Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
March 31, 2016
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
TMI SMS
Articles
News
Notifications
Companies Law
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F. No. 17/45/2015-CL-V - dated
29-3-2016
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Co. Law
Companies (Auditor's Report) Order, 2016
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F. No. 17/45/2015-CL-V - dated
29-3-2016
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Co. Law
Companies (Removal of Difficulties) Second Order, 2016
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F. No. 17/45/2015-CL-V - dated
29-3-2016
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Co. Law
Companies (Removal of Difficulties) First Order, 2016
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F. No. 01/04/2013 CL-V (part-II) - dated
29-3-2016
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Co. Law
Companies (Share Capital and Debentures) Second Amendment Rules, 2016 - where all members of a company agree, the offer for buy-back may remain open for a period less than fifteen days
Customs
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12/2016 - dated
29-3-2016
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ADD
Seeks to levy provisional anti-dumping duty on Glazed/Unglazed Porcelain/Vitrified tiles in polished or unpolished finish with less than 3% water absorption, originating in, or exported from the China PR for a period not exceeding six months
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11/2016 - dated
29-3-2016
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ADD
Seeks to levy definitive anti-dumping duty on imports of Tyre Curing Presses also known as Tyre Vulcanisers or Rubber Processing Machineries for tyres, excluding Six Day Light Curing Press for curing bi-cycle tyres originating in, or exported from China PR for a period of five years
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10/2016 - dated
29-3-2016
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ADD
Seeks to levy definitive anti-dumping duty on 2-Ethyl Hexanol, originating in, or exported from the European Union, Indonesia, Korea RP, Malaysia, Chinese Taipei and USA for a period of five years
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25/2016 - dated
30-3-2016
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Cus
Exemption from customs duty on cut/polished diamonds imported for testing/certification
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42/2016 - dated
29-3-2016
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Cus (NT)
Amendment in Notification No. 63/94-CUSTOMS (NT), dated the 21st November, 1994
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1/2016 - dated
29-3-2016
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Safeguard
Seeks to levy safeguard duty on imports of Hot-rolled flat products of non-alloy and other alloy Steel in coils of a width of 600 mm or more for a period of two years and six months
Income Tax
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21/2016 - dated
23-3-2016
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IT
Income-tax (8th Amendment) Rules, 2016
Circulars / Instructions / Orders
Highlights / Catch Notes
Income Tax
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TDS u/s 194J - transaction charges paid by a member of the Bombay Stock Exchange to transact business of sale and purchase of shares - whether amounts to payment of a fee for 'technical services' rendered by the Bombay Stock Exchange? - Held No - No TDS on such payments would be deductible u/s 194J - SC
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Validity of assessment u/s 153C - real owner of the document seized - the presumption cast under provisions of section 132(4A) of the Act, comes into play. - even the provisions of section 292C(1) also provide the same. This presumption was not rebutted by the AO of the searched person - assessee-firm cannot be said to be the owner of the document seized. - AT
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Eligibility of exemption claimed u/s. 10B on call centre operation - It is not in dispute that a call centre operation has been duly notified as IT enabled services and thereby eligible for deduction for 100% export oriented unit contemplated u/s. 10A/10B of the Act. - AT
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Exemption u/s 54F - long term capital gains (LTCG) - it is undoubtedly clear that as on the date of transfer of original asset, the assessee has owned two residential flats. Therefore, the assessee is not eligible for exemption u/s 54F - AT
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Disallowance of carry forward of loss - Since no claim of set off of loss is made by the assessee in this year the action of AO in rejecting to allow carry forwarded is not tenable as it preempts the future quasi-judicial powers of the AO who has to actually set off of the loss if and when there are profits - AT
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Nature of receipts of the assessee - income from salary or professional receipts - No employee and employer relationship - The sole reason given by the authorities below was that the assessee is a salaried employee and not the professional. - assessee is a professional, income is taxable under the head PGBP- AT
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Penalty u/s 271B - accounts of the assessee from speculative business were not audited u/s 44AB - the notional value of such speculative transactions cannot be held as turnover as the assessee is eligible only to income or loss and delivery of the commodities is not exchanged. - Further when two views are available no penalty can be imposed - AT
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Computation of income from business u/s 45(2) when a capital asset converted into stock in trade - A.O. was not correct in adopting gross land for computing long term capital gain and only saleable land for the purpose of income from business - AT
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Disallowance of deduction u/s 80P(2)(i) - addition of gross interest income treating interest received from banks and govt. securities as income from other sources u/s 56 - the assessee is eligible for deduction of ₹ 50,000/- under section 57 - AT
Customs
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Demand of Interest - Department is unable to deny that neither Section 114A nor Section 28AB could have been invoked as far as the SCN issued to the Petitioner was concerned. Therefore, in the interests of justice recovery of penal interest u/s 28AB as well as the penalty u/s 114A by the department is not sustainable - HC
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Eligible benefit of the notification could not be extended to assessee due to an error and non updation of the program in the EDI system, cannot be held against an assessee, only on the ground that they had not challenged the assessment for the bills of entry. - AT
Corporate Law
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Companies (Auditor's Report) Order, 2016 - Notification
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Companies (Share Capital and Debentures) Second Amendment Rules, 2016 - where all members of a company agree, the offer for buy-back may remain open for a period less than fifteen days - Notification
Indian Laws
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Charge of corruption against the Superintendent of Central Excise, Service Tax Cell, Chennai, Commissionerate - the appellant/accused guilty under the sections mentioned in the charge. - HC
Service Tax
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Seeking release of payments due to the petitioner along with suitable interest - in the absence of any contract between the petitioner and the first respondent with regard to the payment of service tax and the reimbursement of the same, the said issue cannot be gone into in the writ petition. - HC
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Seeking direction for refund and release of security deposit of ₹ 24,21,125/- - Amount of Service tax paid by Corporation on behalf of the petitioner - Jurisdiction under Article 226 is not the appropriate remedy to be invoked for the grievance and the dispute of the above nature which stem from contract between the parties - Petition dismissed - HC
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Recovery of Service tax from service recipient - the Corporation must be allowed to recover such charges on the computation of unpaid rentals to be paid by the petitioner to the Corporation as per offer letter. - HC
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The penalty imposed on the appellant is unwarranted as the Service Tax liability and interest thereof was paid by the appellant before the issuance of show-cause notice. Provisions of Section 73(3) of the Finance Act, 1994 would apply - AT
Central Excise
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Refund claim rejected - bar of limitation - Relevant date - Since, the second component of the limitation i.e. the relevant date from which the limitation period is to be counted is missing in Clause 6 of the Notification No. 11/2002-C.E. (N.T.), dated 1-3-2002, thus in view the limitation provision in this notification is meaningless. - AT
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Dismissal of refund claim - Export of goods - If the refund of service tax paid on input services is not allowed to the appellant then the said taxes would have to be built in the cost of the final products and thus it would lead to export of taxes which are against the policy of the government - refund allowed - AT
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Demand of excise duty / reversal of cenvat credit - shortages of raw material - the shortages found are very minor in nature, i.e. 0.6% which is well accepted in petroleum products - there is no allegation that there is clandestine removal of goods by the appellant - demand set aside - AT
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Entitlement to claim cenvat credit on barbed wire being accessory to the transmission tower - whether the said accessory falls in the definition of ‘input' under Rule 2(k) of the Cenvat Credit Rules, 2004? - the price of barbed wire is included in the assessable value - credit allowed - AT
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Demand of duty and penalty on the quantity of goods shown in the respective small chits/papers - In absence of cogent and corroborative evidences showing production and removal of goods without payment of duty, entries reflected in private chits cannot itself be a ground for confirmation of demand - AT
Case Laws:
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Income Tax
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2016 (3) TMI 1026
TDS u/s 194J - transaction charges paid by a member of the Bombay Stock Exchange to transact business of sale and purchase of shares - whether amounts to payment of a fee for 'technical services' rendered by the Bombay Stock Exchange? - Held that:- There is no exclusivity to the services rendered by the Stock Exchange and each and every member has to necessarily avail of such services in the normal course of trading in securities in the Stock Exchange. Such services, therefore, would undoubtedly be appropriate to be termed as facilities provided by the Stock Exchange on payment and does not amount to technical services provided by the Stock Exchange, not being services specifically sought for by the user or the consumer. It is the aforesaid latter feature of a service rendered which is the essential hallmark of the expression technical services as appearing in Explanation 2 to Section 9(1)(vii) of the Act. The view taken by the Bombay High court that the transaction charges paid to the Bombay Stock Exchange by its members are for 'technical services' rendered is not an appropriate view. Such charges, really, are in the nature of payments made for facilities provided by the Stock Exchange. No TDS on such payments would, therefore, be deductible under Section 194J of the Act.
