Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
April 10, 2017
Case Laws in this Newsletter:
Income Tax
Customs
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
TMI SMS
Articles
News
Circulars / Instructions / Orders
Highlights / Catch Notes
Income Tax
-
The Finance Act, 2002 itself indicates that during the relevant assessment year compensation received by the Assessee under non-competition agreement was a capital receipt, not taxable under the 1961 Act. It became taxable only with effect from 1.4.2003. It is well settled that a liability cannot be created retrospectively - HC
-
TPA - reject the 53 comparable entities - scope of adjudication in remand proceedings - The operative part of the ITAT’s direction to carry out the exercise afresh since it did not have the figures relating to the comparables has to be therefore, seen in the context of what was actually done. Therefore, the Revenue’s argument that the TPO/AO could doubt the appropriateness of the comparables used by the assessee is insubstantial and unmerited. - HC
-
Nature of Land - assessee has erred in disclosing the land earmarked for promoting software park in the financial system of stock-in-trade - it is genuine mistake of the assessee in recording the financial statements cannot be seriously viewed in interpreting the provisions of the Income-tax Act. - HC
-
Addition u/s 40A(2)(a) - payment to the shareholders-directors - compensation to the tenants for vacating the premises - Since the amount was paid as a commercial consideration and nothing was brought on record by the AO to the effect that amount so paid was higher than the fair market value, no additions - AT
-
Expenses incurred for CSR by providing ambulance services, paramedical services and medical supplies to villagers in the vicinity of its container terminal cannot be allowed as business expenses - AT
-
We are inclined to adopt GP ratio of 12.5% on alleged bogus purchases in the instant case which in our considered view is fair, reasonable and rational keeping in view factual matrix of the case - AT
-
When the provision of section 80lA had been substantially amended and where the enterprise was only a developer of the Infrastructure facility, deduction could not be denied u/s 80-lA on the ground that the concept of BOT/BOOT was the main requirement for getting benefit of deduction u/s 80-lA - AT
-
An isolated transactions or activity cannot be a part of business and to consider the question of business there must regular activity of purchasing and selling. In the present case there is no iota of evidence on the record to show that the assessee was regular in the business of purchase and sale of land or plots - AT
-
In the event of assessee being allowed only partial tax credit in respect of taxes withheld abroad, the assessee cannot be allowed any deduction, in respect of the balance of the taxes so withheld abroad, u/s 37(1) - AT
-
Clam of deduction u/s 54F - assessee made the investment within the due date prescribed under section 139(4) and it was held that section 54 or section 54F for that reason uses the word "section 139", which meant not only section 139(1) but also section 139(4). Therefore, a larger time-limit was available to the assessee. - AT
Customs
-
Export of rice - the proportion of non-Basmati Rice found in the samples exceeded 20%. The goods were exported against test bond and therefore the liability of confiscation and penalty u/s 114 (i) arises. - AT
-
Classification of butter flavouring - classified under CTH 3302 10 90 or CTH 2106 90 60? - the ingredients i.e. butter fat is not a plant origin. Therefore, in our considered view the lower authorities have correctly classified the product under Chapter 21 - AT
Service Tax
-
Adjustment of excess amount of Service Tax paid in earlier months in the succeeding months - whether the adjustment made by the appellant on the excess payments made by them under the provisions of Rule 6 of the Service Tax Rules for payments of service tax, a liability that arose subsequently? - Adjustment allowed - AT
Central Excise
-
SSI exemption - Valuation - the appellant has put mark of M/s Director Transport, UT, Chandigarh and M/s Chief General Manager, DTC, New Delhi i.e. CTU/DTC, therefore, its brand name of another person which is not includable in the clearance for computing total clearance. - AT
-
CENVAT credit - inputs written off - even for the period prior to insertion of sub-rule (5B) of Rule 3 of the CCR, 2004, this Tribunal in the appellant's own case decided the issue against them and according to the said decision, the appellant is required to reverse the credit on the written off quantity. - AT
-
Removal of capital goods after use - once the appellant have admittedly paid the duty, payment of interest is inevitable and the same is piggyback of the principal amount of duty - However, the duty was not otherwise chargeable on the removal of capital goods, the penalty u/s 11AC is not imposable - AT
-
Valuation - sales promotion which is part and parcel of sale price of distributors cannot be added in the sales price of the appellant, particularly when there is no extra consideration flowing on account of sales promotion to the appellant - AT
VAT
-
The legislature is entitled to prescribe the conditions subject to which the taxable person shall be entitled to ITC. When a party fulfills the conditions, as may be prescribed, his entitlement to ITC is crystallized and vested in him. - HC
Case Laws:
-
Income Tax
-
2017 (4) TMI 414
Undisclosed income in the form of cash & jewellery found & seized from various bank lockers - Held that:- Lack of the capacity to possess cash could not be a reason to discard the ownership, in the facts of the case, is wholly erroneous as in the instant case there was a complete lack of any plausible explanation as to the source of acquisition of money either by the assessee's wife or by his two sons from any source and in any case, the first, and at times the only presumption that may arise upon lack of financial capacity of a person being proven be that such a person was not at all possessed of the money being claimed by him. A very heavy burden would then be on such persons to explain the source of money being claimed by them. It was never discharged in the instant case. The said three persons only sought to explain the source through their own earning and from no other source which issue stood determined against them upon finding of lack of financial capacity recorded by the all members of the Tribunal. From perusal of their returns as also from their status namely Smt. Vijay Dhir being a partner in a partnership firm with declared income of ₹ 2 lacs per annum and the assessee's two sons being student at the relevant time, it is clear that they had no means to come in possession of such large amount of cash or jewellery. Clearly they had claimed the money and jewellery only to cover the unexplained income of the assessee. The judicial member had rightly rejected the explanation of the claim and accountant member and third member accepted the claim on no evidence. Their findings to that effect are clearly perverse. - Decided against assessee. cash found from the lockers - Held that:- It is an admitted case between the parties that no cash book was found during the course of search and it was not produced in the course of investigation following the search, though again it is a common case between the parties that the search and survey conducted in the case of assessee was quite extensive. The cash book was produced for the first time in the block assessment proceedings itself and it was not the case of the assesse that the cash book had been produced during the search and survey proceedings. This act appears, to us, to be clearly a case of poor afterthought after considerable lapse of time of almost one year or more. - Decided against assessee Dis-allowance of agricultural income of the assessee - Held that:- The finding of the third member of the Tribunal and the accountant member do not suffer from any infirmity inasmuch as, the ownership of agricultural land about seven acres is undisputed. Besides the observation that there was no evidence of the assessee having carried out any agricultural activities, there is nothing on record to disbelieve the claim made by the assessee. We do not find any infirmity in such finding keeping in mind the total amount of agricultural income (accumulated) claimed by the assessee, being about seven lacs, such income in any case being a matter of estimation. Accordingly, question no.4 is answered in favour of the assessee
-
2017 (4) TMI 413
Non-compete agreement - Capital gain considered to be long term capital gain - Whether the ITAT was justified in holding that the amount paid by the Company to the assessee in terms of the agreement dt. 24.5.1999, would not fall within the meaning of words ‘right to manufacture, produce or process any article or thing’ but, within the meaning of the words ‘right to carry on any business? - Held that:- As decided in Guffic Chem Private Limited vs. Commissioner of Income Tax, Belgaum and anr. [2011 (3) TMI 6 - Supreme Court] Payment received as non-competition fee under a negative covenant was always treated as a capital receipt till the assessment year 2003-04. It is only vide Finance Act, 2002 with effect from 1.4.2003 that the said capital receipt is now made taxable [See: Section 28(va)]. The Finance Act, 2002 itself indicates that during the relevant assessment year compensation received by the Assessee under non-competition agreement was a capital receipt, not taxable under the 1961 Act. It became taxable only with effect from 1.4.2003. It is well settled that a liability cannot be created retrospectively In view of the observations which are made by the Tribunal and the finding arrived at regarding capital gain and clause to carry on business as introduced in 2003, the observations made by the Tribunal are required to be upheld and same is upheld. - Decided in favour of the assessee
-
2017 (4) TMI 412
Attachment orders - proof of notice issued - Held that:- As rightly submitted by the learned counsel for the respondents, the order dated 30.03.2012 has become final. It was issued to M/s.Sankar Traders. None appears for the enquiry at the time of passing the order. Thereafter, a letter was sent by the petitioner representing M/s.Sankar Traders, which shows that he is the Proprietor. This letter was sent by the petitioner to the third respondent on 27.09.2003. The information obtained by the respondents from the Income Tax Department under Section 138 (1) (b) of the Income Tax Act dated 10.03.2004 also shows the name of the petitioner as a Proprietor of M/s.Sankar Traders. For the said concern, assessment has been made by showing the petitioner as a Proprietor. The matter did not rest there. Form 5-A submitted on behalf of M/s.Sankar Traders dated 31.03.2004 also shows the name of the petitioner as a Proprietor. Petitioner would submit that there appears to be a case of forging the signature of the petitioner. This Court is afraid that the said contention cannot be accepted. It is not as if the respondents have relied upon one document but three documents. The earlier proceeding has become final. The reasoning adopted by this Court on the earlier occasion would apply to this case also as it is the petitioner, who, now seeks to raise the contention of forgery. The petitioner has also not proved the factum of participating in the enquiry proceedings in the year 2003 and thereafter, sent a letter seeking adjournment. Thus this Court does not find any merit in the writ petition.
