TMI Tax Updates - e-Newsletter
April 5, 2017

Case Laws in this Newsletter:

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

TMI SMS

• Non-appearance against the notices issues u/s 142(1) r.w.s. 143 - assessee is liable to pay Rs. 20,000/- as penalty u/s 271(1)(b)

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Articles

• LEARNING FROM CASE OF BERGER PAINTS: ALL POSSIBLE CONTENTIONS MUST BE RAISED
• CBEC unveils 8 GST Rules and revised FAQs on GST

News

• Joint statement by the Chancellor of the Exchequer and the Finance Minister of India at the 9th UK-India Economic and Financial Dialogue held in Delhi today

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• Revenue Department exceeds Revised Tax Collections target for 2016-17 around 18% taken together in case of Direct and Indirect Taxes; Provisional figure of Total Tax Collections in 2016-17 is ₹ 17.10 Lakh Crore as against the Revised Target of ₹ 16.97 Lakh Crore.;

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• Directives under Rule 126 of Explosives Rules 2008

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• Text of the opening remarks of Shri Shaktikanta Das, Secretary, Department of Economic Affairs, Ministry of Finance at the Curtain Raiser Event of the 52nd Annual Meeting of African Development Bank (AfDB), 2017 in New Delhi

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• CBDT Requests for Stakeholder’s comments on Draft Notification to be issued Under Section 10(38) of the Income-tax Act, 1961

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Notifications

Customs

• 11/2017 - dated 3-4-2017 - ADD
  Amendment in Notification No. 01/2017-Customs (ADD), dated the 5th of January, 2017

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Income Tax

• S.O. 1021(E) - dated 31-3-2017 - IT
  Central Government constituted the National Committee for Promotion Social and Economic Welfare

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SEZ

• S.O. 1037(E) - dated 31-3-2017 - SEZ
  Central Government notifies the 2.33 hectares area at Survey No. 2/1 & 2/2, Venkatala Village, Yelahanka Hobli, Bengaluru, in the State of Karnataka and constitutes an Approval Committee

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• S.O. 1043(E) - dated 27-3-2017 - SEZ
  Central Government notifies the 2.56 hectares area at at Kokapet Village, Gandipet Mandal, Ranga Reddy District, in the State of Telangana and constitutes an Approval Committee

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• S.O. 1042(E) - dated 27-3-2017 - SEZ
  Central Government notifies the 1.66 hectares area at Kokapet Village, Gandipet Mandal, Ranga Reddy District, in the State of Telangana and constitutes an Approval Committee

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Highlights / Catch Notes

Income Tax

• Nature of land - merely because the peculiar situation of the land near the sea side or stony side of the sea and that they never shown agriculture income out of it, it cannot be held that the land in question is not agriculture land - HC
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• TDS u/s 194A - interest payment made under the award of the Tribunal in motor vehicle accident case - action of the Petitioner deducting tax at source on the interest awarded by the Tribunal, was wholly unjustified and illegal - HC
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• Additions cannot be made u/s 69C of the Act, as unexplained expenditure, towards difference between purchase price found in loose slips and amount recorded in books of account - AT
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• A.O. has no jurisdiction to make additions in respect of concluded assessments in the absence of any incriminating materials. Hence, we direct the A.O. to delete additions towards notional interest on interest free advances given to sister concerns - AT
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• Levy of penalty u/s 271B read with section 274(1) - technical snag while upholding the tax audit report electronically - aking into the fact that the audit report has subsequently been uploaded electronically and also hard copy has been furnished before the AO before the completion of the assessment proceedings, no penalty - AT
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• Addition of the land development expenses - Taking into consideration all aspects, we are of the view that end of justice would meet if the expenditure out of land development could be estimated at 10% for disallowance - AT
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• Addition of cessation of liability u/s 41 - since the coupon in question is valid for a clear-cut expressly stated time period of one year wherein the coupon holder is otherwise nowhere in picture - additions confirmed - AT
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• Penalty u/s 271(1)(c) - assessee has made a claim, which is one of the arguable claims, but assessee in its own wisdom, withdrawn that claim During the course of assessment proceedings itself, but it cannot be said that the claim of the assessee was wrong or false - no penalty - AT
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• The punitive charges paid are only compensatory in nature pursuant to the contractual obligation which is directly connected or intrinsically related with the carrying on of its business which unequivocally qualifies as an allowable deduction under section 37(1) - AT
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• Addition on account of website development expenses - the intended purpose behind the website was not to create an asset but only to provide a means for disseminating the information about the assessee - allowed as revenue expenditure - AT
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• Draft of Notification to be issued under third proviso to the clause (38) of section 10 of the Income-tax Act, 1961
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Customs

• Effective date of amending notification - In the notification dated 27.01.2017, nothing has otherwise been provided as regards the date of its enforcement. Therefore, it remains beyond the pale of doubt that its operation would be governed by Clause (a) of Sub-section (4) of Section 25; and, accordingly, it has come into force on the date of issuance and not before. - HC
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• Quantum of surety amount - If the petitioner can travel by Air and can have 1 kg. gold, he cannot be said to be a poor person - petition lacks merit, deserves to be dismissed - HC
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• The mistake of law or mistake in legal understanding of opinion of a counsel does not bind the party whom he or she represents or at least to the extent of causing irreparable prejudice. - HC
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Corporate Law

• Sanction and approval of a Scheme of Arrangement - looking from any angle this Tribunal is perforce to apply the provisions of 2013 Act in considering the sanction of the Scheme and not as espoused by the Petitioner for the applicability of the 1956 Act - Scheme not allowed - Tri
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Service Tax

• Business Auxiliary Service - the services rendered to principal in USA, who had paid for the services in foreign exchange, has to be considered as export of service - AT
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• Valuation - Works contract - The appellant have suo-moto paid service tax on the labour component, have paid Excise duty on the manufacture of LV/HV coils, and further have paid Sales Tax on the material component used in the repair of the Transformers. In this view of the matter, the SCN is not tenable - AT
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• The SCN never proposed imposition of penalty under various sub-section/sub-clauses of Section 77 and the Original Authority traveled beyond the scope of SCN in imposing various penalties under the said section - penalties set aside. - AT
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• CENVAT credit - works contract - the Cenvat credit to which the contractor themselves are not entitled to, the said cenvat credit cannot be transferred to anyone - AT
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Central Excise

• Valuation - subsidy - manufacture of DDT - whether amount of subsidy received by the appellant from the Government of India is to be treated as additional consideration for the sale of the goods manufactured by the appellant and sold to the Ministry, Govt. of India? - Held Yes - AT
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• CENVAT credit - there was no bar to utilize Cenvat credit of Basic Excise Duty for payment of Education Cess - demand set aside - AT
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Case Laws:

• Income Tax

• 2017 (4) TMI 191
  Revision u/s 263 - Held that:- We do not consider it necessary to go into the question whether at the relevant point of time the exercise of jurisdiction under section 263 of the Income-tax Act, 1961 by the Commissioner of Income-tax (Appeals) was justified in view of the fact that the subsequent events have clearly demonstrated that there has been no leakage of revenue and the matter has become academic. HC ref case 2014 (4) TMI 683 - DELHI HIGH COURT

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• 2017 (4) TMI 190
  Nature of land - whether the Tribunal was justified in holding that 80% of the land is not an agricultural land and liable to capital gains tax? - Held that:- The finding of facts so recored by the Tribunal itself confirms the position that the case of the assessees fall within the ambit of definition of “agriculture” as defined under the Code. The property requires to be treated as agricultural land and its' activities are “agricultural” in nature. We are inclined to observe that the property in question cannot be treated as “Capital Asset” as contemplated under Section 2(14) (iii) of the Act. It is wrong to hold, in view of the facts and circumstances and the nature of agricultural land because of peculiar situation of the land near the sea side or stony side of the sea, that assessees are not doing any regular agriculture operation, this is also on the ground that they never shown agriculture income out of it. Any agriculture produce and products can be for personal use also. Therefore, taking overall view of the matter including the reports placed on record, which supports the case of the assessee and for the reasons so recorded above, we are inclined to allow these appeals.

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• 2017 (4) TMI 189
  Penalty u/s 271(1)(c) - disallowance of deduction u/s. 80IB relating to on account of interest income on bank deposit / staff loan - Held that:- The amount of penalty imposed on the aforesaid would be too small. Apart from above, even there is a clear finding by the learned ITAT that with respect to the above the assessee had furnished all details. Under the circumstances, the case will not fall in any of the parameters mentioned under Section 271 (1)(c) of the Act as rightly observed by the learned ITAT. Under the circumstances, the present Appeals with respect to the deletion of the penalty in respect of the dis-allowances under Section 80IB on account of interest income on bank deposit / staff loan is not required to be interfered by this Court. Disallowance / deduction under section 80IB of the Act relating to price paid by the assessee for the purchase of raw materials at lower rate and with respect to selling and distribution expenses is concerned, the present Appeals are disposed of with the liberty in favour of the Revenue to initiate appropriate proceedings afresh for penalty, after the decision of the Hon’ble High Court in the quantum Appeals and subject to the decision that may be taken by the Hon’ble High Court in the quantum Appeals considering section 275 (1A) of the Income Tax Act and as and when such proceedings are considered the same may be considered in accordance with law and on merits.

