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Newsletter: Where Service Meets Reader Approval. TMI Tax Updates - e-Newsletter March 20, 2018 Case Laws in this Newsletter: GST Income Tax Customs Corporate Laws Insolvency & Bankruptcy Service Tax Central Excise CST, VAT & Sales Tax Wealth tax Indian Laws Articles Credit Notes and accounting implications of Discounts & Incentives for GST E-ITR FORM MUST HAVE OPTIONAL SHEETS FOR EXPLANATIONS AND FURTHER CLAIMS FOR CONSIDERATION BY AO News CBEC to verify GST transitional credit claims of 50,000 taxpayers Draft Agriculture Export Policyput up in the public domain RBI Reference Rate for US $ Informal World Trade Organisation Ministerial Meeting on 19-20th March in New Delhi Notifications Customs 21/2018 - dated 19-3-2018 - Cus (NT) Declaration of Vijayawada Airport as Customs Airport; amendment of Notification No. 61/94(NT)- CUSTOMS dt. 21st November, 1994 GST - States S.O. No. 25-05/2018 State Tax (Rate) - dated 5-3-2018 - Jharkhand SGST Seeks to exempt Central Government’s share of Profit Petroleum from State tax. S.O. No. 23-09/2018 State Tax (Rate) - dated 5-3-2018 - Jharkhand SGST Amendments in the Notification of the Government of Jharkhand, in the Department of Commercial Taxes, No. 45/2017- State Tax (Rate), S.O 125, dated the 14th November, 2017. S.O. No. 22-08/2018 State Tax (Rate) - dated 5-3-2018 - Jharkhand SGST Exempts the State tax on intra-state supplies of goods - Old and used, petrol Liquefied petroleum gases (LPG) or compressed natural gas (CNG) driven motor vehicles. S.O. No. 21-07/2018 State Tax (Rate) - dated 5-3-2018 - Jharkhand SGST Amendments in the Notification of the Government of Jharkhand in the Department of Commercial Taxes No.2/2017- State Tax (Rate), dated the 29th June, 2017. S.O. No. 20-06/2018 State Tax (Rate) - dated 5-3-2018 - Jharkhand SGST Amendments in the Notification of the Government of Jharkhand in Department of Commercial Taxes, No.1/2017- State Tax (Rate), S.O 31 dated the 29th June, 2017. S.O. No. 19-04/2018 State Tax (Rate) - dated 5-3-2018 - Jharkhand SGST Notifies the following classes of registered persons who supply development rights to a developer, builder, construction company or any other registered person against consideration, wholly or partly, in the form of construction service of complex, building or civil structure. S.O. No. 18-03/2018 State Tax (Rate) - dated 5-3-2018 - Jharkhand SGST Amendments in the Notification of the Government of Jharkhand, Department of Commercial Taxes No.13/2017- State Tax (Rate), S.O 43, dated the 29th June, 2017 S.O. No. 17-02/2018 State Tax (Rate) - dated 5-3-2018 - Jharkhand SGST Amendments in the Notification of the Government of Jharkhand, Department of Commercial Taxes, No.12/2017- State Tax (Rate), S.O. No. 17 dated the 29th June, 2017. S.O. No. 16-01/2018 State Tax (Rate) - dated 5-3-2018 - Jharkhand SGST Amendments in the Notification of the Government of Jharkhand, in the Department of Commercial Taxes No.11/2017- State Tax (Rate), S.O 41 dated the 29th June, 2017. Va Kar/GST/1/2018-S.O. No. 09 - dated 20-2-2018 - Jharkhand SGST Appellate Authority for Advance Ruling S.O. No. 15-09/2018-State Tax - dated 20-2-2018 - Jharkhand SGST Notification related to electronic way bill. S.O. No. 14-08/2018-State Tax - dated 20-2-2018 - Jharkhand SGST Extends the time limit for furnishing the return by an Input Service Distributor in FORM GSTR-6. S.O. No. 13-07/2018-State Tax - dated 20-2-2018 - Jharkhand SGST Waives the amount of late fee payable the return in FORM GSTR-6. S.O. No. 12-06/2018-State Tax - dated 20-2-2018 - Jharkhand SGST Waives the amount of late fee payable the return in FORM GSTR-5A. S.O. No. 11-05/2018-State Tax - dated 20-2-2018 - Jharkhand SGST Waives the amount of late fee payable the return in FORM GSTR-5 of twenty-five rupees for every day. S.O. No. 10-04/2018-State Tax - dated 20-2-2018 - Jharkhand SGST Waives the amount of late fee of the details of outward supplies for any month/quarter in FORM GSTR-1. S.O. No. 08-11/2018-State Tax - dated 19-2-2018 - Jharkhand SGST Rescission, the notification of the Government of Jharkhand (Department of Commercial Taxes) No. S.O. 4 State Tax dated the 3rd January 2018. S.O. No. 07-03/2018-State Tax - dated 30-1-2018 - Jharkhand SGST The Jharkhand Goods and Services Tax (Amendment) Rules, 2018. 09/2018 - dated 25-1-2018 - Karnataka SGST seeks to amend Notification No.(45/2017) - FD 48 CSL 2017 dated 14/11/2017 08/2018 - dated 25-1-2018 - Karnataka SGST Seeks to amend Notification No.(01/2017 - FD 48 CSL 2017 dated 29/06/2017. 07/2018 - dated 25-1-2018 - Karnataka SGST Seeks to Amendment in the Notification No.(02/2017) - FD 48 CSL 2017 dated 29/06/2017. 06/2018 - dated 25-1-2018 - Karnataka SGST Seeks to amend Notification No.(01/2017) - FD 48 CSL 2017 dated 29/06/2017. 05/2018 - dated 25-1-2018 - Karnataka SGST Seeks to exempt Central Government’s share of Profit Petroleum from Central tax. 04/2018 - dated 25-1-2018 - Karnataka SGST Seeks to provide special procedure with respect to payment of tax by registered person supplying service by way of construction against transfer of development right and vice versa. 03/2018 - dated 25-1-2018 - Karnataka SGST Specify services supplied by the Central Government, State Government, Union territory or local authority by way of renting of immovable property to a registered person under KGST Act, 2017 to be taxed under Reverse Charge Mechanism (RCM) 02/2018 - dated 25-1-2018 - Karnataka SGST Seeks to amend Notification No. (12/2017) No. FD 48 CSL 2017,dated the 29th June, 2017 so as to exempt certain services as recommended. 01/2018 - dated 25-1-2018 - Karnataka SGST Seeks to amend notification No. 11/2017 No. FD 48 CSL 2017, dated 29th June, 2017 so as to notify KGST rates of various services as recommended Circulars / Instructions / Orders Customs 06/2018 - dated 16-3-2018 Refund of IGST on Export - EGM Error related cases Highlights / Catch Notes GST Levy of GST - Works Contract, on which VAT was imposed previously - The appropriate person who would be in a position to give reply is that the Commissioner of Commercial Taxes shall give a reply. - HC Visit to Get Source Income Tax Additions u/s 56(2)(viib) r.w.r 11UA on account of undervaluation of shares - fair market value - share price calculated by the assessee of TEPL for ₹ 5 per shares has been determined in accordance with the provision of Rule 11UA - no additions - AT Visit to Get Source Scope of Section 73 - carry forward of loss on sale of investment - loss in share trading was not to treated as speculative loss in case of an company whose principal business was trading in shares and that the said amendment to the explanation was retrospective and clarificatory in nature - AT Visit to Get Source Exemption u/s 11 & 12 - sale the immovable property for medical facilities - the activities of the trust are carried out in accordance with objects mentioned in the trust deed and accordingly there is no violation under the provisions of Section 11 / 12 - AT Visit to Get Source Addition on account of bogus creditors - if the income has been assessed after rejecting the books of accounts and net profit rate has been applied, then no separate addition on account of trade creditors should be made - AT Visit to Get Source Additions on account of suppression of closing stock - defects in the LIFO method adopted - AO, is wrong in disturbing the method of accounting regularly employed by the assessee for valuation of closing stock. Hence the addition is bad in law - AT Visit to Get Source Unexplained cash deposits - addition u/s 68 - Merely because the creditor did not respond to the notice, no adverse inference can be taken with regard to the creditworthiness of the creditor - AT Visit to Get Source Application for rectification made u/s 154 has been rejected in breach of principles of natural justice, i.e. without granting the petitioner a personal hearing - the impugned order is quashed and set aside - HC Visit to Get Source Addition u/s 40A - purchases of meat in cash in excess of ₹ 20,000/ - whether assessee has fulfilled the condition laid down in Rule 6DD? - CBDT Circular cannot put in new conditions for grant of benefit which are not provided either in the Act or in the Rules framed there-under - HC Visit to Get Source Addition on account of gift and presents and general expenses - All the expenses as claimed are fully verifiable and supported by third party vouchers - AO cannot make addition on estimation - AT Visit to Get Source Customs Import of prohibited item - batteries as per ISO-9128 specifications or not? - only on the basis of internet website, the learned Commissioner has concluded that the goods are not of Malaysia origin which is not correct. - AT Visit to Get Source Duty demand on crude oil based on Bills of Lading quantity - customs duty needs to be worked out only on the basis of the quantity of crude oil received in the shore tanks - AT Visit to Get Source Vires of para 7 of Annexure-1 of the Anti- Dumping Rules - Section 9A of the Customs Tariff Act, 1975 - the Petitioner’s submission that the determination of "normal value" as provided in para 7 of Annexure-1 read with Rule 10 of the Anti-Dumping Rules is ultra vires section 9A of the Custom Tariff Act 1975 is invalid - HC Visit to Get Source Corporate Law Application before the NCLT seeking facility of attending the Board meetings through video-conferencing - It would not be appropriate to shut-out these provisions on mere apprehensions - the provisions of Section 173 (2) of the New Act are mandatory and the companies cannot be permitted to make any deviations therefrom. - AT Visit to Get Source Winding up petition - non reply to statutory notice - commercial insolvency - as each of the companies are unable to discharge their debts, are commercially insolvent and require to be wound up - HC Visit to Get Source Indian Laws Partition of Hindu Joint Family (HUF) - Daughters as Coparceners in the Joint Family - In the present case, no doubt, suit for partition was filed in the year 2002. However, during the pendency of this suit, Section 6 of the Act was amended as the decree was passed by the trial court only in the year 2007. Thus, the rights of the appellants got crystallised in the year 2005 and this event should have been kept in mind by the trial court as well as by the High Court - SC Visit to Get Source IBC Deed of guarantee executed by the guarantors duly stamped - whether or not this company petition be admitted basing on this deed of guarantee? - the Creditor has furnished the material showing existence of debt and default by the principal borrower, these Company Petitions are in fact fit to be admitted for declaration of moratorium as envisaged under Section 14 of the Code. - Tri Visit to Get Source Initiation of Corporate Insolvency Resolution Process - applicant has not come with clean hands and has suppressed facts - it is no longer res integra that pendency of a suit or court proceedings is no bar for initiation of insolvency proceedings under the Code - Tri Visit to Get Source Service Tax Renting of immovable property service - appellant collected the rend and remitted tot he board - The Board is also paying the service tax to the department - if service tax is demanded from the appellant, it would amount to double taxation - AT Visit to Get Source Intellectual Property Right Services - the transfer of right is absolutely in terms of the agreement, therefore, proviso Section 65(55)b) of the act are not applicable - AT Visit to Get Source Scientific or technical consultancy service - The assessee is manufacturer of excisable goods and they are not Scientist or Technocrat or any science or technology institute - demand of service tax set aside - AT Visit to Get Source Central Excise Manufacture or service - catering services, according to the Revenue, amount to manufacture of edible preparation and supply of food preparation/materials to various airlines, served on board of aircrafts - The tribunal erred in law in not completely deciding the matter - HC Visit to Get Source CENVAT credit - duty paying documents - it cannot be said that prior to 01.04.2011, the appellant was not entitled to avail Cenvat Credit on the strength of supplementary invoices issued by the service provider - AT Visit to Get Source Levy of excise duty - manufacture of Corrugated Boxes - payment of service tax instead of excise duty - if Revenue has accepted service tax from the appellant, therefore, the Revenue cannot issue a show cause notice on demand of duty - AT Visit to Get Source CENVAT credit - the denial of credit of service tax paid on renting of immovable property services seems to be totally incorrect proposition when the factory is functioning from the rental premises - AT Visit to Get Source VAT Rate of tax - Un-interrupted Power Supply Systems (UPS) - Validity of clarification - there is a gross difference in back up time for both UPS and Inverter, apart from the circuitry difference - UPS cannot be taxed as inverter under TNGST - HC Visit to Get Source Levy of tax on purchase of goods - since the export sale is fully covered by the definition of sale under Section 2(n) read with Explanation 3(a) of the TNGST Act, the Assessing authority cannot levy tax under Section 3(4) of the Act - HC Visit to Get Source Case Laws: GST 2018 (3) TMI 901 Release of detained goods - Section 129 of the Central Goods and Services Tax Act - Held that: - the writ petition is disposed of directing the competent authority to complete the adjudication provided for under Section 129 of the statutes - It is also directed that if the petitioner complies with Rule 140(1) of the Kerala Goods and Services Tax Rules, 2017, the goods detained shall be released to the petitioner forthwith - petition disposed off. 2018 (3) TMI 900 Consideration of representations submitted by the petitioner - Levy of GST - Works Contract, on which VAT was imposed previously - the petitioner/association made representations on 05.07.2017, 29.08.2017 and 11.09.2017 to the respondents stating that the contract works for which the agreements were executed prior to 01.07.2017 GST cannot be imposed and 2% VAT alone is applicable. Held that: - since the petitioner's representations are pending, it is appropriate for the respondent to respond to the same by giving them a reply. The appropriate person who would be in a position to give reply is that the Commissioner of Commercial Taxes shall give a reply. Because all other authorities are