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2016 (3) TMI 1025
Reopening of assessment - reasons recorded - Held that:- In case of absence of records, the AO can assess the income of an assessee on the basis of a reasonable estimation. In such cases, it would not be open for the AO to subsequently hold that the Assessee had failed or omitted to truly and fully disclose all material facts and reopen the assessment on the basis that he should have estimated the income by adopting a different method. In the present case, there is no material to hold that the Assessee had withheld or concealed any material information; on the contrary, the Assessee had specifically pointed out that it had not maintained India specific books of accounts. The Assessee had furnished the records that it maintained and also answered all the queries raised by the AO; the fact that another AO had adopted a different method of estimating the income attributable to Indian activities can hardly be a reason to reopen the assessment or to allege that the Assessee had failed to truly and fully disclose material facts for the purposes of its assessment. - Decided in favour of assessee
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2016 (3) TMI 1024
Penalty proceedings under section 271(1)(c) - Held that:- The initiation and levy of the penalty should be on a specific charge otherwise the whole proceedings is bad in law and gets vitiated. This principle has been followed by the Tribunal in several cases. Before us, no contrary decisions of any other High Court have been brought to our notice, accordingly, we are of the view that the entire proceedings of initiation and levy of penalty under section 271(1)(c) is bad in law and hence, the penalty levied by the AO and as confirmed by the CIT(A) is quashed. - Decided in favour of assessee
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2016 (3) TMI 1023
Validity of assessment u/s 153C - real owner of the document seized - presumption - Held that:- The satisfaction note recorded by the AO is identical for all the years except for difference in the assessment year. From the material seized, though there was a reference to the name of the assessee-firm, equally there are some documents which do not even contain name of the assessee-firm but there is nothing to indicate that these documents were disclaimed by Indian Builders Corporation in whose case search was conducted. The AO has not referred to any material to indicate that the assessee is the owner of those seized documents. Therefore, the presumption cast under provisions of section 132(4A) of the Act, comes into play. The said provision stipulates that where any document is found in the possession or control of any person in the course of search it may be presumed that such document belongs to such person. Further, even the provisions of section 292C(1) also provide the same. This presumption was not rebutted by the AO of the searched person. Therefore, it cannot be said that assessee-firm is the owner of the seized material based on which the impugned additions were made. Furthermore, even in terms of law laid down by the Hon’ble Supreme Court in the cases of Bishwanath Chatterjee [1976 (4) TMI 1 - SUPREME Court ] and late Nawab Sir Mir Osman Ali Khan [1986 (10) TMI 2 - SUPREME Court ], assessee-firm cannot be said to be the owner of the document seized. - Decided in favour of assessee
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2016 (3) TMI 1022
Addition made on account of unexplained cash credit in Mauritius Bank Account - Held that:- Find merit in the plea of assessee that where additional income is being added to the income of assessee, then credit for the amount offered by way of additional income, while recording the statement under section 132(4) of the Act should be allowed to the assessee. Another aspect to be noted in this regard is that the CIT(A) vide para 8.7 at page 8 has also allowed the said addition of Euro 2000 equivalent to ₹ 1,03,560/- to be adjusted out of additional income offered of ₹ 10 lakhs. The Revenue is not in appeal against the said finding of CIT(A). In the entirety of the above said facts and circumstances, we direct the Assessing Officer to allow the credit of the balance of ₹ 10 lakhs against the addition made on account of Euro 26000 i.e. ₹ 14,78,360/- and balance amount is to be added in the hands of assessee. However, since the bank account relates to the assessee, we uphold the addition made on account of interest credited to the bank account of Euro 268.43 equivalent to ₹ 15,413/-. - Decided partly in favour of assessee Addition on account of Bandra Home on protective and substantive basis - Held that:- First of all, the figure mentioned on the said document is 20.00 and in the absence of Assessing Officer establishing 20.00 stands for ₹ 20 lakhs, the said addition cannot be upheld in the hands of assessee. Secondly, the said document has not been proved to relate to the assessee and merely because the assessee had given certain information about Bandra flat, which admittedly is owned by one person and was being used by him and was later owned by some other person, we find no merit in the presumption and assumptions made by the Assessing Officer that the entries in the document relate to a rental income of ₹ 68 lakhs, against which the assessee has earned commission of ₹ 20 lakhs. The said flat was being used as guest house and there was no question of earning rental income. Consequently, the objections and assumption raised by both the authorities that the assessee is aware of such flat in Bandra and hence, the name of Ajay relates to the assessee is baseless. First of all, before making any addition in the case of any of assessee, complete details should be available. It is not even clear as to which Bandra flat, the said paper relates and it is also not clear what are the entries made on that document whether relating to sale of the property or giving the same on rent. In the absence of any clarity, the said document at best is a dumb document and entries in the said document are not relatable to the assessee. Both the authorities below have failed to establish connection of the assessee with the said document, which is annexed to PIL and have also failed to establish that the said entries relate to the assessee himself. In the absence of the same, we find no merit in the aforesaid additions either on protective and / or substantive basis and we delete the same. Also once if commission income was added in the hands of assessee, then no addition is warranted on account of rental income, since apparently, the assessee was only a broker and cannot be both a broker and owner in the same breath. We find no merit in the orders of authorities below in this regard - Decided in favour of assessee Addition on account of entry made in the computer in the name of Kohinoor’s account - Held that:- As third party confirmed by way of Affidavit filed before the Assessing Officer that the said Excel files related to him and he also confirmed all these facts by way of e-mail to the e-mail ID of Assessing Officer and also filed the requisite passport details in this regard that he was in Pune during the period and those documents were prepared by him and they belonged to him.The onus in this regard was upon the Assessing Officer to verify the claim of assessee and not to merely reject the same. The assessee was engaged in the business of real estate and the transaction had to be seen with an angle of business carried on by the assessee. We find no merit in the aforesaid addition made by the Assessing Officer in the hands of assessee, which in turn, has been clarified by him that in case evidence is filed, the same would be deleted. Further, the learned Authorized Representative for the assessee has fairly pointed out that in order to cover up discrepancy from year to year, it has offered additional income in its hands of ₹ 40 lakhs up to 31.03.2007 and ₹ 10 lakhs in the current year under appeal. In the totality of the above said facts and circumstances, we delete the addition of ₹ 47 lakhs. - Decided in favour of assessee Addition made on account of cash seized at the time of search - Held that:- With regard to observation of CIT(A) vis-à-vis remaining cash in hand being available on the date of search, we find no merit in the said stand of the authorities below. With regard to entries in the books of account, which were made on a later date, however, looking at the difference between the cash found of ₹ 3,78,500/- and the availability of cash as per cash book of ₹ 42,31,973/-, we are of the view that the presumption is in favour of the assessee that the cash found during the course of search is duly explained. In view of the smallness of cash found during the course of search as against the large amount shown in the books of account, we accept the plea of the assessee. However, this decision of our, shall not be used as precedent in any other case. - Decided in favour of assessee Addition on account of entries under the head ‘Sai Account’- Held that:- The assessee admits to have included the said sum of ₹ 13,62,000/- in the declared income of ₹ 70 lakhs for the year under consideration and since the amount was additional income, there was no merit in any further addition. We find that the CIT(A) vide para 58.7 at page 68 has directed the Assessing Officer to verify the claim of the assessee in this regard and we find no merit in the ground of appeal raised by the assessee - Decided against assessee Addition computed on the basis of cumulative total of credit entries on the seized document - Held that:- In the entirety of the above said facts and circumstances, we find merit in the claim of the assessee that the addition cannot be made in the hands of assessee by only totaling of credit side of the entries. The debit side entries, if any, on the said seized document, needs to be considered and only difference of the entries is to be added in the hands of assessee. Further, the assessee claims that it had already offered ₹ 70 lakhs as additional income against the discrepancy, if any, found in the seized documents. The CIT(A) had taken note of the fact that the Assessing Officer had not allowed the benefit of ₹ 70 lakhs while computing addition in the hands of assessee. The Assessing Officer in the remand report has admitted that the same is allowable to the assessee. Accordingly, we direct the Assessing Officer to re -compute the income on the basis of entries in the said document, both credit and debit and to give benefit of additional income of ₹ 70 lakhs before making any addition in the hands of assessee. It may also be clarified here that the additional income of ₹ 70 lakhs also covers the addition of ₹ 13,62,000/-, which has been confirmed by us in respect of ground of appeal No.3. The Assessing Officer shall give reasonable opportunity of hearing to the assessee while re-computing the income of the assessee.
