Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
May 10, 2014
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
FEMA
Service Tax
Central Excise
CST, VAT & Sales Tax
Wealth tax
Indian Laws
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
Income Tax
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Cancellation of penalty u/s 271(1)(c) - no prudent purpose could be served for the assessee by filing inaccurate particulars in the current years while the assessee had already offered for tax the capital gains on sale of impugned land in the AY 2000-01 - no penalty - AT
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The amount is nothing but the advances for the purpose of fixed assets, which does not attract penalty u/s 271D of the Act as it is not a loan or deposits within the meaning of S.269SS - AT
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For making assessment u/s. 158BC, it is not necessary to issue authorization u/s. 132 or make requisition u/s. 132A separately in the name of each person - Authorization or requisition in the name of more than one person is permissible - AT
Customs
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Liability for Confiscation of goods - Section 113(d) - Once filing a manual Shipping Bill is allowed, subsequent activities undertaken by exporter become perfectly legal and cannot be considered as illegal - AT
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CHA License - Ignorance of the conduct/activities of CHA`s Employees - G Card and H Card Authorisation appellant had no means to have proper control over the employees and even those steps have not been taken by CHA - decided against the CHA - AT
FEMA
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Order of detention - COFEPOSA - Undue and unexplained delay in execution of the order of detention vitiates it, but in the facts of the present case, it cannot be said that such delay has occurred - SC
Wealth-tax
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Computation of taxable income and taxable wealth of discretionary trust - erely because the Settlor and after his death, his son did not exercise their power to appoint the discretion exercisers, the character of the subject trusts does not get altered. - SC
Service Tax
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Non compliance of Rule 16 of CESTAT (Procedure) Rules 1982 - it is necessary for Registry to ensure that entire paper book with relevant documents are file within the time frame prescribed by the above Rule. - AT
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CENVAT Credit - on the basis of debit notes which did not contain Service Tax registration number - if the services on which credit has been taken have been received and accounted for, credit can be allowed - AT
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A taxing entry brought to the statute book at a later stage does not mean that legislature is prevented to tax an activity in terms of a former entry embracing an activity defined by law for taxation. When the work executed by the appellant could not be held as dam constructed, the appellant lost exemption. - AT
Central Excise
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Cenvat credit - Merely because the appellant has chosen to provide rented premises to his job worker, it cannot be said that such a facility extended to the job worker is associated with the appellants business and is covered by the definition of input services - AT
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Manufacture - Marketability - captive consumption - The appellant was manufacturing exempted drug intermediates from unstable Glyoxal 20% which was not marketable and on which no duty was thus payable. - AT
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Clandestine removal - estimation of value of clearance - An admission made by the sole beneficiary of such an activity is itself enough to hold against the appellants. - AT
VAT
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While calculating the turnover for the purpose of levy of penalty, the turnover are to be excluded and only those turnover which are estimated having reference to a specific concealment alone invite the penal provisions - HC
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Rate of tax Option of Compounding of Tax - there can not be two assessments for the same period of time, one on compounded basis and another on regular basis. - HC
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Rate of tax Option of Compounding of Tax - Once such an option is exercised, all the contracts entered into either before giving the option or subsequent thereto, for the relevant period covered by the agreement are covered by the compounding scheme - HC
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Nature of contract - sales or works contract - whether a contract for manufacture, supply and installation of lifts in a building is a contract for sale of goods or a works contract - Held as works contract - SC
Case Laws:
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Income Tax
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2014 (5) TMI 285
Gross receipts to be estimated @5% instead of 3% - Rejection of books of accounts Held that:- Following CIT v. Jain Construction Co. & Others [1999 (9) TMI 26 - RAJASTHAN High Court] - the estimation of income of the assessee made by the assessing officer adopting a rate of 5% is on higher side, and it would meet the ends of justice if the income is estimated applying a rate of 3% - the assessee does not own trucks used in the business and is incurring huge incidental expenditure - From such income estimated applying rate of 3%, deduction towards interest and remuneration to partners in terms of S. 40(b) of the Act may be allowed - the assessee produced the books of account and vouchers - On examination of the books of account with reference to the voucher produced, the AO found that the voucher does not tally with the cashbook - When the voucher does not tally with cashbook, the assessee has not maintained the books of account properly - the book result will not reflect the correct profit of the assessee - the AO has rightly rejected the books of account thus, there was no infirmity in the order in rejecting the books of account and estimating the profit Decided against Assessee. Claim of seigniorage charges Held that:- The material supplied by the Government/contractor will not have any element of profit - it shall be reduced from the contract receipts - the seigniorage charges shall be reduced from the total contract receipts for the purpose of estimating the profit thus, the AO is directed that while computing the total contract receipts the seigniorage charges shall be reduced from the total contract receipts for the purpose of estimating the profit. Estimation of income @5% - Grant of depreciation - Held that:- Following Indwell Constructions Versus Commissioner Of Income-Tax [1998 (3) TMI 121 - ANDHRA PRADESH High Court] - the deduction available u/ss. 30 to 38 shall be deemed to have been already given full effect and no further deduction under those sections shall be allowed - Depreciation is allowable u/s. 32 of the Income-tax Act - as provided in section 44AD no further/separate deduction shall be allowed - the claim of depreciation on the estimated income is not justified. Payment of interest and salary to the partner Held that:- The provision of section 44AD as it is applicable for the assessment year under consideration and the amendment made with effect from1.4.2011 it is obvious that the Legislature intended to allow the interest and salary separately from the estimated income the AO is directed to allow the salary and interest paid to the partner subject to the limitation provided in section 40(b) of the Act Decided against Revenue.
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2014 (5) TMI 284
Nature of income Prize money received on unsold tickets Business income OR income from any winnings from lotteries u/s 2(24)(ix) r. w section 115BB of the Act Held that:- The amount of prize received on unsold lottery tickets is an income by way of winning prize from lottery - the prizes awarded to the assessee by draw of lots fall within the ambit of lottery and the amount gained falls within the ambit of income by way of winnings from lotteries - Section 115BB is a special provision under the Act to tax the income by way of winnings from lotteries Decided against Assessee.
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2014 (5) TMI 283
Pending appeal for more than one year No hearing made for the application for interim relief Held that:- The prayer of the assessee for quashing the order dated 25.03.13 cannot be accepted in the petition as an appeal against the order is pending consideration before the appellate authority and after the appeal is decided, assessee has a further right of appeal to the Appellate Tribunal - the question of quashing of the assessment order in these proceedings under Article 226 of the Constitution does not arises - The appellate authority have passed an order of stay and granted certain benefit, now no further interim order can be passed the revenue is directed to decide the appeal Decided against Assessee.
