TMI Tax Updates - e-Newsletter
March 25, 2015

Case Laws in this Newsletter:

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

TMI SMS

• Re-export of capital goods - removal as such - reversal of cenvat credit to be treated as payment of duty - Claim of Rebate allowed - CGOVT

  ---

• Sale transaction concludes in the State of AP - mere transport of goods from AP to Maharashtra would not result in an inter-State sale - SC

  ---

Articles

• REPORTING FRAUDS BY AUDITORS

News

• Corrigendum to the Press Release ‘Issuance Calendar for Marketable Dated Securities’ dated 23rd March, 2015.

  ---

• RBI Reference Rate for US $

  ---

• Calendar for Auction of Government of India Treasury Bills

  ---

• Issuance Calendar for Marketable Dated Securities for April 2015-September 2015

  ---

Notifications

Income Tax

• 25/2015 - dated 23-3-2015 - IT
  Agreement for Avoidance of double taxation and prevention of fiscal evasion with foreign countries - - Czechoslovak Socialist Republic - Clarification on Applicability of Agreement Dated 25-5-1987 to Slovak Republic

  ---

Circulars / Instructions / Orders

Companies Law

• F.NO.10/22/2015-CLB - dated 20-3-2015
  Modification of Order [F. No. 10/43/2005-CLB], Dated 29-1-2015
• F. NO. 10/43/2005-CLB - dated 29-1-2015
  Constitution of board of company law administration for discharging the Board's powers and functions u/s 10E of the Companies Act, 1956, read with Regulation 4 of the company law board regulations, 1991

Highlights / Catch Notes

Income Tax

• Disallowance u/s 80IC - allegation that assessee has inflated the receipts in Baddi unit - In the absence of establishing such relationship between two units assessing officer has no justification to tinker with the computation of 80IC claim on assumptions and presumptions. - AT
  Visit to Get Source

  ---

• Deemed dividend u/s 2(22)(e) - a person who is shareholder in the company is partner in the firm - it could not be legitimately held that amount retained by the firm was for the assessee’s benefit - no addition - HC
  Visit to Get Source

  ---

• TDS while paying the amount under the award of the Motor Accident Claims Tribunal - There being clear provision under the Income Tax Act with regard to deduction of tax, it was not open to the District Judge to have held to the contrary - HC
  Visit to Get Source

  ---

• Refund on the basis of forged TDS certificates - criminal prosecution - respondent-accused, who was an Advocate, had just submitted the income tax return on behalf of main assessee, cannot possibly be and indeed could not legally be held liable for criminal prosecution for procuring the documents by main assessee in order to attract the penal provisions of offences in question - HC
  Visit to Get Source

  ---

• Deduction u/s 80-IA - the income on sale of certified emission reduction/carbon credit would form part of the profit and gains of business ; however, cannot be treated as profit derived from the industrial undertaking - AT
  Visit to Get Source

  ---

• Deduction u/s 80IA - Where a basket of "market values" are available for the relevant period and relevant geographical area where the eligible unit is situated, the assessee has discretion to adopt any one of them as market value and if the value adopted by the assessee is "market value", it is not permissible for the AO to adopt any other "market value" - AT
  Visit to Get Source

  ---

• Sale of land - AO is not correct in holding that the land was not an agricultural land and the activity of purchase and sale of the said land being an adventure in the nature of trade, profit arising therefrom was chargeable to tax in her hands as business income - Not taxable - AT
  Visit to Get Source

  ---

• Once the assessee exercises the option of claiming deduction from a particular assessment year, then only losses of the years beginning from initial assessment year alone are to be brought forward and no losses of earlier years which were already set off against the income of the assessee cannot be notionally brought forward. - assessee’s claim of deduction u/s 80IA is not maintainable - AT
  Visit to Get Source

  ---

• Additions on the basis of Admission / statement made during survey - facts create doubt regarding the genuineness of the survey. Thus addition has been made without any evidence and is merely on the basis of statement recorded during the survey which cannot be sustained - AT
  Visit to Get Source

  ---

Customs

• Penalties under Regulation 12 (8) of the Handling of Cargo in Custom Area Regulation, 2009 - If the show cause notice alleges violation and breach of these Regulations and section 8(b) and 141(2) of the Customs Act, 1962, then, we do not see how the Tribunal, in a single paragraph reasoning, makes no reference to any of these provisions or the clauses of the Regulations, but only section 158. - HC
  Visit to Get Source

  ---

• Extension of warehousing period - request for reexport - petitioner failed to discharge its duty by not paying the duty due on the warehoused goods as undertaken by it - detained goods were sold in e-auction - writ petition dismissed - HC
  Visit to Get Source

  ---

Central Excise

• Clearance of goods after processing but as such - reversal of credit - value addition without any change in name, character or end use of goods cannot possibly constitute criteria to decide as to what is manufacture - SC
  Visit to Get Source

  ---

• Denial of rebate claim - merchant exporter - excess duty paid by the manufacturer supplier - rebate is admissible only to the extent of duty paid at the effective rate of duty i.e. 4% or 5% in terms of Notification No. 4/06-CE dated 1.03.06 as amended - CGOVT
  Visit to Get Source

  ---

• Re-export of capital goods as such - whether reversal of cenvat credit under rule 3(4)/ 3(5) of Cenvat Credit Rule 2004 on removal of inputs / capital goods as such is to be treated as payment of duty for the purpose of sanctioning rebate claim under rule 18 of CER 2002 read with Not. No. 19/04-CE(NT) dated 6.9.2004 - Held Yes - CGOVT
  Visit to Get Source

  ---

VAT

• Classification of goods - "Ujala Supreme" and "Ujala Stiff and Shine" - once goods fall under any of the HSN classification, that is, the goods/commodities that are included in list "A" to the Third Schedule, entry 103, which is residuary in nature, would not get attracted. - SC
  Visit to Get Source

  ---

• Central Sale or not - Inter state sale or intra state sale - purchase of Beedi leaves in auction - Once the sale transaction concludes in the State of Andhra Pradesh only, the mere transport of goods from branch office in Andhra Pradesh to the head office in Maharashtra would not result in an inter-State sale - SC
  Visit to Get Source

  ---

• Classification of sale - whether the transaction itself was covered by an inter state sale or otherwise is a burden that the assessee has to discharge, that it did so in other 20 cases but was unable under these 6 cases precisely underscores or highlights the burden placed upon it - HC
  Visit to Get Source

  ---

Case Laws:

• Income Tax

• 2015 (3) TMI 792
  Applicability of section 44BB on assessee's income - allocation of expenses incurred by assessee for the services rendered to BGEPIL - whether assessee has been able to provide primary evidence in respect of various types of services allegedly rendered to BGEPIL for which it claimed to have received reimbursement from BGEPIL? - assessee is a non-resident company and is AE of M/s BGEPIL - Held that:- Once it is accepted that global cost allocation policy exist in a case of group of size like B.G. Group, then it cannot be denied that the debit notes raised are towards services rendered. Now the core issue that remains for consideration is whether the whole amount claimed to be reimbursement should be accepted or not. On this count, admittedly the assessee has not been able to establish one to one nexus between the services rendered and alleged reimbursement. There are also no comparable cases which obviously could not be there. Thus, in sum and substance the position as it emerges is that inspite of there being a global cost allocation policy, the existence of which is not doubted by revenue, the assessee failed to substantiate its claim regarding allocation of expenses incurred by it for the services rendered to BGEPIL. It has not been able to substantiate its claim as to what common expenses had been incurred; how those were allocated to assessee; and why those needed to be allowed as deduction from Indian operations. It is settled law that unless the assessee is able to substantiate its claim the deduction cannot be allowed. In this regard we may refer to the decision of Hon’ble Supreme court in the case of CIT Vs. Calcutta Agency Ltd. (1950 (12) TMI 4 - SUPREME Court) wherein it has been held that the burden of proving the necessary facts in order to entitle the assessee to claim exemption u/s 10(2)(xv) was on the assessee but the necessary facts had not been established by the assessee at any stage of the proceedings and the High Court was in error in applying the principles of Mitchell’s case on the assumption of facts which were not proved. Consequently the assessee was not entitled to the deduction claimed. In view of above discussion, keeping in view the entire conspectus of the cases, we are of the opinion that it would be fair to tax the assessee’s receipts u/s 44BB, as has been done in past also. In this regard we find ourselves in agreement with the ld. counsel for the assessee that in AY 2003- 04, the department while preferring appeal before Hon’ble High Court has itself taken a ground that the assessee’s receipts are taxable u/s 44BB and the ITAT erred in deciding that the receipt are not taxable u/s 44BB. We are conscious of the fact that earlier we have observed that merely because in AY 2004-05 assessee agreed for its receipts being taxed u/s 44BB, cannot operate as estoppels against it for pleading that the entire receipts were in the nature of reimbursement. However, considering the fact that assessee is not able to substantiate its claim, as has been extensively demonstrated by ld. Cit(DR) in his submissions and the assessee has only given a general writ e up for the benefits derived by BGEPIL, we are of the considered opinion that no fruitful purpose would be served by restoring the matter to the file of AO for examining the assessee’s claim again as that would be a futile exercise particularly because assessee has clearly stated that it is not possible to have one to tone nexus of the expenses with the services rendered. Thus the only possible course is to invoke section 44BB because B.G.I. provide services to BGEPIL, which was engaged in prospecting the mineral oils. We direct accordingly.

  ---

• 2015 (3) TMI 770
  Disallowance u/s.40(a)(ia) - CIT(A) deleting the disallowance holding that TDS disallowance applies only to amounts ‘payable’ as on 31st March and not to amounts already paid during the year - Held that:- There is no dispute to the fact that the assessee has not deducted TDS on an amount of ₹ 58,81,847/- for which the Assessing Officer applying the provisions of section 40(a)(ia) made addition of the above amount. We find the Ld.CIT(A) deleted the addition made by the Assessing Officer on the ground that provisions of section 40(a)(ia) are not applicable since no amount is payable at the end of the year. While doing so, he relied upon the decision of the Special Bench of the Tribunal in the case of Merilyn Shipping and Transport ([2012 (4) TMI 290 - ITAT VISAKHAPATNAM] ). The Coordinate Bench in the case of Vinay Ashwinikumar Joneja ( 2013 (11) TMI 1243 - ITAT PUNE) has already taken a view that provisions of section 40(a)(ia) are applicable even if no amount is payable at the end of the year. Therefore, the order of the CIT(A) has to be reversed. However, the assessee has made a new legal argument that the Finance Act, 2010 has amended the first proviso to section 40(a)(ia) w.e.f. 01-04-2010 and it has been held by various judicial authorities that such amendment is retrospective in nature. It is the submission of the Ld. Counsel for the assessee that the second proviso to section 40(a)(ia) was inserted by the Finance Act, 2012 w.e.f. 01-04-2013 wherein it is stated that disallowance u/s.40(a)(ia) of the Act need not be made if the assessee is not deemed to be an assessee in default under the first proviso to section 201(1) of the I.T. Act., therefore, this should also be held as retrospective since it has been introduced to eliminate unintended consequences which may cause undue hardship to the tax payers. We find some force in the above argument of the Ld. Counsel for the assessee. We find the Cochin Bench of the Tribunal in the case of Antony D. Mundackal [2013 (12) TMI 67 - ITAT COCHIN] relied on by Ld. Counsel for the assessee, had an occasion to decide an issue in the light of the above argument and has restored the issue to the file of the Assessing Officer with certain directions. the assessee is that the second proviso to sec, 40(a)(ia) of the Act, inserted by the Finance Act, 2012 with effect from 1.4.2013 is clarificatory in nature and hence the benefit of the same should be applied retrospectively. However, the correctness of this contention has not been examined by the tax authorities. Hence, in the interest of natural justice, we are of the view that this contention of the assessee requires examination at the end of the assessing officer - Decided in favour of assessee for statistical purposes.

  ---

• 2015 (3) TMI 769
  Disallowance u/s 80IC - allegation that assessee has inflated the receipts in Baddi unit to a tune of ₹ 2039591/- (3650576- 1610985= 2039591) and took undue benefit of deduction u/s 80IC as said by AO - CIT(A) deleted disallowance - Held that:- AO has mechanically proceeded to disallow the sum of ₹ 20,39,591/- merely on the basis of comparative rate of the products between the old unit in Delhi and the new unit at Baddi. AO has failed to establish any of the above pre-requisites, viz. close connection, course of business being d, more than the ordinary profits, for invoking the provisions of the above section. No infirmity in the order of CIT(A) inasmuch as the alleged close relation of assessee and Ranbaxy does not exist. In the absence of establishing such relationship assessing officer has no justification to tinker with the computation of 80IC claim on assumptions and presumptions. The books of account of both the units are separately managed. In view thereof we uphold the order of CIT(A). CIT(A)didnot erred in directing the AO to delete the disallowance of ₹ 20,39,591/- u/s 80IC. - Decided against revenue. Inclusion of amount on sale of scrap in the computation of deduction u/s 80IC - Held that:- CIT(A) in his order has relied on the ratio of decision of Hon’ble Delhi High Court in the case of Sadhu Forging Ltd. ( 2011 (6) TMI 9 - DELHI HIGH COURT ) in allowing the claim. We see no infirmity in the order of CIT(A) - Decided against revenue.