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2016 (3) TMI 1021
Addition made u/s.69B on account of difference in valuation - addition on the basis of the valuation report - Held that:- We find in the instant case the addition has been made by the AO mainly based on the valuation report of the DVO. The Hon’ble Delhi High Court in the case of Punnet Sabharwal (2010 (12) TMI 846 - Delhi High Court ) has held that addition to income based solely on report of DVO is not valid in absence of any evidence of understatement of consideration. There is no other material available with the revenue to show that assessee has paid anything more than what has been stated. Since the Ld.CIT(A) has given a factual finding that the price paid by the assessee for Flat No.7 is more than the price paid by another purchaser being Flat No.201 in the same building and since the addition has been made by the AO only on the basis of the valuation report of the DVO, therefore, in absence of any contrary material/evidence brought before us by the revenue authorities that the assessee has paid anything beyond whatever has been disclosed we find no infirmity in the order of the CIT(A) deleting the addition - Decided in favour of assessee Deduction u/s 80IA(4)(i) in respect of profit earned by the assessee from development of infrastructure facilities - Held that:- We find merit in the submission of the Ld. Counsel for the assessee that netting of interest should be allowed for computation of deduction u/s.80IA in the light of the ratio of the decision of Hon’ble Supreme Court in the case of ACG Associated Capitals Vs. CIT [2012 (2) TMI 101 - SUPREME COURT OF INDIA ]. We accordingly set aside the order of the CIT(A) and direct the AO to recompute the deduction u/s.80IA by netting the interest.- Decided in favour of assessee Deduction on account of proportionate interest on diversion of funds for non business purposes - CIT(A) allowed the claim - Held that:- The factual finding given by the CIT(A) that the advances were made to the sub contractors namely Sunil Construction and Ashok Chipre since 2001-02 and 2002-03 and therefore disallowance, if any, could have been made in those years and not in this year also could not be controverted by the Ld. DR. Further the finding given by the Ld.CIT(A) that the own capital and free reserves of the assessee company is much higher than the amount of advances given and no interest bearing funds were utilized to carry the load of these advances in the future years also could not be controverted by the Ld. Departmental Representative. In view of the above and in view of the detailed reasoning given by Ld.CIT(A) while deleting the addition and in absence of any contrary material brought to our notice by the Ld. Departmental Representative we do not find any infirmity in the order of Ld.CIT(A). Accordingly, we uphold the order of the CIT(A) on this issue.- Decided in favour of assessee Deduction on account of Pooja Expenses - CIT(A) allowed the claim - Held that:- In our opinion the expenditure incurred in Pooja could not be treated as expenditure wholly and exclusively for the purpose of business or profession of a company and the assessee could not be allowed any deduction u/s.37(1) of the Act towards such expenditure. For the above proposition, we find support from the decision of Hon’ble Bombay High Court in the case of Kolhapur Sugar Mills Vs. CIT [1977 (8) TMI 19 - BOMBAY High Court ] wherein it has been held that expenses incurred for Pooja is not an allowable deduction. - Decided against assessee Assessee also entitled to deduction u/s.80IA(4) on the additional income Addition on Unexplained expenditure - Held that:- Various expenses incurred on hotel, gold purchases, plywood purchase, mobile bills of Naveen, Dynapac list etc.. Page no. 4 contains details of expenses incurred by both Mahalaxmi Construction Corporation Ltd. and B T Patil and Sons and the receivable position as on 11/07/2007. The contents on page no. 5 arc details of various expenses including those which are written as 'K' expenses. The total of 'K' expenses is ₹ 26,13,500/- which is incurred on various dates between 26/12/2008 to 24/01/2009. Page no. 7 contains working of interest payment on purchase of tender documents, bank guarantees for EMDs, FDs to be kept for EMDs and EMDs required for procuring mobilization advances. It appears that this is a working or estimate of money required by Mahalaxmi Construction Corporation Ltd. and B T Patil and Sons for giving various bank guarantees and meeting EMD requirements. In fact, the word 'official' is also mentioned against these workings. In my opinion, the contents of page 7 do not reflect the unaccounted expenses of the appellant and the assessing officer is directed to reduce this sum from the total for assessment year 2010-11 and thereafter work out the expenses incurred on the basis of these papers as additional income of the assessee. - Decided in favour of assessee
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2016 (3) TMI 1020
Eligibility of exemption claimed u/s. 10B on call centre operation - denial of claim on the ground that the assessee company did not have any ‘Certificate of Approval’ from the Board of Approval appointed in that regard by the Central Government - also the assessee could not submit any ratification obtained from the ‘Board of Approval’ as required as per the clarification of the CBDT dated 09.03.09 - Held that:- It is not in dispute that a call centre operation has been duly notified as IT enabled services and thereby eligible for deduction for 100% export oriented unit contemplated u/s. 10A/10B of the Act. Instruction (F.No.178/19/2008-IT-I) dated 9th March’ 2009 issued by CBDT clarifies that the power to grant approval u/s. 14 of industrial (Development & Regulations) Act, 1951 has been delegated to Development Commissioners and approval granted by the Development Commissioner shall be considered valid for the purpose of exemption u/s. 10B. It would be pertinent to note that in the instant case approval under the STP scheme is granted by the Designated Officer, Department of Information Technology and by the Inter-ministerial Standing Committee (IMSC). Hence, the approval granted under STP Scheme complies with all the requirements contemplated u/s. 10B of the Act when read with Industrial (Development & Regulations) Act, 1951, Foreign Trade Policy 2004-2009, Hand book of Procedures (Volume-I) & Appendix to the Handbook As find that the contents of audit report in form no. 56F and 56G together with the computation mechanism remains the same for claiming the deduction u/s. 10A/10B of the Act.the assessee is entitled to claim the benefit of deduction under the provisions of section 10A as well as section 10B of the Act. Hence we find no infirmity in the impugned orders of the ld.CIT(A) in deleting the disallowance as made by the ld.AO on this issue. We uphold the impugned orders of the ld.CIT(A). - Decided against revenue
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2016 (3) TMI 1019
TDS u/s 194C(2) - non deduction of tds on payments made to transporters - whether no relationship of a contractor between the appellant and the small contractor exists? - CIT(A) held that non-existence of a "formal contractual agreement" vitiates the very existence of an "oral contract" - disallowance u/ section 40(a)(ia) - Held that:- Since no amount of the freight was unpaid or was payable as on 31-03-2007 we hold that the provisions of section 40(a)(ia) are not attracted and in this view of the matter we are of the opinion that Revenue's appeal is liable to be dismissed. The assessee is a transport contractor. The assessee was awarded contract of transportation to various locations of Ambuja Cement, Manigarh Cement, Maratha Cement etc. The assessee received freight charges from these companies. The contract with these companies shows that the assessee was responsible for transportation of cement from one destination to other. The contractual liability was discharged by transporting cement through assessee's own trucks and also from hired trucks belonging to outside parties. It is clear from the facts on record that the risk and responsibility for carrying out the contract work was solely that of the assessee. There is no material to suggest that there was any contract or sub contract written or oral with the outside truck owners and the assessee. It is in these circumstances that when these outside truck owners do not have any responsibility or liability towards the Ambuja Cement or other principals then in absence of any privity the obligation to deduct the tax at source was not that of the assessee. Since we have already held that the provisions of section 40(a)(ia) were not attracted inasmuch as no amount was payable as on the close of the year as well as in absence of any contracts, there was no obligation on the part of the assessee to deduct the tax at source - Decided in favour of assessee
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2016 (3) TMI 1018
Penalty made u/s.271(1)(c) - merger expenses - Held that:- Assessee had shown a merger expenditure of ₹ 15,99,298/- in its profit and loss account and suo motu added it back in its computation statement. As per the Ld. AR, merger related expenditure to the extent of ₹ 5,14,240/- was accounted by the assessee under various other heads which came to light only during the course of verification. Nevertheless what we find is that even for this amount assessee was eligible for claiming 1/5th write off u/s.35DD of the Act. Thus at the best, claim can be considered to be erroneously made and not one done with any malafide intention or with any intention to conceal. Whether a particular expenditure can be related to merger cost itself is debatable. In our opinion, levy of penalty ought not have been done on such amount. Levy of penalty relating to prior period expenditure admittedly the Tribunal in assessee’s appeal held the differential CST of ₹ 91,89,001/- to be an allowable claim. Vide the very same para it also held that differential property tax of ₹ 23,46,492/- to M/s. Nagar Nigam paid was also an allowable claim. CIT (A) at page 5 of his order in assessee’s appeal against levy of penalty, deleted the penalty levied of ₹ 1,49,658/- made for expenses relating to earlier years. What is left out of the above amounts is ₹ 4,96,780/- being obsolete stock written off and ₹ 37,06,054/- being advance to Balbir Distilleries. In so far as obsolete stock is concerned, addition was sustained for a reason that assessee could furnish details for ₹ 20.73 lakhs against the claim of ₹ 25,69,780/-. Tribunal has has clearly mentioned this. Tribunal has also mentioned that what assessee has produced was a list of small items. Non-production of supporting records to show value of obsolete stock could, in our opinion, be a reason for disallowance. However, we cannot say that such a claim is far fetched or an illegitimate one. Just because the claim was disallowed, in our opinion, penalty ought not have been levied on the said amount. Disallowance towards advance to Balbir Distilleries which was written off by the assessee, this Tribunal sustained the order of CIT (A) wherein he deleted the disallowance to the extent of ₹ 33 lakhs. AO had disallowed the claim for a reason that it was a capital loss being an advance, given for acquiring capital asset. There is no finding by the lower authorities that the advances were not related to the business of the assessee. Whether write off of advance can be considered as a capital loss or revenue loss is, in our opinion, is a debatable issue not amenable to a levy of penalty. Write off of bad debts disallowed by the AO on which penalty has been levied, CIT (A) in assessee’s appeal had deleted the penalty relatable to the sum of ₹ 15,79,679/-. When the matter reached this Tribunal it deleted the disallowance made by the AO in full. Hence penalty levied on such amount cannot be sustained. Levy of penalty is deleted on all. - Decided in favour of assessee
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2016 (3) TMI 1017
Treatment to interest income - Held that:- We find that in assessment year 2005-06 and 2006-07 and also in assessment year 2009- 10, the Tribunal has restored back the matter to the file of the Assessing Officer for fresh decision with the direction to readjudicate the issue afresh in the light of the order of the State Government dated 03/04/80. Hence, in the present year also, we set aside the order of CIT(A) and restore the matter back to the file of the Assessing Officer for fresh decision in the light of the order of State Government dated 03/04/80. - Decided in favour of assessee for statistical purposes. Disallowance u/s 14A - Held that:- in the present case, the Assessing Officer has recorded his satisfaction with proper reasons that the assessee’s claim regarding the amount to be disallowed u/s 14A is not correct. At the cost of repetition, we again narrate the reasoning given by the Assessing Officer in the assessment order for the present year. In Para 5 of the assessment order, the Assessing Officer has stated that the computation of disallowance u/s 14A of the Act is not in accordance with the provisions of Rule 8D and thereafter, the Assessing Officer has worked out the disallowance as per Rule 8D of the Act. We have also discussed earlier in this order that if the assessee gives actual working of the amount of expenses incurred for earning exempt income then the same has to be examined by the Assessing Officer and before rejecting the same, the Assessing Officer has to give proper reasons but if the working of the assessee is of the estimated expenditure then in our considered opinion, such working itself is not as per Rule 8D because Rule 8D prescribes a particular manner and method for estimation of expenses incurred for earning exempt income and therefore, if actual detail and working is not made available by the assessee then there is no other option but to adopt the basis of estimation as per Rule 8D and since the working of the assessee regarding estimation of the expenses is not as per Rule 8D, the reasoning given by the Assessing Officer for not accepting the working of the assessee that the same is not as per Rule 8D, is cogent reasoning in our considered opinion and therefore, none of the various judicial pronouncements cited by Learned A. R. of the assessee is rendering any help to the assessee in the present case. - Decided against assessee Addition of amount received for up gradation and development of computer labs - Held that:- We find that this is the claim of the assessee that the amount in question was retained by Inotech for providing training and therefore, even if this amount is considered as income being grant received, then the expenses on account of training has to be allowed resulting into no effective addition and in view of these facts, we hold that this addition made by the Assessing Officer is not justified in the facts of the present case. The same is deleted. - Decided against revenue
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2016 (3) TMI 1016
Rental Income - “Income from business” or “Income from house property” - nature of income - Held that:- In the present case, the assessee has acquired the land on lease basis in various places i.e. Mumbai, Kolkata, Bangalore, Chennai and constructed commercial complexes and leased out the same to the commercial entrepreneurs such as Standard Chartered Bank, Bata India Limited, EDS Electronic Data Systems India (P) Ltd. and Spencers for a higher rental amount. The intention of the assessee is very clear from the date on which it is existed is to carry out the business activity such as to construct the godowns or residential or commercial buildings or commercial shops, etc. the lands owned by firm or by taking land on long lease from others is the activity of the assessee. In our opinion, the judgement of the Hon’ble Supreme Court in the case of M/s. Chennai Properties and Investments Ltd.[2015 (5) TMI 46 - SUPREME COURT ] squarely applies to the facts of the case and we hold that the income earned by the assessee is “Income from business” and not “Income from house property”. - Decided in favour of assessee
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2016 (3) TMI 1015
Exemption u/s 54F - whether two flats owned by the assessee are commercial and assessee is eligible for exemption under sec. 54F for acquiring 3 flats in lieu of development agreement - Held that:- In the present case on hand, the records show that the assessee along with family members purchased incomplete residential apartment consisting of 8 flats. The assessee has taken housing loan from bank. The plan sanction was also for the purpose of residential purpose. The revenue records show that properties are residential in nature. Just because, the flats are let out for commercial purposes for financial viability, it cannot be said that the properties lose its basic nature and characteristics. From the facts, it is undoubtedly clear that as on the date of transfer of original asset, the assessee has owned two residential flats. Therefore, we are of the opinion that the assessee is not eligible for exemption u/s 54F of the Act for the flats received in lieu of joint development agreement. The CIT(A) has rightly confirmed the order of the assessing officer denial of claim - Decided against assessee.