-
2017 (4) TMI 411
Additional depreciation - assessee not permitted to carry forward, the balance additional depreciation, to the following year, in which, the said asset had been installed and first put to use - Held that:- The provision incorporates within itself certain attributes qua the asset in issue based on which the Assessee can claim additional depreciation. The word 'new' which precedes 'machinery or plant' is indicative of the type of asset, on which, additional depreciation can be claimed. In our opinion, it does not, in any way, limit or restrict the claim for additional depreciation, to the previous year, in which, the said asset is installed and used. Accordingly, in our view, the Assessee cannot be prevented from claiming balance additional depreciation in the following year. - Decided in favour of assessee
-
2017 (4) TMI 410
TPA - reject the 53 comparable entities - scope of adjudication in remand proceedings - Held that:- It is obvious that the ITAT was not seized of any dispute with respect to the appropriateness of including any comparable or excluding any from the list furnished by the assessee. The record nowhere shows that the original TPO report, or the draft assessment order, or even the DRP’s determination reflects any concern about the appropriateness of the inclusion of any comparable on the ground of its/their functionality. The ITAT’s substantial ruling shows that the TPO had followed the previous order and changed the basis of PLI of Operating Profit/Total Cost to FOB value of the export goods in the hands of the AEs. The assessee had computed its OP/TC at 7.56% based on the cost incurred by it as constituting 'Total cost'. This is reflected in the finding and conclusion that “We, therefore, set aside the impugned order and hold that the 'total cost' being the denominator in the PLI of OP/TC, has to be taken as the costs incurred by the assessee and not the FOB value of goods between third party enterprises sourced through the assessee. In other words, the tested party should be the assessee and not it's A.E”. The operative part of the ITAT’s direction to carry out the exercise afresh since it did not have the figures relating to the comparables has to be therefore, seen in the context of what was actually done. Therefore, the Revenue’s argument that the TPO/AO could doubt the appropriateness of the comparables used by the assessee is insubstantial and unmerited. The court is of opinion that the impugned show cause notice cannot be sustained. Firstly, when there is a remand on the basis of a specific finding (in this case, the untenability of shifting of the OP/TC to FOB) the TPO could not have travelled beyond it, given that there was no controversy ever about the inclusion of any comparable. Concededly there was no controversy about the appropriateness of inclusion of any comparable for the ALP determination purpose. Nor was there any finding or direction on that score. In the given circumstances, the Revenue could not have seized upon the direction to determine it “afresh” as the basis for going into the merits of inclusion of such comparables. Secondly and more fundamentally, the issue of comparables’ inclusion is not one that goes to define jurisdiction itself. There is authority for the proposition that invocation of jurisdiction is itself in issue, notwithstanding that being not subject to remand. However, that is not the case here. The remand was essentially consequential to give tax effect to the findings of the ITAT.
-
2017 (4) TMI 409
Nature of land - Property considered as a "stock-in-trade" or a part of "inventory" or whether it can be treated as capital asset? - Held that:- Tribunal has recorded the finding of fact that the assessee- company has erred in disclosing the land earmarked for promoting software park in the financial system of stock-in-trade. The Tribunal has further found that it is genuine mistake of the assessee in recording the financial statements cannot be seriously viewed in interpreting the provisions of the Income-tax Act. The Tribunal has also further recorded that subsequent conduct of the assessee in leasing out the buildings also reflects the initial intention of the company to hold these assets as fixed assets/investments. The aforesaid finding of fact so recorded by the Tribunal cannot be termed as perverse to the record because learned counsel for the Revenue has not been able to show or satisfy the court that any of the aforesaid finding of fact is not supported by the record or Tribunal has recorded such finding of fact without there being any material on record. Applying the test of reasonable prudence, when aforesaid facts and circumstances are apparent and if the Tribunal has taken the view that entries in the books of account or statement given by the assessee to the property as stock-in-trade and not as fixed assets/investments/capital assets, could be said as genuine mistake or error, such view on the part of the Tribunal cannot be said to be ex facie unreasonable view or that no person with reasonable prudence would take such a view. As such, we are of the considered opinion that a view on the basis of facts placed before the Tribunal could be said as one possible view and not an impossible view by applying the test of reasonable prudence. Finding recorded by the Tribunal is not perverse to the record nor we have found that finding recorded or the view taken by the Tribunal is not an impossible view
-
2017 (4) TMI 408
Addition u/s 40A(2)(a) - payment of higher compensation to the shareholders-directors - Held that:- While invoking provisions of Section 40A(2)(a), the AO has overlooked all the three ingredients of Section 40A(2)(a) and his order is silent about the concrete/convincing reasons for forming the opinion that payment of compensation to shareholders- directors is unreasonable having regard to the three stipulated conditions, The Assessing Officer also failed to appreciate that there cannot be same fair market value of tenancy rights surrendered at all times. The Assessing Officer has also not given proper consideration to the legitimate business needs and benefit aspect of the assessee. The AO has failed to appreciate that the shareholders-directors being in better position to know the benefit accruing to the assessee have in turn struck a better bargain with the assessee at relevant time as compared to the other tenants. The assessee has paid higher compensation to the shareholders-directors considering the legitimate business needs and the benefit derived by the assessee from such payment. It is also a matter of common knowledge that comparison can be made at all times with the like ones only. In the present case, there cannot be any comparison of shareholders-directors with the other tenants as the benefit accruing to the assessee from shareholders-directors is far more than the other tenants and they stand on different footing. We found that assessee has made payment to these two Directors. Since they were tenants holding tenancy right in respect of commercial shop and also holding possession of large area of land appurtenant thereto - behind the commercial shop, it was the sole and absolute responsibility of the indenting developers to settle with the tenants, provide the compensation to the tenants for vacating the premises. Since the amount was paid as a commercial consideration and nothing was brought on record by the AO to the effect that amount so paid was higher than the fair market value, the CIT(A) has deleted the same after recording detailed finding at para 1.5 of his appellate order. The finding so recorded by CIT(A) are as per material on record and do not require any interference on our part. - Decided against revenue Addition made by the AO on the plea that sale value of 2750 sq.ft was not offered by the assessee - Held that:- We found that detailed finding has been recorded by CIT(A) to the effect that assessee has surrendered 2750 sq.ft area and as disclosed in its books of accounts, the sum of ₹ 1,16,00,000/-, accordingly no addition was warranted. The detailed finding so recorded by CIT(A) are as per material on record, therefore, do not require any interference on our part. - Decided against revenue
-
2017 (4) TMI 407
Penalty u/s 271(1)(c) - defective SCN - Held that:- The penalty has been initiated on one limb but finally imposed for another limb. Further, the show-cause notice u/s 274 read with section 271 issued to the assessee did not specify the limb for which the penalty proceedings were being initiated against the assessee which took away a valuable right of the assessee and therefore, vitiates the penalty proceedings. Thus we hold the penalty proceedings to be bad in law and therefore, quash the same. See CIT Vs SSA’s Emerald Meadows [2016 (8) TMI 1145 - SUPREME COURT]. - Decided in favour of assessee
-
2017 (4) TMI 406
Revision u/s 263 - claim of exemption u/s.11 entitlement denied - Held that:- As from the record we found that the assessee filed its return of income on 30.09.2009 along with the Income & Expenditure Account, Balance Sheet and Audit Report in Form No.10B declaring total income at Rs.NIL. The trust is registered as a Charitable Organisation with DIT(E), Mumbai u/s. 12A under vide Registration No.INS/36714. The trust claims to be engaged in Planning and Development and during the course of scrutiny assessment, AO after making detailed enquiry declared assessee’s claim of exemption u/s.11. We had carefully gone through the order passed by the AO u/s.143(3) as well as the order passed by CIT(A) u/s.263, as well as the order of the Tribunal dated 31/10/2015. We found that exactly under similar facts and circumstances, the order passed by CIT(A) u/s.263 was cancelled by observing that in so far as entire assessment order of the whole of the surplus amount has been challenged before the CIT(A), then the entire assessment order including taxing of the entire exempt income u/s.11 is the subject matter of the appeal and there is complete merger with the order of CIT(A) within the terms and ambit of section 263 read with clause (c) Explanation 1. Tribunal also observed that in so far as tax effect is concerned, there is no difference at all between the income which was assessed in the original assessment order and the income which is now being sought to be assessed in wake of order u/s.263. Under both these assessments surplus amount will get taxed, hence, no prejudice is caused to the Revenue so far as tax effect is concerned, except for the fact that Section 11 is being sought to be examined from a different perspective. Respectfully following the order of the Tribunal in case of Slum Rehabilitation Authority [2016 (1) TMI 798 - ITAT MUMBAI] we do not find any merit in the order of CIT(A) u/s.263 - Decided in favour of assessee
-
2017 (4) TMI 405
MAT computation - Addition of provision of slow moving / obsolete stock to the book profit of the Appellant while computing the tax liability under Section 115JB - Held that:- Keeping in view specific provision in the Statute vide explanation 1(c) and(i) to Section 115JB of 1961 Act, the additions to book profit are required if the nature of said cost of obsolescence and loss on account of obsolete and slow moving inventory as debited in Profit and Loss Account is merely a provision or an unascertained liability for which onus is on the assessee to rebut the same and prove that it is a business loss sustained by the assessee and is not hit by explanation 1(c) and (i) to Section 115JB of 1961 Act. The case laws relied upon by the assessee are not relevant at this stage as the assessee has not discharged its prima onus cast under law as no details of obsolete and slow moving inventory and basis of its working was submitted before the authorities below .In our considered view, the matter need to go back to the file of A.O. for de-novo adjudication of the issue on merits by the AO after considering the claim of the assessee that the said claim was towards cost of obsolescence and loss on account of obsolete and slow moving inventory incurred by the assessee and it is in the nature of an ascertained liability , instead of merely being a provision or unascertained liability as contended by Revenue. CSR expenses dis-allowance - Held that:- The onus lie on the assessee to prove with cogent material to have substantiated its claim that the said expenses is incurred wholly and exclusively for the purposes of business of the assessee as required u/s 37(1) of 1961 as some remote connection with business is not sufficient to claim the expenses as business expenses, which in the instant case the assessee failed to prove the same. Hence, these expenses incurred for CSR by providing ambulance services, paramedical services and medical supplies to villagers in the vicinity of its container terminal cannot be allowed as business expenses and hence, the appellate order of learned CIT(A) is hereby confirmed Business promotion expenses which are added in the CSR expenses and which were claimed by the assessee as business promotion /sponsorship expenses , details were submitted by the assessee which are placed in paper book /page 1-5,18 to 25 filed with tribunal. It is the contention of the authorities below that no details were submitted before them to show that the same was incurred wholly and exclusively for the purposes of business of the assessee . In our considered view, , this matter also need to go back to the file of the A.O. for denovo determination of the issue on merits wherein assessee is directed to produce all relevant evidences to prove before the AO that the said expenses were incurred wholly and exclusively for the purposes of business of the assessee and it satisfy the mandate of section 37(1) of 1961 Act. Add-hoc disallowance of 25% of business promotion expenses - Held that:- The assesssee has prayed that if the matter is restored to the file of the AO, all the details of these expenses along with evidences for having incurred these expenses shall be duly placed before the AO to prove that these expenses were incurred wholly and exclusively for the purposes of business of the assessee and it satisfy the mandate of Section 37(1) of 1961 Act. The learned DR fairly agreed that this matter can be set aside to the file of AO for de-novo adjudication on merits. Thus, we are inclined to set aside and restore this matter to the file of the AO for de-novo determination of the issue on merits and direct the assessee to produce cogent material and evidences in support of its claim before the A.O.to prove that the said expenses towards board meeting and air tickets for Copola Lungi (Benzy Tours and Travels) were incurred wholly and exclusively for the purposes of business as required u/s 37(1) of 1961 Act.
