Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
April 24, 2017
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
TMI SMS
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
Income Tax
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Prim-facie adjustment u/s 143(1) intimation - Expenditure on advertisement and public issue - Even though it is a debatable issue but as Gujarat High Court had taken a view that it is capital expenditure, and the registered office of the respondent assessee being in the State of Gujarat, the law laid down by the Gujarat High Court was binding. - SC
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Disallowance of Interest payable to Alimenta on the amount awarded - Confirmed liability or contingent liability - the mere fact that the said judgment and decree was stayed by a DB would not relieve NAFED of its obligation to pay interest in terms thereof to Alimenta - Claim of deduction allowed - HC
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Year of taxability of the consideration received for the sale of goodwill - the Tribunal erred in deleting the addition on account of goodwill when the same has, as a fact, been transferred as on 28.2.1999 and full consideration received then and there. The amount representing goodwill is thus liable to be taxed in the present year. - HC
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Amount received after deducting Notice pay - whether liable to be taxed under the head "Salary" u/s. 16? - this is a case of recovery of the salary which is already made to the assessee - the actual salary received by the assessee is only taxable - AT
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TPA - If there is no value addition and if the finished goods which are purchased from AE are resold in the market as it is, then gross profit margin earned on such transaction becomes the determinative factor to analyse the gross compensation after the cost of sales - RPM should be held as MAM. - AT
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Addition u/s 41 - Where the assessee continues to carry on the same business but in the later years, it is not eligible for section 80P due to amendment in the law as has happened in the instant case, it cannot be held that the provisions of section 41(1) are not applicable. - AT
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MAT adjustment - provision for gratuity and leave encashment - Even though the A.O. could not have entertained the said claim but it does not impinge upon the appellate authorities to entertain such a claim if all the facts are there on record- AT
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Penalty levied U/s. 271(1)(c) - false claim of exemption of LTCG u/s 10(38) - mere making of a claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee - AT
Customs
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Classification of import of external/ portable hard disk drives - correctly classified under declared CTH 8471 70 20 as Hard disk drives - benefit of concessional rate of duty (CVD) extended - AT
Corporate Law
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Restoration of name of the petitioner Company - if the petitioner is able to file all the overdue documents as called for by the Registrar of Companies, it is for the Registrar of Companies to consider as to whether the company can be revived. - HC
Service Tax
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Validity of SCN - Service on partners instead of firm - the renting services provided by the partnership firm being the owner of the property - the show cause notice/demand raised against one partner/Managing Partner is non est in law - AT
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CENVAT credit - denial on the ground that service tax was paid with much delay after being pointed out in audit - Rule 9(1)(bb) bars the availment of credit when the service tax is paid pursuant to the notice issued alleging fraud, suppression of facts and wilful misstatement - credit allowed - AT
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Short payment of service tax - as and when irregularities/objections were pointed out by the audit party, the respondents have immediately complied with the objections and paid the service tax pointed out in the audit report - the SCN issued alleging suppression of facts with an intention to evade payment of service tax is definitely unsustainable - AT
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Adjustment of the service tax already paid under the wrong head - Commissioner directed to make the adjustment of the service tax which has already been paid to the Government exchequer in the proper head - demand set aside - AT
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Even though the export of software is not a taxable service but still the assessee cannot be denied Cenvat credit and that limitation u/s 11 B does not apply for refund of accumulated Cenvat credit - AT
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CENVAT credit - The non registration of the Head office as ISD and the distribution of the credit on documents other than bills/invoices can be considered as procedural infractions - credit allowed - AT
Central Excise
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Liability of interest - delayed payment of duty - When the appellants are eligible for benefit of N/N. 67/95 they cannot be compelled to pay interest alleging delay in payment of duty on molasses cleared and used by them - AT
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Valuation - related party transaction - The transaction of ₹ 5 lakhs as loan on payment of interest cannot be the reason for holding partnership and private limited as related person - AT
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Since tractors are also motor vehicles and the services relating to motor vehicles having been expressly excluded, the credit of service tax paid on hiring of motor vehicles/tractors is not eligible to the appellant - AT
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Refund claim - amount paid under protest using cenvat credit - Section 11B of the CEA does not make any distinction between duty paid in cash and that by utilization of credit - refund allowed - AT
VAT
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Requirement of pre-deposit - when there is a demand for tax in the order of assessment, the assessee will not be permitted not to deposit the requisite 15% on the ground that, it had claimed refund and the order of assessment is one of demand for tax. - HC
Case Laws:
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Income Tax
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2017 (4) TMI 975
Prim-facie adjustment u/s 143(1) intimation - Expenditure on advertisement and public issue - whether public issue expenses were covered by Section 35D or Section 37? - High Court dismissed the appeal on the ground that a debatable issue cannot be disallowed while processing return of income under Section 143(1)(a) of the Act - Held that:- Even though it is a debatable issue but as Gujarat High Court in the case of Ahmedabad Mfg. & Calico (P) Ltd. (1986 (2) TMI 25 - GUJARAT High Court) had taken a view that it is capital expenditure which was subsequently followed by Alembic Glass Industries Ltd. V. CIT (1992 (9) TMI 49 - GUJARAT High Court) and the registered office of the respondent assessee being in the State of Gujarat, the law laid down by the Gujarat High Court was binding. In view of all the submissions, in our considered view the order passed by the CIT (Appeals), the Income Tax Appellate Tribunal and also the order of the Gujarat High Court impugned herein cannot sustain and are set aside as they have wrongly held that the issue was debatable and could not be considered in the proceedings under section 143 (1) of the Act. With the aforesaid observations, the Appeal succeeds and the same is allowed.
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2017 (4) TMI 974
Disallowance of Interest payable to Alimenta on the amount awarded - Confirmed liability or contingent liability - AO noticed that the liability was not even acknowledged in the books of accounts - as a result of the stay order granted by the DB of this Court, the liability of NAFED to pay interest @ 18% to Alimenta remained suspended from the date of such stay - Held that:- In the present case, with the Award having been made rule of the Court by a learned Single Judge of this Court, the mere fact that the said judgment and decree was stayed by a DB would not relieve NAFED of its obligation to pay interest in terms thereof to Alimenta. Such liability commenced in the previous year in which the said judgment and decree was passed by the learned Single Judge. To borrow the phraseology of the Supreme Court in Shree Chamundi Mopeds Ltd. v. Church of South India Trust Association [ 1992 (4) TMI 183 - SUPREME COURT] held a distinction has to be made between quashing of an order and stay of operation of an order. Quashing of an order results in the restoration of the position as it stood on the date of the passing of the order which has been quashed. The stay of operation of an order does not, however, lead to such a result. It only means that the order which has been stayed would not be operative from the date of the passing of the stay order and it does not mean that the said order has been wiped out from existence This Court is unable to sustain the impugned order of the Special Bench of the ITAT. Accordingly, the question framed is answered in the negative i.e., in favour of the Assessee NAFED and against the Revenue.
