TMI Tax Updates - e-Newsletter
March 24, 2018

Case Laws in this Newsletter:

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

TMI SMS

• E-Way Bill Rules shall come into force w.e.f. 1.4.2018 - transporter shall be exempted from generation of E-way bill for the time being

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Articles

1. GST AND FINANCIAL YEAR 2017-18

   By: Dr. Sanjiv Agarwal

2. Clarifications must be clear and only when required, otherwise will create more confusions and ambiguities.

   By: DEVKUMAR KOTHARI

3. Anti-Profiteering in Goods and Service Tax

   By: Mallikarjuna Gupta

News

1. Goods & Services Tax (GST) collections

2. MoS for Communications (Independent Charge) and Railways, Shri Manoj Sinha: Competition is the catalyst for change, quality and affordable prices; Delivers Valedictory Address at the International Competition Network Annual Conference 2018 (ICN2018) in New Delhi today;

3. Financial Assistance to Economically Backward Region

4. Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and Pradhan Mantri Suraksha Bima Yojana (PMSBY)

5. E-Insurance Accounts: 15,21,907 accounts opened as on 15th March 2018

6. Roundtable of Invest India Held Today

7. RBI Reference Rate for US $

8. Niti aayog Initiates implementation of strategy on Resource efficiency

Notifications

Customs

1. 15/2018 - dated 22-3-2018 - ADD

Seeks to amend notification No. 03/2013 - Customs(ADD) dated 26 March, 2013

DGFT

2. 55/2015-2020 - dated 23-3-2018 - FTP

Amendments to Foreign Trade Policy 2015-20 Extension to Integrated Goods and Service Tax (IGST) and compensation Cess exemption under EOU scheme till 01.10.2018

3. 54/2015-20 - dated 22-3-2018 - FTP

Amendments to Foreign Trade Policy 2015-2020 - Extension of Integrated and Goods and Service Tax (IGST) and Compensation Cess exemption under Advance Authorisation and EPCG scheme till 01 .10.2018

GST

4. 16/2018 - dated 23-3-2018 - CGST

Seeks to prescribe the due dates for filing FORM GSTR-3B for the months of April to June, 2018

5. 15/2018 - dated 23-3-2018 - CGST

Notifies the date from which E-Way Bill Rules shall come into force

6. 14/2018 - dated 23-3-2018 - CGST

Amending the CGST Rules, 2017(Third Amendment Rules, 2018)

7. 10/2018 - dated 23-3-2018 - CGST Rate

Seeks to exempt payment of tax under section 9(4) of the CGST Act, 2017 till 30.06.2018.

8. 11/2018 - dated 23-3-2018 - IGST Rate

Seeks to exempt payment of tax under section 5(4) of the IGST Act, 2017 till 30.06.2018.

9. 10/2018 - dated 23-3-2018 - UTGST Rate

Seeks to exempt payment of tax under section 7(4) of the UT GST Act, 2017 till 30.06.2018

GST - States

10. 5737-FIN-CT1-TAX-0034/2017-S.R.O. No. 92/2018 - dated 7-3-2018 - Orissa SGST

The Odisha Goods and Services Tax (Second Amendment) Rules, 2018.

11. 5733-FIN-CT1-TAX-0043/2017-S.R.O. No. 91/2018 - dated 7-3-2018 - Orissa SGST

Rescind the notification of the Government of Odisha in the Finance Department No. 2266-FIN-CT1-TAX-0043/2017,dated the 25th January, 2018-S.R.O. No 50/2018.

12. 2491/CT., Pol-41/1/2017 - dated 8-2-2018 - Orissa SGST

Notification on amendment to CCT’s Notification no. 14031,dt.16.09.2017

13. G.O. Ms. No. 19 - dated 15-3-2018 - Puducherry SGST

Rescinding notification issued vide G.O. Ms. No.11 dt.23.12.2018.

14. G.O. Ms. No. 18 - dated 15-3-2018 - Puducherry SGST

The Puducherry Goods and Services Tax (Second Amendment) Rules, 2018

15. G.O. Ms. No. 16 - dated 10-2-2018 - Puducherry SGST

Seeks to postpone the coming into force of the e-way bill rules.

Circulars / Instructions / Orders

GST - States

1. Trade Notice 05/2018 - dated 20-3-2018

Clarifications on export related refund issues.

2. Trade Notice 04/2018 - dated 14-3-2018

Processing of Refund Applications for UIN entities.

3. Trade Notice No. 03/2018 - dated 28-2-2018

Directions under Section 168 of the CGST Act regarding non-transition of CENVAT credit under Section 140 of CGST Act or non-utilization thereof in certain cases-

4. Trade Notice 02/2018 - dated 14-2-2018

Proper officer under Section 73 & 74 of the CGST & IGST Act,2017

5. Trade Notice No. 22/2017 - dated 26-12-2017

Manual filing of applications for Advance Ruling and appeals before Appellate Authority for Advance Ruling.

6. Trade Notice 21/2017 - dated 26-12-2017

Manual filing and processing of refund claims on account of inverted duty structure,deemed exports and excess balance in Electronic cash ledger

DGFT

7. 68/2015-2020 - dated 22-3-2018

Amendments in Handbook of Procedures 2015-20

Highlights / Catch Notes

GST

• Third Amendment Rules 2018: Key Updates to Central GST Rules 2017 for Improved Compliance and Efficiency.

  Notifications : Amending the CGST Rules, 2017(Third Amendment Rules, 2018) - Notification
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• Transporters Temporarily Exempt from Generating E-Way Bills if Consignor or Consignee Fails to Do So.

  Notifications : E-Way Bill Rules shall come into force w.e.f. 1.4.2018 - However, where the consignor or the consignee has not generated the e-way bill, the transporter shall be exempted from generation of E-way bill for the time being
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• The due dates for filing FORM GSTR-3B have been extended for the months of April to June 2018.

  Notifications : Due dates for filing FORM GSTR-3B further extended for the months of April to June, 2018
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• GST Reverse Charge Exemption Extended u/s 5(4) Until June 30, 2018.

  Notifications : Exemption from GST on reverse charge basis u/s 5(4) extended till 30.06.2018
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Income Tax

• No Penalty u/s 271D for Cash Deposits Treated as Business Income, Not Loans Violating Section 269SS.

  Case-Laws - AT : Penalty u/s 271D - receipt of loans in cash - Once the bank deposits are treated as freight receipt or business receipt for estimating income of the assessee, the same cannot be considered as loans in violation of Section 269SS of the Act - no penalty - AT
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• Penalty for Delayed Filing of Annual Information Return Deleted Due to Reasonable Cause u/s 273B.

  Case-Laws - AT : Penalty u/s.271FA - delay filing on AIR - appellant was having reasonable cause for delay filing on AIR and in our opinion benefit of section 273B should be given to the appellant - levy of penalty deleted - AT
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• Taxpayer's Club Membership Fees Deemed Revenue Benefit, Not Capital Asset Acquisition, Despite Long-Term Advantage.

  Case-Laws - AT : Addition of club membership fees paid by assessee - By obtaining membership for a period of more than one year, there may be an advantage of enduring nature. However, such advantage is in the field of revenue benefit and not for obtaining any capital asset or obtaining benefit in capital field. - AT
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• Tax Penalty Case Remanded for Reassessment Due to Misinterpretation of Section 271AAA's 'Specified Previous Year' Requirement.

  Case-Laws - AT : Penalty u/s 271AAA - CIT(A) simply went by the dates given in sub-section (1) of section 271AAA without examining ‘specified previous year’ which is crucial for determination of the applicability or otherwise of section 271AAA - CIT(A) directed to examining the case afresh - AT
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• Court Validates Gifts for Son's College from Mother and Husband; No Income Additions Made to Assessee.

  Case-Laws - HC : Genuineness of Gift from her mother and her husband - whether donors in question had the funds to make a gift to the respondent-assessee for the purpose of admission of her son in a medical college - explanations found satisfactory - no additions - HC
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• Assessee Qualifies for Section 80IA Deduction as Infrastructure Developer, Not Just a Works Contractor, Due to Comprehensive Role.

  Case-Laws - AT : Entitlement for deduction u/s 80IA - The assessee was not merely providing labour but was providing a complete infrastructure required to support the development of infrastructure facility. It deployed its various resources like material, manpower, machinery etc. In addition it exposed itself to various risks. - assessee is a developer and not a mere works contractor - AT
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• Income from Daily Share Transactions Considered Business Income, Not Capital Gains, Due to Market Fluctuation Strategy.

  Case-Laws - AT : Income from share transaction - capital gain or busniss income - there were repeated purchase of same scrip and sale thereof immediately, almost on daily basis to take advantage of the market fluctuations - sale of shares to be treated as business income - AT
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• High Court denies writ petition for delay in third tax installment under Income Disclosure Scheme, 2016; Section 119 cited.

  Case-Laws - HC : Condonation of delay in payment of 3rd Instalment of the tax amount declared by the petitioner assessee under the Income Disclosure Scheme, 2016 (IDS 2016) rejected u/s 119 - HC refused to entertain the writ petition
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• Tax Assessment Reopened: Non-Disclosure of Interest Income Extends Limitation Period Beyond Four Years.

  Case-Laws - HC : Reopening of assessment - assessee had not returned the income received as interest from deposits in Banks - The limitation of 4 years would not be applicable, since the specific allegation, which we have found to be correct, is of non-disclosure of full and true material facts necessary for assessment. - HC
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• Res Judicata Not Applicable: Previous Assessment Lacked Discussion, Mere Acceptance of Assessee's Contention Not Conclusive.

  Case-Laws - HC : Doctrine of res judicata - The previous year’s assessment order in fact did not lead any discussion on this aspect and appear to have merely accepted the assessee’s contention. Those cannot by any stretch of imagination be conclusive. At any rate in such cases, one cannot apply the principle of res judicata or estoppel. - HC
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• Petitioner Denied Waiver of Interest u/s 220(2) of Income Tax Act Due to Lack of Cooperation.

  Case-Laws - HC : Seeking waiver of interest payable u/s 220(2) - full co-operation was lacking during the assessment proceedings - the petitioner is not entitled to waiver. - HC
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• Court Rules Late Notice u/s 143(2) Invalid if Objection Raised Before Assessment Completion.

  Case-Laws - HC : Reopening of assessment - failure to serve the Notice u/s 143(2) within prescribed time - if an objection is raised before the completion of assessment proceedings, then, a notice would not be deemed to have been validly served upon the respondent u/s 292BB - HC
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Customs

• Court Rules Initial NOC for Pigeon Peas Import from Mozambique Remains Valid Despite New Certification Requirement.

  Case-Laws - HC : Import of Pigeon Peas from Mozambique - When the 1st respondent had issued the No Objection Certificate in favour of the petitioner, they cannot withdraw the No Objection Certificate merely because the Government of Mozambique had taken a subsequent decision asking the importers to get No Objection Certificates from ICM. - HC
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• Panasound Music System Case: Rule 2(a) Inapplicable Due to Missing CD/VCD Mechanism and Top Cover in CKD Import.

