Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
March 3, 2015
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Articles
News
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Change In Tariff Value of Crude Palm Oil, Rbd Palm Oil, Others – Palm Oil, Crude Palmolein, Rbd Palmolein, Others – Palmolein, Crude Soyabean Oil, Brass Scrap (All Grades), Poppy Seeds, Areca Nuts, Gold And Silver Notified
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New Investment Pattern For Non-Government Provident Funds, Superannuation Funds And Gratuity Funds With Effect From 1st April, 2015
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RBI Reference Rate for US $
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International Financial Services Centre (IFSC)
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Banking Reforms
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Changes proposed in priority sector lending (psl)-regarding
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Steps Being Taken for Increasing Financing to Micro, Small And Medium Enterprises (Msmes)
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Micro Units Development and Refinance Agency (Mudra) Bank
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Introduction of the Atal Pension Yojana
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Highlights of The Pradhan Mantri Jeevan Jyoti Bima Yojana
(PMJJBY – SCHEME 2 - FOR LIFE INSURANCE COVER)
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Highlights of the Pradhan Mantri Suraksha Bima Yojana (Pmsby – Scheme 1 - for Accidental Death Insurance)
Highlights / Catch Notes
Income Tax
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Penalty u/s 271D - there is nothing to show that there was urgency for the assessee to avail the loan in cash in violation of Section 269SS - such a transaction would not come under the exception clause of Section 271D - HC
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Conversion of land - whether the land which was converted by the assessee into stock in trade (housing plots) is an agricultural land or not? - Held No - taxable in the year of sale - AT
Customs
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Since there was no fraudulent intention whatsoever and the applicant/appellant had made application for amendment to the IGM mentioning about the facts in its entirety, the said application for amendment should have been allowed by the proper officer in terms of the powers conferred on him - AT
Service Tax
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Activity of providing harvesting sugar cane and transporting the harvested sugar cane from the farmers' fields to the factory site - No merit in classifying the service under the category of 'Manpower Recruitment or Supply Agency service' - AT
Central Excise
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Area based exemption under Notification No. 50/03-CE. - delayed filing of declaration - allegations of suppression of facts and clandestine clearance are prima facie not sustainable - AT
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Area Bases Exemption - substantial expansion - Just because no additional machinery for manufacture of corrugated boxes was installed, it cannot be presumed that there was ho enhancement in the manufacturing unit's capacity to manufacture corrugated boxes - AT
Case Laws:
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Income Tax
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2015 (3) TMI 20
Eligibility of deduction under Section 80HHC - activity of manual washing/chipping of quartz and feldspar - whether Feldspar while cutting and polishing undergoes any one of the processes as defined under the Explanation to the 12th Schedule? - Held that:- In the assessment order, the Assessing Officer has accepted the process as defined in the Explanation to the 12th Schedule. We find that Feldspar, as a mineral, could be exported either in the cut and polished form or in the pulverized and micronised form. It is not correct to say that cut and polished feldspar is not a mineral. The pulverized and micronised is one among the various processes provided for different types of minerals. In the same manner, cut and polished minerals, undergoing various processes as per Explanation to the 12th Schedule, is a processed mineral. The Commissioner of Income Tax (Appeals) is correct in holding that if any one of the processes specified in the 12th Schedule is satisfied, then the benefit would be automatic. In our considered opinion, the restrictive meaning given by the Assessing Officer does not appear to be correct. The Assessing Authority misconstrued the 12th Schedule and the Explanation to deny the benefit of deduction under Section 80HHC only on the wrong premise that Feldspar should be exported only in pulverized and micronised form. If such a view is taken, item (x) of 12th Schedule will become redundant and meaningless. The decision of the Supreme Court in the case of Gem Granites V. Commissioner of Income-Tax reported in (2004 (11) TMI 13 - SUPREME Court) relied on by the Revenue does not get attracted to the facts of the present case, as the said case deals with the issue pertaining to the assessment year 1987-88, which is prior to the amendment in 1991. The present cases are after the amendment in the year 1991, wherein in clause (2) (b) (ii) of Section 80HHC of the Income Tax Act, the words 'other than processed minerals and ores specified in the Twelfth Schedule' are inserted. But prior to the amendment in the year 1991, there are no words of restriction 'other than'. - Decided in favour of the assessee
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2015 (3) TMI 19
Penalty u/s 271D - contravention of the provision under Section 269SS - whether the explanation given by the assessee has a reasonable cause to embark on such transaction, which would fall within the provisions of Section 269SS? - Held that:- Though several documents have been submitted by the assessee, there is nothing to show that there was urgency for the assessee to avail the loan in cash in violation of Section 269SS and that the Assessing Officer has given a detailed reasoning as to why he finds that such a transaction would not come under the exception clause of Section 271D of the Income Tax Act. The Tribunal has confirmed the said finding of fact. Being a pure finding of fact, we find no reason to interfere with the order of the Tribunal. In fact, the assessee himself has relied on the decisions of this Court in the case of Commissioner of Income -Tax V. Balaji Traders reported in (2006 (12) TMI 126 - MADRAS HIGH COURT) and in the case of Commissioner of Income-Tax V. Deccan Designs (India) P. Ltd. reported in (2010 (7) TMI 818 - Madras High Court) wherein this Court clearly held that unless there is any inconsistency in the finding of fact arrived at by the Tribunal or the Authorities concerned, the Court should not interfere with such a finding of fact. - Decided against assessee.
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2015 (3) TMI 18
Reopening of assessment - assessee's claim of deduction u/s. 80IB is not in order and has resulted in income escaping assessment to the tune of ₹ 2,10,41,019/- - Held that:- Notwithstanding the binding decision of this Court in Asian Paints Ltd. [2007 (1) TMI 159 - BOMBAY High Court ] wherein held that when an objection to reopening of an assessment is disposed of by an order, adverse to the petitioner, no further proceedings for reassessment would be initiated by the Assessing Officer for a period of four weeks from the date of disposal of the objections, the Assessing Officer did not wait for a period of four weeks from the order dated 23 November 2010 and passed the assessment order on 30 November 2010 under Section 143(3) r/w 147 of the Act. The petitioner has made a grievance of the order dated 30 November 2010 being dispatched in the evening of 13 December 2010 after being informed of the writ petition filed. Be that as it may, at this stage we enquired of Mr. Pinto, the learned Counsel for the Revenue as to how does he justify the order dated 30 November 2010 in the face of the decision of this Court in Asian Paints Ltd. (supra). Mr. Pinto very fairly states he is unable to justify the same. Therefore the assessment order dated 30 November 2010 cannot be sustained and the same is hereby quashed and set aside. The consequent demand notice dated 30 November 2010 issued under Section 156 of the Act and the show cause notice dated 30 November 2010 in respect of proposed penalty also cannot be sustained and are hereby quashed and set aside. - Decided in favour of assessee. Challenge to the impugned notice dated 26 March 2010 seeking to reopen the assessment for the Assessment Year 2005-06 - Held that:- We do not disturb the impugned notice dated 26 March 2010 and the order dated 23 November 2010 disposing of the petitioner's objections as second ground in the reasons recorded indicates that the basis of the Assessing Officer for issuing the impugned notice was that the factory license to manufacture the goods inrespect of Unit No.II was issued to the petitioners only on 22 April 2004 i.e. after the end of the previous year relevant to the Assessing Year 2004-05 thus leading to a reasonable belief that the petitioners claim that they had commenced manufacturing in the Unit No.II on 22 March 2004 is not correct. This resulted in a prima facie view that in the absence of manufacture in Unit No.II, during the Assessment Year 2005-06 the benefit of Section 80IB of the Act is not available. However the petitioner's contention that the impugned notice is without jurisdiction is left open to be urged before the Assessing Officer during the reassessment proceedings. It is made clear that the petitioner's submissions in support of the above would be independently considered by the Assessing Officer without in any manner being influenced by any observation herein. - Decided against assessee.
