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TMI Tax Updates - e-Newsletter May 28, 2016 Case Laws in this Newsletter: Income Tax Customs Corporate Laws Service Tax Central Excise CST, VAT & Sales Tax TMI SMS Refund claim - merely because the procedure of provisional assessment have not been followed, refund of excess duty cannot be denied - Tri Validity of Assessment Order - whether it is antedated? - there is no proof of dispatch of the final order - AO and penalty quashed - HC Articles INTERNATIONAL TAXATION News EU-India Make Co-ordinated Proposal for KP Chair in 2018 and 2019 Government Invites Comments and Inputs of the Stakeholders on Implementation of General Anti Avoidance Rule Provisions-Issuance of Guidance Note RBI Reference Rate for US $ Notifications Central Excise 28/2016 - dated 26-5-2016 - CE (NT) CENVAT Credit (Seventh Amendment) Rules, 2016 Customs 20/2016 - dated 27-5-2016 - ADD Seeks to impose anti-dumping duty on Coumarin of all types [Tariff Item 2932 20 10], originating in or exported from People's Republic of China, for a period of five years (unless revoked, superseded or amended earlier) 35/2016 - dated 26-5-2016 - Cus Seeks to further amend notification No.27/2011-Customs dated 1.3.2011 - exemption withdrawn on export of Chromium ores and concentrates, all sorts. Service Tax 31/2016 - dated 26-5-2016 - ST Service Tax (Third Amendment) Rules, 2016 30/2016 - dated 26-5-2016 - ST Seeks to amend notification No. 12/2013- ST, dated the 1st July, 2013 so as to inter alia allow refund of Krishi Kalyan Cess paid on specified services used in an SEZ 29/2016 - dated 26-5-2016 - ST Seeks to amend notification No. 39/2012- ST, dated the 20th June, 2012 28/2016 - dated 26-5-2016 - ST Krishi Kalyan Cess - Exempts such taxable services 27/2016 - dated 26-5-2016 - ST Seeks to provide that provisions of notification No. 30/2012 - Service Tax dated the 20th June,2012 shall be applicable for the purposes of Krishi Kalyan Cess Circulars / Instructions / Orders Service Tax 194/04/2016 - dated 26-5-2016 Accounting code for payment of Krishi Kalyan Cess Income Tax Press Release - dated 27-5-2016 Clarification for implementation of FATCA and CRS 20/2016 - dated 26-5-2016 E-filing of appeals: Extension of time limit F. No. 504/632/2015-FT & TR-III(1) - dated 26-5-2016 Clarifications for implementation of FATCA and CRS Central Excise Trade Notice No. 003/2016 - dated 5-4-2016 Central Excise & Service Tax - Taxpayer Services - Creation of Zonal Unit of Directorate General of Taxpayer Services at Chennai Highlights / Catch Notes Income Tax The premium on the 'Keyman Insurance Policy' of partner of the firm is wholly and exclusively for the purposes of business and is allowable as business expenditure - HC Visit to Get Source Reopening of assessment - sale price of the shares - LTCG or STCG - certain shares had been acquired by the Assessee by way of a gift - the statement of shareholding indicating the dates on which the subject shares were acquired was provided to the AO in response to the queries raised by him. - the notice is occasioned by a change of opinion and therefore quashed - HC Visit to Get Source Validity of assessment order - whether it is antedated? - whether time period specified u/s144(C)(4) r.w.s. 144(C)(3) adhered or not? - there was no such despatch register available which would have shown the date of despatch of the final assessment order and proof of service of such assessment order - assessment order and consequent levy of penalty quashed - HC Visit to Get Source Genuity of gift from father - One is also at a loss to understand why, if her father was stationed in Bahrain as claimed by the appellant and if he wanted to gift his salary income earned in that country to his daughter living in India, he should transfer the amount to Singapore and then to India, instead of directly transferring the amount from Bahrain itself. - HC Visit to Get Source Penalty u/s 271D - The firm has accepted loan from the partners by passing journal entries and also explained sources. Moreover, the repayment of loan is made to a nationalized bank - No penalty - AT Visit to Get Source A.O. to consider the repayment of liabilities of the donor, made by the assessee as that which is incurred to perfect his title of the property and thus it is cost of improvement and consequentially the borrowings made for the same is to be taken as that which is for incurring the cost of improvement of the property and consequentially the interest expenditure incurred should be allowable u/s 24(b) from House Property Income - AT Visit to Get Source MAT - Exclusion of undisclosed income from the book profit computed u/s 115JB - AO has no power to tinker with the accounts of the assessee, which have been prepared in accordance with Part-II of schedule-VI to the Companies Act. - AT Visit to Get Source Reopening of assessment - addition on repayment of sign on bonus back - whether the provision of Act permit deduction were the assessee voluntarily resigned from Barclays Bank and joined Deutsche Bank violating the pre-conditions of employment to stay with Barclays Bank for a period of one year? - Held No - AT Visit to Get Source Addition u/s 69A - No plausible explanation has come on record during the assessment proceedings or thereafter as to why the cash book, subsequently relied upon by the assessee, has not been produced before the AO - Additions confirmed - AT Visit to Get Source Once the income is estimated, after rejection of books of accounts, no other addition is permissible on the basis of rejected books - AT Visit to Get Source Claim of TDS liability under different provision i.e u/s 194I as against u/s 194J - It is not possible to import the existence or the consideration of any point not raised and adjudicated before the authorities or the Tribunal, much against the principles of natural justice and that too at this juncture in the appeal proceedings under the fiscal statute. - HC Visit to Get Source TDS u/s 194J - whether