  Case-Laws - AT : Valuation - Panasound music system - whatever parts were imported in CKD form, the parts such as CD/VCD mechanism and top cover were not in the consignment. Therefore Rule 2(a) of Rules of Interpretation is not applicable - AT
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DGFT

• Extension of IGST and Compensation Cess Exemption for Advance Authorisation and EPCG Scheme Until October 1, 2018.

  Notifications : Amendments to Foreign Trade Policy 2015-2020 - Extension of Integrated and Goods and Service Tax (IGST) and Compensation Cess exemption under Advance Authorisation and EPCG scheme till 01 .10.2018 - Notification
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Corporate Law

• High Court Upholds Director Disqualification Rules Under Companies Act to Ensure Strong Corporate Governance Standards.

  Case-Laws - HC : Disqualifications for appointment of director - Merely because the provisions may operate harshly against the Directors of the defaulting company, it does not render a provision enacted with an avowed purpose of ensuring the due compliance of the provisions of the Act, foundationless or ultra vires. - HC
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Indian Laws

• Court Upholds Orders in Cheque Dishonor Case; Petitioners Can Challenge Bank's 'Holder in Due Course' Status During Evidence.

  Case-Laws - HC : Dishonor of Cheque - drawer and drawee were one and the same - The orders passed by the Courts below cannot be held to be illegal and it shall always be open to the petitioners to rebut the presumption during the course of evidence that the Bank was not a 'holder in due course' and it was not for any consideration of liquidation of the loan. - HC
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Service Tax

• Interest on Service Tax: Cheque Presentation Date is Payment Date, No Interest for Processing Period.

  Case-Laws - AT : Demand of interest for the intervening period from the date of presentation of cheque till its realization - date of presentation of cheque is the date of payment of service tax - demand of interest set aside - AT
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Central Excise

• Authorities Wrongly Deny Cenvat Credit to Appellant; Decision Deemed Unjustified Under Current Provisions.

  Case-Laws - AT : CENVAT credit - authorities below has applied wrong provision to deny Cenvat credit to the appellant. Therefore, Cenvat credit cannot be denied to the appellant. - AT
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• Revenue's Claims Against Appellants Dismissed Due to Lack of Evidence on Stearic Acid Mislabeling as HRBO Flakes.

  Case-Laws - AT : Clandestine removal - As the Revenue has not shown any positive evidence to corroborate the statements of the buyers/suppliers to show that the appellants were clearing stearic acid in the guise of HRBO flakes. In that circumstance, the allegations made against the appellants are not sustainable. - AT
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VAT

• Court Finds No Malicious Intent by Assessee Despite Department's Oversight in Allowing Remittances Under Compounding Scheme.

  Case-Laws - HC : Tax under the compounding scheme - The department was not vigilant but was also lethargic in so far as permitting the assessee to make remittances under the scheme for the subsequent year also when already notice was issued for cancellation of the compounding in the previous year. There can be no contumacious conduct found on the part of the asessee - HC
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Case Laws:

• GST

• 2018 (3) TMI 1152
  Prayer for issuance of Writ of Manamus to declare Condition (iv) contained in Section 140 (3) of Central Goods and Service Tax Act, 2017 - Input tax credit of eligible duties - Held that: - inadvertently certain typographical errors have occurred in the writ petition - prayer as made that he may be allowed to withdraw the present writ petition with liberty to the petitioner to file fresh one on the same cause of action by furnishing correct and better particulars, is allowed - petition dismissed as withdrawn.

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• 2018 (3) TMI 1151
  Prayer for issuance of Writ of Mandamus to declare Condition (iv) contained in Section 140 (3) of Central Goods and Service Tax Act, 2017 - Input tax credit of eligible duties - Held that: - inadvertently certain typographical errors have occurred in the writ petition - prayer as made that he may be allowed to withdraw the present writ petition with liberty to the petitioner to file fresh one on the same cause of action by furnishing correct and better particulars, is allowed - petition dismissed as withdrawn.

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• Income Tax

• 2018 (3) TMI 1185
  Genuineness of Gift from her mother and her husband - whether donors in question had the funds to make a gift to the respondent-assessee for the purpose of admission of her son in a medical college - Held that:- Assessee had sufficiently been able to explain that the sum of Rs. 93,11,000/- was received by her by way of gift from her mother and her husband respectively. The materials on record reveal that the gift from the mother was to fund for admission of her grand son to a private medical college. - Decided against revenue

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• 2018 (3) TMI 1184
  Disallowance relating to Employees Contribution of Provident Fund - Held that:- CIT(A) has correctly expressed the view that the above said payment was not made into PF account before the due date of filing the return for the subject year. The Ld CIT(A) has further observed that various decisions have liberally interpreted the provisions of and have laid down the principle that the employees contribution paid before the due date for filing return of income is allowable as deduction. Since the employees contribution is income of the assessee u/s 2(24(x) of the Act, the Ld CIT(A) held that the same is allowable as deduction only if it is paid before the due date for filing return of income. Accordingly the Ld CIT(A) has rejected the claim of the assessee. A.R took an alternative plea that the impugned amount is allowable as deduction in AY 2004-05 itself, as it has been paid within the extended time limit prescribed for AY 2004-05 u/s 139(1) of the Act. We notice that the assessee is taking this alternative plea for the first time before us. Hence we restore this plea of the assessee to the file of the AO for deciding the same in accordance with the law Rejection of depreciation claimed by the assessee on EDP equipments taken on lease from M/s HCL Infosystems Ltd - Held that:- We notice that the CIT(A) has, however, proceeded to examine the terms and condition of the Contract and has given a finding that the assessee was only a lessee and the ownership has remained with lessor only. He has also given a finding that the assessee had got the right to use the equipments only and the lessor continued to have legal possession over the assets. The Ld CIT(A) has also observed that the assessee did not furnish any information about similar claim made in the succeeding years. Under these set of facts, the Ld CIT(A) has confirmed the rejection of claim for depreciation. The assessee did not furnish any document to contradict the interpretation given by the Ld CIT(A). The ld A.R disputed the observations of the AO by stating that the supplier of equipment and lessee were one and the same. What is required to be shown is that the ownership of the equipments has transferred from M/s HCL infosystems ltd to the assessee. In our view, the assessee has failed to show the same. In the absence of relevant agreement, it may not be proper to understand the terms and conditions of the lease on the basis of some other agreement. Hence we are of the view that the Ld CIT(A) was justified in confirming the order passed by the AO on this issue.

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• 2018 (3) TMI 1183
  Penalty u/s 271D - assessee has received three loans in cash in contravention of provisions of Section 269SS - Held that:- From the bank account at page 6 of the assessment order, it is seen that the assessee has received cash from the five persons in SB Account No.881 and CD92 and as per CIT(A) order an amount of Rs. 1,68,500/- was deposited in A/c No. CD 92 as received in cash from Shri Arvind Sikarwar. Therefore, we find there is factual errorin the order of the lower authorities which the ld. DR could not reconcile with the support of relevant material evidence at the time of hearing. Merely stating that just because mischievously or erroneously the amount got treated by the CIT(A) as freight receipts admitted position that they were loans as such cannot be ignored is not sufficient to prove the charge of receipt of loans in cash, in contravention of provisions of Section 269SS of the Act. It is evident from the above that the freight receipt from dumpers as deposited in bank account SB No. 881 and CD 92 by the assessee were treated as business/freight receipt by the ld. CIT(A). As such, the charge framed for levy of penalty get changed by treating the cash deposits in the bank account of the assessee as freight receipts and estimating income therefrom. The ld. DR has not controverted these facts. Once the bank deposits are treated as freight receipt or business receipt for estimating income of the assessee, the same cannot be considered as loans in violation of Section 269SS of the Act. Penalty levied u/s 271D is hereby deleted. - Decided in favour of assessee

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• 2018 (3) TMI 1182
  Addition of “depreciation diminution written back claim”- Held that:- While examining the paper book we find that the amount of Rs. 3.15.748/-, Rs. 12,20,981/- and Rs. 46,35,092/- totaling to Rs. 61,71,821/- has been offered to income in the income tax returns for the assessment years 2006-07 to 2008-09 respectively by treating them as inadmissible expenses. The relevant pages of computation of income as well as the income tax return form support the contention of the assessee. The learned DR failed to controvert any of these facts contended by the learned counsel for the assessee. We, therefore, in the given facts and circumstances of the case and in view of our verification of the relevant documents annexed with the paper book, are of the view that Rs. 61,71,821/- claimed by the assessee as “depreciation diminution written back” stands already offered to tax in the preceding years as and when provided. We, therefore, find no reason to interfere with the findings of the Commissioner of Income Tax - Decided against revenue

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• 2018 (3) TMI 1181
  Rejection of application for registration u/s 12AA (1)(b)(ii) - test of the genuineness of the activity at initial stage when the trust has not yet commenced the charitable activity - Held that:- The assessee society objected to the ld CIT(E) observation as regards his non-satisfaction about ‘genuineness of activities as no activities were started by the assessee trust since, it was incepted on 01/07/2016 and being the first year of the trust no activities could be conducted during the year. On fact, in the absence of activities, any enquiry of the nature would amount putting the cart before the horse. At this stage, only the genuineness of the objects has to be tested and not the activities, which have not commenced. We find that on the facts, the findings of the Ld. CIT(E) regarding the ‘genuineness of activities’ is in direct conflict with the law laid down by Hon’ble jurisdictional High Court in the case of ‘CIT(E) vs. SheedharSewa Trust Asharfi Bhawan, [2017 (10) TMI 386 - ALLAHABAD HIGH COURT]. Thus, at the initial stage when the trust has not yet commenced, the test of the genuineness of the activity cannot be the ground for the rejection of the registration of the assessee trust. In view above, we accept the grievance of the assessee is justified. Therefore, reverse the findings recorded by the CIT(E) and direct to issue Certificate granting registration under section 12AA in the name of the applicant society, forthwith from the financial year in which application was filed. - Decided in favour of assessee.

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• 2018 (3) TMI 1180
  Penalty imposed u/s 271(1)(c) - Held that:- We find that the assessee did not cooperate during the course of assessment proceedings as well as the penalty proceedings and further the Commissioner of Income Tax (Appeals) overlooked the fact that remand report was very crucial in the present cases and the assessee did not file requisite details during the assessment and penalty proceedings. All the issues raised in these four appeal relating to quantum as well as penalty imposed u/s 271(1)(c) of the Act needs to be set aside to the file of the Assessing Officer for de novo assessment and we further direct the assessee to remain compliant with the notices of hearing and should not take unnecessary adjournment unless otherwise required.