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2015 (3) TMI 17
Revision u/s 263 - Assessing Officer had not made inquiry on certain aspects - Held that:- Relying on two judgments of Delhi High Court in CIT Vs. Vikash Polymers [2010 (8) TMI 745 - Delhi High Court] and CIT Vs. Vodafone Essar South Ltd. [2012 (12) TMI 70 - DELHI HIGH COURT], it held that once inquiry was made, a mere non discussion or non mention thereof in assessment order cannot lead to assumption that Assessing Officer did not apply his mind or that he has not made inquiry on the subject and this would not justify interference by Commissioner by issuing notice under Section 263 of the Act. Tribunal fairly concluded that the Assessing Officer had investigated all the points and reply relating to all the query were given. - Decided in favour of assessee.
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2015 (3) TMI 16
Validity of assessment - no notice was issued u/s.143(2) of the IT Act during the course of assessment proceedings - whether ITAT was right in law in upholding the assessment order passed by the Assessing Officer for A.Y. 1998-99 as in sum and substances u/s.144 of the IT Act, 1961? - Held that:- The facts of the present case show that the A.O. in respect of A.Y.1998-1999 of the Assessee-appellant, assessed income under Section 143(3) read with Section 147 at ₹ 14,96,750/-. In appeal, the C.I.T. (Appeals) maintained the assessment but on the point of interest, the appeal was partly allowed. The Tribunal passed the common order in respect of A.Y.1997-1998 as well as 1998-1999. The Tribunal found that proviso to Section 143(2) of the Act would apply only to a valid return and not to invalid return and hence, the A.O. was not required to issue notice under Section 143(2) of the Act and the assessment was to be made under Section 144 of the Act and, therefore, could be said as upheld. In our view, as the fact situations in the present case are the same, similar view, as was taken in [2015 (3) TMI 15 - GUJARAT HIGH COURT] deserves to be taken in the present matter wherein held that where the Assessing Officer in repudiation of the return filed under section 158BC(a) proceeds to make an enquiry, he has necessarily to follow the provisions of section 142, sub-sections (2) and (3) of section 143 and in absence of fulfillment of mandatory requirement of issuance of notice under section 143(2) both the authorities rightly and validly held against the Revenue and in favour of the assessee. Thus the assessment proceedings cannot be maintained - Decided in favour of assessee.
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2015 (3) TMI 15
Validity of assessment - no notice was issued u/s.143(2) of the IT Act during the course of assessment proceedings - whether ITAT was right in law in upholding the assessment order passed by the Assessing Officer for A.Y. 1998-99 as in sum and substances u/s.144 of the IT Act, 1961? - Held that:- Assessing Officer has to necessarily follow the provisions of section 142 and sub-sections (2) and (3) of section 143. See Assistant Commissioner of Income-tax vs. Hotel Blue Moon [2010 (2) TMI 1 - SUPREME COURT OF INDIA]. In the instant case, we notice that both CIT(Appeals) and the Tribunal have held that the procedure prescribed for issuance of notice under section 143(2) has not been followed at all. - Decided in favour of assessee.
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2015 (3) TMI 14
Transfer pricing adjustment - ITAT directing inclusion of data and particulars pertaining to Cyber Media Events Limited in the transfer pricing studies, to determine arm’s length price (ALP) for the purpose of income tax - Held that:- ITAT’s order does not raise a substantial question of law. As observed in the impugned order, as to whether the turnover filter is an appropriate one and applicable cannot be answered in the abstract and is entirely fact dependent. In the given facts of this case, the record indicates that the TPO chose to apply that filter but used it to exclude the data pertaining to M/s. Capital Trust Ltd. This inconsistency went unnoticed even by the DRP. The ITAT corrected the position and noticed that not having applied the turnover filter at the initial stage, the Revenue cannot take advantage, in the facts of the case, particularly when the turnover filter is not a test even in respect of the surviving comparable which are concededly part of the record. For the above reasons, no question of law arises. - Decided against revenue.
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2015 (3) TMI 13
Interest under Section 220(2) - Power of settlement commission - whether be legally leviable from the date of default in payment of demand by the assessee till the date of admission of application by the assessee by settlement Commission under section 245D(1) and not till the final order of settlement commission under section 245D (4)? - Held that:- Section 220 and 245D and the legal position as emerging from the decision referred to above namely, CIT vs Damani Brothers reported [2002 (12) TMI 11 - SUPREME Court], held that interest under Section 220 (2) would be legally leviable from the date of demand raised in assessment before admission of application for settlement under section 245D (1). However, if the demand stands reduced under order of Settlement Commission, interest would undergo revision correspondingly. The position as far as charging interest under Section 220 (2) is concerned is no longer res integra. It has been made clear under the decision in the case of Damani Brothers (supra) as also in the decision of Brij Lal and Ors v. Commissioner of Incometax reported in [2010 (10) TMI 8 - SUPREME COURT ] observing till the Settlement Commission decides to admit the case under section 245D (1) the proceedings under the normal provisions remain open. But, once the Commission admits the case after being satisfied that the disclosure is full and true then the proceedings commence with the Settlement Commission. In the meantime, the applicant has to pay the additional amount of tax with interest without which the application for settlement would not be maintainable. Thus, interest under section 234B would be payable up to the stage of section 245D (1) - Decided against revenue.
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2015 (3) TMI 12
Share transactions - CIT(A) concluded that the amount received on sale of share is taxable as capital gains in the hand of the respondent assessee and not as income from other sources do confirmed by tribunal - Held that:- Orders of the CIT (Appeals) as well as the Tribunal are detailed orders rendering findings of fact about the nature of the transaction of purchase and sale of shares entered into by the respondent-assessee. The aforesaid finding of fact was reached on consideration o as similar transactions in the past was accepted by the revenue when loss returned, certificate given by the subbroker confirming that transaction belonged to appellants, the shares purchased had been taken dealivery of within the settlement cycle, but the same was kept as collateral security by the sub-broker as security for payment to be received from respondent-assessee, the purchases shares were thereafter transferred to the DMAT account of the respondent assessee; and the contract notes produced by the respondentassessee for purchase and sale of shares has not been challenged by the revenue. - Decided in favour of assessee.