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2014 (5) TMI 282
Transaction charges paid to the stock exchanges - fees for technical services - TDS u/s 194J - Prior decision of Court not put into light Issues already rejected - Held that:- The decision in Kisan Ratilal Choksey Share & Securities Pvt. Ltd. [2014 (5) TMI 192 - BOMBAY HIGH COURT] and Commissioner of Income-tax - 4(3) Versus Kotak Securities Ltd. [2011 (10) TMI 24 - Bombay High Court] followed - Major two main issues were there in the earlier appeal as to the transaction charges paid to the stock exchanges and fees for technical services TDS u/s 194J which were rejected by the Court in appeal - The Revenue insists in arguing Appeals in the manner and for subsequent Assessment Years - Revenue ought to have been fair and brought to the notice of the Court the fact that its Appeal challenging the very findings and conclusions for prior Assessment Years has been dismissed by the Court on merits thus, there is no substantial question of law arises for consideration Decided against Revenue.
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2014 (5) TMI 281
Remand of order - Income from letting out of commercial complex Income from house property OR not Maintenance charges Income from other sources Held that:- The Tribunal was of the view that the income earned by the assessee from letting out the commercial complex should be brought to tax under the head 'income from business' - Relying upon COMMISSIONER OF INCOME TAX Vs. VELANKANI INFORMATION SYSTEMS (P) LTD. [2013 (8) TMI 113 - KARNATAKA HIGH COURT] - since the material placed on record does not clearly show that the assessee had other properties and that they are in the business of acquiring the properties and letting them out, the matter may be remanded to the AO to verify and/or to examine the case of the assessee, whether they are in the business of taking land and putting up commercial buildings thereon and letting out such buildings as their profession or business thus, the matter is remitted back to the AO for fresh adjudication Decided in favour of Revenue.
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2014 (5) TMI 280
Maintainability of appeal - Escapement of income u/s 144/147 of the Act - Addition of interest u/s 234B of the Act Held that:- The assessee rightly contended that the department is not entitled to prefer an appeal following the Instruction No.3 of 2011 dated 9th February, 2011 issued by the C.B.D.T - the amount of interest claimed u/s 234B of the Act of the AO cannot be taken into account for the purpose of determining the tax effect - the appeal has been filed by violating the Instructions issued by the CBDT, which were binding upon the revenue u/s 268A of the Income Tax Act Decided against Revenue.
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2014 (5) TMI 279
Validity of order u/s 143(3) r.w.s. 147 of the Act - Requirement of notice Held that:- From the order passed by the AO, it is difficult to infer that the learned Advocates or representatives of the assessee had appeared seeking a copy of the recorded reason - copy had already been given to the assessee and he had also given reply the views expressed by the Tribunal are erroneous - Even assuming that the order u/s 143(3) r.w.s. 147 of the Act was passed by the AO without notice or proper notice u/s 143(2) of the Act - the omission could have been a reason for setting aside the order of assessment, but that could not have been a reason for nullifying the exercise u/s 147 of the Act thus, the order of the Tribunal is set aside and the matter is remitted back to the AO for fresh adjudication Decided in favour of Revenue.
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2014 (5) TMI 278
Allowability of deduction 80P(2)(a)(i) of the Act Held that:- Following CIT vs. Jafari Momin Vikas Co-op. Credit Society Ltd. [2014 (2) TMI 28 - GUJARAT HIGH COURT] - the assessee was not allowed to do banking business as defined under Banking Regulation Act it is not a co-operative bank and accordingly is not excluded from the benefit of deduction u/s.80P(2)(a)(i) of the Act - it does not fall under the exceptions as provided u/s 80P(4) of the Act - there being no mistake in the order of the CIT(A) Decided against Revenue. Deduction u/s.80P(2)(a)(i) not allowed in respect of interest Held that:- There is no finding on fact that whether the deposits were maintained by the assessee for liquidity of funds for the business purpose of the assessee and whether Jafari Momin Vikas Co-op. Credit Society Ltd. is applicable to the part of deduction u/s.80P(2)(a)(i) of the Act in respect of interest thus, the matter is remitted back to the AO for fresh adjudication Decided in favour of Assessee.
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2014 (5) TMI 277
Chargeability of FBT on Sales Promotion Expenses Expenses incurred for non-employee for the business purpose Held that:- Relying upon Intas Pharmaceuticals Ltd. Versus DCIT, Cent. Cir. 2(1), Ahmedabad [2014 (3) TMI 685 - ITAT AHMEDABAD] - there is no finding of AO or CIT(A) as to whether the expenses which have been incurred were for employees or nonemployees and whether the expenses were for the purpose of business - the provision of "FBT" could not be invoked in respect of the expenses which were not incurred on employees or their family members thus, the matter is required to be remitted back to the AO for fresh adjudication Decided in favour of Assessee.
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2014 (5) TMI 276
Disallowance of interest Return of income declaring loss Held that:- Following SA BUILDERS LTD. Versus COMMISSIONER OF INCOME-TAX [2006 (12) TMI 82 - SUPREME COURT] - The expression commercial expediency is one of wide importance and includes such expenditure as a prudent businessman it incurs for the purpose of business - The expenditure may not have been incurred under any legal obligation, but yet it is allowable as business expenditure if it was incurred on grounds of commercial expediency - an order without reasons is as good as no order - the issue of non-interest bearing fund and interest bearing fund had no relevance to decide the tax liability of the assessee - the FAA does not reveal the reasons for upholding the order of the AO thus, the matter is remitted back to the FAA for fresh adjudication Decided in favour of Assessee.
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2014 (5) TMI 275
Applicability of section 154 of the Act - No mistake apparent on record to rectify the order Held that:- CIT(A) was rightly of the view that the matter was out of the purview of Section 154 - Even if there was a difference in the details of purchases furnished and the purchases shown in the P&L account, it was for the AO to call for the explanation of the difference during assessment proceedings - During proceedings u/s 154, the AO made the addition without even considering the assessees explanation wherein the assessee has furnished the correct list of purchase account giving party-wise details Decided against Revenue.
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2014 (5) TMI 274
Deduction u/s 80-O of the Act with respect to interest income - Withdrawal of deduction u/s 80-O in full Held that:- Following of the order of the Tribunal in the case of the same assessee for the earlier assessment year - the receipt of interest is not the income falling u/s 80-O, it was on fixed deposits - the assessee would not be entitled to deduction for withdrawal of deduction u/s 80-O, it has been held that it is a case of reassessment u/s 148 and the issue as to the allowability of the deduction u/s 80-O was not in dispute or subject matter of reopening - the CIT(Appeals) cannot exercise the power of enhancement that too without giving notice of enhancement, which has apparently not been given in this case - the AO has not rightly construed the order of the ITAT because as per ITAT, the assessee was entitled to deduction u/s 80-O but not on interest income there was no justification to interfere with the order of CIT(A) Decided against Revenue.