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2016 (3) TMI 1014
Addition pertaining to interest income - Held that:- We are of the view that there is merit in the contention of the assessee that the period of “Jan – Dec” stated in the later part of the loose paper should relate to the calendar year 2001. Since the assessee is following cash system of accounting and since these figures have been claimed to have been noted by the broker, there is merit in the submission of the assessee that the broker has noted down the prospective interest income of the calendar year 2001. Accordingly, we are of the view that the above said amount of ₹ 3,36,000/- could not be assessed in AY 2001-02, since there is no evidence to show that the assessee has received this interest income. Accordingly, we set aside the order of Ld CIT(A) on this issue and direct the AO to delete the addition of ₹ 3,36,000/- pertaining to interest income. Addition of loan - Held that:- As observed by us in the earlier paragraphs, the question before us is about the interpretation of the entries found noted in the loose paper. It is also a fact that the entries made in the loose paper have not been corroborated with any other material. There is no dispute that the money lending business was carried on by assessee’s spouse and it has been inherited by the assessee. Further, these transactions have been accepted to have been made through a broker and the receipt of ₹ 2.00 lakhs on 6.6.2000 supports the contentions of the assessee the amount of ₹ 22.00 lakhs were deployed prior to 1.4.2000. This is also supported by the fact that an amount of ₹ 1,08,000/- was shown as adjusted against the amount of ₹ 2.00 lakhs, meaning thereby the amount of ₹ 1,08,000/- pertain to the period prior to 6.6.2000, in which case, the corresponding principal amount of ₹ 12.00 lakhs should have been available prior to 1.4.2000. Further, it is seen that the broker Shri Chottu has deployed the amount of ₹ 10.00 lakhs on various dates and he has been working from the firm R.Ravinder & Co. also. Hence it is seen the loans were given as and when there was a demand and hence the claim of the assessee that the amount of ₹ 10.00 lakhs was also available with the assessee prior to 1.4.2000 is, in our view, finds merit. Accordingly, we set aside the order of Ld CIT(A) on this issue and direct the AO to delete the addition of ₹ 22.00 lakhs. Addition from her brother in law - Held that:- We notice that the seized documents as well as the explanations furnished by the assessee would show that Ld CIT(A) has proceeded to make this addition on wrong presumption. The seized documents as well as the evidences furnished by the assessee show that the brother in law of the assessee had included his name along with the name of original owner of the flat. Later on the flat has been claimed to have been sold for a sum of ₹ 61.00 lakhs and the brother in law of the assessee has been claimed to have appropriated a sum of ₹ 20,25,000/- in settlement of loan obtained by him from State Bank of India. Thus, we notice that the brother in law of the assessee has indulged in the property transaction and it is claimed that the assessee later on lodged her claim over the sale consideration. Accordingly, in a family settlement, it is claimed that the brother in law of the assessee paid a sum of ₹ 28.50 lakhs to the assessee, which was shown as gift. Due to family dispute about the ownership of flat, it is stated that the incidence of capital gains tax, if any, is required to be addressed separately. It is an undisputed fact that the details of property transactions are available in the seized records. Considering the contents of the seized records as well as the explanations furnished by the assessee, we are of the view that the claim of receipt of ₹ 28.50 lakhs from her brother in law cannot be doubted with. Accordingly, we are not inclined to agree with the view taken by the Ld CIT(A) in the peculiar facts and circumstances of the instant case. Accordingly, we set aside his order on this issue and direct the AO to delete the addition - Decided in favour of assessee
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2016 (3) TMI 1013
Disallowance of carry forward of loss - Held that:- Since no claim of set off of loss is made by the assessee in this year the action of AO in rejecting to allow carry forwarded is not tenable as it preempts the future quasi-judicial powers of the AO who has to actually set off of the loss if and when there are profits. Therefore, the remarks/ findings of the ld. AO denying claim of carryover of earlier losses and unabsorbed depreciation are expunged. The legality of claim of set off will be considered by AO who will deal with the aspect of set off. See Manmohan Das [1965 (11) TMI 33 - SUPREME Court ]. Thus the grounds of the assessee to this extent are allowed.
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2016 (3) TMI 1012
Nature of receipts of the assessee - income from salary or professional receipts - whether the relationship between the assessee and the Resonance was of employee and employer or Consultant and Principal? - Held that:- The document before us i.e. Consultancy Agreement is not colorful device but only an admitted document and no material whatsoever has been brought on record to show that it is a colorful device. No notice u/s 131 was issued to Resonance Institute to confront that the agreement is a colorful device. In view of that we decide the issue in favour of the assessee and against the revenue. Once we have held that the relationship between the assessee and the Resonance was of Consultant/Professional, therefore, the consequences of being professional are required to be given to the assessee. As per the ld. CIT (A), the only reason for denying the expenses etc was that the assessee has been treated as a salaried employee instead of Consultant. Once we have held that the assessee is a consultant, therefore, as a consequence, the assessee is entitled to benefit under the Act. Therefore, ground no. 1.1 and 1.2 are also decided in favour of the assessee. No reason whatsoever has been given by the authorities below for rejecting the books of account. The sole reason given by the authorities below was that the assessee is a salaried employee and not the professional. Since we have held that the assessee is a professional, therefore, this ground is also decided in favour of the assessee.