the department of Highways and National Highways etc., who would not be in a position to specifically address the issue pointed out by the petitioner. There will be a direction to the Commissioner of Commercial Taxes to consider the representation given by the petitioner/ association and pass orders on merits and in accordance with law, within a period of four weeks from the date of receipt of a copy of this order. Income Tax 2018 (3) TMI 899 Addition u/s 40A - purchases of meat in cash in excess of ₹ 20,000/ - whether assessee has fulfilled the condition laid down in Rule 6DD? - Tribunal deleted the addition - Held that:- The basis of the Revenue seeking to deny the benefit of the proviso to Section 40A(3) of the Act and Rule 6DD(e) of the Rules is non satisfaction of the condition provided in CBDT Circular No.8 of 2016. Non furnishing of a Certificate from a Veterinary Doctor. The proviso to Section 40A(3) of the Act seeks to exclude certain categories / classes of payments from its net in circumstances as prescribed. Section 2(33) of the Act defines “prescribed” means prescribed by the Rules. It does not include CBDT Circulars. It is a settled position in law that a Circular issued by the CBDT cannot impose additional condition to the Act and / or Rules adverse to an assessee. In UCO Bank Vs. Commissioner of Income Tax [1999 (5) TMI 3 - SUPREME Court] as observed “Also a circular cannot impose on the taxpayer a burden higher than what the Act itself, on a true interpretation, envisages”. Thus, the view of the Tribunal that the CBDT Circular cannot put in new conditions for grant of benefit which are not provided either in the Act or in the Rules framed there-under, cannot be faulted. - Decided against revenue 2018 (3) TMI 898 Application for rectification made u/s 154 rejected - exemption u/s 10(10C) as an ex-SBI employee rejected - rectification applications rejected without grant of personal hearing - Held that:- As admittedly, the impugned order on rectification has been passed in breach of principles of natural justice, i.e. without granting the petitioner a personal hearing, the impugned order dated 2nd May, 2016 is quashed and set aside. The petitioner's rectification applications dated 30th September, 2009 and 4th December, 2015 is restored to the Assessing Officer for fresh disposal after taking into account, the decision of this Court in Commissioner of Income-Tax-III, Pune Vs. Shri. Ramesh Dattatraya Kulkarni (2015 (5) TMI 75 - BOMBAY HIGH COURT) and Circular issued by the Central Board of Direct Taxes in this regard. 2018 (3) TMI 897 Recalling/rectification of order on the ground that few clerical mistakes have occurred which have bearing on the decision of this Court [2017 (11) TMI 1492 - DELHI HIGH COURT] - Held that:- No directions for filing the written arguments were ever given to the counsel for the petitioner. Thus, it is factually incorrect that written arguments were to be filed within 15 days by the petitioner. According to learned counsel for the petitioner, when he came to Courts for filing of written arguments on 24.11.2017, he came to know that order had already been pronounced on 23.11.2017 is belied from the record as the matter was listed for pronouncement of order on 23.11.2017 at 2:30 p.m.. As on merits, while going through paras 3 (I) to (V) of the application, it is clear that infact learned counsel for the petitioner is asking for re-hearing of the matter and a fresh decision in the garb of present application seeking recalling/rectification of the order dated 23.11.2017. The application being devoid of any merit, is dismissed 2018 (3) TMI 896 Unexplained cash deposits - additions u/s 68 - creditor did not respond to the notice - nature of the transaction / identity of the creditors, genuineness and creditworthiness of the transaction - Held that:- In the instant case, the Pattadar Pass Book, name and address of the creditors, agreement of sale and cancellation agreement and also the account copies were placed before the A.O. as well as the Ld. CIT(A). This fact is not controverted by the Learned Departmental Representative. Assessing Officer has issued summons to the creditor but when the creditor has not responded, the A.O. neither called upon assessee to produce the creditor nor gave further opportunity to the creditor to appear in person and assessment was made in a hurry on 28.03.2013. The fact remains that assessee represented before A.O. on 19.03.2013 whereas the assessee called Sri K. Chandra Sekhar Rao on 25.03.2013 and completed the assessment on 28.03.2013. This shows that the Assessing Officer has taken an adverse opinion without giving a proper opportunity to the assessee. Merely because the creditor did not respond to the notice, no adverse inference can be taken with regard to the creditworthiness of the creditor. The complete particulars and the source of income earned by the creditor were available on record and if there is any doubt with regard to the source, the assessee could have been given further opportunity. - Decided in favour of assessee 2018 (3) TMI 895 Additions on account of suppression of closing stock - defects in the LIFO method adopted - AS-2 by Institute of Chartered Accountants of India (ICAI) - Held that:- It is well settled that the consistent method of accounting or stock valuation followed by the assessee cannot be disturbed by the AO, without pointing out the defects in the method. LIFO is a well accepted and recognised method of valuation of closing stock. In our view, AS-2 by Institute of Chartered Accountants of India does not state that valuation of closing stock under LIFO method cannot be done. The act mandates that the valuation of inventory should be made in accordance with the method of accounting regularly employed by the assessee. Thus the AO, is wrong in disturbing the method of accounting regularly employed by the assessee for valuation of closing stock. Hence the addition is bad in law. - Decided in favour of assessee TDS u/s 194C - tds on payments made for melting charges and hall marking charges - assessee submits that the recipient parties have already offered this receipt to tax in their computation of total income and have accordingly paid tax on the same - Held that:- The second proviso to section 40(a)(ia) of the Act provides that in such cases no disallowance can be made u/s 40(a)(ia) of the Act. The courts have held that this proviso is retrospective in nature. Thus we set aside this issue to the file of the AO for verification and denovo adjudication of this issue of disallowance u/s 40(a)(ia) of the Act in accordance with law. - Decided in favour of assessee for statistical prposes. 2018 (3) TMI 894 Reopening of assessment - addition on account of suppression of sales by adopting GP rate @ 15% on unaccounted sale - Held that:- As Departmental Representative vehemently contends that the CIT(A) has erred in law as well as on facts in deleting the impugned addition he however fails to dispute the fact that the impugned re-assessment exercise is based on the Central Excise Department’s show cause notice. It has come on record that the assessee has already succeeded on the very issue before the “CESTAT” tribunal. The impugned addition therefore has no legs to stand since not based on any independent evidence. The CIT(A)’s above extracted findings are accordingly confirmed. - Decided against revenue 2018 (3) TMI 893 Sale of property - nature of income - LTCG or busniss income - Held that:- The company was initially formed for the purpose of running a LPG Bottling plant. Since formal approvals were not granted by the authorities, the assessee company could not commence the business. However, no business activities were carried out by the assessee during the year. Ultimately, the land was sold to West Bengal Government for a total sum of ₹ 8.51 crores which was sold in two parts and two deeds were executed in this regard. The assessee has calculated the income/loss from capital gain u/s 50C of the Act. All the investments including improvement made in the earlier years have been duly recorded in the balance sheet and have been accepted under assessment proceedings from time to time, as investments is not under dispute. Therefore the assessee’s investment is treated as investment for the purpose of capital gain alongwith purchase cost and site development and the same has to be allowed under the head capital gain and in no stretch of imagination it can be an adventure in the nature of trade. For compensation paid to VLS capital Ltd as cost of improvement to be deducted from sale consideration for the purposes of Capital Gains - Held that:- As the amount was borrowed from VLS Capital Ltd for setting up LPG Bottling plant where formal approvals were not accorded by the various authorities. Therefore, the project was discarded and the land was sold to West Bengal Government. The West Bengal Government, if has acquired the said land for the purpose of residential colony or whatever, is not a concern of the assessee and therefore, cannot be held to be an adventure in the nature of trade. Thus as relying on CIT Vs. Mithlesh Kumari[1973 (2) TMI 11 - DELHI High Court] the interest part as deduction of ₹ 1.40 crore is directed to be allowed and deduction of ₹ 2 crores is rejected. Thus, on the second aspect of the issue, the same is partly allowed. 2018 (3) TMI 892 Addition on account of bogus creditors - case of the revenue before us is that, the outstanding trade creditors is a part of balance sheet item, therefore, separate addition can be made over and above the business income assessed by applying the net profit rate after rejecting the books of accounts - Held that:- When the books of accounts are rejected and income is assessed on the principle of ‘best judgment assessment’, then entries of the amounts shown in the books of accounts cannot be held to be reliable. Once business income of the assessee from the contract receipt business has been assessed at 8%, then it take cares of all other additions made on account of trading account and any liability including outstanding amount of trade creditors. Thus, we agree with the contention of assessee that if the income has been assessed after rejecting the books of accounts and net profit rate has been applied, then no separate addition on account of trade creditors should be made. Accordingly, we direct the AO to make addition of ₹ 35,25,490/- as has been worked out by the Ld. CIT(A). The additions on account of sundry creditors raised in both the appeals are dismissed. Decided in favour of assessee Addition on account of unexplained loan - Held that:- CIT (A) has noted that the party was old lender and assessee has filed his PAN details which has been verified by the AO; copy of return of income for the current year of the said creditors which reflects his creditworthiness from the quantum of income shown by him; and the genuineness of the transaction is also proved as the transaction is through banking channel. Not only that, he has already directed the Assessing Officers of the said creditors to initiate that the scrutiny proceedings in their cases. The observation and the finding of the Ld. CIT(A) as incorporated above does not call for any interference which is based on correct appreciation of law and facts and consequently, the ground raised by the revenue is dismissed 2018 (3) TMI 891 Penalty u/s 27(1)(c) - non specification of charge - defective notice - Held that:- Notice issued by the AO u/s. 271(1)(c) read with Section 274 of the Act is bad in law as it does not specify which limb of section 271(1)(c) of the Act, the penalty proceedings had been initiated i.e. whether for concealment of particulars of income or furnishing of inaccurate particulars. Therefore, the penalty in dispute is not sustainable in the eyes of law - Decided in favour of assessee 2018 (3) TMI 890 Revision u/s 263 - AO has not called for and taken on record all the necessary details, has not even examined the bank statement of the assessee company to see whether the interest was paid to the directors or whether the TDS was deducted on that or not, and has not sought any detail as to whether the loans were utilized for the purpose of construction at 3, Kapashera Estate, the rented property or the other property at 3A, Kapashera Estate - Held that:- There was no want of enquiries on the part of the Ld. assessing officer and as a matter of fact all the relevant material was submitted before the Ld. CIT also. However, without adverting to the circumstances and material pleaded by the assessee, Ld. CIT has recorded a finding that the AO has not called for and taken on record all the necessary details of the Ld. assessing officer has not even examined the bank statements of the assessee company to see whether the interest was paid to the directors or whether the tedious was directed or not. Further, when the explanation was offered by the assessee wide letter dated 08/02/2017, Ld. CIT recorded a finding that the details as to whether the loans were utilized for the purpose of construction at 3, Kapashara estate the rented property or the other property. All the details were available before the Ld. CIT. In the circumstances, we find that the exercise of revision proceedings by the Ld. CIT is not justified - Decided in favour of assessee. 2018 (3) TMI 889 Entitlement to the claim of deduction u/s.54EC – investment in the NHAI bonds made in two financial years - Held that:- The expression ‘any financial year’ is explained as including ‘more than one financial year’ for the assessment year under consideration and the judgment of Hon’ble Madras High Court in the case of C. Jaichander (2014 (11) TMI 54 - MADRAS HIGH COURT) and the order of Pune Bench of the Tribunal in the case of ITO Vs. Smt. Bala R. Venkitachalam (2016 (6) TMI 1122 - ITAT MUMBAI) were rightly relied while deciding the issue in favour of the assessee. 2018 (3) TMI 888 Estimation of income @8% of purchase price - estimation of profit in respect of IMFL business carried by the assessee - Held that:- As relying on Tangudu Jogisetty and Others Versus ITO [2016 (7) TMI 379 - ITAT VISAKHAPATNAM] we direct the A.O. to re-compute the income of the assessee at 5% of purchase price. Accordingly, this ground of appeal raised by the assessee is partly allowed. Unexplained investment u/s 69 - assessee failed to establish the source of deposit, identity and genuineness of the creditor - Held that:- During the appeal hearing before us also, the assessee failed to establish the source of credit, identity and credit worthiness of the creditor. Since the assessee failed to establish any of the requirements, we do not find any reason to interfere with the order of the Ld.CIT(A) and the same is upheld. - Decided against assessee. 