TMI Tax Updates - e-Newsletter
April 4, 2018

Case Laws in this Newsletter:

GST Income Tax Service Tax Central Excise CST, VAT & Sales Tax Indian Laws

Articles

1. Procedures and Intricacies of E-Way Bill - How, When and Who to generate

   By: Bimal jain

2. OCC Waste Paper; a great opportunity for new startup Import Export business

   By: Kishan Barai

News

1. Suresh Prabhu Launches Digital Initiative for Ease of Export

2. REPORT OF THE INSOLVENCY LAW COMMITTEE

3. Indian Advance Pricing Agreement regime moves forward with the signing of 16 APAs by CBDT in March, 2018

4. RBI Reference Rate for US $

5. Rendering of Valuation Services without a Certificate of Registration under the Companies (Registered Valuers and Valuation) Rules, 2017 till 30th September, 2018

6. Now 97.05 lakh subscribers base under Atal Pension Yojana

Notifications

Companies Law

1. F. No. 17/32/2017-CL-V - S.O. 1965(E) - dated 2-4-2018 - Co. Law

Amendment in Notification No. S.O. 529(E), dated the 5th February, 2018

Customs

2. 29/2018 - dated 2-4-2018 - Cus (NT)

Pre-notice consultation regulations, 2018

GST - States

3. G.O.Ms.No.141 - dated 29-3-2018 - Andhra Pradesh SGST

Amendment to APGST Rules, 2017 - Rules with respect to e-way bills issued - Effective Date Notified.

4. G.O.Ms.No.138 - dated 27-3-2018 - Andhra Pradesh SGST

Andhra Pradesh Goods and Services Tax (Sixteenth Amendment) Rules, 2018.

5. 12/2018-State Tax - dated 7-3-2018 - Arunachal Pradesh SGST

Rescinds the notification of the Government of Arunachal Pradesh Department of Tax & Excise No. 6/2018 - State Tax, dated the 23rd January, 2018.

6. 11/2018-State Tax - dated 7-3-2018 - Arunachal Pradesh SGST

Arunachal Pradesh Goods and Services Tax (Second Amendment) Rules, 2018.

7. 004/2018-GST - dated 27-3-2018 - Assam SGST

Provisions of the e-way bill rules for intra-state movement of goods.

8. S.O. 160 - dated 27-3-2018 - Bihar SGST

Notified Bihar E-way Bill.

9. GSL/GST/RULE-138(14)/B.11 - dated 28-3-2018 - Gujarat SGST

Exemption from e-way bill for Intra State Movement

10. (GHN-41)/GST-2018/S.148(6)TH-17/2018-State Tax - dated 28-3-2018 - Gujarat SGST

Time Limit for GSTR-1 for Turnover upto 1.5 Crore for furnishing the details of outward supply of goods or services or both.

11. 46/ST-2 - dated 30-3-2018 - Haryana SGST

Exempting generation of E-Way Bill in case of intra-state movement of goods for the time being

12. 45/ST-2 - dated 30-3-2018 - Haryana SGST

Seeking to prescribe the due dates for filing FORM GSTR-3B for the months of April to June, 2018

13. 44/ST-2 - dated 30-3-2018 - Haryana SGST

Amendment in the Notification No. 42/ST-2, dated the 30th June, 2017,

14. 43/ST-2 - dated 30-3-2018 - Haryana SGST

Notification prescribing the date (i.e. 1st April, 2018) from which E-Way Bill Rules under the HGST Act, 2017 shall come into force.

15. 42/ST-2 - dated 30-3-2018 - Haryana SGST

The Haryana Goods and Services Tax (Fifth Amendment) Rules, 2018.

16. 42/2018-GST - dated 31-3-2018 - Jammu & Kashmir SGST

E-Way Bill Notification Regarding Transfer of Goods Within J&K

17. SRO-GST-038 (Rate) - dated 28-3-2018 - Jammu & Kashmir SGST

Amendment in SRO Notification GST – 08, dated – 08/07/2017.

18. SRO 147 - dated 28-3-2018 - Jammu & Kashmir SGST

The Jammu and Kashmir Goods and Services Tax (Third Amendment) Rules 2018.

19. SRO 146 - dated 28-3-2018 - Jammu & Kashmir SGST

Appoints the 1st day of April, 2018, as the date from which the provisions of sub-rule (ii) of rule 2 (other than clause (7), (iii), (iv), (v), (vi) and (vii) of rule 2 of SRO notification No. 144 of 2018 dated 27.03.2018.

20. 41/2018 - dated 28-3-2018 - Jammu & Kashmir SGST

Extension of date for submitting the statement in FORM GST TRAN-2 under rule 117(4)(b)(iii) of the Jammu and Kashmir Goods and Service Tax Rules, 2017.

21. SRO 144 - dated 27-3-2018 - Jammu & Kashmir SGST

The Jammu and Kashmir Goods and Services Tax Rules, 2017.

22. Va Kar/GST/04/2018-S.O. No. 033 - dated 31-3-2018 - Jharkhand SGST

Notifies that the provisions of rules 138 so far as they relate to generation of e-way bill, in respect of movement of the goods stated.

23. S.O. No. 32-15/2018-State Tax - dated 30-3-2018 - Jharkhand SGST

Appoints the 1st day of April, 2018, as the date from which the provisions of sub-rules (ii) [other than clause (7)], (iii), (iv), (v), (vi) and (vii) of rule 2 of notification No. 12/2018 – State Tax, dated the 30.03.2018.

24. S.O. No. 31-14/2018-State Tax - dated 30-3-2018 - Jharkhand SGST

The Jharkhand Goods and Services Tax (Third Amendment) Rules, 2018.

25. S.O. No. 30-10/2018-State Tax (Rate) - dated 30-3-2018 - Jharkhand SGST

Amendment in the Notification No.8/2017 – State Tax (Rate), dated the 29th June, 2017 and Notification No. 38/2017- State Tax (Rate), dated the 20th October, 2017.

26. S.O. No. 29-12/2018 State Tax - dated 30-3-2018 - Jharkhand SGST

The Jharkhand Goods and Services Tax (Second Amendment) Rules, 2018.

27. S.O. No. 28-16/2018-State Tax - dated 30-3-2018 - Jharkhand SGST

Last date for filing of return in FORM GSTR-3B.

28. S.O. No. 26-13/2018-State Tax - dated 21-3-2018 - Jharkhand SGST

Rescinds the notification of the Government of Jharkhand in the Department of Commercial Taxes No. 6/2018 - State Tax, dated 20th February 2018.

29. FA-3-92/2017-1-V-(38) - dated 26-3-2018 - Madhya Pradesh SGST

Amendment in this department's Notification No. FA-3-92-2017-1-V (164), dated 30th December 2017.

30. 15/2018-State Tax - dated 31-3-2018 - Maharashtra SGST

Notifies the date as 1st April 2018 from which E-Way Bill Rules shall come into force

31. 14/2018-State Tax - dated 31-3-2018 - Maharashtra SGST

The MGST Rules (Third) Amendment, 2018

32. 13/2018-State Tax - dated 31-3-2018 - Maharashtra SGST

Rescinding notification No. 06/2018 - ST dated 24.01.2018-Waiver of late fee for GSTR-5A.

33. 12/2018-State Tax - dated 31-3-2018 - Maharashtra SGST

The Maharashtra Goods and Services Tax (Second Amendment) Rules, 2018.

34. 10/2018-State Tax (Rate) - dated 31-3-2018 - Maharashtra SGST

Exemption from payment of tax RCM under section 9(4) of the MGST Act, 2017 till 30.06.2018.

35. 16/2018-State Tax - dated 27-3-2018 - Maharashtra SGST

Prescribes the due dates for filing FORM GSTR-3B for the months of April to June, 2018.

36. 15A/2018-State Tax - dated 27-3-2018 - Maharashtra SGST

No requirement of E-way Bill from 1st April 2018 until further orders for intra-State movement of the goods with Maharashtra.