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• 2017 (4) TMI 188
  Validity of reopening of assessment - Held that:- Having regard to the contents of the notice for AY 2003-04, the court is unable to agree with the findings of the ITAT. It constitutes reference to tangible material “outside” the record, i.e. information based upon the investigation of the Commissioner of Central Excise with respect to the purchases made by the assesses. However, as far as the second issue is concerned, the Court is of the opinion that even the rectified order does not address the issues squarely. Thus, arguendo such arguments could be validly raised. At the same time, the court notices that for both AYs 2004-05 and 2005-06, the note discloses the source of the information, i.e. DRI Local Unit at Jaipur, sending information based upon the Commissioner of Central Excise’s investigations. To require the Revenue to disclose further details regarding the nature of documents or contents thereof would be virtually rewriting the conditions in section 147. After all, Section 147 merely authorises the issuance of notice to reopen with conditions. If the Court were to dictate the manner and contents of what is to be written, the statutory conditions would be added as it were. In this context, it needs to be emphasized that the court would interpret the statute as they stand in their own terms, but at the same time being conscious of the rights of the citizens. So viewed, Kelvinator (2010 (1) TMI 11 - SUPREME COURT OF INDIA) strikes just balance. To add further conditions to the nature of discussion/reasons that the officer authorising the notice would have to discuss in the note or decision would be beyond the purview of the Courts and would not be justified. For the above reasons, this Court is of the opinion that the impugned order – and the consequential order of 05.01.17 cannot be sustained. They are accordingly set aside. The question of law urged by the Revenue is answered in its favour.

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• 2017 (4) TMI 187
  Reconciliation of accounts with the bank disallowed on the ground that it did not pertain to the year under consideration - Held that:- If the income is to be considered then the loss is also to be considered for the relevant year.

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• 2017 (4) TMI 186
  Penalty u/s 271(1)(c) - non-disclosure of benefits and advantages they had derived from the services and also describe the nature of the services and that its failure resulted not only in rejection of the transactional net marginal method but also reduction of losses - Held that:- Income-tax Appellate Tribunal's impugned order has elaborately dealt with the rationale in rejecting the Assessing Officer's imposition of penalty. This court is of the opinion that the view taken by the Income-tax Appellate Tribunal does not in any manner deviate against the Seventh Explanation to section 271(1)(c). Furthermore, having regard to the fact that the assessee's claim was in respect of a new line of business of manufacturing, introduced for the first time in the given year, its failure per se could not have triggered the automatic presumptive application of Seventh Explanation to section 271(1)(c) as perceived by the Revenue authorities in this regard. Undoubtedly, the application of the exception has to be based upon the facts of each case and no generalisation can be made. Given this reality, the court is satisfied that in the present instance, the Income-tax Appellate Tribunal did not commit any error of law. No substantial question of law arises.

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• 2017 (4) TMI 185
  Addition u/s 68 - Held that:- Revenue states that the impugned order itself holds that share premium of ₹ 490 per share defies all commercial prudence. Therefore it has to be considered to be cash credit. We find that the Tribunal has examined the case of the Revenue on the parameters of section 68 of the Act and found on facts that it is not so hit. Therefore, section 68 of the Act cannot be invoked. The Revenue has not been able to show in any manner the factual finding recorded by the Tribunal is perverse in any manner.- Decided against revneue Interest income from fixed deposit chargeable as business income - assessee's subsidiary company has started manufacturing - Held that:- The business of the respondent- assessee was of financing, investing, sourcing, operating, green or clean technological products and services had commenced. Therefore, consequently, allowed the claim made for depreciation and expenses to deter mine business profits. The above finding of the Tribunal that the business of the respondent had commenced is not challenged before us by the Revenue. It needs no emphasis that setting up a business or commencement of business cannot vary dependent upon the claim being made, i.e., for expenses it has commenced and for income it has not commenced. Therefore it is not open to the Revenue to contend that the business was not set up/commenced for the purposes of holding that the income earned is not income from business. Further the respondent's business and the period of fixed deposits, the impugned order holds the interest earned on them is taxable as business income. In fact this court is almost similar circumstances in Indo Swiss Jewels Ltd. (2005 (9) TMI 47 - BOMBAY High Court ) has held interest earned on short- term deposits on the money kept apart for the purposes of business had to be treated as income earned from business and could not be treated as income from other sources. Considering the short duration in which the amounts were kept in fixed deposit awaiting use in its business operations would necessarily mean income earned on account of business following the ratio of this court in Indo Swiss Jewels Ltd. (2005 (9) TMI 47 - BOMBAY High Court ). - Decided against revneue

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• 2017 (4) TMI 184
  TPA - selection of comparable - Held that:- As finances of the company that outsources a major part of its business cannot be compared to one that does not.

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• 2017 (4) TMI 183
  TDS u/s 194A - interest payment made under the award of the Tribunal in motor vehicle accident case - Held that:- The action of the Petitioner deducting tax at source on the interest awarded by the Tribunal, without following the mandate of the Division Bench of this Court in Gauri Deepak Patel & Ors. Vs. New India Assurance Co.Ltd. & Anr. (2009 (12) TMI 964 - BOMBAY HIGH COURT ) was wholly unjustified and illegal Petitioner wherein held Petitioner as having knowledge of the provisions of the Income Tax Act and the law laid down by the Division Bench ought not to have deducted a lumpsum TDS and deposited the same with the Income Tax department. It was observed that the Petitioner by deducting the TDS amount has actually deprived Respondent No.1 from receiving the award amount, and as the Petitioner was not ready to deposit the amount, warrant of attachment was directed The submissions on behalf of the Petitioner relying on a cumulative reading of Sections 56, 145A and 194A(3)(ix) of the Act cannot be accepted for two reasons, firstly there cannot be any dispute in the context what Section 56 and 145A would provide in respect of tax to be paid on interest directed to be paid on the compensation awarded by the Tribunal, as these provisions would stipulate and secondly, in view of the above clear position in law as laid down by the Division Bench of this Court in Gauri Deepak Patel & Ors. (supra) interpreting Section 194(3)(ix) of the Act, relevant in the present context. Resultantly the action of the Petitioner deducting tax at source on the interest awarded by the Tribunal, without following the mandate of the Division Bench of this Court in Gauri Deepak Patel & Ors. Vs. New India Assurance Co.Ltd. & Anr. (supra) was wholly unjustified and illegal.

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• 2017 (4) TMI 182
  Entitlement for the benefit under section 80-I - Held that:- Tribunal was justified in holding that the assessee is entitled for the benefit of deduction under section 80-I of the Act on the machinery which was an old asset and was put to use by the assessee in its old unit has also claimed depreciation on same in the earlier assessment year. Benefit envisaged under section 80-I(2) - Held that:- Tribunal has erred in law and acted perversely in holding that the forklift truck was on trial run in the old unit and which was ready for use in the new unit should be treated as a new asset without properly interpreting the provisions of section 80-I(2) and Explanation 2 thereof according to which the total value of old plant and machinery exceeded 20 per cent. and the assessee was not entitled to the benefit envisaged under section 80-I(2) Rejection of accounts as well as invoking of provisions of section 145 - Held that:- Lump sum amount taken by the Commissioner of Income-tax (Appeals), the contention of Mr. Jain is required to be accepted. The Assessing Officer by adopting 35 per cent., in our view which is at higher side, even if we accept the profit which has been shown by the assessee from the year 1991-92 to 1996-97, the average of which comes to 31. 4, for that we put the estimate at 32 per cent. instead of 35 per cent. by the Assessing Officer. In that view of the matter, the issue No. 3 is answered in favour of the Department and against the assessee and we estimate profit at 32 per cent. and calculation may be done on that basis by the Assessing Officer.

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• 2017 (4) TMI 181
  Deduction under section 80P(2)(a)(i) - Held that:- The appellate authority, namely, the Commissioner of Income-tax (Appeals) and the Income-tax Appellate Tribunal has clearly perceived that the assessee is not a co-operative bank and that the activities of the bank are in the nature of accepting deposits, advancing loans, etc., carried on by the assessee, but are confined to its members only and that too in a particular geographical area. Therefore, the respondent society is eligible for deduction under section 80P(2)(a)(i) of the Act. The contention of the appellant that the members of the assessee-society are not entitled to receive any dividend or having any voting right or no right to participate in the general administration or to attend any meeting, etc., because they are admitted as associate member for availing of loan only and was also charging a higher rate of interest at the rate of 14 per cent., is not a ground to deny the exemption granted under section 80P(2)(a)(i) of the Act. - Decided in favour of assessee

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• 2017 (4) TMI 180
  Addition on account of short-term capital gains - ownership of land - whether only for convenience the land was purchased in the name of the director otherwise it has been accounted for by the company? - Held that:- The sale deed was executed by the assessee in respect of Khasra No. 6/1 and 6/4 at village Basda Alias for and on behalf of M/s. Grass Field Farms and Resorts Pvt. Ltd. and the said amount was shown as stock in the books of M/s. Grass Field Farms and Resorts Pvt. Ltd. as on March 31, 2008 and not only this, the limited company had also made a surrender in the survey conducted on February 28, 2008 and the sale proceeds of the said land at ₹ 1,51,80,000 is duly recorded in the books of account of the company and business profit has been offered to tax in the case of the company. On perusal of the material available on record, it is also noticed that the limited company, namely, M/s. Grass Field Farms and Resorts Pvt. Ltd. sold this land to another limited company namely; Grass Field Fire Capital Developers Private Limited on August 5, 2008 for ₹ 1,51,80,000 where also the assessee executed sale deed as an agent for and on behalf of M/s. Grass Field Farms and Resorts Pvt. Ltd. and even the Commissioner of Income-tax (Appeals) and the Tribunal have found that the sale amount is duly recorded in the books of M/s. Grass Field Farms and Resorts Pvt. Ltd. It is also a fact that even a certificate of the company was placed on record confirming ownership of the land before the Assessing Officer himself. There can be no two owners and in the instant case, from the material placed by the assessee and considered by both the appellate authorities, it clearly proves that the assessee being a director executed title deeds for and on behalf of M/s. Grass Field Farms and Resorts Pvt. Ltd. and the beneficial owner for all practical purposes was the limited company which had even paid due taxes later on at the time when the property was sold. - Decided in favour of assessee.