2018 (3) TMI 887 Allowability to exemption to the assessee u/s 11 & 12 - sale the immovable property for medical facilities - benefit denied as activities of the trust were not chargeable in nature to trust - proof of charitable activities - Held that:- It is undisputed fact that there was no change in the object clause of the trust since its inception. On the basis of same objects Clauses, the trust was granted registration under Section 12A / 80G of the Act. The assessee during the year has sold its plots no. 1202, 1203 and 1204 admeasuring 5.692 Acres to M/s OSL Health Care Private Limited for an amount of ₹ 47,69,97,000/-. On perusal of the balance-sheet enclosed at pages 42 of the paper book as on 31st March, 2011, it was observed that the amount of sale consideration was deposited in saving bank account and term deposited for ₹ 58,11,71,654/- which is an eligible investment as per Section 11(5) of the Act. Thus, there remains no doubt that the fund was not used other than the charitable purposes. Thus the activities of the trust are carried out in accordance with objects mentioned in the trust deed and accordingly there is no violation under the provisions of Section 11 / 12 - Decided in favour of assessee 2018 (3) TMI 886 Benefit of indexation to the assessee while calculating the capital loss - additional ground raised by the assessee - Held that:- As decided in Pruthvi Brokers and Shareholders Ltd. (2012 (7) TMI 158 - BOMBAY HIGH COURT) AO could accept new claim only a new return was filed by an assessee. Here as stated earlier the case is of additional ground. The assessee was not aware as to how the claim made by it would be treated by the AO during the set aside proceedings. Only after receiving the order it came to know that loss has been treated as capital loss. No chance for it to claim indexation. Only remedy left was to raise an additional ground on the first opportunity available and it did so. FAA was fully empowered to admit the additional ground and to decide the same on merits without asking for comments/remand report of the AO. Assessee had also filed an application u/s. 154 of the Act in that regard. The AO should have dealt it disregarding the filing of appeal. We are of the opinion the order of the FAA allowing indexation to the assessee with regard to the capital loss does not need any interference from our side. - Decided against revenue. Applicability of the provisions of explanation to section 73 - carry forward of loss on sale of investment - Held that:- As during the appellate proceedings the FAA had held that the assessee was covered by the exceptions mentioned in the explanation. He had calculated the figure of capital gains and other sources and had compared the same with the figure of business or professional loss. It was a simple arithmetic exercise. As the gross figure was more than business loss figure the FAA allowed the claim of the assessee. In our opinion there is no legal or factual infirmity in his order. Secondly in the case laws relied upon by the assessee before us the judicial forums have held that loss in share trading was not to treated as speculative loss in case of an company whose principal business was trading in shares and that the said amendment to the explanation was retrospective and clarificatory in nature. - Decided against revneue 2018 (3) TMI 885 Applicability of section 33AB(7) - Investment deposit account - addition as deemed income as unutilized amount out of withdrawals from NABARD deposit account which was not utilized before 31.3.2011 for its intended purpose - Held that:- The provisions of section 33AB (7) of the Act uses the expression ‘being utilised’. It is not in dispute that the amount withdrawn by the assessee from NABARD was for utilisation as per Tea Development Scheme of 2007 and the assessee had in fact placed orders for acquisition of various machineries that are required for setting up of new units to be engaged in growing and manufacturing of tea i.e acquisition for machineries /specified purposes as envisaged in para 9(a) to (k) of the Scheme. It is not in dispute that the assessee had paid substantial portion of the proforma invoice value as advance before 31.3.2011 and had included the same in the utilization statement before 31.3.2011 which clearly indicates its intention of utilizing the withdrawals from NABARD deposit accounts. Hence the purpose for which the provision has been made by the legislature has been satisfied by the assessee in this case before us. Thus we hold that the action of the revenue in bringing to tax the deemed income in terms of section 33AB(7) of the Act deserves to be deleted. - Decided in favour of assessee 2018 (3) TMI 884 Profit estimation - rejection of books of accounts - assessee is in the business of construction of sale of apartments - Held that:- We find that ld. CIT(A) for the year under consideration, has considered the profit of earlier year and scaled down the estimation of profit from 12.5% to 9%. We find no reason to interfere in the order passed by the ld. CIT(A). Thus, this ground field by the Revenue is dismissed. Disallowance of interest - Non deduction of tds u/s 194A - Whether once income of the assessee is estimated, no separate addition can be made in respect of interest paid by the assessee? - Held that:- We find that the assessee has not claimed any expenditure in the profit & loss account, therefore, the disallowance made by the Assessing Officer under section 40(a)(ia) is not warranted. We find that ld. CIT(A) has rightly directed the Assessing Officer to delete the addition. Also no further disallowance under section 40(a)(ia) and 40A(3) can be made on the basis of the books of accounts in spite of mandatory provision and non-obstante clause contained therein, merely because the income was determined on estimate basis, by rejecting such books of accounts. See Indwell Constructions Versus CIT [1998 (3) TMI 121 - ANDHRA PRADESH High Court] - Decided in favour of assessee 2018 (3) TMI 883 Penalty u/s 271(1)(c) - disallowance of expenses - non specification of charge - Held that:- After perusing the aforesaid contents of the Notice dated 24.12.2009, we are of the view that the AO has initiated the penalty for concealment of particulars of income or furnishing of inaccurate particulars, which is contrary to the provisions of law. We are of the view that notice issued by the AO u/s. 271(1)(c) read with Section 274 of the Act is bad in law as it does not specify which limb of section 271(1)[c] of the Act, the penalty proceedings had been initiated i.e. whether for concealment of particulars of income or furnishing of inaccurate particulars. Therefore, the penalty in dispute is not sustainable in the eyes of law, hence, we cancel the penalty in dispute. - Decided in favour of assessee. 2018 (3) TMI 882 Additions u/s 56(2)(viib) r.w.r 11UA on account of undervaluation of shares - fair market value - whether the land shown by the TEPL should be taken as per the book value or as per the market value while valuing its shares? - FMV adoption - Held that:- While valuing the shares the book value of the assets and liabilities declared by the TEPL should be taken into consideration. There is no whisper under the provision of 11UA of the Rules to refer the fair market value of the land as taken by the Assessing Officer as applicable to the year under consideration. Therefore, we are of the view that the share price calculated by the assessee of TEPL for ₹ 5 per shares has been determined in accordance with the provision of Rule 11UA. Therefore, we have no hesitation in reversing the order of the lower authorities. Hence, the grounds of appeal of the assessee are allowed. 2018 (3) TMI 881 Trading Addition - G.P. rate determination - Held that:- GP rate declared by the assessee for the year under consideration is 6.056%. Therefore, if we compare the average G.P. of past history with the G.P. declared for the year under consideration the G.P. for the year under consideration is more than the average figure of GP and therefore, even if the books of accounts of the assessee are rejected it may not necessary by lead to any addition to the total income of the assessee. We do not find any reason to interfere with the order of the CIT(A) on this issue. Disallowance of interest on account of charging short interest or interest free loan to the sister concerns - Held that:- The assets and liabilities reveals that during the year under consideration the assessee has added fixed asset of about ₹ 1 crore and further there is an increase of trade debtor from ₹ 2.27 Crores to ₹ 4.08 Crores. The current liabilities show that the borrowing are only for the short term and therefore, are not meant for acquiring the fixed asset. Availability of the assessee’s own fund is required to be examined and verified by considering all the facts. Neither the AO nor the CIT(A) has gone only the factual aspect of the issue. The assessee is also required to filed the proper fund/cash flow statement to show that the availability of the assessee’s own funds for fresh loan and advances given during the year to the tune of ₹ 9.7 Crores. AO to examine the availability of the assessee’s own fund to the extent of the loan and advances given to the sister concerns during the year under consideration. Appeal of the Revenue is partly allowed for statistical purposes 2018 (3) TMI 880 Revision u/s 263 - whether PCIT(Central) has wrongly passed order u/s 263 on the issue already decided by the Assessing Officer in order passed under section 153A(1)(b) r.w.s 143(3) - excise incentive is not eligible for deduction - Held that:- We find that the companies availing the benefit of notification no. 56/2002 CE dt. 14/11/2002 to Central Excise which under a special procedure the manufacturers located in J&K first pay excise duty and cess and there after claim the refund of the same under Central Excise Tariff. Thus it makes an integral part of the profits of the business which would be eligible for deduction under section 80IB. The order of the Pr. CIT holds that the excise incentive is not eligible for deduction which is in contravention with the established judicial position as detailed above. Hence, the order of the Ld. Pr. CIT cannot be held to be valid under this head. Regarding the FDR's from the perusal of the record and submissions it was found that the FDR's have been made for the purpose of electricity connection for the Jammu Unit. Since the FDR's have been made out of business compulsion, the interest earned would be eligible for deduction under section 80IB. Reliance is placed on the judgment of Hon'ble Delhi High Court in the case of Pr. CIT Vs. Universal Precision Screws in ITA No. 392/2015 dt. 06/10/2015 and also on the judgment of Hon'ble Delhi High Court in the case of Riviera Home Furnishing Vs. Addl. CIT [2015 (11) TMI 1139 - DELHI HIGH COURT] The sale of scrap is an integral part of the manufacturing activity thus it would be directly related to business and eligible for deduction. Reliance is placed on the judgment of Hon'ble Delhi High Court in the case of CIT Vs. Saadhu Forging Ltd. [2011 (6) TMI 9 - DELHI HIGH COURT]. Similarly the misc. income written off of ₹ 1,222/- is a part of the business income and would be eligible for deduction. Since the additions proposed by the Pr. CIT on account of excise incentives, sale of scrap, interest on FDR's are squarely covered by the judicial precedence's, it cannot be said that allowing of such deduction by the Assessing Officer is erroneous or prejudicial to the interest of Revenue. Hence we found no justification in invoking the provisions under section 263 - Decided in favour of assessee. 2018 (3) TMI 879 Addition on account of advertising expenses, Entertainment & Hospitality Expenses and festival celebration - Held that:- On perusal of above statement, we find that no disallowance was made in the A.Ys 2008-09, 09-10 & 10-11. We further find that no submissions were made by the ld.DR before us that the appeal, if any, challenging the same is pending before the Tribunal or the Hon’ble High Court. We find that the CIT-A was not correct in confirming the same. In view of above, no disallowance can be made on adhoc basis. Addition on account of gift and presents and general expenses - Held that:- We find from the assessment order that the assessee produced the vouchers and supporting evidence before the AO. All the expenses as claimed are fully verifiable and supported by third party vouchers. The case laws as relied on by the assessee before us are relevant to the facts of the present case. The Hon’ble High Courts and Tribunals held that the AO cannot make addition on estimation. No submissions were made by the ld.DR before us that the appeal, if any, challenging the same is pending before the Tribunal or the Hon’ble High Court. In view of above, no such disallowance can be made on adhoc basis. Charging of interest on dividend distribution tax (DDT) - Held that:- It is observed from record that no discussion whatsoever was made by the AO in the assessment order in this regard. Inspite of which, the assessee raised a issue before the CIT-A challenging the said addition. The CIT-A did not adjudicate the issue as there was no such issue decided by the AO. In view of the same, we remand the matter to the file of the AO to decide and adjudicate the same afresh. Customs 2018 (3) TMI 878 Vires of para 7 of Annexure-1 of the Anti- Dumping Rules - Section 9A of the Customs Tariff Act, 1975 - direction to not levy antidumping duty charged on the graphite electrode imported from China. Held that: - In the opinion of this court, the question cannot be considered as it would be affording the Petitioner a fresh round to litigate the self same cause of action. - The Petitioner is a corporation; one of the largest public sector companies, no less. It was well aware about the applicable law; especially the impugned Para 7 of Annexure I to the Anti Dumping Rules. Yet, in the previous round of litigation, it did not urge about the alleged ultra vires of the said rule; it could well have urged it, at least as a contention. Res judicata and constructive res judicata are well recognized principles that the courts in India follow, to screen out multifarious litigation by the same parties on the same issue. In the present case, there is no dispute that the Petitioner had sufficient opportunity to challenge the provisions it impugns here. Therefore, its failure to do so, now results in this court’s exercise of discretion not to entertain the challenge on substantive basis. The Anti-Dumping Rules cannot be impugned as contrary to the larger purpose and spirit of anti-dumping law; a determining requirement in deciding the legitimacy of sub-ordinate legislation - the Petitioner’s submission that the determination of "normal value" as provided in para 7 of Annexure-1 read with Rule 10 of the Anti-Dumping Rules is ultra vires section 9A of the Custom Tariff Act 1975 is invalid. Petition dismissed. 