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• 2018 (3) TMI 1179
  Deduction u/s 80IA(4) in respect of profits on 90MV Captive Power Plant - Hon’ble High Court’s judgment in assessee’s own case [2016 (10) TMI 1111 - GUJARAT HIGH COURT] wherein Their Lordships have approved adoption of rate of power generation at Rs. 4.73 per unit i.e. the rate on which GEB supplied power to its consumers and not the rate of Rs. 2.36 per unit i.e. the rate at which the assessee had supplied its power to GEB. In effect thus the legal position seems to be that the rate at which internal consumption of power is to be taken into account is the rate at which GEB sells power to its consumers. Accordingly, we deem it fit and proper to remit the matter to the file of the Assessing Officer for examining the claim in the light of above legal position. In case of working of profits on which deduction under section 80IA(4) is claimed is indeed on this basis, the Assessing Officer will allow the same.

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• 2018 (3) TMI 1178
  Validity of assessment u/s 153A - Rejection of new claim of deduction in the returns of income filed u/s 153A in respect of assessment years for which assessment proceedings have not abated - Held that:- In the facts of the present case also, admittedly, no incriminating document was found, on the basis of which additions were made. In view thereof and following the ratio laid down by the Hon’ble Bombay High Court in CIT Vs. (1) Continental Warehousing Corporation (Nhava Sheva) Ltd. All Cargo Global Logistics Ltd. (2015 (5) TMI 656 - BOMBAY HIGH COURT) and in CIT Vs. Shri Deepak Kumar Agarwal [2017 (9) TMI 850 - BOMBAY HIGH COURT], we find that in the absence of any incriminating document, no addition is warranted in the hands of assessee in the respective years which are non-abated assessment years. Accordingly, we direct the Assessing Officer to delete all the additions made in the respective years from assessment years 2004-05 to 2008-09. Also the assessee is also not entitled to any fresh claim on account of depreciation on Motor Car and loss on trading of shares - Decided partly in favour of assessee

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• 2018 (3) TMI 1177
  Addition on account of alleged undisclosed jewellery - search and seizure action u/s 132 - Held that:- The jewellery found in possession of the Assessee and his family is within the normal limits of the jewellery which as per the Board’s Circular not to be seized during the search proceeding of the Income Tax Act. Moreover, in the case of Haroon Mohd. Unni Mumbai vs Department of Income Tax, the Assessing Officer conducting the search suo-moto allowed 250 gms. each to the married ladies of the family as their 'Streedhan’. CIT(A) has not considered the status of the family, the circular of the Board where in case of married ladies 500 gms. and in case of unmarried lady 250 gms. and in case of male member 100 gms. jewellery need not be seized. The Income-tax department has accordingly released the said jewellery. The assessee, in fact can possessed upto 1450 gms. of jewellery as per the circular and looking to the social and financial status of the family, CBDT Circular the jewellery possessed by the assessee is quite reasonable and no addition on this account can be made and additions - Decided in favour of assessee.

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• 2018 (3) TMI 1176
  Liability for collection of TCS u/s 206C(1C) - toll collections / amount received by the concessioner as entry fee at the toll plaza - assessee in default for non deduction of TDS u/s 194C - escrow account whether it is opened in the joint name or in the name of the contractor - Held that:- We are of the view that let the issue be remitted to the file of the Assessing Officer for examining whether the escrow account is opened by the concessionaire in its own name or jointly. AO will also examine whether the concessionaire has been granted contract of developing project highway by which project asset shall be created on BOT basis and what will be the use of the project asset so developed by the concessionaire for the purpose of his business including collection of toll to compensate the project expenditure and the profit thereon. AO will also examine whether the concessionaire is entitled to collect toll in view of the terms of the agreement and who has the right to levy fee/toll and who has granted this by the central government or by NHAI. Alternative contention of the assessee also needs examination whether the fee as has been prescribed at Rs. 1 per annum which is payable by the concessionaire to NHAI in consideration of grant of the project highway on BOT basis. This also requires examination. Similar are the facts relating to the issue of TDS under Section 194C - Decided in favour of assessee for statistical purposes.

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• 2018 (3) TMI 1175
  Addition on accrued interest of Non Performing Asset accounts - Held that:- As we have principally decided the issue in favour of the assessee in the case of THE BULDHANA DISTRICT CENTRAL COOP. BANK LTD. vs DCIT (2018 (3) TMI 1100 - ITAT NAGPUR) 1726003, respectfully following the same, we direct the AO to re-compute the overdue interest and accrued interest on NPAs according. Disallowance of deduction u/s 40(a)(ia) for short deduction of TDS - Held that:- this issue is covered in favour of the assessee and against the Revenue by the decision in the case of CIT vs S.K.Tekriwal [2012 (12) TMI 873 - CALCUTTA HIGH COURT] wherein it is held that no disallowance u/s 40(a)(ia) of the Act can be made wherever short deduction of TDS is made. As no disallowance can be made for short deduction of TDS, we direct the AO to verify that the assessee has deducted TDS but may be short. Short deduction does not given any right to AO to disallow the expenses for short deduction. - Decided in favour of assessee

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• 2018 (3) TMI 1174
  Assessment u/s 153C - Held that:- AO of the searched person and the other person is the one and the same, then also the Assessing Officer has to record his satisfaction in the case of the other person i.e., other than the searched person. In view of the facts in entirety and the dictum of Hon'ble Supreme Court in the case of CIT Vs. Calcutta Knitwears – [2014 (4) TMI 33 - SUPREME COURT] which was further adopted by CBDT vide Circular No.24/2015 dated 31st December, 2015, respectfully following the same, we are of the view that in the present case, the assumption of jurisdiction by the Assessing Officer for issuance of notice u/s 153C of the Act and consequent assessment framed is bad in law. Consequently, we hold that the assessment order passed by the Assessing Officer was bad in law - Decided in favour of assessee.

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• 2018 (3) TMI 1173
  Penalty u/s.271FA - delay filing on AIR - Held that:- Appellant is a Govt. servant and AR stated that they have assigned job to submit AIR to some outsources agency and sometime staff of the outsources agency become careless. In these case, appellant is a newly incumbent with the office and was not aware of the income tax provisions. Moreover, department authority did not inform in above said responsibilities of during the same. Moreover, income tax was paid on time therefore, no loss to the revenue. In our considered opinion, appellant was having reasonable cause for delay filing on AIR and in our opinion benefit of section 273B should be given to the appellant. Therefore, we delete the penalty in all above said three appeals. - Decided in favour of assessee

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• 2018 (3) TMI 1172
  Disallowance on account of expenditure incurred on advertisement - Held that:- We feel that the impugned expenditure has been incurred by assessee exclusively for its business activity and therefore the same is eligible for deduction us 37(1) of the Act. As such, in the given facts and circumstances no disallowance of impugned expenditure is warranted. Thus, we reverse the order of lower authorities and direct the AO to delete the addition. Addition of club membership fees paid by assessee - Held that:- The main purpose of the organization is to induce its officers to attend such places for maintaining and making contacts for the benefit of business. Even if some personal advantage is obtained by officers, it will be in nature of maintaining good relations with officers and in nature of staff welfare expenses. Therefore, the expenses are incurred wholly and exclusively for the purpose of business. By obtaining membership for a period of more than one year, there may be an advantage of enduring nature. However, such advantage is in the field of revenue benefit and not for obtaining any capital asset or obtaining benefit in capital field. Therefore such expenses will be of revenue nature. - Decided in favour of assessee.

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• 2018 (3) TMI 1171
  Deduction claimed u/s 10A - Held that:- Benefit of deduction is available from the profits and gains derived by an undertaking from the export of articles or things or computer software for a period of ten consecutive assessment years beginning with the assessment year relevant to the previous year in which the undertaking begins to manufacture or produce such articles or things or computer software, as the case may be. Undisputedly, the assessee (the undertaking) manufactured or produced such articles or things or computer software, as the case may be, and exported them from assessment year 2000-01 only, as extracted above, and hence it is eligible for such deduction for a period of ten consecutive ays beginning with ay 2000-01 i.e., up to assessment year 2009-10, ie upto this ay, being the 10th consecutive year. Therefore, the orders of the lower authorities in this regard are set aside, the AO is directed to allow the impugned deduction. Corresponding appeal grounds are allowed. On the validity of reopening the assessment, we have considered the rival submissions. The assessee has taken similar plea before the CIT(A) and the CIT(A) after examining the submissions and relevant material and the Explanation u/s 147, has recorded a finding that on the impugned issue the AO has not formed any opinion at the time of original assessment, hence there is no change of opinion and upheld the action of the AO. Since, the assessee has not laid any material to refute such findings, we do not find any infirmity in the order of the CIT(A)

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• 2018 (3) TMI 1170
  Deduction u/s 10A - provision written back and miscellaneous income eligibility - Held that:- Legal position of the assessee in the case on hand on the issue before us would be supported by the ratio of the decisions of the Full Bench of the Hon'ble Karnataka High Court in the case of CIT Vs. Hewlett Packard Global Soft Ltd. (2017 (11) TMI 205 - KARNATAKA HIGH COURT); wherein it has been held that in the case of a 100% EOU, all the profits and gains arising thereof, including incidental income, would be entitled to exemption / deduction under Section 10A of the Act. Thus we direct the Assessing Officer to allow the assessee deduction under Section 10A of the Act in respect of the assessee's 100% EOU business income, including therein, the provision written back and miscellaneous income which also forms part of the assessee 100% EOU business. TDS u/s 194C/194J applicability for making TDS on payments for lease line expenses for purchase of bandwidth - Disallowance of payments towards Lease line charges u/s.40(a)(ia) - Held that:- Respectfully following the decision of the co-ordinate bench of this Tribunal in the assessee's own case for Assessment Year 2009-10 we uphold the finding of the learned CIT (Appeals) that lease line charges paid for bandwidth are not liable for TDS under the provisions of Sec.194C / 194J of the Act and therefore no disallowance under Section 40(a)(ia) of the Act was called for. Deduction u/s.10A - reduction of expenditure incurred in foreign currency towards telecom charges as are attributable to the delivery of software outside India - Held that:- The jurisdictional High Court of Karnataka in the case of Tata Elxsi Ltd. (2011 (8) TMI 782 - KARNATAKA HIGH COURT ) has held that when certain expenses are excluded from the export turnover for the purposes of claiming deduction admissible under the Act, like under Section 10A of the Act, such expenses are also to be excluded from total turnover, as export turnover forms part of total turnover.

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• 2018 (3) TMI 1169
  Gain on sale of shares - capital gain or busniss income - Held that:- Mere fact that dividend received is nominal, cannot be the deciding factor as to whether income from sale of investment is to be assessed as business income or capital gain, particularly when long term capital gain is accepted by the AO. In respect of sale of shares of LML Ltd and Oswal chemicals, it can been seen that sale is made on various dates as the sale order sometimes takes days to be fully executed. It is not the case that on some days sales are being purchased and sold. Just because assessee has purchased and sold number of shares does not by itself make it business income when the AO has accepted the scripts as investment in the balance sheet and books of account are accepted. In view of the above discussion, we are of the considered view that the CIT(A) has rightly treated the gain on sale of shares as short term capital gain. Accordingly, we find no infirmity in the order of the ld. CIT(A). Thus, the grounds raised by the Revenue in are dismissed.