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2017 (4) TMI 973
Penalty us 271(1))(c) - Commission of offence under Sections 276 (CC) read with Section 278 (B) - Held that:- As the accused persons have not willfully delayed the filing of the return and the deposit of tax and also as the accused were not given any notice before giving sanction, this Court finds that prosecution has failed to prove the guilt of the accused persons beyond the shadow of reasonable doubt. It has been held in K. Prakashan vs. P.K. Surenderan (2007 (10) TMI 551 - SUPREME COURT) that when two views are possible, appellate Court should not reverse the judgment of acquittal merely because the other view was possible. When judgment of trial Court was neither perverse, nor suffered from any legal infirmity or non consideration/misappreciation of evidence on record, reversal thereof by High Court was not justified. The Hon’ble Supreme Court in T. Subramanian vs. State of Tamil Nadu (2006 (1) TMI 550 - SUPREME COURT) has held that where two views are reasonably possible from the very same evidence, prosecution cannot be said to have proved its case beyond reasonable doubt. In view of the above discussion, the prosecution has failed to prove the guilt of the accused conclusively and beyond the scope of reasonable doubt. The findings of the learned Court below are not required to be interfered with. Thus,the present appeal, being devoid of merits, deserves dismissal and is accordingly dismissed.
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2017 (4) TMI 972
Levying of penalty under Section 13 of the Interest-Tax Act, 1974 - interest on securities and interest on head office investment account - whether the assessee has concealed the particulars of interest nor furnished inaccurate particulars of interest ? - Held that:- There was no occasion for the respondent Bank to show interest on securities and interest on head office investment account, because same was made chargeable pursuant to Board’s instructions No. 1923 dated 14.3.1995 and that too for the period October, 1991 to 31.3.1992 and as such there is no concealment, if any, on the part of assessee. Learned counsel representing the appellant was unable to dispute that interest on securities and interest on head office investment account was made chargeable pursuant to Board’s instructions No. 1923 dated 14.3.1995 and as such, this Court sees no occasion for assessee Bank to declare same in its profit and loss account, wherein it had declared interest of ₹ 39.98 Crores, on approved securities for the period 1.10.1991 to 31.3.1992. Otherwise also, penalty order dated 28.5.2010 passed under Section 13 of the Interest-Tax Act, 1974, nowhere suggests that appellant was able to prove on record that assessee concealed particulars of interest or furnished inaccurate particulars of interest, rather, careful examination of material available on record clearly suggests that assessee had furnished complete particulars of its income in the profit and loss account and as such, there is no illegality or infirmity in the order passed by learned Tribunal below, whereby it has held that there is no merit in holding assessee liable to pay penalty under Section 13 of the Interest-Tax Act, 1974. Thus, this Court sees no illegality or infirmity in the order passed by learned Tribunal below, whereby it has deleted penalty on the ground that interest became chargeable to tax only after Board’s instructions No. 1923 dated 14.3.1995, because, admittedly, interest on securities and interest on head office investment account was made chargeable pursuant to Board’s instructions, which could certainly be not made applicable to the assessment made for the period October, 1991 to 31.3.1992.- Decide against the appellant/ revenue.
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2017 (4) TMI 971
Reopening of assessment - not deducting T.D.S. on the payment of Tanker Hire Charges to the resident of France - Held that:- From the objections it appears that payment of Tanker Hire Charges was made to the resident of U.K. and Singapore only. The learned counsel appearing on behalf of the revenue is not in a position to point out any tangible material available with the A.O. in support of his belief that any payment of Tanker Hire Charges was made to the resident of France, on which T.D.S. was required to be deducted. Under the circumstances, there is not tangible material available with the A.O. to form an opinion that the income chargeable to tax has escaped assessment within the meaning of section 147 of the Act.- Decided in favour of assessee. Interest paid to the banks situated outside India - Held that:- The reason is factually not correct. As per the specific case on behalf of the assessee so stated even in the objections, no amount of interest was paid to any of the banks situated outside India. Under the circumstances, assumption of jurisdiction to reopen the assessment on the aforesaid ground is on incorrect factual premise. Under the circumstances also the impugned reassessment proceedings deserve to be quashed and set aside. - Decided in favour of assessee.
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2017 (4) TMI 970
Entitlement to deduction of Bad Debts written off in the books - Held that:- The claim of bad debts was rejected holding that the assessee had not complied with the provisions of section 36(2) of the Act. To this extent, the order of the tribunal is misconceived for the reason that the embargo placed in section 36(2) would not apply in the case of a non banking financial company which status, the appellant admittedly enjoys. All that remains is to examine if the debt has been written off in accordance with the mandate of section 36(1)(vii) of the Act. We thus remand the matter to the file of the assessing officer for the limited purpose of examining whether the amounts have been written-off in accordance with the methodology set out by the Supreme Court in Southern Technologies vs. The Joint Commissioner of Income Tax, Coimbatore (2010 (1) TMI 5 - SUPREME COURT OF INDIA) and Vijaya Bank vs. Commissioner of Income Tax (2010 (4) TMI 46 - SUPREME COURT ). Substantial question of Law No.1 is decided in favour of the assessee by way of remand. Claim of deduction of long term capital loss on sale of shares - Held that:- We are of the opinion that the matter has not been considered in the proper perspective and neither of the authorities below have appreciated the materials that were produced or afforded an opportunity to the assessee to produce further details if they were of the opinion that the same were required. This issue is thus remanded back to the file of the assessing officer for consideration anew after affording appropriate opportunity to the assessee to produce materials and substantiate its claim. Substantial Question of Law No.2 is allowed by way of remand. Claim of loss that has been considered by the assessing authority in detail and rejected for want of documentary evidence. The appellant also did not produce any material either before the Commissioner of Income Tax (Appeals) or the tribunal in this regard. In view of the concurrent finding of the authorities to the effect that the claim is wholly unsubstantiated, we do not find any reason to interfere with the conclusion of the tribunal confirming the rejection of the claim. Substantial question of law No.3 stands rejected.