2018 (3) TMI 877 Duty demand on crude oil based on Bills of Lading quantity - Whether the appellant has discharged the customs duty on the crude oil which was imported by them? Held that: - the issue is now squarely settled by Hon’ble Supreme Court in the case of Mangalore Refinery & Petrochemicals Limited Vs. CC, Mangalore [2015 (9) TMI 245 - SUPREME COURT], where it was held that If the goods are pilferred after they are unloaded or lost or destroyed at any time before clearance for home consumption or deposit in warehouse, importer is not liable to pay duty leviable on such goods - customs duty needs to be worked out only on the basis of the quantity of crude oil received in the shore tanks - appeal disposed off. 2018 (3) TMI 876 Import of prohibited item - batteries as per ISO-9128 specifications or not? - confiscation - Held that: - whatever material relied upon by Revenue for holding the goods as prohibited and in respect of country of origin, the same is not sufficient to hold against the appellant - it cannot be said that the appellant have mis-declared the goods only on the basis of report received from ERTL (W). As per the documents and certificate of origin it was found that the goods are of Malaysia origin. Therefore, only on the basis of internet website, the learned Commissioner has concluded that the goods are not of Malaysia origin which is not correct. The adjudicating authority need to give a relook in the entire issue and pass a fresh speaking order - appeal allowed by way of remand. 2018 (3) TMI 875 Whether the appellant is liable to pay duty on the export made under shipping bill no. 5475349 dated 05.05.2008 as prevailing on the date of export which became nil by N/N. 77/2008-Cus dated 13.6.2008? Held that: - this Tribunal has already decided the caption issue in the case of M/s Jindal Saw Ltd. Versus Commissioner of Customs (Export), Nhava Sheva [2018 (2) TMI 246 - CESTAT MUMBAI] wherein it has been held that the appellant is liable to pay duty @ 10% for export of the goods. Appeal dismissed - decided against appellant. 2018 (3) TMI 874 Quantum of redemption fine and penalty - Valuation - Held that: - the declared CIF value was ₹ 1,01,35,168/-.The CIF value was however revised to approximately ₹ 1.1 Crore.The redemption fine imposed works out to approximately 35% of the revised CIF value - .In the instant case, the appellant have not mentioned about any demurrage etc. paid in their appeal memorandum.Moreover, this is not the first time the appellant have been booked for this offence - he redemption fine is reduced from ₹ 38 lakhs to ₹ 30 lakhs - The penalty however is sustained on ₹ 4 lakhs - appeal allowed in part. 2018 (3) TMI 873 Maintainability of appeal - assessment order passed by Proper Officer or not? - benefit of N/N. 69/11-Cus - importer fails to claim the notification, which was claimed at a later stage - Held that: - As per the certificate of origin, there is no dispute that the goods were imported from Japan - any beneficial notification even if at the time of clearance of goods is not claimed, the same can be claimed at a later stage. There is no infirmity in the impugned order, which is only directed the assessing authority to reconsider the Bills of Entry in the light of N/N. 69/2011-Cus - appeal dismissed - decided against Revenue. 2018 (3) TMI 872 Valuation - enhancement of value of imported scrap on the basis of the report submitted by the Chartered Engineer - Held that: - As the report of the Chartered Engineer is not conclusive, in that circumstances, it cannot be held that the appellant has mis-declared the goods, as appellant was not knowing the contents heaving purchased on high sea sale basis and they have declared the goods as per the import documents - charge of mis-declaration is not sustainable against the appellant - appeal allowed - decided in favor of appellant. 2018 (3) TMI 871 Passing of a public order - principle of judicial discipline - Held that: - the basic principle of judicial discipline is that a person who hears should pass an order and should not fancifully communicate his order through a subordinate who has not heard the matter - learned Commissioner is directed to pass a public order hearing the appellant publicly without communicating his decision through a subordinate. While passing appropriate order, learned Authority shall grant reasonable opportunity of hearing to the appellant and record its pleadings as well as evidence. Stating reason of his decision, he shall pass appropriate order - appeal disposed off. Corporate Laws 2018 (3) TMI 870 Disqualifying the petitioners as Directors in the company as there was default in submitting returns with regard to the affairs of the said Company - Condonation of Delay Scheme, 2018 benefit seeked - Held that:- We direct as follows: (i) Subject to the petitioner submitting the requisite fees with the respondents within a period of two weeks as prayed, the respondents shall forthwith take steps for removal of the petitioners’ names from the disqualified directors. In case the petitioners have not submitted the prescribed form under the CODS Scheme, 2018 the same may be also submitted within the same period. (ii) It is made clear that given the fact that the petitioners have already submitted the deficient returns it shall not be necessary for them to submit the same afresh along with this writ petition. (iii) The orders to this effect would be posted on the website and shall also be communicated to the petitioners within two weeks from the deposit of the requisite form and fees. 2018 (3) TMI 869 Winding up petition - non reply to statutory notice - commercial insolvency - Held that:- The submissions that the claim under petition was not a 'debt' and petitioner is not a creditor of the company but the claim is for 'damages' and there was no ascertained liability which can be proved only in a Civil Court, is not tenable and requires to be rejected. There is no question of the claim being in respect of damages or being unascertained in any manner whatsoever. On the contrary, the amount claimed, as satisfied, are admittedly ascertained and due and payable by the company to petitioner. There is no dispute in respect of the admitted outstanding of ₹ 6,07,00,000/ payable by respondent. Respondent company did not reply to the statutory notice that was sent by petitioner to respondent company. It is settled law that where no response to a statutory notice has been made, the court may pass a winding up order on the basis that amount claimed has not been denied by the company and there is a presumption of inability to pay by the company. Where no response has been made to the statutory notice, the respondent-company runs a risk of winding up petition being allowed. By virtue of Section 434 of the Companies Act 1956 a presumption of the indebtedness can be legitimately drawn by the court where no reply to the statutory notice is forthcoming. It should also be noted that in the affidavit in reply, there is not even a mention that the company is commercially solvent. On the contrary, there is an email dated 30th July 2014 (Exh.'B') from respondent-company to petitioner and also to Abhishek Aggrawal of Ksure that the company has been declared as nonperforming Asset and its bank account has also been frozen. Thus as each of the companies are unable to discharge their debts, are commercially insolvent and require to be wound up. Company petitions allowed 2018 (3) TMI 868 Application before the NCLT seeking facility of attending the Board meetings through video-conferencing - appellant contended that, sub-Rule (2)(e) puts the burden on the Chairperson to ensure that no person other than the concerned Director is attending and this would not be possible for Chairperson to ensure in video-conferencing. - Held that:- It would not be appropriate to shut-out these provisions on mere apprehensions. - NCLT took note of the fact that the Company in this matter had all the necessary infrastructure available. The learned Judicial Member took judicial notice of the physical condition of Kaziranga National Park and found that the Company had no reason not to provide the concerned facility. NCLT came to the conclusion that the provisions of Section 173 (2) of the New Act are mandatory and the companies cannot be permitted to make any deviations therefrom. NCLT directed non-applicants before it to provide the facilities as per Section 173(2) of the New Act subject to fulfilling the requirements of Rule 3(3)(e) of the Rules. No reason to interfere with the impugned order. The impugned order must be said to be progressive in the right direction and there is no reason to interfere with the same. Insolvency & Bankruptcy 2018 (3) TMI 903 Initiation of Corporate Insolvency Resolution Process - Held that:- The Insolvency and Bankruptcy Code, 2016 is a complete Code in itself. The provisions of the Code are to be mandatorily followed. Tribunal cannot exercise the power as enshrined in Article 142 of the Constitution of India. Adherence to the statutory requirements has to be in toto. Section 10 (4) (a) of the Code mandates the Adjudicating Authority to admit the application if it is complete. When the language of the Code is clear and explicit the Adjudicating Authority must give effect to it, whatever may be the consequences. The stand of Canara Bank that the applicant has not come with clean hands and has suppressed facts, cannot be a ground to reject the application if it is otherwise complete. Also it is no longer res integra that pendency of a suit or court proceedings is no bar for initiation of insolvency proceedings under the Code. In view of the overriding effect given by the provisions of Section 238 of the Code, the initiation and pendency of proceedings before DRT is no bar for initiation of resolution and insolvency proceedings under the Code. Hence, the objections raised by the financial creditor cannot sustain. The present application is complete and that the applicant corporate debtor has committed a default. Therefore, as the application is complete the present application is admitted under section 10 (4) (a) of the Code. The corporate insolvency resolution process shall commence from the date of this order under sub-section 5 of Section 10 of the Code. 2018 (3) TMI 902 Deed of guarantee executed by the guarantors duly stamped - whether or not this company petition be admitted basing on this deed of guarantee? - Held that:- For the Corporate Debtor themselves agreed that the right against the principal borrower and the corporate guarantors is co extensive, the creditor need not remain in waiting until the realisable claim is crystalized from the principal borrower. Since the right against the principal borrower not being extinguished in making the claim against the principal borrower, the creditor has every right as per law to proceed against the Corporate Debtors therefore, we have not found any merit in the arguments made by the Corporate Debtors Counsel. Whether these proceedings are liable to be stayed as prayed by the corporate debtors. On perusal of the provisions of the Insolvency & Bankruptcy Code as well as Indian Contract Act, we have not seen any impediment in proceeding against the guarantors under any provision of law, much less under Insolvency & Bankruptcy Code, whereby we have not found any sufficient cause to stay these proceedings against these Corporate Debtors. On having already stated the Creditor has furnished the material showing existence of debt and default by the principal borrower, these Company Petitions are in fact fit to be admitted for declaration of moratorium as envisaged under Section 14 of the Code. Service Tax 2018 (3) TMI 864 100% EOU - Refund claim - export of services - denial on the ground appellant had not debited the amount for which refund has been claimed, as required by N/N. 27/2012-CE (NT) dated 18.06.2012 - Held that: - On the specific query from this Bench as to whether these details were produced before the Adjudicating Authority or otherwise, it was submitted by appellant possibly were unable to produce the details before the Adjudicating Authority - the appellant has to produce these details, before the Adjudicating Authority. Matter remitted back to the Adjudicating Authority to reconsider the issue afresh after following the principles of natural justice - appeal allowed by way of remand. 2018 (3) TMI 863 Condonation of delay in filing appeal - refund claim - time limitation - Held that: - the last date to file the appeal was 19.7.2015 which was a Sunday i.e. a non-working day for the Central Government offices. In such a case, the last date for filing the appeal would shift to the next working day i.e. 20.7.2015 on which date the appeal was admittedly to have been filed. In fact the appeal was filed within the limitation of two months, but the Commissioner (Appeals) has wrongly computed the period of limitation in filing the appeal and has wrongly arrived at a finding that the appeal was filed after the expiry of two months and one day from the date of receipt of the order-in-original. Matter remanded to the Commissioner (Appeals) with a direction to decide the same on merits after complying with the principles of natural justice - appeal allowed by way of remand. 2018 (3) TMI 862 Commercial construction services - services provided to Agriculture Produce Market Committee, Ahmednagar - Held that: - this issue has been decided in the case of A.B. Projects Pvt. Ltd. [2017 (8) TMI 518 - CESTAT MUMBAI], where it was held that the activities of APMC in respect of these contracts are not commercial in nature. Thus these contracts are not covered under the purview of commercial and industrial construction service - appeal allowed - decided in favor of appellant. 