-
2017 (4) TMI 404
TDS u/s 194A - Disallowance of interest expenditure under section 40(a)(ia) - payments to Adlabs Films Ltd. for non-deduction at source - Held that:- The disallowance under section 40(a)(ia) of the Act will not be attracted in the case on hand if the payee M/s. Adlabs Films Ltd. has offered for tax the interest payments received by it from the assessee in its return of income for A.Y. 2007-08 as claimed, subject to restoration of this issue to the file of the AO for verification of the actual position, i.e. as to whether the payee/recipient M/s. Adlabs Films Ltd. has offered the said interest receipts for taxation in its return of income for A.Y. 2007-08. We hold and direct accordingly.
-
2017 (4) TMI 403
Income from sale of shares - capital gains OR business income - Held that:- We found that shares costing for ₹ 3. 59 croress were realized for ₹ 14. 50 crores. The shares were sold during the period from April2007 to January, 2008 and fresh shares has been acquired during the period June, 2007 to March, 2008. In case of unquoted shares, the assessee has acquired the same during the period June, 2007 to March, 2008, which was acquired out of share application given in earlier years, which clearly indicates that assessee has not used borrowed funds for investment held either as on 31-3-2008 or 31-3-2007. The AO has failed to appreciate the factual position emerging out of the audited balance sheet to the effect that increased unsecured loans has been utilized for further advancing loans. Loans and Advances as on 31-3-2008 amounted to ₹ 20. 56 croress as against loans and loan of ₹ 8. 96 croress as on 31-3-2007. Thus, increase in loans and advances were much more than increase in unsecured loans. Accordingly, we do not find any infirmity in the order of CIT(A) for holding these shares as investment giving rise to the capital gain. The CIT(A) has properly appreciated the volume and frequency of the transaction, the assessee’s intention of investing in shares as well as department‟s conclusion of treating these shares as investment in the scrutiny assessment framed in earlier years. - Decided in favour of assessee. Disallowance u/s 14A - Held that:- No disallowance should be made under the head interest expenditure. Disallowance under Rule 8D (2) (iii) should be restricted to the expenses claimed in the P&L account, as disallowed in earlier year. See HDFC Bank Ltd (2016 (3) TMI 755 - BOMBAY HIGH COURT). Effective ground of appeal is allowed in favour of the assessee, in part.
-
2017 (4) TMI 402
Reopening of assessment - Gross profit additions @ 12.5% over the total bogus purchases - Held that:- There were definite tangible and material incriminating information before the AO based on information received from the DGIT(Inv) Mumbai which is backed with information from Maharashtra Sales Tax Department that there are 28 entities through whom assessee made bogus purchases of material as these entities were engaged in providing accommodation entries only without supplying any material, which in turn was also supported by deposition’s by way of affidavit/statements of these 28 hawala entry providers. While, we are conscious that the reassessment notice should not have been routinely issued, at the same time, the nature of power is wide enough that when there is an escapement of income and the Revenue has information ruling that this escapement is also relatable to suppression of material facts (which could include false claims), the power to reopen concluded assessment can validly be exercised. Re-opening of the assessment as done in the instant case by the AO u/s 147 of 1961 was valid and legal which is upheld by us , and the contentions of the assessee are , hereby, rejected. The books of accounts were not rejected u/s 145(3) of 1961 Act by the Revenue . In the immediately preceding year i.e. assessment year 2008-09, the assessee earned GP ratio of 4.3% on total turnover, while for the year under consideration GP ratio earned was 5.45%. Thus end of justice will be met in this case if GP ratio of 12.5% on alleged bogus purchases is added to income of the assessee against which credit for the declared GP ratio on the alleged bogus purchases will be granted by the AO after verification by the AO because of failure of the assessee to come forward to discharge primary onus cast upon him as detailed above for which assessee is to be blamed and in the midst of afore-stated un-rebutted allegation against the assessee and non discharge of primary onus, the declared lower GP ratio of 5.45% in the instant previous year under appeal cannot be accepted. Thus, in nut-shell we are inclined to adopt GP ratio of 12.5% on alleged bogus purchases in the instant case which in our considered view is fair, reasonable and rational keeping in view factual matrix of the case , while the assessee shall be granted credit of GP ratio declared on these bogus purchases in the return of income filed with the Revenue. The assessee gets part relief.
-
2017 (4) TMI 401
Claim of deduction u/s 80IB (10) - delay in getting BU permission - Held that:- Although the assessee has filed for issuance of completion certificate to the local authority well before the stipulated dates i.e. 31.03.2008 except in assessment years 2009-10 wherein the relevant date is 31.03.2009 pertaining to the fourth project (supra), the same is held up because of technical reasons. We refer to hon’ble jurisdictional high court’s decision in Tarnetar Corporation (2012 (10) TMI 803 - GUJARAT HIGH COURT ) upholding this tribunal’s order for assessment year 2006-07 wherein the project in question had been approved before 01.04.2004, the said assessee applied for BU permission to the local authority before 31.03.2008 which stood rejected followed by subsequent revised permission on 19.04.2009. Their lordships observe in said factual backdrop that delay in getting BU permission cannot be held to be fatal to Section 80IB(1) deduction claim as “not every condition of the statute can be seen as mandatory” in case the same stands substantially complied with. We are of the opinion in this factual and legal backdrop that we have to necessarily follow hon’ble jurisdictional high court’s decision even if the Revenue finds strong support of any hon’ble non jurisdictional high court deciding the very issue against the assessee. We follow our detailed discussion on the issue of completion of assessee’s residential projects in all the remaining for assessment years involving Revenue’s as many appeals and assessee’s cross objections hereinabove. We thus find no reason to reverse ld. CIT(A)’s identical conclusion extracted in preceding paragraphs holding the assessee to have completed the residential projects before 31.03.2008 and 31.03.2009; as the case may be (supra). The Revenue’s appeal fail.
-
2017 (4) TMI 400
Additions on a/c. of bad debt - Held that:- Issue under consideration is covered by the decision of Hon’ble Bombay High Court in the case of CIT v Shreyas S. Morakhia (2012 (3) TMI 103 - BOMBAY HIGH COURT) and CIT v. Bonanza Portfolio (2009 (8) TMI 636 - DELHI HIGH COURT). SLP dismissed by Supreme Court in case of CIT v. Bonanza Portfolio (2010 (7) TMI 1068 - SUPREME COURT). Thus we do not find any infirmity in the order of CIT(A) for deleting the disallowance on account of the bad debts. Mark to market loss - Addition of net loss on account of Vanda transaction - assessee debited the same to the P&L A/c and claimed as part of net arbitrage income which is considered as business income - Held that:- e order of the lower authorities we found that CIT(A) has relied upon his order for A.Y.2009-10 to A.Y.2010-11. The issue is covered in favour of assessee vide orders of the Hon’ble Tribunal in assessee’s own case for A.Y.2009-10 and 2010-11 as well as the decision of the Hon’ble Supreme Court in the case of CIT v. Woodward Governor [2009 (4) TMI 4 - SUPREME COURT ] .We do not find any reason to interfere in the order of CIT(A) for deleting the loss claimed under the head ‘Mark to Market Loss’. Claim of depreciation on Customer Rights - Held that:- No reason to interfere in the order of CIT(A) for allowing claim of depreciation on customer’s right as held that the purchase of clientele business was a right which could be used as a tool to carry on business and therefore eligible for depreciation on the payments made, since it falls within the expression "any other business or commercial rights of similar matter" used in section 32(1)(ii) of the Income Tax Act, 1961. Disallowance u/s.14A - Held that:- We have considered rival contentions and found that the own funds of assessee (Rs. 555.45 crores) are sufficient to cover up the value of investment (Rs. 41.07 crores) so no interest disallowing is required to be made u/ s 14A of the Act. With regard to administrative expenses, the issue is covered vide order of the Hon’ble Tribunal in assessee’s own case A.Y.s 2008-09 to 2010-11.The matter has been sent back to the file of Assessing Officer for deciding the issue in accordance with the direction given by the Hon’ble Tribunal in case of sister concern of the assessee wherein a similar working given by the assessee has been accepted by the Assessing Officer for A.Y.2009-10 to 2011-12. After going through the order of the Tribunal as well as consequential orders passed by the AO, in the case of sister concern for the A.Y.2009-10 to 2011-12, we do not find any justification for disallowance so made by the AO and confirmed by CIT(A). Accordingly AO is directed to delete the disallowance made in excess of ₹ 11.84 lakhs. Disallowance of indexed cost of acquisition on sale of shares of BSE Ltd. need to be deleted as relying on assessee's own case for A.Y.s 2008-09 to 2010-11 [2016 (3) TMI 962 - ITAT MUMBAI].