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2014 (5) TMI 273
Cancellation of penalty u/s 271(1)(c) of the Act Capital gains not declared amounts to furnishing of inaccurate particulars of income or not Held that:- The assessee had not received the balance 50% of the sale consideration till the land was released - The provisions of MOU clearly provide that the assessee shall have to refund the said advance of 50% of sale consideration if it could not get the land released CIT(A) rightly held that it is debatable to hold whether the appellant had already obtained approval from the Haryana Government prior to the impugned transfer of land or not - no prudent purpose could be served for the assessee by filing inaccurate particulars in the current years while the assessee had already offered for tax the capital gains on sale of impugned land in the AY 2000-01 - the capital gain in respect of the transfer of land should be taxed in the AY 2000-01 and not in the year under consideration could be called debatable but the same could not be said as a conscious act of tax avoidance it does not amount to furnishing of inaccurate particulars of income or concealment of particulars of income the order of the CIT(A) of cancelling the penalty is upheld Decided against Revenue.
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2014 (5) TMI 272
Confirmation of penalty u/s 271(1)(c) of the Act - Estimated Addition made Comparison between expenditure debited to P&L account of current year with preceding year Held that:- The CIT(A) rightly held that the addition was made by the AO on the basis of estimation but it was based on figures worked out in each head of expenditure for the two years - The production ratio had been computed on the basis of production figure disclosed by the assessee - the addition remains estimated - The books had been audited and all the particulars of income as well as expenditure have been disclosed by the assessee - Bogus purchases were claimed and purchases were not shown in sales or stock - Addition was made in GP - no such findings were given by the AO that there was specific discrepancy found in purchase and sale - no penalty u/s 271(1)(c) can be imposed upon the basis of estimated addition Decided in favour of assessee.
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2014 (5) TMI 271
Deletion of Penalty u/s 271D of the Act Cash loans noticed during assessment Violation of section 269SS of the Act - Held that:- Relying upon CIT us. Noida Toll Bridge Co. ltd. [ 2003 (1) TMI 46 - DELHI High Court] the amounts standing as liability in the appellant's balance sheet are nothing but "advances" for purchase of fixed assets, which does not attract penalty u/s.271D as it is not a loan or deposit within the meaning of Sec.68 r.w.s.269SS - the amount is nothing but the advances for the purpose of fixed assets, which does not attract penalty u/s 271D of the Act as it is not a "loan" or "deposits" within the meaning of S.269SS of the Act - the advances received by the assessee for purchase of assets cannot be held as loan or deposit as prescribed in Section 269SS - AO has recorded the statement of lenders who had confirmed on oath before the AO and also filed the affidavits that they had advanced money to the appellant against purchase of assets Decided against Revenue.
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2014 (5) TMI 270
Admission of additional ground Held that:- The objections should have been raised by the revenue at the time of admission of the additional ground - admission of additional ground has been upheld by the HC thus, revenue cannot urge the objection at this point of time Decided against Revenue. Assessment u/s 158BC after Initiation of search proceedings u/s 132 Interpretation of section 292CC of the Act - Authorisation and assessment in case of search of requisition - Whether in the absence of names of the assessees on the warrant authorizing search can proceedings u/s. 158BC be initiated against them or not Held that:- For making assessment u/s. 158BC of the Act, it is not necessary to issue authorization u/s. 132 or make requisition u/s. 132A separately in the name of each person - Authorization or requisition in the name of more than one person is permissible - names of these assessees are not appearing in the authorization/requisition, proceedings initiated u/s. 158BC of the Act against them are void ab-initio Relying upon CIT v. Ms. Pushpa Rani [2004 (1) TMI 68 - DELHI High Court] - where no search warrant is issued in name of assessee proceedings initiated u/s. 158BC are ab-initio void and without jurisdiction Decided in favour of Assessee.
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2014 (5) TMI 269
Books of accounts not maintained in the business premises Addition made on the basis of estimation Assessee contended that the accounts are maintained at head office - Held that:- No specific defect has been pointed out by the AO in respect of the books of accounts - CIT(A) has confirmed the addition on the basis that cash found in the possession of the employees of the assessee-firm as on 24/10/2008, clearly shows that the daily turnover was at Rs.17,51,000/- and has taken as commission income @ Rs.175/- per lacs - the finding of the CIT(A) is purely based on conjectures and surmises - The Revenue has not placed any material on record that the assessee was having at least daily turnover of Rs.17,51,000 - Merely finding on a single day cannot be made applicable for the entire month or throughout the year - There is always possibility of lesser and higher amount - Since no specific defect is pointed out in the books of accounts of the assessee, thus, the AO is directed to set aside the addition made on the basis of estimation Decided in favour of Assessee.
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2014 (5) TMI 268
Disallowance u/s 40(a)(ia) of the Act Reimbursement expenses paid to clearing and forwarding agent TDS not deducted Held that:- Following CIT vs Gujarat Narmada Valley Fertilizers [2014 (4) TMI 235 - GUJARAT HIGH COURT] no part of amount reimbursed was to be disallowed u/s. 40(a)(ia) if tax has not been deducted - expenses were incurred by agent on behalf of assessee-principal for transportation and other charges, which had been spelt out in bill itself - So far as obligation to deduct tax at source form payment of transport charges and other charges was concerned, same was complied with by agent, who had made payment on its behalf Decided in favour of Assessee. Disallowance of expenses u/s 14A r.w. Rule 8D of the Act Exempted dividend - Held that:- The asssessee himself had admitted there was an expense of Rs. 98,404/- towards demat charges in respect of this exempt income - The assessee did not attribute any administrative or managerial expenses towards earning of this dividend income - Investments decisions are taken by the top management of the company, therefore some part of administrative and managerial expenses can be held as attributable to earn the exempt income from such investments - thus, the disallowance u/s. 14A is restricted to Rs. 3 lacs Decided partly in favour of Assessee. Disallowance u/s 40(a)(ia) of the Act Lower rate of TDS deducted as prescribed u/s 194J of the Act Held that:- Following APOLLO TYRES LTD Versus DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-1(1), ERNAKULAM [2013 (11) TMI 209 - ITAT COCHIN] - if any part of the tax which required to be deducted was found to be not deducted then can be levied in respect of that part of the amount which was not deducted - the language of section 40(a)(ia) does not say that even for short deduction disallowance has to be made proportionately - section 40(a)(ia) does not enable the assessing officer to disallow any proportionate amount for short deduction or lesser deduction thus, the order of the CIT(A) deleting the addition is upheld Decided against Revenue. Disallowance u/s 40(a)(ia) of the Act Payment made for machinery hiring charges TDS not deducted Held that:- CIT(A) has deleted the disallowance on the ground that machinery/plant and equipment were covered in definition of rent for the purpose of section 194I only w.e.f. 13-07-2006, therefore before this date assessee was not liable to deduct tax at source u/s.194I from machinery hire charges and disallowance made by AO u/s. 40(a)(ia) on this count was not sustainable there was no infirmity in the finding of CIT(A) Decided against Revenue.