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2017 (4) TMI 969
Reduction of the value of breakages of bottles and crates from the written down value ( WDV ) in the computation of short term capital gains u/s 50 - Held that:- In accordance with the provisions of section 50, where a capital asset forms part of a block of assets and depreciation has been allowed in regard to the same, then, in the computation of capital gain on the transfer of such asset, the cost of acquisition shall be the written down value of the block of assets at the beginning of the previous year, as increased by the actual cost of any asset falling within that block acquired during the previous year. In the present case, the WDV as on 1.4.1998 is ₹ 12,02,56,812/- after reducing the depreciation allowable. In such an event, and in the light of the fact that the breakages have not been claimed in the computation of income, there is no justification for any further reduction from WDV. Question No.1 is answered against the Revenue and in favour of the Assessee. Compensation charges paid - Claim u/s 36(1)(iii) rejected on the ground that there was no borrowal by the assessee per se - alternate claim under section 37 was also rejected on the ground that the expenditure was capital in nature - Held that:- The arrangement with SFL for financing the acquisition and leasing of the equipment is only for the business purposes of the assessee. The provision of compensation charges is in the nature of the interest liability payable to the manufacturer or supplier of the equipment by SFL that the assessee makes good. The sum and substance of the arrangement is that the assessee engages the services of SFL for rendering financial assistance for acquisition of equipment for its business. SFL, while advancing the funds, negotiates the purchases of the equipment and the assessee undertakes to pay charges at the rate of 21% to compensate SFL for the advances made by it to the manufacturers and suppliers of equipment. We are thus of the view that the assessee assumes the role of the borrower in this situation. The compensation charges paid are in the nature of interest, liable to be allowed in terms of section 36(1)(iii) of the Act. With respect to the alternate plea under section 37 of the Act, the equipment has been acquired for the expansion of the business of the assessee. The second unit at Nemam is also engaged in the bottling of beverages under the existing franchaisee with Coco Cola. Thus, while a new asset is acquired, it is for the purpose of the expansion of the existing business of the assessee and not for the development of a new line of business. The charges paid are consequently allowable u/s 37 of the Act being wholly revenue in nature. Substantial Question No.2 is thus answered against the Revenue and in favour of the Assessee. Year of taxability of the consideration received for the sale of goodwill - Held that:- There is nothing whatsoever to indicate that the agreement was tentative or that the transfer was incomplete or subject to other stipulations. The finding of the Tribunal to the effect that the consideration on account of goodwill was not received is contrary to Clause No.2 extracted above wherein the vendors specifically confirm the receipt thereof. The execution of a Bank Guarantee as well as the Letter dated 28.03.2002 by HCC where the payment of ₹ 3 crores is shown as an advance has to be seen in the context of the agreements between the parties and the suspension of the business of the assessee as on 28.02.1999. We are thus of the view that the Tribunal erred in deleting the addition on account of goodwill when the same has, as a fact, been transferred as on 28.2.1999 and full consideration received then and there. The amount representing goodwill is thus liable to be taxed in the present year. The conclusion of the Tribunal stands reversed and that of the Assessing Officer in this regard restored. Consequently, the amount shall stand reduced from the taxable income in respect of assessment year 2002-03.
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2017 (4) TMI 968
FAA direction to AO to take action u/s. 147/148 and to assess the income of the assessee for the AY. 2008-09 and not for the year under consideration - Held that:- FAA had no power to give directions about another AY. especially no appeal was filed before him for that year. Therefore we hold that the order passed by him was invalid. See Lilasons Industries Ltd case [2016 (6) TMI 1193 - ITAT INDORE]and Murlidhar Bhagwan Das [1964 (1) TMI 5 - SUPREME Court] - Decided in favour of assessee
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2017 (4) TMI 967
Addition u/s 14A - Interest payment made by the partnership firm to the partners - Held that:- Interest expenditure incurred by the partnership firm on account of interest paid to the partners cannot be disallowed under provisions of section 14A of the Act. Decided in favour of the assessee It is found that the assessee had made investment in real estate funds and guilt funds. Income arising from such investments could be taxable. Hence same should not have been considered for computing the disallowance u/s. 14A.We find that AO/FAA has not made proper investigation in that matter. Therefore, in the interest of Justice, we are restoring that the issue to the file of the AO for fresh adjudication. He is directed to afford a reasonable opportunity of hearing to the assessee. The assessee-firm would produce the documents related to taxable generating funds.
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2017 (4) TMI 966
Addition u/s 69 - cash deposits in the bank unexplained - Held that:- Assessee has claimed that an amount of ₹ 75,16,179/- deposited in cash in bank accounts with ICICI Bank and Bank of India , were partly out of certain loans raised by the assessee which were subsequently repaid while partly the same were out of sale of family jewellery. These contentions of the assessee need verification, enquiries as well examination by the AO on merits as the AO may deem fit to decide the matter on merits in accordance with law. Thus, we are setting aside the matter to the file of the AO for de-novo adjudication of all issues arising in the assessment on merits by the AO. We would like to clarify that this is an open remand as the orders were all passed by authorities below ex-parte, wherein it is averred by the Revenue that none appeared for the assessee and there has been no compliances on part of the assessee before the AO as well learned CIT(A).
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2017 (4) TMI 965
Salary income - Amount received after deducting Notice pay - whether liable to be taxed under the head "Salary" u/s. 16? - Held that:- We find that employers have made deduction from the salary which was paid to the assessee during the year under consideration because of leaving the services as per agreement made by the assessee and the respective employer. We find that this is a case of recovery of the salary which is already made to the assessee for which we have not to refer Section 16 of the Act as mentioned by the ld. CIT(A). It is pertinent to note that the assessee has actually received the salary from his previous employers after deducting the notice period as per the job agreement with them. Therefore, in our considered view, the actual salary received by the assessee is only taxable and therefore, we allow this ground of appeal of the assessee. Undisclosed interest income from bank and interest income - Held that:- As at the time of assessment proceedings the assessee had accepted that the interest income from bank and interest income from Reliance Infocom Ltd employee provident fund was remained undisclosed in the return of income. The assessee has not provided supporting evidence that the particular income is exempt from the income tax, therefore we do not find any reason to interfere in the finding of the Ld.CIT(A). Thus, this ground of appeal of the assessee is dismissed.
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2017 (4) TMI 964
Claim of long term capital gain from sale of shares and treating the same as income from other sources - Held that:- It is not in dispute that these shares were finally dematerialized and shown in the demat account of the assessee however, the actual date of dematerialization entry in the demat account is not proved by the assessee. The request for dematerialization dated 08.12.2005 itself is not a conclusive proof of converting the shares into the demat account and further the details filed by the assessee regarding the demat account also do not reflect the entry of shares in the demat account. Only the sale transaction as on 27.02.2007 has been reflected in the demat account. Therefore the transaction of sale is no doubt proved by the assessee. But, the date of purchase is still not clear. Thus the only question which remains to be ascertained is the date of dematerialization of these shares and therefore the market price of the shares on the date of dematerialization would be considered as purchase consideration of the shares and consequently the sale on 27.02.2007 may result short term capital gain or long term capital gain as case may be depending upon the date of dematerialization of the shares. Further the quantum of capital gain is also depending on the purchase price which is the prevailing price on the date of dematerialization. Accordingly, this issue of computation of capital gain whether it is short term or long term as well as the purchase price on the date of dematerialization is remanded to the record of the AO for proper verification. The AO is specifically directed to find out the actual date of dematerialization of shares and the prevailing market price of the shares on the date of dematerialization to be considered as purchase consideration and then compute the capital gain. Since the facts are identical in all the cases therefore the issue in all three cases is set aside to the record of the AO. - Appeals of the assessee allowed for statistical purposes.
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2017 (4) TMI 963
Unexplained investment - Held that:- We wish to observe here that the CBDT’s circular dated 10.03.2003 already advises the search authorities to collect evidence pointing out any undisclosed income rather than recording admissions of the searched assessees. Hon’ble jurisdictional high court’s judgment in Kailashben Manoharlal Choksi vs. CIT (2008 (9) TMI 525 - GUJARAT HIGH COURT) also adopts the same very view. We therefore do not find any reason to interfere the CIT(A)’s conclusion hereinabove deleting the impugned addition of unexplained investment in all three assessment years in question Section 40(a)(ia) disallowances - failure in deducting TDS upon various C&F payments - Held that:- Both the learned representatives very much agree that this issue stands on identical footing as in former assessee’s case wherein we have directed the Assessing Officer not to make the impugned disallowance if it is found that the payees concerned have already been assessed to tax qua the payments in question as per 40(a)(ia)(2nd proviso). We adopt the very course of action herein as well in absence of any distinction on facts being pointed out in the course of hearing. This identical substantive ground is accepted for statistical purposes.