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• 2017 (4) TMI 179
  Additions under section 69C - additions solely based on the documents found during the course of survey - Held that:- Merely based on the statement, which was recorded during the course of survey, such additions cannot be made unless such addition is supported by some corroborative evidence. Where the assessee has been able to explain the discrepancy found during the course of survey with regard to purchase price paid for distribution rights, additions cannot be made solely on the basis of statement made by the assessee during the course of survey. In this case, the assessee during the course of survey, in the statement recorded, categorically stated that he has paid ₹1,01,29,747/- , but not ₹ 1,85,00,000/-. The Assessing Officer without any evidence to suggest that the assessee has paid on money in cash over and above the consideration recorded in the books of account, which was further supported by the deposition of producer in the form of letter, wherein he had confirmed receipt of ₹ 1,01,29,747/- additions cannot be made under section 69C of the Act, as unexplained expenditure, towards difference between purchase price found in loose slips and amount recorded in books of account. The Commissioner of Income Tax (Appeals), after considering the relevant facts, has rightly deleted the additions - Decided in favour of assessee

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• 2017 (4) TMI 178
  Addition on income from sand business - Held that:- Keeping in view of the business carried-out by the assessee, the Commissioner of Income Tax (Appeals) was of the opinion that estimation of income of ₹ 30,000/- from the sand business is reasonable. Accordingly, confirmed the order of the Assessing Officer. Even before me, assessee was not able to substantiate any evidence that the addition made by the Assessing Officer and confirmed by the Commissioner of Income Tax (Appeals) is on higher side. In view of the above, find no reason to interfere in the order passed by the Commissioner of Income Tax (Appeals). Thus, this ground of appeal raised by the assessee is dismissed. Unexplained investment in purchase of TATA Safari Car - Held that:- Commissioner of Income Tax (Appeals) has given many opportunities to file details about the repayments received and also details in respect of sale of car to the third party. The assessee neither appeared nor filed details before the Commissioner of Income Tax (Appeals). Under these facts and circumstances of the case, Commissioner of Income Tax (Appeals) confirmed the order passed by the Assessing Officer. Even Before us, the assessee has not filed any details in respect of payments received from Sri Tadi Tada Rao from whom assessee purchased the car nor filed any details of third party to whom car was sold. Under these facts and circumstances of the case, find no infirmity in the order of the Commissioner of Income Tax (Appeals). Credits in the bank account as representing receipts from sand business - Held that:- The assessee has not furnished any information regarding bank credits. During the course of appellate proceedings also, no information was given with regard to deposits in the bank account, accordingly, he upheld the order passed by the Assessing Officer. Before me, learned counsel for the assessee submitted that the addition made by the Assessing Officer on estimate basis is without any basis, however, the assessee has not filed any material to explain the source of credits in the bank account to the tune of ₹ 50,30,160/-. Under these facts and circumstances of the case, I find that Assessing Officer has justified in estimating the income of the assessee and the same was confirmed by the Commissioner of Income Tax (Appeals). Unexplained investment in land - Held that:- No material is filed to substantiate that the assessee’s son is having source of income to purchase the land. As no evidence was filed to substantiate the source of investment and also return of income filed by his son Commissioner of Income Tax (Appeals) rightly confirmed the order of the Assessing Officer Addition towards contract business - Held that:- The assessee has not filed any evidence to shows that the amount received from Dattatreya Company has been paid to original owners of the sand. He has also not given the details of the original owners. Before me also, the assessee has not submitted any details regarding original owners and also not able to substantiate that the amount credited in his bank account has been transferred to owners of the sand. Assessee appeal dismissed.

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• 2017 (4) TMI 177
  Additions towards notional interest on interest free advances given out of interest bearing funds - A.O. jurisdiction to make additions in respect of concluded assessments - Held that:- In this case, search was taken place on 9.1.2009. As on the date of search, the assessment for the assessment years 2005-06 to 2007-08 were already concluded and there are no proceedings pending for those assessment years. The time limit for issue of notice u/s 143(2) of the Act, for the assessment years 2005-06 to 2007-08 has been expired. The A.O. made additions towards notional interest on interest free advances given to sister concerns without any incriminating materials and based on the books of accounts and financial statements, which were already part of regular return of income filed by the assessee u/s 139(1) of the Act for those assessment years. Therefore, we are of the view that the A.O. has no jurisdiction to make additions in respect of concluded assessments in the absence of any incriminating materials. Hence, we direct the A.O. to delete additions towards notional interest on interest free advances given to sister concerns for the A.Y. 2005-06 to 2007-08. - Decided in favour of assessee

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• 2017 (4) TMI 176
  Assessment u/s 153A - unexplained cash deposits - Held that:- In this case, the assessment for the assessment year 2003-04, 2004-05 & 2006-07 are already concluded and there is no proceedings pending for those assessment years. The time limit for issue of notice u/s 143(2) of the Act has been expired. The A.O. has made additions towards unexplained cash deposits found in the bank account, unexplained loans and advances and unexplained credits in apital account without any incriminating materials. Therefore, we are of the view that the A.O. has no jurisdiction to make additions for the assessment years 2003-04, 2004-05 & 2006-07 in the absence of any incriminating materials. In this case, the A.O. has made additions towards unexplained cash credits, unexplained advances and unexplained credits in capital accounts based on the books of accounts which were already part of regular return filed by the assessee u/s 139(1) of the Act, but not based on any incriminating materials. Hence, we are of the considered view that, the A.O. has no jurisdiction to make additions towards any income in the absence of seized materials for the assessment years which are concluded as on the date of search. Accordingly, we direct the A.O. to delete additions made for the assessment year 2003-04, 2004-05 & 2006-07. Additions towards cash found during the course of search for the assessment year 2009-10 we find force in the arguments of the assessee for the reason that the assessee has filed necessary evidences in the form of the confirmation letter from the debtor who has confirmed repayment of advance of Rs. 7 lakhs. We further observed that the debtor Shri P.N. Raju has given the deposition before the A.O., wherein he has confirmed that he has repaid the advance. The A.O. made additions by stating that the assessee has failed to prove the genuineness of transactions and creditworthiness of the debtor. We find no merits in the findings of the A.O., for the reason that once the debtor repaid the amount in the capacity as debtor to the assessee, the necessity of proving the creditworthiness, identity and genuineness is not on the assessee as it is only amount received back out of advance made in the earlier period and shown in the return. The CIT(A) without appreciating the facts, simply confirmed additions based on the remand report of the A.O., wherein the A.O. has reiterated its stand at the time of assessment proceedings. Therefore, we direct the A.O. to delete additions made towards cash found during the course of search. - Assessee appeal allowed.

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• 2017 (4) TMI 175
  Exemption u/s 11 - non charitable activity - Held that:- The assessee is a society created to take over the state resource center for adult education from Andhra Mahila Sabha on a mutually agreed terms and to run it with the assistance of the Govt. of India. Mere buying and selling may not be considered as commercial activity with the presence of some profit, which may be for the purpose meeting certain incidental expenditure in the society. In the given case, assessee has purchased some books and distributed the same as per the directions of Govt. of AP to Anganwadis with a minimum profit of 5% which also fixed in consultation with the State Govt. This 5% margin will be utilized to meet the expenditure in State Resource Centre (SRC) which was taken over by the assessee. As per the income and expenditure statement extracted by the AO, profit earned by the assessee is about 3% which may be applied by the society for the mandate under the National Literacy Mission to undertake the task of procurement and supply of teaching material. Therefore, one cannot jump into conclusion merely because there is buying and selling activity. Whether it is in the nature of commercial activity or not has to be determined. It can be termed as commercial activity when it is carried out with the intention of making only profit. When there is no presence of motive to make profit, it cannot be considered as commercial activity. In the given case, rates and profit margin is determined with the consultation of State Govt. and the assessee has no role to play in determining the profit margin in the above transaction. Hence, it clearly shows that presence of profit, which also fixed by the State Govt., does not mean that the assessee is carrying on commercial activity. Moreover, whatever profit generated by the assessee are applied for the mandate under National Literacy Mission or to run/meet the administrative expenses of the society. Thus assessee is not carrying any commercial activity and the provisions of section 2(15) will not apply to the case of the assessee. Accordingly, we uphold the order of the CIT(A) in directing the AO to allow exemption u/s 11 - Decided in favour of assessee

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• 2017 (4) TMI 174
  Rejecting the books of accounts - estimating the profits at 15% of turnover - Held that:- As the issue under consideration is materially identical to that of AYs 2000-01 to 2006-07 and 2008-09 to 2010-11 in assessee’s own cases, respectfully following the decision of coordinate bench in those years, we confirm the order of the CIT(A) in directing the AO to estimate income of the assessee @ 8% of the sales.