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2016 (3) TMI 1011
TDS u/s 194C - non tds on advertisement expenses - disallowance u/s 40(a)(ia) - revision u/s 263 - Held that:- find from the amended provision of Finance Act, 2012 that in case, assessee fails to deduct TDS from the payment of expense to the party concerned and receiver of the payment has paid tax on the amount received then assessee should not be held as guilty for default of TDS u/s 40(a)(ia) of the Act. Ld. AR submitted that a certificate from Chartered Accountant certifying that the party i.e. M/s I.S. Trading to whom the advertisement expenses were paid by assessee that the income tax on the amount received from assessee has been duly paid which is placed on page 26 and 27 of the paper book. Therefore, we are of the considered view that the observation of Ld. CIT u/s. 263 of the Act that the order is erroneous is correct observation. However, as per the provision of Sec. 263 of the Act the order of the AO should not only be erroneous but also to the interest of revenue. So in this view of the matter the order passed by Assessing Officer is not prejudicial to the interest of revenue. Regarding the claim of assessee that the printing material expense is out of the purview of TDS provision, we find that this is a transaction of purchase of printing material as evident from the bill of the party concern M/s Jyoti Enterprise which are placed at page No. 6 to 8 of the paper book. We also find that there was no contract between the assessee and the party M/s Jyoti Enterprise for attracting the provision of Sec. 194C of the Act. In our considered view, we reverse the order of Ld. CIT - Decided in favour of assessee Revision u/s 263 - addition of interest income - Held that:- CIT found the order of the AO erroneous and prejudicial to the interest of Revenue as the income of the interest was understated by the assessee by an amount of ₹ 1,30,145/-. However before us the ld. AR has submitted the reconciliation statement for the interest income and the explained that part of the interest income was pertaining to the earlier year. Therefore we reverse the order of the ld. CIT passed under section 263 of the Act.- Decided in favour of assessee
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2016 (3) TMI 1010
Penalty u/s 271B - accounts of the assessee from speculative business were not audited u/s 44AB - whether the assessee's speculative transaction on NCDEX can be considered as actual transaction liable for provision of audit u/s 44AB read with Section 271B or they are mere speculative profit and transaction value and the entire notional transaction value cannot be treated as turnover of the assessee? - Held that:- ITAT Pune Bench in the case Banwari Sitaram Pasari HUF vs. ACIT [2013 (1) TMI 234 - ITAT PUNE] and Growmor Exports Ltd. vs. Asstt. Commissioner (2000 (6) TMI 774 - ITAT MUMBAI) have held that the notional value of such speculative transactions cannot be held as turnover as the assessee is eligible only to income or loss and delivery of the commodities is not exchanged. Thus find force in the contentions of the ld. AR of the assessee that ITAT Mumbai Bench in the case of Anahaita Nalin Shah Vs. DCIT [2014 (1) TMI 1582 - ITAT MUMBAI] has not considered these two published decisions in the cases of ITAT Pune Bench in the case Banwari Sitaram Pasari HUF vs. ACIT and Growmor Exports Ltd. vs. Asstt.Commissioner (supra). The contention of the ld. AR of the assessee is that when there are two views on same issue, the issue favorable to the assessee should be considered for which the ld. AR of the assessee relied on the decisions of CIT vs. Vegetable Products Ltd. [1973 (1) TMI 1 - SUPREME Court] and CIT vs. Vatika Township (P) Ltd. (2014 (9) TMI 576 - SUPREME COURT). - Decided in favour of assessee
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2016 (3) TMI 1009
Accrual of income - Assessment of income - nature of receipt - assessee has received power escalation charges from CSEB - department has taken a view that the said amount is taxable on accrual basis, therefore, made additions for the assessment year 2008-09 - Held that:- CIT(A) after considering the facts and circumstances of the case, held that it is settled principles of law that there cannot be double taxation of any income and set aside the issue to the file of the A.O. with a direction to consider the assessee’s submissions. In case the appeal of the assessee for the assessment year 2008-09 is dismissed, then the relief should be allowed for assessment year 2009-10. In case, the appeal of the assessee for the assessment year 2008-09 is allowed in favour of the assessee, then no relief should be given for the assessment year 2009-10. The sum and substance of the CIT(A)’s order is that the income is taxable either for the assessment year 2008-09 or for the assessment year 2009-10 and it cannot be taxed for both the assessment years. We concurred with the decision taken by the CIT(A). It is settled proposition of law that no income shall be taxed twice. In the present case on hand, the A.O. has accepted that the income has been taxed by the department for the assessment year 2008-09. As rightly contended by the assessee it can be taxed either for the A.Y. 2008-09 or 2009-10 and it cannot be taxed for both the years. Therefore, we are of the opinion that, the CIT(A) has rightly set aside the issue to the file of the A.O. with the above direction. We do not find any error or infirmity in the order passed by the CIT(A) - Decided against revenue Disallowance of sales tax and service tax on payment basis - addition u/s 43B - Held that:- We are of the opinion that CST and Service tax paid under protest is deductible in the year in which such liability was paid u/s 43B of the Act, irrespective of whether such liability was incurred in any previous year. Therefore, we direct the A.O. to delete the additions made u/s 43B of the Act.- Decided against revenue
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2016 (3) TMI 1008
Computation of income from business u/s 45(2) when a capital asset converted into stock in trade - A.O. computed long term capital gain for conversion of capital asset into stock in trade as on the date of conversion and also computed income from business proportionately to the area of site sold during the year under consideration - Held that:- When a capital asset is converted into stock in trade, as per section 45(2) of the Act, it is certain that the assessee needs to compute long term capital gains as on the date of conversion and pay tax as and when such capital asset is sold. But, when it comes to calculation of capital gain as well as income from business, there won’t be any difference in the area of capital asset converted into stock in trade and stock in trade used for business purpose. In the present case on hand, on perusal of the calculations provided by the A.O., we find that the A.O. has made basic mistake in calculating the proportionate land area for the purpose of computation of income from business, by ignoring the land earmarked for internal roads, drains and other civic amenities. Though assessee could not receive any value for such earmarked land, which is mandatory for any developer to allow setback as per the prevailing laws regulating such activities. Therefore, we are of the opinion that the A.O. was not correct in adopting gross land for computing long term capital gain and only saleable land for the purpose of income from business. The CIT(A) rightly deleted the addition. We do not see any error in the order of CIT(A). Hence, we inclined to upheld the order of CIT(A) and direct the A.O. to allow the cost of 9,778 sq.yds. land which is earmarked for roads, drains, parks and other civic amenities for the purpose of computation of income from business. - Decided against revenue
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2016 (3) TMI 1007
Disallowance of deduction u/s 80P(2)(i) - addition of gross interest income treating interest received from banks and govt. securities as income from other sources u/s 56 - Held that:- Major portion of interest income is from government securities and are not in the nature of short term deposits. Therefore, the facts of the case are clearly distinguishable from the facts discussed in the case of Totagars Co-op. Sale Society Ltd. vs. ITO (2010 (2) TMI 3 - SUPREME COURT) and that of co-ordinate bench in the case of Jafari Momin Vikas Co-op. Credit Society Ltd. [2014 (1) TMI 481 - ITAT AHMEDABAD]. This interest income is on investments not of short term nature except bank interest which too includes interest on Fixed Deposits. In these circumstances, we are of the view that as the assessee suo moto has given a proposition of taxing the interest and commission income on investments to be taxed u/s 56 of the Act and has also shown that proportionate expenses of ₹ 3,31,828/- have been incurred to earn the above income and the same has duly been accepted by the assessing authority, so we find it justified that Assessing Officer has rightly taxed the interest income of ₹ 2,16,689/- as income from other sources. From going through the above provisions it is very clear that the assessee is eligible for deduction of ₹ 50,000/- under section 57 of the Act and the same should have been allowed by the Assessing authority. Partly allow the appeal of assessee and accordingly the addition made by Assessing Officer shall be reduced to ₹ 1,68,305/- [Rs.2,16,689/- minus ₹ 50,000/- deduction u/s 80P(2)(c)].
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2016 (3) TMI 1006
Revision u/s 263 - AO could not make the verification for the amount towards the income of labour charges which was not disclosed by assessee in his return of income - Held that:- AR had not brought anything on record that the disputed income was declared by the assessee in the subsequent year and the TDS was also deducted in the subsequent year. The case cited by the ld. AR above regarding the labour charges income is different from the facts of the instant case. The case law was on the issue of project completion method and percentage completion method for working out the profit of the assessee engaged in the construction of commercial and residential premises. Accordingly we are not inclined to interfere in the order of the ld. CIT. - Decided against assessee Commission expenses unverified - Held that:- It is settled law that the commissioner of income tax can exercise his jurisdiction u/s 263 of the Act only in cases where no enquiry is made by the Assessing Officer. In the instant case, it is admitted by the Income Tax Department that the Assessing Officer had made some enquiries though according to them it was not a proper enquiry. In our view of the fat that some enquiry was made is sufficient to debar the authorities from exercising the powers u/s 263 of the Act. The Tribunal was accordingly justified in setting aside the order passed u/s 263 of the Act. We do not find any substantial question of law arising for consideration the appeal is accordingly dismissed. In the case one hand, the AO has made an addition by disallowing the commission expenses after making the necessary enquiry. The instant case is duly covered with the decision of Hon’ble Allahabad High Court M/s Ashok Handloom Factory Pvt. Ltd. (2016 (3) TMI 650 - ALLAHABAD HIGH COURT) as discussed above, therefore relying on the same, we reverse the order of Ld. CIT for u/s 263 of the Act. - Decided in favour of assessee
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2016 (3) TMI 1005
Revision u/s 263 - deduction in respect of excise duty on closing stock was claimed - Held that:- In the present case the facts are that a deduction in respect of excise duty on closing stock was claimed in AY 2009-10 and the same was added back in the computation of income for the following assessment year i.e. AY 2010-11. The tax rate for both the years was 33.99%. Similarly, a deduction was claimed in the earlier assessment year i.e. AY 2008- 09 and added back in the computation in AY 2009-10. The deduction was claimed and allowed in the assessment in line with the case of Berger paints India Ltd. (2004 (2) TMI 4 - SUPREME Court ) and as per the said decision of Hon'ble Supreme Court, deduction u/s. 43B is to be fully allowed for excise duty and other duties on payment basis inclusive of the amount included in closing stock. In view of above discussion, we find that the order passed by the ld. CIT u/s 263 of the Act is not erroneous in so far as it is prejudicial to the revenue. Interest on the refund granted by the AO under section 244A - Held that:- The assessee is very much entitled to have the refund along with the interest. Therefore we deem it that the AO's order is not erroneous in so far as it is prejudicial to the revenue. Hence provisions of section 263 are not applicable and should be dropped we allow this ground of appeal of the assessee accordingly.