Indian Laws

37. F. No. P.12011/24/2017-ES Cell-DoR - G.S.R. 314(E) - dated 31-3-2018 - Indian Law

Central Government extends the date of submission of Aadhaar Number, and Permanent Account Number or Form 60 by the clients to the reporting entity till a date to be notified subsequent to pronouncement of final judgement in W.P. (C) 494/2012 etc

Circulars / Instructions / Orders

GST - States

1. 905/ST-II - dated 30-3-2018

Extension of date for submitting the statement in FORM GST TRAN-2 under rule 117(4)(b)(iii) of the Haryana Goods and Service Tax Rules, 2017.

2. 06/2018-GST - dated 27-3-2018

Effective date of introduction of e-Way Bill system on inter-State and intra-State movement of goods.

3. 07/2018-GST - dated 27-3-2018

GST Inward Permit under GST

4. 18/2017-18 - dated 17-3-2018

Instruction regarding exports related refund issues.

GST

5. 39/13/2018 - dated 3-4-2018

Setting up of an IT Grievance Redressal Mechanism to address the grievances of taxpayers due to technical glitches on GST Portal-reg.

Highlights / Catch Notes

GST

• CBIC Establishes IT Grievance Redressal Mechanism to Address Technical Issues on GST Portal for Taxpayer Concerns.

  Circulars : Setting up of an IT Grievance Redressal Mechanism to address the grievances of taxpayers due to technical glitches on GST Portal - CBIC issues directions.
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Income Tax

• Non-Performing Asset Classification Means No Tax on Notional Income, Even Under Hybrid Accounting System.

  Case-Laws - HC : Interest income - When a particular asset is shown to be NPA, the assumption is that it is not yielding any revenue; and there is no reason that the assessee be subjected to tax on the alleged notional income, even if it has adopted hybrid system of accounting. - HC
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• Assessment Order Issued Incorrectly to Deceased; New Order Needed for Legal Representative as per Procedure.

  Case-Laws - HC : Assessment order made in the name of deceased person - assessment against legal representative of the deceased - AO has to pass denovo assessment order on the legal representatives of the deceased assessee in accordance with law. - HC
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• University's Exemption Denied u/s 10(23C)(vi) Despite Non-Profit Status; Economic Condition of Students Considered.

  Case-Laws - AT : Rejection of the application filed u/s. 10(23C)(vi) - university / educational institution - means may be determined based on economic condition or the situation of the student - the appellant university is not established with the profit motive - there is no reason for denying the exemption u/s. 10(23C)(vi) of the Act. - AT
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• No TDS Required on Sales Commission to Foreign Agents for Order Procurement Services, Income Not Taxable in India.

  Case-Laws - AT : TDS on payment to non-residents - disallowance of sales commission to foreign agents - income from services of the non-residents of procuring orders are not chargeable to tax in India and, therefore, assessee was not liable to deduct tax at source on the payments of commission made to those agents - AT
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• Payments for Software Not "Royalty" Under DTAA, No Tax Deduction Required u/s 195 of Income Tax Act.

  Case-Laws - AT : TDS u/s 195 - royalty - purchase of software - copyrighted articles - payments made by it to various suppliers of six countries did not amount to royalty within the definition of Article 12/13(3) of the DTAA and it was not obliged to deduct tax at source - AT
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• Mutual Benefit Society's Property Income Classified as Business Income; Eligible for Depreciation Claims Under Tax Rules.

  Case-Laws - AT : Depreciation claim - mutual benefit society - Once the properties of the society are used for the purpose of activities of the assessee, the same would have to be treated as being used in the business of the assessee. If this is so, the income under the head business in the hands of the assessee, would have to be considered and depreciation liable to be allowed - AT
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• Society's Funds Used for Non-Member Business Purposes Not Subject to Mutuality When Profits or Interest Earned.

  Case-Laws - AT : Applicability of the principles of mutuality - once the funds of the society are given for the business purposes of a non-Member and the assessee receives any compensation either in the form of profits or in the form of interest from such non-Member, the principles of mutuality cannot be applied - AT
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• Assessee eligible for Section 54F exemption on LTCG; no need for Capital Gains Account deposit after timely house investment.

  Case-Laws - AT : Claim for exemption u/s.54F - LTCG - Since the assessee had invested in the new residential house within the time limits specified under the Act, the question of depositing the consideration received on the sale of the property in an account under the Capital Gains Account Scheme does not arise. - AT
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• Proceedings u/ss 201(1) & 201(1A) Invalid Due to Amalgamated Company's Non-Existence for TDS Non-Deduction.

  Case-Laws - AT : TDS u/s 194C - non deduction of tds - proceedings against a person who is not in existence - On amalgamation, the amalgamating company stands dissolved without winding up. In other words, the amalgamating company ceases to exist in the eyes of the law - proceedings u/s 201(1) and 201(1A) of the Act held to be invalid and hereby annulled - AT
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Customs

• Pre-notice Consultation Regulations 2018: Officer Must Communicate Grounds Before Issuing Notice to Encourage Response and Representation.

  Notifications : Pre-notice consultation regulations, 2018 - communication of the grounds known to the proper officer for issuance of notice to the person chargeable with duty or interest in order to elicit the response of the person and consideration of the representation of the said person
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Corporate Law

• Deferred Tax Exemption Extended to Specified Government Companies u/s 129(6) of Companies Act 2013, Easing Compliance.

  Notifications : Recognizing Deferred Tax Assets/ Deferred Tax Liability under AS-22/Ind AS-12 - Exemption to specified Government Companies u/s 129(6) of Companies Act, 2013 - Condition of seven years removed.
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Service Tax

• Court Rules 2015 Service Tax Amendment on Chit Transactions Not Retroactive; Defines Pre-2007 Service Scope.

  Case-Laws - HC : Liability to service tax - chit transactions - scope of definition of the service prior to 01-06-2007 - The amendment made in 2015 cannot be said to be clarificatory and there can be no retrospective operation given to such amendment. - HC
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• Service Tax Not Applicable on Retained Fees for Cancelled International Travel Tickets; No Service Provided, Says Court.

  Case-Laws - AT : Liability of service tax - Retention of amount - no service of international travel is being provided on such cancelled tickets. The amount retained by the appellant is more in the form of penalty for cancellation though called administration fee - demand set aside - AT
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Central Excise

• Audit Confirms Validity of CENVAT Credit via ISD Invoices; Compliance with Rule 4A(2) and Rule 9 Verified.

  Case-Laws - AT : CENVAT credit - duty paying invoices - ISD - No errors have been found in any of the invoices and audit found the wanting details. As required, the requisites of the ISD invoice contain all the details prescribed under Rule 4A(2) of S.T.R. 1994 read with Rule 9 of CCR, 2004 - credit allowed - AT
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• Refund Claim Under Central Excise Act Section 11B Valid if Filed Within One Year of Adjudication Order.

  Case-Laws - AT : Refund claim - time limitation - section 11B of CEA - the period of one year provided under Section 11B should be reckoned from the date of such adjudication order, from the said date, the appellant has filed refund within one year - AT
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• Continuous Computer Stationery, Carbon Leaflets Classified Under Chapter 49, Not Chapter 48 Per Excise Regulations.

  Case-Laws - AT : Classification of goods - Continuous computer stationery in the form of Carbon Leaflet/Money Receipts - subject item reflects more a member of Chapter 49, family compared to Chapter 48. - AT
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• Excise Duty Exclusion in Raw Material Valuation Upheld When CENVAT Credit is Used in Fabrication Case.

  Case-Laws - AT : Valuation - inclusion of excise duty in the price of raw material when cenvat credit for the same has been availed - fabrication of the body on Chassis - demand set aside - AT
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Case Laws:

• GST

• 2018 (4) TMI 97
  Seizure of goods - penalty u/s 129 (3) of the U.P. G.S.T. Act, 2017 - it was alleged that the goods were not accompanied with proper documents - petitioner contends that all proper documents were furnished by it to the proper officer in response to the SCN - Held that: - the petitioner is a registered dealer inside the State of U.P. and certain documents i.e. original tax invoices, goods receipts etc. are being claimed to have been issued to cover the transactions - Since the revenue disputes the existence of those documents, an enquiry may be required to be conducted in that regard - However prima facie the petitioner being a registered dealer inside the State of U.P., no useful purpose would be served in allowing the goods to continue under detention - goods to be released subject to fulfillment of conditions. Penalty - Held that: - it appears that the penalty order was passed ex parte and there are some defects in the same - penalty order dated 28.10.2017 is therefore set aside and the matter is remitted to decide those proceedings afresh. Petition allowed - part matter on remand.