  ---

• 2015 (3) TMI 768
  Disallowance of sales promotion expenses - Held that:- The Assessing Officer himself has stated that above sales promotion expenses paid to Doctors including travelling and conveyance, selling and distribution expenses, conference expenses incurred on the doctors for promoting the sales. The Assessing Officer has not pointed out any expenses which is directly incurred which prohibited by law and the AO has not brought out any evidence that assessee has incurred this expenditure which is prohibited by CBDT's Circular No. 5/2012. We find that the CIT(A) has disallowed the sales promotion expenses @ 10% of the total expenditure. We find that the Assessing Officer did not point out which expenditure is prohibited by law, therefore, in assessee's own case in Assessment Year 2007-08 and in 2008-09 the Tribunal has dismissed the appeal of the revenue and CIT(A) has followed the decision of the Tribunal, therefore, our interference is not required. - Decided against revenue. Deletion on account of difference in the closing stock as per stock statement given to the Bank and Stock as appearing in the Balance Sheet - Held that:- Assessee showed stock of ₹ 8,75.59 lakhs at the year end to the Bank, whereas subsequent to tax audit, the assessee disclosed closing stock valued at 858.48 lakhs difference being 17.11 lakhs. We find that the assessee has submitted the stock value at the end of the month end with the Bank before 15th of the next month. Accordingly, assessee has filed the stock statement giving value as at 31-03-2010 which was worked out on the basis of cost sheet as at 31st December, 2009. However, while finalising the Accounts as per the costs sheets as at 31st December, 2010 and the valued the stocks which is slightly higher than the earlier value informed to the Bank. While finalising the Accounts for 2009-10, the assessee has write off stocks of Playmax valuing ₹ 51.54 lakhs since the same has expired but was shown in the stock statement submitted to the Bank on 15.04.2010. The stock value on 31st March, 2010 was further reduced at the time of finalisation of Accounts to the extent of ₹ 1.71 lacks for the stock of expired goods. The CIT(A) has verified and he was of the view that the stock statements given to Bank on 15.04.2010 was only provisional and estimated basis, therefore, he has deleted this addition and our interference is not required. - Decided against revenue.

  ---

• 2015 (3) TMI 767
  Deemed dividend u/s 2(22)(e) - CIT (A) held that SISICOL had advanced sums to a concern (the firm) in which the assessee had a substantial interest. and taking note that Section 2(22)(e) as applicable after its amendment w.e.f. from 31-05-1987, for AY year 1988-89, included concerns in which shareholder is a member or partner, the CIT (A) upheld the addition made - Held that:- Granted, the assessee is a shareholder of SISICOL; he is also a partner of the firm. However, neither did SISICOL give him the money nor did it advance the amount to the firm. The firm has an independent existence and it had over ₹ 60 crores in its account. That a significant part of it, i.e., 44% or over ₹ 26 crores was payable to SISICOL could not have blinded the revenue to the fact that the other amount was available and given as a loan to the assessee. In these circumstances at least, it could not have been said that the loan to the assessee and the loan (in the form of credits in favour of SISICOL) were really one transaction. It is also a matter of record that the firm had over 290 branches or units and collection by it exceeded- on an average ₹ 10 crores per month. Therefore, it could not be legitimately held that amount retained by the firm was for the assessee’s benefit. The amount of ₹ 1,84,19,305 was not deemed dividend in the hands of the assessee under the provisions of Section 2 (22) (e) of the Income Tax Act, 1961 - Decided in favour of assessee. Revenue’s application for rectification of the majority opinion, in view of the third member not noticing or wrongly appreciating important features has been challenged - Held that:- The impugned order does not suffer from any infirmity calling for interference. As to whether there was a mistake apparent from the face of the record, in the context of this case, the ITAT felt that the revenue could not establish its case, since the basic contention about applicability of Section 2 (22) (e) was not accepted. - Decided against revenue.

  ---

• 2015 (3) TMI 766
  Admissibility of claim under Section 80HH in respect of Namoli Unit and 80I in respect of Malanpur Unit - CIT(A) and ITAT allowed claim - Held that:- Both the CIT (A) and the ITAT carried out an elaborate factual analysis about the existence of manufacturing activity at Namoli and Malanpur. Based on this analysis, these fact finding authorities concurrently ruled in favour of the assessee. In contrast, the AO - as is evident from the extracts of his order - based his decision entirely on assumptions. Those assumptions stemmed out of his belief that the claim for losses of the Noida unit could not co-exist with the profits derived from the Namoli and Malanpur units. We also noticed that the AO’s order did not take into account the materials which were ultimately considered by the CIT (A). The latter, in fact, took care to call for the AO’s comments during the course of the appellate proceedings. The material in the form of factory register, employee’s rolls, periodic sales tax and excise returns, evidence of electricity payments etc. was decisive enough for both the CIT (A) and ITAT to be satisfied that in fact the two units in question functioned.- Also whether the activity carried out in Malanpur and Namoli amounted to manufacturing goes, the fact that the assessee claimed and was granted modvat credit under Rule 57H of the Central Excise Rules at the relevant time itself is indicative that for purposes of excise, “the assembling of cassettes amounted to manufacture”. It goes without saying that the goods in question, i.e. Audio Video Tapes are manufactured in bulk - as in the present instance in Noida, which in turn constitute the raw materials for the ultimate assembly of the marketable products into cassettes in which several intervening stages would be involved. These would be cutting of the tapes into requisite levels, their placement in cassettes shells, packaging of such finished cassettes and labelling etc. In these circumstances, the Revenue’s argument that no manufacturing activity was involved in the assembling of cassettes is unsustainable - Decided in favour of assessee. Depreciation claims for the Namoli unit - Held that:- In view of the concurrent findings of the CIT (A) and the ITAT that in fact Namoli unit actually functioned during the relevant year, the depreciation was correctly allowed. - Decided in favour of assessee. Alleged suppression of sale - Held that:- In 1993-94, one of the Noida units transferred 5000 pieces of VMT to the Malanpur Unit for ₹ 97 per piece including the excise duty component of ₹ 55.05. The Malanpur unit had moved 1960 video cassettes in the two years in question, i.e., 1993-94 and 1994-95. The reduced excise duty led to fall in the price of video cassettes. Consequently, the average market price also went down. In order to compensate the Malanpur unit, M/s Super Cassettes Industries purchased video cassettes at the price of ₹ 104. The concurrent findings of fact are that there was no suppression of sale prices since 83% of the total video cassettes sales was exported at an average price of ₹ 27.79/-. The CIT (A) held that these exports are substantial enough and that the allegations that there was under-invoicing of exports by the assessee could not be validly returned. These findings were affirmed by the ITAT. Again being entirely factually in nature, the Court sees no reason to interfere with them - Decided in favour of assessee. Disallowance of loss claimed in respect of Noida unit - ITAT allow the loss to the extent of ₹ 39,45,798/- and to sustain the balance loss of ₹ 26,80,087 - Held that:- Apart from stating that the findings are erroneous, the Revenue has not pointed out either perversity or unreasonableness or that any of these findings were not based upon the inference that could not have been drawn in the circumstances of the case. Consequently, no substantial question of law arises. - Decided partly in favour of assessee. Disallowance of foreign exchange fluctuation - CIT (A) and ITAT allowed the claim - Held that:- It is not disputed that this head of expense was correctly treated as falling in the revenue stream in view of the decision of this Court in CIT vs. Woodward Governor India P. Ltd. (2007 (4) TMI 118 - HIGH COURT , DELHI) also affirmed by the Supreme Court in CIT v. Woodward Governor India (P.) Ltd. (2009 (4) TMI 4 - SUPREME COURT ). - Decided in favour of assessee.

  ---

• 2015 (3) TMI 765
  TDS while paying the amount under the award of the Motor Accident Claims Tribunal - deduction of ₹ 24,175/- by way of income tax is not sustainable and directed the petitioner to disburse the said amount to the claimant as held by district judge - Held that:- Any person responsible for paying any income by way of interest other than income by way of interest on securities is obliged to deduct income tax thereon at the rate in force at the time of payment of the said amount to the concerned payee and the only exception in case of income paid by way of interest on the compensation amount awarded by the Motor Accidents Claims Tribunal is where the amount of such income or, as the case may be, the aggregate of the amounts of such income credited or paid during the financial year does not exceed fifty thousand rupees. It is, thus, evident that if the interest component of the payment to be made during the financial year on the basis of award of the Motor Accident Claims Tribunal exceeds ₹ 50,000/- then the person making the payment is obliged to deduct income tax at source while making payment; this is what the petitioners have done. In the said circumstances, it was not open to the District Judge to hold to the contrary. As a matter of fact, the District Judge was exercising his jurisdiction with regard to executing the award but while executing the same he had to be conscious of the fact that any such payment would be subject to statutory provisions. There being clear provision under the Income Tax Act with regard to deduction of tax, it was not open to the District Judge to have held to the contrary. The only remedy for the assessee under such circumstances would have been either to have approached the assessing officer under Section 197 of the Income Tax Act before the said payment was made for issuing a certificate for deduction of income-tax at a lower rate or no deduction of income-tax as the case may be or if that had not been done then to approach the Income Tax Department for refund of the amount in case no income-tax or less amount is due and payable by the concerned respondent.. W.P. allowed. Orders of the District Judge set aside.

  ---

• 2015 (3) TMI 764
  Refund on the basis of forged TDS certificates - criminal prosecution against lawyer of main assessee submitting returns on behalf of assessee - Held that:- The complainant ITO had not filed any complaint against the main assessee and only arrayed the respondent Advocate as an accused, who was stated to have submitted the income tax returns of relevant years on his behalf, for the reasons best known to him (ITO). That means, the respondent-accused had only submitted the income tax return along with all the indicated documents on behalf of main assessee. In other words, all the TDS certificates, which were purported to have been issued by the Northern Railway, were supplied by the main assessee to his Advocate. It was the main assessee, who had procured the documents from the concerned authorities and claimed the refund. Not only that, in case, the main assessee had claimed the refund on the basis of forged TDS certificates, then, the Income Tax Authorities were competent and well within their jurisdiction to reject his claim of refund and even to impose penalty under the relevant provisions of The Income Tax Act. Thereafter, the aggrieved party had a right to file the statutory appeal in this relevant connection. Be that as it may, therefore, the respondent-accused, who was an Advocate, had just submitted the income tax return on behalf of main assessee, cannot possibly be and indeed could not legally be held liable for criminal prosecution for procuring the documents by main assessee in order to attract the penal provisions of offences in question, as contrary urged on behalf of complainant-ITO. Thus the respondent was acquitted. Also see Income tax Officer Versus Sudesh Sharma [2015 (1) TMI 975 - PUNJAB & HARYANA HIGH COURT]- Appeal against lawyer dismissed.

  ---

• 2015 (3) TMI 763
  Deduction u/s 80HHC on counter sales - whether ITAT as well as the CIT(A) was justified in allowing the deduction u/s 80 HHC when there is no finding to the effect that the goods were cleared at any of the custom station? - Held that:- Apex Court in CIT vs. Silver & Arts Palace [2002 (12) TMI 12 - SUPREME Court] has held that the counter sale to the foreign tourists against convertible foreign exchange in India, is eligible for deduction under section 80HHC of the Income Tax Act. The Apex Court has also approved the decision of the Allahabad High Court in the case of Ram Babu & sons vs. Union of India [1996 (5) TMI 61 - ALLAHABAD High Court]. In the present case the assessee had produced the Sale To Foreign Tourists Voucher, which not only recorded the name and address of the customer (tourist), but also his/her passport number and the declaration given by him that the goods will not be gifted or sold in India. The goods sold at counter at the shop/emporium were sold to be taken out of the country, which necessarily involved clearance of baggage, by the customs authorites. There was no further proof, nor any document in proof of clearance of the goods at the Customs Station by the assessee is required. The declaration in the form of Sale To Foreign Tourist Voucher, for sale made against the convertible foreign exchange with the undertaking that the goods will not be gifted or sold in India, was sufficient proof for export out of India. Unless anything contrary was alleged and proved by the department, it was not necessary for the assessee to have produced the documents of clearance of goods sold by him to the foreign tourists at any Customs Station. The Explanation (aa) is not a rule of evidence, nor raises any presumption. It also does not require any proof of clearance at any Customs Station. The explanation is couched in double negative. It is a rule of exclusion and excludes only those transactions, which do not involve clearance at any Customs Station. It cannot be read in a manner, as suggested by learned counsel appearing for the department that a proof of customs clearance of baggage must be provided to establish the export of goods out of India for the purpose of deduction of profits on such sales under section 80HHC of the Income Tax Act. - Decided in favour of assessee.

