for the purpose of furnishing a place of business or office or a house as articles of furniture. If any term or expression has been defined in the enactment then it must be understood in the sense in which it is defined but in the absence of any definition being given in the enactment the meaning of the term in common parlance or commercial parlance has to be adopted. Apparently, the deciding factor is the predominant or ordinary purpose or use. It is not enough to show that the article can be put to other uses also. It is its general or predominant user which seems to determine the category in which an article will fall. The test, is not whether the articles are capable of being used as furniture; the test is whether they are ordinarily so used and can be accepted as such according to the general or popular notion of what furniture is. Sales tax is a liability which affects the mercantile community and the consumer public. The list of items mentioned in the notification must be construed according to the understanding popular in that community and section of the people. To impose a technical or artificial meaning will result in defeating or stultifying the intention behind the provision. According to the general or popular notion of what furniture is, whether the article can be described as furniture turns upon its definition in relation to daily needs of a convenient living. It is the general or predominant user which determines the category in which an article will fall and therefore, the nomenclature given to an article is not decisive. Input tax paid by an assessee in purchasing the goods on set out in V Schedule are not eligible for input tax deduction. That rule has an exception. That is, if the goods mentioned in V Schedule are resold then Section 11 is not attracted. Similarly when the goods mentioned in the V Schedule are used for manufacture or any other process of other goods for sale, even then Section 11 is not attracted. Work stations may be a computer or device such as computer work station, a high performance desktop computer as may be designed for scientific or engineering applications or a music work station. The work station or a cubicle is used to sit and operate a computer with all attendant accessories. It is a nature of accessory for use in the manufacture or processing of goods for sale and those are used in computing etc. In common parlance it is not understood as a furniture for a convenience or a decoration. It is not used as chairs, tables, cupboards etc. The purpose for which the said work station is used is in reality for a manufacturing process as a part of manufacturing process. At any rate, it is so understood in the trade. A work station includes a cubicles, a computer on the top of cubicle and chair in front of the computer to sit and work on the computer and also electrical connections for getting electricity as well as internet connections. Therefore, a work station is not used as a convenience or for decoration in a dwelling place or used to furnish a place of business. Therefore, it is not possible to accept the view of the revenue that a cubicle or a work station would fall within the meaning of the word 'Furniture' and therefore, the assessee is not entitled to the benefit of input tax paid for acquiring such work stations. - Decided against Revenue.
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Indian Laws
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2015 (2) TMI 1043
Entertainment tax on Direct-to-home service providers (DTH) under provisions of the Jharkhand Entertainment Tax Act, 2012 - Taxable under service tax under category broadcasting service - Ultra virus provisions to the Constitution of India - Covered under entry 92C of the Union list or entry 62 of the State list - Doctrine of harmonious construction - Aspect theory - Held that:- In our view, the respondents as a cable operator, for the purpose of levy and collection of tax under sub-section (4a) of section 4A of the Act have direct and close nexus with the entertainments made available to the viewer through their cable television network. The performance, film or programmes shown to the viewers through the cable television network come within the meaning of entertainments and therefore within the legislative competence of the State Legislature under entry 62 of List II of the Seventh Schedule to the Constitution of India to make law for the levy and collection of tax on such entertainments. We also see no substance in the submission that the impugned legislation impinges on the field occupied by the Central legislation. The aforesaid Central legislation has been enacted to regulate the operation of cable television network in the country and matters connected therewith or incidental thereto whereas the State legislation is for levy of entertainment tax on entertainment within the legislative field exclusively assigned to the State Legislature under entry 62 of List II of the Seventh Schedule to the Constitution. Thus the objects sought to be achieved by two different Acts enacted under two different legislative fields exclusively assigned to the respective Legislatures are entirely distinct