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2014 (5) TMI 267
Deletion made - Undervaluation of closing stock Held that:- The assessee has valued the stock at -weighted average cost in the current year and the same method was followed by assessee in earlier years and it was accepted by the Department while finalizing the assessment u/s. 143(3) - The assessee has also adopted the same method for arriving at the "cost of goods sold". The method of valuation is also in consonance with the IT. Act and the Accounting Standards prescribed by ICAI - No material has been brought on record by Revenue to controvert the facts - the AO has started to value the stock at close intervals of each month but finally that was not made the basis of addition - The AO has left that observation/calculation without drawing a conclusion however finalized the valuation on an ad-hoc basis - CIT (A) has rightly deleted the addition made to closing stock Decided against Revenue. Rejection of books of accounts u/s 145(3) of the Act Failure to include making charges in the value of closing stock Held that:- CIT(A) had deleted the entire addition of Rs. 40 lacs made by the AO which also included the under valuation on account of non-inclusion of making charges which was surrendered and accepted by the assessee during the course of assessment proceedings - the addition can be sustained only with respect to the under valuation for making charges amounting to Rs. 3,31,266/- which was accepted by Assessee out of the total addition of Rs. 40 lacs which was deleted by CIT(A) Decided partly in favour of Revenue.
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2014 (5) TMI 266
Recall of order - Nexus between interest borrowings and interest free advances Proper amount of closing balance Cited case laws not considered - Held that:- The assessee submitted that the Tribunal has not considered the contentions of the applicant the Tribunal has not fully and properly considered the case laws cited and relied upon by the applicant and merely observed that they were not applicable though the same were fully applicable to the facts of the case - the assessee has a case and is required to reconsider the facts of the case and case laws cited by the assessee thus, the recall of order on the issue is allowed Decided in favour of Assessee.
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Customs
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2014 (5) TMI 292
Liability for duty on capital goods with interest - Non-fulfilment of export obligation Non-production of export obligation discharge certificate from the Director, STPI since 9 years - Non extension of period beyond 3 years - Held that:- The demand for duty on capital goods with interest has been made because assessee did not produce export obligation discharge certificate from the Director, STPI - Even the letter dated 22-6-2004 makes it clear that LOP issued by the appellant has not been extended and appellants have achieved only Rs. 33,000/- of exports - Therefore, stand taken by the department that appellant is liable to pay Customs duty on the imported capital goods with interest cannot be found fault with. In any case the whole obligation to be fulfilled was Rs. 26.6 crores and the fact that appellant has achieved or received foreign currency of Rs. 1.71 crores also does not help the appellant - Even though the learned counsel made a plea that further time should be granted to enable them to produce a certificate from STPI unit, in view of the fact that export obligation fulfilled is only to the extent of Rs. 1.71 crores and it is more than 9 years since the Director STPI unit had written a letter informing that LOP has not been extended, no purpose would be served by giving further opportunity to the appellant or time for furnish any such certificate - Appeal has no merit and is thus, rejected Decided against assessee.
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2014 (5) TMI 291
Liability for Confiscation of goods - Section 113(d) - Imposition of Penalty before exportation - Section 114 of the Customs Act - Non-possession of Importer-Exporter Code (IEC) Held that:- Confiscation could not have been ordered and penalty u/s 114 cannot be sustained in view of the fact that at the time when penalty of Rs. 2000/- was imposed, goods were not exported or not even attempted to be exported - Filing a manual Shipping Bill was allowed thus, it cannot be said that there was an attempt of export contravening provisions of the law - Once filing a manual Shipping Bill is allowed, subsequent activities undertaken by exporter become perfectly legal and cannot be considered as illegal - Although this is not the basis on which Commissioner (A) has taken a view that goods are not liable to confiscation and penalty is not imposable, it is found this is the statutory position and cannot be ignored Thus, no merit found in appeal filed by Revenue Decided against Assessee.
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2014 (5) TMI 290
Revocation of CHA License - Forfeiture of security - Ignorance of the conduct/activities of CHA`s Employees - G Card and H Card Authorisation Forgery by signature Whether there is lack of supervision on part of appellant as CHA over work of the authorized G Card holder who transacted the business in Custom House Held that:- This Court cannot find fault with the Commissioner`s observation that appellant had not taken the precaution of meeting importer personally - CHA allowed the documents for import to be handled by the employee Shri Vipin Kumar on behalf of the firm, who prepared the check list and signed the bill of entry by forging the signature of the appellant - Moreover 2 copies of H cards and G cards were issued to 2 friends of Shri Vipin Kumar - It is not the case that appellant had no means to have proper control over the employees and even those steps have not been taken by CHA in this case especially in view of the fact that he has 12 branches all over the country. Appellant`s only claim before the original authority as well as before this Court is that Shri Vipin Kumar did forging on his own and he did not know it - Even this claim has been found to be baseless and Commissioner made an observation that this was not a one off instance - These observations have not been contradicted by showing any evidence or making any submissions - In fact after the amendment of CHA Regulation in 2010, there is another regulation introduced which requires a CHA to verify who is the importer etc. - This is really not relevant and may not be proper for consideration since this was not the point which was taken into account by the Commissioner or in the earlier proceedings - This is another aspect which also goes against conduct of CHA - According to Regulation 13 the CHA is required to verify correctness of the IE code No - Therefore all the claims of the appellant go against him rather than in his favour Relying upon CC v. Worldwide Cargo Movers [2006 (11) TMI 281 - BOMBAY HIGH COURT] In view of Regulation 19(8), no merit is found in the appeal and is rejected Decided against Assessee.