  ---

• 2015 (3) TMI 762
  Grant of stay of recovery of the balance amount in respect of the assessment year 2009-10 till the disposal of the appeal by the Tribunal - Held that:- It is settled law that there is no bar for grant of such a relief if the Court is of the opinion that the circumstances and the ends of justice so warrant. This has also been stated clearly in Maruti Suzuki (2014 (2) TMI 1037 - DELHI HIGH COURT ). Since the petitioner had already been granted unconditional stay by the Tribunal in respect of the said appeal and that the Tribunal is in the midst of hearing the appeal, it would be in the interest of justice that the stay order granted by the Tribunal is continued till the disposal of the appeal by the Tribunal. It is ordered accordingly. The writ petition stands disposed of.

  ---

• 2015 (3) TMI 761
  Provisions of Section 43B - whether CIT (A) was warranted in ignoring the provisions of Section 43B and granting relief of ₹ 91,97,390/- which was not actually paid by the assessee to the government/financial institution/bank - Held that:- Learned counsel for the appellant is unable to show as to how the decision of the Apex Court in the case of S.A. Builders (2006 (12) TMI 82 - SUPREME COURT ) does not apply in the matter before us wherein held that interest on barrowed capital by the assessee is to be allowed even if assessee has not charged any interest on the advances given by it out of such borrowed funds if such advances are for business purpose. It was held by the Supreme Court that such interest on borrowed funds by the assessee ought to be allowed as deduction under Section 36 (1) (iii) of the Income Tax Act; only an enquiry should be made in such circumstances as to whether the loan was given by the assessee as a measure of commercial expediency. - Decided in favour of assessee.

  ---

• 2015 (3) TMI 760
  Disallowance of additional depreciation - new machinery and plant acquired after September 30, 2006 - According to assessee for the assessment year 2007-08 additional depreciation was granted only at 10 per cent, the balance 10 per cent. has to be allowed during the year under consideration - Held that:- Assessee is entitled for additional depreciation at 10 per cent. during the year under consideration. Accordingly, the orders of the lower authorities are set aside and the Assessing Officer is directed to allow 10 per cent. of the balance depreciation.- Decided in favour of assessee. Disallowance of share issue expenditure - equity shares and fee paid to the Registrar of Companies for increasing the authorised capital - Held that:- The assessee now claims that expenditure was incurred for issue of shares to Qualified Institutional Buyers and fees paid to the Registrar of Companies. Therefore, it has to be amortised for five years and one-fifth of the amount shall be allowed during the year under consideration. A bare reading of the draft assessment order; the objection filed by the asses see before the Assessing Officer and the decision of the Dispute Resolution Panel clearly shows that the assessee claimed that additional capital was raised for augmentation of the working capital ; therefore, it was in the revenue field. It was also not claimed before the lower authority that the expenditure was incurred in respect of issue of shares and fees paid to the Registrar of Companies. Therefore, the lower authorities had no occasion to examine whether the expenditure was in fact incurred for issue of shares and fees paid to the Registrar of Companies. Since now the assessee claims that the expenditure was incurred for issue of shares to the Qualified Insti tutional Buyers and on fees paid to the Registrar of Companies, this Tribunal is of the considered opinion that the matter needs to be reconsidered by the Assessing Officer. The decision rendered for the assessment year 2007-08 equally holds good for the assessment year under consideration also. As such, consistent with the decision taken earlier for the assessment year 2007-08 we remit the matter back to the file of the Assessing Officer with similar directions. - Decided in favour of assessee for statistical purposes. Disallowance of additional weighted deduction of 50 per cent - Held that:- Consistent with the earlier decision taken for the assessment year 2007-08 the orders of the lower authorities are set aside and the issue under section 35(2AB) of the Act is remanded back to the file of the Assessing Officer for reconsideration as the assessee failed to claim the same before the Assessing Officer. The Assessing Officer shall reconsider the issue and decide the same afresh in accordance with law after giving reasonable opportunity of hearing to the assessee.- Decided in favour of assessee for statistical purposes. Disallowance of pre-operative expenditure - expenses incurred by the assessee for setting up for a new manufacturing plant at Chennai - Held that:- It is settled principles of law that an expenditure incurred in the process of earning of profit is to be treated in the revenue field. However, in the case on hand, the assessee claims that the authorities below proceeded on misconception of fact that the preoperative expenses are related to construction and erection of plant and machinery and building at Chennai whereas expenses in question relates to salary, travelling, conveyance, provident fund, postage and miscellaneous expenses incurred by the head office for the purpose of exploratory work done by the project division which are in the nature of administrative expenses which need to be allowed under section 37 of the Act. For this proposition learned counsel relied upon a plethora of judgments. The assessee also claims that no deduction was claimed during the year under consideration. The cost of land acquired to the extent of ₹ 13.79 crores was claimed to be capitalised in the balance-sheet. Therefore, there was a factual misconception as claimed by the assessee. If there is no purchase of plant and machinery and construction during the year under consideration, there is no question of treating the expenditure as capital in nature. However, the matter needs to be verified by the Assessing Officer whether the expenditure was incurred for purchase and erection of plant and machinery or it is only administrative expenses as claimed by the assessee. This factual aspects need to be verified by the Assessing Officer. - Decided in favour of assessee for statistical purposes. Disallowance of depreciation - Rental income received by the assessee from its sister concern in respect of let out portion at the corporate office at Gurgaon - Held that:- The very same issue came up before this Tribunal for the assessment year 2007-08 [2014 (1) TMI 33 - ITAT COCHIN] wherein by following the earlier orders of this Bench of this Tribunal for the assessment years 2001-02 to 2006-07 we found that the assessee was not entitled for depreciation on the let out portion of the property. - Decided against assessee. Transfer pricing adjustment on reimbursement received by the assessee from Dunlop Tyres International Pty. Ltd. - Held that:- In the case before us, the Transfer Pricing Officer found that the reimbursement received by the assessee from its associate enterprises and he adjusted 5 per cent. of marking on the ground that the reimbursement of expenditure does not consistent with the arm's length price. The Transfer Pricing Officer has not discussed any comparable cases as per the method provided in the Income-tax Act. If the Assessing Officer found that the reimbursement received by the assessee is not consistent with the arm's length price, then, he ought to have compared the case as per the proper method as provided in the Act. If the Assessing Officer found that there are more than one price as per the computation made by the most appropriate methods, then he may determine the arithmetic mean of such prices. In this case, without considering any comparables and without determining more than one price, the Transfer Pricing Officer made adjustment of 5 per cent. mark up. Unless and until more than one price is determined after considering comparables on the basis of the most appropriate method, this Tribunal is of the considered opinion that adjustment of 5 per cent. is not permissible. Therefore, before making any adjustment the services rendered by similarly placed industries needs to be determined on the basis of the appropriate method prescribed in the Income-tax Act. Since the lower authorities have not considered the comparable cases the orders of the lower authorities are set aside and the matter is remanded back to the file of the Assessing Officer. The Assessing Officer shall consider the comparable cases and determine the arm's length price, for the services rendered by the assessee on the basis of the most appropriate method and thereafter decide the issue in accordance with law after giving reasonable opportunity to the assessee. - Decided in favour of assessee for statistical purposes. Income from sale of certified emission reduction (carbon credit) - Held that:- In the case on hand the certified emission reduction/carbon credit was obtained by the assessee in the course of its business activity, therefore, the same cannot be treated as a capital asset. This Tribunal is of the considered opinion that certified emission reduction/ carbon credit is at par with import entitlement. Admittedly, the import entitlement was given to the exporter on the basis of the foreign exchange earned through export under the import and export scheme formulated by.Government of India. In this case also, the certified emission reduction/ carbon credit was given on the basis of the United Nations Framework Convention on Climate Change under Kyoto Protocol. Therefore, both import entitlement and certified emission reduction/carbon credit comes from a scheme. Therefore, this Tribunal is of the considered opinion that import entitlement as well as certified emission reduction/carbon credit are at par. The income on sale of certified emission reduction/carbon credit cannot be treated as capital receipt, therefore, it is to be treated as profits and gains of business or profession ; hence liable for taxation. - Decided against assessee. Entitlement for deduction under section 80-IA - Held that:- Deduction of an amount equal to 100 per cent. of the profit derived from business undertaking is alone eligible for deduction under section 80-IA of the Act. While interpreting the words "derived from", the apex court, in the case of Sterling Foods [1999 (4) TMI 1 - SUPREME Court] found that the expression "attributable to" is wider in import than the expression "derived from". In this case also, the income on sale of certified emission reduction/ carbon credit was attributable to the business of the assessee since the same was conferred on the assessee under the scheme promoted by the United Nations Framework Convention on Climate Change under Kyoto Protocol. But it is not the direct source of income from the industrial undertaking of the assessee. At the best, we may say that it has nexus with the business of the assessee or attributable to the business of the assessee. Therefore, the income on sale of certified emission reduction/carbon credit would form part of the profit and gains of business ; however, cannot be treated as profit derived from the industrial undertaking. Since the Legislature has specifically used the term "derived from", we are of the considered opinion that the assessee is not entitled for deduction under section 80-IA of the Act. - Decided against assessee.

  ---

• 2015 (3) TMI 759
  Reduction in claim for tax holiday under section 80-IA - assessee's power undertaking as a result of modification in the market price of the power captively consumed - Held that:- The value adopted by the assessee be it value as per the independent third party trading transactions or as per power exchange (IEX etc.) or any other independent transaction (for the relevant period and which has taken place in the relevant area where the eligible unit is located) constitute "market value" in terms of the Explanation to section 80-IA(8). The value at which State grid has sold power to the cement unit of the assessee (average annual landed cost) also constitute "market value" in terms of the Explanation to section 80-IA(8) but the value at which State Grid or the third party has purchased power from the power unit of the asses see, which represents its power which is sold when not required by the cement unit, does not constitute "market value" in terms of the Explanation to section 80-IA(8). It is the "principle" and not the "quantum" which is deciding factor. Where a basket of "market values" are available for the relevant period and relevant geographical area where the eligible unit is situated, the assessee has discretion to adopt any one of them as market value and if the value adopted by the assessee is "market value" as explained above, it is not permissible for the Revenue to recompute the profits and gains of the eligible unit by substituting the said value (as adopted by the assessee) by any other "market value". Thus delete the disallowance as made by the Assessing Officer in order under section 143(3) on account of deduction under section 80-IA of the Act - Decided in favour of assessee. Disallowance on account of expenditure incurred towards gifts - CIT(A) allowed part claim - Held that:- CIT(Appeals) following the decision of the Tribunal vide order in the assessee's own case for the assessment year 2003-04 allowed relief of ₹ 31,11,876 and restricted the disallowance to ₹ 16,00,000. We find that facts for the year under consideration are similar with the facts of the earlier year. Following the decision of the Tribuna the disallowance confirmed by the Commissioner of Income-tax (Appeals) is reasoned one and hence we do not find any infirmity therein. - Decided against assessee. Disallowance of telephone expenses - Held that:- Tribunal in the assessment year 2003-04 had set aside the issue to the file of the Assessing Officer to examine the contention of the assessee as there cannot be disallowance of personal expenditure in the hands of the company. Accordingly, following the order of the earlier year, we set aside this ground to the file of the Assessing Officer to verify the same after giving opportunity to the assessee before deciding the issue. - Decided in favour of assessee for staitistical purposes. Disallowance on account of sales tax subsidy - capital receipt v/s revenue receipt - CIT(A) deleted the disallowance - Held that:- With the help of reasoning given in the orders by this Tribunal for the earlier years in the assessee's own case (assessment year 2004-05 to assessment year 2006-07) we reject the argument of the Department and hold that receipt on account of sales tax subsidy is capital in nature and not chargeable to tax. - Decided against revenue. Interest under section 244A on minimum alternate tax credit - Held that:- Issue is covered in favour of the assessee by the decision of the hon'ble Bombay High Court in the case of Apar Industries Ltd. [2010 (4) TMI 151 - BOMBAY HIGH COURT ] wherein the hon'ble court has held that interest under section 244A is allowable on the refund of prepaid taxes after giving credit of brought forward minimum alternate tax under section 115JAA. Also in the case of CIT v. Bharat Aluminium Co. Ltd. [2011 (5) TMI 565 - DELHI HIGH COURT ] after considering the proviso to section 115JAA(2) observed that since the minimum alternate tax credit is available for adjustment and set off on the first date of the previous year even before the instalment of advance tax is due on the current income, the advance tax liability has to be worked out on the current income only after the adjustment and set off of minimum alternate tax credit brought forward from the earlier years and therefore interest under section 244A is payable to the assessee if refund arises from advance tax paid by it. - Decided in favour of assessee. Disallowance of carbon credit in computing book profit under section 115JB - Held that:- In the present case, receipt on account of carbon credit, being purely capital in nature needs to be excluded in computation of the book profit. The Assessing Officer is accordingly directed to delete the addition made on account of carbon credit in computing book profit under section 115JB of the Act - Decided in favour of assessee.