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• Income Tax

• 2018 (4) TMI 96
  Grant of exemption u/s 10(23C)(vi) denied - Society has moved the Application and not the Institution - proof of charitable activities - Held that:- The appellant has not thought it fit to reject the Application on the ground that the Application has not been moved by the Institution. True it is that the proviso to Section 10(23C)(6), inter alia, contemplated that the Application is to be made by the Institution. It is, accordingly, that the Officer has also, in this context, found that in order to qualify for grant of exemption under Sub-Section (23C), the Institution should exist only for educational purpose, which is not the case of the writ petitioner Society. Objects of the Society include objects such as eradication of untouchability, dealing with environmental pollution, plantation, AIDS Education, achievement of communal harmony, over all local development, promotion of fruit bearing trees and plantation in the hill areas. Here, we must notice that there is a definite case for the respondent / writ petitioner that the respondent/ writ petitioner is only running one Institution and there is no other Institution, which is being run by it and, in fact, even it has a case that there is no other activity. As under the Memorandum of objects, there are various objects, other than education. What Section 10(23C)(6) of the Act actually does contemplate is that income received by any person on behalf of the Institution, which is an educational institution and that Institution should exist solely for educational purpose and not for the purpose of profit, other than those mentioned in Clauses (iiiab) (iiiad). It is also to be approved by the Prescribed Authority. Therefore, the requirement of law must be that the educational institution is to exist solely for educational purpose and it should not exist for the purpose of profit. Underlying object appears to be that the words existing solely are to be understood in the context of the words not for the purpose of profit . In the light of this, we would think that the Appeal must be partly allowed and the portion of the judgment directing exemption to be granted must be set aside, and instead a direction must be issued to the appellant to re-consider the matter in the light of the judgment of the Hon ble Apex Court in the case of American Hotel Lodging Association Educational Institute v. CBDT reported in (2008 (5) TMI 17 - SUPREME COURT OF INDIA and also Queen s Educational Society vs. Commissioner of Income Tax (2015 (3) TMI 619 - SUPREME COURT).

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• 2018 (4) TMI 95
  Eligibility to benefit of Section 80HHC - commission deducted by the foreign agent from the sale consideration - nexus between the commission payment and the exports made by the assessee - Held that:- Section 80HHC, as per Sub Section (2)(a) applies only if the sale proceeds of goods or merchandise exported out of India are received in or brought into India, by the assessee in convertible foreign exchange, within a period of six months from the end of a previous year or within such further period as the competent authority may allow in this behalf. The condition having been not complied with, the commission deducted by the foreign agent from the sale consideration cannot enjoy the benefit of Section 80HHC. We have no hesitation in setting aside the order of the Tribunal and we answer the questions of law in favour of the Revenue and against the assessee.

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• 2018 (4) TMI 94
  Deductions u/s 10-A claim computation - Interpretation of Total Turnover & Export Turnover under 10A - Held that:- The method of computing the exemption under Section 10-A of the Act and precisely, the question as to whether the expenses excluded from the export turnover are also to be excluded from the total turnover for the purpose of Section10- A of the Act, has been dealt with by this Court in the case of TATA ELXSI LTD. [2011 (8) TMI 782 - KARNATAKA HIGH COURT] as held there should be uniformity in the ingredients of both the numerator and the denominator of the formula, Section 10-A is a beneficial section. It is intended to provide incentives to promote exports. If the export turnover in the numerator is to be arrived at after excluding certain expenses, the same should also be excluded in computing the export turnover as a component of total turnover in the denominator. The reason being the total turnover includes export turnover. The components of the export turnover in the numerator and the denominator cannot be different. - Decided against revenue

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• 2018 (4) TMI 93
  Addition in respect of interest on non-performing assets (NPAs) - assessee is said to be a Co-operative Society, engaged in banking business - Held that:- We are satisfied that the suggested question of law does not arise in this case, as the matter stands concluded in this Court in view of the decision in Canfin Homes Ltd. (2011 (8) TMI 178 - KARNATAKA HIGH COURT), wherein, this Court has specifically held that income from NPA should be assessed on cash basis and not on mercantile bas is, despite the assessee following mercantile system of accounting. When a particular asset is shown to be NPA, the assumption is that it is not yielding any revenue; and there is no reason that the assessee be subjected to tax on the alleged notional income, even if it has adopted hybrid system of accounting. Tribunal cannot be said to have committed any error in approving the decision of the CIT (A), who had deleted the addition in respect of interest on NPAs. - Decided in favour of assessee

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• 2018 (4) TMI 92
  Credit of TDS - loss return - no tax liability - AO observed that corresponding receipt had not been offered to tax - Held that:- On a conjoint reading of Sections 194C, 199 and 237 of the Act, this Court has held that when there was no liability to pay the tax, the TDS paid was liable to be refunded. No reason to interfere in the order of the Tribunal directing the Assessing Officer to allow the credit in respect of the TDS in question. - Decided against revenue.

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• 2018 (4) TMI 91
  Deduction u/s 10B - Held that:- The assessee was entitled to deduction under Section 10B, as its activities amounted to manufacturing. Accordingly, the assessee was held to be entitled for deduction.

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• 2018 (4) TMI 90
  TDS u/s 194C OR 194I - TDS not having been done for the vehicles hired by the respective assessee - Held that:- The Tribunal was perfectly correct in so deciding the issue. Section 194C of the Act speaks of any payment made to any resident, referred to as a contractor, for carrying out any work including supply of labour, in pursuance of a contract between the contractor and a specified person. Here, the contract if at all, is between the assessee and the principal being M/s.Logos Logistics (P) Ltd. The hiring of vehicles, on the conditions above noticed, does not fall within the ambit of Section 194C of the Act. We also notice that from 01.06.2007 definitely deduction would have to be made at source even for hiring of vehicles as Section 194-I of the Act stands amended to bring in such transactions also. The questions of law for the subject assessment years is answered against the revenue and in favour of the assessee.

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• 2018 (4) TMI 89
  Assessment order made in the name of deceased person - assessment against legal representative of the deceased - Held that:- Tribunal allowing cross-objection directed the assessing authority to redo denovo assessment, it is the apprehension of the appellant that by virtue of the order of the Tribunal, the authorities may proceed to substitute the name of the appellant while passing the orders, which would be contrary to the provisions of the Act. It is trite law that the Revenue cannot collect taxes against the provisions of law. The basis of tax demand is the assessment order. The assessment order which is passed in the name of a deceased person is wholly unjustifiable and is non-est in the eye of law. Section 159(1) and (2) of the Act provides about the liability of legal representatives in special cases. It is not in dispute that any proceeding which could have been taken against the deceased if he had survived may be taken against the legal representative, in terms of Section 159(2)(b) of the Act. The legal representative of the deceased was for the purpose of the Act, deemed to be an assessee as per Section 15 9(3) of the Act. This being the position, the Tribunal is justified in setting aside the order of CIT (Appeal's) and of the Assessing Officer and remanding the matter to the Assessing Officer for denovo assessment order on the legal representative of the deceased.