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Corporate Laws
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2014 (5) TMI 289
Abuse of the judicial process - Held that:- We should not be taken to have suggested, that the cost of litigation should be enhanced. It is not our suggestion, that Court fee or other litigation related costs, should be raised. Access to justice and related costs, should be as free and as low, as possible. What is sought to be redressed is a habituation, to press illegitimate claims. This practice and pattern is so rampant, that in most cases, disputes which ought to have been settled in no time at all, before the first Court of incidence, are prolonged endlessly, for years and years, and from Court to Court, upto the highest Court. Does the concerned litigant realize, that the litigant on the other side has had to defend himself, from Court to Court, and has had to incur expenses towards such defence? And there are some litigants who continue to pursue senseless and ill-considered claims, to somehow or the other, defeat the process of law. The present case, is a classic illustration of what we wish to express. Herein the regulating authority has had to suffer litigation from Court to Court, incurring public expense in its defence, against frivolous litigation. Every order was consistently and systematically disobeyed. Every order passed by the SEBI was assailed before the next higher authority, and then before this Court. Even though High Courts have no jurisdiction, in respect of issues regulated by the SEBI Act, some matters were taken to the High Court of Judicature at Allahabad (before its Lucknow Bench). Every such endeavour resulted in failure, and was also sometimes, accompanied with strictures. Even after the matter had concluded, after the controversy had attained finality, the judicial process is still being abused, for close to two years. A conscious effort on the part of the legislature in this behalf, would serve several purposes. It would, besides everything else, reduce frivolous litigation. When the litigating party understands, that it would have to compensate the party which succeeds, unnecessary litigation will be substantially reduced. At the end of the day, Court time lost is a direct loss to the nation. It is about time, that the legislature should evolve ways and means to curtail this unmindful activity. We are sure, that an eventual determination, one way or the other, would be in the best interest of this country, as also, its countrymen.
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FEMA
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2014 (5) TMI 288
Order of detention - Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974, (COFEPOSA) - delay in passing the orders - Held that:- We must bear in mind that distinction exists between the delay in making of an order of detention under a law relating to preventive detention like COFEPOSA and the delay in complying with procedural safeguards enshrined under Article 22(5) of the Constitution. In view of the factual scenario as aforesaid, we are of the opinion that the order of detention is not fit to be quashed on the ground of delay in passing the same. The conclusion which we have reached is in tune with what has been observed by this Court in the case of M. Ahamed kutty v. Union of India, [1990 (1) TMI 72 - SUPREME COURT OF INDIA] Undue and unexplained delay in execution of the order of detention vitiates it, but in the facts of the present case, it cannot be said that such delay has occurred. As stated earlier, the order of detention dated 6th of May, 2013 was served on the detenu on 11th of June, 2013. It is expected of the detaining authority to take recourse to ordinary process at the first instance for service of the order of detention on a detenu and it is only after the order of detention is not served through the said process that recourse to the modes provided under Section 7 of the COFEPOSA are to be resorted. Here, in the present case, that occasion did not arise as the order of detention was served on the detenu on 11th of June, 2013. Therefore, in our opinion, the order of detention cannot be said to have been vitiated on this ground also. We cannot expect the detaining authority to know each and every detail concerning the detenu in different parts of the country. Not only this, the conditions imposed while granting bail to the detenu which we have reproduced above in no way restrains him from continuing with his prejudicial activity or the consequences, if he continues to indulge. We are in agreement with the High Court that the bail order passed by the trial court in Andhra Pradesh is not a crucial and vital document and the omission by the detaining authority to consider the same has, in no way affected its subjective satisfaction. There is no error in the order of detention and the order passed by the High Court, refusing to quash the same. - Decided against the appellant.
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Service Tax
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2014 (5) TMI 309
Waiver of pre-deposit - business auxiliary services - marketing activities - tribunal directed the appellant to deposit 50% of the assessed service tax liability plus the proportionate interest - principle of consistency and binding precedent and uniformity - Held that:- in the matters of interlocutory orders, the principle of binding precedents do not apply. - the appellant is directed to deposit a sum of Rs. 50 lacs as a condition precedent for hearing of the appeal which would meet the ends of justice. - Decided partly in favor of assessee.
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2014 (5) TMI 308
Non compliance of Rule 16 of CESTAT (Procedure) Rules 1982 - Held that:- it is necessary for Registry to ensure that entire paper book with relevant documents are file within the time frame prescribed by the above Rule. We may add that non compliance to Rule 16 causes impediment in the process of delivery of justice and justice is also delayed - We request the Secretary of the Bar to widely circulate a copy of this order among the Members of Bar so that they shall ensure timely compliance to Rule 16 of CESTAT (Procedure) Rules, 1982. We also direct the office of learned CDR to ensure that Revenue in its appeals is also strictly follow the procedure prescribed by Rule 16 and immediately after getting a copy of appeal memo they should inform the Registry in the event they do not get a copy of the Paper Book. We hope that the mandate of Rule 16 shall be complied with by both sides including proper scrutiny by Registry to save delay and obstruction to the process of delivery of justice.
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2014 (5) TMI 307
CENVAT Credit - respondent has availed Cenvat credit on the basis of debit notes which did not contain Service Tax registration number and sl. no. of bill of invoices - Held that:- It is not correct to say that the credit has been taken only on the basis of debit notes. According to the observations of learned Commissioner, debit notes were raised for recovery, value of services and for recovering of Service Tax, the service provider has raised a separate bill. In the bill, the registration number of the service provider, the amount of Service Tax paid and to whom the service was provided are available. He has taken a view that these details are sufficient and therefore credit is admissible. According to proviso to Rule 9(2) of Cenvat Credit Rules, credit can be allowed even if the document does not contain all the particulars but contains the details of Service Tax payable, description of taxable service, value of service, registration number of the person issuing the invoice, name and address of the factory. The rule also provides that if the services on which credit has been taken have been received and accounted for, credit can be allowed. Further, the rule also does not bar the availment of credit on the basis of an invoice, bill or challan. In this case as observed by the learned Commissioner (Appeals), no doubt the procedure adopted by the service provider is somewhat abnormal. But the fact remains that debit notes issued provides the value of service and separate bill has been raised for payment of Service Tax. The bill contains the details which are specified in the proviso to Rule 9(2) as mentioned above. Since the documents on the basis of which credit has been taken contain essential details which are required as per the proviso to Rule 9(2) and there if no observation that service has not been received or Service Tax was not paid by the provider of service, the decision of the Commissioner (Appeals) cannot be found fault with - Decided against Revenue.
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2014 (5) TMI 306
Demand of service - commercial or industrial construction service - Held that:- A taxing entry brought to the statute book at a later stage does not mean that legislature is prevented to tax an activity in terms of a former entry embracing an activity defined by law for taxation. When the work executed by the appellant could not be held as dam constructed, the appellant lost exemption. Service tax is not commodity taxation. The authorities have taxed the service which was taxable under law for the time being in force. The plea of sub-contract was disallowed. Nothing came to record to show that service tax leviable on the taxable service provided by the appellant had suffered tax in the hands of the sub-contractors. The Adjudicating authority in para 7.6 has examined the sub-contract issue also. Finding no evidence relating to the suffering of the work by the incidence of levy under Finance Act, 1994 he levied tax - On an overall examination of the plea of the appellant and findings in the adjudication order, we are prima facie of the view that Revenues interest shall be prejudiced if no pre-deposit is called for - Conditional stay granted.