  ---

• 2015 (3) TMI 758
  Sale of land - Assessing Officer held that the land sold by the assessee was not an agricultural land and the activity of purchase and sale of the said land being an adventure in the nature of trade, profit arising therefrom was chargeable to tax in her hands as business income - Held that:- Section 2(14)(iii)(b) of the Act covers the situation where the subject land is not only located within the distance of 8 kms from the local limits, which is covered by Clause (a) to section 2(14)(iii) of the Act, but also requires the fulfilment of the condition that the Central Government has issued a notification under this Clause for the purpose of including the area up to 8 kms, from the municipal limits, to render the land as a “Capital Asset.In the present case, it is not in dispute that the subject land is not located within the limits of Dasarahalli City Municipal Council therefore, Clause (a) to section 2(14][iii] of the Act is not attracted. When the land which does not fall under the provisions of section 2(14)(iii) of the IT Act and an assessee who is engaged in agricultural operations in such agricultural land and also being specified as agricultural land in Revenue records, the land is not subjected to any conversion as non-agricultural land by the assessee or any other concerned person, transfers such agricultural land as it is and where it is basis, in such circumstances, in our opinion, such transfer like the case before us cannot be considered as a transfer of capital asset or the transaction relating to sale of land was not an adventure in the nature of trade so as to tax the income arising out of this transaction as business income. As the land sold is not only agricultural in nature but is also situated beyond 12 kms from the limit of a municipality notified by the central govt. Hence, land sold by assessee not being a capital asset, the gain derived there from is not taxable at the hands of the assessee. - Decided in favour of assessee.

  ---

• 2015 (3) TMI 757
  Disallowance of deduction claimed under section 80IA in respect of profit derived from wind mills - notionally brought forward the losses relating to different wind mill units for set off against the profits of the wind mill units - Held that:- The Coordinate Bench of this Tribunal in assessee’s own case after considering the decision of Hon’ble Madras High Court in the case of Velayudha Swamy Spinning Mills P. Ltd., vs. ACIT (2010 (3) TMI 860 - Madras High Court) as well as the decision of ACIT vs. Gold Mine Shares and Finance Limited [2008 (4) TMI 405 - ITAT AHMEDABAD ] wherein wherein following its earlier unreported judgment held that once the assessee exercises the option of claiming deduction from a particular assessment year, then only losses of the years beginning from initial assessment year alone are to be brought forward and no losses of earlier years which were already set off against the income of the assessee cannot be notionally brought forward. - assessee’s claim of deduction under section 80IA is not maintainable - Decided against assessee. Disallowance of weighted deduction claimed under section 35(2AB) - Held that:- Considering assessee’s claim that Form 3CL containing necessary details was furnished before the first appellate authority which has not been taken into consideration before disallowing assessee’s claim, we remit the matter back to the file of A.O. to verify assessee’s claim and decide it accordingly. - Decided in favour of assessee for statistical purposes. Disallowance of deduction claimed under section 80IB - Held that:- As can be seen from the facts on record, the A.O. has disallowed assessee’s claim of deduction in A.Ys. 2007-08 to 2009-2010, basically on the ground that Jammu unit has been set up by splitting up or reconstruction of a business already in existence. Ld. CIT(A) while deciding the issue in A.Y. 2007-08 had gone through the enquiry report of the Inspector of Income Tax and has concluded, as the assessee has made substantial investment in land, building, machinery, plant etc., while setting up the Jammu unit, it cannot be considered to have been set up by splitting up or reconstruction of existing business. Hence, assessee is eligible for deduction under section 80IB. There is no reason to hold that the assessee is not eligible for deduction under section 80IB as the Jammu unit is formed by splitting up or reconstruction of business already in existence. After, going through the facts and materials on record, we are of the firm view that the order passed by the Ld. CIT(A) for A.Y. 2007-08 allowing assessee’s claim of deduction under section 80IB deserves to be upheld whereas, the decision taken by the Ld. CIT(A) in A.Ys. 2008-09 and 2009-10 is not the correct view. Accordingly, we set aside the impugned orders of the Ld. CIT(A) for A.Ys. 2008-09 and 2009-10 and direct the A.O. to allow assessee’s claim of deduction under section 80IB of the Act. It is relevant to note that in the grounds taken for A.Y. 2007-08 the department has alleged that assessee has transferred old machinery and plant for setting up the Jammu unit and is also engaged in manufacturing of oil. However, at the time of hearing, learned D.R. could not substantiate the aforesaid fact by bringing any material on record. Therefore, the aforesaid allegation of the department not being borne out from record deserves to be rejected. - Decided in favour of assessee.

  ---

• 2015 (3) TMI 756
  Initiation of reassessment proceedings - transfer of exclusive distribution rights of AC and water cooler was credited by assessee to the capital reserve A/c and was not treated as income for the year - change of opinion - Held that:- Once the Hon’ble High Court in assessee's own case [2012 (9) TMI 767 - DELHI HIGH COURT] has considered and held it to be not a case of deemed formation of opinion by the AO during the course of original assessment proceedings, being not a trivial or an axiomatic issue, it implies that the same was not found to be falling within the purview of ‘obvious and apparent’, so as to bring it within the scope of deemed examination and the resultant formation of opinion on it. If, now, we accept the assessee’s contention that the non-taxability of ₹ 179 lac was ‘too apparent and obvious’, it would mean that the situation falls within para 39 of the FB judgment, which, in turn, would mean taking a contrary view from the one that has been canvassed by their Lordships in the FB judgment. We, therefore, refuse to accept the contention advanced by the ld.AR on this issue. Objection by the internal audit party - Held that:- The audit party suggested that this amount was chargeable under the head ‘Capital gains’ and noninclusion of this amount in the assessee’s total income resulted into the escapement of income to that extent. It shows that the AO was simply informed about a fact which had escaped his attention during the course of assessment proceedings to the effect that a sum of ₹ 173 lac was a consideration for the transfer of exclusive distribution rights which was received but not taken to the Profit & Loss Account. It was conveyed that such amount is chargeable to tax u/s 45(1) of the Act which is nothing, but, communication of law to the AO. We are not confronted with a situation in which the AO, after due consideration of the matter in the original assessment proceedings, interpreted section 45(1) as not applicable to transfer of intangible asset, but the audit party interpreted this provision in a different manner from the way in which it was interpreted by the AO and then suggested that the amount ought to have been charged to tax. The instant case is fully covered by the judgment in the case of PVS Beedis Pvt. Ltd. (1997 (10) TMI 5 - SUPREME Court) read with the exception formulated by the Hon’ble Supreme Court in Indian & Eastern Newspapers Society (1979 (8) TMI 1 - SUPREME Court) drawing a line of distinction between communication of law and interpretation of law. The contention of the ld. AR on this issue, being devoid of any merit, is hereby jettisoned. It is, therefore, held that the audit objection in the instant case constituted an information about the escapement of income to the AO, thereby justifying the initiation of reassessment. No tangible material to justify initiation reassessment - Held that:- In the facts and circumstances of the present case, we find the requirement of the existence of some tangible material showing escapement of income, has been duly met with. It can be noticed from the factual matrix discussed above that it was only after the completion of original assessment that the audit objection was raised by the audit party on 10.02.2005, which led to the initiation of reassessment by recording such reasons on 30.05.2005. In an earlier para, we have held that the audit objection in the instant case is a valid piece of information about the escapement of income. Such audit objection is nothing but a tangible material. As this tangible material, in the shape of audit objection, came into existence after the completion of the original assessment and led to the initiation of reassessment, we hold this report of the internal audit party, formed a valid foundation for the initiation of reassessment proceedings, thereby pushing the case outside the ambit of `change of opinion’. Ground no. 1 challenging the initiation of reassessment proceedings is not allowed. - Decided against assessee. Taxability of transfer of exclusive distribution rights - Held that:- When we look at the Preamble part of the Agreement, it can be easily noticed that the assessee agreed to sell ‘the said business and the goodwill and other assets thereof.’ At this juncture, it is pertinent to mention that the assessee, apart from carrying on the business of airconditioners and water coolers, was also engaged in the business of fans, sewing machines, etc. By transferring its distribution network for the business of ACs and water coolers, and continuing to retain it for the business of fans and sewing machines, the assessee, in fact, transferred to Daikin a part of its goodwill earned over the period with such distributors. When we consider the definition of `Exclusive Business Right’ in a holistic manner, it transpires that the assessee not only transferred records and benefit of orders and bids to JVC on one hand, but also `to represent itself as carrying on the business as successor to UAL’ (the assessee) and the goodwill earned by it over the period in its distribution network. That appears to be the reason for which Clause B in the preamble part of the Agreement mentions in unambiguous terms about the transfer of ‘the said business and the goodwill’. Similar position follows when we consider Clause 2 of the Agreement with the caption ‘Purchase of Assets’. Sub-clause (1) of this clause categorically mentions that the assessee shall sell: ‘the business as a going concern together with all associated goodwill and the Assets free from all Encumbrances’. In a nutshell, the Agreement amply demonstrates that the assessee not only transferred its ‘Business’ to Daikin, but also the ‘Goodwill’ and the consideration of ₹ 1.73 crore is for both of such capital assets. Ex consequenti, neither the view point of the authorities below that the entire consideration was for the transfer of `Goodwill’ merits acceptance nor the contention of the assessee that it was for the transfer of `Business’ is sustainable. It has been noticed above that `Goodwill’ having Nil cost of acquisition was inserted in section 55(2) w.e.f. the assessment year 1995- 96 and the `Right to carry on any business’ having Nil cost of acquisition w.e.f. the assessment year 2003-04. There cannot be any retrospective operation of the latter insertion, as it casts a fresh and an additional tax liability. As the assessment year under consideration is 2001-02, there can be no question of computation of capital gain on the transfer of ‘Right to carry on any business’ during the year in question. At the same time, the transfer of `Goodwill’ with Nil cost of acquisition to the assessee will rightly trigger the provision of section 45(1) of the Act. Since the authorities below have treated the entire amount of ₹ 1.73 crore as a consideration for the transfer of `Goodwill’, we cannot uphold the same. The impugned order on this score is set aside and the matter is remitted to the AO for bifurcating the consideration for transfer of `Goodwill’ and for transfer of `Right to carry on business’ in some reasonable and justifiable manner. The part of the consideration relating to transfer of `Goodwill’ would attract taxability u/s 45(1) and the other part would escape the taxation net because of the absence of cost of acquisition and the resultant impossibility of computation of capital gain in terms of the judgment in B.C. Srinivasa Shetty (1981 (2) TMI 1 - SUPREME Court). Needless to say, the assessee will be allowed a reasonable opportunity of being heard in such fresh proceedings. - Decided in favour of assessee for statistical purposes.

  ---

• 2015 (3) TMI 755
  Addition made u/s.68 / 69 / 69A / 69C - CIT(A) deleted the addition accepting additional evidence under Rule 46A(1) - assessee is a non-resident Indian, generally resident of Dubai - Held that:- We are unable to understand how Assessing Officer can consider inward remittance of moneys into NRI A/c of a non-resident Indian as income of assessee as unexplained. Assessee in the course of assessment proceedings furnished enough evidences in support of inward remittance of funds including a certificate from M/s.Vitrual International Ltd., about the source of funds being loan. If Assessing Officer has any doubt about the said company in Mauritius, he cannot reject the genuineness of the said company without making necessary enquiries either through the internal mechanism of foreign tax division of CBDT or by any other means. Just because the certificate furnished does not have any seal, the same cannot be rejected outright. However, the matter did not end there. Assessing Officer took pains to verify from the internet and also from the website of the SEBI and came to the conclusion that the said company is one of the group companies of assessee listed as persons constituting group under Monopolies and Restrictive Trade Practices Act, 1969 and further noticed from the red herring prospectus of M/s.Lanco Infratech Limited, wherein this company was shown as single shareholder company of assessee as on 29-07-2006. This means the existence of the company is accepted by the authorities, not only by SEBI and other statutory authorities but even by the Assessing Officer, as can be seen from the enquiries conducted. We are unable to understand how the Revenue could raise ground on existence of the above company in Ground No.7 about the identity of the company when Assessing Officer himself acknowledged the same in the assessment order. Coming to the creditworthiness of the amount, assessee's explanation is that the amounts were transferred from his own bank account in Mauritius to the NRI account in India. Therefore, the immediate source of funds is his own account from Mauritius which is not disputed. If funds are received into Mauritius account, then that becomes source of the source which cannot be examined by Assessing Officer, unless there is any incriminating evidence. Except presumptions and allegations, virtually there is no evidence against assessee that these funds received into his bank account in Mauritius are his own incomes from India or 'round trip' funds of assessee as alleged. Therefore, all the grounds raised on this issue, particularly Ground No.10 & 11 does not require any consideration on the facts of the case. Coming to the issue of creditworthiness of the above said company, there is no dispute with reference to the funds. It has its own funds and Ld.CIT(A) took pains to examine and hold that it is creditworthy. Nothing was brought on record to counter the findings of Ld.CIT(A), except contending that the order of the CIT(A) is not correct. Therefore, the ground regarding creditworthiness of the company particularly from Ground No.6 to 10 also does not require any consideration. It is not assessee who furnished the additional evidence. Therefore, it cannot be strictly considered as additional evidence under Rule 46A. CIT has co-terminus powers as that of Assessing Officer as far as appeals before him are concerned. In fact, he even had enhancement powers, if Assessing Officer has missed out bringing into tax any amounts. He also has powers of enquiry and investigation. Therefore, the CIT(A) if exercises his powers as an Assessing Officer, there is no need to give an opportunity to the Assessing Officer who passed the assessment order under Rule 46A. The action of the CIT(A) is completely justified Thus merely on suspicions or doubts, conjectures or surmises, no inference can be drawn against the assessee. The assessee, who is a non resident brought money into India through banking channel and the manner in which this money was utilized in India is described in the Annexure. It has been observed that because of the mode of banking channel, admittedly, used for the remittance in this case, the onus on the assessee under section 69 stood discharged, and therefore it was not taxable in India under section 5(2)(b). In view of these facts of the case, we are of the opinion that various case laws relied by the Revenue does not apply and they are clearly distinguishable. In view of this, we have no hesitation in upholding the order of the CIT(A) and rejecting the Revenue's grounds. - Decided in favour of assessee.