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2015 (3) TMI 11
Depreciation on capital assets - whether the Tribunal was justified in allowing depreciation claimed by the assessee on capital assets for which capital expenditure has already been allowed in the year under consideration? - Held that:- The assessee is a charitable institution registered under Section 12-A of the Act of 1961 and 100% capital expenditure was availed by it against the asset concerned i.e. a building. Section 32(1) of the Act of 1961 provides for depreciation in respect of building, plant and machinery owned by the assessee and used for business purposes. Income of a charitable trust like the present assessee derived from the depreciable heads is also liable to be computed on commercial basis, however, while doing so it is to be kept in mind that ultimately assessee is a charitable institution and its income for tax purposes is required to be determined by taking into consideration provisions of Section 11 of the Act of 1961 after extending normal depreciation and deductions from its gross income. In computing the income of a charitable institution/trust depreciation of assets owned by such institution is a necessary deduction on commercial principles, hence, the amount of depreciation has to be deducted to arrive at the income available. Thus ITAT rightly allowed depreciation claimed by the assessee on capital assets for which capital expenditure was already given in the year under consideration. See Director of Income Tax v. Framjee Cawasjee Institute (1992 (7) TMI 331 - BOMBAY HIGH COURT) and in CIT v. Institute of Banking Personnel (2003 (7) TMI 52 - BOMBAY High Court ). - Decided in favour of assessee.
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2015 (3) TMI 10
Entitlement for deduction under section 80P(2)(a)(i) - AO denying the assessee's claim on the ground that since the assessee is a co-operative bank, the provisions of section 80P(4) are attracted and not 80P(2)(a)(i) - CIT(A) allowed assessee claim - Held that:- As relying on case of Sri Biluru Gurubasava Pattina Sahakari Sangha Niyamitha [2015 (1) TMI 821 - KARNATAKA HIGH COURT] wherein held when the status of the assessee is a co-operative society and is not a co-operative bank, the order passed by the assessing authority extending the benefit of exemption from payment of tax under section 80P(2)(a)(i) of the Act is correct. - Decided in favour of assessee. Deduction under Section 80P(2)(a)(i) - interest received by the appellant on government securities - Held that:- . Applying the ratio of the judgement of the Hon'ble Karnataka High Court in the case of Tumkur Merchants Souharda Credit Co-operative Ltd. (2015 (2) TMI 995 - KARNATAKA HIGH COURT), we hold that the assessee is entitled to deduction under section 80P(2)(a)(i) of the Act in respect of the interest income earned on fixed deposit and government securities as well, as it forms part of the business income earned by the assessee and the same is not to be taxed under the head “ Other Sources.” In this view of the matter, the deduction claimed by the assessee under section 80P(2)(a)(i) of the Act in respect of interest of ₹ 3,90,246 earned from investments in fixed deposits and government securities out of surplus funds from business is allowed. - Decided in favour of assessee.
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2015 (3) TMI 9
Transfer pricing adjustment - segmental details taken by the assessee in its TP analysis rejected merely on the ground that they are unaudited, as done by the TPO - Held that:- Find merit in the contentions of assessee that there is no point in rejecting the entire segmental details when the segmental activities are different and specific allocation keys are given for allocating the indirect expenses between different segments. In these facts and circumstances, we are of the view that it is incumbent upon TPO to examine the segmental details after verifying the allocation of direct and indirect expense made by the assessee with reference to the respective allocation keys and if on such examination/verification, it is found that the segmental financials are not reliable, he could reject the same by giving specific reasons. Otherwise, if the allocation of overhead is by and large fair and reasonable and the segmental results can be fairly and appropriately adjusted, by changing/adjusting the allocation, the TPO, in our opinion, should make such adjustments and do the Transfer Pricing Analysis on the basis of such adjusted segmental financials, instead of rejecting the same straight away. - remit this issue to the file of the AO/TPO to decide the same afresh - Decided in favour of assessee for statistical purposes. Adjustment on account of interest attributable to the excess credit period allowed by the assessee to its Associated Enterprise - addition of ₹ 1,60,66,825 made to the total income of assessee - Held that:- it is pertinent to note that credit was being offered by the assessee company even in the case of non-AE transactions and these internal comparables thus were available for the comparability analysis. As agreed by the learned representatives of both the sides, the average credit period offered by the assessee in the non-AE transactions can be taken as the credit period offered in an arm’s length situation. In this regard, the learned counsel for the assessee has submitted that the average credit period offered by the assessee to its AE, going by the quantum of receivables at the end of the year under consideration vis-à-vis corresponding turnover, is the same as offered to the non-AEs. The learned Departmental Representative, however, has contended that this mater requires verification and the Assessing Officer may be allowed to work out the average credit period actually offered by the assessee in case of non-AE transactions and compare the same with the credit period allowed by the assessee in the case of AE transactions. Remit this issue to the file of the Assessing Officer/TPO with a direction to decide the same afresh - Decided in favour of assessee for statistical purposes.
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2015 (3) TMI 8
Conversion of land - whether the land which was converted by the assessee into stock in trade (housing plots) is an agricultural land or not? - Held that:- The certificate issued by the village officer goes against the fact admitted by the assessee. Since the assessee itself admits that the land was converted into housing plots as on 19-09-2006 the same cannot remain as agricultural land for any longer. In other words, the purpose and usage of the land was converted into non agricultural land as on 19-06-2006 and part of the land was sold as on 27- 03-2007. Therefore, this Tribunal is of the considered opinion that when the assessee itself claims that the land was converted into non agricultural land as on 19-06-2006 it cannot continue as agricultural land any further. Therefore, the certificate said to be issued by the village officer has no relevance in view of the facts admitted by the assessee. Hence, there is no justification in the claim of the assessee that the land is an agricultural land. This Tribunal is of the considered opinion that the subject land is not an agricultural land. - Decided against assessee. Computation of capital gain - which is the year in which the capital gain has to be charged - year in which the conversion was made or the year in which the land was sold after the same was converted into stock-in-trade? - Held that:- In the case on hand, the assessee claims that only 188 cents of and was sold in the assessment year 2007-08. No material is available on record in respect of the year in which the remaining land was sold. Therefore, the assessing officer has to ascertain when the remaining portion of the land was actually sold after the same was converted into stock in trade. The capital gain shall be charged in the year in which the land was sold after conversion into stock in trade. Accordingly, the orders of the lower authorities to that extent is set aside and the issue of charging capital gain is remitted back to the file of the assessing officer to find out the assessment years in which the land was actually sold after the same was converted into stock in trade and bring the profit on conversion of the land into stock in trade to capital gain in the assessment years in which the land was actually sold. Apart from the capital gain, the profit on sale of the land after its conversion shall also be chargeable to tax as business income in the year in which the land was sold. Therefore, the assessing officer shall ascertain the year in which the land was sold and bring the profit on sale of land also as business. - Decided in favour of assessee for statistical purposes. Disallowance u/s 14A r.w.r. 8D - Held that:- As rightly contended by the ld.DR, though Rule 8D was introduced in the statute book from assessment year 2008-09, the Income-tax Act does not permit for allowance of any expenditure on income which is not chargeable to tax. Therefore, irrespective of Rule 8D, this Tribunal is of the considered opinion that the assessee cannot claim any expenditure including interest on borrowed funds for earning the exempted income. Since the availability of the liquid funds needs to be verified, this Tribunal is of the considered opinion that the assessing officer has to examine the same in the light of the contentions raised by the assessee. Accordingly, the orders of the lower authorities are set aside and the issue is remitted back to the file of the assessing officer. The assessing officer shall reexamine the issue with regard to the availability of liquid funds for making investments for earning tax free income as also the other related expenditure incurred for earning exempted income in the light of contentions raised by the assessee before this Tribunal and thereafter decide the same in accordance with law after giving reasonable opportunity of hearing to the assessee. - Decided in favour of revenue for statistical purposes.