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Central Excise
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2014 (5) TMI 301
Waiver of pre-deposit - 100% EOU - appellant submitted that the liability has been illegally fastened on the appellant. It was urged that the requirement of ₹ 1,00,00,000/- as a pre-deposit as directed by the Tribunal was unfair and excessive under the circumstances. - cancellation of Letter of Permission - debonding - Held that:- After hearing learned counsel for the parties and keeping in view the totality of the facts and circumstances of the case, a sum of ₹ 30 lacs in addition to the amount already deposited, be deposited as a condition precedent for hearing of the appeal by the Tribunal which would meet the ends of justice. - Decided partly in favor of assessee.
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2014 (5) TMI 300
Levy of penalty - Whether on the facts and circumstances of the case, the Tribunal was justified in reducing the penalty levied on the assessee under Rule 96ZO(3) (ii) of the Central Excise Rules, 1944? - Held that:- when Section 37, which is the rule making power, is clear that penalty can be imposed only when the assessee is guilty of intending to evade the payment of duty, the penalty cannot be imposed without such intention. Furthermore, even when intention may be there, the penalty must be reasonable and cannot, in all cases, be fixed at 100% of the excise leviable. Each case must be decided on its own facts and circumstances. - Following the decision in Bansal Alloys & Metals Pvt. Ltd's case [2010 (11) TMI 83 - PUNJAB & HARYANA HIGH COURT], decided against the revenue.
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2014 (5) TMI 299
Waiver of pre-deposit - Tribunal has directed the appellants to deposit 25% of duty demand - allegation of clandestine removal - estimation of value of clearance - Held that:- Honble the Apex Court in Indu Nissan Oxo Chemicals Ind. Ltd. v. Union of India (UOI) and Ors. [2007 (12) TMI 220 - SUPREME COURT OF INDIA], considering the matter relating to waiver of deposit of amount or pre-deposit of demand during pendency of the appeal relating to the Customs Act, 1962 and considering the plea of financial hardship and balance of convenience, held that even if there is financial hardship, the same cannot be a ground to dispense with pre-deposit amount and balance of convenience is not in favour of appellant. - no merit in any of the appeals and the same are, accordingly, dismissed - Decided against the assessee.
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2014 (5) TMI 298
Claim of interest on refund of pre-deposited amount - maintainability of writ petition - Held that:- In view of the statutory remedy of appeal available to the petitioner, I decline to entertain this Writ Petition but with liberty to the petitioner to avail of the statutory remedy of appeal as against the order impugned herein in accordance with law. Petition dismissed.
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2014 (5) TMI 297
Levy of penalty u/s 11AC - demand of interest - The Tribunal by its order dated 20th March, 2006 held that since the amount of duty was already paid before issuance of the show-cause notice, the penalty and interest was not payable. - Held that:- When the Tribunal was specifically directed to consider said decisions by an order of this Court, the Tribunal was duty bound to consider the same and render its decision with reference to and in light of the law laid down by the Apex Court. When a lower Court or quasi-judicial authority or the Tribunal is directed by the High Court to decide a question in a particular manner or with reference to a particular decision, such lower court or authority would be required to decide the issue in that manner only. The cryptic approach, as is reflected from the impugned order, cannot be justified. It is always permissible for the Tribunal to take a particular view and arrive at its own conclusion, however, the order it may pass has to be in conformity with the directions issued by this Court while remanding the matter. It is deemed appropriate that the matter is again remanded to the Tribunal for passing a fresh order - decided in favor of revenue.
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2014 (5) TMI 296
Demand of duty - extended period of limitation - when and under what circumstances the excise authorities could keep the assessment provisional under the prevailing statutes, namely, Section 11A read with Rule 9B - whether the authorities could reopen an approved classification list through a non-appealable communication. - After the proceeding came to its finality and when the petitioner also started paying the duty from 4-11-1984, the Superintendent of Central Excise, Range-IIC has issued a show cause notice dated 15-3-1994 calling upon the petitioner to pay the duty from 3-8-1982 to 4-11-1984 and the same was confirmed - Held that:- the respondent has not proved either before the issuance of the show cause notice dated 15-3-1994 or before this Court that they have complied with what was laid down by the Apex Court in paragraph 12 of the judgment in Metal Forgings v. Union of India [2002 (11) TMI 90 - SUPREME COURT OF INDIA] It goes without saying that the respondents have not followed any of the conditions, hence, I fail to understand how the case of the petitioner was not considered while allowing the appeal made by the department. The show cause notice issued on 15-3-1994 was admittedly barred by time as provided under clause (1) of Rule 10 of the Rules, hence, the order impugned herein comes under the scrutiny of this Court. - the order quashed - Decided in favor of assessee.
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2014 (5) TMI 295
Cenvat credit of service tax paid on rent of premises - eligible input services - if the rent of the premises occupied by job worker is paid by him only, whether the appellant would be entitled to avail the credit of the service tax paid on the same? - Held that:- Admittedly not, the appellant has extended the facility of the rented premises to its job worker out of his own sweet will. Such extended facility, along with installation of the machines would definitely have impact on the quantum of the job charges being charged by the job worker. Merely because the appellant has chosen to provide rented premises to his job worker, it cannot be said that such a facility extended to the job worker is associated with the appellants business and is covered by the definition of input services. Extended period of limitation - Held that:- As such, it is seen that a part of the demand is barred by limitation. Admittedly, the appellant was availing the credit by reflecting the same in their statutory records as also in the returns filed with the department. Further the issue involved is also a bona fide dispute on interpretation of law and does not involve any clandestine activities. - Benefit of extended period of limitation extended to assessee. While confirming the demand for the normal period with interest, penalty set aside. - Decided partly in favor of assessee.
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2014 (5) TMI 294
Manufacture - Marketability - captive consumption - Demand of duty on captive consumption of Glyoxal used in the manufacture of Drug intermediates - Drug intermediates (2-Methyl Imidazol and 2-Methyl 5 Nitro Imidazol) exempted under Notification No.147/1984-CE, dt.19.06.1984 - Held that:- it is specifically mentioned that though one of the raw materials for making drug intermediates is Glyoxal 40% but they are using Glyoxal 20%, which is an intermediate stream of their Glyoxal plant. No investigation has been done by the Revenue to argue that unstable Glyoxal 20% cannot be used in the manufacture of exempted drug intermediates manufactured by the appellant. It is also observed from the chemical test report dt.24.01.1991 from Chemical Examiner, Central Excise, Vadodara, that Glyoxal 20% on storage, deteriorates and cannot be considered as marketable. It cannot be said that drug intermediates are manufactured by the appellant only from the stable Glyoxal 40%. No case can be made against the assessee on presumptions and conjectures. The appellant was manufacturing exempted drug intermediates from unstable Glyoxal 20% which was not marketable and on which no duty was thus payable. - Decided in favor of assessee.