  ---

• 2015 (3) TMI 754
  Disallowance of Commission and Brokerage paid - non deduction of tds - CIT(A) deleted the addition - Held that:- So far as the Commission paid to Mrs. Sita Ram Parodkar is concerned, we noted that while disallowing the commission, the AO got impressed with the fact that since the receiver of the commission is a 63 years old illiterate lady, therefore, she could not have entered into the transaction and the rate of commission paid is too high. In our opinion, the main service which is being rendered by a commission agent is to bring two parties together. The parties so brought together may negotiate the terms and conditions for the deal being carried out themselves or can negotiate the terms and conditions through the commission agent. It is not necessary that the terms and conditions of the deal have to be negotiated through the commission agent. Once two genuine parties - one in need of buying the material and other in need of selling the material - are introduced by a commission agent, the services of the commission agent stands rendered. The parties may not like that the terms and conditions should be negotiated by the commission agent. It depends on both the parties. It is not a case where M/s. Mayur Minerals has denied that it was not got introduced through Mrs. Sita Ram Parodkar to the Assessee. One Mrs. Sita Ram Parodkar, who may be illiterate, got introduced M/s. Mayur Minerals with the Assessee, in our opinion, if the Assessee is satisfied her job is over. CIT(A), in our opinion, has rightly dealt with this issue and deleted the disallowance. We, therefore, confirm the order of CIT(A) on this issue. - Decided in favour of assessee. Disallowance in respect of commission paid to M/s. De Long Mineral & Logistics Pvt. Ltd. no material has been brought on record by the Revenue which may prove that M/s. De Long Mineral & Logistics Pvt. Ltd. has permanent establishment in India. The commission earned by M/s. De Long Mineral & Logistics Pvt. Ltd. has to be regarded as business profit of M/s. De Long Mineral & Logistics Pvt. Ltd. and therefore, in our opinion, Article 7 of the DTAA entered into between India and Singapore will not be applicable. Once M/s. De Long Mineral & Logistics Pvt. Ltd. does not have permanent establishment, the business profit earned by M/s. De Long Mineral & Logistics Pvt. Ltd. by way of commission are not chargeable to tax in India and therefore, the Assessee, in our opinion, was not under obligation to deduct tax at source as per provisions of Sec. 195. We, therefore, do not find any illegality or infirmity in the order of CIT(A) deleting the disallowance made by the AO in respect of commission paid to M/s. De Long Mineral & Logistics Pvt. Ltd. - Decided in favour of assessee. Disallowance made on account of hire charges - CIT(A) reduced the disallowance to 20% of such transportation expenses - Held that:- The Assessee in this case has shown the payment of the transportation charges for transporting iron ore from Jalna to Redi. The payment made by the Assessee to each of the truck in respect of transportation ranges from ₹ 10,000/- to ₹ 19,500/-. We do agree that it may be due to the quantity of iron ore transported but, in our opinion, the difference cannot be too much. The Assessee even though has given the details and self-made vouchers but could not give the calculation of how much iron ore has been transported by each truck. Under these facts and circumstances, in our opinion, CIT(A) was fair enough to reduce the disallowance to 20% of the expenses and confirm the disallowance to the extent of ₹ 8,43,986/-. In our opinion, this is not a fit case which warrants our interference. We accordingly confirm the order of CIT(A) - Decided partly in favour of assessee. Disallowance of screening and crushing charges - CIT(A) deleting the disallowance - Held that:- AO cannot enter into the shoes of the businessman and decide at what rate the Assessee should pay the charges to the party from which the Assessee has got the job work done until and unless the case of the Assessee falls within the provisions of Sec. 40A(2). The AO, we noted, in this case has not invoked the provisions of Sec. 40A(2). Even in case the provisions of Sec. 40A(2) are applied, the AO has to prove that the Assessee has made payment for services charges at a rate which is more than the market rate. That is not the case of the Revenue. The AO treated 50% of the expenditure to be bogus on the presumption that no crushing was required as what the Assessee brought from M/s. Mayur Minerals is fines and does not require further crushing. CIT(A), we noted, has appreciated the facts of the case and found that disallowance has been made merely on assumption and presumption and therefore deleted the disallowance of ₹ 10 lacs. We do not find any illegality or infirmity in the order of CIT(A) in deleting the disallowance - Decided in favour of assessee. Disallowance of the labour charges - CIT(A) restricted the disallowance to 20% of the total claim of the expenses amounting to ₹ 2,10,800/-. - Held that:- We noted that the CIT(A) has given a finding of fact that the labour expenses have been incurred through self-made vouchers and there are not supporting bills. Even the expenses have been paid at ₹ 18,500/- or ₹ 19,500/- per day in cash. The onus is on the Assessee to prove the genuineness of the expenses incurred. The ld. AR did not controvert the finding that the expenses are through self-made vouchers and accepted that there is no supporting evidence available. Under these facts and circumstances, in our opinion, there is no infirmity in the order of the CIT(A). - Decided partly in favour of assessee. Cash payment made for the purchase of iron ore - Held that:- The Assessee has made purchases for the iron ore in cash but all the purchases are shown with self-made vouchers. Even when the AO asked for, the Assessee could not produce the cash memo but since the AO accepted the quantitative statement showing the opening stock, purchases, consumption as well as the closing stock, therefore, in our opinion, without making the purchases the Assessee cannot consume the iron ore. We, therefore, delete the disallowance. - Decided in favour of assessee. Payment of demurrage without deducting TDS - CIT(A) deleted the disallowance - Held that:- The issue is duly covered by the decision of the jurisdiction High Court in the case of CIT vs. Orient Goa Co. P. Ltd.[2009 (10) TMI 575 - Bombay High Court] to hold that the facts of the present case, are governed by section 40(a)(i ) of the Act 1961 as Amount paid to non-resident without deducting tax at source - Decided against assessee.

  ---

• 2015 (3) TMI 753
  Profit arising out of the sale of property - business income or capital gain - Commissioner of Income-tax (Appeals) treating the same as capital gain - Held that:- In the case on hand, the property was not purchased in the name of firm. The property was purchased in the individual name even though the assessee was a partner in a firm by name, Sion Land Developers and Builders. If the intention of the assessee was to trade in the land, then, the property would have been purchased in the name of the partnership firm. The very fact that the land was purchased in the individual name clearly shows that the intention was to keep the land as a pride owner of the property. After retaining the property for about eight years there was a capital accretion to the assessee and thereafter she constructed a residence on it by investing ₹ 48 lakhs. In the year 2008, the building along with the land was sold to one Shri E. B. Anilkumar. In these facts and circumstances of the case, this Tribunal is of the considered opinion that this is a sale transaction entered into by the assessee in her individual capacity. Therefore, there is no presumption that the assessee purchased the property with an intention to sell the same. The very fact that the assessee retained the property for eight years before construction shows that the assessee intended to possess the property as a pride owner. Therefore this Tribunal is of the considered opinion that the judgment of the apex court in the case of G. Venkataswami Naidu and Co. [1958 (11) TMI 5 - SUPREME Court] may not be applicable to the facts of the case. Hence, the Commissioner of Income-tax (Appeals) has rightly found that what is to be assessed is only capital gain and not any business profit. Hence, the order of the Commissioner of Income-tax (Appeals) on this issue is confirmed. - decided in favour of assessee. Profit on sale of agricultural land - no capital gain arose to the assessee on sale of such land as has been found by the Commissioner of Income-tax (Appeals) - Held that:- This Tribunal is of the considered opinion that when the land was maintained as agricultural land and coconut trees were cultivated on it, the land has to be treated as agricultural land. The mere fact that the purchaser has developed the plot into residential plots cannot be a ground for treating the land as non-agricultural land in the hands of the assessee. In other words, for all practical purpose, the land should be treated as agricultural land in the hands of the assessee. Therefore, no capital gain arose to the assessee on sale of such land as has been found by the Commissioner of Income-tax (Appeals).The issue does not rests here in this case. The Assessing Officer found that the profit on sale of land is business income. The Commissioner of Income-tax (Appeals) has not addressed this issue in the impugned order. If the assessee is herself engaged in the business activity in purchase and sale of land, then this Tribunal is of the considered opinion that the profit has to be classified as business income. The intention of the assessee at the time of purchase of the property needs to be ascertained. Though the assessee claims that the land was purchased during the assessment year 1996-98 the intention of the assessee to purchase land to such an extent is also not known. It is also necessary to find out whether the assessee has purchased by way of one single sale deed or by means of several sale deeds. It also needs to be ascertained whether the assessee has also purchased property in the same area and sold the same to persons other than M/s. Manhattan Enterprises (Private) Limited. Since the Commissioner of Income-tax (Appeals) has not addressed this issue, this Tribunal is of the considered opinion that the matter needs to be reconsidered by the Commissioner of Income-tax (Appeals) - decided in favour of revenue for statistical purposes. Profit o sale of villas - capital gain v/s business income - Held that:- The Commissioner of Income-tax (Appeals) being an officer having jurisdiction co-terminus with that of the Assessing Officer has to rectify the procedural error committed by the Assessing Officer by calling for the remand report. Merely because the Assessing Officer has not made further enquiry, this Tribunal is of the considered opinion that deleting the entire addition by accepting the claim of the assessee may not be justified. The Assessing Officer, as rightly claimed by the assessee, has mainly placed reliance on the appraisal report of the Department and the seized material. The seized material discloses the profit on sale of the property. The assessee, however, claims that it is an anticipated sale profit and not the actual profit. When the assessee claims that it is only an anticipated sale profit, the Assessing Officer ought to have found out what was the actual sale consideration received on sale of villas.Therefore, this Tribunal is of the considered opinion the Assessing Officer has to examine the matter afresh. Since the Assessing Officer placed reliance on the appraisal report of the Department, the copy of the same shall be furnished to the assessee so as to enable the assessee to offer his comments on the appraisal report. Accordingly, the orders of the lower authorities are set aside and the issue of computation of profit on sale of villas at Irinjalakuda is remitted back to the file of the Assessing Officer. The Assessing Officer shall examine the matter afresh - Decided in favour of revenue for statistical purposes. Profit on sale of agricultural land - Commissioner of Income-tax (Appeals) has deleted the addition - Held that:- It is not in dispute that during the course of the assessment proceedings, the Inspector of Income-tax inspected the land on the instructions of the Assessing Officer and found that pineapple was cultivated on the land which is not disputed at any quarter. It is also not in dispute that the assessee has disclosed agricultural income from the above property. Though the amount shown as agricultural income is very paltry, the fact remains is that agricultural income has been disclosed. When the report of the Inspector of Income-tax discloses that the land was cultivated with pineapple and the assessee also claims that earlier the land was cultivated with plantain, tapioca and pineapple, we find no reason to reject the claim of the assessee. It is also a fact that the subject land was classified as wetland in the records of the State Government. When the assessee is using the land for cultivation, this Tribunal is of the considered opinion that it cannot be a capital asset within the meaning of section 2(14) of the Act. Therefore, the Commissioner of Income-tax (Appeals) has rightly found that it cannot be treated as capital asset within the meaning of section 2(14) of the Act. - decided in favour of assessee Cash seized from the locker - CIT(A) deleted addition - Held that:- in the absence of any satisfactory explanation for the earning of the amount or receipt of advance in pursuance to the agreement it has to be treated as income from unaccounted source. The very fact that the cash was received and kept in the locker would go to show that it is an unaccounted transaction between E. P. Jose and the assessee. No person would keep ₹ 20 lakhs in the bank locker nowadays if it is a real transaction. Therefore, it is for the assessee to explain how he came to the possession of ₹ 20,50,000 in cash and the circumstances under which it was kept in the bank locker. The normal human conduct and behaviour cannot be ignored while deciding the ownership of the money in question. Therefore, this Tribunal is of the considered opinion that the Commissioner of Income-tax (Appeals) is not justified in deleting the addition. Accordingly, the order of the Commissioner of Income-tax (Appeals) is set aside and the order of the Assessing Officer on this issue is restored.- Decided against assessee.