-
2017 (4) TMI 399
Disallowance of deduction claimed u/s.80-IA - BOT/BOOT requirement for getting benefit of deduction - Held that:- As gone through the orders of the Tribunal in case of group concerns of the assessee held that the concept of BOT IBOOT underwent changes in the year 2000. If the Intention was only to give benefit to enterprises on the income earned from operating and maintaining the Infrastructure facility, In that case, the provision would not have been amended in such a manner so as to also allow benefit to the enterprise which was merely developing the facility. Further, there would have been no necessity to make the amendment if the enterprise was to be allowed in respect of Income earned from operating and maintaining the facility. When the provision of section 80lA of the Act had been substantially amended and where the enterprise was only a developer of the Infrastructure facility, deduction could not be denied under section 80-lA of the Act on the ground that the concept of BOT/BOOT was the main requirement for getting benefit of deduction under section 80-lA of the Act. - Decided against revenue
-
2017 (4) TMI 398
Appellate authority entertain the fresh claims on the basis of facts available on record without revision of the return of income under s.139(5) - Held that:- The issue is no longer res integra. It is well settled that the assessee is entitled to do so. Reference may be made to the decision of CIT vs. Pruthvi Brokers & Shareholders (P) Ltd.(2012 (7) TMI 158 - BOMBAY HIGH COURT) in this regard. Accordingly, we find no infirmity in the order of the CIT(A) in accepting the claim of Assessee after appreciation of facts. - Decided against revenue Disallowance of interest expenditure u/s 36(1)(iii) - Held that:- AO should have only disallowed the interest from the time when the capital goods were purchased till the time the capital goods were put to use. The above contention of the AR of the appellant appears justified. The AO has disallowed the interest because as per the AO since the appellant had not produced the bank account to show the utilization of funds for purchase of capital goods hence he disallowed the interest for the full year. The AR of the appellant was asked to furnish the complete working of the interest which was to be disallowed based on the date on which the funds were used for the purchase of the asset till the date when it was actually put to use. Vide submissions filed on 23.10.2013 the AR of the appellant has filed these details. The details filed show that the entire amount of interest which could be disallowed is ₹ 2,24,334/-.- Decided against revenue Admission of additional evidence in violation of Rule 46A of the I.T.Rules, 1962 - Held that:- Notwithstanding Rule 46A of the IT Rules, the CIT(A) has inherent power under s.250(4) to call for and admit such evidence as necessary for the disposal of the appeal. Therefore, Rule 46A does not act as a fetter for exercising the power available to the CIT(A). Thus ground No.2(b) raised by the Revenue has no force in law and is accordingly dismissed.
-
2017 (4) TMI 397
Entitlement of exemption u/s 54 - period required to be considered as holding of the sold property for assessing the income as Short Term / Long Term Capital Gain - Held that:- Ratio given in the case titled Mrs. Madhu Kaul Vs. CIT and another [2014 (2) TMI 1117 - PUNJAB & HARYANA HIGH COURT] and CIT Vs. S.R.Jeyshankar [2014 (12) TMI 264 - MADRAS HIGH COURT] are quite applicable to the facts of the present case in which the date of allotment letter was considered to assess the holding period to ascertain the entitlement of exemption u/s.54 of the Act. In view of the said circumstances we are of the view that the finding of the CIT(A) on this said issue is wrong against law and facts and is not liable to be sustainable in the eyes of law. Hence, we set aside the finding of the CIT(A) on this issue and direct the Assessing Officer to consider the allotment letter dated 30.03.2005 to determine the Long Term / Short Term Capital Gain and accordingly entitlement of exemption u/s.54 of the Act
-
2017 (4) TMI 396
Disallowance u/s 14A - held that:- The issue involved in the present case is squarely covered by the order passed by the Tribunal in the case of the assessee itself for A.Y. 2001-02 and A.Y. 2002-03, wherein the coordinate bench of the Tribunal had held that if an assessee is having substantial interest free funds which far exceeds the amount of investments made in tax free securities, therein no disallowance of interest under Sec. 14A would be called for in the hands of the assessee. We further find that the aforesaid issue as averred by the Ld. A.R stands settled and is found to be no more res integra in light of the judgments of the Hon’ble jurisdictional High Court in the case of : CIT Vs. HDFC Bank Ltd. (2014 (8) TMI 119 - BOMBAY HIGH COURT).Thus in the backdrop of the aforesaid facts read in light of the settled position of law, we herein restore the matter to the file of the A.O, who is directed to verify the aforesaid contention of the Ld. A.R that the interest free funds by way of share capital, reserves and surplus and cash accruals over the years, so available with the assessee during the year under consideration, far exceeded the amount of investments in the tax free securities, and in case the said claim is found to be in order, then in light of our aforesaid observations no disallowance with respect to the interest expenditure would be called for in the hands of the assessee under Sec. 14A of the ‘Act’. Disallowance of interest on outstanding advances to subsidiary companies - ALP - Held that:- Principle of commercial expediency would not come into play, and as the assessee had not charged interest on the outstanding receivables from the overseas subsidiaries, the ALP of the same had rightly been determined by the A.O/TPO. Having held so, we now advert to the rate of interest which is liable to be attributed to such transactions entered into by the assessee with its AE’s. We are of the considered view that finding no reason to take a departure from the view taken by the Tribunal in the case of the assessee in the aforesaid preceding years, the disallowance of interest during the year on the similar footing be computed at LIBOR + 300 points. We thus in the backdrop of our aforesaid observations herein direct the A.O to compute the disallowance of notional interest on advances given by the assessee to its overseas subsidiaries at LIBOR + 300 points for the year under consideration. We thus in order to facilitate giving effect to our aforesaid directions, therein restore the aforesaid issue to the file of the A.O, who is directed to recompute the disallowance of interest as directed hereinabove. Disallowance on notional basis of interest in respect of overseas investments made in its foreign subsidiaries - Held that:- The coordinate bench of the Tribunal while disposing of the appeals of the assessee for A.Y 2003-04 and A.Y 2004-05 deleted the disallowance on notional basis of interest in respect of such overseas investments, after appreciating the contentions advanced by the assessee on both the issues which had been averred by the assessee in the course of the proceedings for the year under consideration, viz. (i). Investments had been made by the assessee out of commercial expediency and wholly and exclusively for the purposes of its business, and (ii).The investments were made by the assessee out of its own funds. We thus in the absence of any averment by the Ld. D.R which could go to prove that the facts involved in the case of the assessee were distinguishable as against those for the aforesaid preceding years, or could go to dislodge the aforesaid two fold contention of the assessee in support of its contention that no disallowance on notional basis of interest in respect of the overseas investments made by the assessee was called for in the hands of the assessee, thus we delete the disallowance made by the A.O. - Decided in favour of assessee.
-
2017 (4) TMI 395
Income accrued to the assessee from sale of land/plots - LTCG or capital gain - Held that:- Unable to agree with the contention of the AO as well as observations of the Ld. CIT(A) that the sale of land immediately after 5 months of diversion is an activity of adventure in the nature of trade and business because as per ratio laid down in the case of CIT vs. Suresh Chand Goyal (2007 (1) TMI 90 - MADHYA PRADESH HIGH COURT) as reproduced hereinabove. Section 2(13) of the Act, defines the word ‘business’ which includes any trade, commerce or manufacture or any other adventure or concerned in the nature of trade, commerce or manufacture. Their lordship clearly held that an isolated transactions or activity cannot be a part of business and to consider the question of business there must regular activity of purchasing and selling. In the present case there is no iota of evidence on the record to show that the assessee was regular in the business of purchase and sale of land or plots, therefore, conclusion drawn by the AO and uphold by the Ld. CIT(A) cannot be held as valid and sustainable as per provisions of the Act - Decided in favour of assessee Claim of deduction u/s 54F on account of investment in construction of residential house out of the long term capital gains from the sale of land - Held that:- the authorities below, after treating the income as business income of the assessee, preceded to frame assessment and the issue of exemption/deduction u/s 54F of the Act was not properly adjudicated by them. Since by the earlier part of this order, we have allowed ground no.1 of assessee and we have directed the AO to treat the income from sale of plots/land as long term capital gain. Therefore, consequently, the assessee is entitled to claim exemption u/s 54F of the Act, on the expenditure incurred for construction of residential house. However, since there is no adjudication either by the AO or by the Ld. CIT(A) on this issue requires proper examination and verification at the end of the AO. Therefore, the issue is restored to the file of the AO for reconsideration.