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• 2018 (4) TMI 88
  Revision u/s 263 - addition towards interest granted under section 244(1A) to the assessee - whether interest granted under Section 244 (1A) escaped inclusion in the income chargeable to tax? - Held that:- We answer the first question framed, being one on facts, in favour of the assessee and against the department. The assessee was perfectly right in having included the interest received in 1992-93 in the A.Y. 1993-94, as income. The deletion made by the Tribunal of the addition of a sum of 88,007/- towards interest granted under Section 244(1A), was perfectly justified. - Decided against revenue Expenses incurred towards the construction of the houses to the weaker sections of the society come under business expenditure under section 37 - Held that:- Commissioner was exercising powers under Section 263 to undo the erroneous assessment carried out by the A.O; which were prejudicial to the interest of the Revenue. The Tribunal egregiously erred in qualifying the amounts expended by the assessee in charity, as one “wholly and exclusively” laid out or expended for the purpose of business; for reason of the incidental goodwill and popularity garnered by such charitable act. The question has to be answered against the assessee and in favour of the Revenue. Entitled to depreciation u/s 32 for the expenses incurred towards installation of plant and machinery at their Palghat Unit - Held that:- Third question too has to be answered in favour of the Revenue and against the assessee since the assessee had not commenced production in the relevant assessment year and the depreciation claim on the basis of the installation of plant and machinery and readying the unit for use for business purposes, cannot be sustained in the wake of the overwhelming precedents noticed against such a claim

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• 2018 (4) TMI 87
  Entitlement to registration u/s 12A - proof of charitable activities - non-furnishing of explanation regarding registration of the assessee society twice - Held that:- The contention of the Ld. CIT that the assessee had offered no explanation about the registration of the society twice is not correct. In any case registration of a society is not a pre condition for granting registration under Section 12AA. A perusal of Rule 17A of the Income Tax Rules 1962, referred to above would show that the only requirement is to furnish the documents evidencing the creation of the trust or establishment of the institute in original, which we find, the assessee society has furnished in the form of Trust Deed. In view of the facts stated above we hold that Ld. CIT was not right in refusing registration to the assessee society for non-furnishing of explanation regarding registration of the assessee society twice.- Decided in favour of assessee.

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• 2018 (4) TMI 86
  Disallowance of loss - valuation of securities - reduction in value of the investment as per the direction of the RBI - value to decrease by the premium - investments were held as stock in trade by the assessee - Held that:- We find that the assessee had furnished only the journal entry stated to be suggested by the RBI and had promised to submit the Inspection Report after the hearing. We find that the said RBI Inspection Report was not furnished to us to understand the real intent behind RBI suggesting the provision to be made in the sum of 5,22,250/-. We deem it fit and appropriate, in the interest of justice and fairplay, to remand this issue to the file of the AO to decide this issue afresh in the light of RBI Inspection Report. If it is found that the RBI Inspection Report had suggested the assessee to remove this portion of investment of 5,22,250/- either in the form of provision / write off, then the same becomes a trading loss as the investments were held as stock in trade by the assessee. Hence the decision is to be taken based on the findings given in the RBI Inspection Report. Accordingly, the Ground No. 1 raised by the assessee is allowed for statistical purposes. Disallowance in respect of investments lost in Treasury Office - Held that:- We find that a similar view has been taken in the case of CIT vs Bonanza Portfolio Ltd (2009 (8) TMI 636 - DELHI HIGH COURT), wherein the monies receivable from the client was treated as a debt and hence irrecoverability of the same is liable to be treated as a bad debt and write off of such bad debt would be squarely allowable as deduction. The similar is the situation in the facts of the present case. It is not in dispute that the WB Treasury was not able to trace the investments for quite a long time since 2001 and RBI accordingly having waited for considerable period of time had suggested the assessee to write off the same in its books, which in our considered opinion, would be a regular business loss. Disallowance of difference in value of deposits between Party Ledgers and the General Ledger - Held that:- During this year, pursuant to the suggestion made by the RBI in its Inspection Report and in order to bring the General ledger balance at par with the personal ledgers of depositors , the assessee had further provided for the difference in liability of deposits payable by debiting its profit and loss account. This, in our considered opinion, is squarely allowable as deduction under the head ‘income from business’. We hold that they are not adhoc provisions made without any basis. The personal ledgers of depositors contained names and addresses of various depositors to whom the assessee is obligated to repay the deposits with interest on the date of maturity. Hence there is going to be physical outflow of money by the assessee in future. Hence it becomes an ascertained liability and is supported by proper scientific basis. In view of these observations, we hold that the assessee is indeed entitled for claim of deduction in the assessment. Addition made in the sum towards excess provision written back under the head ‘Reserve for NPA Account’ - Held that:- We find that the RBI had considered the accounting error committed by the assessee in as much as the assessee had credited the amount withdrawn from ‘Reserve for NPA’ to profit and loss account ( i.e above the line) instead of profit and loss appropriation account. It was stated that similar write back of ‘reserve for NPA’ to profit and loss account had not been treated as income in the hands of the assessee in Asst Years 2003-04, 2004-05, 2005-06 and 2006-07. Merely because the assessee erroneously had credited this sum of 1,00,00,000/- in its profit and loss account, the same would not assume the character of income u/s 4 of the Act for consequential taxation thereon. In any case, the same is not emanating out of current year profit. It only represents accumulated profits of the past written back to profit and loss account of the year. We hold that these facts had been duly appreciated by the ld CITA in making the aforesaid observations and accordingly do not find any infirmity in his order. - Decided against revenue.

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• 2018 (4) TMI 85
  Nature of income - agricultural income - deposits in the bank account - Held that:- It is absolutely clear that income derived are in the nature of agricultural income. CIT(A) have analysed the fact that Department had some point or the other either prior to the block assessment period or even after in the succeeding assessment year have taken a view that assessee is having agricultural income and, therefore, findings of CIT(A) is correct that all deposits in the bank account are from agricultural income. This moment on the remand report of the Assessing Officer wherein he has denied the fact that assessee has produced all the documents as proof of agricultural income whereas in the contrary, the records itself speak that all the evidences regarding agricultural income were produce before the Department. It is also pertinent to note that the same Assessing Officer, who has refused the claim of the assessee as agricultural income in the remand report, has accepted assessee’s claim of agricultural income in the later year. - Decided in favour of assessee Addition on account of unexplained investment - Held that:- As it was explained before the Assessing Officer as well as the ld. CIT(A) that all deposits in FDRs were out of agricultural income. Once agricultural income has been accepted, question of making addition on account of unexplained investment does not arise. CIT(A) has dealt with the deposits in FDRs and interest accrued separately. Out of total addition made, the amount to the extent of 1,29,52,434/- has been found to be unexplained to the satisfaction of the CIT(A) and that too under different heads. We do not find any infirmity with the findings given by the ld. CIT(A), therefore, ground No.4 of the appeal of the Revenue is dismissed. Addition made appearing in the name of Shri Raghuraj Pratap Singh - Held that:- The addition referred to in this ground of appeal has been made on protective basis in the hands of the assessee. Since the same addition has been made on substantive basis in the hands of Raghuraj Pratap Singh and the order in his case has become final, question of making separate addition again in the hands of the assessee does not arise. We, therefore, dismiss these grounds of appeal. Income from The Bazari and rent of HUF - Held that:- From the order of the ld. CIT(A) it is absolutely clear that this addition of 7,03,846/- belongs to HUF and it has to be assessed in the hands of HUF and therefore the same should not have been assessed in individual assessment. We, therefore, direct deletion of this amount. Unexplained deposit - as vehemently argued by the ld. A.R. of the assessee that they were excessive in nature - Held that:- We are not convinced with the contentions of the ld. A.R. of the assessee and therefore, we dismiss these grounds.