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Customs
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2016 (3) TMI 990
Validity of policy framed for classification of importers of poppy seeds - Policy framed by the government in categorizing the importers in Category-A and Category-B for importing poppy seeds from Turkey - Held that:- by the impugned notification, categorizing the importers in two categories, that is, A and B, is withdrawn by the government and the government has decided to treat all the applicants in one category. Therefore, the challenge to the policy becomes infructuous. - Appeal disposed of
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2016 (3) TMI 989
Applicability of Section 114A and 28AB of the Customs Act, 1962 to the imports - Medical equipment imported for use in the diagnostic centre cleared without payment of duty - Availed exemption from payment of customs duty under Customs Notification No.64/88 dated 1st March, 1988 on the strength of certificate issued by Director General of Health Services - Held that:- on the date of import of the seven consignments by the Petitioner, i.e. March 1990 to December 1992, neither Section 28AB of the Act nor Section 114A of the Act existed in the statute. It is not the case of the Department that these provisions, introduced with effect from 28th September 1996, had retrospective operation. Therefore, it is clear that the said two provisions could not be applied to the Petitioner for the non-compliance with the conditions attached to under Notification No. 64/88. In law there is no denial by the Department that the said two provisions did not exist in the statute at the time of import of the seven equipments by the Petitioner. In other words, the Department is unable to deny that neither Section 114A nor Section 28AB could have been invoked as far as the SCN issued to the Petitioner was concerned. Therefore, in the interests of justice recovery of penal interest under Section 28AB as well as the penalty under Section 114A of the Act by the department is not sustainable. Decided in favour of petitioner
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2016 (3) TMI 988
Seeking provisional release of seized goods with modification in conditions - Machines imported under EPCG scheme - Petitioner firm would be required to fulfill the export obligation in terms of the EPCG scheme authorization granted to it - Held that:- without entering into the merits of the contentions of the rival parties, the interests of justice would be served if the order of provisional release of the seized goods is modified that the requirement of petitioner to furnish a bond for the full value of the goods is required to be sustained, the requirement of petitioner to furnish bank guarantee for full duty amount is required to be modified by directing the petitioner to furnish a bank guarantee to the extent of 30% of the duty amount in line with the decision of the Supreme Court in Commissioner of Customs, ICD, TKD, New Delhi v. Navshakti Industries Pvt. Ltd [2011 (5) TMI 149 - SUPREME COURT] and also requiring to furnish a bank guarantee of ₹ 43.50 lakh. - Petition disposed of
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2016 (3) TMI 987
Period of limitation - No fraud or suppression or wilful mis-statement - Held that:- bill of entry as per annexure to the show cause notice was filed on 6.12.1994 and the show cause notice was issued on 26.3.1999, which is clearly barred by limitation as no fraud or suppression or wilful concealment has been alleged in the show cause notice. Availment of Modvat credit - Transferor of advance licence - Import duty cannot be confirmed and demanded from the transferor who is not the importer - Appellant failed to produce documentary evidence to prove that they did not avail modvat credit on inputs - Held that:- the case is covered by the judgment of this Tribunal in the case of Sunbeam Garments Pvt. Ltd. vs. CC, Kandla [2013 (5) TMI 382 - CESTAT, AHMEDABAD] in which the judgment of the Hon'ble Supreme Court in the case of CC vs. Auto Ignition Ltd. [2008 (4) TMI 43 - SUPREME COURT] has been relied on wherein the onus to prove that the assessee has availed of the modvat credit was on the Revenue and the Revenue has failed to discharge that onus and, therefore, the impugned order is liable to be set aside. - Decided in favour of appellant with consequential relief
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2016 (3) TMI 986
Imposition of penalty under Section 114 (i) & (iii) of Customs Act, 1962 - Violation of Facility Notice No. 41/2009 by the appellant and due to negligence of the appellant serious offence of the smuggling of red-sanders was committed - Held that:- the details of the shipping bills were not reflecting in the online data. In this situation, it is very clear that when the shipping bills unauthorizedly filed were not appearing online, no obligation can be casted on the appellant as the appellant had no knowledge about the filing of the subject shipping bills. The penalty can only be imposed in a case when the appellant knowingly involved in any act which helped the smuggling of red sanders which is not the case here. In this fact of the case, the involvements of the appellant or non-compliance of Facility Notice No. 41/2009 is not established. Therefore, penalty can not be imposed on the appellant. - Decided in favour of appellant
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2016 (3) TMI 985
Eligibility for benefit of notification no. 56/2008 dated 29/04/2008 and notification no. 21/2002 - EDI system which is operational into the customs was not updated to extend benefit of notification 56/2008 to the product imported - Respondent sought amendment to bills of entry as per the provisions of section 149 and/or 154 of the Customs Act, 1962 which was not responded to - Held that:- eligible benefit of the notification could not be extended to assessee due to an error and non updation of the program in the EDI system, cannot be held against an assessee, only on the ground that they had not challenged the assessment for the bills of entry. This would deny legitimate benefit available to an assessee and more so when the assessee, had sought the amendment of bills entry as per the provisions of Customs Act, 1962. Therefore, the respondent is eligible for the benefit of above notification followed by the decision of Tribunal in the case of Oswal Agloimpex Pvt. Ltd. [2012 (10) TMI 170 - CESTAT, AHMEDABAD]. - Decided against the revenue
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2016 (3) TMI 984
Whether the raw material imported by the appellant from their parent concern needs to be loaded with the value of royalty paid by them to parent concern - Import of raw materials from their collaborator - Held that:- the agreement is titled as a technical know-how agreement. The entire agreement is in respect of the finished goods to be manufactured by the appellant in their factory from the technical know-how received from parent concern. The said agreement does not talk about or restrict the appellant to purchase or procure raw materials only from the parent concern. The findings of adjudicating authority are correct. The first appellate authority has not brought on record any evidence to indicate that there was restriction imposed on the appellant to procure the raw materials only from the parent concern. In the absence of any such evidence, we are of the considered view that the loading of the value of by the amount of royalty paid by appellant is not in consonance with the law settled by the higher judicial fora. - Decided in favour of appellant
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Corporate Laws
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2016 (3) TMI 979
Scheme of Amalgamation - Held that:- As it appears that the requirements of the provisions of sections 391 to 394 of the Companies Act, 1956 are satisfied. The Scheme appears to be genuinely in the interest of the shareholders and creditors. This Court, therefore, allows the Company Petitions and sanctions the Scheme. The prayers made in the respective Company Petitions are granted. The petitions are allowed, accordingly.
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Service Tax
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2016 (3) TMI 1004
Seeking release of payments due to the petitioner along with suitable interest - Execution of the works in favour of the first respondent to the tune of ₹ 67 lakhs - Services carrying on are cable laying works and rehabilitation of external plant to various parties - Held that:- In the absence of any averment stated in the affidavit, filed in support of the writ petition that the petitioner got the leave from BIFR for filing the writ petition for claiming a sum of ₹ 67,00,000/-, the writ petition cannot be maintained at this stage. That apart, when the contract is between the first respondent and the petitioner, who is a sub contractor of the first respondent, the claim made by the petitioner to the tune of ₹ 67,00,000/- cannot be made in the writ petition. the contract was only between the first respondent and the BSNL and the petitioner is not a party to the said contract. Further, there is no clause in the contract between the first respondent and the petitioner with regard to the payment of Service Tax by the petitioner. In such circumstances, in the absence of any contract between the petitioner and the first respondent with regard to the payment of service tax and the reimbursement of the same, the said issue cannot be gone into in the writ petition. Therefore, the claim made by the petitioner can be decided only by a competent civil Court and not under Article 226 of the Constitution of India. - Decided against the petitioner
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2016 (3) TMI 1003
Seeking direction for refund and release of security deposit of ₹ 24,21,125/- - Amount of Service tax paid by Corporation on behalf of the petitioner - Petitioner under the contract appointed as sole agent for transportation of parcels to render other allied services and to operate courier services through the buses of the Corporation - Held that:- even if the aspect is apart that the petitioner has challenged communication dated 30.09.2013 after unexplained gap of three years, there is no gainsaying from the facts and the outlines of the controversy recorded above that the dispute between the parties is in the realm of the contractual obligations flowing from the service contract given to the petitioner by the Corporation. Thus, it is in the arena where the writ jurisdiction would not be attracted. Going into the case of the petitioner and the grievance raised by him would necessarily involve adjudicating upon the contractual terms and conditions and the mutual obligation between the parties arising therefrom with reference to entitlement of the Corporation to claim the amount from the security deposit as well as its justifiability or otherwise of the claim of the petitioner to seek refund/release of the said amount. Jurisdiction under Article 226 is not the appropriate remedy to be invoked for the grievance and the dispute of the above nature which stem from contract between the parties. Therefore, this petition is not entertainable and it does not qualify for any relief. - Petition dismissed
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2016 (3) TMI 1002
Recovery of Service tax from service recipient - Petitioner contended that Corporation has accepted compromise formula so it now cannot recover any additional charges, either in the guise of service tax or escalation clause - Held that:- the offer letter does not make any mention of service tax and must therefore be seen out side of such an offer. What is concluded refers to the rental charges and not the service tax. The offer letter is silent and refers to rental payable by the petitioner to the Corporation. If other than the rental charges, there is any other tax liability upon the petitioner, he must separately pay the same. Under the circumstances, the Corporation must be allowed to recover such charges on the computation of unpaid rentals to be paid by the petitioner to the Corporation as per offer letter. Also the Corporation shall be entitled to recovery of service tax also with respect of zones No.1 and 2 and there shall be no fresh computation of liability. - Decided against the petitioner
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2016 (3) TMI 1001