-
2017 (4) TMI 394
Disallowance of commission paid to non-residents - Held that:- Once the agreements and related invoices have been furnished by the assessee at the assessment as also at the appellate stage, and no specific defects have been pointed out in the same, it cannot be open to the revenue to contend that genuineness of commission payments is not established. The commission payments are made with regulatory approvals and through banking channels, and all the requisite documentation is furnished for perusal. In these circumstances, we are of the considered view that the CIT(A) was indeed justified in his well reasoned conclusions on this aspect of the matter. We approve the same. As regards the question as to whether the assessee had any obligations to deduct tax at source from these payments of commission to non resident agents, as learned representatives fairly agree, the issue is now covered, in favour of the assessee, by a coordinate bench decision in the case of DCIT Vs Welspun Corporation Ltd [2017 (1) TMI 1084 - ITAT AHMEDABAD] wherein held payer is bound to withhold tax from the foreign remittance only if the sum paid is assessable to tax in India. The assessee cannot, therefore, be faulted for not approaching the Assessing Officer under section 195 either. As regards the withdrawal of the CBDT circular holding that the commission payments to non resident agents are not taxable in India, nothing really turns on the circular, as de hors the aforesaid circular, we have adjudicated upon the taxability of the commission agent’s income in India in terms of the provisions of the Income Tax Act as also the relevant tax treaty provisions - Decided against revenue Disallowance on account of provision for warranty - Held that:- As long as the assessee has made the provision for warranty claims on a scientific basis and historical data, this is admissible as deduction in computation of business income. As noted the warranty provision was computed as a three step process to quantify such provision (a) the assessee determines, on the basis explained above, percentage of defects likely to occur in the product sold by the assessee; (b) the assessee determines, based on the past experience and the repair cost estimate received from the vendors, average per unit likely repair costs; and (c) the assessee determines the likely number of units which are likely to have such defects, by adopting percentage (a) to the total units sold, and estimates the provision required by multiplying the number of units so likely to receive warranty service, with the average cost incurred on such service as a result of (b) above. This method, in our considered view, a fairly scientific basis, supported by historical data, and it meets the tests laid down by Hon’ble Supreme Court in Rotork Control’s case (2009 (5) TMI 16 - SUPREME COURT OF INDIA) above.The Assessing Officer ought to have reconciled to the fact that, as is the legal position as on now, the liability in respect of provision for warranty claims is not a contingent liability but rather a reasonably estimated, to borrow the felicitous words employed by Their Lordships, “present obligation as a result of past events (i.e. sale of products) resulting in an outflow of resources (in future)”. Learned CIT(A) was, therefore, quite justified in granting the impugned relief. We uphold his action and decline to interfere in the matter.- Decided against revenue Disallowing the employees' contribution to ESI of ₹ 43,908 under section 2(24)(x) r.w.s. 36(1)(va) - Held that:- This issue is covered, against the assessee, by Hon’ble Gujarat High Court’s judgment in the case of CIT Vs Gujarat State Toad Transport Corporation [2014 (1) TMI 502 - GUJARAT HIGH COURT]. Disallowance of Marked to Market Loss - Held that:- The gains on foreign exchange contracts in the same year have been taxed as ‘other income’, the losses on foreign exchange contracts have not been allowed as deduction. Such an approach cannot meet any judicial scrutiny. As for the CBDT instructions, it is only elementary that any instructions issued by the CBDT cannot bind the assessee even though the assessee is entitled to, and can legitimately ask for, any benefits granted to the assessee by such instructions or circulars. Nothing, therefore, turns on the CBDT instruction even if it is actually contrary to the claim of the assessee. Allowing entire foreign tax credit - Held that:- Coming to the scope of Explanations to Section 40(a)(ii), on which learned counsel for the assessee has relied upon so much, we may only add that if the main provision, as is the claim of the learned counsel, does not cover the taxes paid abroad, there cannot be any occasion to include, under Explanations to Section 40(a)(ii), taxes in respect of which relief under section 90 and 91 is not admissible. These Explanations donot extend the scope of the Section 40(a)(ii) but rather explain the scope of the said section. If something is covered by the Explanation, it cannot be said that it is not covered by the main provision. If taxes in respect of which tax credit under section 90 or 91 are covered by the proviso, these are covered by the scope of Section 40(a)(ii) as well. And if these taxes are covered by Section 40(a)(ii), the theory that meaning of ‘tax’ under section 40(a)(ii) must remain confined to the taxes levied under Income Tax Act, 1961 comes to a naught since the taxes in respect of which credits are available under section 90 or 91 cannot be, under any circumstances, imposed under the Indian Income Tax Act. The argument of the learned counsel, if we have understood it correctly, is devoid of, in our considered view, legally sustainable merits. In view of the above discussions, we are of the considered view that no deduction under section 37(1) can be allowed in respect of any income tax withheld abroad as the same will be, for the detailed reasons set out above, hit by the disabling provisions under section 40(a)(ii) of the Act. The relief granted by the CIT(A), by directing the grant of deduction of ₹ 52,50,507 in respect of income tax withheld abroad in respect of which no foreign tax credit is admissible, under section 37(1) of the Act must, therefore, stand vacated. We direct so. We further direct that, as a result of our directions earlier in this order, in the event of assessee being allowed only partial tax credit in respect of taxes withheld abroad, the assessee cannot be allowed any deduction, in respect of the balance of the taxes so withheld abroad, under section 37(1) of the Act.
-
2017 (4) TMI 393
Revision u/s 263 - order erroneous and also prejudicial to the interests of the Revenue - Held that:- Unless the order passed by the Assessing Officer is erroneous and also prejudicial to the interests of the Revenue, the Commissioner of Income-tax cannot assume the jurisdiction to revise the assessment order, this is because the twin conditions i.e. the order is erroneous and the same is prejudicial to the interests of the Revenue are co-exist. In the present case, the order passed by the Assessing Officer neither erroneous nor prejudicial to the interests of the Revenue as the Assessing Officer has considered all the issues and after considering the details furnished by the assessee rejected the books of account and estimated the net profit from the business. Once the net profit is estimated from the business, the question of referring to the books of account to revise the assessment order is not justified. It is the general presumption of law that the Assessing Officer has considered all the details before completion of assessment and the Commissioner of Income-tax cannot presume that enquiries conducted by the Assessing Officer is insufficient and also the Assessing Officer has not applied his mind, unless the Commissioner of Income-tax proves that the assessment order passed by the Assessing Officer is erroneous. In this case, the Commissioner of Income-tax never pointed out any specific instance of erroneous decision taken by the Assessing Officer before completion of assessment. Without pointing out any defects in the assessment order, simply directing the Assessing Officer to cause further enquiries on the presumption that the enquiries conducted by the Assessing Officer are insufficient is not permissible under the provisions of section 263 of the Act. Therefore, we are of the view that the assessment order passed by the Assessing Officer under section 143(3) of the Act dated March 26, 2013 is not erroneous in so far as it is prejudicial to the interests of the Revenue. - Decided in favour of assessee
-
2017 (4) TMI 392
Clam of deduction u/s 54F - amount was not deposited in the scheme notified by the Government and the investment was not made in the manner provided under section 54F(4) - Held that:- Section 54F(4) provides that where the amount of net consideration is not utilised by the assessee for the purchase or construction of the new assets before the date of furnishing of the return of income under section 139, the same shall be deposited before furnishing such return but in any case not later than the due date under section 139(1). The facts in the present case are not in dispute that the assessee had already invested substantially more amount, i.e., ₹ 23,00,000 as against the net consideration of ₹ 13,00,000 only in the purchase of plot on July 28, 2010 itself. In other words, even before the due date prescribed under section 139(1) being July 31, 2010 the investment of larger amount than the net consideration was made. There apart, construction of the house thereon was also completed within the prescribed time limit of three years. These facts were not denied even during the course of hearing. The authorities cited by the learned counsel for the assessee related to the situation where the assessee made the investment within the due date prescribed under section 139(4) and it was held that section 54 or section 54F for that reason uses the word "section 139", which meant not only section 139(1) but also section 139(4). Therefore, a larger time-limit was available to the assessee. The appellant was fully entitled to the deduction as claimed under section 54F, there was no justifiable reason to deny the same by the authorities below. - Decided in favour of assessee Addition u/s 68 - unexplained deposits in bank account - Held that:- Before invoking section 68, maintenance of the accounts by the assessee itself and finding credit of the subjected amount therein, are the conditions precedents, and without satisfying them, the Assessing Officer could not have invoked section 68. Having a bearing over the issue in hand, not denied, are that it was a joint bank account where in the husband was first named. In answer to question No. 6 of his written statement placed in the assessee's paper book he clearly admitted having opened the said bank account. He also admitted having deposited cash and also further transacted. On the other hand, there appears no contrary evidence brought on record to suggest that it was a assessee only who made the entire deposits in the said bank account on all the days. The Assessing Officer fully relied upon the statements of the husband only, ignoring the above facts as also the facts that once, the husband was admittedly having earnings in the past, he could have also deposited in the bank account, even assuming Assessing Officer's version is accepted. The motive of husband appears clear behind alleging that it was all the assessee's money, because of the ongoing dispute between the husband and wife and the fear of being caught in the tax net. The Assessing Officer merely proceeded on suspicion. He even did not held the husband as the assessee's benamidar. No justification on making addition - Decided in favour of assessee
-
2017 (4) TMI 391
Branch office in India constituted a permanent establishment (PE) - article 5 of the India-US Double Taxation Avoidance Agreement - Held that:- As various features as have been brought out before us, the activity profile of the branch office has not been examined by either of the lower authorities. As has been observed by us in the earlier part of our order that the Assessing Officer has not done any factual analysis at all and the learned Commissioner of Income-tax (Appeals) has done a brief factual analysis but that was full of mistakes or lacks clarity and precision. Under these circumstances, it is difficult at this stage to apply the correct legal principles on the real facts. Therefore, we find it appropriate to send this issue back to the file of the Assessing Officer who shall take into account. All the facts and circumstances of the case and pleadings and documentary evidences as has been made before us and that may be made by the assessee before the Assessing Officer in support of its claim. The Assessing Officer shall give adequate opportunity of hearing to the assessee for furnishing all detailed submissions and requisite documentary evidences and these shall be taken into account before deciding this issue afresh. The Assessing Officer shall accordingly decide the issue keeping in view the facts of the case and applicable judgments as may be relied upon by the learned counsel before the Assessing Officer to decide whether the Indian branch constitutes a permanent establishment in India of the assessee-company in terms of article 5 of the India-US Double Taxation Avoidance Agreement. This ground may be treated as allowed for statistical purposes. Sale of shrink wrap software - whether did not involve receipt of consideration which could be said to be "royalty" - Held that:- Revenue has contended that the learned Commissioner of Income-tax (Appeals) has erred in taking this decision as the Indian branch office acted as permanent establishment in India of the assessee-company. Thus, this ground is dependent upon the outcome of the issue of determination of permanent establishment. The issue of permanent establishment has been restored to the file of the Assessing Officer for deciding it afresh. Since the issue in the Revenue's appeal is dependent upon the issue of permanent establishment which has been restored to the file of the Assessing Officer, this ground is also restored to the file of the Assessing Officer. The Assessing Officer shall first decide the issue of permanent establishment which has a bearing on the ground raised by the Revenue in its appeal and then decide the issues under appeal.