2018 (3) TMI 861 Reverse charge mechanism - Commission paid to overseas commission agents for procuring the orders from them - liability of service tax - Held that: - for the period from 09.07.2004 to 18.04.2006, the question of demand on service tax liability under reverse charge mechanism does not arise, as has been settled by the Apex Court various decisions - demand for this period withheld. Period post 18.04.2006 to 31.10.2006 - Held that: - even if the amounts are paid service tax they are availed the CENVAT credit it is undisputed as commission is towards the business activity. Hence the question of Revenue Neutrality arises - demand set aside. Appeal dismissed - decided against Revenue. 2018 (3) TMI 860 Scope of SCN - Revenue issued a SCN to the respondent ascertaining that they are also involved in providing maintenance and repair services without registration and were not paying service tax on the same - Held that: - the SCN clearly pointed out that the common area maintenance charges (CAM) have been collected to take care of electricity, water and AMC (Annual Maintenance Contract) charges for equipment like, lifts, motor pumps, etc. and insurance charges apart from miscellaneous repair and replacement charges also. The impugned order does not deal with all aspects of the charges but deals only with water, electricity charges. The impugned order is not correct as it should deal with the issues raised in the show-cause notice. The matter is remanded to the Commissioner (Appeals) for fresh decision after examining all the heads of expenses identified in the SCN. 2018 (3) TMI 859 Misdeclaration of total income from brokerage during the year 1995-2000 and 2000-2001 - demand of service tax - Held that: - There is no dispute by either side that a sub-broker is falling under the definition of stock broker under Section 65(101) of the Finance Act, 1994 w.e.f. 10-9-2004 - It is apparent that the services provided by sub-broker to investor was not liable to tax prior to 10/09/2004. The services provided by sub-broker to brokers stand exempted vide N/N. 25/2004-ST for the past period - the demand in so far as it relates to the brokerage received by the appellant in a capacity as sub-broker is set aside. Demand of service tax on income under various heads like, penalty charges, insurance charges, NSE transaction charges, SEBI fees and stamp duty, other charges and share transfer fees, etc. - Held that: - the matter is remanded to the Commissioner (Appeals) to decide the issue. Appeal allowed in part and part matter on remand. 2018 (3) TMI 858 Scientific or technical consultancy service - the appellants had supplied the Drug Master File (DMF) / Technical Package (TECHPACK) to various customers and recovered on data / information about the goods to study the manufacturing and testing procedures in respect of the goods of the appellants - case of appellants are that they are manufacturer of excisable goods and not any Scientist or Technocrat or any science or technology institutes and hence they cannot be treated as provider of scientific or technical consultancy service. Held that: - the activities of the assessee do not fall under the provisions of Service Tax. The assessee is manufacturer of excisable goods and they are not Scientist or Technocrat or any science or technology institute.Therefore, the service rendered by them cannot be treated as provider ofscientific or technical consultancy. Appeal dismissed - decided against Revenue. 2018 (3) TMI 857 Penalty u/s 76 and 77 - Held that: - As the learned Commissioner (Appeals) remanded the matter back for quantification to the Adjudicating Authority, therefore, we keep open the issue of imposition of penalty under Section 76 of the Finance Act, 1994 before the Adjudicating Authority - appeal of Revenue disposed off. 2018 (3) TMI 856 Intellectual Property Right Services - the transfer of Intellectual Property Right by the respondent - whether gets covered under taxable service of Intellectual Property Right Services or not? - Held that: - On going through the terms of the agreement dated 05 August, 2008, we find that the Intellectual Property Right sold by the respondent not shows the temporary transfer on right and Section 66(55b) of the Finance Act, 1994 are not effective to the fact in dispute - the transfer of right is absolutely in terms of the agreement, therefore, proviso Section 65(55)b) of the act are not applicable - appeal dismissed - decided against Revenue. 2018 (3) TMI 855 Penalty u/s 77 and 78 - payment of tax with interest on being pointed out - Held that: - as soon as, the levy of service tax was known to the respondent, the respondent paid the service tax with interest, the provisions of Section 80 for paid under the Statute to give benefit to the assessee from penalties - Revenue has not come up with the concrete evidence before us that the respondent did not pay service tax with mala fide intentions - penalty not warranted - appeal dismissed - decided against Revenue. 2018 (3) TMI 854 Supply of tangible goods service - amount collected by appellant as “fixed facility charges” from their clients for installing gas storage facility in the premises of the client - Held that: - Admittedly, the clarification dated 10.11.2014 issued by the Board on similar set of facts, as well as, the clarification dated 24.04.2014 issued in respect of appellant’s unit in Orissa are applicable to the present dispute - The Circular clarified that fixed facility charges are part of transaction value for the purpose of Central Excise duty - appeal allowed - decided in favor of appellant. 2018 (3) TMI 853 Renting of immovable property service - appellant collected rent on behalf of the Haryana State Agriculture Marketing Board and remitted it to the Board - Held that: - Considering the fact that the appellant is not owner of the property in question and collecting the rent on behalf of the Board and remitting the same to the Board. The Board is also paying the service tax to the department - if service tax is demanded from the appellant, it would amount to double taxation - appeal allowed - decided in favor of appellant. Central Excise 2018 (3) TMI 852 Manufacture or service - catering services, according to the Revenue, amount to manufacture of edible preparation and supply of food preparation/materials to various airlines, served on board of aircrafts - Held that: - A party should not be left guessing nor a higher court speculating as to whether the tribunal decided the matter by holding that the activity amounts to manufacture and yet not sustained the demand in terms of the adjudication order on the ground of limitation. Precisely, that has happened in this case. The tribunal erred in law in not completely deciding the matter, but remanding it to the Commissioner by rendering a partial conclusion - The matter now stands remanded to the adjudicating authority for adjudication of the show cause notice afresh on merits and in accordance with law - appeal allowed by way of remand. 2018 (3) TMI 851 Refund claim - Held that: - the order passed by the Tribunal is wholly correct in so far as it has recorded reasons that the two orders were passed by the Commissioner (Appeals) in cross appeals arising from a single order- in-original passed by the adjudicating authority and further that two orders of the Commissioner (Appeals) were apparently conflicting - appeal dismissed. 2018 (3) TMI 850 Enhancement of punishment imposed on the respondents / accused - main point raised by the learned Special Public Prosecutor for Central Excise appearing for the petitioner/complainant is that the Trial Court had committed an error by imposing a lesser sentence of imprisonment i.e., till the raising of the Court, without following the mandatory provisions of Section 9(1)(d)(i) of the Central Excise Act, 1944. Held that: - It is seen that the Trial Court having found the respondents / accused guilty under the relevant provisions of the Central Excise Act failed to ensure compliance with mandatory requirement, but awarded the punishment till raising of the Court, which is lesser than the minimum prescribed under the Act. In order to exercise desertion of reducing the sentence, the statutory requirement is that the Court has to record special and adequate reason in the Judgment, which would permit the Court to impose a sentence less than the prescribed minimum. The reason has not only to be special, but also adequate - In this case absolutely no reason has been recorded by the Trial Court for awarding such a sentence. Such an order is violative of the mandatory requirement of law and has defeated the legislative mandate. The imposition of sentence is in the realm of the discrimination of the Court. However, when law prescribes that there shall not be a lessor sentence than what is prescribed in the absence of special and adequate reasons to the contrary, which has to be recorded in the judgement, the order of imposing sentence till the raising of the Court without recording any special or adequate reasoning is an order violative of the mandatory requirement of law. The matter is remanded back to the file of the Trial Court to determine the quantum of sentence / punishment afresh - petition allowed by way of remand. 2018 (3) TMI 849 Whether the appellant is required to be saddled with Central Excise duty on value of scrap generated at the job worker's premises for which a credit note was issued by the job worker or otherwise? Held that: - It is settled law, Central Excise duty on waste and scrap generated during the manufacture of finished goods has to demanded from the manufacturer of the final products, which in this case is the job worker - demand not warranted - appeal allowed - decided in favor of appellant. 2018 (3) TMI 848 CENVAT credit - Consultancy Charges - Insurance Charges - Security Service Charges - Maintenance Services - Survey Fees - inputs/capital goods - MS Plates - Held that: - both the lower authorities have mis-interpreted the provisions of the definition of input services as mentioned in Rule 2(l) of CENVAT Credit Rules - It is undisputed that the appellant herein is a manufacturer and had availed the CENVAT credit of the service tax paid on the various services which were, used by them, for setting up, modernization, renovation and repairs of the factory. The appellant is eligible to avail the CENVAT credit of the service tax paid on the services as also the Central Excise duty on MS Plates which were consumed in the factory premises, more so when there is no dispute as to the receipt of the input services and the inputs in the premises as also that factory was undergoing setting up, modernization, renovation and repairs. Appeal allowed - decided in favor of appellant. 2018 (3) TMI 847 Penalty u/r 26 of CER, 2002 - availment of irregular CENVAT credit - Held that: - if no demand survives on main appellant, the question of imposing penalty under Rule 26 of Central Excise Rules, 2002, on the present appellant will not stand scrutiny of law - penalty set aside - appeal allowed - decided in favor of appellant. 2018 (3) TMI 846 CENVAT credit - non-excisable goods - power generated out of bagassee - Rule 6 of CCR 2004 - principles of natural justice - Held that: - the amount of the refund of ₹ 9,95,016/-, which is disputed in this appeal by the appellant needs reconsideration by the First Appellate Authority - the First Appellate Authority in the impugned order has only reproduced the provisions of “Explanation I” to Rule 6 which was inserted by an amendment in 2015, but has not gone into detail, as to how explanation will apply to the case in hand and also the grounds of appeal before him - this issue needs reconsideration in the hands of the First Appellate Authority. The matter is remitted back to the First Appellate Authority to decide the same after following the principles of natural justice. 2018 (3) TMI 845 CENVAT credit - xerox copies of invoices - MS plates, MS Flats, MS coils, angles, channels, TMT bars etc. - Held that: - there is no dispute as to the receipt of said items like MS plates, MS Flats, MS coils, angles, channels, TMT bars etc. and put to use for fabrication of storage tanks, boilers, support structures for plant & machinery - the appellant is eligible to avail cenvat credit on MS plates, MS Flats, MS coils, angles, channels, TMT bars etc. CENVAT credit availed on xerox copies of the invoices - Held that: - the matter may be remitted back to the adjudicating authority to reconsider the issue afresh as they will be able to produce the original copies of the invoices - matter on remand. Appeal disposed off. 2018 (3) TMI 844 CENVAT credit - renting of immovable property services - Held that: - when it is undisputed that the factory which was taken on rent is being put to use for manufacturing of final product on which duty liability is discharged, the denial of credit of service tax paid on renting of immovable property services seems to be totally incorrect proposition when the factory is functioning from the rental premises, it has to be held that services are utilised for manufacturing of excisable goods. Reliance placed on Circular dated 04.01.2008 is totally misplaced, as that circular clarifies about eligibility to avail CENVAT credit of service tax paid on commercial or industrial construction services which are used for construction of immovable property or otherwise. Appeal allowed - decided in favor of appellant. 2018 (3) TMI 843 CENVAT credit - inputs/capital goods - MS rods, TMT bars, MS Angles, Channels etc. - Held that: - there is no dispute as to the receipt of these inputs and consumption thereof for the stated purposes - Hon’ble High Court of Madras in the case of Thiru Arooran Sugars Vs CESTAT [2017 (7) TMI 524 - MADRAS HIGH COURT] has specifically held that these items are eligible for availment of CENVAT credit - credit allowed - appeal allowed - decided in favor of appellant. 2018 (3) TMI 842 CENVAT credit - inputs/capital goods - MS Angles, Shapes, Sections, Plates, Rods, Rounds, Beams, Joists and H.R. Coils/Sheets - Held that: - there is no dispute as to the receipt of these inputs and consumption thereof for the stated purposes - Hon’ble High Court of Madras in the case of Thiru Arooran Sugars Vs CESTAT [2017 (7) TMI 524 - MADRAS HIGH COURT] has specifically held that these items are eligible for availment of CENVAT credit - credit allowed - appeal allowed - decided in favor of appellant. 