  ---

• 2015 (3) TMI 752
  Revision u/s 263 - whether order erroneous and prejudicial to the interests of revenue although the twin conditions required to be fulfilled for exercising the jurisdiction are not satisfied - exercise of jurisdiction u/s 263 whether is valid or not? - whether the appellant is not entitled to a deduction u/s 32(iia)? - Held that:- A.O. might have accepted the bifurcation of assessee receipts and offering the incomes under respective heads in the scrutiny orders passed. Therefore, it is to be considered that he has formed an opinion of accepting assessee’s rental income under the head “Income from House Property” and allowing the claims as per that Head rather than allowing depreciation on assets, if it is converted to income from business. Since the A.O. formed an opinion not only in the impugned assessment years but also in earlier years, we are of the opinion that the Ld. CIT opinion that the same is to be assessed as business income will fall under the category of difference of opinion. If A.O. has taken one of the opinion available out of the two, the Ld. CIT cannot invoke jurisdiction under section 263. Provisions of section 263 does not permit substituting one opinion by another opinion. Therefore, the order of Ld. CIT cannot be sustained on the principles of ‘erroneous’ nature of A.O. order, as it is not erroneous. - Decided in favour of assessee. Claim of interest - Held that:- As can be seen from the facts and materials on record, in course of revision proceeding, assessee has submitted detailed working relating to apportionment of interest to house property income as well as business income. As it appears, ld. CIT has not at all applied his mind to the working submitted by assessee. However, on perusal of the working submitted by assessee in course of revision proceeding, clearly demonstrate that actually there is no such excess claim as alleged by ld. CIT in the show cause notice. Ld. CIT while issuing the show cause notice u/s 263 has specifically alleged of excess claim of interest to the tune of ₹ 557.23 lakhs, but, ultimately he has not at all given any specific finding with regard to such allegation and has merely remitted the issue back to the file of AO for verification. It is to be noted the direction of ld. CIT in this regard is nothing but a general direction and in the nature of roving and fishing inquiry as ld. CIT has not brought any material on record to substantiate his allegation that assessee has claimed financial charges in excess. - Decided in favour of assessee.

  ---

• 2015 (3) TMI 751
  Determination of income - whether appellant-company is covered under Chapter XII-G, of the 'Act' for determination of its taxable income? - whether appellant-company's various incomes, viz., core ship ping, incidental shipping, interest and dividend are from business of operation of qualified ships? - treatment of reasonable allocation of common costs as per provisions of section 115VJ of Act - Held that:- The issues involved in grounds of the assessee's appeal for the assessment year 2006-07 are similar to the issues involved in assessee's appeal for the assessment year 2005-06 except that the claim of the assessee for allocation of administrative expenses against incidental activities is also not allowed in the assessment year 2006-07 whereas the same was allowed by the Assessing Officer himself in the assessment year 2005-06. Learned counsel for the assessee has submitted that only this aspect of the matter may be restored to the file of the Assessing Officer for deciding the same afresh after taking into consideration the assessment made for the assessment year 2005-06 on similar issue and after verifying of the relevant facts. As the learned Departmental representative has also not raised any objection in this regard, we restore this limited issue to the file of the Assessing Officer for deciding the same afresh. As regards the claim of the assessee for allocation of common costs towards interest and dividend income, we follow our conclusion drawn in the assessment year 2005-06 and decide this issue against the assessee - Decided partly in favour of assessee for statistical purposes. Re-adjusting the turnover by reducing ₹ 73.52 crores from 'core shipping - Held that:- Respectfully following the Tribunal's order dated July 29, 2011 (Shipping Corporation of India Ltd. v. Addl. CIT [2011 (7) TMI 588 - ITAT, Mumbai]) in the assessee's own case for the assessment year 2007-08, we uphold the action of the authorities below in reducing the profit on sale of ships and fixed ships from the turnover of core shipping. The action of the authorities below in reducing the excess provision written back and sundry credit balances written back, however, is set aside and the Assessing Officer is directed to include the said income in the turnover of core shipping. As regards item No. 3 (sundry receipts from core shipping) and item No. 6 (reimbursement from managed vessels), learned counsel for the assessee has submitted that neither the Assessing Officer nor the learned Commissioner of Income-tax (Appeals) has examined the relevant details placed and urged that the matter may be sent back to the Assessing Officer for deciding the same afresh after verifying the said detail. As the learned Departmental representative has no objection in this regard, the issue relating to inclusion or exclusion of item Nos. 3 and 6 is restored to the file of the Assessing Officer for deciding the same afresh after verifying the said details.- Decided partly in favour of assessee. Readjustment in turnover of core shipping - Assessing Officer has committed the arithmetic totalling errors of ₹ 41.62 lakhs in the assessment order - Held that:- assessee has submitted that certain factual mistakes committed by the Assessing Officer in computing the turnover of the core shipping activities were pointed out by the assessee before the learned Commissioner of Income-tax (Appeals) and the direction was given by the learned Commissioner of Income-tax (Appeals) vide his impugned order to the Assessing Officer to verify and correct the said mistakes. He has submitted that the Assessing Officer, however, has not complied with the direction of the learned Commissioner of Income-tax (Appeals) and a fresh direction may therefore be given to the Assessing Officer to correct the mistakes pointed out by the assessee after verification. We accordingly direct the Assessing Officer to rectify the mistakes, if any, as pointed out by the assessee in working of turnover of core shopping activities after verification - Decided in favour of assessee.

  ---

• 2015 (3) TMI 750
  Additions on the basis of Admission / statement made during survey - statement retracted later - whether Assessing Officer has failed to establish by bringing on record any evidence that addition of ₹ 5,00,000 and ₹ 69,00,000 was warranted and called for - amount of ₹ 75 lakhs is surrendered as additional income for the financial year 2008-09 over and above any regular income as per books of account - Held that:- We fail to understand that once the assessee has retracted from surrender within seven days and has in fact complained against high headedness of the survey team led by the Additional Commissioner of Income-tax, what prevented the Department from making any enquiries in respect of the persons from whom so called receivables were there which had not been recorded in the books of account. As held by the hon'ble Supreme Court in case of Pullangode Rubber Produce Co. Ltd. v. State of Kerala [1971 (9) TMI 64 - SUPREME Court] that admission is important piece of evidence but the person making admission can show that such admission is not correct. Once this was done by the assessee, the onus was on the Revenue to make enquiries and only then some addition could have been made on the basis of such enquiries. The submissions clearly show that no address is mentioned. It does not indicate that the amount is receivable. If the assessee admitted during the survey that these amounts represent receivables, the Revenue should have at least extracted address of such persons and when the assessee retracted from the surrender then the statements of these persons should have been recorded which has not been done. There is a clear cut overwriting in the inventory of notes of ₹ 500. Further there is no mention about any note found in the denomination of ₹ 50. These features also create doubt regarding the genuineness of the survey. Thus addition has been made without any evidence and is merely on the basis of statement recorded during the survey which cannot be sustained. Accordingly we set aside the order of the learned Commissioner of Income-tax (Appeals) and delete the addition. - Decided in favour of assessee.

  ---

• 2015 (3) TMI 749
  Rectification of mistake - Tribunal has not considered the correspondence exchanged between the assessee and the Assessing Officer with regard to the purchase of goods for a sum of ₹ 17,989,142/- from M/s J.S. Jain Agro Industries Pvt. Ltd. (Shamily Party) in a proper manner and has confirmed the additions on account of unexplained investment - Held that:- . From the orders of the lower authorities, we find that after collecting the evidence from JSJAI, the Assessing Officer has immediately confronted the same to the assessee. Thereafter the ld. counsel for the assessee asked the Assessing Officer to afford an opportunity to cross-examine the responsible Director of JSJAI but he has not made any effort to obtain the confirmations from JSJAI or to ask him as to why he has shown sales in its name in its books of account. We also find force in the observations of the ld. CIT(A) that if JSJAI has done mischief with the assessee or has committed any fraud by showing wrong sales in its name, there could have been some criminal complaint or FIR against JSJAI. But nothing has been done by the assessee against JSJAI. Even till final hearing of the appeal before the Tribunal, the ld. counsel for the assessee could not place any evidence on record as to how and when he has recovered the outstanding debit balance of ₹ 17,98,142.70 from JSJAI nor did he claim it to be as bad debt if he failed to recover it for any reason. All these facts support the case of the Revenue that the assessee has made purchases as declared in the books of JSJAI out of its books of account and made sale thereof and earned profit. Since the assessee has been showing debit balance in the name of JSJAI in its books of account and no purchase was shown in its account, the purchases made by it as per statement of JSJAI is outside the books of account, in which the investment made is to be considered as unexplained investment for which addition is called for. Since the Tribunal has examined all the facts in the light of the orders of the lower authorities and the rival submissions and adjudicated the issue after taking into account all minor details and the assessee sought re-appreciation of facts through its Miscellaneous Application, which is not permissible under the law, we find no error apparent in the order of the Tribunal and we accordingly reject the Miscellaneous Application of the assessee. - Decided against assessee.

  ---

• Customs

• 2015 (3) TMI 778
  Violation of Regulation 6(n) and Regulation 9 - Imposition of penalty - Penalties under Regulation 12 (8) of the Handling of Cargo in Custom Area Regulation, 2009 and Section 158(3) of the Customs Act, 1962 and penalties on the co-appellant of ₹ 1 lakh each under Section 117 - Held that:- The allegations would reveal as to how the boundary wall of the CFS encompasses the whole area of Survey Nos. 117 and some 145 containers are stacked in the unauthorised area. The whole show cause notice is premised on the fact that the Customs operations have been carried out in the area outside the demarcated CFS. Therefore, unauthorised area has been brought in within the purview of the CFS. The Directors of the Appellants had clarified that Survey No.117 was not a part of notified area, however they stated that while constructing the wall of the CFS they did not pay particular attention to the various survey numbers mentioned in the Notification. The Directors further informed that the initial wall of the CFS was constructed including the area of Survey No. 117. The legal owner of Survey No. 117 is Shri.Ramesh Gharat and they have a lease agreement with him for 15 years. The reply to this allegation in the show cause notice reveals that all the directions have been complied with and the total area together with the boundaries has been indicated in the reply to the show cause notice. Thus, the land Survey No. 117 was, according to the Appellants, already used by them as open warehouse for storing various goods and which was enclosed by 10 feet wall. It was incumbent upon the Tribunal to find out whether the allegations in the show cause notice and particularly of violation of Regulation 6(n) and Regulation 9 could be held to be established and proved. Regulation 6(n) sets out the responsibility of Customs Cargo Service Provider not to make any alteration in the entry or exit points or boundary wall without the permission of the Commissioner of Customs. Regulation 9 provides for an application for approval of Customs Cargo Service Provider and the details in which it has to be made. - If the show cause notice alleges violation and breach of these Regulations and section 8(b) and 141(2) of the Customs Act, 1962, then, we do not see how the Tribunal, in a single paragraph reasoning, makes no reference to any of these provisions or the clauses of the Regulations, but only section 158. An imposition of penalty has a far reaching effect and consequence and may result in suspension of the approval or withdrawal of it or nonPage renewal thereof. Therefore, all such matters have to be gone into and considered meticulously, minutely and seriously. That having not been done and the Tribunal failing to apply its mind to some of the most important and crucial factors that we are constrained to set aside the impugned order. - Decided in favour of appellants.

  ---

• 2015 (3) TMI 777
  Validity of auction sale - Petitioner's bid being highest in fourth auction was not considered and the goods were auctioned again in 5th auction - Held that:- In terms of Clause 3.10 of the Circular No. 12/2006, it is evident that the goods have to be sold to the highest bidder obtained in the third auction. In the present case, the difficulty is that the petitioner did not participate in the third auction. Therefore, even if the Circular No. 12/2006 were to be strictly adhered to, the petitioner would have no case. Moreover, we are clear that it is Circular No. 12/2006 which would be applicable in the present case and not Circular No. 50/2005 because the latter circular pertains to auctions by the custodians and the former circular applies to auctions by the customs directly. The present case is one of an auction by the customs and not by any of the custodians. - The petitioner, having lost out in the fifth auction, cannot be permitted, after it has participated in the same, to challenge the said fifth auction. We are also informed that the highest bid obtained in the fifth auction is about ₹ 80 lacs more than what the petitioner had offered in the fourth auction - No merit in petition - Decided against Petitioner.