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• 2018 (3) TMI 1168
  Penalty u/s 271AAA - CIT(A) observed that the penalty ought to have been imposed u/s 271AAA as the search was conducted on 31.01.2011, which date falls within the period 01.06.2007 to 30.06.2012, being the period prescribed u/s 271AAA - Held that:- Going through the definition ‘specified previous year’ in juxtaposition to section 271AAA(1), it becomes clear that penalty at the rate of 10% of the undisclosed income is to be imposed only in respect of ‘specified previous year.’ CIT(A) simply went by the dates given in sub-section (1) of section 271AAA without examining ‘specified previous year’ which is crucial for determination of the applicability or otherwise of section 271AAA. Under these circumstances, we set aside the impugned order and remit the matter to the file of the ld. CIT(A) for examining the case afresh in the light of the Explanation (b) to section 271AAA. - Decided in favour of revenue for statistical purposes.

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• 2018 (3) TMI 1167
  Profits for the purposes of deduction under Section 80 HHC - compensation paid under the Voluntary Retirement Scheme (VRS) to the workers of its Bhandup Unit, would be costs which is includable in traded export goods - Held that:- We note that the AO had considered the detailed written submission, inter alia, on the issue of deduction under Section 80HHC of the Act. On consideration of the submissions, the Assessing Officer came to view that the costs incurred for payment of VRS to its Bhandup Unit workers, cannot be considered as an indirect cost to determine the profits of its traded export goods for allowing deduction under Section 80HHC of the Act. This view is a possible view as it is not the case of the Revenue that in law, it is an impossible view. Therefore, in the above facts, the exercise of powers of Revision by the CITwas in the face of the decision of the Apex Court in CIT v/s. Max India Ltd.[2007 (11) TMI 12 - Supreme Court of India]. In the above case, it has been held that where two views are possible, a power of Revision is not to be exercised by the Commissioner only because he does not agree with the view of the Assessing Officer, unless, of course, the view of the Assessing Officer is untenable in law. This is not even urged by the Revenue before the Tribunal or before us. Therefor, admittedly a possible view. No substantial questions of law.

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• 2018 (3) TMI 1166
  Reopening of assessment - failure to serve the Notice u/s 143(2) within prescribed time - Held that:- It is a settled position in law that a service of notice under Section 143(2) of the Act is a sine qua non for completion of assessment under Section 143(3) of the Act. In this case, admittedly, the notice is served beyond the period as prescribed in Section 143(3) of the Act. The grievance of the Revenue that as the respondent had participated in the assessment proceedings and raised the objection of non-service of notice under Section 143(2) of the Act only at the end of the assessment proceedings, it must be deemed that the objection is waived but the proceedings in the absence of service of notice, within the prescribed time will not be saved by Section 292BB of the Act as the proviso thereto very clearly states that if an objection is raised before the completion of assessment proceedings, then, a notice would not be deemed to have been validly served upon the respondent within time provided under the Act. - Decided against revenue

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• 2018 (3) TMI 1165
  Seeking waiver of interest payable under Section 220(2) - delay in payment of the tax for the block period 1st January, 1985 to 24th August, 1995 - Held that:- It is an undisputed fact that the tax payable is in respect of the period 1985 to 1995. The petitioners have chosen not to pay the tax even though it was conscious of the fact that in case it fails in its challenge, it would have to pay the interest due on the same. Thus, it was a call which the petitioner took at a time when the demand was confirmed by the Assessing Officer. Moreover, the Commissioner, in the impugned order, also found that during the assessment proceedings, statements were made and retracted. This would by itself establish the fact that, full co-operation was lacking during the assessment proceedings. Thus holding the petitioner is not entitled to waiver.

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• 2018 (3) TMI 1164
  Deduction towards Area Development Fund - Held that:- The Commissioner and the Tribunal have not given any finding that the fund collected under the Area Development is not utilised for the purpose, for which it was collected. The Tribunal and the Commissioner were required to consider threadbare the relevant aspects of the matter as observed by the Apex Court in case of Siddheshwar S.S.K.Ltd. Vs. Commissioner [2004 (9) TMI 6 - SUPREME Court] Thus impugned orders of the Commissioner of Income Tax (appeals) and the Income Tax Appellate Tribunal are set aside. The parties are relegated before the Commissioner (appeals) who shall decide the appeals afresh expeditiously.

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• 2018 (3) TMI 1163
  Claim of Short Term Capital Gain sought to be set off against Short Term Capital Loss - Held that:- Revenue authorities including the CIT(A) and the ITAT carried out a detailed analysis of the transactions in question including the volume of holding, duration of holding and the dividend earned and other essential details. The lower authorities-including the AO considered the cumulative effect of these factors and also all the relevant authorities, starting from the judgment of the Supreme Court in Raja Bahadur Visheshwara Singh vs. Commissioner of Income Tax, (1960 (12) TMI 12 - SUPREME Court). In this background the assessee’s assertion that the previous year’s assessment-which had accepted the reporting of the transaction which he claims to be identical, is unpersuasive. The previous year’s assessment order (for AY 2008-09) in fact did not lead any discussion on this aspect and appear to have merely accepted the assessee’s contention. Those cannot by any stretch of imagination be conclusive. At any rate in such cases, one cannot apply the principle of res judicata or estoppel.

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• 2018 (3) TMI 1162
  Application for stay under Section 220(6) rejected - Held that:- Both the impugned orders dated 30th January, 2018 and 19th February, 2018, rejects the Petitioner's application without considering the Petitioner's, prima facie, case on merits. Both the impugned orders have ignored the binding decision of this Court in KEC International Ltd., v/s. B. R. Balakrishnan & Others [2001 (3) TMI 32 - BOMBAY High Court] and UTI Mutual Funds v/s. ITO (2012 (3) TMI 333 - BOMBAY HIGH COURT) which laid down the manner in which stay application under Section 220(6) of the Act have to be disposed of by the authorities under the Act. In the above circumstances, we set aside the orders dated 30th January, 2018 passed by the Assessing Office and also an order dated 19th February, 2018 passed by the Principal Commissioner of Income Tax. However, we restore, the Petitioner's application dated 24th January, 2018 to the Assessing Officer to decide it afresh. Respondent-Revenue will not act upon the Notice of demand issued, consequent to Assessment Order dated 22nd December, 2017 till one week after the Assessing Officer's order under Section 220(6) of the Act is communicated to the Petitioner.

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• 2018 (3) TMI 1161
  Reopening of assessment - assessee had not returned the income received as interest from deposits in Banks - Held that:- In the present case, true, after regular assessment and after notice for reassessment was issued, there was a Supreme Court judgment finding the interest income received even before the commencement of production would be income from other sources. But, that decision is not the cause for the aforesaid reopening. It is only in the assessment order as seen from Annexure-A that the Assessing Officer relied on the decision of the Hon'ble Supreme Court, to further sustain the re-assessment of undisclosed income to tax. The Assessing Officer, later to the regular assessment, saw from the P&L account that there was further income by way of interest from deposits, which had not been disclosed in the returns filed by the assessee. This was the reason for issuance of notice of reassessment, for bringing to tax income that escaped assessment within the six year period. The limitation of 4 years would not be applicable, since the specific allegation, which we have found to be correct, is of non-disclosure of full and true material facts necessary for assessment. We answer the question of law in favour of the Revenue and against the assessee.

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• 2018 (3) TMI 1160
  Condonation of delay in payment of 3rd Instalment of the tax amount declared by the petitioner assessee under the Income Disclosure Scheme, 2016 (IDS 2016) rejected u/s 119 - Held that:- This Court is of the opinion that there is no justification or reason for invoking the extra-ordinary jurisdiction of this Court under Article 226 of the Constitution for interference in the matter of relaxation or extension of time limit as prayed for and therefore the Respondent Authority was justified in rejecting the said request of the petitioner, in view of the aforesaid Supreme Court decision in the case of Hemalatha Gargya Vs. Commissioner of Income Tax (2002 (11) TMI 6 - SUPREME Court) The petitioner assessee will be free to approach the Respondent Authorities in accordance with law and the Respondent Authorities are expected to pass appropriate orders in the matter with regard to refund/adjustment of amount already deposited by the petitioner.

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• 2018 (3) TMI 1159
  Income from house property - actual rent determination - application of provision of Section 23(1)(c) - contention of the assessee before the assessing officer was that the building being under construction during the relevant previous year, the same could not be taxed applying the provision of Section 23(1)(c) - Held that:- Any part of the property was vacant then only actual rent had to be taken and not any amount received or receivable on the basis of annual valuation. The decision in the case of RUSSEL PROPERTIES PVT. LTD.(1981 (11) TMI 43 - CALCUTTA High Court) as held Tribunal was correct in law in holding that the service and maintenance charges recovered from the lessees were not only towards the provision of lifts but also for other services rendered by the assessee, which squarely covers the points raised in this appeal and the ratio is in favour of the assessee. We, accordingly, dismiss this appeal.

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• 2018 (3) TMI 1158
  Addition of outstanding amount in the name of sundry creditor - Held that:- The amount in question has been offered to tax in A.Y. 2010-2011. If the said amount is offered for taxation in subsequent year, it would prove the bonafide of the assessee that it was an advance received by the assessee. Since the party disputed the advance given to the assessee, therefore, it has to be taxed, which, according to the assessee, have been offered for taxation in subsequent year. Set aside the orders of the authorities below and restore this issue to the file of the A.O. with a direction to verify this fact of offering the amount in question for taxation in A.Y. 2010-2011 and pass the order accordingly by giving reasonable, sufficient opportunity of being heard to the assessee. This ground of appeal of assessee is allowed for statistical purposes. Addition to capital account as unexplained - Held that:- The matter requires reconsideration at the level of the A.O. Assessee submitted before Ld. CIT(A) that source of the capital introduced was through the bank account of the assessee. Copy of the written submissions is filed in the paper book. No finding have been given by the authorities below and even the assessee has not referred to the bank statement from which the amount is transferred. The orders of the authorities below are set aside and the matter is restored to the file of the A.O. with a direction to re-decide this ground on merit, by giving reasonable, sufficient opportunity of being heard to the assessee. Assessee is directed to file copy of the bank account before A.O, through which, amount is introduced as capital, in the account of the assessee. This ground is allowed for statistical purposes. Disallowance of 10% out of wages claimed and Diwali expenses - Held that:- Explanation of assessee should not have been disbelieved by the A.O. Further, Diwali expenses are paid to the employees as bonus, which is an undisputed fact. Therefore, merely because the turnover was lesser as compared to the earlier year, is no ground to reject the explanation of assessee. Assessee rightly contended that it is an adhoc addition, without pointing-out, as to which, of the expenses are not admissible expenses and are not related wholly and exclusively to the business of the assessee. Therefore, there is no justification to sustain the addition. Accordingly, set aside the orders of the authorities below and delete the entire addition made on account of disallowance out of Wages and Diwali expenses. This ground of assessee is allowed. Undisclosed receipt - Held that:- Assessee correctly submitted that the details submitted in Form 26AS is, statement relating to tax deducted and tax paid. It has no connection with the income generated by the assessee. The assessee also submitted before A.O. that assessee has received TDS Certificates from the parties which apparently have not been examined by the A.O. The assessee denied receipt of any such amount from the 04 parties. A.O. should have examine the concerned parties in order to fix the liability of the assessee. These facts, therefore, show that the matter requires reconsideration at the level of the A.O. Accordingly, set aside the orders of the authorities below and restore this issue to the file of the A.O. with a direction to re-decide this issue by giving reasonable, sufficient opportunity of being heard to the assessee. This ground of the assessee is allowed for statistical purposes. Addition of employees share of PF contribution received - Held that:- Direct the CIT(A) to decide this ground of appeal of the assessee as per law by giving reasonable, sufficient opportunity of being heard to the assessee. This ground of the assessee is allowed for statistical purposes.