and separate. The Cable Television Networks (Regulation) Act, 1995 of the Union Legislature does not denude the State Legislature for levying entertainment tax on entertainment. In this context, it is important to refer to the case of Express Hotels Private Ltd. [1989 (5) TMI 52 - SUPREME Court] in which the Constitution Bench had dealt elaborately with Western India Theatres Ltd. [1959 (1) TMI 23 - SUPREME COURT]. In the said case, with reference to entry 50 in Schedule VII of the Government of India Act, 1935, which is identical to entry 62, contention was raised that levy with respect to luxuries, entertainments or amusements can be made on person's receiving such luxuries or entertainment and that there can be no levy of tax on those who are givers or providers of such luxuries, entertainments, etc. While rejecting such a contention that it is only the receivers who can be taxed and not the giver, the learned judges observed that there can be no reason to 'differentiate between the giver and the receiver of entertainments and amusements and both may with equal propriety be made amenable to the tax'. Therefore, there is no substance in the contention that taxable event is entertainment and there can be no tax if there is no entertainment. As held by the Constitution Bench, existence of means of providing entertainment would be sufficient to support a law imposing tax thereon and that means of providing entertainment provides the nexus between the taxing power and the subject of tax. In the case of Kesoram Industries Ltd. [2004 (1) TMI 71 - SUPREME Court] , the honourable Supreme Court referred to the aspect theory and pointed out that the transaction may involve two or more taxable events in its different aspects. Merely because they overlap, the same does not detract from the distinctiveness of the aspects. Thus, there could be no question of a conflict solely on account of two aspects of the same transaction being made a subject-matter of legislation by two Legislatures falling within two fields of legislation respectively available to them. So long as the essential character of the levy is not departed from within the four comers of the particular entry, the measure of tax or the manner of levying the tax would not have any vitiating effect. In the present case the question which is required to be determined is whether the levy of tax by the State Legislature was on the service aspect or the entertainment aspect. As has been held in the case of Federation of Hotel [1989 (5) TMI 50 - SUPREME Court] by the honourable apex court, if the same transaction involved two or more taxable events in its different aspects, the fact that there is an overlapping does not detract from the distinctiveness of the aspect which can be subjected to legislation under different legislative power of the Union and the State Legislature. The distinction between the two aspects/spheres/profession on the one hand and service on the other hand, was considered by the honourable Supreme Court in the All India Federation of Tax Practitioners [2007 (8) TMI 1 - Supreme Court].The honourable Supreme Court drew distinction between the two aspects/spheres, i.e., profession on the one hand and service on the other hand and upheld the levy of service tax on chartered accountants or cost accountants. The validity of the levy of entertainment tax on DTH providers by the State of Uttarakhand was challenged before the High Court of Uttarakhand. Referring to the distinction drawn by the apex court between the two aspects/spheres, i.e., profession on one hand and service on the other hand in All India Federation of Tax Practitioners [2007 (8) TMI 1 - Supreme Court] and treating the similar distinction between the two aspects/spheres on DTH broadcasting service, i.e., service on the one hand and entertainment on the other hand, the Uttarakhand High Court held. We fully agree with the view taken by the Uttarakhand High Court and we hold that there are two different aspects/spheres of "direct-to-home" (DTH). One is broadcasting service, for which service tax is levied and another one entertainment, for which entertainment tax is levied by the State of Jharkhand. Applying the doctrine of "aspect theory" in a similar case reported as Tata Sky Limited [2010 (10) TMI 930 - PUNJAB & HARYANA HIGH COURT] , the Punjab and Haryana High Court held that levy of service tax on the providing of service vide entry 97 read with entry 92C of List I and levy of entertainment tax covered by entry 62, List II of the Seventh Schedule to the Constitution of India can co-exist and can be harmonized on being different aspects. In the case of Purvi Communication P. Ltd. [2005 (3) TMI 438 - SUPREME COURT OF INDIA] , the honourable Supreme Court upheld the levy of "entertainment tax" on cable television by the State of West Bengal. Ratio of the decision in Purvi Communication upholding the levy of entertainment tax on cable operators by the West Bengal Legislature is squarely applicable. The contention of the petitioners is that the value of set top box or other equipments cannot be included in valuable consideration and gross collection. The learned senior counsel for the