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• 2017 (4) TMI 173
  Treatment of unabsorbed depreciation carried forward in the subsequent assessment year - Held that:- Since the brought forward depreciation is to be considered as forming part of the current year’s depreciation by legal fiction as noted, same treatment to unabsorbed depreciation of earlier years would follow at par with the current year’s depreciation. In view of the aforesaid position of law set off of unabsorbed depreciation of the earlier years is not confined to the ‘profits and gains of business or profession’ alone in the relevant assessment year. In this view of the matter, we find no infirmity in the order of the CIT(A) in admitting the set off of unabsorbed depreciation of the earlier year against the current year’s income as claimed. - Decided against revenue

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• 2017 (4) TMI 172
  Levy of penalty u/s 271B read with section 274(1) - Held that:- The audit report in Form 3CB/3CD has been uploaded on the same date ie, 18.9.2013 as date of filing of the return of income but due to some technical snag in the e-filing system of I.T system, the same could not be viewed later on by the AO, at the same time, the ld AR has not been able to furnish any confirmation that the audit report has been uploaded electronically on 18.09.2013. It is also a fact that the audit report has subsequently been uploaded afresh after the assessee become aware of the technical snag and also a hard copy has been furnished before the AO which is again not disputed by the Revenue. The intention behind carrying out the audit u/s 44AB and furnishing a copy of the audit report to the AO is to aid and assist the latter in completing the assessment proceedings. It is not the case of the Revenue that any prejudice or hindrance is caused to the Revenue or the audit report has been filed after the close of the assessment proceedings. Taking into the fact that the audit report has subsequently been uploaded electronically and also hard copy has been furnished before the AO before the completion of the assessment proceedings, non furnishing of the return electronically on 18.09.2013 is merely a technical breach of the provisions of the Act and respectfully following the decision of the Hon’ble Supreme court in the case of Hindustan Steel Ltd. vs. State of Orissa (1969 (8) TMI 31 - SUPREME Court) penalty levied u/s 271B of the Act is hereby directed to be deleted. - Decided in favour of assessee.

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• 2017 (4) TMI 171
  Principal portion of loan waived by a bank assessed u/s 41(1) - provisions of sec. 28(iv) applicability - Held that:- Having regard to the submissions made by the parties, we are of the view that, in the interest of natural justice, the assessee may be given one more opportunity to prove actual utilisation of loan. Further, as observed by us in the earlier paragraphs, there is confusion about the name of bank from which the loan was obtained. Further we are of the view that the assessee should be given an opportunity to explain as to why the provisions of sec. 28(iv) will not be applicable in this case. Accordingly we set aside the order passed by Ld CIT(A) on this issue and restore the same to the file of the AO for examining the same afresh. The assessee is directed to clarify about the name of the bank, demonstrate the actual utilisation of loan with necessary evidences to the satisfaction of the AO and to show as to how the provisions of sec. 28(iv) are not applicable. After hearing the assessee, the AO may take appropriate decision in accordance with the law. Quantum of unabsorbed depreciation & business loss brought forward from the earlier years that is eligible for set off - Held that:- Respectfully following the decision rendered by Hon’ble Gujarat High Court in the case of General Motors India P Ltd (2012 (8) TMI 714 - GUJARAT HIGH COURT ), we hold that the unabsorbed depreciation pertaining to AY 2000-01 should be allowed to be set off during the year under consideration. We have noticed that the AO had assessed the capital portion of loan waived by the bank as income of the assessee in AY 2008-09 and accordingly a part of brought forward unabsorbed depreciation was set off by the AO in AY 2008-09. Since the matter relating to assessment of capital portion of loan has been set aside by us to the file of the AO, we are of the view that the AO should decide the quantum of unabsorbed depreciation eligible for set off in AY 2009-10 after passing the assessment order for AY 2008-09 in the set aside proceedings. Accordingly this issue is restored to the file of the AO. - Decided in favour of assessee for statistical purposes.

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• 2017 (4) TMI 170
  Addition of the land development expenses - Held that:- AO has not drawn interfere from case of any assessee who was engaged in the business of land development.The nature of assessee's business is altogether different. It is to be seen the nature of expenditure incurred and element of profit involved in the land development activities, it cannot be compared with the manufacturing of oil, cake etc. Thus decision of Vijay Proteins Ltd. [1996 (1) TMI 144 - ITAT AHMEDABAD-C] cannot be a guiding factor for estimating disallowance out of expenditure at 25% in a case where activities of assessee is of land development. Section 44 AD provides estimation of profit at 8% in the case of assessee who was engaged in construction activities or doing contractual job. Though this guidance of estimation of profit at 8% is for those assessee’s whose turnover is less than 40 Lacs and we are not strictly using it, but for the purpose of exercising our discretion as to find out what could be element of inflation in claiming expenditure at the end of assesse, we just tookcognizance of this section. Taking into consideration all these aspects, we are of the view that end of justice would meet if the expenditure out of land development could be estimated at 10% for disallowance. - Decided partly in favour of assessee

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• 2017 (4) TMI 169
  Addition of cessation of liability u/s 41 - Held that:- There can hardly be any dispute that the assessee’s so-called marketing scheme is very much in the nature of a ponzy one wherein it collected moneys by exploiting aspirations of the lower income strata of the society by issuing the investors in question some marketing coupons valid for a year. Shri Shah fails in proving assessee’s bonafides since we find it very much and unjustifiable explanation that there was no coupon holder coming forward to encash the same in lieu of the specified electronic items between assessment years 2008-09 to 2013-14 including the impugned assessment year 2012-13. These facts constrain us to speak about the assessee’s marketing scheme alike “the pied piper of Hamlin” type fleecing poor investors. We further wish to highlight the fact that there is no privity of contract/agreement between the assessee and the above investors since the coupon in question is valid for a clear-cut expressly stated time period of one year wherein the coupon holder is otherwise nowhere in picture. We deem it appropriate to reject assessee’s argument that it has been entertaining its coupon holders’ claims and conclude that the express terms indicated in the coupons in question could not be further given a wider meaning than the specified one. Our detailed discussion hereinabove makes Shri Manish Shah to once again vehemently argue that the impugned liability; if at all is to be added u/s.41(1) of the Act, has not ceased to exist in the impugned assessment year as the period of one year after issuance of the relevant coupons has expired much earlier which is not liable to be accepted as section 153 of the Act prescribing time limit of completion of assessment very well deals with such an instance where the Assessing Officer concerned can reopen assessment in an assessee’s case in consequence to this tribunal’s findings. We notice that a co-ordinate bench in Mosbacher India Chennai vs. Addl.DIT [2016 (12) TMI 235 - ITAT CHENNAI] explains ambit of the above statutory provision in such a case wherein it can be clearly held that the amount in question in assesseble as income in earlier assessment year - Decided against assessee.

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• 2017 (4) TMI 168
  Penalty u/s 271(1)(c) - non application of mind - notice between charge and approval given by the higher authorities of the penalty order - Held that:- As perused the letter dated 28/03/2012 issued by the joint Commissioner of income tax, range – 37, New Delhi to the assessing officer approving the penalty order. On reading of the above letter, it is apparent that the assessee has sent the penalty order for approval which was received on 27th of March 2012 by the Ld. at joint Commissioner of income tax and who has granted approval. It is also apparent from reading of the letter that the Ld. assessing officer has sent the draft assessment order along with the assessment records to the Ld. at joint Commissioner of income tax, who approved the same as well as also instructed the assessing offer officer. Regarding timely services of the order returning the assessment records and is also directed him to submit a copy of the order to his office. The approval means confirmation, ratification, or assent to some action or thing done by another, which is submitted to. It may not be said in so many words, but it can also be inferred by the conduct of the higher authorities. Therefore it cannot be said that the deponent granted by the higher authorities without application of mind and is a nonspeaking order when same as been granted after perusal of the order as well as on verification of the records. Hence, we also reject the contention of the Ld. AR that the approval granted by the higher authority is by a nonspeaking order and without application of mind. Disallowance of interest u/s 234A and 234C applying provisions of section 40a (ii) - Held that:- While interpreting the provisions of section 2 (43) of the income tax act and has held that from a reading of Section 2(43) of the Act it is clear that tax under the Act does not include penalty and interest. Therefore it can be a plausible argument that the provisions of section 40a(ii) do not include the payment of interest under section 234B and 234C of the income tax act. Furthermore identical situation prevails under section 249 (4) (a) as well as provisions of section 221 of the income tax act. However, the courts have held that „tax dues‟ does not include interest and penalty. Therefore it can be possibly argued that if the „tax dues‟ does not include interest and penalty then how the word „tax‟ can include the interest and penalty. The above, you can also be examined with respect to the provisions of section 209 of the income tax act. It provides for the payment of advance tax and after that there are other specific provisions that if the advance tax is not paid in accordance with the scheme of the act then assessee are liable for payment of interest under the provisions of section 234A, 234B, 234C of the income tax act. In the tax audit report also the tax auditor has also mentioned the amount is allowable as Rs. nil though the claim of the assessee was on the face of the profit and loss account Therefore according to us during the course of penalty proceedings as well as during the course of assessment proceedings the assessee has made a claim, which is one of the arguable claims, but assessee in its own wisdom, withdrawn that claim During the course of assessment proceedings itself, but it cannot be said that the claim of the assessee was wrong or false. Therefore according to us, for the reasons mentioned above, penalty under section 271 (1) ( c) of the act cannot be levied on claim of the assessee for not disallowing interest on income tax under section 40 a(ii) of the income tax act and thereby claiming deduction of interest under section 234B and 234C of the income tax act, which was withdrawn during the course of assessment proceedings. In the result we set aside the order of the penalty - Decided in favour of assessee

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• 2017 (4) TMI 167
  Denial of exemption u/s.11 - Held that:- Assessee is a charitable trust engaged in promotion of education and allied activities. Assessee was running school, college of Engineering, Pharmacy, Management etc., With respect to each and every query of the AO, the CIT(A) has dealt in great detail and after giving detailed finding, reached to the conclusion that deposit of ₹ 6,68,00,000 was in pursuance of valid lease agreement for the user of the premises and various other facilities and fixed asset in nature of building, ground etc., In the process of carrying out educational activities / charity, the assessee has used the premises and other leased assets for its purpose after recording detailed finding at para 4.32 -5.6, the CIT(A) reached to the conclusion that there is no case of any benefit being diverted by the assessee trust to the interested persons. Accordingly, denial of exemption u/s.11 by the AO was not correct. Accordingly there is no application of Section 13 of IT Act. - Decided in favour of assessee