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2017 (4) TMI 962
Transfer pricing adjustment - whether RPM should be considered as most appropriate method or not? - Held that:- It is quite ostensible that in case of a distributor, wherein the goods are purchased from AE and resold to other independent entities without any value addition, then resale price method should be reckoned as MAM. One of the main reason given by the TPO as well as the DRP is that the assessee is a full-fledged/full risk distributor and performing host of functions, therefore, RPM should not be taken us the MAM, because all these functions required huge cost which may not represent correct gross profit margin. We are unable to appreciate such proposition, because in a comparable uncontrolled transactions scenario, a normal distributor will undertake all kind of functions which are related to sales of the product. The functions like market research, sales and marketing, ware-housing, inventory control, quality control etc. and also risk like market risk, inventory risk, credit risk etc all are undertaken by any distributor for sale of products. No comparable instances have been brought either by the TPO or by the Ld. DRP that the other distributors are not performing such functions. What is important is to see is, whether there is any value addition or not on the goods purchased for resale? If there is no value addition and if the finished goods which are purchased from AE are resold in the market as it is, then gross profit margin earned on such transaction becomes the determinative factor to analyse the gross compensation after the cost of sales. Thus, we hold that under the facts of the present case, RPM should be held as MAM. Huge variation in the gross profit margin of the two products distributed by the assessee and, therefore, under the RPM same cannot be clubbed together, because it will not yield proper arm’s length result - Held that:- As already clarified by the assessee before the authorities below as well as before us that, assessee has separately worked out the gross profit margin for both the items distributed and even then the assessee’s gross profit margin is higher than the comparables. However, in order to examine whether the gross profit margin for both the products are at arm’s length margin or not vis-a-vis the comparables, we are of the opinion that for the limited purpose of benchmarking the gross margins of the comparables selected by the assessee for both the products, i.e., automotive components and medical equipment should be separately benchmarked; and if on comparison it is found that the gross profit margin of these comparables chosen by the assessee as well as accepted by the Department are within the arm’s length range, then no adjustment should be made. With this limited direction the matter is remitted back to the TPO/AO only to verify the gross margins of the comparable companies.
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2017 (4) TMI 961
Exemption u/s 80P(2) eligibility - Addition u/s 41 - transfer to Reserve Fund of the excess provisions made for establishment and other expenses in earlier years when the business income of assessee bank was totally exempt u/s 80P of I.T. Act, 1961 amounts to cessation of liabilities - Held that:- Unless and until there is one to one correlation between the expenses disallowed earlier and benefit obtained now by way of reversal of such provision for expenses, it cannot be held that the provisions of section 41(1) are not applicable. Therefore, the above said contention of the ld AR in respect of deemed disallowance of the provisions of expenses by way of a note in the computation of income and hence, not applicability of section 41(1) cannot be accepted. Whether allowance/deduction in section 41(1) means that the same are made while computed taxable income but when whole income of assessee bank is exempt then they cannot be inferred any allowance/deduction having made while computing exempt income? - Held that:- We have given a careful consideration to the said contention raised by the ld. AR but we are unable to accept the same. Section 41(1) talks about allowances/deductions which has been made in the assessment for any year in respect of loss, expenditure or trading liability incurred by the assessee. The said allowance/deduction u/s 41(1) has not been made subject to deduction under Chapter-VIA of the Act as claimed ld. AR. If the contention raised by the ld. AR is accepted, then it leads to the situation where no allowance or deduction will have be claimed by the assessee and further, in such circumstances, provisions of section 41(1) cannot be invoked where an assessee is eligible for deduction under Chapter-VI-A of the Act. In our view, the said contention of the ld AR will make section 41(1) infructous in such cases. The income that is eligible for deduction under section 80P has to be computed in accordance with the provisions of Act and which includes section 41(1) of the Act. Therefore, firstly the income has to be computed taking into consideration the provisions of section 41(1) of the Act and thereafter, the deduction under Section 80P has to be determined. It may so happen that the whole of the income so computed in accordance with the provisions of the Act is held eligible for deduction under section 80P of the Act however, the same cannot be a basis to hold that provisions of section 41(1) are not applicable. There could also be situations where the business which is eligible for section 80P is no more in existence and the assessee has obtained some benefit, provision of section 41(1) continues to apply. Where the assessee continues to carry on the same business but in the later years, it is not eligible for section 80P due to amendment in the law as has happened in the instant case, it cannot be held that the provisions of section 41(1) are not applicable. The provisions of the Act, therefore, have to be read harmoniously and in such a manner that none of the provisions are rendered infructuous. No infirmity in the order of the AO who has rightly followed the directions of the Coordinate Bench and the order of the ld. CIT(A) which is hereby confirmed. - Decided against assessee .
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2017 (4) TMI 960
Transfer pricing adjustment - selection of comparable - Held that:- Assessee is rendering software development research and other related services to its parent company, thus companies functionally different from the assessee need to de-selected from the final list of comparable. MAT adjustment - provision for gratuity and leave encashment - Held that:- The assessee has filed a revised computation of book profit as per the provision of Sec.115JB during the course of assessment proceedings, claiming that provision for gratuity and leave encashment forming part of the audited financial statements, was ascertained liabilities as it was recognised on the basis of actuarial valuation and is not in the nature of unascertained liabilities as referred in Explanation to Sec 115 JB of the Act. The AO has declined to delete the said adjustment and did not accept the assessee’s revised computation on the ground that the assessee has not filed the revised return of income. Even though the A.O. could not have entertained the said claim but it does not impinge upon the appellate authorities to entertain such a claim if all the facts are there on record. This has been so clarified by the Hon’ble Supreme Court itself in the case of Goetz India Ltd. (2006 (3) TMI 75 - SUPREME Court). Thus, we remit this matter back to the file of the AO to consider the assessee’s claim and if the claim is found admissible under the provisions of the law, then he shall allow the same after giving assessee opportunity to explain its case.