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• 2018 (4) TMI 84
  Rejection of the application filed u/s. 10(23C)(vi) - appellant university is a profit making university - appellant university is totally dependent upon Sponsoring Body and whenever the Sponsoring Body wants the University can be dissolved - Held that:- It is a fallacy to state that the appellant university has been constituted for profit motive. It is equally a fallacy to deny the exemption solely on the concern about the assets of the appellant university in the event of dissolution and what would be the fate of the assets created in the event of dissolution of university. The CIT(Exemption) has grossly erred in not considering the financials of the appellant company in the light of the specific directions of the Hon’ble High Court of Gujarat. The fees structure of the appellant university is related to the provisions of the State Government relating to admissions. It is provided that the means may be determined based on economic condition or the situation of the student. Considering the objects of the appellant university in the light of the relevant documentary evidences brought on record we are of the opinion that the appellant university is not established with the profit motive. Therefore, we do not find any reason for denying the exemption u/s. 10(23C)(vi) of the Act. - Decided in favour of assessee

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• 2018 (4) TMI 83
  Treating the income from sale of shares as Long Term Capital Gains (LTCG) and Short Term Capital Gains (STCG) - nature of income - period of holding - nature of portfolio - Held that:- It is not in dispute that the assessee during the year under appeal was having only investment portfolio in its balance sheet. The assessee has been consistently showing these shares and mutual funds under Investments in its balance sheet. We find that the issue under dispute is covered in favour of the assessee in Asst Year 2005-06 [2015 (7) TMI 679 - ITAT KOLKATA] as held he profit that has been attributable to this trading activity corresponding to conversion of stock-in-trade into investment is to be treated as ‘business income’ and accordingly to be taxed. In view of the above findings of Ld. CIT(A) that the income from investment is to be taken as ‘capital gains’ and conversion of stock-in-trade into investment is to be taken as ‘trading income’, which is based on facts of the case and need no disturbance - Decided against revenue

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• 2018 (4) TMI 82
  TPA - comparable selection criteria - Held that:- Assessee is engaged in the business of rendering software development and ITES and IT services, thus companies functionally dissimlar with that of assessee need to be deselected from final list. Disallowance of depreciation under software on the ground that the TDS was not deducted at source - Held that:- The assessee lower authorities was not correct in not allowing the depreciation on the software and therefore we direct the AO to allow the depreciation on the software. See M/s. Vogue Vestures Pvt. Ltd. Vs. DCIT [2018 (4) TMI 29 - ITAT BANGALORE]. - Decided in favour of assessee.

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• 2018 (4) TMI 81
  Non deduction of tds on payment to non-residents - disallowance of sales commission to foreign agents - PE in India - income deemed to accrue or arise in India - DTAA - Held that:- The assessee has a choice of applying either the provisions of the DTAA or the Income-tax Act, whichever is more beneficial to him. In view of the articles of the DTAA, for holding the fee for technical services as liable to tax in source country, the services should make available the technical knowledge etc to the assessee of the source country. AO has not been able to establish that the services of procuring orders has made available any technical knowledge, experience, skill know-how etc. to the assessee, and, therefore, in our considered opinion, the services rendered by the non-resident agents cannot be taxed as fee for technical services under the DTAA. We hold that income from services of the non-residents of procuring orders are not chargeable to tax in India and, therefore, assessee was not liable to deduct tax at source on the payments of commission made to those agents, accordingly, no disallowance could have been made under section 40(a)(i) of the Act. The finding of the Ld. CIT(A) on the issue in dispute is upheld and accordingly, the ground of the appeal of the Revenue is dismissed.

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• 2018 (4) TMI 80
  TDS u/s 195 - non deducting tax at source for the payments made by them to the non-resident-entities - payments for purchase of software to non-resident-entities - income accrued in India - PE in India - India-Sweden DTAA - Held that:- From the perusal of the agreements one thing is clear that there was no transfer of copyright of the software in any manner. As mentioned earlier, a copyright is different from the work in respect of which copyright subsists. The assessee had only got a copy of software without any part of the copyright of the software. All the arguments advanced by the DR about ICA, including the section 30, in our opinion are of no help. At the cost of repletion , we are holding that in the cases under consideration payments made by the assessee was for copyrighted articles. So, we are of the opinion that payments made by it to various suppliers of six countries did not amount to royalty within the definition of Article 12/13(3) of the DTAA - and it was not obliged to deduct tax at source. - Decided in favour of assessee

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• 2018 (4) TMI 79
  Determination of Arms Length Price in respect of an international transaction of rendering software development services - comparability analysis - Held that:- The assessee rendered software development services thus companies functionality dissimilar with that of assessee need to be deselected from final list. Working capital adjustment - Held that:- Direct the assessee to give computation of working capital adjustment as per the formula for calculating the working capital adjustment. The TPO is directed to examine the working capital adjustment so given in accordance with law. Disallowance of Entrance fees, subscription and cost of facilities paid to clubs - addition of aforesaid expenses had no nexus with the business of the assessee - Held that:- The tribunal following the decision of the Hon’ble Supreme Court in the case of United Glass Manufacturing Co. Ltd. [2012 (9) TMI 914 - SUPREME COURT] wherein it was held that club expenses of employees was business expenditure allowable u/s 37 of the Act, allowed the claim of the assessee. Respectfully following the decision of the tribunal in assessee’s own case we direct the AO to allow the claim of the assessee for deduction. Provision for replacement guarantee allowable. Direct the AO to allow the lease rent paid as deduction. Short credit of tax deducted at source - action of the AO in not granting credit of tax deducted at source - Held that:- AO is permitted to waive the claim of the assessee and allow appropriate credit for TDS.

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• 2018 (4) TMI 78
  Treatment to gain on sale of shares - busniss income or capital gain - ‘initial intention’ of the assessee to decide whether an activity amounts to ‘trading activity’ or ‘investment activity’ - conversion of investment into stock-in-trade - Held that:- We note that the sources for acquisition of shares are from share capital, reserves and surplus funds. The assessee has been an investor and not a trader as seen from the intention of the assessee. The treatment given in the books under the head ‘investment’ clearly shows that the assessee’s intention to deal in shares as investment. The conversion of investment into stock-in-trade and continuing the trading under that head and again converting the closing stock under that head into ‘investment’, under consideration amounts to a clear change of intention depending on the circumstances. By converting the stock-in-trade into investment, it does not alter the character, nature and intention of that particular transaction especially in the context of capital gain versus business income. Subsequent conversion and treatment given in the books of accounts do not alter the character of commercial transaction. The profit that has been attributable to this trading activity corresponding to conversion of stock-in-trade into investment is to be treated as ‘business income’ and accordingly to be taxed. In view of the above findings of CIT(A) that the income from investment is to be taken as ‘capital gains’ and conversion of stock-in-trade to investment is to be taken as ‘trading income’, which is based on facts of the case and need no disturbance. - Decided against revenue.

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• 2018 (4) TMI 77
  Applicability of the principles of mutuality - registered society for the benefit of its members - receipt from the non- Member - Held that:- One of the primary conditions for the applicability of the principles of mutuality, is that no person can make a profit from himself, the participants must be Members, once the funds of the society are given for the business purposes of a non-Member and the assessee receives any compensation either in the form of profits or in the form of interest from such non-Member, the principles of mutuality cannot be applied to that receipt from the non- Member. This being so, we are of the view that the findings of the Ld.CIT(A) on this issue are on right footing and does not call for any interference. Depreciation claim to assessee society - Held that:- It is an undisputed fact that the properties of the assessee are used for carrying out the activities of the society as directed by the Hon’ble High Court. Once the properties of the society are used for the purpose of activities of the assessee, the same would have to be treated as being used in the business of the assessee. If this is so, the income under the head business in the hands of the assessee, would have to be considered and depreciation liable to be allowed. Admittedly, if depreciation is allowed and the income of the assessee becomes negative or loss, the same is available for set off against the income from the other heads representing income from other sources. This being so, the findings of the Ld.CIT(A) in respect of the non-granting of the depreciation is allowed and the AO is directed to grant the assessee the benefit of depreciation as claimed.