  ---

• 2015 (3) TMI 776
  Extension of warehousing period - petitioner failed to discharge its duty by not paying the duty due on the warehoused goods as undertaken by it - detained goods were sold in e-auction - said sale proceedings came to be cancelled since the bidder had not fulfilled the terms. - Held that:- request for re-export of the goods could be allowed even if the maximum period of warehousing had expired and demand notices had been issued and even if it had been decided to put the goods to auction - circular would not apply to the present case, inasmuch as the warehoused goods were not only decided to put on auction, but also they were already put to e-auction held on 23.12.2011 and sold for ₹ 2,26,55,556/- to one Sri Shiva Impex, Chennai, which stood as highest bidder. Of-course, it is true that the said sale proceedings were subsequently cancelled, but, this cannot make any favour to the petitioner company to claim for extension of the period. It is no doubt true that warehousing is permissible even beyond the period fixed by the statute, subject to payment of interest on the amount of duty on the warehoused goods towards permissible period, however, it is to be noted that mere seeking for extension of the period does not serve the purpose and there should be a reasonable cause has to be shown for such extension. In this case, the petitioner company, right from the inception, has been seeking for extension of the warehousing period from time to time though citing reasons that the company was declared sick, etc., but there was no genuineness in its attempt in clearing the goods even after expiry of extended period. Petitioner company had no intention, whatsoever to clear the goods, but has been attempting throughout one and half a decade long period to stall the disposal of these uncleared time-expired bonded goods. - writ petition is liable to be dismissed for want of merits. - Following decision of Union of India v. Shakti LPG Ltd. [2008 (2) TMI 25 - SUPREME COURT] - Decided against assessee.

  ---

• 2015 (3) TMI 775
  Detention order - Offence committed under Section 135 of the Customs Act, 1962. - Detention order passed under Section 3(1)(i) and 3(1)(iii) of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 - smuggling of goods and illegal transportation and concealment of contraband goods - Held that:- The contentions have to be rejected for several reasons. Firstly, the contention of the petitioner that he knows and understands only Bengali is inaccurate. In fact, we feel that the petitioner has deliberately projected and misstated that he does not know and understand English. Given his background, it appears that he knows and understands English perfectly well - This apart, it would be fallacious and wrong to hold that the failure to supply Bengali translation of the standard terms and conditions and other portions/ notings on the documents is fatal to the validity of the detention order and would merit setting aside or quashing of the detention. The contention of the petitioner that though he was furnished with the Bengali translation of the letter dated 27th November, 2013, he wasn't supplied with the English version of the same, must perish for the same reason. Once the petitioner accepts that he was furnished with the Bengali translation of the said letter, which he can read and understand, it should be held that there was adequate and proper compliance with the constitutional mandate. first detention order was passed after examining the relevant facts when the petitioner was not in detention. Bail granted by the trial Court had been cancelled, but the petitioner had not surrendered or arrested. Subsequently, the petitioner surrendered on 11th June, 2014 and till then the detention order had not been served. Thus, the Sponsoring Authority deemed it appropriate to intimate the said factual position to the Detaining Authority to ascertain whether they should execute the said order. The Detaining Authority after examining the relevant facts, passed an additional detention order in continuation of the earlier order dated 27th May, 2014, elucidating reasons why the detention order dated 27th May, 2014, should still be served and executed. We do not think that the letter/ order dated 13th June, 2014, which purports to provide additional grounds of detention can stand on its own. It is not by itself a separate and independent detention order. It is necessarily an adjunct and a corollary to the earlier order dated 27th May, 2014. It would be incorrect and improper to state that the authorities had not ascertained full facts. Filing of charge sheet on the completion of investigation is a separate matter. In the present case, the contention of the respondents is that there were several collateral and ancillary aspects, which required consideration before the charge sheet could be filed. We do not think that this case can be equated with a case of incomplete or inchoate investigation. The detention order is a speaking order and is crystal clear on the factual narration and factual matrix. The object and purpose of preventive detention which is anticipatory and precautionary in nature in the said sense does not relate to an offence punishable in criminal proceedings. A preventive detention order is not a parallel proceeding. - No merit in petition - Decided against petitioner.

  ---

• Corporate Laws

• 2015 (3) TMI 773
  Company in liquidation - Asset purchased before initiating liquidation - Execution of Deed of Conveyance for the said asset - Held that:- The winding-up petition was filed on 15th March, 1996 and the MOU and lease agreement are dated February 1999 and March 1999. Admittedly, by the said agreement possession and lease have been granted. This will amount to variation of the terms of the 1995 agreement and disposition of property and will therefore be hit by Section 536(2) of the 1956 Act. This will render the MOU of February 1999 and the lease agreement of March 1999 void. Although a plea was taken by Counsel for the applicant that Section 536 is not mandatory but discretionary in nature and the said issue has not been raised by the Official Liquidator, the said cannot be supported as Section 536(2) of the 1956 Act makes it clear that any disposition of property after commencement of winding-up proceedings “shall” be void. Assuming that the said issue has not been raised by the Official Liquidator, the language of the section itself renders such disposition void as the same is without jurisdiction and non-est in the eye of law. - Decided against the appellant.

  ---

• Service Tax

• 2015 (3) TMI 791
  Liability of subcontractor for payment of service tax - discharge of service tax by the principal - Held that:- A reading of the circulars (Appendix-I) show that there is substance in the submission of the counsel for the Assessee. However, it is not possible for us to finally decide this point as neither the AO nor the Tribunal has recorded any Finding whether the BHEL has paid the service tax for the period in question for the services rendered by the Assessee or not. - Tribunal has already remanded the matter back for re-decision; there appears to be substance in the submission of the counsel for the Asseesee; in view of the same, all the findings recorded by the Tribunal against the Assessee are set aside. The AO may again decide both the cases afresh in accordance with law, without being influenced by any observations made in the judgement of the Tribunal or in this order. - Matter remanded back - Decided in favour of assessee.

  ---

• 2015 (3) TMI 790
  Rectification of mistake - Held that:- As regards para 4.6, in the said para we have recorded the contention submitted by the learned DR during the course of arguments. So long as the same is not disputed by the DR, we cannot delete the said para. Para 4.6 merely records the contention raised by the DR on the matter and is not a finding or conclusion drawn by the Tribunal - As regards para 5.9, in the said para we have given consideration to the various contentions raised by both the sides and thereafter came to the conclusion that the plea of the bonafide belief claimed by the appellant cannot be accepted. Thereafter in para 5.10, we have recorded that the appellant has collected service tax from the students who attended the various courses and have remitted the same to the exchequer. Therefore, the question for consideration was only making the payment under protest and nothing more and hence, the question of demand being time barred would not arise. - Rectification denied.

  ---

• 2015 (3) TMI 789
  Demand of service tax - appellant during the material period involved in all these appeals has not included the value of supply of Electricity supplied free by the service recipient - Held that:- Departmental Representative submitted that the issue involved in these appeals and the order as cited is same and places on record a letter received from office of Commissioner of Customs, Excise and Service tax (Letter no. V(2)04/2012/R&T/594 dated 29.01.15 addressed to Addl. Commissioner (AR), CESTAT, Mumbai) wherein it is stated that CBEC has decided not to file Civil Appeal in the case against [2014 (5) TMI 651 - CESTAT MUMBAI]. - Impugned order is set aside - Decided in favour of assessee.

  ---

• 2015 (3) TMI 788
  Banking and other financial services - Held that:- There appears no difference at all in the facts what that was covered by the cited decision to hold that present case is a different case. Therefore, the authority misconceiving the appellant to be financial company to tax the appellant does not arise - The facts in dispute are similar in appeals as at Sl.No.75 to 78 of the cause list. But so far as appeal No.ST/711/2010 listed in Sl.No.79 of the cause list, it is brought to our notice by learned counsel that vending machine supplied by the appellant were subjected to rental and that rent was also taxed under the aforesaid taxing provision. Principally when the appellant does not come within the purview of other financial service provider, there shall be no liability also in this appeal - Decided in favour of assessee.

  ---

• Central Excise

• 2015 (3) TMI 784
  Demand of differential duty - clearance of goods after processing but as such - reversal of credit - activity is amount to manufacture or not - purchase of bumpers, grills, etc., on which the process of Electro Deposition anti-rust so that the shelf life of the said bumpers, grills, etc., would be generally increased) - Held that:- Appellants purchase inputs, avail MODVAT Credit of duty paid thereon subject them to the process of E.D. Coating and remove the same on payment of duty equivalent to the amount of MODVAT Credit availed by them initially at the time of receipt of the inputs. It is thus apparent that the inputs are removed from the factory after undertaking the process of E.D. Coating. In view of this the ratio of the decision of the Larger Bench in the case of Commissioner of Central Excise, Vadodra v. Aisa Brown Boveri Ltd., 2000 (120) ELT 228 is not applicable as the facts are different in as much as the inputs were cleared as such in the said matter. It has been emphasized by the learned counsel for the appellants that words "as such" were not mentioned in Rule 57-F at the relevant time. In our view the absence of these words does not make any difference as Rule 57-F of the Central Excise Rules deals with the "Manner of Utilization of Inputs and the Credit". It is clear that bumpers and grills are most certainly of commercial use in themselves whether the process of ED coating is applied or not. Importantly, this Court laid down that value addition without any change in name, character or end use of goods cannot possibly constitute criteria to decide as to what is manufacture. - Court would be adding words to Rule 57F(1) to the effect that value additions made to inputs covered by sub-rule (ii) would also suffer duty even if there is no manufacture. Second, sub-rule (3) and (3A) apply to an entirely different factual scenario, as has been conceded by learned counsel for Revenue, and it is only after all the conditions under the said sub-rules are met that duty attributable to inputs contained in partially processed inputs would then become dutiable - Impugned order set aside - Decided in favour of assessee.

  ---

• 2015 (3) TMI 783
  Maintainability of appeal - Monetary limit - Refund claim - Claim for accumulated CENVAT Credit - Whether the Tribunal has committed error in granting claim of cash refund of unused accumulated deemed credit contrary to the provisions of Rule 57A of the Central Excise Rules, 1944 and Notification No. 85/87- CE dated 1st March, 1987 - Held that:- It is not disputed by the appellant's counsel that the amount to be refunded is less than ₹ 2 lakh and in view of the Circulars issued by the Department which have been considered in COMMR. OF C. EX. & CUS., VADODARA-I VS. PHARMANZA HERBAL PVT. LTD. reported in [2014 (9) TMI 330 - GUJARAT HIGH COURT] and Commissioner of C. Ex. & Customs Vs. Stovec Industries Ltd. reported in [2013 (1) TMI 72 - GUJARAT HIGH COURT], the Tax Appeal below amount of ₹ 2 lakh is not maintainable. Even though the appeal was filed prior to issuance of the Circulars in the year 2010, the Circulars would apply even to the pending appeal. - Appeal not maintainable.

  ---

• 2015 (3) TMI 782
  SSI Exemption - benefit of exemption under Notifications Nos.175/86-C.E. and 1/93-C.E. dated 1.3.1986 and 28.2.1993 - Whether a party is entitled to the benefit of exemption under Notifications Nos.175/86-C.E. and 1/93-C.E. dated 1.3.1986 and 28.2.1993, respectively, for the clearance of their product(s) manufactured under the brand name of another company not entitled to SSI exemption - Held that:- A plain reading of the Section 23(1) of The Trade Marks Act, 1999 would disclose that once the registration of the trade mark under the said Act is granted, it takes effect from the date of making of the application for the registration. The certificate of registration issued to the appellants clearly discloses that the application was filed on 01.05.1992. In fact, the certificate itself reads that the appellants have been registered under the Act in relation to the trade mark for telephone (basic and cordless) as of the date of 01.05.1992. Obviously, therefore, the authorities below erred in denying the benefit under the said notification w.e.f. 01.05.1992 to the appellants and order in that regard cannot be sustained. - The appellants are entitled for the benefit under the Notification Nos.175/86- CE dated 01.03.1986 and 1/93-CE dated 28.02.1993 w.e.f. 01.05.1992 onwards. - Decided against Revenue.

  ---

• 2015 (3) TMI 781
  Cenvat Credit - Supply to SEZ - Amendment to rule 6 - whether retrospective or prospective - Held that:- Following decision of Commissioner of Central Excise & Customs, Raipur vs. M/s. Steel Authority of India Ltd., Bhilai Steel Plant, Bhilai reported in [2013 (5) TMI 460 - CHATTISGARH HIGH COURT] - Decided against Revenue.

  ---

• 2015 (3) TMI 780
  Denial of rebate claim - merchant exporter - excess duty paid by the manufacturer supplier - Notification No. 19/2004-CE(NT) dated 06.09.2004 and Notification No. 4/2006-CE dated 01.03.2006 - original authority held that duty was required to be paid on exported goods at the effective rate of duty @ 4%/5% in terms of Notification No. 4/2006-CE dated 01.03.2006 as amended and sanctioned the rebate claims to the extent of duty payable @ 4%/5% - Simultaneous availment of benefit of two notifications - Commissioner (Appeals), modified the impugned Orders-in-Original and allowed the recredit in cenvat credit account of the amount rejected as rebate. Held that:- There is no merit in the contentions of applicant that they are eligible to claim rebate of duty paid @10% i.e. General Tariff Rate of Duty ignoring the effective rate of duty @ 4% or 5% in terms of exemption notification No. 4/06-CE dated 1.03.06 as amended. As such Government is of considered view that rebate is admissible only to the extent of duty paid at the effective rate of duty i.e. 4% or 5% in terms of Notification No. 4/06-CE dated 1.03.06 as amended, as applicable on the relevant date on the transaction value of exported goods determined under section 4 of Central Excise Act, 1944. - Decided against the assessee. Allowing the manufacturer to avail re-credit of the amount paid in excess - revenue contended that manufacturers have already recovered excess duty from its buyer M/s Cipla Ltd., Mumbai and allowing re-credit of excess paid amount in the cenvat credit account of manufacturer will lead to additional benefit to the manufacturer which will amount to unjust enrichment. - Held that:- The factual position is to be verified by the original authority from records. Government notes that in these cases claimant is a merchant exporter and duty on exported goods is paid by manufacturer. So, the re-credit of excess paid amount is to be allowed as ordered by Commissioner (Appeals),, only if the provisions of section 12B of Central Excise Act 1944 are complied with. - Decided in favor of Revenue.