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• 2017 (4) TMI 166
  Addition on account of undisclosed stocks - survey operation was conducted at the business premises of the assessee - Held that:- A reading of the material shows that the purchase bills and transport receipts as well as form D-VIII are drawn on the name of the contractors and we find any amount of force in the submission the learned authorised representative that these bills and the other bills cannot be taken as fabricated. All these bills are dated before March 29, 2010 before a close proximity of time to the date of survey, lending support to the contention of the authorised representative for the manufacturer kept these materials in the possession of the assessee in view of the arrangement between the assessee, manufacturer and the contractors. There is nothing improbable in this proposition put forth before us and merely because some suspicion occurred to the mind of the Assessing Officer such suspicion cannot prevail over broad probabilities. Source and destination of the payments are verifiable and the ledger book, which are not in the custody and control of either assessee or contractor but in the custody and the maintenance of the manufacturers are available on record for verification. In these circumstances the authorities below should have noticed that all the bills are excisable bills. There is no finding that these bills are fabricated. Suspicion, however grave it is, cannot take the place of legal evidence or proof and in the absence of any tangible evidence in the possession of the authorities below and without giving a finding that the document produced by the assessee or the contractors or the manufacturer are false and fabricated once, in addition made on suspicion cannot be sustained. In respect of sprinklers the bills issued by the manufacturer the assessee produced the material to show that one Satyam Enterprises is the owner thereof t is submitted before us that the owner of Satyam Enterprises is the own brothers of the assessee and conducting the business in the same premises of old house in which the assessee is conducting the business as such it is natural that the stock to the business of Satyam Enterprises could also be found in the same premises. There is nothing unusual in this submission and the documents that are produced by way of paper books on pages 87 to 94, which shall include the purchase bills and transportation receipts, established the fact that the ownership of such property is vested in Satyam Enterprises but not in the assessee. The value of this stock cannot be included in the stock of the assessee as undisclosed stock and no additions could be made on this account. - Decided in favour of assessee

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• 2017 (4) TMI 165
  Method of recognising the income for the assessment to tax in respect of sale of plots - Held that:- The appellant firm had recognised the income in respect of sale of plots by adopting completed contract method, whereas, the Assessing Officer is of the view that income should be offered to tax received on year to year basis based on the stage of receipt of consideration, irrespective of the fact that the title in the plots have been passed on the buyer or not. It is an undisputed fact that the plots forms a part of stock-in-trade in the business of appellant- firm and are immovable properties. The title in the immovable property can be passed on only in terms of the provisions of the Transfer of Property Act. Thus the provisions of section 2(47) of the Act have no application to the transactions of stock-in-trade. In this case, the stock-in-trade in immovable property and the title in immovable property can be transferred or alienated in accordance with the provisions of the Transfer of Property Act. The right, title or interest in the immovable property can be transferred only by way of registering the conveyance deed executed in this behalf. Even the Accounting Standard-9 dealing with the recognition of income also lays down that the income in respect of transfer of immovable property can be recognised only when the risks, rewards and ownership of the property is transferred to the buyer. Therefore in our considered opinion, the matter requires a fresh examination by the Assessing Officer in the light of the above position of law. Therefore, we remand this matter back to the file of the Assessing Officer with a direction that the income in respect of sale of plots can be recognised only in the year in which conveyance deed executed is registered in favour of the buyers and to allow the development expenditure incurred as expenditure or the expenditure likely to be incurred on the plots sold as expenditure.

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• 2017 (4) TMI 164
  Disallowance made on account of demurrage charges and penalty charges imposed - Held that:- The contractees, Steel Authority of India and Central Coalfields Limited imposed the instant punitive charges on account of breach of contract which does not fall in the category of payment of penalty for breach of any law of the land but is simply a compensation for breach of contractual obligations. In other words, the punitive charges arose out of the failure of the assessee to complete the work within the time frame agreed with the contractees, Steel Authority of India and Central Coalfields Limited. Such types of penalties are usual in this, line of business and the contractees deduct such charges from the payment disbursed by them. The works undertaken as agreed in the contracts entered into were not completed in time and therefore punitive charges under the default clause as laid down therein had to be paid. It is not a penalty for breach of law. Such payment was perforce made to honour the contractual obligation under the agreements executed. This was done in course of carrying on of the business by the assessee. In the instant case, there was a specific requirement to complete the work in time and a clause for imposing punitive charges was included for any default. These rights and obligations arose in course of carrying on of the business of the respondent. Therefore, this payment made under a contractual obligation is to be allowed under section 37(1) of the Act. We find that the payments in the form of punitive charges made by the assessee could under no circumstances be regarded as illegal payments or payments which were opposed to public policy. We find that as long as the payment made is not by way of default on account of infraction of any law and/or opposed to public policy, the same would be allowable as deduction. We hold that in the instant case, the punitive charges paid are only compensatory in nature pursuant to the contractual obligation which is directly connected or intrinsically related with the carrying on of its business which unequivocally qualifies as an allowable deduction under section 37(1) of the Act. - Decided in favour of assessee.

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• 2017 (4) TMI 163
  Addition on account of website development expenses - revenue or capital expenditure - Held that:- The issue involved in this appeal of the Revenue is squarely covered in favour of the assessee, inter alia, by the decision of the hon'ble Supreme Court in the case of Alembic Chemical Works Co. Ltd. v. CIT [1989 (3) TMI 5 - SUPREME Court] wherein it was held that the expenditure incurred by the assessee on website development was of a revenue nature and not of a capital nature. It was held that although the website might provide an enduring benefit to an assessee, the intended purpose behind the website was not to create an asset but only to provide a means for disseminating the information about the assessee. - Decided against revenue

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• 2017 (4) TMI 162
  Penalty under section 271(1)(c) - Entitlement to claim a benefit under section 43B(d) - Held that:- The penalty order that the Assessing Officer has not given any finding that the assessee either concealed the income or filed inaccurate particulars. It is only observation of the Assessing Officer that the assessee tried to evade the tax. The Commissioner of Income-tax (Appeals) has also not given any finding that the assessee has either concealed the income or filed inaccurate particulars. Under these facts and circumstances of the case, we are of the opinion that the assessee neither concealed the income nor filed inaccurate particulars. The assessee has to pay interest of ₹ 38,46,611 to the APSFC. He has already paid an amount of ₹ 19,68,980. The balance amount payable is ₹ 18,77,631. According to the assessee, he is entitled to claim a benefit under section 43B(d) of the Act for entire amount, which is payable to APSFC. Therefore, the assessee filed all the details before the Assessing Officer and under bona fide belief, he has claimed excess relief which is not permissible in accordance with law. Thus, penalty provisions should not be attracted to the assessee. - Decided in favour of assessee

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• Customs

• 2017 (4) TMI 142
  Effective date of amending notification - import of Areca Nuts/Betel Nuts - Whether the amendment notification dated 27.01.2017 is prospective in operation or could have any retrospective operation? Held that: - The notification dated 27.01.2017 is specifically that of an amendment of Appendix-I to the principal notification dated 13.08.2008 and thereby, the entry at serial number 14 has been substituted. There is not a whisper or even a remotest suggestion in any manner in the said notification that the same would be applicable from any date anterior to the date of issuance i.e., 27.01.2017. As per Sub-section (2A) of Section 25 ibid., if any explanation was to be inserted in the notification for the purpose of clarifying the scope and applicability, the same was required to be issued within one year of the date of issuance of the principal notification. Obviously, the notification as issued on 27.01.2017 is not the one issued under Sub-section (2A) of Section 25 of the Act of 1962. Moreover, the notification itself clearly states that the same has been issued in exercise of the powers conferred by Sub-Section (1) of Section 25 of the Act of 1962 for the purpose of amendment of the principal notification dated 13.08.2008. In the notification dated 27.01.2017, nothing has otherwise been provided as regards the date of its enforcement. Therefore, it remains beyond the pale of doubt that its operation would be governed by Clause (a) of Sub-section (4) of Section 25; and, accordingly, it has come into force on the date of issuance and not before. Petition allowed - decided in favor of petitioner.

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• 2017 (4) TMI 141
  Permission to intervene/be impleaded as respondents in the captioned writ petitions - It was submitted that the applicants were an integral part of the investigation and adjudication before the Designated Authority and that therefore, they are necessary and proper parties to the proceedings before this Court - Held that: - Rule 5 of the Rules makes provision for procedure for filing appeals and who may be joined as respondents. Sub-rule (2) of Rule 5 enumerates the persons who are required to be joined as respondents to the appeal. The category of persons under clause (c) thereof is “Interested persons who submitted representations to the designated authority in the course of investigation”. In these circumstances, having regard to the fact that in the present case, the applicants had submitted representations to the Designated Authority and were an integral part of the investigation, the applicants can be said to be necessary parties to the captioned petitions - application allowed - decided in favor of applicant.

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• 2017 (4) TMI 140
  Quantum of surety amount - petitioner's case is that the petitioner was simply carrier of the Gold and he is a poor person and received only ₹ 1200/- as carrier charges, therefore, the surety amount of ₹ 5,00,000/- is excessive and the same may be reduced - Held that: - From possession of the petitioner 1 kg. gold, which was being smuggled from Singapore to India has been recovered at the Airport. There is no evidence on record that the petitioner is a poor person. If the petitioner can travel by Air and can have 1 kg. gold, he cannot be said to be a poor person - petition lacks merit, deserves to be dismissed - petition dismissed - decided against petitioner.