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2014 (5) TMI 293
Clandestine removal - estimation of value of clearance - demand based on packing and folding register - non consideration of production capacity and electricity consumption figures - Held that:- said register indicates at specific pages which are allotted to Shri Krishna Screen Print Art; activity undertaken by them of cutting and folding of the processed fabrics, the entries thereto which have been culled out in the Annexure A to the show cause notice indicate that the said packing register specifically points out the activity undertaken by M/s. Sunira Traders for Shri Krishna Screen Print Art. Shri Rajan Ishwar Jariwala who is the sole person who is aware of entire activity of Shri Krishna Screen Print Art, M/s. Shri Govardhan Textiles, M/s. Sunira Traders and M/s. Sunita Textiles, was in the knowledge of the entire activity and was the only beneficiary of the evaded duty, which was not paid on the manmade fabrics which were processed on machine in Shri Krishna Screen Print Art and cleared as hand processed material of M/s. Shri Govardhan Textiles. An admission made by the sole beneficiary of such an activity is itself enough to hold against the appellants. - adjudicating authority was correct in coming to the conclusion in holding that the appellant Shri Krishna Screen Print Art is liable to be visited with the duty liability, interest thereof and penalty; penalty on Shri Rajan Ishwar Jariwala and M/s. Shri Govardhan Textiles. - Decided against the assessee.
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CST, VAT & Sales Tax
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2014 (5) TMI 305
Revision against the order passed by the Tribunal(A) - Whether levy of penalty u/s 12(3)(b) of the Tamil Nadu General Sales Tax Act, 1959 was justifiable when there was no suppression pointed out by the Revenue Held that:- When the turnover assessed under the assessment order is drawn from the books of accounts and no reference to any specific concealment of the turnover in the accounts made, the question of invoking Section 12(3)(b) would not arise - The Explanation to Section 12(3)(b) specifies the turnover which merited to be excluded for the purpose of levy of penalty - Even while calculating the turnover for the purpose of levy of penalty, the turnover are to be excluded and only those turnover which are estimated having reference to a specific concealment alone invite the penal provisions under the Act - when the assessment is based on the accounts turnover, the question of levy of penalty does not arise Order of Tribunal Set aside Decided in favour of assessee.
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2014 (5) TMI 304
Rate of Tax Whether Asessing Authority had correctly applied rate of tax at 5% on the same items, was subject matter of consideration both in the assessment years 1999-00 and 2000-01, which was to decide earlier and in respect of assessment year 1998-99 - Classification - Miscellaneous scraps - Interpretation of Statute Reassessment - Held that:- Even if we accept that the audit report is not the basis of reopening assessment, the reasoning on which Division Bench held that the reassessment in the case of applicability of the rate of tax on Misc. scraps which will amount to change of opinion, will cover the field - Though the principle of res - judicata is not applicable in tax matters relating to different assessment years, the reasons on which reassessment was set aside are the same - The report of the audit party annexed to the writ petition was in respect of two assessment years, this Court has already taken the view that the order u/s 21 (2) amounted to change of opinion on which reassessment could not be made - Respectfully following the reasoning, on which the writ petition filed by the same petitioner was allowed, on the same issue in respect of assessment years 1999-2000 and 2000-01 in respect of the same assessee, It is found that the order in the present case under the proviso to Section 21(2) authorising the reassessment is also liable to be set aside. In the present case the interim order was made on 31.3.2005 - In the counter affidavit it is stated that on the same day, when the interim order was passed on 31.3.2005, the order of reassessment was passed, which in compliance of the High Court's order dated 31.3.2005 has not been served upon the assessee - Since prayers are allowed and orders for reopening assessment are set aside, the orders of the DC, Moradabad dated 18.3.2005 and 23.3.2005 by which he authorised reassessment for the year 1998-99 shall not be acted upon Decided in favour of assessee.
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2014 (5) TMI 303
Liability to pay Tax - Inter-state transfer of goods Nature of Assessee Assessee being a service provider of machines and paper Brief Facts - The writ petitions were entertained on the ground that the petitioner was not accepted as dealer in the previous assessment years and as such he was not required to present Form-'F' of CST Act, for taking out and bringing machines or paper, as the petitioner was only providing services of machines and paper, and does not deal in sale and purchase of drilling machine and paper - Held that:- Assessment orders for the subject years, passed by the assessing authority, for almost in the same type of transactions could not have been passed only on the ground of judgment in M/s. Ambica Steels Ltd and another Vs. State of U.P. and others [2007 (8) TMI 688 - ALLAHABAD HIGH COURT] unless the assessing authority had examined the question whether the petitioner carries on the business in the State of U.P., and thus he is not required to obtain Form 'F' - It would be necessary for the appellate authority, in case of appeal against the assessment order, to decide the questions. Alternative remedy Held that:- The Central Sales Tax, 1956 was amended by inserting Section 18-A by the Finance Act 2010 providing for appeal before the highest appellate authority of the State against the order of the assessing authority u/s 6A(2) or u/s 6A(3) - Looking into the nature of the dispute involved it would be appropriate to relegate the petitioner to file an appeal u/s 18-A of the Central Sales Tax Act 1956 - Writ petitions are dismissed on the ground of alternative remedy - The interim orders are discharged Decided against the assessee.