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• 2018 (4) TMI 76
  Penalty u/s 271(1)(c) - non specifying the limb under which penalty is being imposed, whether for furnishing inaccurate particulars of income or concealment of income - Held that:- As notice under section 271(1)(c) of the Act is not specific as it did not mention specifically as to which limb penalty under section 271(1)(c) is imposed upon the assessee by the Assessing Officer. Notice for imposition of penalty under section 271(1)(c) of the Act issued in the case of the assessee is bad in law, invalid and, therefore, liable to be quashed. We, therefore, set aside the order of the ld. CIT(A) and the penalty imposed by the Assessing Officer and confirmed by the ld. CIT(A) under section 271(1)(c) of the Act is deleted. - Decided in favour of assessee

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• 2018 (4) TMI 75
  Rejection of books of accounts - estimation of gross profit - Held that:- In the instant case of the assessee, cash book and ledger were with the Department. The purchase bills along with TCS certificates were also produced. The selling price was also displayed in front of every shop of the assessee. All the purchases are done by the assessee on the basis of license fees and TCS certificates, which were also not disputed by the Department. Neither the AO nor the CIT(A) has conducted any independent enquiry regarding the same and just on the basis of guess work has observed that assessee is not bringing out full particulars. Even the judicial pronouncements are clear on the facts that in the nature of trade as like assessee, cash memos for day-to-day sales are not required and that a consolidated entry in the cash book along with relevant documents of purchase of liquor are sufficient to prove the genuineness. CIT(A) was not justified in confirming the rejection of the books of account and adopting the G.P. rate on the higher side and, therefore, we set aside the order of the ld. CIT(A) on this issue and allow grounds No.1 3,000/- per month per shop, however, neither the order of the AO nor of the ld. CIT(A) was a speaking order on this issue and the reasons for arriving at the conclusion was not spelt out specifically. We are of the considered view that any ad-hoc disallowance made summarily by a quasi-judicial authority, without any factual basis, cannot be held justified. Ad-hoc disallowance on account of salary paid - Held that:- Total salary paid of 3,800/- per month and 1,800/- as house rent allowance i.e. totaling to 5,600/- per month to each employee, is evidenced with affidavit filed as placed in the paper book from pages 52 to 147. As held in various judicial pronouncements discussed hereinabove, how the business has to be conducted, it is the prerogative of the assessee and not of the Department. The Department is, however, free to conduct enquiry and have a physical verification to put forth the allegation on the assessee, but on guess work and summary basis any addition made is unwarranted. In view of commercial expediency of the expenditure incurred expenses to be allowed. - Decided in favour of assessee Disallowance of processing fee, assessment fee and renewal fee - Held that:- Additional evidences go to the root of the matter wherein all these details of renewal, processing and assessment fees paid to the Government are there and such evidences filed by the assessee are accepted. We also find that these payments were paid to the Government agencies and that is certified from the receipt letter of the District Excise Officer - Under these facts and circumstances of the case, these expenses cannot be held as unjustified expenses and it has direct nexus with the nature of business of the assessee and the payment is also duly debited in the cash book and it has been paid to the Government. we set aside the order of the ld. CIT(A) on this issue and allow grounds of assessee.

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• 2018 (4) TMI 74
  Claim for exemption u/s.54F for investment made in a residential house not allowed while computing capital gains - whether assessee completed the construction before 31.03.2008? - whether the construction was carried out within the time limit available u/s.139 of the Act? - Held that:- If a person has not furnished the return of the previous year within the time allowed under subsection (1), i.e., before the 31st day of July of the assessment year, the assessee can file return before the expiry of one year from the end of the relevant assessment year. In the case before us, the valuation report filed by the assessee clearly show that he had completed the construction of the new residential house by March, 2008. That apart, assessee had also furnished before the ld. Commissioner of Income Tax (Appeals) electricity bills, dated 04.10.2007 and 07.12.2007. Assessee having completed the construction before 31.03.2008, in my opinion judgment of Hon’ble Punjab and Haryana High Court in the case of Ms. Nagriti Agarwal (2011 (10) TMI 279 - PUNJAB AND HARYANA HIGH COURT) will come to its aid. The date of actual filing of return by the assessee is irrelevant for construing the time limits within which the investments have to be made for availing exemption u/s.54F of the Act. Since the assessee had invested in the new residential house within the time limits specified under the Act, the question of depositing the consideration received on the sale of the property in an account under the Capital Gains Account Scheme also does not arise. Therefore assessee was eligible for claiming exemption u/s.54F - Decided in favour of assessee

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• 2018 (4) TMI 47
  Disallowance in computing the book-profit u/s 115JB in respect of depreciation claimed on land after amortization of land by the assessee - whether computation of book profit was not as per Companies Act and wrongly claimed depreciation on land not allowable in Companies Act? - Held that:- Assessing Officer while computing the income under Section 115-J has only the power of examining whether the books of account are certified by the authorities under the Companies Act as having been properly maintained in accordance with the Companies Act. The Assessing Officer thereafter has the limited power of making increases and reductions as provided for in the Explanation to the said section. To put it differently, the Assessing Officer does not have the jurisdiction to go behind the net profit shown in the profit and loss account except to the extent provided in the Explanation to Section 115-J - Decided in favour of assessee. Addition in computing the book profit u/s 115JB as well as in normal income in respect of provisions for loss in hedging transaction - Held that:- In the present case, the loss suffered by the assessee on account of the exchange difference as on the date of the balance sheet is an item of expenditure under Section 37(1) - Decided in favour of assessee. Addition u/s 14A - addition in respect of indirect expenses incurred on administrative and other heads relating to the income to which section 10 applies - Held that:- The assessee s business assets were about 26,930 crores of which 1014 crores were invested in its wholly owned subsidiaries. It is from the investment in its subsidiaries that the assessee earned 36.06 crores by way of dividend. However, it is important to note that the assessee had, free funds of its own of a sum of 17,275 crores available to it. As against the investment of 1014 crores which yielded dividend of 36.06 crores, the assessee had available to it 17,275 crores. As Mr. Ved Jain, the learned counsel appearing on behalf of the assessee, rightly submitted, the presumption is that the assessee used its own funds while making the investment of 1014 crores in the subsidiaries. There is nothing to rebut this presumption. The Tribunal, therefore, rightly held that there was no question of disallowance under section 14A.- Decided in favour of assessee.

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• 2018 (4) TMI 46
  TDS u/s 194C - non deduction of tds - proceedings against a person who is not in existence - existence after its amalgamation / merger - Held that:- The law is well settled that the proceedings against a person who is not in existence is null and void and has no legal effect. Under the Income Tax Act, 1961 an assessment can be made only against a person as defined u/s 2(31) of the Act. A company after it is dissolved cannot be said to be a person in terms of that section. On amalgamation, the amalgamating company stands dissolved without winding up. In other words, the amalgamating company ceases to exist in the eyes of the law. Though rules of abatement of suits under the Civil Procedure Code would not apply to assessment proceedings under the Income Tax Act, as the ITO was not a Court but the principle of representation applicable to regular suits and proceedings under the Civil Procedure Code would well apply to such proceedings. The existence of an assessee is essential for an assessment. There cannot be an assessment of a non-existent person - present proceedings u/s 201(1) and 201(1A) of the Act held to be invalid and hereby annulled. - Decided in favour of assessee.

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• Service Tax

• 2018 (4) TMI 73
  Liability to service tax - chit transactions - scope of definition of the service prior to 01-06-2007 - whether between 2012 and 2015 there could be tax levied on the chit transactions deeming it to be a service, which has not been excluded in the definition nor included in the negative list? - Held that: - the issue whether between 2012 and 2015, the tax can be levied on the chit transactions is beyond the scope of dispute - the transactions “by a foreman of chit fund for conducting or organizing a chit in any manner” was specifically excluded from the definition of transaction in money or actionable claim. As a consequence, the chit transaction becomes liable to tax under the Finance Act, 1994, from 2015 onwards. The amendment made in 2015 cannot be said to be clarificatory and there can be no retrospective operation given to such amendment. The legislature felt the need for inclusion of the transactions within the fold of service and hence amended the Finance Act, 1994 by Finance Act, 2015. Petition allowed.

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• 2018 (4) TMI 72
  Leasing of license charges - Held that: - we find merit in the appeal so far as it relates to renting of immoveable property and the appeal on the said ground is allowed. Service tax collected from service receivers but not deposited - Held that: - The appellant had clarified that they had deposited the said amount and also once again in the appeal memorandum claimed that they have deposited the said amount. In support of the said assertion the appellant have filed a copy of ST-3 return filed on 26.5.2010 - matter remanded to the original adjudicating authority for ascertaining facts and deciding the issue thereafter. CENVAT credit - duty paying documents - documents which are either zerox copies or not bearing the registration number of the service provider - Held that: - In the appeal memorandum the appellant have given compliance of all these objections - Since the compliance has been made by the appellant the impugned order in so far it relates to the demand of reversal of cenvat credit and imposition of penalties thereon is set aside and matter remanded to the adjudicating authority to verify the compliance of various objection. Appeal allowed - part matter on remand.