  ---

• 2015 (3) TMI 779
  Denial of Rebate claims on reexport of capital goods as such - whether reversal of cenvat credit under rule 3(4)/ 3(5) of Cenvat Credit Rule 2004 on removal of inputs / capital goods as such is to be treated as payment of duty for the purpose of sanctioning rebate claim under rule 18 of CER 2002 read with Not. No. 19/04-CE(NT) dated 6.9.2004 - Held that:- an amount reversed under rule 3(4) / 3(5) of Cenvat Credit Rules 2004 on removal of inputs / capital goods as such payment of duty of excise for the purpose of sanctioning rebate claim under rule 18 of Central Excise Rules 2002 read with Not. No. 19/04-CE(NT) dated 6.9.2004 - that applicant has cleared the capital goods as such for export after payment of duty by way of reversal of cenvat credit under Rule 3(5) of Cenvat Credit Rules 2004. Therefore, the rebate claim is admissible to the applicant under Rule 18 of Central "Excise Rules 2002 read with Notification No.19/04-CE(NT) dated 6.9.04 subject to the condition that the provision of Notification No.19/04-CE(NT) dated 6.9.04 are complied and rebate claim is otherwise in order. - Following decision of Sterlite Industries Ltd. Raigarh [2011 (3) TMI 1556 - BOMBAY HIGH COURT] - Decided in favour of assessee.

  ---

• CST, VAT & Sales Tax

• 2015 (3) TMI 787
  Classification of goods - "Ujala Supreme" and "Ujala Stiff and Shine" - it is claimed that "Ujala Stiff and Shine" is a liquid form and is covered under primary form - Whether both the items fall under residuary entry 103 of S.R.O. No. 82 of 2006 which provides for rate of tax on items not covered by any of the entries in the list provided in the notification or by any entry of any of the Schedules to the Act? - Held that:- provision deals with the levy of tax on sale and purchase of goods and provides various facets. It applies to an importer, casual trader, agent of a non-resident dealer, dealer in jewellery or gold, silver & platinum group metals or silver articles or contractor of State Government or the Central Government, etc. regardless of the turnover. Under Clause (a), in respect of the goods specified in the second and Third Schedule, tax is payable at the rate specified in the said schedule. Tax is payable at the point of sale. As is seen, clause (b) stands deleted. Under Clause (d), goods not falling under Clauses (a) or (c), tax is payable at the rate of 12.5% at the point of sale within the State. The legislature has conferred the power on the Government to notify a list of goods taxable at the rate of 12.5%. Harmonious construction of Clause (a) and (d) clearly demonstrates that in case of notified goods, the rate of tax would be 12.5%. Similarly, in case of goods not falling under Clause (a), that is Second and Third Schedule, the rate of tax would be 12.5%. It requires to be clarified here that this does not necessarily mean that exempted goods would be taxable by virtue of Clause (d). It is luculent that the commodities mentioned in the schedules have been allotted code numbers developed by International Customs Organisation, which is known as Harmonised System of Nomenclature (HSN). The same has been adopted in the Customs Tariff Act, 1975. Where the commodities have been given HSN numbers, the same meaning would be given for classification under the Customs Tariff Act, 1975. The rules accept that for certain entries, HSN numbers are not given. Where commodities are not ascribed any HSN number, they would be interpreted as understood in common or commercial parlance. In case of inconsistency between meaning of a commodity without HSN number and a commodity with HSN number, the commodity without HSN number should be interpreted by including the commodity in that entry, which has been given HSN number. Thus, primacy is given to HSN number classification and adoption/interpretation of HSN classification under the Customs Tariff Act, 1975 and any inconsistency or debate would be decided with the commodity being categorized against the HSN number. Respondents have not invoked and there is no lis as regards the applicability in Entry 27. As per the respondent and the impugned judgment, the residuary Entry, that is, Entry No. 103, is attracted. Needles to say, the residuary entry would apply only when the goods are not covered under any other Entry of the List or any other Entry in the Schedules. To elaborate, the case of the respondent is that two goods under consideration are not covered by any specified Entry in the Schedules as well as in SRO 82/2006 dated 21.01.2006. If the goods in question are covered under any of the Entries in the Schedule, Entry 103, which is the residuary Entry, would not get attracted. In such cases, the tax rate as stipulated in the Schedule, applicable to the Entries would be applicable. It is clear as crystal that two goods/products have been held to be covered under the HSN Code 3905, and HSN Code 3204.12.94 and hence, there can be no shadow of doubt that the said entries fall under entry numbers 155(8)(d) and 118(5) of the list "A" of Third Schedule of the 2003 Act covering industrial inputs and packaging materials, but that would not be material and relevant regard being had to the rules of interpretation which are applicable. The subject matter of the list will not fall under residuary entry 103 in SRO 82/2006 dated 21.01.2006, if the goods in question fall in any entry of any of the schedule. That is what is conveyed by the language employed in Entry No. 103. The said Entry, as we find, does not stipulate or carves out any exception in respect of list "A" to the Third Schedule. That being the position, once goods fall under any of the HSN classification, that is, the goods/commodities that are included in list "A" to the Third Schedule, entry 103, which is residuary in nature, would not get attracted. It has been laid down that after devolution with water the goods continue to remain classified under the same HSN number. This means that the goods remain in list "A" of the Third Schedule. It may be noted that the position would have been totally different had the goods in question been separately and specifically itemized in SRO number 82/ 2006 dated 21st January 2006. The goods which are specifically mentioned in any of the entries of the said SRO, would be chargeable to tax @ 12.5%. But that is not the lis here, for the Revenue has included the goods in the residuary Entry 103 and the said entry, by no stretch of reasoning, can be made applicable. - High Court, has missed the issue in entirety and, therefore, we are obliged to dislodge the impugned judgment and orders. However, if any assessee-appellant has paid the amount of VAT to the State Government, they will not be entitled to get any refund of the said amount. - Decided in favour of assessee.

  ---

• 2015 (3) TMI 786
  Denial of exemption claim - Inter state sale or intra state sale - assessee had purchased `Beedi' leaves, by participating in the auction conducted by the Forest Department, Government of Andhra Pradesh - After the purchase, the assessee had dispatched the said `Beedi' leaves to the head office in the State of Maharashtra - Whether the transactions in question are exigible to tax in the State of Andhra Pradesh under the provisions of the Act - Held that:- Assessee-herein is a branch office which procures `Beedi' leaves from the seller. The seller had issued a notice inviting for the tenders and the tender quotes stating the rate per kg at which the prospective purchasers desire to purchase the `Beedi' leaf to be collected, cured, bagged in trade bags and delivered at the godown of a unit. The assessee had participated in the auction pursuant to the aforesaid invitation and succeeded in its offer. With regard to the conditions of completion of the sale transaction, it is relevant to notice Rule 3(13) of Andhra Pradesh Minor Forest Produce (Regulation of Trade in Abnus Leaves) Rules, 1970 which are applicable to the tender issued by the seller. - The tender schedule, as issued by the seller, also stipulates that the purchaser should remove the stocks from the godowns within 30 days of issue of delivery orders failing which the purchaser will have to pay the godown rent and other expenses on watch and ward, insurance etc. Further, the period for which the stocks remain in the godown, the seller shall not be responsible for any deterioration in the quality of `Beedi' leaves during the storage in godown. Based on the aforementioned stipulations, it is clear that the delivery of the goods is complete at the godown of the seller on payment of the amount of the agreed consideration. It can be inferred that the events of sale of goods by the seller and the movement of goods from the State of Andhra Pradesh to another State are not inextricably connected and independent of each other. There is no incident of direct sale between the seller and the head office of the respondent-Company in the State of Maharashtra. It is the branch office that purchases the goods and receives them subsequent to payment made by it to the seller and thereafter, transfers it to the head office of the respondent-Company in the State of Maharashtra. The incidence of sale is complete once the purchaser, that is, the branch office renders the payment for the goods. Once the sale transaction concludes in the State of Andhra Pradesh only, the mere transport of goods from branch office in Andhra Pradesh to the head office in Maharashtra would not result in an inter-State sale. Therefore, the sale or purchase of the `Beedi' leaves in the present case do not occasion the movement of the goods outside the State in order to qualify as an inter-State sale under Section 3(a) of the CST ACT and therefore, is exigible to tax under the Act. - impugned judgment and order passed by the High Court cannot be sustained and requires to be set aside - Decided in favour of Revenue.

  ---

• 2015 (3) TMI 785
  Classification of sale - Whether the Tribunal fell into error in rejecting the assessee’s contention that the goods in question were inter state sales within the meaning of Section 3(a) of the Central Sales Tax Act - Held that:- assessee was able to substantiate its contention that 20 of the transactions were, in fact, inter state sales. This was because each one of them had the necessary supporting document in the form of GRs. However, in the case of these 6 transactions, there is no material to show that the movement of goods was caused by and was the result of the contract of sale. The assessee counsel contends that this Court must consider the facts in totality of circumstances i.e. 20 out of 26 transactions are undisputed and that given the factual compulsion i.e. the inability to use a formal carrier the assessee should not be prejudiced. Though this submission is attracted, the Court is at the same time aware that there is no presumption either way that an inter state sale claimed by the assessee is one per se - As to whether the transaction itself was covered by an inter state sale or otherwise is a burden that the assessee has to discharge, that it did so in other 20 cases but was unable under these 6 cases precisely underscores or highlights the burden placed upon it - Decided against assessee.

  ---

• Wealth tax

• 2015 (3) TMI 771
  Valuation of net worth of assessee company - whether under Section 40(3)(vi) of the Finance Act, 1983, "the building" is used by the assessee as a factory for the purpose of its business - Held that:- No doubt, M/s Dior International P. Ltd. was manufacturing the garments for the assessee but it was charging the price for the same from the assessee and assessee was charging rent for the use of the premises. Therefore, the only relationship between the parties was that of the lessor and lessee and nothing else. Therefore, the contention of the assessee that M/s. Dior International was manufacturing the garments for the assessee, in our opinion, would not advance the case of the assessee and is, therefore, rejected. In view of the above discussion, it is held that a portion of the building belonging to assessee was in fact used by M/s. Dior International for its own use of manufacturing activity and consequently, it cannot be said that such portion of building was used by the assessee for the purpose of its own business of manufacturing as factory. Therefore, such portion of the building was rightly included by the lower authorities in the net wealth of the assessee company. - Decided against assesseee.

  ---

• Indian Laws

• 2015 (3) TMI 774
  Complaint under Section 138 of the Negotiable Instruments Act - Statement of the appellant under Section 313 of the Code of Criminal Procedure, 1973, recorded - Material documents not placed when statement was recorded - Held that:- In our opinion, the appellant is right in his contention. Since these documents were material, the appropriate course of action for the High Court was to remand the matter back to the trial court for recording a supplementary statement of the appellant under Section 313 of the Code instead of straight away convicting the appellant without giving him an opportunity to have a say in respect of the documents, viz., exhibit CW 3/3 (collectively) and CW 3/4 (collectively). Under the circumstances, we allow these appeals and set aside the impugned judgment of the High Court and remand the matter back to the trial court for recording a supplementary statement of the appellant under Section 313 of the Code and passing appropriate orders after giving an opportunity of being heard to the appellant.- Decided in favour of appellant.

  ---

• 2015 (3) TMI 772
  Abuse of dominant position under section 4(2)(a)(i) of The Competition Act,2002 - Change in the terms of allotment of flats - Held that:- As per OP's own website, it had only one residential project in the relevant market. The informants did not submit any information on the presence of other players in the relevant market in which OP was operating. However, as per the information available in public domain, there are many other real estate developers such as Supertech, Amrapali Group, K.V. Developers, Nirala Group, Earth Infrastructure Group etc. which are operating in the relevant market. Further the size and resources of OP does not seem to be much in comparison to these other players in the relevant market. Also there seems to be no entry barriers or any dependence of buyers on OP for any reason whatsoever. Therefore, prima facie, it does not appear that OP held a dominant position in the relevant market. Since OP, prima facie, does not appear to be in a dominant position in the relevant market, there seems to be no question of abuse of its dominant position within the meaning of the provisions of Section 4 of the Act. - Case close down.

  ---