2018 (3) TMI 841 CENVAT credit - inputs/capital goods - HR Plates, Base Plates, MS Channels, MS plates, Angles etc - Held that: - there is no dispute as to the fact that these items were received in the factory premises and consumed for fabrication of various frame works for lift operation, furnace control room etc. - Hon’ble High Court of Madras in the case of Thiru Arooran Sugars Vs CESTAT [2017 (7) TMI 524 - MADRAS HIGH COURT] has specifically held that these items are eligible for availment of CENVAT credit - credit allowed - appeal allowed - decided in favor of appellant. 2018 (3) TMI 840 CENVAT credit - inputs/capital goods - HR Plates, Base Plates, MS Channels, MS plates, Angles etc - Held that: - there is no dispute as to the fact that these items were received in the factory premises and consumed for fabrication of various frame works for lift operation, furnace control room etc. - Hon’ble High Court of Madras in the case of Thiru Arooran Sugars Vs CESTAT [2017 (7) TMI 524 - MADRAS HIGH COURT] has specifically held that these items are eligible for availment of CENVAT credit - credit allowed - appeal allowed - decided in favor of appellant. 2018 (3) TMI 839 CENVAT credit - credit is deniable and the invoices issued by their head office is incorrect as the invoices are issued by the head office who has no input service distributor (ISD) registration certificate - Held that: - identical issue decided in the case of M/s. Doshion Limited Versus Commissioner of Central Excise, Ahmedabad [2012 (10) TMI 952 - CESTAT AHMEDABAD], where it was held that In the absence of any legal requirement to avail credit based on the services received during the relevant time and the procedural irregularity has to be ignored and the demand confirmed has to be set-aside on this ground - appeal allowed - decided in favor of appellant. 2018 (3) TMI 838 Demand of duty - products arising when crude vegetable oil into refined vegetable oils, like Gums/Soap Stock/Wax/muddy/Liquid Sludge/Palm Fatty Acid Distillate etc. - Held that: - an identical issue in the case of M/s Ricela Health Foods Ltd., and Others [2018 (2) TMI 1395 - CESTAT NEW DELHI] were before the Larger Bench of the Tribunal, where it was held that the appellants are eligible for exemption under N/N. 89/1995 CE dated 18.05.1995 - appeal allowed - decided in favor of appellant. 2018 (3) TMI 837 CENVAT credit - export of exempted goods - common inputs and input services and manufactured dutiable as well as exempted goods - Held that: - The ratio of the judgement of the Hon’ble High Court of Bombay in the case of Repro India Ltd., [2007 (12) TMI 209 - BOMBAY HIGH COURT] would squarely covered in their favor of assessee, where it was held that in such case where goods are exported, direction by revenue to the petitioner to pay 10% of sale price of exempted goods u/r 6(3)(b) is not justified. If the exempted products are exported outside India the provisions of Rule 6(6)(v) of CCR are applicable. Demand set aside - appeal allowed - decided in favor of assessee. 2018 (3) TMI 836 Benefit of N/N. 64/95-C, dated 16.03.1995 - Revenue authorities were of the view that these goods which are cleared by appellant claiming the benefit of N/N. 64/95-C cannot be considered as ship builders as the goods were used for construction of ships by Indian Navy - Held that: - for the clearances made from 11.04.2002 to 28.02.2003 were done so, without such certificate, hence claiming the benefit of N/N. 25/2002-CE, dated 11.4.2002 does not arise - benefit rightly denied. Time limitation - Held that: - the demand of duty liability for the period beyond one year from the date of issuance of show cause notice is hit by limitation and demand needs to be set aside - Lower authorities will recalculate the demand within the limitation period and inform the appellant to discharge the same alongwith interest. Penalty - Rule 25 of CER 2002 - Held that: - the appellant being a Government organization, could not have had any intention to remove the goods without payment of duty and more specifically when they have subsequent clearances, produced various certificates issued by Navel authorities indicating that these goods are used as stores in the ship - This could be the mis-interpretation and mis-conception of N/N. 64/95-C. - penalty set aside. Appeal allowed in part. 2018 (3) TMI 835 CENVAT credit - TMT Bars, TOR steel and other bars, MS plates, MS angles, SS sheets, HR sheets, supporting structures, MS coils/plates, MS joists, HR coils, Floor/GI gratings, Galvanised step treads, Galvanised floor grills - Held that: - an identical issue in respect of Thiru Arooran Sugars vs. CESTAT, Chennai was decided by Honble High Court of Madras [2017 (7) TMI 524 - MADRAS HIGH COURT], wherein Hon'ble High Court held in favor of the appellants therein, holding that items are eligible as inputs/capital goods - appeal allowed - decided in favor of appellant. 2018 (3) TMI 834 Refund of excess payment of duty - duty paid under protest - Principles of natural justice - both the lower authorities have not gone into details of the case and the issue needs reconsideration on the face of the fact that Revenue officers had specifically stated in a correspondence to appellant that rubber tyres, interchangeable tyre treads, tyre flaps and inner tubes will not get covered under parts or accessories under N/N. 11/2006-CE. - the issue needs reconsideration by the adjudicating authority - appeal allowed by way of remand. 2018 (3) TMI 833 Ineligible deduction from the total turnover - demand of differential duty - Held that: - the first appellate authority has correctly came to the conclusion in setting aside the Order-in-Original - it was held that there is no suppression with intent to evade payment of duty - Mere non-mentioning of the second sale on the invoices would not suffice to prove that the unit is indulged in evasion of duty and deliberately suppressed the facts. The findings of the first appellate authority on limitations are correct - appeal dismissed 2018 (3) TMI 832 Levy of excise duty - manufacture of Corrugated Boxes - case of the Revenue is that as principal manufacturer has supplied papers to the appellant for making corrugated boxes on which and same were cleared to the principal manufacturer without payment of duty - Held that: - it is an admitted fact that activity under taken by the appellant amount to manufacture but instead of paying duty on their goods the appellant is paying the service tax and same has been accepted by the Revenue for one activity and two demands cannot be confirmed against the appellant service tax as well as central excise duty - if Revenue has accepted service tax from the appellant, therefore, the Revenue cannot issue a show cause notice on demand of duty. Time limitation - Held that: - the SCN has been issued by invoking the extended period of limitation, as the appellant was paying service tax and the said activity known to the Department - the extended period of limitation is not invokable. Appeal allowed - decided in favor of appellant. 2018 (3) TMI 831 Levy of excise duty - intermediate goods or waste/ scrap - whether untrimmed sheets/circles of Brass manufactured by the respondents were leviable to Central Excise Duty as an intermediate product arising in the course of manufacture of trimmed product and waste and scrap attracting Nil rate of duty being captively consumed or whether the said untrimmed sheets of brass were leviable to Central Excise duty? Held that: - Undisputedly untrimmed sheets of brass were being used in the manufacture of utensils and handicrafts and, therefore, they were attracting Nil rate of duty and, therefore, the question of applicability of said N/N. 67/95 did not arise - demand do not sustain. Appeal dismissed - decided against Revenue. 2018 (3) TMI 830 Refund claim - Abatement claim - closure of factory - Held that: - In terms of Rule 10 of Pan Masala Packing Machine (Capacity Determination and Collection of Duty) Rules, 2008, the assessee entitled to claim abatement of duty paid if their machines were remained in-operational continuously for 15 days - Admittedly, the machines were remained closed for continuous 15 days. In that circumstances, if the refund claim filed by the respondent for 13 days in the month of January, 2013, it cannot be said that the said refund claim cannot entertainable - appeal dismissed - decided against Revenue. 2018 (3) TMI 829 Levy of excise duty - whether untrimmed sheets/circles of Brass manufactured by the respondent were leviable to Central Excise Duty or not? - Held that: - untrimmed sheets of brass were being used in the manufacture of utensils and handicrafts and, therefore, they were attracting Nil rate of duty and, therefore, the respondents are not liable to pay duty - appeal dismissed - decided against Revenue. 2018 (3) TMI 828 CENVAT credit - various steel items and welding electrodes which has been used for fabrication/repair and maintenance of plant and machinery or not - Held that: - reliance placed in the decision in the case of M/s Singhal Enterprises Pvt. Ltd. vs. Commissioner Customs & Central Excise, Raipur [2016 (9) TMI 682 - CESTAT NEW DELHI], wherein this Tribunal held that if the steel items has been used for fabrication of various steel items although and used in manufacture of excisable goods the assessee is entitled to avail Cenvat Credit - on the steel items the appellant is entitled to avail Cenvat Credit. In the case of Ambuja Cements Eastern Ltd. vs. CCE [2010 (4) TMI 429 - CHHAITISGARH HIGH COURT], the Hon'ble Chattisgarh High Court held that the welding electrodes used for repair and maintenance of plant and machinery is entitled to avail Cenvat Credit. Appeal allowed - decided in favor of appellant. 2018 (3) TMI 827 CENVAT credit - manufacture of dutiable as well as exempted goods - non-maintenance of separate records - Rule 6(3) of Cenvat Credit Rules, 2004 - Held that: - Since both the units are entirely different whatever records were being maintained by the Party in the name of separate records was just an attempt to hoodwink the Department. In the above circumstances the correlation for separate account was not possible in terms of the Rule. The condition of maintaining separate account has not been met in the facts and circumstances of the present case - appeal dismissed - decided against Revenue. 2018 (3) TMI 826 CENVAT credit - duty paying documents - supplementary invoices issued by the service provider - Held that: - it cannot be said that prior to 01.04.2011, the appellant was not entitled to avail Cenvat Credit on the strength of supplementary invoices issued by the service provider - the demand confirmed on account of denial of Cenvat Credit on the strength of supplementary invoices is set aside - matter remitted back (for part of the demand) for verification purposes to the Adjudicating Authority is confirmed. 2018 (3) TMI 825 CENVAT credit - molasses which has been used for manufacturing of rectify spirit which was ultimately used for manufacture of Indian Made Foreign Liquor (IMFL) - classification declaration under Rule 173-B of the Central Excise Rule, 1944 - Held that: - there was no stay order for implementation to said Final Order dated 07.12.2001 and, therefore, the said Order-in-Original dated 06.01.2003 was sustainable. - appeal dismissed - decided against Revenue. 2018 (3) TMI 824 CENVAT credit - molasses which has been used for manufacturing of rectify spirit which was ultimately used for manufacture of Indian Made Foreign Liquor (IMFL) - classification declaration under Rule 173-B of the Central Excise Rule, 1944 - Held that: - the reference made to the Hon’ble High Court of Allahabad has already been decided by the Hon’ble High Court vide order dated 08.02.2017 wherein the Reference No. 02/2001 filed by the Revenue has been dismissed - appeal dismissed - decided against Revenue. 2018 (3) TMI 823 Refund of unutilized CENVAT credit - the matter was decided in favor of assessee but was sent back for verification of the documents - Held that: - It is seen that the appellate authority has rightly observed that inasmuch as the first order of Commissioner(Appeals) was in favour of the assessee, on merits, and it was remanded only for verification of documents, it was not open to the original adjudicating authority to reject the claim again on merits - appeal dismissed - decided against Revenue. 2018 (3) TMI 822 CENVAT credit - job-worker - credit on the strength of ISD invoices issued by the principal supplier of input - Held that: - on the identical facts in the case of Ruby Confectionery Pvt. Ltd. [2016 (9) TMI 781 - CESTAT HYDERABAD] the demand has been dropped on limitation. Since the fact in the present case also absolutely identical. The demand is not sustainable on time bar therefore the impugned order is set aside - appeal allowed - decided in favor of appellant. 2018 (3) TMI 821 Adjustment of Outstanding amount against rebate claims - pre-deposit - Rule 18 of the Central Excise Rules, 2002 - Held that: - Admittedly, the appellant has made the pre-deposit and the appeals are pending disposal before this Tribunal. In these circumstances, the amount confirmed by the order dated 31.5.2010 and 20.1.2011 are in dispute, therefore, during the pendency of the appeal filed by the appellant, the same cannot be adjusted against the rebate claim. The dues against the order dated 31.5.2010 and 20.1.2011 cannot be adjusted against the rebate claim filed by the appellant - appeal allowed - decided in favor of appellant. 