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• 2018 (3) TMI 1157
  Unexplained investment u/s. 69 - Held that:- The opening WDV was declared as lesser value in the original return of income. These are genuine explanations assessee has to offer before the assessing authorities. Ld.CIT(A) has deleted the addition merely because these additions were made in the subsequent assessment year, the same cannot be added in this assessment year as unexplained investment, which is, according to us not proper. When assessee claims differently in the revised return of income, it is the duty of assessee to explain properly the source of such investment. Therefore, for the sake of justice, we are remitting back this issue of unexplained investment to the file of AO to verify the sources of investment with a proper opportunity of being heard to the assessee. Disallowance of expenditure - Held that:- AO has made the three additions relating to consultancy charges, cost of medicines and salaries. With regard to consultancy charges, assessee has brought on record the details of expenditure relating to consultancy charges and the differences in the relevant P&L statement itself. As such, there is no additional evidence submitted before the Ld.CIT(A). Therefore, we uphold the findings of Ld.CIT(A) with regard to consultancy charges. Coming to cost of maintenance and salaries, assessee has recognized the pending receipts from Arogya Sree Scheme at the same time recorded the relevant expenditure only in the revised return of income filed. Assessee has submitted relevant information along with confirmation of balance received from suppliers before the CIT(A). This balance confirmation and relevant vouchers for purchase of medicine and salaries due were not submitted before the AO. In our considered view, this needs verification as the same was not submitted before the AO. Salary payable and supplier confirmation are remitted back to the file of AO for verification. Needless to say that assessee may be given proper opportunity of being heard. Ground No. 2 is allowed for statistical purposes. Claim of inflated expenditure relating to chit discount, bank interest and X-ray expenses - Held that:- We have noticed that assessee has disclosed Arogya Sree receipts in the original return of income after adjusting the expenditures. According to assessee, it is relevant to that particular source of income. Whereas at the time of filing revised return of income, it has properly disclosed the total receipts from Arogya Sree and declared the above said expenditure in the P&L A/c as expenditure. Further, relevant information was submitted before AO on 25-02-2013 which was also acknowledged by the AO. Therefore, it is not an additional evidence, it is only a book adjustment which is already in the file of AO. Therefore we are in agreement with the findings of Ld.CIT(A). Moreover, the proceedings before CIT(A) are nothing but extension of assessment proceedings. Accordingly, ground raised by Revenue is dismissed. Consultancy charges to doctors under the head consultancy charges - addition u/s. 40(a)(ia) due to non-deduction of TDS - Held that:- We noticed that assessee has filed evidences to claim that it has paid payment to doctors below Rs. 20,000/- and claim under Arogya Sree Scheme before CIT(A). This information was not submitted before the AO. We noticed that this information needs no further verification. These are handful vouchers which were submitted before Ld.CIT(A) which he has verified and agreed. No need of any further investigation or verification. Accordingly, ground raised by Revenue is dismissed. Disallowance of depreciation - Held that:- We found that the claim of assessee is proper. The claim made by assessee in return of income is relevant and not the calculation as per the depreciation schedule, which may be filed by the assessee before the AO. We find that the assessee has claimed valid depreciation in the return of income as per depreciation schedule. Therefore, ground raised by Revenue is dismissed. Appeal of Revenue is partly allowed for statistical purposes.

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• 2018 (3) TMI 1156
  Income from share transaction - capital gain or busniss income - Held that:- The relevant financial year is 1.4.2007 to 31.3.2008. Before 1.4.2007, the shares purchased by the assessee were of Aravind Chemicals i.e. on 23.3.2007 to 26.3.2007, GVK Power on 30.03.2007, Zee News on 30.03.2007, which were sold on 8.10.2007 to 25.10.2007, on 7.7.2007 and on 7.5.2007 respectively. Thus, the holding period of all the above shares is 213, 99 and 38 respectively. During the relevant financial year, there were repeated purchase of same scrip and sale thereof immediately, almost on daily basis to take advantage of the market fluctuations. Therefore, respectfully following the decisions of the Coordinate Benches in the cases of Geeta Devi Gaggar [2013 (12) TMI 1414 - ITAT HYDERABAD] and Sunitha Devi Gaggar [2012 (10) TMI 1173 - ITAT HYDERABAD], both of whom are also family members of the assessee, we do not find any reason to interfere with the order of the CIT (A). In view of the same, the assessee’s appeal is dismissed.

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• 2018 (3) TMI 1155
  Penalty u/s 271(1)(c) - Eligible for exemption u/s 54F denied - Held that:- Assessee can only understand that the penalty is initiated for non-furnishing of the information on investment made, unless the AO clarifies that the penalty is initiated for making a wrong or fictitious claim or for making an ineligible claim. We find that the penalty can only be levied only if the assessee furnishes inaccurate particulars of income or conceals its income and not for making any inaccurate claim. In the case before us, the assessee has made an inaccurate claim but has furnished all the relevant data before the AO. Therefore, we are inclined to allow the assessee’s appeal both on ground of invalidity of the notice and also on merits. Therefore, the penalty levied by the AO is deleted.- Decided in favour of assessee.

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• 2018 (3) TMI 1154
  Entitlement for deduction u/s 80IA - whether assessee is a developer and not a mere works contractor?- Held that:- We find that like any other entrepreneur who employs his material, plant, machinery, labour etc. in a project and undertakes risk, the assessee was also exposed to a substantial amount of risk by virtue of engaging his establishment in the infrastructure projects. In addition, the assessee was exposed to risk of non-completion of work within time, any damage caused to the works, site etc. increase in prices of materials, labour etc. beyond what the Government had agreed to compensate as per the agreement. It is clear that the assessee was a developer and not a mere works contractor. Thus, it is clearly outside the purview of the Explanation to section 80-IA(13) of the Act. The assessee in the given case was to procure raw material, make arrangements for power, water, plant machinery etc., and conduct all the other activities needed for construction. Now the aforesaid agreement with the NHAI was produced before the Ld. CIT(A) who after perusal of the same allowed the assessee’s appeal. The assessee was not merely providing labour but was providing a complete infrastructure required to support the development of infrastructure facility. It deployed its various resources like material, manpower, machinery etc. In addition it exposed itself to various risks. We hold that the assessee is a developer and not a mere works contractor and accordingly is eligible for deduction u/s 80IA of the Act, which has been rightly held by the CIT-A. - Decided against revenue.

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• 2018 (3) TMI 1153
  Addition on account of machinery hire charges - Held that:- Referring to date wise details of machinery hire charges paid to Philips Electronics India Ltd together with bill details, PAN, gross amount, TDS details and TDS remittance details. As gone through the entire ledger account of Philips Electronics India Ltd for the period 1.4.2009 to 31.3.2010 enclosed in the paper book and we are not able to find the figure disallowed by the AO in the sum of Rs. 3,51,932/-. Even the ld DR was not able to identify the said figure from the said ledger account before us. It is not in dispute that these papers were submitted before the ld AO. CIT-A had rightly deleted the addition in the sum of Rs. 3,51,932/-. Ground No. 1 raised by the revenue is dismissed. Addition on account of commission - Held that:- This is not the case that the assessee as well as the commission agents had not submitted any details so as to give one more opportunity to the revenue for making fresh enquiry. The net profit shown by the assessee during this year had increased substantially when compared to that in the earlier year. Since the services rendered by the commission agents had been proved conclusively in the instant case, the reliance placed on the decision in the case of Vishnu Agencies (P) Ltd vs CIT (1978 (8) TMI 66 - CALCUTTA High Court) does not come to the rescue of the revenue, as in that case, the services rendered were not proved by the assessee. Hence the same is factually distinguishable. The fact of rendering of services by these commission agents to the assessee has been proved beyond doubt and accordingly the assessee is squarely eligible for deduction of commission expenditure u/s 37. - Decided in favour of assessee.

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• Customs

• 2018 (3) TMI 1150
  Recovery of duty - import of Low Ash Matellurgical Coke claiming the benefit of certain advance licences allegedly purchased by the respondent Company - only submission made by the learned counsel for the appellants is that when such an application under Section 130A seeking a reference is made, the High Court is mandatorily obliged to call for a statement from the Tribunal before deciding the application - Held that: - We do not find anything in the text of Section 130A which implies that the High Court is mandatorily required to call for a statement from the Tribunal in every case, where a reference is made. We say so because of the language of SubSection 4 which opens with an ‘if’ - having regard to the fact that it is a question of law, we deem it appropriate that the matters be decided by a larger Bench of appropriate strength. Matter placed before Hon’ble the Chief Justice of India for appropriate further course of action.

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• 2018 (3) TMI 1149
  Withdrawal of 'No Objection Certificate' granted to the petitioner for import of 2000 MTs of "Pigeon Peas from Mozambique" - withdrawal on the ground that subsequently the Government of Mozambique informed the Government of India mandating only ICM (Institute de Cereasi de Mozambique) to be the sole designated agency responsible for regulating export of pulses to India under Memorandum of Understanding. Held that: - On a perusal of the trade notice, it could be seen that nowhere it has been mentioned that service would be only by ICM. In the impugned communication, it has been stated that the decision taken by the Government of Mozambique much after the sale contract dated 10.10.2017 was entered into for supply of pigeon peas and after issuance of the No Objection Certificate by the 1st respondent vide proceedings dated 28.11.2017 - Admittedly, the decision of Government of Mozambique stating that the certification would be only by ICM is a subsequent decision. When there is no mention in the impugned order as to the withdrawal of the No Objection Certificates already issued in favour of the importers, there is no necessity for withdrawing the existing No Objection Certificates issued in favour of the importers. The respondents could have very well advised the petitioner to approach the Government of Mozambique for getting suitable clearance based on the No Objection Certificates already issued in their favour - When the 1st respondent had issued the No Objection Certificate in favour of the petitioner, they cannot withdraw the No Objection Certificate merely because the Government of Mozambique had taken a subsequent decision asking the importers to get No Objection Certificates from ICM. Petition allowed.