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2015 (3) TMI 7
Addition on account of income from business - low gross-profit - rejection of books of accounts - Held that:- Conclusion of the AO, to reject the books of accounts merely on the ground of non-furnishing of list of parties to whom sales have been made in cash cannot be a solitary basis to reject the books of account. The assessee has placed on record, the audited books of accounts, in which no discrepancy has been pointed out by the AO. Moreover, the assessee has explained that the low gross-profit is on account of incentive passed onto the retailers, and demonstrated that submission by inviting our attention to the expenditure incurred by the assessee this year and the preceding year to show the fall in expenses on account of rebate and rent. It was pointed out that the expenses of rebate were of ₹ 1,53,000/- in the preceding year, apart from cartage and distribution expenses of ₹ 57,000/- on a turnover of ₹ 1.33 crores. However, we take note that no expenses were incurred by the assessee in the relevant Assessment Year, as the assessee opted to avoid complete distribution cost and pass on the margin and incentive to the customers. No doubt, that approach has resulted into reduction of expenses including rent from ₹ 36,000/- for 5 months to ₹ 12,000/- for the entire year. However, we feel that the said explanation too, cannot be a sole basis to accept the declared result. In such circumstances, we deem it appropriate to remit the matter back to the file of AO, for re-consideration, of the trading results declared by the assessee, in the light of the explanation tendered before us. - Decided in favour of assessee for statistical purposes. Addition in respect of incentive received and not declared by the assessee - Held that:- We are remitting back the matter to the file of the AO, we set-aside the order of the AO on this issue and direct that he may ascertain the veracity of the claim of the assessee that the impugned incentive pertains to the earlier Assessment Year and not relevant to the Assessment Year under consideration. If the said claim of the assessee is found correct, then the impugned addition may be deleted otherwise it may be upheld.Decided in favour of assessee for statistical purposes.
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2015 (3) TMI 6
Addition of undisclosed working capital - CIT (A) restricted the addition at 8,91,445/- as against ₹ 14,76,464/- made by AO - Held that:- CIT(A) has only telescoped this income against income from undisclosed portion of business and according to him, the undisclosed business income will be ₹ 10,49,059/- as the books of account had already been rejected and estimation has been made by the AO. We find no infirmity in the direction of CIT(A) telescoping this income against the business income. - Decided against revenue. Unexplained investment in RIP - CIT(A) deleted the addition - Held that:- No infirmity in the findings of CIT(A) as he is telescoped the investment in RIPs at ₹ 1,39,941/- against left out unadjusted profit from business at ₹ 1,57,614/-. Hence, we confirm the order of CIT(A) on this issue - Decided against revenue. Non existent trade creditors - addition to income - Held that:- Trade creditors/sundry creditors exist in the Balance Sheet of the assessee and there is no write off made by the assessee or no claim made by the assessee. Once this is the position, this cannot be added because liability still exists. In such circumstances, we delete the addition. - Decided in favour of assessee. Disallowance under section 40A(3) - Held that:- We find that the AO has rejected the books of account and estimated the profit and these purchases are included in the estimated sales of ₹ 1,57,84,783 /-. Once the books of account are rejected and profit is estimated on the disputed turnover/purchases, no further disallowance can be made by invoking the provisions of section 40A(3) of the Act - Decided in favour of assessee.
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2015 (3) TMI 5
Disallowance of export commission - non deduction of TDS on the commission paid to non-residents - Held that:- Since the above exports commission relates to services rendered outside India and payment is made outside India, there is no income chargeable to tax in India in the hands of foreign agents and hence the provisions of Section 195 of the Act was not applicable. As in the assessee's own case for Assessment Year 2008-09, the co-ordinate bench of the Tribunal has allowed the export commission to the very same non-resident, so therefore the ld CIT(A) erred in disallowing the said export commission merely on the basis that TDS was not deducted by the assessee. Thus disallowance under section 40(a)(i) was not called for on sales commission paid to non-resident - Decided in favour of assessee.
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2015 (3) TMI 4
Disallowance of loss arising from the derivative transactions - whether loss speculative in nature? - as contended by the assessee, there was foreign currency exposure, as a result of conversion of rupee loans of the assessee into foreign currency loans and in order to hedge such exposure, the relevant derivative transactions were entered into by the assessee, as a measure of risk management - Held that:- Going through the relevant RBI guidelines, underlying the purpose of relevant derivative transactions, as well as the relevant terms and conditions of such transactions agreed between the assessee and the Axis Bank, we find ourselves in agreement with the contention of assessee that the nature of the relevant derivative transactions was not properly appreciated either by the Assessing Officer or by the learned CIT(A) and the said transactions were treated by them as speculative transactions by referring to the provisions of S.43(5) without appreciating the correct nature of the relevant derivative transactions. Keeping in view this position, clearly emanating from the relevant documents as well as the orders of the authorities below, we are of the view that the matter should go back to the file of the Assessing Officer for deciding the same afresh, after properly appreciating and ascertaining the exact nature of the relevant derivative transactions. - Decided in favour of assessee for statistical purposes.
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2015 (3) TMI 3
Exemption under section 10(23C)(iiiad) denied - Held that:- Where the assessee had solely engaged in engaging it self and providing education through its Nursing Institute to girls students and where the annual receipts of the said institute were less than the prescribed limit, we hold that the assessee is entitled to the benefit of exemption under section 10(23C) ( i i i ad) of the Act . Merely because the assessee in its aims and objects had prescribed other objects which it was not pursuing during the years under consideration, we find no merit in the orders of the authorities below in holding that the assessee was not exclusively existing for educational purposes . The conduct of the assessee and the activities carried on by the assessee clearly established that it was solely engaged in providing education to the girl students in the rural area in which it had established its Nursing Institute. Thus we direct the AO to allow the benefit of exemption under section 10(23C) ( i i i ad) of the Act . - Decided in favour of assessee.