petitioner urged to segregate the cost of set top box or other equipments and other instruments of like nature from valuable consideration received by the assessee and from gross collection. By reading of section 2(aj), we do not think that the value of set top box is included as valuable consideration. What is stated as valuable consideration in section 2(aj)(ii) in respect to direct-to-home (DTH) broadcasting service means any cash, deferred payment by way of contribution, subscription, installation or rent or security or activation charges or connection charges or any other charges collected in any manner whatsoever for direct-to-home (DTH) broadcasting service with the aid of any type of set top box or any other instrument of like nature at a residential or non-residential place. We are of the view that the connection charges are integral part of "entertainment" and have to be taken into account for the valuable consideration received by the assessee for calculating the gross collection. Jharkhand Entertainment Tax Act, 2012 levying tax on "entertainment" through direct-to-home (DTH) in pith and substance, is on entertainment which falls under entry 62 of List II of the Seventh Schedule. The levy of "entertainment tax" is different from the levy of tax on "broadcasting service" which falls under entry 92C of List I of the Seventh Schedule to the Constitution of India. Entry 62 of State List and entry 92C of the Union List operate in two different spheres. There is no transgression or encroachment upon the field of Union legislation and the levy of tax on "entertainment" through direct-to-home (DTH) by the State Legislature is not ultra vires the power of the State Legislature provided under entry 62 of List II of the Seventh Schedule to the Constitution of India. In view of the fine distinction between direct-to-home service and cable T. V., levy of "entertainment tax" at the rate of 10 per cent. on direct-to-home (DTH) service vis-a-vis 7.5 per cent. on the "entertainment" through cable TV, is not discriminatory. Applying the R. M. D. Chamarbaugwalla [1957 (4) TMI 56 - SUPREME COURT] the principle of severability, section 2(s)(v) read with section 2(aj)(ii) of Jharkhand Entertainment Tax Act shall not include the cost of set top box or any other instrument or equipment of like nature to levy entertainment tax. The impugned demand notices issued to the writ petitioners are in consonance with the provisions of the Jharkhand Entertainment Tax Act, 2012, the prayer sought for by the petitioners to quash the impugned notices is liable to be rejected. - Decided against the appellants.
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2015 (2) TMI 1042
Refusal to accept compromise / settlement between the parties - Power of high court under Section 482 of the Code of Criminal Procedure to quash the proceedings - Held that:- We find from the impugned order that the sole reason which weighed with the High Court in refusing to accept the settlement between the parties was the nature of injuries. If we go by that factor alone, normally we would tend to agree with the High Court approach. However, as pointed out hereinafter, some other attendant and inseparable circumstances also need to be kept in mind which compel us to take a different view. We have gone through the FIR as well which was recorded on the basis of statement of the complainant/victim. It gives an indication that the complainant was attacked allegedly by the accused persons because of some previous dispute between the parties, though nature of dispute etc. is not stated in detail. However, a very pertinent statement appears on record viz., “respectable persons have been trying for a compromise up till now, which could not be finalized”. This becomes an important aspect. It appears that there have been some disputes which led to the aforesaid purported attack by the accused on the complainant. In this context when we find that the elders of the village, including Sarpanch, intervened in the matter and the parties have not only buried their hatchet but have decided to live peacefully in future, this becomes an important consideration. The evidence is yet to be led in the Court. It has not even started. In view of compromise between parties, there is a minimal chance of the witnesses coming forward in support of the prosecution case. Even though nature of injuries can still be established by producing the doctor as witness who conducted medical examination, it may become difficult to prove as to who caused these injuries. The chances of conviction, therefore, appear to be remote. It would, therefore, be unnecessary to drag these proceedings. We, taking all these factors into consideration cumulatively, are of the opinion that the compromise between the parties be accepted. - Decided in favour of appellants. Principles lay down by which the High Court guided :- 1) Power under Section 482 to quash the criminal proceedings even in those cases which are not compoundable, is to be exercised sparingly and with caution. 2) When parties have reached the settlement and petition for quashing the criminal proceedings is filed, the guiding factor would be to secure ends of justice or to prevent abuse of the process of any court. 