2018 (3) TMI 820 Benefit of N/N. 15/2012 - appellant had supplied 690 vehicles as ambulances to the Government of Maharashtra - Penalty - Held that: - the vehicle cannot be used other than the ambulances after the fitment. Moreover, ambulances were supplied to the Government of Maharashtra. So, there is no chance of misuse of the vehicles - Fitment of accessories have already been done as per the requirement of the exemption list - appeal allowed - decided in favor of appellant. CST, VAT & Sales Tax 2018 (3) TMI 819 Reversal of input tax credit - assessment of escaped turnover - CST Act, 1956 - Penalty u/s 27(4) of the Act - Held that: - when exercise of reassessment, was resorted, under Section 27 of the Tamil Nadu VAT, 2006, the petitioner had already paid the tax and thus, there was no redetermination of tax, after making an enquiry, as contemplated under sub-Section 1 of Section 27 of the Tamil Nadu VAT Act, 2006 - the tax has been paid, even before the reassessment, under Section 27 (2) of the TANVAT Act, 2002. Though the Assistant Commissioner (CT), assessing Officer, has imposed the penalty, under Section 27 (4) of the TANVAT Act, the same has been reversed on appeal, by the Appellate Deputy Commissioner (CT), Chennai. In Lingam and Sons Vs. State of Tamil Nadu [2009 (11) TMI 852 - MADRAS HIGH COURT] on identical issue it was held that Since cheque bearing No. 697629 dated January 7, 1998 for ₹ 14,905 was given by the assessee even on January 7, 1998, levy of penalty under section 12(3) of the Act is not justified. Tax Case Revision Petitions are allowed 2018 (3) TMI 818 Levy of tax on purchase of goods - the Assessing Authority found that the dealer has exported finished goods after using raw materials purchased against Form XVII and therefore, the Assessing Authority levied tax under Section 3(4) of the TNGST Act on a turnover of ₹ 1,06,000/- at the rate of 1% - Held that: - Following the decision of this Court in Tube Investment of India Ltd., v. State of Tamil Nadu [2010 (10) TMI 938 - MADRAS HIGH COURT], the Appellate Tribunal by its order dated 19.05.2014 allowed the appeal filed by the dealer stating that since the export sale is fully covered by the definition of sale under Section 2(n) read with Explanation 3(a) of the TNGST Act, the Assessing authority cannot levy tax under Section 3(4) of the Act - revision dismissed. 2018 (3) TMI 817 Levy of tax - the Assessing Authority found that the dealer has exported finished goods after using raw materials purchased against Form XVII and therefore, the Assessing Authority levied tax under Section 3(4) of the TNGST Act on a turnover of ₹ 1,06,000/- at the rate of 1% - Held that: - Following the decision of this Court in Tube Investment of India Ltd., v. State of Tamil Nadu [2010 (10) TMI 938 - MADRAS HIGH COURT], the Appellate Tribunal by its order dated 19.05.2014 allowed the appeal filed by the dealer stating that since the export sale is fully covered by the definition of sale under Section 2(n) read with Explanation 3(a) of the TNGST Act, the Assessing authority cannot levy tax under Section 3(4) of the Act - revision dismissed. 2018 (3) TMI 816 Whether in the facts and circumstances of the case, the Tribunal is legally correct in having held that the amendment made by insertion of new Section 2(aa) along with explanation to the TNAST, 1970 from 01.08.1996 cannot be applied for the year 1995 - 96 which such amendment was made to the Act was only declaratory in character in order to clarify the meaning or effect of such provision and that such Acts are always held to be retrospective? Held that: - In Apollo Saline Pharmaceuticals vs. Commercial Tax Officer (Fac) [2001 (10) TMI 1100 - MADRAS HIGH COURT], a Hon'ble Division Bench of this court held that the order of the Tribunal to the extent it upholds levy of penalty for these years namely, 1987-88, 1988-89, 1989-90, 1990-91, 1991-92 and 1992-93 is set aside. The assessing authorities shall now hear the assessee with regard to the question of penalty in relation to assessment for these years and thereafter proceed to make appropriate orders - revision dismissed. 2018 (3) TMI 815 Rate of tax - Un-interrupted Power Supply Systems (UPS) - Validity of clarification issued by the first respondent, dated 13.01.2006, in Clarification No.11/2006 - first respondent stated that the UPS with built in battery, or attached to batteries is also known as 'Inverter' and taxable at 16% under Entry No.5(i) of Part-E of the First Schedule to the TNGST Act, and if imported, it is taxable at 20% under Entry No.9 of 11th Schedule. Held that: - the observation made in the impugned clarification that UPS is also known as ''Inverter'' is not substantiated by any material, and appears to be a personal opinion of the Authority. That apart, the clarification states that the UPS should be treated as Inverter, and taxable at 16% under Entry No.5(i) of Part – E of the First Schedule - This entry cannot made applicable, since it deals with Generators, Generating Sets, Transformers and Non-Electronic Voltage Stabilizers. Therefore, the impugned clarification is wholly flawed. Though the articles are not authenticated, it gives a broad distinction between a UPS and Inverter. The subtle but relevant distinction, which has been shown is that UPS is used in the Desktop Computers, and provides power in the case of power-cut, and the Computer does not shut down, whereas, the Inverter is only a power back up solution, it converts Direct Current into battery current electricity, and mainly used to supply back up power for homes and offices, and cannot be used for a Computer system. That apart, there is a gross difference in back up time for both UPS and Inverter, apart from the circuitry difference. The impugned clarification is incorrect and cannot be made applicable to the petitioner - petition allowed - decided in favor of petitioner. Wealth tax 2018 (3) TMI 814 Wealth tax assessment - ITAT directing the AO to disregard the recent valuation report and adopt old valuation report - current valuation of the assets was available with the assessee at the time of filing of Wealth Tax return - Valuation of jewellery - Held that:- A conjoint reading of the Rules require valuation of all assets; furthermore, the valuation operates not on a year to year basis but for a four year cycle. The only exception made out is that where jewellery includes gold or silver or any other alloy, the valuation of gold has to be undertaken annually. Furthermore, if the jewellery or any part of such asset is sold or acquired before valuation date (i.e. within the four year period) such value has to be reduced or increased as the case may be and has to be reflected in the subsequent assessment year. It is evident from the facts of the present case that the search was an event which per se could not have compelled the assessee to go in for fresh valuation, unless there was a compulsion in law to do so. In these circumstances, the assessees acted within their rights in relying upon the prevailing valuation, which ended on 31.03.2012. - Decided in favour of the assessee 2018 (3) TMI 813 Assets taxable under the provision of Wealth Tax Act - addition of the properties in the ‘net wealth’ on the basis of statement recorded u/s.132(4) of the Income Tax Act, 1961 - Held that:- The assessee in his statement admitted that investments in the movable and immovable properties listed above are made out of undisclosed income. AR has reiterated the fact that the assessee has financed for purchase of assets in the name of his wife and nephews. It is also an un-rebutted fact that the assessee has disclosed the assets listed above in his block return of income. No reason to disturb the findings of Commissioner of Wealth Tax (Appeals). The order of Commissioner of Wealth Tax (Appeals) in confirming the additions is well reasoned and justified. We concur with the same. Accordingly, the impugned order is upheld and appeals of assessee are dismissed. The assessee has filed certain documents as additional evidences to substantiate that the properties added in the ‘net wealth’ of assessee are not registered in his name. AR has failed to give any plausible reason as to why these documents have not been placed before the AO or Commissioner of Wealth Tax (Appeals) when they were in possession of assessee at the time of assessment/hearing before First Appellate authority. Additional evidences could not be admitted merely on the asking of appellant. The assessee/appellant has to show reasonable cause for not producing the documents/evidences, (now furnished as additional evidences) before the lower Authorities when the same were available with him. In the absence of any valid reason for not producing these documents before Authorities below, the prayer of assessee for admitting additional evidences is rejected. - Decided against assessee. Indian Laws 2018 (3) TMI 867 Partition of Hindu Joint Family (HUF) - Right of Daughters as Coparceners in the Joint Family - case against the appellants were that appellants herein were not the coparceners in the said joint family as they were born prior to the enactment of Hindu Succession Act, 1956. It was also pleaded that they were married daughters and at the time of their marriage they had received gold and money and had, hence, relinquished their share - appellants herein contested the suit by claiming that they were also entitled to share in the joint family properties, being daughters of Gurulingappa Savadi and for the reason that he had died after coming into force the Act of 1950. Whether, the appellants, daughters of Gurulingappa Savadi, could be denied their share on the ground that they were born prior to the enactment of the Act and, therefore, cannot be treated as coparceners? Held that: - No doubt, Explanation 1 to Section 6 of Hindu Succession Act, 1956, states that the interest of the deceased Mitakshara coparcenary property shall be deemed to be the share in the property that would have been allotted to him if the partition of the property had taken place immediately before his death, irrespective whether he was entitled to claim partition or not. Amendment to the Section vide Amendment Act, 2005 clinches the issue, beyond any pale of doubt, in favour of the appellants. This amendment now confers upon the daughter of the coparcener as well the status of coparcener in her own right in the same manner as the son and gives same rights and liabilities in the coparcener properties as she would have had if it had been son. The law relating to a joint Hindu family governed by the Mitakshara law has undergone unprecedented changes. The said changes have been brought forward to address the growing need to merit equal treatment to the nearest female relatives, namely daughters of a coparcener. The section stipulates that a daughter would be a coparcener from her birth, and would have the same rights and liabilities as that of a son. The daughter would hold property to which she is entitled as a coparcenary property, which would be construed as property being capable of being disposed of by her either by a will or any other testamentary disposition. These changes have been sought to be made on the touchstone of equality, thus seeking to remove the perceived disability and prejudice to which a daughter was subjected. The right to partition has not been abrogated. The right is inherent and can be availed of by any coparcener, now even a daughter who is a coparcener. In the present case, no doubt, suit for partition was filed in the year 2002. However, during the pendency of this suit, Section 6 of the Act was amended as the decree was passed by the trial court only in the year 2007. Thus, the rights of the appellants got crystallised in the year 2005 and this event should have been kept in mind by the trial court as well as by the High Court - So far as partition suits are concerned, the partition becomes final only on the passing of a final decree. Where such situation arises, the preliminary decree would have to be amended taking into account the change in the law by the amendment of 2005. In the said partition suit, share will devolve upon the appellants as well. Since, Savadi died leaving behind two sons, two daughters and a widow, both the appellants would be entitled to 1/5th share each in the said property - appeal allowed. 2018 (3) TMI 866 Smuggling - transportation of contraband ganja - offences punishable under sections 20(b)(ii)(C) & 29 of the Narcotic Drugs and Psychotropic Substances Act, 1985 - The defence plea of the appellants is one of denial and it is further pleaded that nothing was seized from their possession and they have been falsely entangled in the case. Held that: - the only material available on record against the appellant Firoz Alli Khan @ Bulu is the confessional statement of co-accused persons before P.W.14, the Inspector in Charge of Jarada police station - The object of section 25 of the Evidence Act, wherein it is mentioned that no confession made to a police officer, shall be proved as against a person accused of any offence, is that the officer would make every effort to collect the evidence of the commission of the crime and from the power he possesses, he has the capacity to influence, pressurise or subject the person to coercion to extract confession. Confession of a co-accused does not come within the definition of "evidence" as contained in section 3 of the Evidence Act. It cannot be treated as substantive evidence. Law is well settled that the Court cannot start with confession of a co- accused person. It must begin with other evidence adduced by the prosecution and after it has formed its opinion with regard to the quality and effect of the said evidence, then it is permissible to turn to the confession in order to receive assurance to the conclusion of guilt which the judicial mind is about to reach on some other evidence. In view of the glaring inconsistencies in the evidence of prosecution witnesses, absence of clinching evidence relating to compliance of mandatory provision under section 42(2) of the N.D.P.S. Act, absence of any cogent materials that the seized articles along with sample packets were kept in safe custody till its production in the Court - it would be very risky to uphold the impugned judgment and order of conviction in respect of the appellants Ramakrushna Sahu, Trilochan Sahu, Subash Mahapatra @ Subash Ch. Mahapatra and Kailash Chandra Panda under section 20(b)(ii)(C) of the N.D.P.S. Act. Appeal allowed. 2018 (3) TMI 865 Writ of mandamus - mandamus to return the title documents, deposited with it, as Collateral Security, for the loan availed of by the Respondent No.1, albeit, without insistence on payment of sales tax or any other such levy - whether the Respondent No.1 was required to reimburse the sum of ₹ 13,13,075/- along with interest to the appellant herein? Held that: - A plain reading of impugned judgment would show that the appellant had apparently, via his counsel given its consent to the learned single Judge that it would stand protected, if a bank guarantee, in the sum indicated in Paragraph 19 was furnished to it - In case a party is of the view that the proceedings of the Court have been incorrectly recorded in the judgement, it is incumbent upon such party to move the concerned Court for rectification, while the matter is still fresh in the mind of the Judge, who passed the order. There is no other way known to law to correct the record of the Court. Appeal disposed off.
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N: Inland Container Depots for loading and unloading of goods - Seeks to ...