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2015 (3) TMI 2
Short deduction of tax - application of wrong provision - payments made for hiring of vehicles and other equipments - Assessee had deducted TDS u/s. 194C and not u/s. 194I - Assessee had deducted TDS u/s. 194C and not u/s. 194I - Held that:- In respect of rig service drilling the payments are made for actual use for the services and and the assess.ee has no control over the same. It is further clear therefrom that the possession and control of the rig always remained with the provider, In the circumstances, in our view, it is only the provisions of S.194C and not provisions of S.194I that are applicable.See M/s. Modern Transport M/s, ITO [2011 (8) TMI 1057 - ITAT BANGALORE] With respect to crane hire charges showed that the payment is not made for any rent or actual movement/transport of goods-arid material and hence, it was rightly treated as contract for carrying of work and tax has been deducted in terms of S.194C. With, respect to DG set, the charges are on hourly basis, as seen from the copies of invoices and not as rent for equipment, The DG set is under the control and operation of the service-provider and the expense on diesel as well as maintenance are borne by the DG owner, In this view of the matter, in respect of these payments also, the provisions of S.1941 are inapplicable, and the assessee has correctly deducted tax in terms of S.194C of the Act. - Decided against revenue.
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2015 (3) TMI 1
Excise and VAT for valuation of stock - inclusion v/s exclusion - Held that:- There is submission of the assessee before the authorities below that while the entire amount of excise duty realized on sales was included in the sale amount but out of entire amount of excise duty paid on purchases, only that portion of such excise duty paid which was utilized by way of MOD VAT, had been included in the value of purchases and the balance amount of Modvat credit which could not be utilized in the present year was shown in the balance sheet as an amount receivable and this portion was not included in the value of purchases. Ld. D.R. could not controvert these submissions of the assessee made by the assessee before the authorities below. Once it is accepted that these submissions of the assessee are correct, it means that excise duty paid but not included in the purchases was shown in the balance sheet as excise duty receivable and therefore, there cannot be a reason to make any addition in the income of the assessee because even if we include such excise duty receivable in the value of closing stock, the same is also required to be included in the value of purchases and it will have no impacts on the profits of the assessee. Therefore, we do not find any reason to interfere in the order of Ld. CIT(A). Thus no addition on account of MODVAT and VAT as made by the A.O needs to be made in the present case. See Snehal Pharma Chem [2015 (2) TMI 151 - ITAT AHMEDABAD] and The DCIT, Circle 1, Versus M/s Bloom Dekor Ltd. [2013 (8) TMI 180 - ITAT AHMEDABAD] - Decided in favour of assessee.
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Customs
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2015 (3) TMI 28
Permission for stuffing of the goods at the factory at Silvasa has been denied or not renewed on account of pendency of proceedings under the law applicable to the exports or activities of the Petitioners in relation thereto - Held that:- The argument of the Petitioner's counsel is that in the teeth of such communications and coming from the officers at the local level, the port Officers deny this facility because of the legal proceedings. It is argued that there is no complaint of the goods being not accessed or the supervision becoming impossible or difficult if the goods are allowed to be stuffed at the factory. - Respondent stated on instructions that in the event a fresh application is made by the Petitioners and seeking similar facility, that application would be considered by keeping in mind the conditional no objection from the Range Office and brought on record at page 52 to 56 of the paper book. This stipulation is contained in the letters, inter alia, dated 2nd August, 2013. - Petition disposed of.
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2015 (3) TMI 27
Condonation of delay - Inordinate delay of 266 days in filing of the Appeal - Held that:- Even the Tribunal, does not refer to the delay of more than 12 years and as claimed by the Revenue. It refers to the period of delay as of 266 days. That it relies on the fact that even after obtaining the information and receiving the copy of the adjudication order, the Assessee failed to file the Appeal in time. Thus, this delay has not been satisfactorily explained. - if there was doubt and which could be inferred from the records and information provided to the Assessee by the Revenue after he invoked the Right to Information Act, 2005, then, the Tribunal should have condoned the delay and in all fairness and in the interest of justice. Eventually if the Assessee cannot be faulted for being negligent or reckless in pursuing the remedy, then, the delay could have been condoned by compensation of payment of costs. - The impugned order is quashed and set aside. The delay of 266 days is condoned in the peculiar facts and circumstances but by directing that the Appellant- Assessee before us, shall pay costs quantified at ₹ 25 ,000 /- within a period of four weeks from the receipt of copy of this order. If these costs are paid and the proof is produced, the Tribunal shall restore the Appeal, register it and hear and dispose of the same on merits and in accordance with law. - Decided conditionally in favour of assesssee.
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2015 (3) TMI 26
Commission of the offences punishable under Sections 25(A), 28 and 29 of NDPS Act - Contravention of provisions of Section 9A of NDPS Act and Clause 3 of Narcotics Drugs and Psychotropic Substances (Regulation of Controlled Substances) Order, 1993 - petitioners came forward to file these petitions for return of CPUs as well as mobile phones for the reason that even as per the version of the prosecution, data stored therein have been retrieved and no purpose would be served by keeping those articles in the custody of the respondent - Held that:- impugned order dated 18.09.2014 made in Cr.M.P.Nos.1572 and 1573 of 2014 respectively, on the file of the Principal Special Court for EC & NDPS Act Cases, Madurai is set aside and the return of articles sought for by the petitioners is ordered, subject to the certain conditions - Appeal disposed of.
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2015 (3) TMI 25
Confiscation of gold u/s 115 - Contraband gold was recovered from the middle seat of vehicle, fitted with two screws, in a false cavity, which contained two heavy packets wrapped with electrical insulation/adhesive tape - In prosecution case the accused were found 'not guilty', and were discharged under Section 135(1)(i) of the Customs Act, 1962. The sale consideration of the gold however, was not directed to be released - Held that:- In the reply, it is stated that the consequential benefits, as claimed by the petitioner, in pursuance to order of CEGAT dated 30.12.1997, were neither quantified, nor any direction was issued to assess and to pay the difference of the price of gold, on the date when it was seized, and thereafter sold, and interest. - The CEGAT was required to assess, compute and issue directions for any consequential benefits, which it had intended to be paid in the order. This Court under Article 226 of the Constitution of India does not act as an executing court for any consequential directions. If no specific orders were passed with regard to consequential directions, the petitioner may approach appropriate authorities for its assessment/quantification and payment, in accordance with law. - Decided against assessee.