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2017 (4) TMI 959
Penalty levied U/s. 271(1)(c) - false claim of exemption of LTCG under Section 10(38)- Held that:- Now when the assessee had made a complete disclosure of the purchase and sale of shares of M/s Talent Infoway Limited in her return of income, the genuineness and veracity of which set of transactions had been accepted by the CIT(A) and all adverse inferences arrived in the said context by the A.O. had been set aside and put to rest, therefore merely for the reason that the LTCG emerging on the sale of the aforesaid shares had been claimed by the assessee as exempt u/s 10(38), the same in itself would not tantamount to concealment or furnishing of inaccurate particulars of income by the assessee. We thus in the backdrop of the facts involved in the present case hold a strong conviction that an incorrect claim in law by the assessee, wherein the latter after disclosing the complete details of transactions in respect of purchase/sale of shares of M/s Talent Infoway Limited (supra), had therein claimed the LTCG relatable to the said scrips as exempt under Section 10(38), cannot in itself lead to levy of penalty under Section 271(1)(c). That our aforesaid view is fortified by the judgment of the Hon’ble Supreme Court in the case of CIT Vs. Reliance Petroproducts (Ltd.) (2010 (3) TMI 80 - SUPREME COURT) held that mere making of a claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. - Decided in favour of assessee
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2017 (4) TMI 958
Disallowance u/s 14A - Held that:- Ground should be restored to the file of AO, as he has not examined the disallowance u/s 14A of the Income Tax Act, 1961 (Act) with respect to share of profit received by the assessee from partnership firms which are also not includible in the total income liable to tax of the assessee. The ld. DR has rightly relied on the judgement of ITAT Ahmedabad Bench in the case of Vishnu Anant Mahajan vs ACIT (2012 (6) TMI 297 - ITAT, Ahmedabad) Deemed dividend addition u/s 2(22)(e) - assessee pledged his properties to the bank by way of equitable mortgage and also stood as a guarantor for the credit facilities taken by the company - Held that:- The proposition laid down in Pradip Kumar Malhotra Versus Commissioner of Income-tax, West Bengal-V [2011 (8) TMI 16 - CALCUTTA HIGH COURT] that transactions, whether the assessee has permitted his property to be mortgaged to the bank, for the company to take certain benefit by way of loan and when certain facilities granted by such company in lieu of such mortgage and in lieu of the same, the company grants some interest free advance to the assessee, such transaction is not a gratuitous transaction. This principle is fulfilled in the case on hand. Thus respectfully following the same we allow this ground of the assessee as the amount advanced by the company to the assessee is not a gratuitous transaction. - Decided in favour of assessee. Disallowance of interest paid - Held that:- The claim of the assessee has to be examined with the help of a cash flow statement. The assessee should demonstrate whether interest bearing funds have gone into taxable income earning activities. It is for the assessee to demonstrate that interest fee funds have been utilised for personal purposes. The issue has to be examined holistically. This has not been done. Hence we set aside these grounds to the file of AO for fresh adjudication - Decided in favour of assessee for Statistical purpose.
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2017 (4) TMI 957
Disallowance of commission - Held that:- Disallowance of commission cannot be sustained. As already seen, the payment of commission and the transactions for which Savita Industrial Agencies acted as an intermediary have been given from pages 6 to 20 of the assessee’s paper book. This contains the entire details of the transactions for which the recipient received commission and the contract for which he has acted as an intermediary, the value of the contract, percentage of the commission, details of TDS etc. In the light of this availability of documentary evidence which contains all details, it is futile to contend that the assessee has failed to prove the nature of services rendered. As rightly contended by the ld. Counsel for the assessee, if the AO was serious in verifying the nature of services rendered by the recipients nothing prevented him from issuing summons u/s 131 of the Act to enforce the attendance of Savita Industrial Agencies. The position of the other parties Shri Shyam Marketing service and Yashwant Mourya are also identical. Also find that expenditure on account of commission to the aforesaid three parties has been claimed in A.Y.2008-09 and allowed by the AO. This fact also goes to show that the claim of the assessee is genuine and calls for no disallowance. - Decided in favour of assessee Disallowance of telephone expenses, conveyance expenses and travelling expenses at 20% - Held that:- As we have already seen the Assessee was handicapped by the fact that several of documents to support his claim were destroyed in a fire at his business premises. In my view such disallowance on an adhoc basis without any satisfactory material cannot be sustained. Therefore direct that the aforesaid disallowances should also be deleted. Ground raised by the assessee is allowed.
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2017 (4) TMI 956
Claim of bad debts - D.R submitted that there is no evidence produced by the assessee to the fact that bad debts written off in earlier years were offered for taxation in the computation of income of those years - Held that:- We find force in the argument of ld.D.R When originally assessee passed the entry as above, the assessee cannot claim deduction as it is only of provisions for bad and doubtful debts. When the assessee has actually written off debts by crediting the individual account by reversing the provisions, the assessee can claim bad debts, though it was not routed through P&L A/c in assessment year under consideration as that was already over, in earlier A.Y, when the bad debts written off through provisions of bad and doubtful and offered to taxation in earlier year adding the same to income. Hence, with this observation, we remit the issue to the file of AO to examine whether the assessee has offered for taxation the provisions made in earlier year to taxation by adding the same to the income of assessee in computation of income for the relevant to assessment year. Hence, this ground raised by Revenue is allowed for statistical purposes.
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Customs
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2017 (4) TMI 1002
Classification of import of external/ portable hard disk drives - concessional rate of duty (CVD) - Exemption Notification Nos. 6/2011 CE and 12/2012-CE - classifiable under declared CTH 8471 70 20 as Hard disk drives or under CTH 8471 7030 as Removable or Exchangeable Disc Drives - Extended period of limitation - Held that:- Revenue has only taken a stand of convenience to anyhow deny the benefit of exemption which is clearly available to the appellant importers, by ignoring amongst others even the clarification dated 5.6.2013 issued in this regard by such Department of Central Government, which is concerned with such imported goods. - the imported goods are correctly classified under declared CTH 8471 70 20 as Hard disk drives. The exemption notifications did not make any distinction between internal Hard Disk Drive and external Hard Disk Drive for the purpose of concessional rate of duty. - Imported hard disc drive are eligible for concessional rate of duty as claimed by the Importer Appellants.
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2017 (4) TMI 1001
Demand of duty on relinquished goods after assessment - Scope of Section 23(2) of customs act, 1962 - import of vessels for the purpose of breaking - It is their contention that the Dept is at liberty to dispose of the goods without notice to the appellant in view of Sec 48 of the Customs Act since the appellant relinquished the title on the goods. - Held that:- the matter is remanded to the Adjudicating Authority to analyze and examine the representation of the appellant dt 11.5.2006 informing the relinquishment of title of the goods on which, the duty has been demanded. - The appeal is accordingly allowed by way of remand.
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2017 (4) TMI 980
Jurisdiction to issue SCN - Benefit of N/N. 93/2004-Cus. dt. 10.09.2004 - DEEC licences - violation of Rule 5 (3) of CCR, 2004 - Held that: - Discernably, conflicting views have thus been taken by different High Courts on this issue. - Matter is pending before the Supreme Court - it would be imprudent and improper for us to reach a decision in the present appeal by following any of the High Court decisions discussed supra including that of the jurisdictional High Court of Telangana and Andhra Pradesh. It is so enjoined on us by judicial discipline, decorum & propriety. Hence, this Tribunal should not adjudicate on this issue till the law is settled by the Hon’ble Apex Court in the said writ petition filed in Mangali Impex case. In this scenario, the liberty is granted to the appellant to come again after the final verdict of the Hon’ble Supreme Court in Mangali Impex case within the prescribed time, if advised so. With the aforesaid liberty the appeal is disposed of.
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Corporate Laws
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2017 (4) TMI 979
Restoration of name of the petitioner to the Register under Section 560(6) - Held that:- The only objection raised by the Registrar of Companies is that in case, an order is passed for revival of the company, the same shall be subject to the filing of all overdue documents, statutory filing, namely, Annual Return and Balance Sheet from the date of default by the petitioner company with the respondent. Therefore, if the petitioner is able to file all the overdue documents as called for by the Registrar of Companies, it is for the Registrar of Companies to consider as to whether the company can be revived. Therefore, at this juncture, the question of issuing a positive direction for reviving the company does not arise and this Court can only direct the Registrar of Companies to consider the application or the request made by the petitioner for revival of the company subject to statutory compliances as may be required by the Registrar of the Companies. In the result, this Petition is disposed of giving liberty to the petitioner to file an application before the Registrar of Companies along with a copy of this Order seeking revival of the company and if such application is filed, the Registrar of the Companies shall consider the same in accordance with the provisions of the Companies Act and the rules framed thereunder within a period of four weeks from the date of filing such application complete in all respects.