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• 2018 (4) TMI 71
  Liability of service tax - Retention of amount - refund administration fee when the tickets were cancelled by the passengers - Held that: - no service of international travel is being provided on such cancelled tickets. The amount retained by the appellant is more in the form of penalty for cancellation though called administration fee - there are no reason to tax such amount without identifying the nature of service provided for such consideration - appeal allowed - decided in favor of appellant.

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• 2018 (4) TMI 70
  Short payment of service tax - Held that: - there is no actual Service Tax, which was short paid - learned Counsel have also taken us through the returns for the relevant period and have reconciled the figures with reference to the SCN, and it is found that there is no Service Tax short paid. CENVAT credit - input services - credit taken since 2006 - Held that: - the issue of input credit, in the facts and circumstances are squarely covered by the ruling of this Tribunal in the case of Oberoi Mall Ltd. Versus 57199/13 Commissioner of Service Tax, Mumbai-Il [2016 (3) TMI 854 - CESTAT MUMBAI], where it was held that the appellant can avail the Cenvat Credit of input service of construction services and other services - credit allowed. Appeal allowed - decided in favor of appellant.

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• Central Excise

• 2018 (4) TMI 69
  Refund claim - respondents have failed to pay the refund only on the ground that they intend filing an appeal - Held that: - mere filing of appeal would not justify withholding the refund. However, with a view to enabling the respondents to obtain a stay against the payment of refund in accordance with law - respondents shall pay the refund.

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• 2018 (4) TMI 68
  Principles of Natural Justice - According to the petitioners, along with the SCN, the authority had not provided copies of the relied upon documents - Held that: - Even though the documents must be concerning the petitioners and seized from their custody, in absence of any proof suggesting that they had copies of such documents within their possession, the adjudicating authority could not have passed the order without supplying copies thereof to the petitioners - proceedings are remanded back to the adjudicating authority for fresh consideration - petition allowed by way of remand.

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• 2018 (4) TMI 67
  Demand of interest - CENVAT credit on supplies made under International Competitive Bidding (ICB) - reverse charge mechanism - whether interest is payable on the amount of cenvat credit of 71,41,940/- which was wrongly availed in the year March 2010, but reversed pursuant to being pointed on investigation by the department on 12th July, 201? - Held that: - interest cannot be recovered when the time barred demand has been paid voluntarily. In the present case, no such findings has been recorded by the Adjudicating Authority i.e., whether the amount paid by the appellant can be confirmed by invoking the extended period or otherwise. Therefore, to ascertain the said fact, the matter need to be remanded to adjudicating Authority. Appeal allowed by way of remand.

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• 2018 (4) TMI 66
  CENVAT credit - M.S.beams, M.S.Channels, M.S.Angles, M.S.Bars, M.S.Joist, H.R.Plate, H.R.Coil, Plate, Chequered Plate, Chequered Coil etc. - Welding Electrodes - Held that: - the said items were used for making various machines /machines parts and accessories thereof such as Kiln, conveyor, pollution control equipments, Hooper - Revenue had not seriously contested the use of items in their appeals. Reliance placed in the case of M/s. Singhal Enterprises Private Limited Versus The Commissioner Customs & Central Excise, Raipur [2016 (9) TMI 682 - CESTAT NEW DELHI], where it was held that applying the “User Test” to the facts in hand, we have no hesitation in holding that the structural items used in the fabrication of support structures would fall within the ambit of ‘Capital Goods’ as contemplated under Rule 2(a) of the Cenvat Credit Rules. Appeal dismissed - decided against Revenue.

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• 2018 (4) TMI 65
  CENVAT credit - credit availed on brass tubes as capital goods which was subsequently removed by them - Rule 3(5)(a) of the CCR 2005 - Held that: - Revenue has not been able to put forth any ground to show that in case of clearance of capital goods, in respect of which the credit has been availed, to the job worker, would not attract the provisions of Rule 4(5)(a) - appeal dismissed - decided against Revenue.

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• 2018 (4) TMI 64
  Rectification of mistake - the case law cited by the assessee-Appellants is either not considered or misinterpreted - Held that: - it may be mentioned that ROM amounts to review of the impugned order which is not permissible - Further, it is not necessary to discuss all the arguments and materials produced during the course of hearing. Only cumulative effect will have to be mentioned - ROM application dismissed.

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• 2018 (4) TMI 63
  CENVAT credit - return of defective goods - Rule 16(2) of the Central Excise Rules, 2002 - difference of opinion - Held that: - there are contrary decision on the issue by this Tribunal, therefore, it would be in the interest of justice to refer the matter to the Larger Bench, therefore, the matter is referred to the Larger Bench of this Tribunal to decided the issue:- In terms of Rule 16(2) of the Central Excise Rules, 2002, Whether the assessee is required to reverse cenvat credit on the returned goods which are not further processed and cleared as scrap or not? Matter referred to Larger Bench.

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• 2018 (4) TMI 62
  Recovery of duty from a successor in business - legal heirs of a deceased assessee - Clandestine manufacture and removal - Held that: - no recovery proceeding can be initiated against the legal heir of late Sudhir Kapoor as they are not carrying on business of the deceased. However, the Department Officers may proceed to recover the Government dues from the attached plant and machineries of the deceased Shri Sudhir Kapoor - reliance placed in the case of THE COMMISSIONER OF CENTRAL EXCISE, BANGALORE-III Versus SHRI DHIREN GANDHI [2012 (6) TMI 556 - KARNATAKA HIGH COURT], where it was held that Courts cannot, under the guise of interpreting these provisions, bring within the network, the legal heirs who are not the person chargeable to duty under the Act. Appeal allowed - decided in favor of appellant.

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• 2018 (4) TMI 61
  Benefit of N/N. 4/2006-CE dated 01.03.2006 - receipt of sulphuric acid without payment of duty for used in manufacture of zinc sulphate - difference of opinion - Held that: - the matter placed before the Hon'ble President to constitute to Larger Bench to decide the following issue:- For manufacture of zinc sulphate (agriculture grade) for which sulphuric acid an input whether the said sulphuric acid can be procured without payment of duty by claiming exemption at serial no.32 of Notification No.4/2006-CE dated 01.03.2006 or not? - matter referred to Larger Bench.

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• 2018 (4) TMI 60
  CENVAT credit - duty paying invoices - whether the appellant assessee have rightly taken CENVAT credit based on ISD invoices Issued by the then head offices during the period August, 2010 to April, 2011? - Held that: - the courts below have rejected the Cenvat credit mechanically without application of mind - It is admitted fact that the relevant invoices were available with the appellant at the time of inspection of audit by the Revenue. No errors have been found in any of the invoices and audit found the wanting details. As required, the requisites of the ISD invoice contain all the details prescribed under Rule 4A(2) of S.T.R. 1994 read with Rule 9 of CCR, 2004 - It is admitted fact that the appellant had given all the invoices, details during the course of enquiry as have been observed in the SCN as well as in the Order-in-Original. The nonavailability of enclosures at the time of audit with the ISD invoice does not disentitle the appellant from taking the credit. Circular No.345/2/2000/TRU dated 29 th August, 2000 provides that Cenvat credit can be taken at any time after receipt of inputs and input services along with the duty paying documents. Appeal allowed - decided in favor of appellant.

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• 2018 (4) TMI 59
  Penalty under Rule 13(2) and Rule 15(2) of Cenvat Credit Rules, 2002/2004 respectively - irregular credit on account of capital goods received from a 100% EOU - difference of opinion - Held that: - the difference of opinion is placed before the Hon'ble President for reference to third Member for resolving the dispute:- Whether the appeal has to be dismissed by upholding the penalty, as held by the Ld. Member Technical, Shri Devender Singh (OR) the same has to be allowed by setting aside the penalty, as held by the Ld. Member Judicial? Matter refereed to Third Member.

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• 2018 (4) TMI 58
  Rectification of mistake - It is the contention of the Revenue that no such document was placed by the appellant on record to establish that fire took place due to unavoidable safety majors - Held that: - it is a document in form of copy of report dated 10.03.2001 was placed on record by the appellant. The said report is issued by Haryana Fire Service Department which shows that fire took place due to electric short circuit. The said document is on record and the same has been placed before the authorities below - ROM Application filed by Revenue is dismissed.