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2014 (5) TMI 302
Rate of tax Option of Compounding of Tax - Applicability of compounding scheme to agreements - Option to opt out of compounding Scheme Held That:- The argument raised by learned counsels appearing for assessees, that once an option is given, they cannot opt out of the scheme and will be bound by the increased rate irrespective of the number of contracts entered into by them is devoid of any substance - The object of the compounding scheme dated 9.6.2009 made u/s 6 (1) of the Act is to provide for compounding at a uniform rate of the tax on the turn over, qua the financial year - The Act does not provide for two or more assessments of commercial tax for the same period, in any financial year; one on a facilitated compounded rate and another by way of regular assessment on the notified rates given in the schedule - The procedure of assessment provided under the Act, restricts the assessment for any period, to only one such assessment - Keeping in view the object of making assessments in a simplified manner without any hassles, an option is provided in the scheme to make applications for compounding of tax for a financial year - Once such an option is exercised, all the contracts entered into either before giving the option or subsequent thereto, for the relevant period covered by the agreement are covered by the compounding scheme - For the subsequent years in case any contract is not completed or the payments are receivable, the same analogy would apply namely that there can not be two assessments for the same period of time, one on compounded basis and another on regular basis. Relying upon Varkisons Engineers v. State of Kerala & Anr., [2009 (4) TMI 433 - SUPREME COURT OF INDIA] - Supreme Court held following CIT v. Scindia Steam Navigation Co. Ltd., 1961 (4) TMI 6 - SUPREME Court; CST v. Modi Sugar Mills Ltd. [1960 (10) TMI 65 - SUPREME COURT OF INDIA] - The imposition of a different tariff in the mill of the assessment order could be given effect to, if the scheme of the Act provides for proper machinery for computing the tax liability - The Supreme Court also drew distinction between Section 5 of the Kerala General Sales Tax Act, 1963, which deals with normal assessment referring to tax on the turn over, and Section 7 (7), which refers to payment of tax on the amount of contract - The matter was remanded to the Kerala High Court for de novo consideration in accordance with law. Unraised Question - Difficulty in assessment of tax for two periods in the same assessment year - Held That:- Assessees have not raised any question with regard to difficulty in assessment of tax for two periods in the same assessment year - The compounding scheme dated 9.6.2009 does not provide for any such eventuality - A dealer has to opt for compounding of tax on the amount of contract or the contracts as the case may be for the entire financial year - The scheme does not provide for any piecemeal option nor provides for any assessment to be made in the same financial year - The amended rate of compounding of tax is applicable prospectively to the applications filed before the commencement of the increased rates of compounded tax This Court do not agree with the learned counsel appearing for assessees, that having applied for compounding, a contractor does not have any option to opt out in any of the subsequent years - In subsequent years, if the applicant is not left with any incomplete contract or a contract in respect of which the payments are receivable, he may not apply for the compounding - In such case, it will be open to the civil contractor or the electrical contractor as the case may be, to make a choice to apply for compounding or subject itself to regular assessments - No merit is found in the grounds for challenging the amendments dated 30.12.2010, to the rates of compounding by the Compounding Scheme for compounding of tax by the building contractors dated 9.6.2009, issued by the State Government u/s 6 - All the writ petitions are dismissed Decided against assessee.
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2014 (5) TMI 265
Nature of contract - sales or works contract - whether a contract for manufacture, supply and installation of lifts in a building is a contract for sale of goods or a works contract . - Decision by constitution bench by majority order - Held that:- the principles stated in Larsen and Toubro [2013 (9) TMI 853 - SUPREME COURT] as reproduced by us hereinabove, do correctly enunciate the legal position. Therefore, the dominant nature test or overwhelming component test or the degree of labour and service test are really not applicable. If the contract is a composite one which falls under the definition of works contracts as engrafted under clause (29A)(b) of Article 366 of the Constitution, the incidental part as regards labour and service pales into total insignificance for the purpose of determining the nature of the contract. If there are two contracts, namely, purchase of the components of the lift from a dealer, it would be a contract for sale and similarly, if separate contract is entered into for installation, that would be a contract for labour and service. But, a pregnant one, once there is a composite contract for supply and installation, it has to be treated as a works contract, for it is not a sale of goods/chattel simpliciter. It is not chattel sold as chattel or, for that matter, a chattel being attached to another chattel. Therefore, it would not be appropriate to term it as a contract for sale on the bedrock that the components are brought to the site, i.e., building, and prepared for delivery. The conclusion, as has been reached in Kone Elevators [2005 (2) TMI 519 - SUPREME COURT OF INDIA], is based on the bedrock of incidental service for delivery. It would not be legally correct to make such a distinction in respect of lift, for the contract itself profoundly speaks of obligation to supply goods and materials as well as installation of the lift which obviously conveys performance of labour and service. Hence, the fundamental characteristics of works contract are satisfied. Thus analysed, we conclude and hold that the decision rendered in Kone Elevators [2005 (2) TMI 519 - SUPREME COURT OF INDIA] does not correctly lay down the law and it is, accordingly, overruled. Keeping in view the conclusions of the majority, expressed in the judgment of Dipak Misra, J., it is held that the decision rendered in State of A.P. v. Kone Elevators [2005 (2) TMI 519 - SUPREME COURT OF INDIA] does not correctly lay down the law and it is accordingly overruled. The assessment orders which have been framed and are under assail before this Court are set aside. It is necessary to state here that where the assessments have been framed and have attained finality and are not pending in appeal, they shall be treated to have been closed, and where the assessments are challenged in appeal or revision, the same shall be decided in accordance with the decision rendered by us. - Decided in favor of assessee.
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Wealth tax
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2014 (5) TMI 286
Computation of taxable income and taxable wealth of discretionary trust - estate of the deceased Settlor - legal position about the discretionary trust - assessment years 1964-65 to 1970-71 and assessment years 1970-71 to 1982-83 - Held that:- A discretionary trust is one which gives a beneficiary no right to any part of the income of the trust property, but vests in the trustees a discretionary power to pay him, or apply for his benefit, such part of the income as they think fit. The trustees must exercise their discretion as and when the income becomes available, but if they fail to distribute in due time, the power is not extinguished so that they can distribute later. They have no power to bind themselves for the future. The beneficiary thus has no more than a hope that the discretion will be exercised in his favour. Having regard to the above legal position about the discretionary trust which is also applied by by this Court in the earlier judgment [1993 (4) TMI 1 - SUPREME Court] and the fact that the income has been retained and not disbursed to the beneficiaries, the view taken by the High Court cannot be said to be legally flawed. Merely because the Settlor and after his death, his son did not exercise their power to appoint the discretion exercisers, the character of the subject trusts does not get altered. In view of the facts noted above, in our opinion, the two U.K. trusts continued to be 'discretionary trust' for the subject assessment years. The above position with regard to the discretionary trust is equally applicable to the controversy in appeals under the Wealth Tax Act. The High Court has taken a correct view that the value of the assets cannot be assessed on the estate of the deceased Settlor. - Decided against the revenue.
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Indian Laws
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2014 (5) TMI 287
Whether a woman employee of the Central Government can ask for uninterrupted 730 days of Child Care Leave - to take care of her son who was in 10th standard. - tribunal directed the respondent to act strictly in accordance with DOPT O.M. dated 11.9.2008 as amended/clarified on 29.9.2008 and 18.11.2008, granting her CCL for the due period. - Held that:- As per circulars where all applications for leave cannot, in the interest of public service, be granted at the same time, the leave sanctioning authority may draw up phased programme for the grant of leave to the applicants by turn with due regard to the principles enunciated under the aforesaid circulars. Judgment and order dated 30th April, 2012 passed by the Tribunal affirmed with a direction to the respondents to comply with the directions issued by the Tribunal within three months from the date of receipt/production of this judgment.
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