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Service Tax
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2017 (4) TMI 998
Validity of SCN - Service on partners instead of firm - Held that: - the rent is received by the Partnership Firm, viz; M/s Satyanarayana Paddy Boiled Unit (SPBU). The property is owned by them and property tax is also paid in the name of the unit. The premises was given for lease for sole use as auction platform for tobacco growers to enable them to get better price for their produce. The service provider here is M/s SPBU and not the individual partner. Therefore, the show cause notice/demand raised against one partner/Managing Partner is non est in law - reliance placed in the case of Hindustan Foam Industry Vs. CCE [1989 (9) TMI 274 - CEGAT, NEW DELHI] - appeal allowed - decided in favor of appellant.
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2017 (4) TMI 997
CENVAT credit - input services - case of Department is that the Commissioner (Appeals) has relied upon the judgment passed in the case of M/s Kyocera Wireless (I) Pvt. Ltd Vs Commissioner of S. Tax, Bangalore in [2014 (9) TMI 1036 - CESTAT BANGALORE]. The said order is only an interim order passed by the Tribunal and does not have any precedent value and therefore Commissioner (Appeals) ought not to have relied upon such interim order to allow the credit/refund - Held that: - All the said services have been held to be eligible for credit by various judgments of the Tribunal including the Final Order of this Tribunal. Further, the Commissioner (Appeals) has only remanded the matter for reconsideration by the adjudicating authority. Therefore, I hold this ground put forward by the Department as unacceptable. CENVAT credit - denial on the ground that service tax was paid with much delay after being pointed out in audit - Held that: - the respondent/assessee is not barred from taking credit in terms of Rule 9(1)(bb) for the reason that Rule 9(1)(bb) bars the availment of credit when the service tax is paid pursuant to the notice issued alleging fraud, suppression of facts and wilful misstatement - credit allowed. Validity of remand order - Although the Commissioner (Appeals) remanded the matter to adjudicating authority for reconsideration of the issue of eligibility of credit, there is no specific direction made for the remand - Held that: - The Commissioner (Appeals) has given detailed discussion of the issues, facts as well as the law relating to them and thereafter has arrived at the conclusion that respondents are eligible for credit/refund. He has remanded the matter only for the limited purpose of verifying and granting the refund. Sub-section (4) of Section 85 does not limit the powers of the Commissioner (Appeals) to remand a matter. Appeal dismissed - decided against Revenue.
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2017 (4) TMI 996
Powers of remand of the Commissioner (Appeals) - Section 35A - Held that: - after verifying the contention of the respondents with regard to deposit of Serve tax & Education Cess vide GAR-7/TR-6 Challans dated 07/01/2008, 19/02/2008, 07/03/2008, 26/03/2008, it was felt necessary to give due opportunity to the respondents to substantiate their claim. It is just and proper to uphold the order of remand by the Commissioner (Appeals) - appeal dismissed - decided against Revenue.
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2017 (4) TMI 995
CENVAT credit - input services distribution (ISD) - duty paying documents - the documents on which the credit has been taken are not proper in terms of Rule 9 of CCR, 2004 - time limitation - Held that: - Proviso to Rule 9 states that whenever there is a doubt regarding the documents on which credit has been availed the concerned AC/DC can allow the credit after being satisfied that the credit has been properly accounted - The non registration of the Head office as ISD and the distribution of the credit on documents other than bills/invoices can be considered as procedural infractions - As the appellant succeeds on merits, it is not necessary to enter into the issue of limitation - credit allowed - decided in favor of appellant.
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2017 (4) TMI 994
Short payment of service tax - wrongful availment of abatement under N/N. 12/2003 - non-inclusion of the TDS component in the taxable value of the service - time limitation - Held that: - There were three audits conducted for the periods covered in the SCN. Further, as and when irregularities/objections were pointed out by the audit party, the respondents have immediately complied with the objections and paid the service tax pointed out in the audit report - the SCN issued alleging suppression of facts with an intention to evade payment of service tax is definitely unsustainable - the demand is time barred - appeal dismissed - decided against Revenue.
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2017 (4) TMI 993
Adjustment of the service tax already paid under the wrong head - The appellant has already paid the service tax but, under the wrong head of ECI. But the department has demanded the service tax under the GTA - Held that: - the Circular No. 7/93 dated 23.04.1993 issued by the Board, clearly permitted the transfer of credit balance lying in Personal Ledger Account under one minor head to another minor head - we direct the Jurisdictional Commissioner to make the adjustment of the service tax which has already been paid to the Government exchequer in the proper head - appeal allowed - decided in favor of appellant.
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2017 (4) TMI 992
100% EOU - Refund claim - rejection on the ground that Information Technology Service rendered by the respondent was excluded from the scope of BAS and hence not liable to tax and that the services rendered were not covered within clauses (i) to vii) of the definitions of BAS u/s 65(19) of the FA 1994 - Held that: - even though the export of software is not a taxable service but still the assessee cannot be denied Cenvat credit and that limitation u/s 11 B does not apply for refund of accumulated Cenvat credit - The services referred do not appear to fall within the category of BAS but fall under the category of IT services - it appears that the above aspects were not examined by the lower authority - appeal allowed by way of remand.
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2017 (4) TMI 991
Refund claim - N/N. 41/2007-ST dt 06.10.2007 - denial on the ground of non-fulfilment of certain conditions laid down under Notification - Held that: - in its subsequent order dt.7.10.2010, the Ld. Commissioner (Appeals), after taking into consideration of the documents/evidences being satisfied about the eligibility of refund of Service Tax paid on such services, allowed their Appeal which has been followed by the Adjudicating Authority in its order dtd 08.4.2011 - the matter needs to be remanded to the Original Authority to decide the issues afresh - appeal allowed by way of remand.
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2017 (4) TMI 990
CENVAT credit - capital goods - 100% credit availed in the same financial year - Held that: - the appellant does not have the proof that they have reversed the irregularly availed credit - the unutilised credit of 50% is shown as credit availed by appellant and the period is prior to 1.4.2011. Therefore, the demand of interest is justified. However, as the appellant was eligible to take credit of the balance 50% in the subsequent year, no penalty can be imposed - appeal allowed - decided partly in favor of appellant.
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Central Excise
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2017 (4) TMI 989
Valuation - related party transaction - whether the appellant and partnership firm concern M/s. Randeep Automobiles wherein HUF of Shri. B.G. Gandhi and M.G. Gandhi are the partners are related person and value at which the M/s. Randeep Automobiles sold the goods shall be treated as transaction value of the appellant - Held that: - there is nothing on record that there is any flow back of any extra consideration from M/s. Randeep Automobiles to the respondent company. Respondent company is a private limited company and M/s. Randeep Automobiles is partnership firm therefore both are not related in the eyes of the law. The transaction of ₹ 5 lakhs as loan on payment of interest cannot be the reason for holding partnership and private limited as related person - value of M/s. Randeep Automobiles cannot be adopted as assessable value of the respondent company - appeal dismissed - decided against Revenue.