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• 2018 (4) TMI 57
  Refund claim - time limitation - section 11B of CEA - whether the appellant’s refund is hit by limitation or otherwise? - Held that: - the refund is in respect of the amount which was debited and involved in the litigation which was pending before the adjudicating authority. Therefore, before the adjudication of the demand of cenvat credit, no refund could have arisen. The refund has arisen only after the adjudication order was passed on 31.12.2015 - the period of one year provided under Section 11B should be reckoned from the date of such adjudication order, from the said date, the appellant has filed refund within one year. Refund claim is filed within time limit - appeal allowed - decided in favor of appellant.

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• 2018 (4) TMI 56
  Clandestine manufacture and removal - CENVAT credit - charge is based on some loose slips - shortage of materials - Held that: - the Investigating Officer had made out the case of such clandestine removal on the basis of the loose slips without basis of any enquiry to the extent of clearance of the goods, buyer name through investigation. Hence, the charge of clandestine removal merely on the basis of the loose slips, cannot be sustained - the charge was made on the basis of loose slips which were disowned by the appellant. Shortage of material - Held that: - The Stock Verification was done by method of Dip Stock Taking for the measurement of the dips of the material in the storage tank - It appears from the record that the stock of two tanks was not considered during the stock verification. The appellant raised this issue before the lower authorities and it was not refuted by any material. Appeal allowed - decided in favor of appellant.

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• 2018 (4) TMI 55
  CENVAT credit - duty paying documents - whether the appellant have availed Canvat credit of input service in the nature of banking and other services on the basis of improper invoice, not issued in accordance with rule 9 of CCR, 2004 read with Rule 4A of S.T.R. 1994? - Held that: - no specific Performa of the invoice have been notified or prescribed under Rule 4A(2) of S.T.R. but the requirement of the said Rule is that the invoice should contained the details as mentioned therein - Cenvat credit cannot be denied on technical grounds. There is no objection at the end of ISD, and the ISD is also registered under the Service Tax and filing returns - credit availed is proper - penalty also set aside - appeal allowed.

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• 2018 (4) TMI 54
  Classification of goods - Continuous computer stationery in the form of Carbon Leaflet/Money Receipts - validity of SCN - Held that: - subject item reflects more a member of Chapter 49, family compared to Chapter 48. - the very basis of the SCN that the finished products manufactured by the respondents are classifiable under Chapter 48 no longer exists - the order of the Ld. Commissioner (Appeals) impugned herein is correct and requires no interference - appeal dismissed - decided against Revenue.

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• 2018 (4) TMI 53
  CENVAT Credit - input services - manpower services - denial on the ground that the invoices issued by the supplier of service has not been mentioned the registration number - Held that: - manpower used for cleaning service is sought to be denied as the same is no input service as per Rule 2(l) of the CCR 2004. The said reasoning to deny the CENVAT Credit is against the wish of Hon’ble Prime Minister of India, who had initiated ‘Swachchha Bharat Abhiyan’ on 2nd October, 2014 to make the country clean - cleaning service is directly relating to the manufacturing activity of the appellant. Scope of SCN - Held that: - learned Commissioner (Appeals) has sought to deny the CENVAT Credit on the premise that service provider has not mentioned registration number in the invoice. The same is not a ground for rejection of the CENVAT Credit in the SCN - learned Commissioner (Appeals) has gone beyond the scope of SCN. Appeal allowed - decided in favor of appellant.

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• 2018 (4) TMI 52
  Valuation - inclusion of excise duty in the price of raw material when cenvat credit for the same has been availed - fabrication of the body on Chassis - Held that: - M/s. Bhalotia Auto has availed the cenvat credit of this amount of additional basic excise duty paid by the supplier - it is already already settled that there is no need to include the excise duty in the price of raw material when cenvat credit for the same has been availed - appeal allowed - decided in favor of appellant.

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• 2018 (4) TMI 51
  Valuation - Receipt of additional amount - bonus - Held that: - Even though the allegation of Revenue is that bonus is consideration otherwise received by appellant from Shree Cement Ltd., there is no nexus brought out by Revenue to prove that the said consideration was received in consideration of depression of the assessable value or any extraneous consideration received in relation to clearance of goods - In absence of such element, it is difficult for Revenue to allege that the incentives which was received towards efficiency of the appellant was an incentive but not sale price to levy duty - appeal allowed.

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• CST, VAT & Sales Tax

• 2018 (4) TMI 50
  Time limitation - whether Karnataka Appellate Tribunal is right in law even though e-sugam produced by the Respondent at the time of interception is beyond the time prescribed in the Notification issued by the Commissioner of Commercial Taxes u/s 53(2-A) of the KVAT Act? - Held that: - It is not a case in which goods were being transported without an e-sugam. The assessee had obtained e-sugam but it had expired. The cause shown is reasonable - Admittedly, goods were indented from Gujarat. They reached Penambur Port on 27.12.2012. Customs formalities were completed on 31.12.2012. The tile limitation has been adhered to - petition dismissed - decided against Revenue-petitioner.

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• 2018 (4) TMI 49
  Validity of reassessment order - Whether the objection raised by Audit party is sufficient in meeting with requirement of section 15 of the Himachal Pradesh General Sales Tax Act, 1968 read with Rule 61 so as to enable the assessing authority to frame the reassessment without application of his own mind to the facts and circumstances of the case? - Held that: - the issue is no longer res integra for the Hon’ble Supreme Court of India in Indian and Eastern Newspaper Society Vs. Commissioner of Income-Tax, New Delhi [1979 (8) TMI 1 - SUPREME Court] has held that the opinion of an internal audit party of the income tax department on a point of law cannot be regarded as “information” within the meaning of s. 147(b) of I.T. Act, 1961. The order of reassessment dated 24th May, 2003, passed by Assessing Authority, Solan; order dated 10th May, 2005, passed by Additional Excise & Taxation Commissioner-cum-Appellate Authority (South Zone), Himachal Pradeshare quashed and set aside - appeal allowed.

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• 2018 (4) TMI 48
  Input tax credit - inter-state sale - stock transfer - irregular credit on account of capital goods received from a 100% EOU - Whether in the earlier legal action as instituted by the petitioner-company the challenge to the vires of Section 10(3)(a) and Section 10(3)(b) of the TVAT Act was considered and settled? Held that: - Even in the transaction of stock or consignment transfer and export, the State does not get any tax, neither VAT nor CST even then those transactions are under the umbrella of getting benefit of the Input Tax Credit. Thus, the classification made for purpose of the subject matter is unintelligible. Difference in treatment cannot be explained in the light of the object for which Section 10 of TVAT Act generally stands for. The classification is not based on any reasonable distinction. The differential treatment could not be reasonably explained or justified by the respondents and hence, denial of the Input Credit Tax for sale in the course of interstate trade or commerce is discriminatory as already noted, even after we have unconventionally delved into the records, preceded the enactment, but did not get any explanation there for purpose of the above differential which we have now declared as discriminatory. The benefit of Input Tax shall be available to the petitioner-company for carrying out sale in the course of interstate trade or commerce - But that benefit shall not be extended to the petitioner-company in respect of the returns or the assessment orders unrelated to the assessment order dated 16.06.2015 or prior to but such benefit shall continue in respect of the return or the assessment order posterior to 16.06.2015. On comparison between the sale in the course of interstate trade or commerce and the transaction of stock-transfer, inference that has been in the premise of the said impression, has not persuaded us to utilize the same in this case. Petition allowed.

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• Indian Laws

• 2018 (4) TMI 98
  Extension of interim order passed by this Court on 15.12.2017 - grant of Passports - Passports (1st Amendment) Rules, 2018 - Held that: - the interim order passed on 15.12.2017 shall stand extended till the matter is finally heard and the judgment is pronounced. That apart, the directions issued in the interim order shall apply as stated in paragraphs 11 to 13 in the said order. It is also directed that the same shall also control and govern the Passports (1st Amendment) Rules, 2018.

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