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• 2017 (4) TMI 139
  Currency - whether the seized goods being currency, can be allowed to be released on payment of a fine - Held that: - When the power of redemption is exercised, what the law postulates is that there is an option to pay fine in lieu of confiscation. Section 125(1) of the CA, 1962 provides that whenever confiscation of any goods is authorised by this Act, the officer adjudicating it may, in the case of any goods, the importation or exportation whereof is prohibited under this Act or under any other law for the time being in force, and shall, in the case of any other goods, give to the owner of the goods or where such owner is not known, the person from whose possession or custody such goods have been seized, an option to pay, in lieu of confiscation, such fine as the said officer thinks fit - we do not find that there was any error or lack of power - appeal dismissed - decided against Revenue.

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• 2017 (4) TMI 138
  Anticipatory bail - 13.800 kgs of ketamine found from petitioner's manufacturing premises - Held that: - it is for the prosecution to establish beyond reasonable doubt during the course of evidence that petitioner was manufacturing ketamine or was having possession of the same for the purpose of exporting or selling the same. The name of the petitioner is not arrayed as accused person. Since the respondent has taken steps by issuing notice to the petitioner calling upon him to appear before them, the apprehension of his arrest at the hands of the respondent is well founded - Since the alleged offence u/s 22 of the NDPS Act is not exclusively punishable with death or imprisonment for life and as Accused No. 2 has been already granted bail by this Court, petitioner can be admitted to anticipatory bail by imposing reasonable conditions - petition allowed - decided in favor of petitioner.

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• 2017 (4) TMI 137
  Restoration of appeal - rejection on the ground that on 3-7-2015, the appeal itself was dismissed as withdrawn - Held that: - It is an established principle of law that mistake of law or mistake in legal understanding of opinion of a counsel does not bind the party whom he or she represents or at least to the extent of causing irreparable prejudice. This is exactly what happened in this case. The appellant did not have any alternative remedy; yet the CESTAT permitted withdrawal of the appeal. In refusing to restore the appeal on the technical ground that the applicant’s contention that there was no mandatory pre-deposit condition, the CESTAT merely compounded the injustice - the appeal preferred before the CESTAT i.e. ST No. 51757/2015-originally dismissed as withdrawn on 3-7-2015 should be restored to the file of the CESTAT - appeal allowed - decided in favor of appellant.

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• 2017 (4) TMI 136
  Entitlement for bail - Whether the bail order passed in favor of an accused under the first proviso to sub-section (2) of Section 167of the Code stands extinguished and/or cancelled automatically on the mere filing of the charge-sheet/complaint, if the accused, by that time has not actually been released from custody? - Held that: - a bail granted under the proviso to Section 167(2) of Code is, though termed as ‘bail on default’ is as effective as bail granted on merits, and does not get cancelled automatically on completion of investigation or charge-sheet being filed - When the Supreme Court of India has time and again said that ‘mere making of an application for bail would amount to availing of the right accrued to an accused under the said proviso irrespective of whether the Court has actually passed a bail order’ or not, there was no question of refusing to release the petitioner on bail when an order for bail had actually been passed - bail granted - revision allowed - decided in favor of revisionist-petitioner.

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• 2017 (4) TMI 135
  Benefit of N/N. 12/2012-Cus dated 17.03.2012 as amended - import of preforms of precious and semi precious stones - denial on the ground that the imported goods cannot be considered as rough semi precious stones since they have already been partially worked upon - Held that: - the description “rough semi finished stones” will cover anything which requires further working upon to render them as “cut and polished”. These would cover gem stones of various levels of working right from rough stones. In this view of the matter the imported goods will fall under Sl. No. 312 as “rough semi precious stones” since they need to be further worked upon to convert them into cut and polished stones. Consequently, they will be eligible for benefit of “nil” rate of duty for the period upto 01.03.2013. There is no dispute for the period after the amendment carried out on 01.03.2013. - appeal allowed - decided in favor of appellant.

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• Corporate Laws

• 2017 (4) TMI 131
  Sanction and approval of a Scheme of Arrangement - Held that:- In the instant case, as already pointed out, the Scheme which contemplates the action of buy back of shares exceeding the statutory prescribed maximum under Section 68 of 2013 Act by the Petitioner is inconsistent with the provisions of 2013 Act as compared to the repealed enactment, namely 1956 Act and hence the said action on the part of the Petitioner cannot be saved by this Tribunal by upholding the Scheme and sanctioning it. In effect it also makes the decision cited by Learned Counsel for the Petitioner inapplicable to the facts of the case in hand. Hence looking from any angle this Tribunal is perforce to apply the provisions of 2013 Act in considering the sanction of the Scheme and not as espoused by the Petitioner for the applicability of the 1956 Act A vested right has accrued to the petitioner which is sought to be taken away by repeal and subsequent enactment. The Petitioner, by virtue of Clause 20 of the Scheme as reproduced in the initial paragraphs of the instant order itself has made the Scheme conditional upon certain contingencies and compliances one being the sanction of the High Court, presently by this Tribunal, being fully aware of the contingencies and that the scheme hinges upon the statute and cannot exist independent of it. Taking into consideration the position of law presently in force, we are unable to sanction the Scheme in its present form annexed as Annexure 10 to the petition and for the reasons aforesaid the petition fails and the same is dismissed.

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• Service Tax

• 2017 (4) TMI 161
  Cenvat Credit - scope of input services - the case of M/s Infosys Ltd. Versus Commissioner of Service Tax, - BANGALORE, [2014 (3) TMI 695 - CESTAT BANGALORE], brought into record, as the same was not part of record - cost of ₹ 10,000/- is imposed to be deposited.

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• 2017 (4) TMI 160
  Penalty u/s 73 of the Act - invocation of section 80 - contract of construction works - Held that: - The Tribunal rightly held that if the service tax liability and the interest thereon is discharged on the direction of the Central Excise officers, there was no need to issue a SCN - In the circumstances of the case, we do not find any reason to interfere with the order of the Tribunal in which the Tribunal has exercised the discretion in favour of the respondent by invoking the provisions of Section 80 of the Act - appeal dismissed - decided against Revenue.

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• 2017 (4) TMI 159
  100% EOU - refund claim - rejection on the ground that the claim was filed after expiry of one year from the relevant date in terms of Section 11B of the CEA, 1944 - Held that: - Tribunal in the case of M/s Paul Mason Consulting India (P) Ltd. Vs. CCEx., & S.Tax, Vadodara [2015 (12) TMI 1056 - CESTAT AHMEDABAD], observed that the refund claim filed within one year from the date of export invoice, is not hit by limitation - the Adjudicating Authority is directed to decide the refund claim in terms of Section 11B of the CEA, 1944 - appeal allowed by way of remand.

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• 2017 (4) TMI 158
  Business Auxiliary Service - the beneficiaries of the services are in India and the services have not been provided to the recipient outside India and further, no portion of the service has been performed outside India - whether or not the services have been ‘used’ outside India? Held that: - the issue is no longer res-integra and it has been settled in several decisions of the Tribunal in the case of Target Sourcing Service India Pvt. Limited Versus Commissioner of Central Excise & S.T. Delhi-II [2017 (3) TMI 21 - CESTAT NEW DELHI], where the decision in the case of Gap International Sourcing (India) Pvt. Limited vs. CST, Delhi [2014 (3) TMI 696 - CESTAT NEW DELHI], followed as the issue was similar where the the Tribunal has gone on to decide that the services rendered to principal in USA, who had paid for the services in foreign exchange, has to be considered as export of service - appeal allowed - decided in favor of appellant.

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• 2017 (4) TMI 157
  Valuation - Works contract - utilisation of materials in the repair and maintenance and have paid Sales Tax on the material portion - whether the Commissioner (Appeals) have rightly allowed the appeal of the respondent-assessee and set aside the demand of Service Tax ₹ 22,31,227/- along with interest and further equal amount of penalty u/s 78 and also penalty u/s 76 and 77? Held that: - there is no error in the order & findings of the Commissioner (Appeals). In his findings, it is stated that it is a matter of composite contract wherein the appellant have supplied materials in the repair of Transformers.The appellant have suo-moto paid service tax on the labour component, have paid Excise duty on the manufacture of LV/HV coils, and further have paid Sales Tax on the material component used in the repair of the Transformers. In this view of the matter, the SCN is not tenable - appeal dismissed - decided against Revenue.

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• 2017 (4) TMI 153
  Extended period of limitation - non-payment of service tax - Held that: - The material facts, of the nature of service rendered by the appellant, the tax liability on such services were all in the knowledge of the Department. Timely follow up was not done for subsequent periods and that cannot be the basis for issuing another demand invoking suppression of fact etc - extended period not invoked. Imposition of penalties u/s 77 - Held that: - the SCN never proposed imposition of penalty under various sub-section/sub-clauses of Section 77 and the Original Authority traveled beyond the scope of SCN in imposing various penalties under the said section - penalties set aside. Appeal dismissed - decided against Revenue.

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• 2017 (4) TMI 152
  CENVAT credit - works contract - value of the transfer of property in goods - composition scheme - Held that: - Under the CENVAT scheme, the CENVAT credit is passed on by using the invoice documents, which are to be transferred to the buyer of the goods only. Here buyer of the goods is the contractor and not the Appellant M/s Bharat Oman Refineries Ltd. When the buyer M/s Petron Engineering Constructions Ltd., who is the contractor, cannot take CENVAT credit of their input goods, they are not eligible to pass on the CENVAT credit on the said input goods. In other words, the Cenvat credit to which the contractor themselves are not entitled to, the said cenvat credit cannot be transferred to anyone - appeal dismissed - decided against appellant.