-
2017 (4) TMI 390
Validity of reopening of assessment - Held that:- As reasons are undated, which itself prove that the Assessing Officer has not applied his mind. Secondly, nothing appears in the reasons recorded suggesting that the Assessing Officer had made any positive enquiry before coming to the conclusion that the income chargeable to tax has escaped assessment. The Assessing Officer has reopened the case on the basis of borrowed satisfaction, which is not permissible under the law. - Decided in favour of assessee.
-
Customs
-
2017 (4) TMI 372
Proper Officer - jurisdiction to issue SCN - whether Customs officer can be treated as proper officer when he has already issued notice before 8.4.2011 as a measure of curing his defect section 28 of the Customs Act, 1962 - Revenue's case is that when a retrospective amendment was made to section 28, even SCNs issued before 8.4.2011 are the proper SCNs and liable to be adjudicated - Held that: - the case of Mangali Impex Ltd. Vs UOI [2016 (5) TMI 225 - DELHI HIGH COURT] referred where it was held that newly inserted Section 28 (11) does not empower officers of DRI and DGCEI to either proceed to adjudicate SCNs already issued by them for period prior to 08-04-2011 or to issue SCNs for period prior to 08-04-2011. Mangali Impex judgment [2016 (5) TMI 225 - DELHI HIGH COURT] has been stayed by the Supreme Court. It is well settled principle of law by Hon'ble Apex Court in UOI Vs West Coast Paper Mills Ltd. [2004 (2) TMI 344 - SUPREME COURT OF INDIA] that once the appeal been filed against a Judgment of lower court and entertained by the Supreme Court as well as operation thereof stayed, the judgment of lower court is in jeopardy. It would be proper to wait for decision of the Apex Court on the aforesaid jurisdiction issue. Therefore, all these appeals are remanded back to the concerned adjudicating authorities without keeping that pending in Tribunal to pass appropriate orders on the basis of the outcome of the Supreme Court in the Mangali Impex case following course of natural justice. Matter on remand.
-
2017 (4) TMI 371
Export of rice - mis-declaration - All exporters had claimed that they were exporting Basmati Rice, Revenue had claimed that the rice being exported by them is not Basmati Rice - N/N. 67 dated 23.01.2003 - confiscation - penalty u/s 114 (i) - Held that: - in the schedule to the said notification also prescribes that the proportion of non-Basmati Rice in the export consignment should not exceed 15%. The Test Report obtained from the testing agencies clearly shows that the proportion of non-Basmati Rice in the export consignment was in excess of 20% and was found to be upto 90%. Thus, the prohibition in terms of N/N. 67 dated 23.01.2003 clearly applies to all these consignments - the proportion of non-Basmati Rice found in the samples exceeded 20%. The goods were exported against test bond and therefore the liability of confiscation and penalty u/s 114 (i) arises. Penalty u/s 114 AA - Held that: - the exporters have deliberately misdeclared the product to avoid the prohibition under the policy. However, it is seen that the non-Basmati Rice found in the exporter varied from 23% to 90.2% - penalty upheld. Appeal dismissed - decided against appellant.
-
2017 (4) TMI 370
Valuation - technical know-how - includibility - The original adjudicating authority held that the payment of said technical know-how fee is a condition for sale and the same is related to the import of goods i.e. parts, units and sub-assemblies and therefore, is includible in the value of import of plano milling centre M machine - Held that: - foreign collaborator have a significant role in deciding what the appellant can import from others. This would clearly amount to imposition of condition of sale - the appellants are not free to import the parts, units and sub-assemblies from any source. They can do so only if the foreign collaborator allows them to do so - there is a condition of sale attached to the transfer of technical know-how, the amount is includible in the assessable value - appeal dismissed - decided against appellant.
-
2017 (4) TMI 369
Classification of goods - butter flavouring - classified under CTH 3302 10 90 or CTH 2106 90 60? - Held that: - the ingredients i.e. butter fat is not a plant origin. Therefore, in our considered view the lower authorities have correctly classified the product under Chapter 21 - except the test report no material was produced by the appellant to counter the claim of the Revenue - the product is correctly classified under CTH 2106 and not 3302 - appeal dismissed - decided against appellant.
-
2017 (4) TMI 368
Imposition of Penalty - mis-declaration of goods - whether the adjudicating authority was correct in imposing penalty of ₹ 50,000/- on M/s. Weizman Associates (main appellant) and ₹ 10,000/- on the individual under the provisions of 112(a) and 112(b) of CA, 1962 for the absolute confiscation of the goods, which according to the adjudicating authority, were misdeclared? - Held that: - main appellant had abandoned the goods due to litigation which was entered by him in form of filing a writ petition before the Hon'ble High Court of Bombay, the provisions of Rule 23(2) of the CA, 1962 does indicate abandonment of the goods but at the same time, it does not give any immunity from imposition of penalty under the provisions of 112 of the CA, 1962 - The adjudicating authority was correct in imposing penalties on the main appellant, another appellant. However, the penalties imposed are disproportionate to the issue in hand. Accordingly, penalty imposed on the main appellant reduced to ₹ 25,000/- and ₹ 5,000/- on the individual - appeal allowed - decided partly in favor of appellants.
-
2017 (4) TMI 367
Seizure of vehicle with ginger - seized ‘Ginger’, being perishable item, has already been auctioned and the sale proceeds have been deposited in the appropriate account - provisional release of detained vehicle - Held that: - there is no legal impediment in provisionally releasing a vehicle involved in the commission of an offence, pending adjudication of a confiscation proceeding, provided that the authorized officer or the Court, as the case may be, is reasonably assured that the vehicle shall be produced by the custodian as and when ordered or required if such situation arise - there is no bar for the vehicle to be released in interim custody of the petitioner if confiscation proceeding is pending. The power, however, to release the vehicle, in question, provisionally, can be exercised only by the Customs Officer - petition allowed - decided in favor of petitioner.
-
2017 (4) TMI 366
Natural Justice - for the purpose of valuation of the part of the consignment, no notice was issued to the petitioner, though he was asked to segregate the consignment, as in the opinion of the department, it contained different material - Held that: - the order dated 26-10-2015 assessing the value of the part of the goods imported deserves to be set aside for the reason that no opportunity of hearing was afforded to the petitioner before passing the order and the material relied upon therein was not confronted - As far as the second part of the consignment is concerned, it could not be assessed earlier as there was no definite opinion about the goods imported. The same having been received now in the form of test report from Central Institute of Plastic Engineering and Technology, Lucknow, the value thereof is also required to be assessed - petition allowed - decided partly in favor of petitioner and part matter on remand.
-
Service Tax
-
2017 (4) TMI 389
Non-payment/short payment of service tax - reimbursable expenses on actual basis relating to travel and accommodation of some of their employees - Held that: - similar set of facts were subject matter of decision in the case of Engineers India Ltd. – 2016 (12) TMI 1530 – CESTAT, New Delhi, where it was held that the provisions of Section 5 (1) as ultra virus and accordingly, held that reimbursable expenditure cannot form part of taxable value in terms of Section 67 - demand set aside. Utilisation of CENVAT credit to pay service tax liability - Held that: - when the appellant have discharged service tax on eligible input service, they are entitled for credit and for further utilization for discharging duty liability on taxable output services. This can be verified by the jurisdictional authorities, based on the documents produced before him - appeal allowed by way of remand. Appeal allowed - decided in favor of assessee.
-
2017 (4) TMI 388
Utilisation of CENVAT credit account - Goods Transport Agency service - reverse charge mechanism - the case of Revenue is that as credit on account on GTA Service was not in their cenvat credit account, therefore, cenvat credit cannot be utilised for payment on GTA Service in terms of N/N. 10/2008-CE (NT) dated 01.03.2008 - whether in terms of N/N. 10/2008 dated 01.03.2008, the appellant can utilise cenvat credit account for payment on GTA Service for procurement of inputs or not? - Held that: - The said issue came up before this Tribunal in the case of UNI Deritend Ltd. [2011 (10) TMI 347 - CESTAT, MUMBAI] wherein it was held that In view of Shri Tubes & Steels [2010 (9) TMI 815 - CESTAT, BANGALORE] the appellants are entitled to pay service tax through Cenvat Credit account for the period prior to 19.4.2006 - the appellant cannot utilise cenvat credit account for payment on GTA Service for procurement of inputs - demand upheld. Imposition of penalty u/s 76 of FA, 1994 - Held that: - the N/N. 10/08 dated 01.03.2008 came into effect from 01.04.2008, in that circumstances, benefit of Section 80 of the FA, 1994 is available to the appellant as whatever the service tax has been paid, therefore, the appellant is entitled for cenvat credit - penalty u/s 76 of the FA, 1994 is not imposable on the appellant. Appeal disposed off - decided partly in favor of appellants.