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2017 (4) TMI 988
100% EOU - Benefit of N/N. 82/92-CE - case of Revenue is that assessee is entitled for exemption only from Basic Customs Duty and not from CVD and SAD, it was also alleged in the show cause notice that the appellant is not entitled for exemption for the reason that proper procedure for the clearance of goods against ARO has not been followed by the appellants - Held that: - it can be seen that the appellants have substantially complied with the procedure prescribed for removal of goods under exemption against the ARO, therefore it cannot be said that the appellants have not followed the procedure. Accordingly, for this reason the exemption cannot be denied - reliance was paced in the case of LIPY LISY PHARMACEUTICALS P. LTD. Versus COMMISSIONER OF C. EX., MUMBAI-VII [2004 (4) TMI 182 - CESTAT, NEW DELHI], where it was held that the provisions of Notification No.30/97 and 82/92 should be read harmoniously and supplies against Advance Release Order issued under Para 7.4 of Export-Import Policy should be treated as eligible for exemption from additional duty of customs also - appeal allowed - decided in favor of assessee.
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2017 (4) TMI 987
CENVAT credit - input services - gardening services - hiring of tractors - Held that: - the permission given to the appellant by the Ministry of Environment for expansion of their production capacity is subject to condition that the appellant unit maintains 33% of the plant area as green belt. Since this is the statutory requirement and without fulfilling the same, the appellant unit would not be allowed to carry out manufacturing activity, the services of manpower supply used for the maintenance of the green belt have nexus with the manufacture of the final product and, hence, would be eligible for CENVAT credit - the gardening services availed by appellant is eligible for credit. Hiring of tractors - Held that: - Since tractors are also motor vehicles and the services relating to motor vehicles having been expressly excluded, the credit of service tax paid on hiring of motor vehicles/tractors is not eligible to the appellant. The Commissioner (Appeals) has rightly disallowed the credit - credit denied. Appeal allowed - decided partly in favor of appellant.
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2017 (4) TMI 986
Entitlement to exemption - N/N. 10/97-CE dated 1.3.1997 and 3/2004 dated 8.1.2004 - clearance of PVC insulated wires and cables, power cables, etc - penalty u/s 11 AC - Held that: - except for recognition of in-house R &D Unit of the consignee, there is nothing on record that the required certificate from the competent officer of the Department of Scientific and Industrial Research, Government of India, has been obtained for such supplies of duty free excisable items. This is an essential condition which has not been fulfilled by the appellant and as such, they are not eligible for exemption under the said notification. Benefit of N/N. 3/04-CE - Held that: - It is apparent that N/N. 3/04-CE applies to all kinds of excisable products in a broad category as listed in the notification. There is no tariff classification nor there is any specific machinery or instrument or appliances identified by name. In such situation, denial of exemption to the appellant is not justifiable. Penalty - Held that: - there is no justification for imposing equal amount of penalty on the appellant. The show cause notice did not allege or invoke extended period of demand and there is no charge regarding specific violation of various provisions of law attracting such equal penalty - penalty set aside. Appeal allowed - decided partly in favor of assessee.
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2017 (4) TMI 985
Refund claim - amount paid under protest - The reason for rejection of such refund in the impugned order is that the appellant would not be eligible for taking the credit on inputs; once, it has been held that the final products are not liable to payment of Excise duty - Held that: - It is settled law that there is no prohibition under CEA, 1944 or the rules made there-under for cash refund of duty paid by utilization of Modvat/Cenvat credit. Section 11B of the CEA does not make any distinction between duty paid in cash and that by utilization of credit - In view of the fact that the appellant is not in a position to utilize the credit, the refund is to be paid in cash - refund allowed - appeal allowed - decided in favor of appellant.
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2017 (4) TMI 984
Valuation - quantification of sales tax abatement - Section 4 (d) of CEA, 1944 - Held that: - only that amount of sales tax will be permissible as detection u/s 4 as is equal to the amount legally permissible under the local sales tax law to be charged/billed from the customer/buyer - It is clear in the present case that the amount claimed as abatement is the amount charged/billed by the appellant from their buyers. The sales tax assessment also records the full sales tax liability and the manner of discharging such liability by the appellant - appeal allowed - decided in favor of assessee.
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2017 (4) TMI 983
CENVAT credit - GTA Service in respect of outward transportation of the goods beyond the place of removal - Held that: - the issue herein have been considered in detail by Hon’ble Gujarat High Court in the case of Commissioner of Central Excise Vs Philips Carbon Black Ltd. [2016 (2) TMI 20 - GUJARAT HIGH COURT], where it was held that outward transport service used by the manufactures for transportation of finished goods from the place of removal upto the premises of the purchaser is covered within the definition of “input service” provided in rule 2(l) of CCR - credit allowed - decided in favor of appellant.
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2017 (4) TMI 982
Valuation - gutkha - Rule 8 - appellant case is that demand cannot be sustained for manufacture of lower RSP gutkah for machines for which duty has been paid at higher rates - Held that: - Rule provides that if the manufacturer commences manufacturing of the goods of a new retail sale price during the month on an existing machine, it shall be deemed to be an addition in the number of operating packing machine for the month. With the retrospective amendment in the FA, 2014, the said proviso is amended to read as that where a manufacturer uses an operating machine to produce pouches of different retail sale price during a month, he shall be liable to pay the duty applicable to the pouches of the highest the retail sale price for the whole month. In the case in hand, it is not disputed that in mid of September 2008, under intimation to the department, the appellant had manufactured gutkha pouches with RSP ₹ 1.00 on the 12 machines which they were using for manufacture of gutkha with RSP ₹ 1.50. It is also not in dispute that they have discharged the duty liability on the production capacity of these 12 machines based on the calculation that they are going to manufacture gutkha with RSP ₹ 1.50. - demand set aside - appeal allowed - decided in favor of assessee.
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2017 (4) TMI 981
Liability of interest - delayed payment of duty on molasses - case of appellant is that as the molasses were common inputs for rectified spirit (exempted) and denatured spirit (dutiable) they reversed the proportionate credit in terms of Rule 6 of CCR, 2004 - Department entertained a view, that molasses is not common input for rectified spirit and denatured spirit for the reason that the appellants are manufacturing only rectified spirit from molasses - denial of exemption N/N. 67/95-CE dated 16.03.1995 - Held that: - molasses is a common input for appellant for manufacture of rectified spirit and denatured spirit. Accordingly, appellants are eligible for the exemption under N/N. 67/1995 dated 16.03.1995 - In order to avail the exemption under N/N. 67/95 the appellant has to comply with the procedure prescribed in terms of Rule 6 of CCR. In doing so, it is not practical for appellant to pay duty on molasses at the time of clearance - When the appellants are eligible for benefit of N/N. 67/95 they cannot be compelled to pay interest alleging delay in payment of duty on molasses cleared and used by them - appeal allowed - decided in favor of appellant.