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2015 (3) TMI 24
Amendment to the IGM - Confiscation u/s 111(f) and 111(g) - Held that:- Amendment to the IGM was necessitated because one of the importers after filing the bills of entry chose not to clear the goods; therefore, the goods were required to be sold to new consignees and consequently, fresh bills of lading and invoices were required to be issued. It is in these circumstances, the appellant sought amendment to the IGM. There was no fraudulent intention on the part of the appellant to evade or avoid any Customs duty liability. As regards the invoices issued for the supply of goods are concerned that is the responsibility of the foreign supplier and the shipping line has nothing to do with it. As regards the issue of fresh bills of lading, it is true that new numbers and dates should have been given for the fresh bills of lading. However, this is only technical error and does not reflect any fraudulent intention. In any case section 111(f) deals with a situation where there is a deliberate misdeclaration in the import manifest filed which is not the case herein. Therefore, the provisions of the said section has no application whatsoever in the facts of the present case. Similarly, the goods were not sought to be unloaded in contravention in the IGM. Therefore, the provisions of Section 111(g) are also not attracted. Since there was no fraudulent intention whatsoever and the applicant/appellant had made application for amendment to the IGM mentioning about the facts in its entirety, the said application for amendment should have been allowed by the proper officer in terms of the powers conferred on him. There was no warrant to hold the good liable to confiscation and impose any penalty. In these circumstances, I find that the impugned orders are unsustainable in law. Accordingly, I set aside the same - Decided in favour of assessee.
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Corporate Laws
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2015 (3) TMI 23
Admissibility of Winding up application - Factoring of receivables - Denial of liability by borrower company - Held that:- In the instant case, it an admitted position that the appellant had issued the first cheque of ₹ 4,00,06,655.52/- in favour of the respondent and on February 19, 2010 substituted the said cheque by issuing a fresh cheque of ₹ 4,00,06,655.52/- and the said cheque remained unpaid. Thus, the onus was on the appellant company to prove that it had no liability to pay the said sum of ₹ 4,00,06,655.52/- to the respondent which the appellant company has failed to discharge. In the instant case, we find the defence put up by the appellant lacks bona fide and good faith. Thus, we find no merit in the appeal being APO 302 of 2014 and the same stands rejected. Interim orders, if any also stands vacated. - Decided against the appellant. Admissibility of winding up application at lesser value - Held that:- The learned Single Judge admitted the application for ₹ 3,00,06,655/-, as from the documents disclosed it appears that the appellant in this appeal accepted the said two demand drafts for ₹ 75 lac and ₹ 25 Lac against six of the said twenty nine invoices . According to Mr. Vinayak the respondent in this appeal had issued the said two post dated cheques of ₹ 4,00,06,655.52/- and ₹ 1,00,000,536 in acknowledgement of their dues to the appellant in this appeal for factoring said twenty nine and other invoices. However, when the respondent forwarded the said demand drafts of ₹ 75 lacs and ₹ 25 lacs respectively, there was no mention about any specific invoice. Thus, he contended, it was within the right of the appellant in this case to appropriate the said sum of ₹ 1 crore said by the said in respect of some of the said twenty nine bills. Thus, once the respondent had issued the said two post dated cheques for a total sum of ₹ 5,00,07,191/-, even after giving credit to the payment of the said sum of ₹ 1 crore, a sum of ₹ 4,00,06,655.52/- still remains due and payable by the respondent to the appellant. We find merit in such contention made on behalf of the appellant in this appeal. - Decided in favour of appellant.
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Service Tax
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2015 (3) TMI 43
Classification of service - manpower recruitment or supply agency service - activity of providing harvesting sugar cane and transporting the harvested sugar cane from the farmers' fields to the factory site - Held that:- As per the provisions of Section 65(68)'Manpower Recruitment or Supply Agency service' means any person providing any service, directly or indirectly, in any manner, for the recruitment or supply of manpower, temporarily or otherwise to any person' and as per Section 65(105)(k)'taxable service' means'any service provided or to be provided to any person, by a manpower recruitment or supply agency in relation to the recruitment or supply of manpower, temporarily or otherwise, in any manner'. Service brought under the tax net under the'Manpower Recruitment or Supply Agency Service' envisages supply of labour per se. In the instant case, we notice that there is no supply of labour per se to the sugar factory. The work undertaken is harvesting of sugar cane and transporting the same to the sugar factory for which labour is employed. The sugar cane belongs to the sugar factory in terms of the agreement of sale executed between the farmer and the sugar factory. Therefore, the activity undertaken by the appellant is one of procuring or processing of the goods belonging to the client which is classifiable under 'Business Auxiliary Service' and not under 'Manpower Recruitment of Supply Agency Service'. On the supervision charges paid to the appellant for the said activity, they have already discharged service tax liability under 'Business Auxiliary service'. - No merit in the impugned order classifying the service under the category of 'Manpower Recruitment or Supply Agency service'. Accordingly we set aside the impugned order - Decided in favour of assessee.
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2015 (3) TMI 42
Penalty under Section 76, 77 and 78 - Short Payment of service tax - Demand of differential duty - Held that:- After going through the facts of the case, the only error committed by the appellant is that they have not included the amount of TDS deducted at the time of calculating the taxable service. That may be due to the ignorance of law. Therefore, appellant are entitled to benefit of Section 80 of the Finance Act, 1994. Accordingly, as per Section 73 (1) of the Finance Act, 1994, the appellant were not required to be issued show-cause notice for imposition of penalty. Accordingly, after giving benefit of Section 80, I set aside the imposition of penalty against the appellant under various provisions of the Finance Act, 1994. - Decided in favour of assessee.
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2015 (3) TMI 41
Denial of refund claim - failure to comply with the condition of the Notification No. 41/2007-ST dated 06.10.2007 - Business Auxiliary services and CHA - Held that:- As the facts of the case of the Indoworth (India) Ltd. (2011 (6) TMI 311 - CESTAT, MUMBAI) are similar to the facts of this case therefore, following the precedent decision, I hold that the appellants are entitled for refund claim as it is not in dispute that the appellant has not received the services and not paid the service tax thereon. In these circumstances, the impugned order is set aside - Decided in favour of assessee.
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2015 (3) TMI 40
Penalty u/s 76, 77 & 78 - Willful suppression of facts - Demand of differential duty - Held that:- Show-cause notice was issued to the appellant for larger amount but after reconciliation, the amount came down to ₹ 4,22,703/- Further the figure shown in the balance sheet are on the basis of receivable basis and during the impugned period, service tax required to be paid on receipt basis. Therefore, it cannot be termed in the facts and circumstances of the case, that the appellant was having a malafide intention to suppress true facts to ascertain the service tax liability. Although the appellant has not disputed the service tax liability which have been paid along with interest, it cannot be said that the appellant are having malafide intention. In these circumstances, appellant are entitled for immunity under Section 80 of the Act. Accordingly, I set aside the penalty imposed on the appellant by giving the benefit of Section 80 of the Finance Act, 1994. In these terms, penalties are waived, the demand of service tax along with interest are confirmed - Decided partly in favour of assessee.