-
2017 (4) TMI 387
Maintainability of appeal - time limitation - condonation of appeal - issuance of Corrigendum - Held that: - the order-in-original was passed on 31-10-2012 and the appeal was filed on 27-2-2013. It would be seen that after the order was passed on 31-10-2012, there was some mistake in the order was noticed. Corrigendum was issued on 31-12-2012 for correcting the amount of penalty. Naturally the appeal period will have to be computed from the corrected date of the order as that is the order that would be executable - if the Corrigendum is considered, then naturally the appeal would be within limitation - appeal maintainable and is to be considered on merits.
-
2017 (4) TMI 386
Adjustment of excess amount of Service Tax paid in earlier months in the succeeding months - whether the adjustment made by the appellant on the excess payments made by them under the provisions of Rule 6 of the Service Tax Rules for payments of service tax, a liability that arose subsequently? - Held that: - the adjustment of the excess credit paid during the previous period is allowed as was also allowed in the appellant's own case during the previous period - appeal rejected - decided against Revenue.
-
2017 (4) TMI 385
Refund claim - N/N. 41/2007-S.T., dated 6-10-2007 - rejection for the reason that the claim was time-barred - Revenue took the view that the claim filed on 27-10-2008 has been filed after the time limit of 60 days - Held that: - the clarification with N/N. 17/2009-S.T. issued by the Board is in the nature of a benefit extended to the assessees. It is to be viewed as relaxation of the conditions prescribed under N/N. 17/2009-S.T., even though a one time measure - the exports have taken place prior to the issue of the N/N. 17/2009. It is also seen that the refund claim was filed citing the earlier N/N. 41/2007-S.T. Given the benefit of relaxation in the Board Circular, it emerges that refund claim filed within a period of one year from the date of export should be allowed the benefit of refund of service tax paid in export. Since the refund has been claimed for the exports done between October, 2007 and June, 2008, and the refund has been claimed on 27-10-2008, time-bar will arise for exports which have taken place during the period 1-10-2007 to 26-10-2007. This aspect will need to be re-considered by the original authority - appeal allowed by way of refund.
-
Central Excise
-
2017 (4) TMI 384
SSI exemption - Valuation - N/N. 9/2002-CE or 9/2003-CE - The contention of the Revenue is that value of goods cleared to M/s Director Transport, UT, Chandigarh and M/s Chief General Manager, DTC, New Delhi, are to be included for determining aggregate value of ₹ 1 Crore and duty to be discharged @ 16% after crossing the value of clearance of ₹ 1 crore - Held that: - the clearance of bearing a brand name and trade name for other person is not applicable for grant of exemption Notification in terms of para 4. Explanation defines the brand and trade name which says that the brand name and trade name or a mark, such as symbol, monogram, label, signature or invented word or writing which is used in relation to such specified goods for the purpose of indicating, or so as to indicate a connection in the course of trade between such specified goods and some perod using such name or mark - the appellant has put mark of M/s Director Transport, UT, Chandigarh and M/s Chief General Manager, DTC, New Delhi i.e. CTU/DTC, therefore, its brand name of another person which is not includable in the clearance under Notification No. 9/2002 for computing total clearance. It is not intention of the notification that the said branded goods are be used in the course of trade and the same is clear from the language of the notification itself. In that circumstances, on merits, we hold that the clearance made to M/s Director Transport, UT, Chandigarh and M/s Chief General Manager, DTC, New Delhi are not includable in the value of the clearance made by the appellant in terms of N/N. 9/2002 or 9/2003. Extended period of limitation - Held that: - the appellant were regularly filed their returns showing the clearance made to DTC or CTU and paying duty on higher rate on the said goods was in the knowledge of the department. As the activity of clearance made by the appellant were in the knowledge of the Revenue, the extended period of limitation is not invokable. Appeal allowed - decided in favor of appellant.
-
2017 (4) TMI 383
Valuation - pesticides and insecticides - clearnce of products to their depots situated at various parts of the country on stock transfer basis - demand of ₹ 15,10,815.00 has arisen on account of application of Rule 8 of Central Excise Valuation Rules, 2000, which mandates that duty of Central Excise is to be charged at 115% on cost of production, where goods are cleared for captive consumption - Held that: - Rule 8 of Valuation Rules is applicable only when entire production is captively consumed by the manufacturer. In the present case, the assessee is also selling the goods to independent buyers at similar or lower prices. Therefore, the application of Rule 8 of Central Excisable Valuation Rules, 2000 is not correct. In this regard, the assessee has given copies of some sale invoices as a proof that they sold the goods to independent buyers also - the duty demand of ₹ 15,10,815.00 along with interest and equivalent penalty is not sustainable and the same is hereby dropped - demand set aside. The demand of ₹ 2,12,180/-, where department says that assessee paid the duty on invoice price which was less than the revised MRP - Held that: - If MRP has been revised and the same was correctly reflected in the invoice, the said demand cannot be sustained. This fact is required to be verified by the original adjudicating authority. Therefore, the matter is remanded to the original adjudicating authority - matter on remand. Demand of ₹ 13,20,636/-, where department’s charge is that goods were sold from the depots at higher price(s) and duty is leviable on such differential higher price - Held that: - goods have been sold from the depot and not from the factory gate; when it is so, the transaction value at the time of sale from the depot is to be taken as assessable value for charging the duty of Central Excise - When sales have taken place only from the assessee’s depots located at various parts of the country, ‘transaction value’ as per section 4 of Central Excise Act, 1994 is the price at which said goods are sold from the depots and duty accordingly is to be charged on the said price. Consequently there is no scope to interfere with the impugned order in this regard - demand upheld. Appeal disposed off - decided partly in favor and partly against assessee - part matter on remand.
-
2017 (4) TMI 382
SSI exemption - clubbing of clearances - case of Revenue is that the goods were cleared from appellant Paud, Pune unit on behalf of M/s. Industrial Product (Thane). Therefore, there is no doubt that the goods were manufactured by the appellant only, therefore, the duty of such goods was correctly demanded - Held that: - the goods manufactured by M/s. Industrial Product (Thane) are not manufactured by the appellant. The specification and nature of goods in both factories are different - the goods alleged to have been cleared from appellant'Fs factory on behalf of M/s. Industrial Product (Thane) manufactured by M/s. Industrial Product (Thane) only therefore, the value of the said clearances cannot be clubbed with the aggregate value of the appellant. If this is so, then the entire demand is not sustainable - appeal allowed - decided in favor of appellant.
-
2017 (4) TMI 381
CENVAT credit - inputs written off - appellant claim that as per sub-rule (5B) of Rule 3 of the CCR, 2004, the credit is required to be reversed only in case where the CENVAT Credit in respect of inputs has been taken as written off and shown in the Books of Account, but if the inputs were subsequently used in the manufacture then the credit is admissible - whether the CENVAT Credit in respect of inputs and its value shown in the Books of Account as written off is required to be reversed or otherwise? - Held that: - even for the period prior to insertion of sub-rule (5B) of Rule 3 of the CCR, 2004, this Tribunal in the appellant's own case [2012 (11) TMI 294 - CESTAT, MUMBAI], decided the issue against them and according to the said decision, the appellant is required to reverse the credit on the written off quantity. Extended period of limitation - Held that: - Once, the Tribunal decided the issue against them, it is more reason for the appellant to inform to the Department if they continue the practice of showing the written off quantity in the Balance sheet and not reversing the CENVAT Credit thereon. As per this conduct of the appellant, it is clear case of suppression of facts, therefore, extended period was rightly invoked by the Department - extended period invoked. Penalty u/s 11AC also consequently imposable. Appeal dismissed - decided against assessee.
-
2017 (4) TMI 380
CENVAT credit - credit availed inputs used in manufacture of dutiable as well as exempt goods - The department has made out case that for credit of input has been availed and the same has been used for the manufacture of dutiable as well as exempted goods, respondent is required to pay an amount equal to 8-10% total price of the exempted goods as provided u/r 6(3) of CCR, 2004 - Held that: - the respondent had availed the credit on the inputs at the time of receipt but at the time of clearance of the final product under exemption, the said credit was reversed. In this situation, it is the case as if the cenvat credit was not availed by the respondent - Provision of Rule 6(3)(b) is applicable only in case when the appellant availed the cenvat credit. However in the facts of the present case Rule 6(3)(b) has no application - appeal dismissed - decided against Revenue.
-
2017 (4) TMI 379
Removal of capital goods after use - The contention of the department is that appellant is liable to pay excise duty on such removal - Held that: - Duty on removal of capital goods is payable only where the capital goods is removed as such, that means without putting to use. On removal of capital goods after use there is no provision for payment of duty. There is a provision for payment of duty either under Rule 3(5) or Rule 4(5)(a) on removal of capital goods but there is no machinery provision for recovery of the cenvat credit for the reason that Rule 14 only provides for recovery mechanism in case of wrong availment of credit. In the present case, the availment of credit is not wrong. The revenue is seeking payment of cenvat credit only on the removal of capital goods and there is no machinery provision for recovery of duty on removal of capital goods. At the material time, no provision existed for recovery of cenvat credit in case the assessee fails to pay the excise duty on removal of capital goods. In the present case, the appellant have admittedly paid duty along with interest before issuance of SCN - The appellant have admittedly paid duty and their grievance is only against imposition of penalty and demand of interest - As regards the interest, once the appellant have admittedly paid the duty, payment of interest is inevitable and the same is piggyback of the principal amount of duty. Therefore, the interest was rightly demanded - demand of interest upheld. The duty was not otherwise chargeable on the removal of capital goods, the penalty u/s 11AC is not imposable - penalty imposed u/s 11AC is set aside. Appeal allowed - decided partly in favor of appellant.