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• Central Excise

• 2017 (4) TMI 156
  Issuance of notice - Maintainability of appeal - appeal dismissed for non-payment of interest - Held that: - the decision in the case of Chate Educare Pvt. Ltd. Versus Commissioner of Central Excise, Customs And Service Tax [2017 (4) TMI 68 - BOMBAY HIGH COURT] contested - it was directed to issue notice - petition allowed.

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• 2017 (4) TMI 155
  Duty demand - Shortage of goods - Seizure of goods - Fraudulent availment of MODVAT Credit - Non receipt of actual goods - the decision in the case of M/s Bhanu Iron And Steel Co. Ltd., Shri Y.S. Bisht, Shri Anoop Bishnoi Versus Commissioner Customs Central Excise [2015 (9) TMI 206 - MADHYA PRADESH HIGH COURT] contested - Held that: - Court does not find any substance in these appeals and moreover appeals involve no substantial question of law - appeal dismissed - decided against assessee.

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• 2017 (4) TMI 154
  Reversal of CENVAT credit - common inputs used for manufacture of exempted as well as taxable goods, without maintenance of books of accounts - Held that: - since the appellant had reversed proportionate cenvat credit attributable to common inputs used for manufacture of dutiable as well as exempted goods, the same is in conformity with the above amended provisions of Rule 6(3A)(b) ibid. However, since the appellant has not determined and paid the cenvat credit on inputs used for manufacturer of exempted goods on monthly basis, in my opinion, it is liable to pay interest for late reversal on cenvat credit - the appellant is liable to pay interest at the prescribed rate on the amounts paid belatedly on proportionate basis towards inputs used in exempted goods - appeal allowed - decided partly in favor of appellant.

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• 2017 (4) TMI 151
  Clandestine manufacture and removal - excess stock of MS Ingots to the tune of 116.487MT and shortage of stock of Sponge Iron and Pig Iron found - demand - Held that: - the entire demand is based on the loose sheets and other private records recovered from the respondent’s factory. Such private records raise doubt that the respondent has procured raw materials and not accounted the same in the records. Moreover, the author of such documents/private record has not been identified. From the records, it is found that no person of the respondent has explained the entries found in such private records. The Director or anyone else of the respondent has ever been questioned about such details found in the private records. Under these circumstances, the demand upheld on the basis only of such private records cannot be sustained. The allegation of unaccounted procurement of raw-material has not been corroborated by any other document recovered by Revenue during investigation. The department has not carried out investigation into many aspects. The evidences presented by the department, at best, can be considered as a reason to doubt whether the respondent has indulged in clandestine clearances. However, in the absence of clinching evidence supporting the charge of alleged manufacture and clearance, it is to be held that Revenue has not succeeded in proving the allegation of clandestine manufacture and clearance. Appeal dismissed - decided against Revenue.

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• 2017 (4) TMI 150
  Clandestine manufacture and removal - processed man made Fabric (PMMF) - confiscation - the said fabrics did not tally with the appellant’s record and the same was lying unaccounted and stored with the intention to remove the same clandestinely without payment of Central Excise duty - Held that: - there is no justification in the assessee’s prayer to do away with the confiscation of the goods and the redemption fine imposed in case of confiscations, when the assessee M/s Kanchan Processor Pvt Ltd is unable to explain non-accountal of the goods, which have been quantified as 98190.06 mtrs of fabrics valued at ₹ 47,13,123/-. There is also no justification in the prayer of the Revenue for setting aside the findings and the decision arrived at by the Commissioner (Appeals) in the impugned order - decided against assessee. Clandestine removal - whole case is based on the sufficient evidences like private records stock verification, computer records etc which have been corroborated by respective statements of the transporters and purchasers of the goods - Held that: - there is no scope to interfere with the confirmation of demand along with interest and imposition of equivalent penalty against the assessee namely Kanchan Processors Pvt Ltd. However, in the face of the fact that assessee has been imposed with the equivalent penalty of ₹ 86,01,211/- and after considering the totality of facts and circumstances and taking a lenient view, the penalties imposed on the other appellants namely M/s Kanchan Wooltex Pvt Ltd, Shri Jayesh Bangar and Shri Nilesh Bangar appear to be on higher side. We, therefore, reduce these penalties in case of M/s Kanchan Wooltex Pvt Ltd to 20% of the demand confirmed against the assessee M/s Kanchan Processor Pvt Ltd, which comes to ₹ 17,20,242 /-; and in case of Shri Jayesh Bangar and Shri Nilesh Bangar, penalties are reduced to 10% of the demand confirmed against the assessee M/s Kanchan Processor Pvt Ltd, which thus comes to ₹ 8,60,121 /-each. - appeal disposed off - decided partly in favor of appellants.

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• 2017 (4) TMI 149
  Valuation - subsidy - manufacture of DDT - whether amount of subsidy received by the appellant from the Government of India is to be treated as additional consideration for the sale of the goods manufactured by the appellant and sold to the Ministry, Govt. of India? - the appellant manufacturer claims that the subsidy is having no connection with the manufacture and supply of DDT - Section 4(1)(b) read with Rule 6 of Valuation Rules - Held that: - the subsidy received by the appellant certainly is in the nature of reimbursement for the supply of DDT made by the appellant to the Ministry of Health & Family Welfare, Government of India - Rule 6 makes the position further clear that the value of the goods (DDT) shall be deemed to be the aggregate of the subsidized price and the reimbursement or subsidy money (differential price/subsidy being received from the Ministry by the appellant). This aggregate is the actual value on which Central Excise duty is chargeable as this is the consideration which is flowing directly or indirectly to the appellant. The Explanation to Section 4(1) of Central Excise Act, 1944 given earlier makes it clear that in case of reimbursement/subsidy / money received from the Ministry, Govt. of India the same will be deemed to include the duty of such goods.. Therefore, the reimbursement/subsidy amount received by the appellant, M/s Hindustan Insecticides Ltd., the manufacturer of subject goods includes the Central Excise duty component also, which is payable to the National Exchequer under the appropriate head of Central Excise Duty. Extended period of limitation - Held that: - demand beyond the period of one year is time barred as the department had the knowledge of the relevant facts - extended period not invocable. The demand for the period of one year (from the relevant date) is sustained along with interest. However, for re-quantification of the liability of the demand and interest and penalty if any, the matter is remanded to the adjudicating authority - appeal partly allowed by way of remand.

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• 2017 (4) TMI 148
  Refund claim - denial on various grounds like the refund claim is barred by limitation, refund claim is filed without challenging the APC Order of the Commissioner, the appellant could not establish that the incidence of duty claimed as refund had not been passed on to their buyers etc. - Held that: - the refund claim was filed consequent to the order of the Ld Commissioner (Appeals) dt 20.1.2005 setting the demands for the earlier period observing that the APC determined as 971.40 MTs by applying Rule 3 of the Hot Re-rolling Steel Mills Annual Capacity Determination Rules, 1997, is correct and not 2595 MTs as per Rule 5 of the said Rules arrived at by the Commissioner of Central Excise - the matter may be remanded to the Adjudicating Authority to re-examine the all issues afresh in the light of the principles of law laid down on each aspect - appeal allowed by way of remand.

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• 2017 (4) TMI 147
  CENVAT credit - it was alleged that the appellant paid Education Cess wrongly by utilizing cenvat credit on inputs and capital goods - demand - Held that: - The Hon’ble Guwahati High Court in the case of Union of India Vs. Kamakhya Cosmetics & Pharmaceuticals Pvt. Ltd. [2012 (7) TMI 902 - GAUHATI HIGH COURT] on the identical issue, dismissed the appeal filed by the Revenue. In that case, the issue involved is that whether the assessee is entitled to utilize CENVAT Credit of Basic Excise duty for payment of Education Cess and it was held that there was no bar to utilize Cenvat credit of Basic Excise Duty for payment of Education Cess - demand set aside - appeal allowed - decided in favor of appellant.

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• 2017 (4) TMI 146
  Penalty - invocation of Section 11A - Clandestine removal - shortage of stock - Held that: - the respondent had paid the duty evaded even prior to issue of SCN. However, the benefit of Section 11A (2) will be available only if 25% of the penalty is also paid by the assessee within 30 days from the date of receipt of the order. From the records, it is seen that 25% of penalty has not been paid by the respondent even though the duty amount has been paid within 30 days from the date of communication of Order-in-Original. Hence, benefit of reduced penalty will not be available to the respondent and consequently, the penalty leviable u/s 11AC of the Act will be the amount equal to the duty evaded - appeal allowed - decided in favor of Revenue.

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• 2017 (4) TMI 145
  CENVAT credit - AED - dealer's Certificate - it is the case of Revenue that the said Certificate should be countersigned by the Central Excise Officers, though the dealers are registered with the Central Excise Department - Held that: - there is no clarification that the dealer's Certificate would require the countersign of the Central Excise Officers - the appellant should provide the documents to substantiate the dealer's Certificate as available. The Adjudicating Authority would also consider in a reasonable manner to protect the interest of the Revenue - appeal allowed by way of remand.

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• 2017 (4) TMI 144
  SSI Exemption - N/N. 08/2003-CE dated 01.03.2003 - Held that: - Commissioner (Appeals) have rightly remanded to the adjudicating authority for a fresh decision considering the facts and additional evidence produced before him. In this view the matter, the impugned order in appeal directing the adjudicating authority to pass a fresh order as directed - appeal allowed by way of remand.