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Central Excise
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2015 (3) TMI 36
Waiver of pre deposit - Area based exemption under Notification No. 50/03-CE. - delayed filing of declaration - Bar of limitation - suppression of facts - clandestine clearance - Held that:- The show cause notice for demand of duty was issued only on 08/07/11 and as such this show cause notice has been issued beyond the normal limitation period of one year from the relevant date. In these circumstances, the Department s allegation that the appellant had suppressed the relevant facts from the Department with intent to evade the payment of duty is difficult to accept. Moreover, when the appellant's unit was located in the area specified in the Notification No. 50/03-CE and the goods being manufactured by them was not in the negative list of the exemption notification, the appellant had nothing to gain by clearing the goods clandestinely without reporting to the Department. It is not the allegation of the Department that during the period of dispute, the goods being manufactured by the appellant were some other goods covered by the negative list of the exemption. Beside this, when the appellant's stand from the very beginning is that they had filed required declaration on 18/06/09 under certificate of posting and had enclosed a certificate of the postal authorities in this regard, the Department should have at least made inquiries with the postal authorities, but no such inquiries had been made. Similarly, there is no explanation as to why no inquiries were made with the appellant when they were filing quarterly returns in respect of the value of the goods being cleared by them by availing duty exemption under Notification No. 50/03-CE for the quarters ending 30th June, 2009, 30th September 2009, 31st December, 2009. - prima facie case is in favor of assessee - Stay granted.
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2015 (3) TMI 35
Area Bases Exemption - Notification No.50/03-CE - Assessee undertaken substantial expansion on or after 07.01.2003 by the way of increase in installed capacity of unit by not less than 25% - Held that:- As per the documents on record, the officers of inspection team of Directorate of Industries inspected the factory before they started expansion work and also inspected their factory after completion of expansion work in December, 2003. - It is not the contention of the Revenue that the letter regarding inspection mentioned in the Directorate of Industries letter dated 02.01.2004 is false. When this letter dated 02.01.2004 acknowledging more than 25% increase in the installed capacity of semi corrugated paper and corrugated boxes was preceded by the inspection of the unit on 26/12/2003, in our view, it is absurd to doubt the correctness of this letter of the Directorate of Industries. As regards the Department's allegation that enhancement of capacity is only in respect of semi craft papers and corrugated sheets and there is no enhancement of capacity in the manufacture of corrugated boxes, the same is not correct, as the directorate of Industries letter dated 02.01.2004 also mentions enhancement of installed capacity for the manufacture of corrugated boxes from the earlier 1200 MT Per annum 1800 M.T. Per annum. Just because no additional machinery for manufacture of corrugated boxes was installed, it cannot be presumed that there was ho enhancement in the manufacturing unit's capacity to manufacture corrugated boxes. Moreover the Tribunal has held that for achievement of 25% or more enhancement in installed capacity for the purpose of exemption under notification No.50/2003-CE, it is not necessary that the expansion should be in each and every section of the manufacturing plant. - Decided against Revenue.
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2015 (3) TMI 34
Benefit of Cenvat credit scheme in terms of the Cenvat Credit Rules, 2004 - Availment of excess as well as short credit - Held that:- excess credit availed as well as short credit availment occurred due to clerical error, we consider that the penalty need not have been imposed on the appellant. Such mistake should not have been continued for more than three years. Nevertheless, in the facts and circumstances of the case, we consider that the appellant does not deserve to be visited with penalty. Accordingly, while confirming the demand for Cenvat credit with interest, we set aside the penalty imposed on the appellant. - Decided partly in favour of assessee.
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2015 (3) TMI 33
Input service credit - welding electrodes - nexus for manufacturing of the final product - Held that:- In the case of Samruddhi Cement Ltd.(2012 (9) TMI 885 - CESTAT NEW DELHI) this Tribunal has considered the decisions of various Hon'ble High Court namely Ambuja Cements Ltd. [2010 (4) TMI 429 - CHHAITISGARH HIGH COURT ], Alfred Herbert (I) Ltd. [2010 (4) TMI 424 - KARNATAKA HIGH COURT], Hindustan Zinc Ltd. [2008 (7) TMI 55 - HIGH COURT RAJASTHAN] and Sree Rayalaseema Hi-Strength Hypo Ltd. (2012 (11) TMI 255 - ANDHRA PRADESH HIGH COURT) - appellant is entitled to take Cenvat Credit on welding electrodes which have been used for repairs and maintenance and plant and machinery. - impugned orders are set aside - Decided in favour of assessee.
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2015 (3) TMI 32
Reversal of Cenvat Credit - Capital goods - Held that:- When the capital goods have been put to use and cleared on transaction value, the assessee is required to pay Central Excise duty on transaction value and not required to reverse Cenvat Credit availed on such capital goods. The issue is no more integra in the light of the decision of Cummins India Ltd. (2008 (7) TMI 945 - BOMBAY HIGH COURT). Therefore, I set aside the impugned order holding that the appellant has rightly paid the duty on transaction value. - Decided in favour of assesse.
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2015 (3) TMI 31
Penalty u/s 11AC - Duty paid with interest before issuance of SCN - Held that:- As per the proviso to Section 11AC in case the duty and interest has been paid within 30 days of the adjudication, the penalty is leviable to the extent of 25% only. But instead of following the provisions of the law, both the lower authorities have confirmed the penalty to the extent of 100%, which shows that the order has been passed without application of mind. If both the lower authorities have applied their mind, matter need not have travelled till this Tribunal. Appellant has paid duty along with interest before the issuance of the show-cause notice. Therefore, penalty is restricted to 25% of the duty confirmed. The appellant is required to pay 25% of the penalty confirmed against them - Decided in favour of assesse.
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2015 (3) TMI 30
CENVAT Credit - Held that:- Details of the Finance Act, 2014 was not available when the case was adjudicated by the original authority as also the first appellate authority. Prima facie, we find that no duty is chargeable on the goods in view of the retrospective amendment made by the Finance Act, 2014 and the provisions contained thereunder will entitle the refund of duty already paid. Even M/s Hindustan Platinum Ltd. can file the refund claim. Since Finance Act, 2014 was not available when the case was adjudicated, we set aside the impugned order and remand the matter back to the original authority, who after considering various provisions of the Finance Act, 2014 will decide the matter afresh - Decided in favour of assessee.
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2015 (3) TMI 29
Waiver of predeposit of duty - Show cause notice dt. 5.8.2010 was issued to the appellant demanding Central Excise duty on the stock of finished goods as per the balance sheet when compared to ER-1 Returns which is not appropriated by them - Held that:- Since the appellant has already debited the entire duty amount in dispute, they have made out a prima facie case for waiver of interest and penalty. Accordingly, the predeposit of interest and penalty is waived and its recovery is stayed till disposal of the appeal - Stay granted.