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• 2018 (3) TMI 1148
  Classification of imported goods - Crude Palm Oil of Edible Grade in bulk - classification under Chapter Heading 15111000 of the Customs Tariff Act or otherwise - Whether the N/N. 46/2015-Cus dated 17.09.2015 is applicable to the present facts of the case? - Held that: - the amended Act 28 of 2016 has come into force with effect from 14.05.2016. It is trite law that any amendment to the Statute is prospective unless it i s explicitly made retrospective. It is not disputed by the Revenue that this amendment is prospective. Such being the position, the provisions of Section 25(4) as it stood prior to 14.05.2016 shall be made applicable to the facts on hand. If so, the two conditions contemplated under Section 25(4) of the Act has to be satisfied for the notification issued under Section 25(1) of the Act to come into force. Hon'ble Apex Court in the case of PARAM INDUSTRIES LTD [2015 (6) TMI 732 - SUPREME COURT], whereby the Hon'ble Apex Court while considering the identical issue as observed that two conditions are mandatory for bringing the notification under Section 25(1) of the Act into force and make it effective viz., (1). Notification should be published in the official gazette; and (2). It should be offered for sale on the date of its issue by Directorate of Publicity and Public Relations of the Board, New Delhi - it is held that notification may eve n though published on the date when the copies were cleared, it was not justified and lawful on the part of the department to claim the differential amount of duty on the basis of the said notification. Demand not justified - No claim of differential amount of duty can be made on the basis of the notification No.46/2015-Cus dated 17.09.2015, and the same deserves to be set aside - petition allowed.

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• 2018 (3) TMI 1147
  Provisional release of goods - writ court has failed to appreciate the law that when there is no prohibition for seizure of the provisionally released goods under Section 110-A of the Customs Act, 1962, there was a flagrant violation of the statutory provisions of the Export and Import regulations read with Customs Act - Held that: - Writ court failed to appreciate that DRI, CZU, on re-examining the consignment, had arrived at revised values of the offending goods and communicated the same to the concerned Commissionerate, so that the terms of provisional release would be suitably modified by them, so as to reflect the factual position in respect of the quantity and value of the seized goods - there shall be a provisional release of goods, mentioned in Annexure No.II, dated 14.09.2017 of the Deputy Director, Government of India, Ministry of Finance, Department of Revenue, Directorate of Revenue Intelligence Nodal Unit, Chennai, addressed to the Commissioner of Customs, Chennai-IV, Customs House, Chennai, on payment of 30% of the differential duty, on the provisional assessed value of Rs. 2,80,46,001/- - Apart from the above, the respondent shall submit a personal bond on the total provisionally assessed value, as per the Annexure No.II. Appeal disposed off.

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• 2018 (3) TMI 1146
  Revocation of Customs Duty Exemption Certificate (CDEC) - non-compliance with the conditions of the N/N. 64/88-Cus. dated 01.03.1988 - petitioner is a charitable institution - Held that: - The said Authority has neither considered the fact that the petitioner-Institution is a Charitable Hospital nor it has considered the fact that the equipments in question were for a limited purpose and limited period. The N/N. 64/88-Cus. dated 01.03.1988 itself does not stipulate any consequence of loss of exemption in this kind of special circumstances - mere reproduction of conditions of N/N. 64/88-Cus. dated 01.03.1988 by the said Authority in the impugned order and holding that the petitioner having failed to produce the relevant records, which had been destroyed in the flood in the basement area, where such records were kept, was not enough to deny the exemption of customs duty and impose customs duty on the petitioner by withdrawing the CDEC in question. Since in the present case only one of the Authorities viz., Deputy Director General (Medical) passed the order revoking the CDEC, but the Customs Authority has not passed any order before whom the actual factual status was placed, this Court is of the opinion that the matter deserves to be sent back to these Authorities to re-decide the claim of the petitioner in the light of the aforesaid. Petition allowed by way of remand.

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• 2018 (3) TMI 1145
  Principles of Natural Justice - fiscal penalty - merging of company - sick company - Held that: - Not only the relevant present financial position of the amalgamated company EL is before this Court nor it appears to have been examined by any competent authority in the respondent – department or the respondent - DGFT himself. The waiver of interest and penalty at the time when the BIFR Scheme was sanctioned in favour of the erstwhile company KMBL, the present impugned fiscal penalty was not even asked to be waived - It is not even explained before the Court how the present petitioner which stepped into the shoes of KMBL after its merger with EL, the present petitioner EL can revive the cause after KMBL had withdrawn the challenge by withdrawal of the writ petition before the Division Bench of this Court without reserving any such liberty to reagitate the issue. The impugned order, Annexure–A, dated 25.5.2006 cannot be said to be without jurisdiction or passed in breach of principles of natural justice and therefore, the said order does not require any interference - petition dismissed - decided against petitioner.

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• 2018 (3) TMI 1144
  Penalties - smuggling - illegal export of Red Sanders, instead of the declared goods as Polished Marble Slabs - Held that: - the allegations against the appellants are mainly concerned with failure to discharge their duties and responsibilities mandated under various Regulations for dealing with goods in legalized manner. Apparently, there is no material evidence available in records to prove that the appellants were either involved in smuggling of the goods, or encouraged and supported the wrong doer in doing the wrongful act in attempting to export the goods - penal provisions cannot be invoked for imposition of penalties under Section 114 and 114AA of the Act. Penalties set aside - appeal allowed - decided in favor of appellant.

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• 2018 (3) TMI 1143
  Refund claim - duty paid under protest - time limitation - Held that: - there cannot be any doubt that the clearances related to the 7 Bills of Entry relating to Sl.No.12 to 18 of the list have also to be treated as cleared under protest - In any case, as pointed out by the Ld. Advocate, the original authority himself has noted that all these claims have been made within the prescribed period of limitation - denial of refund do not sustain - appeal allowed - decided in favor of appellant.

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• 2018 (3) TMI 1142
  Valuation - Panasound music system - interpretation of statute - Rule 2(a) of Rules of Interpretation - Held that: - firstly, the product Panasound Music System was not imported in assembled form. Secondly whatever parts were imported in CKD form, the parts such as CD/VCD mechanism and top cover were not in the consignment. Therefore Rule 2(a) of Rules of Interpretation is not applicable Secondly whatever parts were imported in CKD form, the parts such as CD/VCD mechanism and top cover were not in the consignment. Therefore Rule 2(a) of Rules of Interpretation is not applicable. Secondly, the provisions of Section 4A can only apply when the goods is in retail pack. In the present case the goods imported is in CKD parts and it is not assembled and imported in retail pack and the same is not capable of being sold as such. Appeal allowed - decided in favor of appellant.

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• 2018 (3) TMI 1141
  Principles of natural justice - the order has been passed by the adjudicating authority without hearing the Appellants - Held that: - the personal hearing notice was displayed on the Notice board of the New Customs House. However it is not appearing as to whether the Appellant were sent the letters for personal hearing or not - it was incumbent upon the department to send personal hearing notices before displaying it to the notice board of the customs house - matter remanded to the adjudicating authority to pass order on merits after grant of personal hearing and consider the matter afresh - appeal allowed by way of remand.

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• 2018 (3) TMI 1140
  Penalty u/s 114(iii) of Customs Act, 1962 - fraud of illegal DEPB and rebate - Held that: - it is established that the appellant have not obtained the authorization from the exporters and also not verified the signatures of the Authorised persons of the documents and submitted the shipping bills intentionally to facilitate exports of the consignments. Therefore, there is omission on the part of the appellant which led to the fraud of illegal DEPB and rebate - the appellant was rightly liable for penalty u/s 114 (iii) of the CA, 1962 - appeal allowed in part.

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• 2018 (3) TMI 1139
  Condonation of delay in filing appeal - the appeal against bill of entry dated 21/01/2009 is beyond the period of 60 days - time limitation - Held that: - the Commissioner (Appeals) when found that the appeal filed belatedly has breached the principles of natural justice. He should have given an opportunity to appellant to explain about the delay in filing the appeal which Commissioner (Appeals) failed to do so - from the records submitted by the appellant in this appeal, it is apparent that the appeal was filed in time. However, these records were neither available to the Commissioner (Appeals) nor he has verified the material. Appeal is disposed off by way of remand to the Commissioner (Appeals) for deciding the appeal before him on the point of limitation on merits.

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• 2018 (3) TMI 1138
  Cross-examination of the witnesses - Principles of natural justice - Held that: - the Learned Commissioner did not allow cross-examination of the witnesses as requested for by the appellant. In similar case, we remanded the matter to the adjudicating authority for passing fresh order after allowing the cross-examination - appeal allowed by way of remand.

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• Corporate Laws

• 2018 (3) TMI 1137
  Disqualifications for appointment of director - constitutional validity of provision U/s.164(2)- Held that:- The operation of law cannot be stalled, diverted or made non-operative and the petitioners cannot be allowed to continue as Directors on the Board of Directors in defaulting company or even other companies and the illegality in the form of non-compliance on the part of the company in which the petitioners were admittedly the Directors, cannot be perpetuated by invoking the extraordinary jurisdiction of this Court. As far as the question of constitutional validity of provision U/s.164(2) of the Act is concerned, this Court does not find any illegality, unconstitutionality or ultra vires in the provisions of Section 164(2)(a) or Section 167 of the Act. Merely because the provisions may operate harshly against the Directors of the defaulting company, it does not render a provision enacted with an avowed purpose of ensuring the due compliance of the provisions of the Act, foundationless or ultra vires.The writ petitions are premature and without any foundation

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• FEMA

• 2018 (3) TMI 1136
  Calling of witness Mr. Chokshi whose cross examination was already conducted on 20/09/2017 was rejected - Held that:- It is the interest of justice, equity and fairplay, let Mt. Chokshi be further cross-examined on this aspect. The argument of the respondent has no forced that the appellant has covered entire case on 20.09.2017 if when the question of 41-45 were put to Mr. Chokshi. Thus, the findings given in the impugned orders are contrary to facts and law and are not sustainable. The prayer for recall of witness ought to have been allowed in view of peculiar facts of the matter. The appeal is liable to be allowed. The impugned order is set-aside.

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• Service Tax

• 2018 (3) TMI 1133
  Refund claim - Whether the Central Excise and Service Tax Appellate Tribunal is justified in accepting the appeal preferred by the assessee irrespective of the fact that the conditions referred in the N/N. 41/2007-ST dated 06.10.2007 and 451/2007-ST dated 06.10.2007 have not been adhered? Held that: - considering the fact that the case has been remitted at the request of learned representative of the Department itself, therefore, the substantial questions of law, which have been framed in these appeals while admitting the appeals, are not required to be answered because the matter has been remitted to the original adjudicating authority for deciding the case afresh, therefore, obviously now it is the duty of the adjudicating authority to consider the said notification. The matter is remitted by the Customs/Excise & Service Tax Appellate Tribunal, New Delhi for decision afresh.