C: Guidelines to Stock Exchanges, Clearing Corporations and Depositories

T: Supreme Court Upholds Validity of Re-Assessment Notices Issued During ...

F: Transfer of ITC without filing ITC-02

F: assessment order

F: INTERMEDIARY SERVICES OR EXPORT SERVICES

H: Revision: Hospital receipts verified, partial refunds & fees paid subs...

F: ITC Issue in case of Acqusition of Company in Insolvency

H: Goods matched documents like e-way bill and invoices; detention order ...

H: Goods Inspection Matches E-Way Bill, Lack of Tax Evasion Intent Quashe...

H: Income tax reassessment validity: AO initiated proceedings u/s 147 ins...

H: Reassessment Rules Interpretation: Taxpayer Wins Over Accommodation En...

H: Sale-purchase loss disallowed unreasonably by tax officer, commercial ...

H: Building sale value can't determine depreciation; actual consideration...

H: Loan to equity conversion attracts income tax on excess share premium ...

H: Property purchase: Joint owners pay via banking channels before regist...

H: Tax exemption limit for leave encashment: Local authorities' employees...

H: Tax assessments beyond 6-year limit quashed, satisfaction note lacked ...

H: Cash found in lockers linked to temple trust and educational foundatio...

H: Microphone Tech Classification: Functionality Over Technology.

H: Exemption from Social Welfare Surcharge on duty-free imports via scrips.

H: Claim for performance pay not an operational debt under IBC; Multiple ...

A: Director Identification Number

A: No GST is applicable for the services provided by the Director under p...

A: Income Tax Act Revamp (Comprehensive Review): Status and Suggestion on...