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CST, VAT & Sales Tax
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2015 (3) TMI 39
Levy of VAT on pea-gravel - Exempted goods or goods falling in residuary entry - Recall of order in [2010 (9) TMI 979 - GAUHATI HIGH COURT] - assesse petitioner submits that there was an error apparent on the face of the record. According to him, Entry No. 193 of Schedule II(b) of the Tripura Value Added Tax Act, 2004 does not entitle the State Government to levy tax on each and every item and it cannot be read in the manner in which it has been interpreted by the learned Division Bench - Held that:- Apex court in [1990 (1) TMI 70 - SUPREME COURT OF INDIA] in no uncertain terms held that only such goods which are not covered by various specific entries in the tariff could be brought under the residuary entry. This leaves no manner of doubt that if any goods are mentioned in any of the Schedules then they cannot be covered by the residuary entry. However, if the goods are not mentioned in any of the Schedules than they would fall within the ambit of the residuary entry. Therefore, we are in total agreement with the findings arrived at by the learned Division Bench that since pea-gravel is not included in the list of exempted goods and also not covered by any other item in any of the other Schedules, the same would fall under entry No. 193 of Schedule II(b) of the TVAT Act. Excessive delegation of power - The Legislature in its wisdom decided to frame the statute in such a fashion that the exempted items are specifically mentioned in Schedule III. The necessary corollary is that all items not mentioned in Schedule III would be taxable. The rates of tax as already pointed out above are mentioned in the different Schedules. Schedule II(b) levies the highest rate of tax and the Legislature in its wisdom decided that all items which do not find mention in any other Schedule would be part of entry No. 193 of Schedule II(b) and tax would be levied at the highest rate. Therefore, there is no excessive delegation because it is Legislature which has fixed the rate of tax and no discretion has been left with the authorities as to which items are to be included in which Schedule. Any item not forming part of Schedule II(a), II(c), II(c)(i) and II(d) will be exigible to tax at the rate mentioned in Schedule II(b). - no merit in the review petition or the writ petition - Decided against Petitioner.
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2015 (3) TMI 37
Whether, on the facts and circumstances of the case, and in the true and correct interpretation of Explanation I to subsection (2) of Section 36 of the Bombay Sales Tax Act, 1959, the Tribunal was justified in holding that the onus lies on the revenue to establish, for invoking the said ExplanationI, that there was gross or willful neglect on the part of the assessee - Held that:- The basic burden about concealment of the transactions or inaccurate furnishing of particulars of the transaction is on the Revenue and in case in the assessment it is found that the tax paid by the assessee is less than 80% of the tax assessed, the presumption with regard to failure to disclose such transaction of sale or purchase would arise. In the present case indisputably the books of accounts had been submitted have been accepted and not objected to at all. There is no evidence on record to show that the assessee in fact had failed to disclose any transaction of sale and purchase neither it was pointed out before the first Appellate Authority or for that matter before the second Appellate Authority. - What emerges is that the books of accounts had been submitted had not been objected to and were accepted. It further comes on record that there was debit balance in the Companies account as on 31.12.1990 to the tune of ₹ 427.22 Lakhs showing that the company had been not faring well financially and had been incurring heavy losses resulting in erosion of capital. Thus it appears that the lesser payment of taxes is not attributable to a neglect by the company or for that matter a willful one at that. Thus, the observations appearing in the judgment of the Tribunal can hardly be said to hold that the onus lies on the Revenue to establish in the facts and circumstances of the present case wherein the books of accounts which have been submitted have been accepted and not objected to and further that the assessee had been facing the financial difficulties and was considered to be a sick industry. In such an indisputable position the question No.1 as has been framed as a matter of fact appears to have been erroneously framed as it does not appear to be the purport of the Tribunal's judgment to hold that the onus in the circumstances of the case lies on revenue and the narration was with respect to the circumstances. The second question has to be answered in the affirmative for it emerges that the Indoswe (1995 (2) TMI 417 - BOMBAY HIGH COURT) judgment by the Division Bench of this Court gives an exposition on the scheme with regard to imposition of penalty under Section 36(2)(c) with reference to the explanations (I) and (II). On perusal of judgment and the facts and circumstances of the case involved in Indoswe case (supra) it cannot be said that it dealt with only explanation II as has been sought to be urged on behalf of the Revenue. - Tribunal is justified in deleting the penalty imposed on assessee under Section 36(2)(c) read with explanation I of the Bombay Sales Tax Act, 1959. - Decided against Revenue.
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Indian Laws
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2015 (3) TMI 22
Jurisdiction of Court - Application under Section 34 of the Arbitration and Conciliation Act, 1996 - Held that:- Indisputably, the Arbitration proceeding has been conducted within the jurisdiction of Raichur court, which has jurisdiction as per Section 20 of the Code of Civil Procedure and is subordinate to the High Court of Karnataka which entertained Section 11 Application. Hence, the Award cannot be challenged before a Court subordinate to the High Court of Bombay. Exercise of jurisdiction by such court shall be against the provision of Section 42 of the Act. We, after giving our anxious consideration to the matter, are of the view that the District Court at Latur and High Court of Bombay have committed error of law in entertaining the application under Section 34 of the Act and dismissing the revision petition. We, therefore, allow this appeal and set aside the order passed by the High Court. - Decided in favour of appellant.
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2015 (3) TMI 21
Period of Limitation under provisions of Section 468 Cr. P.C.- Legal maxim, nullum tempus aut locus occurrit regi ((lapse of time is no bar to the Crown for the purpose of it initiating proceeding against offenders) - Continuing Offence - Held that:- The law of limitation prescribed under the Cr.P.C., must be observed, but in certain exceptional circumstances, taking into consideration the gravity of the charge, the Court may condone delay, recording reasons for the same, in the event that it is found necessary to condone such delay in the interest of justice. In the case of a continuing offence, the ingredients of the offence continue, i.e., endure even after the period of consummation, whereas in an instantaneous offence, the offence takes place once and for all i.e. when the same actually takes place. In such cases, there is no continuing offence, even though the damage resulting from the injury may itself continue. The same view was held in Balakrishna Savalram Pujari Waghmare & Ors. [1959 (3) TMI 53 - SUPREME COURT]. The instant appeals are squarely covered by the observations made in Kishan Singh [2010 (8) TMI 888 - SUPREME COURT] and thus, the proceedings must be labeled as nothing more than an abuse of the process of the court, particularly in view of the fact that, with respect to enact the same subject matter, various complaint cases had already been filed by respondent No.2 and his brother, which were all dismissed on merits, after the examination of witnesses. In such a fact-situation, Complaint Case No. 628 of 2011, filed on 31.5.2001 was not maintainable. Thus, the Magistrate concerned committed a grave error by entertaining the said case, and wrongly took cognizance and issued summons to the appellants. - Decided in favour of appellants.
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