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• 2018 (3) TMI 1132
  Woks contract services - period from 2009-10 to 2010-11 for which SCN dated 19/10/2012 was issued - extended period of limitation - Held that: - the earlier SCN dated 07/04/2010 was issued invoking the suppression clause under Section 73 of the Act covering the period 2004-05 to 2008-09 - the crux of the issue raised in the present proceedings is no different from that in the earlier proceedings. All the issues remain the same. Even the respective contracts, received by the appellant were from the same organizations for similar kind of construction work - the Department is not justified in invoking the suppression clause once again in the second show cause notice. The demand raised in the SCN dated 19/10/2012, on the same grounds as the earlier SCN dated 07/04/2010 has to be restricted to the normal time limit. Matter remanded to the adjudicating authority for de novo decision on merit for the period falling within the normal time limit - appeal allowed by way of remand.

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• 2018 (3) TMI 1131
  Extended period of limitation - suppression of facts - CENVAT credit - GTA Service - Held that: - from the ST-3 Returns filed by appellant, it is found that nowhere it had stated that input services with regard to disputed GTA service was received by them during the relevant period for the trading activities. Therefore, the Department was not aware about taking of irregular credit by the appellant - Since, the Department acquired the knowledge about taking of irregular credit during the course of audit of books of accounts, and thereafter the SCN was issued within one year from the relevant date, the same is not barred by limitation of time - appeal dismissed.

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• 2018 (3) TMI 1130
  CENVAT credit - area based exemption - before start of production, the appellant filed another declaration on 29.06.2007, to the effect that, the appellant have no intention to manufacture any goods but want to let out their premises on lease for further use in manufacturing of intended goods - Held that: - The similar issue in the case of S.T. Cottex Exports Pvt. Ltd. [2011 (1) TMI 491 - PUNJAB & HARYANA HIGH COURT], wherein the assessee initially started manufacturing exempted goods. But in the same year, they started manufacturing dutiable goods also. In that case, the Hon’ble High Court of Punjab and Haryana held that the assessee is entitled to avail cenvat credit. Extended period of limitation - Held that: - As the show cause notice has been issued by invoking extended period of limitation, the extended period of limitation is not applicable. Appeal allowed in part.

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• 2018 (3) TMI 1129
  CENVAT credit - inputs/capital goods used for setting up of towers and pre-fabricated buildings - scope of SCN - Held that: - as the said provisions under Rule 10 have not invoked in the show-cause notice. Therefore, findings of the learned adjudicating authority in the impugned order are contrary to the allegation in the show-cause notice - the adjudicating authority has gone beyond the show-cause notice, which is not permissible on that count also demand is not sustainable. Appeal allowed - decided in favor of appellant.

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• 2018 (3) TMI 1128
  Demand of differential duty - it was alleged that appellant has not provided CA certificate or records for verification whether there was factual error in entering the correct data in ST -3 return or not - Held that: - In the impugned order learned Commissioner (Appeals) has recorded a finding that appellant has not provided any documents in support of their claim. The impugned order was passed on 31.7.2017 whereas all the relevant documents had been produced before the Commissioner (Appeals) on 5.7.2017 - As appellant has filed the relevant documents for verification or examination by the learned Commissioner (Appeals) on 5.7.17 whereas the impugned order has been passed thereafter after 26 days which shows that the learned Commissioner (Appeals) did not bother to consider the documents filed by the appellant which is his duty and bound to do so - the impugned order deserves no merits, hence, same is to be set aside. Demand of interest for the intervening period from the date of presentation of cheque till its realization - Held that: - as per Rule 6 (2A) of the Service Tax Rules, 1994, the date of presentation of cheque is the date of payment of Service tax - date of presentation of cheque is the date of payment of service tax. In these circumstances, demand of interest is not sustainable against the appellant. As learned Commissioner (Appeals) has not taken into consideration the documents filed by the appellant, in that circumstances, the matter needs examination at the end of learned Commissioner (Appeals) to examine the documents - appeal allowed by way of remand.

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• 2018 (3) TMI 1127
  CENVAT credit - input/input service/capital goods used for constructing the mall - denial on the ground that the mall is a immoveable property - Held that: - the CENVAT credit is admissible in respect of input service and capital goods used for construction of mall against renting of mall on which service tax was paid - in City Centre Mall Nashik Pvt. Ltd. [2017 (11) TMI 301 - CESTAT MUMBAI] wherein the identical facts and the law point was involved, where the cenvat credit in respect of the inputs used for construction of mall was allowed. The appellant have shown the entire credit as opening balance of the April 2011 whereas in the month of March 2011 the closing balance was nil - whether the appellant is entitled for the credit in respect of inputs, input service and capital goods received and used prior to 1.4.2011 for construction of mall? - Held that: - it is only a clerical error on the part of the appellant in making entry of CENVAT credit which was otherwise admissible to them. Even if the entry of CENVAT credit on individual services are made on the date of receipt or the consolidated amount for the said credit was shown as opening balance of credit of April 2011 so long there is no dispute about the amount of the credit. CENVAT Credit cannot be denied only for such clerical error. The appellant is not entitled for cenvat credit, in respect of input however they are entitled for cenvat credit in respect of input service and capital goods, accordingly the adjudicating authority may re quantify the demand - appeal allowed by way of remand.

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• 2018 (3) TMI 1126
  Supply of tangible goods service for use - principles of Natural Justice - Held that: - the very crucial issues such as equipments are used by the appellant on their own, the nature of transaction such as supply of water by water tank, the SSI exemption Notification No.6/2005-ST dated 1.3.2005 were not considered either by the original authority or by the Commissioner (Appeals). Therefore, on these aspects, the matter needs to be reconsidered. Time Limitation - Held that: - there is suppression of fact on the part of the appellant - extended period rightly invoked. Appeal allowed by way of remand.

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• Central Excise

• 2018 (3) TMI 1186
  Liability of duty - Henna Powder - Held that: - the Ministry of Finance issue N/N. 11/2017-CE(NT) dated 24.04.2017 under Section 11C of the Central Excise Act, 1944 exempting Henna Powder and Paste falling under Chapter 33 for the period 01.01.2007 to 01.03.2013 - appeal allowed - decided in favor of appellant.

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• 2018 (3) TMI 1125
  Extended period of limitation - suppression of facts - the case of the Revenue is that the appellant is clearing stearic acid in the guise of HRBP flakes and not paying duty - Held that: - When the fact of manufacturing and clearance of HRBO was in the knowledge of the department during the relevant time, therefore, no allegation of suppression cannot be alleged against the appellant and the extended period of limitation is not invokable. As the test report of CRCL states that the samples are having characteristics of Hydrogenated material and the stearic acid can be obtained by splitting but not by Hydrogenation, the samples drawn cannot be said of stearic acid. On the basis of the test report and opinion, it cannot be concluded that the samples were drawn are of stearic acid. As these reports are not conclusive, the benefit of doubt goes in favour of the appellants. As the Revenue has not shown any positive evidence to corroborate the statements of the buyers/suppliers to show that the appellants were clearing stearic acid in the guise of HRBO flakes. In that circumstance, the allegations made against the appellants are not sustainable. Appeal allowed - decided in favor of appellant.

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• 2018 (3) TMI 1124
  CENVAT credit - CVD paid by the appellant on imported coal - sole reason to deny Cenvat credit to the appellant is that the authorities below has taken into consideration N/N. 12/2012-CE dated 17.3.2012 - Held that: - the authorities below have not considering the Notification No. 12/2012-Cus. dated 17.3.2012. If same is taken into consideration and duty paid under the said notification, there is no bar for availment of Cenvat credit in terms of Rule 3(7) of Cenvat Credit Rules, 2004 - authorities below has applied wrong provision to deny Cenvat credit to the appellant. Therefore, Cenvat credit cannot be denied to the appellant. Extended period of limitation - Held that: - As the Revenue itself has applied wrong provisions of law, therefore, the extended period of limitation is not invokable. Appeal allowed - decided in favor of appellant.

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• 2018 (3) TMI 1123
  CENVAT credit - proportionate credit on account of appellant is engaged in trading activity - Held that: - the appellant is nowhere engaged in the activity of trading. In fact the appellant is only a service provider as it has been held that appellant is a service provider. In that circumstances, when it has been held that appellant is not engaged any trading activity, the SCN was not required to be issued to the appellant - appeal allowed - decided in favor of appellant.

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• 2018 (3) TMI 1122
  Valuation - stock transfer - As per the Revenue the goods were being cleared on value lower than that at which they were being sold by the C& F Agents - time limitation - Held that: - as regards limitation, there is a clear finding by the Tribunal that there was no malafide or suppression on the part of the assessee. Inasmuch as the limitation aspect already stand decided by the Tribunal, which order of the Tribunal was accepted by the department and no appeal was filed their against, Revenue cannot held to be aggrieved with the impugned order of Commissioner (Appeals) granting limitation benefit - appeal dismissed - decided against Revenue.

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• 2018 (3) TMI 1121
  Clandestine removal - X-Ray machines - case of appellant is that the matter should be remanded for reconsideration of overall matter as there are serious inconsistencies in the facts and the findings given by the Ld. Commissioner in the impugned order - Held that: - there are indeed inconsistency between the finding given by the Ld. Commissioner in the impugned order and the facts narrated by the appellant, which is arising from the records seized by the investigation at the time of investigation - matter needs remand for reconsideration of various aspects such as quantity of clearance of X-Ray machines, valuation, eligibility of SSI exemption etc. - appeal allowed by way of remand.

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• 2018 (3) TMI 1120
  Refund of excess duty paid - unjust enrichment - Held that: - though the appellant had filed refund claim but the same was withdrawn and subsequently no further refund claim was filed. In this position when no refund claim is pending with the department the question of sanctioning refund claim does not arise - appeal dismissed - decided against appellant.

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• 2018 (3) TMI 1119
  Refund claim - duty paid under protest - Held that: - inasmuch as the dispute relates to the factual position, which can only be verified at the level of the original adjudicating authority, we deem it fit to set aside the impugned order and remand the matter to the original adjudicating authority, who would verify the fact of payment of duty under protest by M/s Godrej & Boyce or alternatively the assessment being provisional - appeal allowed by way of remand.

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• 2018 (3) TMI 1118
  Penalty - Valuation - amortized cost of the Dies/Moulds being provided by the customer for whom the appellant is doing the job-work - Held that: - as regards the absence of any mala fide has been arrived at by him, in which case, we agree with the learned Counsel that no penalty is required to be imposed - penalty of Rs. 5000/- imposed by the original adjudicating authority was not challenged by the appellant, and as such the said penalty would remain - appeal allowed in part.

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• 2018 (3) TMI 1117
  Principles of natural justice - Remission of duty - Held that: - The issue raised being one of denial of principles of natural justice it would be appropriate for the matter to be considered afresh by the original authority after giving an opportunity to the appellant to be heard - appeal allwoed by way of remand.

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• 2018 (3) TMI 1116
  Benefit of cum-duty price - Held that: - though the modification application was rejected, but the appellants were directed to raise the above issue before the original adjudicating authority. The appellant having raised the issue, it was obligatory on the part of the original adjudicating authority to give his finding on the same and to re-quantify the demand accordingly - matter remanded to the original adjudicating authority for proper adjudication after considering the appellant’s plea to allow the cum duty benefit - appeal allowed by wya of remand.