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CST, VAT & Sales Tax
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2017 (4) TMI 1000
Tax paid versus Tax Dispute - Payment versus Pre-deposit - WB VAT - Scope of the term used and defined - second proviso to Section 84(1) - appellant contended that the appeal is required to be made with a payment of tax and not a deposit or a pre-deposit. - Held that:- An assessee applying for refund and such claim for refund having been reduced, an assessee preferring an appeal against such reduction is not required to deposit 15% of the tax in dispute in terms of the second proviso to Section 84(1) of the Act of 2003. This recording cannot be construed to mean that, when there is a demand for tax in the order of assessment, the assessee will be permitted not to deposit the requisite 15% on the ground that, it had claimed refund and the order of assessment is one of demand for tax. In the present case, if an assessee complies with the requirements under the second proviso of Section 84(1) of the Act of 2003, then the revenue would not be proceeding to realize the balance of the sum due. Therefore, effectively by depositing 15% of the tax in dispute, an assessee will receive an order of stay of recovery proceeding. This cannot be said to be hardship let alone undue hardship. Requirement of a pre-deposit is not a hardship. They, however, contend that, so far as the appeal is concerned, they should be guided by the provisions applicable prior to the amendments introduced to the second proviso on Section 84(1). The petitioners seek to have, by such contention best of both worlds. They seek to take the advantage of the amendments being introduced to the various provisions of the Act of 2003 permitting a more transparent and a beneficial method of assessment so far as an assessment is concerned, and on the other hand, not accept the appeal provision which is founded upon the amendments introduced to the other provisions of the Act of 2003 and the Rules framed thereunder. The right of appeal altered with effect from April1, 2015 is in consonance with the amendments introduced to the assessment procedure. The petitioners have accepted the assessment procedure. They are, therefore, bound to accept the appeal provisions also. The right to prefer the appeal is sought to be made conditional. Conditions imposed have not been found to be unreasonable, arbitrary or violative of any provisions of the Constitution. The provisions for appeal, therefore, cannot be said to have violated the right guaranteed under Article 19(1)(g) of the Constitution of India.
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2017 (4) TMI 999
Retiral benefits from post of Member Trade Tax Tribunal (UPTT) - opposite parties refused to pay the pension - The simple reason given in the impugned order is to the effect that the services are not pensionary - Held that:- the appointment order was issued in the year 1998 and the advertisement was issued in the year 1997. A subsequent Government Order cannot alter the conditions of service unilaterally to the prejudice of the petitioner. Justice cannot be denied to the petitioner only because the earlier members did not approach the Court. The opposite parties are directed to pay the pension and other post retiral dues, admissible according to his salary from the date, he retired from service and continue to make the payment every month as due.
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Indian Laws
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2017 (4) TMI 978
High court jurisdiction under Section 482 Cr. P.C. - quashing of criminal proceedings - proceedings under Section 138 of Negotiable Instruments Act - Held that:- Inherent power given to the High Court under Section 482 Cr.P.C. is with the purpose and object of advancement of justice. In case solemn process of Court is sought to be abused by a person with some oblique motive, the Court has to thwart the attempt at the very threshold. The Court cannot permit a prosecution to go on if the case falls in one of the Categories as illustratively enumerated by this Court in State of Haryana vs. Bhajan Lal [1990 (11) TMI 386 - SUPREME COURT]. Judicial process is a solemn proceeding which cannot be allowed to be converted into an instrument of operation or harassment. When there are material to indicate that a criminal proceeding is manifestly attended with mala fide and proceeding is maliciously instituted with an ulterior motive, the High Court will not hesitate in exercise of its jurisdiction under Section 482 Cr.P.C. to quash the proceeding under Category 7 as enumerated in State of Haryana vs. Bhajan Lal, which is to the following effect: “(7) Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge.” Above Category 7 is clearly attracted in the facts of the present case. Although, the High Court has noted the judgment of the State of Haryana vs. Bhajan Lal, but did not advert to the relevant facts of the present case, materials on which Final Report was submitted by the IO. We, thus, are fully satisfied that the present is a fit case where High Court ought to have exercised its jurisdiction under Section 482 Cr. P.C. and quashed the criminal proceedings. Appeal is allowed, the judgment of the High Court as well as the order of Additional Chief Judicial Magistrate and the order of the Sessions Judge including the entire criminal proceedings are quashed.
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2017 (4) TMI 977
Offence under Section 138 of the Negotiable Instruments Act - Held that:- When the special leave petition came up for hearing, by order dated 12.05.2011 this Court had granted stay on condition that the appellant herein should deposit an amount of ₹ 3,00,000/- (Rupees Three Lacs) before the Trial Court i.e. the Court of Small Causes and ACMM, Bangalore, which has been duly complied with. The matter was lingering on file for quite some time. When the matter came up for hearing today i.e. on 27.03.2017, the son of the appellant, by name Srinivasan, was present in the Court. Respondent No.4/Abdul Kaleem, was present in the Court, who stated that he is representing all the legal representatives of complainant/Mohammed Hyath. We suggested to the parties and to their counsel whether they can talk to each other to arrive at an amicable settlement, for which both the parties as well as Ms. Lata Krishnamurti and Mr. A.T.M. Sampath, learned counsel appearing for the parties readily agreed. After talking to each other the parties have arrived at a settlement for a sum of ₹ 6,00,000/-(Rupees Six Lacs) including the amount of ₹ 3,00,000/- (Rupees Three Lacs) already deposited before the Trial Court. In the result, the impugned judgment of the High Court rendered in Criminal Appeal is set aside and this appeal is allowed. The appellant is acquitted of the charge under Section 138 of the Negotiable Instruments Act. The respondents are permitted to withdraw ₹ 3,00,000/- (Rupees Three Lacs) deposited before the Court of Small Causes and A.C.M.M. Court, Bangalore forthwith, along with the accrued interest, on filing necessary application.
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2017 (4) TMI 976
Charge under Section 138 Negotiable Instruments Act - Held that:- Both the complainant and the accused were known to each other being colleagues. It, however, fell into grave error to observe that the respondent was able to rebut the presumption and the burden was heavily upon the appellant to prove its case beyond reasonable doubt. There was no dispute raised by the appellant regarding the payments of ₹ 3.6 lacs and other payments amounting to ₹ 50,000/-. It was explained by the appellant that ₹ 3.6 lacs paid prior to the execution of the document (Ex.DW-1/P1) were towards another transaction and ₹ 50,000/- were out of the loan amount ₹ 5 lacs. The Trial Court failed to record any finding if there was any payment by the respondent after the issuance of the admitted cheque (Ex.CW-1/1) to the appellant. The respondent did not explain as to under what situation and circumstances the cheque on presentation was dishonoured. For the forgoing reasons, respondent’s acquittal under Section 138 Negotiable Instruments Act is unsustainable and set aside. The appeal is allowed and the respondent is convicted under Section 138 Negotiable Instruments Act. Section 138 provides that a person guilty for the offence be punished with imprisonment with term which may extend to two years or with fine which may extend to twice the amount of cheque or with both. In the instant case as observed above, in civil proceedings, the respondent has made certain payments. Having regard to the facts and circumstances of the case, the respondent is sentenced to undergo SI for one month. The respondent shall surrender before the Trial Court to serve the sentence on 24.04.2017 failing which, coercive process shall be issued against him.
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