3) Such a power is not be exercised in those prosecutions which involve heinous and serious offences of mental depravity or offences like murder, rape, dacoity, etc. Such offences are not private in nature and have a serious impact on society. 4) Similarly, for offences alleged to have been committed under special statute like the Prevention of Corruption Act or the offences committed by Public Servants while working in that capacity are not to be quashed merely on the basis of compromise between the victim and the offender. 5) On the other, those criminal cases having overwhelmingly and pre-dominantly civil character, particularly those arising out of commercial transactions or arising out of matrimonial relationship or family disputes should be quashed when the parties have resolved their entire disputes among themselves. 6) The High Court is to examine as to whether the possibility of conviction is remote and bleak and continuation of criminal cases would put the accused to great oppression and prejudice and extreme injustice would be caused to him by not quashing the criminal cases. 7) Offences under Section 307 IPC would fall in the category of heinous and serious offences and therefore is to be generally treated as crime against the society and not against the individual alone. However, the High Court would not rest its decision merely because there is a mention of Section 307 IPC in the FIR or the charge is framed under this provision. 8) While deciding whether to exercise its power under Section 482 of the Code or not, timings of settlement play a crucial role. Those cases where the settlement is arrived at immediately after the alleged commission of offence and the matter is still under investigation, the High Court may be liberal in accepting the settlement to quash the criminal proceedings/investigation. It is because of the reason that at this stage the investigation is still on and even the charge sheet has not been filed.
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2015 (2) TMI 1021
Reinstatement in job in case of honourably acquitted by court - No provision in Tamil Nadu Service rules - Directions to curb Eve-teasing - Held that:- As we have already indicated, in the absence of any provision in the service rule for reinstatement, if an employee is honourably acquitted by a Criminal Court, no right is conferred on the employee to claim any benefit including reinstatement. Reason is that the standard of proof required for holding a person guilty by a criminal court and the enquiry conducted by way of disciplinary proceeding is entirely different. In a criminal case, the onus of establishing the guilt of the accused is on the prosecution and if it fails to establish the guilt beyond reasonable doubt, the accused is assumed to be innocent. It is settled law that the strict burden of proof required to establish guilt in a criminal court is not required in a disciplinary proceedings and preponderance of probabilities is sufficient. There may be cases where a person is acquitted for technical reasons or the prosecution giving up other witnesses since few of the other witnesses turned hostile etc. In the case on hand the prosecution did not take steps to examine many of the crucial witnesses on the ground that the complainant and his wife turned hostile. The court, therefore, acquitted the accused giving the benefit of doubt. We are not prepared to say in the instant case, the respondent was honourably acquitted by the criminal court and even if it is so, he is not entitled to claim reinstatement since the Tamil Nadu Service Rules do not provide so. In view of the above mentioned circumstances, we are of the view that the High Court was not justified in setting aside the punishment imposed in the departmental proceedings as against the respondent, in its limited jurisdiction under Article 226 of the Constitution of India. Directions for All the State Governments and Union Territories in public interest to curb eve-teasing - 1) To depute plain clothed female police officers at public places to monitor and supervise incidents of eve-teasing 2) To install CCTVs in strategic positions 3) Person in charge of the respective public institutions have to take steps as they deem fit and on a complaint, they must pass on the information to the nearest police station or the Women's help centre 4) In case of eve-teasing is committed in a public service vehicle, it is duty of crew to take such vehicle to the nearest police station. Failure to do so should lead to cancellation of the permit to ply. 5) To establish Women’ Helpline in various cities and towns 6) Suitable boards cautioning such act of eve-teasing be exhibited in all public place 7) Responsibility is also on the passers-by and on noticing such incident, they should also report the same to the nearest police station or to Women Helpline 8) To issue suitable instructions to the concerned authorities including the District Collectors and the District Superintendent of Police so as to take effective and proper measures to curb eve-teasing
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