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• 2018 (3) TMI 1115
  Penalty - Section 11AC(5) of the Central Excise Act - Held that: - M/s MITC Rolling Mills have admittedly deposited the entire duty and proceedings against them stand concluded in terms of Section 11AC(5) of Central Excise Act and nothing remains - Filing of appeal against the said respondent cannot be appreciated and the Revenue,s appeal is to be rejected and dismissed on such ground itself - the Revenue,s grievance on non-imposition of penalties on the other co-noticees cannot be appreciated in terms of the various decisions of the Tribunal - appeal dismissed - decided against Revenue.

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• 2018 (3) TMI 1114
  Penalty u/r 25 or 27 of CER, 2002 - default in monthly payment of duty in terms of Rule 8(3A) of CER 2002 - Held that: - this Tribunal time and again held that in case of default in monthly payment of duty in terms of Rule 8(3A) of Central Excise Rules, 2002, it is not the case of clandestine removal or intent to evade payment of duty therefore penalty under Section 11AC or Rule 25 is not imposable - appellant’s act of delay in payment of duty does not invite invocation of Section 11AC or Rule 25. Penalty u/r 27 rightly invoked - appeal dismissed - decided against Revenue.

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• 2018 (3) TMI 1113
  CENVAT credit - manufacture of plastic closure (caps for plastic bottle and cans etc) - The case of the Department is that these goods are not input but are finished goods hence are not used in or in relation to the manufacture of final product but were traded as such in the open market - Rule 3(1) and 2(k)(l) of Cenvat Credit Rules - Held that: - appellant have availed CENVAT credit in respect of plastic closure imported by them and the said goods were sold after testing and inspection - If excise duty was paid on such goods at the time of clearance no demand exist. Though the CENVAT Credit Rules, 2004 provided for eligibility of Cenvat credit in respect of input used in or in relation to the manufacture of final product but Rule 16 also provides Cenvat credit even in respect of duty paid finished goods subject to condition that the said finished goods on which Cenvat credit was availed should be cleared on payment of excise duty i.e. in case of the said finished goods undergone manufacturing process in terms of Section 2(F) Central Excise Act, assesse is required to pay duty on the transaction value, and in other case where the goods does not undergo process which amounts to manufacture, then excise duty equal to Cenvat credit availed on such goods should be paid - In the present case as per the claim of the appellant which was not disputed by the lower authorities that appellant have paid the excise duty at the time of sale of such imported plastic closure. It is found that appellant have paid duty equivalent to the Cenvat credit availed, no further demand would exist. Both the lower authorities have not verified the details of duty payments on the sale of the bought out goods on which credit was taken therefore this aspect needs to be verified - appeal allowed by way of remand.

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• 2018 (3) TMI 1112
  Refund claim - the respondent’s Chinchwad unit has been transferred to the present address of the respondent. The appellant paid the service tax on behalf of the Chinchwad unit on reverse charge basis, which is now sought as refund - Held that: - any CENVAT credit lying unutilized with the transferor unit can be transferred to transferee unit subject to condition that input attributable on which credit was availed has also been transferred to the new location - As per the facts of the case, there is no dispute that the entire factory of Chinchwad has been transferred to the present location i.e. Khed. Therefore, whatever credit is available to Chinchwad shall be allowed to be transferred to the new location in terms of Rule 10. Since the respondent has complied with the provisions of Rule 10, the Commissioner (Appeals) rightly allowed refund of service tax paid by the respondent on behalf of Chinchwad unit as cenvat credit in the books of the respondent. Appeal dismissed - decided against Revenue.

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• 2018 (3) TMI 1111
  CENVAT credit - inputs - The case of the department is that during certain period, the appellant has not manufactured and cleared prototype vehicle whereas they kept on availing the CENVAT credit - Held that: - The appellant admittedly cleared the input as such on payment of duty. Only for the reason that there is a long interval in the manufacture of prototype vehicle, the manufacturer will not cease to be a manufacturer. Therefore, it cannot be said that the appellant is a trading unit and not a manufacturing unit. Even if the manufacturing is not undertaken but the unit is registered, the appellant is entitled to avail the cenvat credit in terms of Rule 16 of the Central Excise Rules, 2002. The only requirement is as and when the said input is cleared, excise duty equal to cenvat credit is required to be discharged. Appeal allowed - decided in favor of appellant.

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• 2018 (3) TMI 1110
  CENVAT credit - fake invoices - case of the department is that the appellant has availed fraudulent cenvat credit without receipt of inputs only on the invoices issued by M/s. Parmeshwari Steels, Mumbai - Held that: - it is clear that the appellant has not received the input whereas they have taken credit only on the invoices - the case of the department is established beyond any doubt - appeal dismissed - decided against appellant.

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• 2018 (3) TMI 1109
  Penalty - short payment of duty - non-inclusion of notional profit of 10% in the value of the finished goods cleared by them - Held that: - This issue involves interpretation and various judgments were passed on this issue. Even the legislators also subsequently amended the rule giving a deeming fiction to the trading activity as exempted service. Therefore the issue was not free from doubt. Despite this, the appellant paid the amount - there is no mala fide intention on the part of the appellant for invoking the provisions of Section 11AC - penalty setaside - appeal allowed - decided in favor of appellant.

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• 2018 (3) TMI 1108
  Penalty u/r 15(2) of CCR 2004 - Held that: - The ingredients of rule 15(2), that are clearly enumerated therein implies that penalty is liable to be imposed only in those conditions and none other - It is clear that rule 6(3) does not envisage a change in the method of compliance during the financial year. When the act of the appellant is not recognised in law, there is no ground for alleging non-disclosure of that fact of change is suppression - penalty set aside - appeal allowed - decided in favor of appellant.

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• 2018 (3) TMI 1107
  CENVAT credit - goods were directly sent to the CHA and subsequently CENVAT credit was availed without receipt of the input in the factory - Held that: - the input on which CENVAT credit was availed by the appellant have been admittedly exported under bond/letter of undertaking, CENVAT credit rules provides CENVAT credit in respect of inputs removed under bond. Merely because inputs have not been received in the factory CENVAT credit cannot be denied - appeal allowed - decided in favor of appellant.

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• 2018 (3) TMI 1106
  CENVAT credit - inputs/input services availed in common for manufacture of dutiable and exempted goods - non-maintenance of separate records - Held that: - There is no allegation in the show cause notice that the reversal was less than that attributable to credit used in the manufacture of exempted goods. To render the process of adjudication to be complete, it is necessary that the books of accounts of the appellant be verified to ascertain the availment of CENVAT credit on inputs used in common for exempted and dutiable goods - appeal allowed by way of remand.

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• CST, VAT & Sales Tax

• 2018 (3) TMI 1105
  Principles of natural justice - validity of assessment order - Held that: - Demand Notice being on the ground of violation of principles of natural justice and not having been examined against that touchstone in writ petition, it appears just and expedient that such issues be examined at the first instance whether the subject Assessment Order and Demand Notice could be assailed on such grounds in the writ petition - the writ petitions are restored for consideration by the learned Single Judge in accordance with law.

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• 2018 (3) TMI 1104
  Liability under Section 3(4) of TNGST Act - Form XVII - According to the Revenue, subsequently, it was found that the respondent had purchased goods against Form XVII declarations and used the same, in the manufacture of goods, sold to a place outside the State - Held that: - identical issue decided in the decision of this Court in Tube Investment of India Ltd., v. State of Tamil Nadu [2010 (10) TMI 938 - MADRAS HIGH COURT], where it was held that Section 3(4) of the Act will have no application since situs of the export sales of the petitioners for the purpose of said Section was the State of Tamilnadu and by virtue of the said factual position, the applicability of Section 3(4) stands excluded for the exigibility of tax - revision dismissed - decided against Revenue.

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• 2018 (3) TMI 1103
  Tax under the compounding scheme - The notice was on the ground that there could be no compounding applied for, for ice-creams which is not a cooked food. Held that: - a penalty has been imposed along with the regular assessment made, which is not possible. The assessee made a bonafide attempt to be included under the compounding scheme on the reasonable presumption that “ice-creams” would also be “cooked food”. A vigilant officer could have rejected the application. The department was not vigilant but was also lethargic in so far as permitting the assessee to make remittances under the scheme for the subsequent year also when already notice was issued for cancellation of the compounding in the previous year. There can be no contumacious conduct found on the part of the asessee. The assessing officer would issue fresh notice for assessment, and the assessee would be entitled to produce the purchase invoices for the two years, which shall be taken into account and the input tax credit allowed to the extent proved by invoices - appeal disposed off.

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• 2018 (3) TMI 1102
  Kara Samadhana Scheme of 2017 - Penalty - Held that: - the intention of the Revenue is to extend the benefit in respect of all kinds of penalties. Therefore, in our view, the expression ‘all kinds of penalties’ must be construed to include penalty imposed for delayed filing also. Therefore, it must be held as penalty ‘till the date of filing’. Filing of return must be held as a process related to assessment. On this premise also, penalty imposed for delayed filing of returns must also be eligible for consideration under the Scheme. Therefore, any other interpretation would be incongruous. Appeal dismissed - decided against appellant.

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• Indian Laws

• 2018 (3) TMI 1135
  Clarification of the order dated 09.02.2018 - Held that: - (i) The appointment of the Chairpersons of the Tribunals shall be made by the Central Government in consultation with the Chief Justice of India; (ii) The Search-cum-Selection Committee for the appointment of Judicial Members of the Central Administrative Tribunal shall also proceed with the selection of Administrative Members; (iii) The tenure of the Chairperson and the Judicial/Administrative/Expert/Technical Members of all the Tribunals shall be for a period of five years or the maximum age that was fixed/determined under the old Acts and Rules; (iv) The Committee that has been constituted for selection of the Members of the Central Government Industrial Tribunal shall proceed as per our previous order as it has already proceeded with its work - application disposed off.

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• 2018 (3) TMI 1134
  Dishonor of Cheque - maintainability of complaint u/s 138 of the N.I. Act - it was contended that the drawer and drawee of the cheques being one and the same, the Branch Manager of the Bank cannot maintain the complaint - whether the Bank was entitled for encashment of Cheque since the drawer and drawee were one and the same? Held that: - The Supreme Court in similar nature of case in Punjab & Sind Bank Vs. Vinkar Sahakari Bank Ltd. [2001 (9) TMI 993 - SUPREME COURT OF INDIA], held that so long as the instrument is in possession of a 'holder in due course' such instrument would be operative as a bill of exchange even if the drawer and drawee are happened to be the same person or banking institution. The orders passed by the Courts below cannot be held to be illegal and it shall always be open to the petitioners to rebut the presumption during the course of evidence that the Bank was not a 'holder in due course' and it was not for any consideration of liquidation of the loan. Prima facie, the complaint having been registered on the basis of section 145 of the N.I. Act upon the affidavit, the same cannot be quashed at the threshold and the petitioners are liable to face the trial of complaint under Section 138 of the N.I. Act. Petition dismissed.

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