-
2017 (4) TMI 378
Doctrine of sub-silentio - re-opening the final assessment, without issuing another SCN - Held that: - Revenue had remedy to file an appeal against the order finalising assessment, which they have not done so, in the absence of an appeal against finalisation of assessment, adjudicating authority as a Deputy Commissioner could not have ordered reopening by directing to issue a show cause notice. There are no provisions in the CEA, 1944 to reopen the assessment by issuing another SCN - appeal rejected - decided against Revenue.
-
2017 (4) TMI 377
Valuation - sale promotion expense - includibility - whether sale promotion to be included in assessable value or not? - Held that: - sale promotion which was included by the lower authorities is not part and parcel of the sale value of the appellant’s goods, the so called sale promotion value was neither shown in the sale price of the appellant’s goods nor recovered as extra consideration - The lower authority carefully erred by including the said sale promotion in the sale price of the appellant, for the reason that this element is related to the distributors sales price to whom the goods were sold on principal to principal basis to the appellant by the distributors - sales promotion which is part and parcel of sale price of distributors cannot be added in the sales price of the appellant, particularly when there is no extra consideration flowing on account of sales promotion to the appellant - appeal allowed - decided in favor of appellant.
-
2017 (4) TMI 376
Charitable Trust - Refund claim - N/N. 32/2005-C.E., dated 17-8-2005 - rejection on account of not producing the required documents - Held that: - refund has been rejected merely on technical ground - the appellant has produced the certificates signed by the Chartered Engineer and countersigned by the District Collector which is sufficient to prove that the appellant has used the cement and steel in the construction of houses - refund allowed - appeal allowed - decided in favor of appellant.
-
2017 (4) TMI 375
Manufacture - process of lamination/printing/slitting of jumbo roles into smaller rolls - case of respondent is that that no distinct, identifiable commodity emerges out of the process undertaken by the respondent, and thus, the activity undertaken is outside the scope and purview of the definition of manufacture - Held that: - the ld. Commissioner (Appeals) vide Para 11 in the impugned order has summarized various judicial pronouncements to hold that the process undertaken by the respondent does not amount to manufacture in terms of Section 2(f) of the CEA, 1944 - appeal dismissed - decided against Revenue.
-
2017 (4) TMI 374
Clandestine removal - the entire case of the Revenue is based upon the recovery of certain loose sheets as also private register - Held that: - Admittedly, the entire case of the Revenue is based upon recovery of some so called incriminating documents without any corroboration from independent sources - the clandestine charges are required to be established beyond doubt and should be on the basis of evidence and not merely assumptive - appeal dismissed - decided against appellant.
-
2017 (4) TMI 373
SSI exemption - inter-related units - clubbing of clearances - whether the eight units are inter-related and whether the clearance needs to be clubbed for arriving at benefit of exemption under N/N. 175/86-C.E., dated 1-3-1986? - Held that: - there is no common control or financial flowback, or movement of finished goods between units, each unit is having independent manufacturing unit registered with the Excise Authority, accordingly the findings of adjudicating authority is correct - there is nothing on record to show that manufacturing activity was distributed amongst of the manufacturing units to create a facade for evasion of duty - appeal dismissed - decided against Revenue.
-
CST, VAT & Sales Tax
-
2017 (4) TMI 365
Vires of Rule 20 of the Punjab Value Added Tax Rules, 2005 - rule prescribes the time limit of 90 days for claiming back the Input Tax Credit (ITC) reversed for the goods which have been sent on job work - The Tribunal noted that although the bullion was not received within 90 days of it having been sent to the job workers, it was received in the subsequent year. It was also contended on behalf of the petitioner that penalty in any event ought not to be charged inter-alia as the petitioner had no intention to evade or avoid the tax and had also disclosed all the facts Held that: - Section 13(1) deals with a taxable person’s entitlement to ITC. It provides that a taxable person would be entitled to ITC subject to such conditions as may be prescribed. The legislature is, therefore, entitled to prescribe the conditions subject to which the taxable person shall be entitled to ITC. When a party fulfills the conditions, as may be prescribed, his entitlement to ITC is crystallized and vested in him. The reason for prescribing a time limit albeit directory as we will shortly indicate is evident. It is to ensure that the goods returned by the job workers after processing are the same as the goods that were sent by the taxable person for further processing on job work basis. The importance of the identity of the goods is obvious for the ITC was claimed in respect of those goods. If the goods returned by the job workers after processing are different from and less in value, than the goods sent for processing on job work basis, the taxable person would in effect be availing the ITC of a higher value than it was entitled to. Prescribing a time limit only makes it easier for the Department to ascertain whether the goods returned by the job workers after processing are the same as the goods that were sent by the taxable persons to the job workers for processing/further processing. Rule 20 is, therefore, not ultra-vires Section 13(3) or otherwise invalid. The period of 90 days prescribed in Rule 20 is only directory and not mandatory - Once it is held that the period of 90 days is only directory, the authorities must not consider themselves bound by any rigid time-frame or any specific period. There is no warrant for holding that the goods sent must be returned by the job workers during the same assessment year. That is not contemplated by Rule 20. The period of 90 days is not confined to the same assessment year. Indeed it cannot be. If for instance the goods are sent during the last few days of the assessment year or even on the last date of the assessment year, they cannot be expected to be returned by the job workers during the same assessment year. That is not even contemplated by the Rule - there is no reason to restrict the right to claim a reversal of the debit under sub section 3 only if the goods are returned within a few days. They must be returned within a reasonable time. The challenge to Rule 20 insofar as it prescribes the time limit of 90 days is rejected. It is, however, held that the same is directory and not mandatory. The Tribunal, therefore, applied the wrong test in determining whether the goods were returned in a reasonable time or not. It would be necessary, therefore, for the Tribunal to decide the question afresh in accordance with this judgment - appeal allowed by way of remand.
-
2017 (4) TMI 364
Restoration of penalties - Section 67 of the KVAT Act - the assessee has not produced documents as directed by the Tribunal and has failed to prove its entitlement for input tax credit - the penalty has been levied on the assessee on the basis that the purchases and sales have no correlation with the quantity and date. It is also held that input tax is seen illegally claimed and that the accounts produced were the cooked up computer printouts drawn after four years since the dealings occurred. Insofar as the absence of correlation is concerned, the order shows that the invoice number and the date do not correlate with the invoices raised by the assessee in respect of Malabar Cements Ltd. Held that: - In Annexure C common order, the Tribunal has restored the penalty levied by the Assessing Officer. However, the order does not show that the Tribunal has assigned any reasons for upsetting the findings of the first appellate authority in favour of the assessee. In other words, the Tribunal has restored the penalty levied on the assessee in Annexure A order produced in O.T. Rev. No. 158 of 2015 without any application of mind. For that reason, the order passed by the Tribunal allowing T.A. (VAT) No. 1506 of 2013, which is the subject matter of O.T. Rev. No. 158 of 2013 is to be set aside. TA (VAT) No. 1506 of 2013 will stand restored to the file of the Tribunal and the Tribunal shall re-consider the matter with notice to both sides and pass appropriate orders in the matter Petition allowed by way of remand.
-
Indian Laws
-
2017 (4) TMI 363
Strike call - abstain from court's work - Lawyers responsibility in discharging the duties of their profession - according to the petitioners, the call now given for the lawyers to abstain from Court work on 31st March 2017, is nothing but a strike which cannot be undertaken by the lawyers community - Held that:- If one has to understand the implication or consequences of abstaining from work in general terms, the strike would mean abstaining from work apart form other meanings. It is nothing but demonstration of protest against the suggestions or resolution denying in line with the demand. It can also mean temporary stoppage of activities in protest against any act or a condition imposed. The observations in the case of ExCapt. Harish Uppal v. Union of India (2002 (12) TMI 562 - SUPREME COURT OF INDIA ) indicate that the proceedings inside the Court are always expected to be held which commands confidence of the public in the efficacy of the institution of the Courts. As also referred to the duties, obligations, responsibilities and the divine work of the community of the lawyers while discharging their professional duties. One has to remember fundamental rights of the litigant. Advocate is an Officer of the Court and plays an important role in the administration of justice. Lawyer must remember nobility and tradition of the legal profession. One cannot forget the past history of this country where lawyers community played a great role, be it political or social revolution. They contributed a great deal even by sacrificing their lives for the sake of the country during freedom struggle. They understand the problems of the litigants as well as the proceedings in the Court better than any one else in the system of dispensation of justice. The lawyers have a significant role to play, in the mechanism of dispensation of justice. The lawyers in performance of their professional obligations, are pillars of strength and hope for the society. We are confident of the wisdom of the lawyers as professionals. In the light of various judgments of the Apex Court and this Court, we hope that wisdom would prevail on the lawyers, so far as the present call to abstain from work is taken by the respondents. It is needless to say that everyone including the community of lawyers have to abide by the directions of the Apex Court in terms of Article 141 of the Constitution. In that view of the matter, we hope that the lawyers community would appreciate their responsibility in discharging the duties of their profession.
|
9911796707