Period of limitation - Condonation of delay of 223 days - Beyond the statutory time limit of three months and also beyond the condonable period of a further three months provided under Section 85 of the Finance Act, 1994 - Held that:- by following the decision of the Division Bench in the case of Albert & Company Pvt Ltd vs Commissioner of Service Tax, Chennai [2014 (3) TMI 655 - MADRAS HIGH COURT], the first respondent has rightly dismissed the appeal on the ground of limitation, since the first respondent does not have the power to condone the delay beyond the period of three months, as provided under Sec.85 of the Finance Act 1994. - Decided against the appellant
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2016 (3) TMI 999
Imposition of penalty - Service Tax liability along with interest on the service rendered under the category of Installation & Commissioning Services - Held that:- the penalty imposed on the appellant is unwarranted as the Service Tax liability and interest thereof was paid by the appellant before the issuance of show-cause notice. Provisions of Section 73(3) of the Finance Act, 1994 would apply, which is settled by the judgments of Tribunal. Accordingly, the impugned order imposing the penalties is liable to be set aside. Liability of Service tax from 10.09.2004 - Construction Services and Commercial & Industrial Services - Construction of new retail outlets and its related works, supplying all the materials involved for completion of the work under the contract and were to be paid as per rate agreed upon - Held that:- the job executed by the appellant would be a ‘works contract'. By relying on the judgment of Hon'ble Apex Court in the case of Commissioner, Central Excise & Customs Versus M/s Larsen & Toubro Ltd. and others [2015 (8) TMI 749 - SUPREME COURT], no Service Tax liability arises under any services for the work/job executed under Works Contract Services. Therefore, demand of Service Tax under ‘Commercial or Industrial Services' is liable to be set aside. Consequent penalties imposed are also set aside. - Appeal disposed of
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Central Excise
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2016 (3) TMI 998
Refund claim rejected - bar of limitation - Relevant date - rejection on account of limitation as in respect of the period April, 2003 to June, 2004, the refund claim was filed on 20.10.2007 - Held that:- Definition of relevant date as given in clause (a) of Explanation B to Section 11B in respect of export rebate claims, cannot be applied to Rule 5 refund claims. There is no other clause of Explanation B to Section 11B which is applicable to the refund claims under Rule 5 of the Cenvat Credit Rules. A limitation prescribed in law always has two components - the period of limitation during which the application is to be filed or something is to be done and the date from which the limitation period is to be counted. Without prescribing the relevant date, a statutory provision prescribing limitation period is meaningless. Since, the second component of the limitation i.e. the relevant date from which the limitation period is to be counted is missing in Clause 6 of the Notification No. 11/2002-C.E. (N.T.), dated 1-3-2002, thus in view the limitation provision in this notification is meaningless. See M/s Deepak Spinners Ltd. Versus CCE, Indore [ 2013 (11) TMI 1221 - CESTAT NEW DELHI ] - Decided in favour of assessee
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2016 (3) TMI 997
Eligibility of CENVAT credit - fake invoices - whether the four invoices in question on the basis of which the appellant has availed the cenvat credit are genuine invoices or fake invoices - Held that:- the investigation by the department is totally faulty and defective. The department did not bother to verify the particulars contained in the invoices submitted by the appellant by visiting the premises of M/s. Annapurna Impex Pvt. Ltd. The department has conveniently recorded the statement of one office attendant Shri Purshottam Lal, to make the basis of the entire case and further, the statement of Shri Purshottam Lal was recorded on 18.5.2005 whereas the invoices involved in this case pertain to much earlier period. It is also pertinent to note that the payment to M/s. Annapurna Impex Pvt. Ltd. was also made by cheques by the appellant. As per the Evidence Act, the onus to prove that the invoices on which the appellant has taken cenvat credit are fake and invalid, was on the department and the department failed to prove the same by bringing on record any credible and convincing evidence. So much so, the appellant was not even allowed to cross-examine the office attendant whose statement was the only basis for framing the appellant. Therefore, the respondent has failed to establish the charge against the appellant. Besides this the entire demand in this case is also time barred. The impugned show cause notice was issued on 17.10.2007 pertaining to the invoices dated 5.2.2004, 17.3.2004, 22.6.2004 and 25.3.2005, which is beyond the normal period of one year. Further, when the appellant has been filing the relevant ER-1 returns regularly and disclosing the details of these invoices on the basis of which the credit was availed, then it cannot be said that the appellant has wilfully suppressed the material fact from the department so as to invoke the extended period of limitation. Therefore, in my view, the entire demand is time barred. Further, the question of penalty does not arise when the demand is time barred. - Decided in favour of assessee
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2016 (3) TMI 996
Benefit of Notification No.24/1991-CE dated 25.07.1991 and 5/1993-CE dated 28.02.1993 denied - validity of the certificate towards installed capacity of the factory - Held that:- In R.A. Cement Pvt. Ltd. (1999 (7) TMI 619 - CEGAT, NEW DELHI ) a similar set of facts were examined by the Tribunal. The assessee claimed certain concessions based on certificate issued by Director of Industries. Certain facts against the claim of the assessee was brought to the notice of the Directorate of Industries who neither cancelled the certificate nor withdrew it. In such situation, it was held that the Department cannot deny the concession claimed based on such certificate. In Suvarna Polymers [2000 (4) TMI 71 - CEGAT, CHENNAI ] The Tribunal held that when the Director of Industries considered the objections raised by the Department and re-conformed the Certificate it cannot be said that the certificate was obtained by fraud. On careful consideration of submissions made by both the sides and the materials on record, we find that the impugned order is not sustainable. Accordingly, the same is set aside. - Decided in favour of assessee
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2016 (3) TMI 995
CENVAT credit on capital goods removed as waste and scrap - Whether the capital goods, if removed, without installation and without putting to use, as waste and scrap will attract duty equal to the amount of credit taken or the duty on the transaction value of the machine sold as waste and scrap - Held that:- The facts is not under dispute that the appellant have availed the Modvat Credit on capital goods which was neither installed in the factory of the appellant nor used for the manufacture of final product. The capital goods were without putting into use cleared showing as waste and scrap. The provision for duty liability on removal of capital goods is provided under Rule 57S of erstwhile Central Excise Rules 1944 which clearly provided that if the capital goods are removed without being used the excise duty payable shall in no case be less than the amount of credit that has been allowed. Intention of the legislature is very clear that when the removal of capital goods is without being used is different from the capital goods sold as waste and scrap that means the term sale of capital goods as waste and scrap then the excise duty shall be payable on the transaction value of the waste and scrap. It is to be kept in mind even after use for some time if the capital goods is sold then also the excisable duty is payable in terms of Clause (b) after allowing the deduction of 2.5% of credit taken for each quarter. Therefore when the capital goods is not installed or has not been used its clearance will clearly fall under the clause (a) of Sub-Rule (2) and not under Clause (c). It is therefore of the view, that the appellant is required to pay excise duty on the capital goods cleared without being used in terms of clause (a) of Sub-rule (2) of Rule 57S of the Central Excise Rules, 1944. Accordingly, equal amount of Cenvat Credit which has been availed shall be payable by the appellant. Commissioner by careful application of mind, after interpreting the provisions of rule 57S(2) held that the removal of capital goods in the present case is covered under Sub-rule (2)(a). - Decided against assessee
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2016 (3) TMI 994
Dismissal of refund claim - refund of service tax paid on the said input services used for manufacture and export of final products - denial of cenvat credit - Held that:- The definition of input service as contained in rule 2(l) very much covers all the input services on which Cenvat Credit is claimed and all the services are directly or indirectly related to business. It is a fact that the appellant are 100% EOU. They received the input service from various services providers and those services providers raised invoices on the appellant for service charges along with service tax leviable thereon. The appellants have claimed refund of service tax paid on the strength of said invoices and these facts are undisputed. In view of this admitted position, the appellants are entitled to refund of service tax paid on the said input services used for manufacture and export of final products. It has been the policy of the government since inception that the export should be tax free. In other words, the object of the government is to export the goods and services and not the taxes. If the refund of service tax paid on input services is not allowed to the appellant then the said taxes would have to be built in the cost of the final products and thus it would lead to export of taxes which are against the policy of the government. - Decided in favour of assessee
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2016 (3) TMI 993
Demand of excise duty on account of reversal of credit on duty paid finished goods at the depot - demand of excise duty on account of shortages of raw material at the factory both for the period 1999-2000 and 2000-01 - demand time barred - Held that:- The base oil being a petroleum product, its weight and volume is dependant upon temperature and density. At the time of receipt in the factory, base oil is emptied in tank and the procedure for determining the weighment is by deducting the gross amount of weight of tanker including the oil and reducing therefrom the weight of the tanker after discharging the oil considering the density and temperature. This method sometimes results into shortage or excess quantity of base oil to the extent of 1 to 2% and this is well recognized within the petroleum industry for petroleum products whereas in this case, the shortage as reported in annexure A to form 3CD during the period 2000-01 has only been to the extent of 0.6% of the total consumption which can arise on account of variation in temperature, variation in viscosity while dip reading, temperature and density at the time of measurement of stock. In this regard, the appellant referred to circular No. 55/89-CX.8 dated 15.12.1989 which provides for condonation of shortage and handling losses of petroleum products in a refinery and in the method of determining the quantities of petroleum products for the purpose of accountal in statutory excise records. Shortage of finished goods at the factory and depots is concerned, the appellant has debited the duty on its own and informed the department vide various letters dated 9.1.2000, 12.6.2000 and 13.2.2001. The goods sold from depot are excisable goods on which excise duty has already been paid and this fact has not been rebutted by the department either in the show cause notice or even in the order-in-original. Therefore, keeping in view the facts and circumstances and the evidence on record, I am of the considered opinion that the shortages found are very minor in nature, i.e. 0.6% which is well accepted in petroleum products as observed in the judgments cited above. Also find that in the show cause notice also, there is no allegation that there is clandestine removal of goods by the appellant. Further, as far as limitation is concerned, the entire demand appears to be time barred as it relates to financial year 1999-2000 and 2000-01 whereas the show cause notice was served on 26.3.2004 on the basis of shortages of raw material and finished goods as shown in form 3CD i.e. the report under the Income Tax Act, which is a statutory report and the appellant has produced the same before the audit party. - Decided in favour of assessee