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• 2017 (4) TMI 143
  CENVAT credit - manufacturer of V.P. sugar and molasses - whether the appellant are entitled to Cenvat credit on various items like Plates, Shape & Section, MS Angles, GP Sheet, HR Coil, CR step, MS Channels, Paints, Welding Electrodes etc. procured and used by the appellant as inputs or in manufacture of capital goods, which have been further used in their factory of production for manufacture of Excisable goods? Held that: - the appellant had lead evidence before the Courts that the items in question like Welding Electrodes, MS electrodes, MS plate, Shape and Section etc have been utilised for fabrication of mostly Capital Goods. The appellant had filed Annexure-A to the reply to show cause, wherein they have explained item wise usage whether the same has been used in fabrication of boiler and Millhouse or boiler or any other machinery or its part in the factory of production. The said explanation usage duly filed by, under certificate of the head of technical department of the appellant, has not been found to be untrue by the courts below - further, the definition of inputs in Rule-2 (k) read with Explanation-2 provides input includes goods used in the manufacture of capital goods which are further used in the factory of the manufacturer. Thus, in view of the specific provision for allowing Cenvat credit on inputs either used as inputs directly or indirectly in the manufacture of final products or used in the factory of production for manufacture of further capital goods which are further used in the factory of manufacturer, the Cenvat credit is allowable - credit allowed - appeal allowed - decided in favor of appellant.

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• CST, VAT & Sales Tax

• 2017 (4) TMI 134
  Validity of Form-III C (2), issued under the U.P. Trade Tax Act, 1948 - denial on the ground that such form is invalid by virtue of Rule 12-B(4) of the U.P. Trade Tax Rules, 1948 - Held that: - the form issued in an financial year would be valid for the transaction of sale or purchase, during financial year or transactions made during two financial years immediately preceding that financial year. Form-III C (2) is issued blank by the concerned tax authority with reference to a particular period. In the facts of the present case the registration of selling dealer existed for the period between 23.12.2006 to 31.12.2007. Such registration was granted in the year 2010. In case issuance of Form-III C (2) in the year 2010 is treated valid for the financial year 2010, then the very purpose and object of issuing registration and Form-III C (2) would be frustrated. Form-III C (2) as well as Rule 12-B(4) would have to be read harmoniously. The blank form issued after dealer's registration in 2010 for the period 23.12.2006 to 31.12.2007 would relate back to the financial year during which the registration itself existed and not on the date of its actual issue. Such interpretation would be reasonable as the selling dealer otherwise had no registration existing in the year 2010 and no form could be issued. In such circumstances, this Court is of the opinion that once Form-III C (2) has been issued by selling dealer pursuant to its registration allowed for a previous period 26.12.2016 to 31.3.2017, the issuance of Form-III C (2) would have to be treated during the year 2006-2007, and would be valid for the transactions of sale and purchase undertaken during 26.12.2006 to 31.3.2007 - revision disposed off.

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• 2017 (4) TMI 133
  Detention of goods - printing machinery - the petitioner had not declared the three imports made by them by Sea and Air on 15.09.2016, 04.10.2016 and 07.03.2017 - Held that: - the machinery is imported for the petitioner's personal use and their specific case that there is no sale or purchase taken place inside the State of Tamilnadu, I am of the view that the first respondent cannot continue to detain the goods any more - goods to be released on furnishing of bank guarantee - petition allowed - decided partly in favor of petitioner.

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• 2017 (4) TMI 132
  Detention of goods - penalty - the petitioner's case is that in the absence of any statutory basis and the publication of relevant forms, the goods vehicles plied by its members cannot be subjected to detention, penalty or any coercive action - Held that: - when the Delhi Sales Tax Act was in force, the DVAT authorities after the enactment of Delhi VAT Act, 2005 have chosen not to publish the relevant forms. They merely appear to have drafted certain forms and have assumed that the general public, i.e., goods transporters are expected to know it and use it - It is a well settled proposition of law as espoused in B.K. Srinivasan v. State of Karnataka, [1987 (1) TMI 483 - SUPREME COURT] that in the absence of a proper publication of the rules or statutory instrument, the action of the executive authorities is unsupportable by law - till the relevant forms are published in accordance with law and the amended rules are brought into force again by operation of law, the transporters especially the goods carriers cannot be compelled to carry such documents with them under pain or coercive action such as detention and penalty - petition allowed - decided in favor of petitioner.

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• Indian Laws

• 2017 (4) TMI 130
  Appropriation of refund amount - compensation paid by the NHAI in respect of the land acquired by them - direction to secure the TDS amount - Held that:- The respondents should not have appropriated the refund they received from the Income-Tax Department. There is nothing wrong in claiming the refund. The problem is in utilising the refund received. The refund they received is actually the compensation in respect of the land acquired from the company and it is that amount which the court wanted to protect by its order dated 23.02.2011. Hence, prima facie, we are of the view that the appropriation made by the respondents of the refund amount they received from the Income-Tax Department was in violation of the order dated 23.02.2011. It appears, for that reason only, even the Division Bench declined to disturb the Rule in the contempt proceedings issued against respondents. However, the Division Bench is wholly wrong in entering a finding that there is no violation of the order dated 23.02.2011 in utilising the refund. No doubt, had the refund and subsequent appropriation been of any amount other than the compensation, there would not have been any contempt at all. Unfortunately, the Division Bench, in the impugned order, failed to recapitulate the background of the order dated 23.02.2011 and its own earlier orders with regard to the refusal for withdrawal by the respondents of the compensation deposited in court. Even if there be pressing needs, there could not have been any utilisation of the compensation amount without leave of the court. Division Bench should not have interfered with the order dated 26.06.2015 passed by the learned Single Judge. However, taking note of the fact, an amount of ₹ 2,23,00,000/- has been kept in fixed deposit towards lien for issuance of bank guarantee, we make it clear that the respondents shall not operate the bank accounts of the company after 03.04.2017 without securing an amount of ₹ 8,32,60,331/-. We also make it clear that without leave of the High Court, the fixed deposit of ₹ 2,23,00,000/- with the Axis Bank shall not be withdrawn. However, it would be open to the respondents to apply for appropriate clarification or modification of the order dated 26.06.2015, after making the deposit as above and it will be open to the learned Single Judge to pass the appropriate orders on merits of the application.

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• 2017 (4) TMI 129
  Youth Bar Association of India prayer directing the Union of India and the States to upload each and every First Information Report registered in all the police stations within the territory of India in the official website of the police of all States, as early as possible, preferably within 24 hours from the time of registration. Held that:- (a) An accused is entitled to get a copy of the First Information Report at an earlier stage than as prescribed under Section 207 of the Cr.P.C. (b) An accused who has reasons to suspect that he has been roped in a criminal case and his name may be finding place in a First Information Report can submit an application through his representative/agent/ parokar for grant of a certified copy before the concerned police officer or to the Superintendent of Police on payment of such fee which is payable for obtaining such a copy from the Court. On such application being made, the copy shall be supplied within twenty-four hours. (c) Once the First Information Report is forwarded by the police station to the concerned Magistrate or any Special Judge, on an application being filed for certified copy on behalf of the accused, the same shall be given by the Court concerned within two working days. The aforesaid direction has nothing to do with the statutory mandate inhered under Section 207 of the Cr.P.C. (d) The copies of the FIRs, unless the offence is sensitive in nature, like sexual offences, offences pertaining to insurgency, terrorism and of that category, offences under POCSO Act and such other offences, should be uploaded on the police website, and if there is no such website, on the official website of the State Government, within twenty-four hours of the registration of the First Information Report so that the accused or any person connected with the same can download the FIR and file appropriate application before the Court as per law for redressal of his grievances. It may be clarified here that in case there is connectivity problems due to geographical location or there is some other unavoidable difficulty, the time can be extended up to forty-eight hours. The said 48 hours can be extended maximum up to 72 hours and it is only relatable to connectivity problems due to geographical location. (e) The decision not to upload the copy of the FIR on the website shall not be taken by an officer below the rank of Deputy Superintendent of Police or any person holding equivalent post. In case, the States where District Magistrate has a role, he may also assume the said authority. A decision taken by the concerned police officer or the District Magistrate shall be duly communicated to the concerned jurisdictional Magistrate. (f) The word sensitive apart from the other aspects which may be thought of being sensitive by the competent authority as stated hereinbefore would also include concept of privacy regard being had to the nature of the FIR. The examples given with regard to the sensitive cases are absolutely illustrative and are not exhaustive. (g) If an FIR is not uploaded, needless to say, it shall not enure per se a ground to obtain the benefit under Section 438 of the Cr.P.C. (h) In case a copy of the FIR is not provided on the ground of sensitive nature of the case, a person a grieved by the said action, after disclosing his identity, can submit a representation to the Superintendent of Police or any person holding the equivalent post in the State. The Superintendent of Police shall constitute a committee of three officers which shall deal with the said grievance. As far as the Metropolitan cities are concerned, where Commissioner is there, if a representation is submitted to the Commissioner of Police who shall constitute a committee of three officers. The committee so constituted shall deal with the grievance within three days from the date of receipt of the representation and communicate it to the grieved person. (i) The competent authority referred to hereinabove shall constitute the committee, as directed hereinabove, within eight weeks from today. (j) In cases wherein decisions have been taken not to give copies of the FIR regard being had to the sensitive nature of the case, it will be open to the accused/his authorized representative/parokar to file an application for grant of certified copy before the Court to which the FIR has been sent and the same shall be provided in quite promptitude by the concerned Court not beyond three days of the submission of the application. (k) The directions for uploading of FIR in the website of all the States shall be given effect from 15th November, 2016.

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