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2016 (3) TMI 992
Entitlement to claim cenvat credit on barbed wire being accessory to the transmission tower - whether the said accessory falls in the definition of ‘input' as contained in Section 2(k) of the Cenvat Credit Rules, 2004? - Held that:- All the conditions are fulfilled in this case inasmuch as barbed wire is essentially required for smooth operation of the transmission tower and secondly, as per the terms and conditions of the agreements, it is necessary for the company to supply barbed wire along with transmission tower and thirdly, the description list of the goods sold is attached with the invoice copy, which clearly shows that the value of the barbed wire has been included in the assessable value and the duty has been paid on the whole amount. Since all the conditions are fulfilled, therefore in my considered opinion, the respondent is entitled to the credit of duty paid on barbed wire as held in the case of Ultrapack [2005 (4) TMI 438 - CESTAT, BANGALORE ]. Further, as find that the respondent supplied barbed wire to all its customers and as per the terms and conditions of the agreement, the price of barbed wire is included in the assessable value. The learned counsel for the respondent placed reliance in the case of Coca-Cola India Pvt. Ltd. vs. CCE, Pune [ 2009 (8) TMI 50 - BOMBAY HIGH COURT ] wherein held that burden of service tax may be borne by the ultimate consumer and not by any intermediary and if the value of the input or input service has been included in the assessable value, then credit should not be denied - Decided in favour of assessee
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2016 (3) TMI 991
Confirmation of demand and penalty on the quantity of goods shown in the respective small chits/papers - Held that:- Merely because the entries mentioned in the rough chits did not tally with the production/clearance register would not by itself lead to a conclusion that the quantity of goods mentioned in those private chits were clearance without payment of duty. On the other hand, on scrutiny of the reconciliation statement submitted by the appellant during the course of hearing, Revenue has fairly accepted that approximately 50% of the quantity mentioned in the private chits had been cleared on payment of duty as it conforms to the respective Central Excise invoices issued during the relevant period. Also, as find from the statements of two customers, namely, Shri Amar Kasera and Shri Sunil Kr.Agarwal recorded by the department that they have purchased the goods against excise invoices and the quantity mentioned in the chits were not received by them. In absence of cogent and corroborative evidences showing production and removal of goods without payment of duty, entries reflected in private chits cannot itself be a ground for confirmation of demand. Therefore, the confirmation of demand on this count is liable to set aside. Demand on cancelled invoices - Held that:- Find force in the contention of the ld.Advocate for the Appellant. In his statement dated 30.11.2004 Shri Ravinder Prasad, Director of the appellant in response to question No.13 has explained that in view of the fact that the levy was new and the appellant had no experience in the field of excise, therefore, mistakes occurred in writing the invoices resulting into frequent cancellations. This statement has not been rebutted by the department by making necessary investigation with the consignees mentioned in the respective cancelled excise invoices. In absence of substantial evidences of clearance of goods against cancelled invoices, it is difficult to accept that the appellant indulged in clearance of goods without payment of duty against cancelled invoices. Therefore on this count also the confirmation of demand fails. Demand on Oxygen gas cleared in the year 2002-03 - Held that:- the appellant themselves had admitted clearance of the Oxygen gases after March, 2003 against the agreement dated 15.03.2003 which has been confirmed by the purchaser Shri Deepak Kr.Agarwal in his statement dated 18.01.2005. In the said statement Shri Deepak Kr.Agarwal has categorically stated against question No.3 that he is related with the appellant from 15th day of March, 2003 and they have been purchasing gases only on the basis of agreement dated 15.03.2003. Therefore, in absence of evidences that the appellant earlier also sold gases without payment of duty, it is difficult to accept the allegation of the Revenue that on the basis of the said agreement dated 15.03.2003 demand could be raised for earlier period also. Hence on this count also the confirmation of demand fails. Considering that the appellant has admitted certain liability and not pleaded about non-imposition of penalty against confirmed undisputed liability, therefore, penalty under section 11AC would remain against the confirmed undisputed liability. But the appellant would be entitled to discharge 25% of the penalty subject to fulfillment of the conditions laid down under section 11AC Further, the redemption fine imposed by the adjudicating authority is too harsh. The redemption fine is thus reduced from ₹ 1.00 Lakh to ₹ 75,000/-(Rupees Seventy Five Thousand only). - Decided partly in favour of assessee
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CST, VAT & Sales Tax
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2016 (3) TMI 983
Validity of order passed ex parte in violation of natural justice - Petitioner unable to represent its case on medical ground - Input Tax Credit - Held that:- in view of the decision of Hon'ble Apex Court in the case of Canara Bank v. V.K. Awasthy [2005 (3) TMI 476 - SUPREME COURT OF INDIA], the order passed is in violation of the principles of natural justice as per the law. Therefore, liable to be set aside. - Decided in favour of appellant
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2016 (3) TMI 982
Validity of order - Violation of principles of natural justice - Order passed without taken in to consideration of sum paid by the appellant and without following the provisions of the Sections 6(2) and 6(3) of the Act and no opportunity of personal hearing before passing an order provided - Held that:- the petitioner should be given an opportunity to putforth their case before the respondents and that the respondents should consider the objections raised by the petitioner and pass fresh orders on merits and in accordance with law. Accordingly, the impugned order is set aside. - Decided in favour of appellant
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2016 (3) TMI 980
Sustainability of Tribunal order - Appeal dismissed for want of pre-deposit of 25% of the additional demand - Held that:- the issue involved in this appeal stands concluded by the decision of this Court in Punjab State Power Corporation Limited v. The State of Punjab and others [2016 (2) TMI 245 - PUNJAB AND HARYANA HIGH COURT]. Therefore, by following this, the orders passed by the Tribunal are set aside. - Appeal disposed of
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2016 (2) TMI 895
Invokation of power under Section 60 of the Delhi Value Added Tax Act, 2004 - Three premises of the petitioner sealed for non production of documents on time - Held that:- there is nothing in the file which shows what reasons weighed with the Commissioner to order a survey under Section 59 of the DVAT Act and subsequently order sealing of the premises under Section 60 of the DVAT Act. The Petitioner was at the time of inspection not functioning at H-45 but from D-4 Udyog Vihar. It had recently shifted from the address at Okhla Estate to Nehru Place. The deployment order was not in respect of the aforementioned two addresses and yet those were sealed. How this was possible without a fresh deployment order being issued is unexplained. There is no indication as to what prompted the extreme step of sealing of the three premises. The order in that behalf has been passed not by the Commissioner but by the VATO but there is nothing to indicate that the VATO was authorised to do so by an order issued in Form DVAT 50 as on 15th March 2013. With the sealing order bristling with so many illegalities, there can be no manner of doubt that the sealing action was undertaken mechanically and only for the reason of failure to produce records as sought by the notice under Section 59 of the Act. There was no satisfaction arrived at by the Commissioner, as mandatorily required by Section 60 (1) of the DVAT Act, that there was any deliberate attempt by the Petitioner to avoid or evade tax or to conceal its tax liability in any manner. Therefore, the sealing order is set aside. Validity of condition of de-sealing - Demand of ₹ 600 crores - Held that:- VATO simply totals up the turnover figures for 2011-12 and 2012-13, deducts 25% therefrom in terms of Rule 3 (2) of the DVAT Rules 2005 and arrives at a figure of ₹ 124.11 crores towards tax and approximately ₹ 31.02 crores as penalty. It then adverts to the assessment order for 2008-09 and the challenge thereto by the Petitioner in the Supreme Court and this Court (which is pending as of date) and in terms of the rectified assessment and penalty orders the demand created worked out to ₹ 614.60 crores. Then it seeks to create a demand "on the basis of same proportions" for 2009-10 to 2012-13 and arrives at a figure of approximately ₹ 2190.44 crores. It is on this basis that the VATO has ordered that as a condition for de-sealing the Petitioners three premises, the petitioner should deposit ₹ 600 crores. This figure is therefore based entirely on guess work and 'projections' without any adjudication. The only description that can fit such a de-sealing order is that it is 'preposterous'. Therefore, the de-sealing order which requires the Petitioner to deposit ₹ 600 crores as a condition for de-sealing is an abuse of the powers under Section 60 (4) of the DVAT Act and is unsustainable in law. - Decided in favour of petitioner
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Indian Laws
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2016 (3) TMI 1000
Charge of corruption against the Superintendent of Central Excise, Service Tax Cell, Chennai, Commissionerate - Alleged demand as well as acceptance of tainted money on the part of the appellant/accused - Found guilty under Section 7 and Sections 13(2) r/w 13(1)(d) of the Prevention of Corruption Act, 1988 - Held that:- by way of examining the defacto complainant viz., PW2 the prosecution has clearly proved the demand of bribe alleged to have been made by the accused as well as acceptance of the same. The evidence given by PW2 has been clearly corroborated by decoy witness viz., PW3. Further the evidence given by PWs.2 and 3 have been clearly corroborated by PW4, trap laying officer. Apart from their evidence, Scientific Analyst has also clearly established the case of the prosecution. Non marking of white cover as well as non playing of micro chip are not fatal to the case of the prosecution and those things are nothing but a piece of evidence and the same cannot be construed as a sole piece of evidence in the present case, since in the present case, both demand as well as acceptance of tainted money on the part of the accused have been clearly proved by the prosecution. Therefore, the contentions put forth on the side of the appellant/accused cannot be a basis for disbelieving the case of the prosecution. Defacto complainant has given picturesque evidence to the effect that the appellant/accused has demanded and accepted tainted money of ₹ 25,000/- and since the said vital aspects have been clearly established on the side of the prosecution, it is very clear that the appellant/accused is liable to be convicted under the sections mentioned in the charge. The trial Court after considering the replete evidence available on record has rightly found the appellant/accused guilty under the sections mentioned in the charge. Therefore, there has neither found any error nor illegality in the convictions and sentences passed by the trial Court. - Decided against the appellant
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