analysis and distribution (SLDC) of electricity from generation point to the consumers of the assessee involving utilization of sophisticated machineries, involvement of technical expertise, application of science, services of Engineers, engagement of qualified technicians and trained, skilled personal/manpower does not amount to technical services? - Held Yes - HC Visit to Get Source Addition on account of cessation of liability u/s 41(1) - merely because the creditor could not be traced on the date when the verification was made, same is not a ground to conclude that there was cessation of the liability - HC Visit to Get Source Penalty levied under section 271(1)(c) - claim of the assessee became untenable by virtue of retrospective operation of law, otherwise, the assessee could have demonstrated the allowance of its claim - no penalty - AT Visit to Get Source Treatment of grant-in-aid towards salary & PF as taxable - received for the payment of arrears of PF of the employees, salary and wages of employees - grant-in-aid is capital in nature therefore it is not liable to tax. - AT Visit to Get Source TDS - discount on MRP granted by the assessee to distributors at the time of sale of the drugs/medicines (i.e. goods) does not fall within the ambit of section 194H - AT Visit to Get Source Carried forward depreciation and loss - A decision recorded by the Income-tax Officer who computes the loss in the previous year that the loss cannot be set off against the income of the subsequent year is not binding on the assessee - AT Visit to Get Source Customs Commissioner (Appeals) allowing the request of the respondent for re-export of goods is not legal and proper and cannot be allowed - order of tribunal sustained - SC Visit to Get Source Seizure of smuggled 1000 gms imported gold - walked through the green channel at the airport without made declaration - confiscation upheld - Commissioner (Appeals) allowing the request of the respondent for re-export of goods is not legal and proper and cannot be allowed - CGOVT Visit to Get Source Extended period of limitation - It is undisputed that the bills of entry which are filed by appellant indicated these items as 'Pharmaceutical Reference Standards' and all the relevant documents for clearance of goods were filed with the authorities, at the time of clearance of goods; which was accepted by the department, hence they permitted clearance on final assessment by extending benefit of notification. - allegation of suppressed the facts is not sustainable - AT Visit to Get Source Import of Heavy Melting Scrap and Re-Rollable Scrap - Bill of Entry should have been assessed on the basis of examination of the goods by Customs Officers and at best, differential duty only be demanded from the assessee. Confiscation of the goods, Redemption fine and penalty are not warranted and would amount to too harsh a measure - AT Visit to Get Source Service Tax Seeks to amend notification No. 12/2013- ST, dated the 1st July, 2013 so as to inter alia allow refund of Krishi Kalyan Cess paid on specified services used in an SEZ - Notification Visit to Get Source Service tax paid on GTA services utilized for outward transportation of final product is allowable for the period prior to 01.04.2008 as per the definition of input services as contained in Rule 2(l) of the Cenvat Credit Rules - AT Visit to Get Source Central Excise CENVAT Credit (Seventh Amendment) Rules, 2016 - Krishi Kalyan Cess shall be allowed as Cenvat Credit - Cenvat Credit (other than Krishi Kalyan Cess) cannot be utilized to pay Krishi Kalyan Cess Visit to Get Source Cenvat Credit - CTD bar invariably used for construction purpose, which cannot be allowed as inputs - AT Visit to Get Source Refund claim - excess duty paid - procedure of provisional assessment not followed - merely because the appellant have not followed the procedure of provisional assessment, the price at which the duty was paid at the time of clearance cannot be treated as final assessment. - AT Visit to Get Source Valuation - additions / deductions from the assessable value u/s 4 - If there was any short payment, assessee can be asked to remit the same but department can not calculate a figure to add to the assessable value on their own based on RT-12 returns - AT Visit to Get Source Appellant had availed CENVAT Credit as per CENVAT Credit Rules and it does not prohibit the domestic unit converted into an 100% EOU, availing and utilizing the CENVAT Credit lying in balance - AT Visit to Get Source Cenvat credit on purchase of raw material - sponge iron being the raw material/inputs purchased from registered dealer - goods received on endorsed invoices - goods were sold in transit - credit allowed - AT Visit to Get Source Demand of duty - extended period of limitation - something positive other than mere inaction or failure on the assessee’s part or conscious withholding of information when assessee knew otherwise is required for invoking extended period - AT Visit to Get Source VAT Whether it is possible to settle a part of a pending dispute under the West Bengal Sales Tax (Settlement of Dispute) Act, 1999 without settling the entire appeal or revision - Held No - HC Visit to Get Source Case Laws: Income Tax 2016 (5) TMI 1155 Premium paid for securing “Keyman Insurance Policy” - Addition of premium paid on the life of partners and debited to the profit and loss account as Keyman Insurance Premium of the assessee firm - Held that:- The Bombay High Court delving into identical issue in Commissioner of Income Tax v. B.N. Exports [2010 (3) TMI 186 - BOMBAY HIGH COURT ] after noticing the relevant statutory provisions and the Board Circular No. 762 dated 18th February, 1998 issued by the Central Board of Direct Taxes on the issue had held that the premium paid for a 'Keyman Insurance Policy' is allowable as business expenditure under Section 37(1) of the Act. It was further noted that the object and purpose of the said policy is to protect the business against a financial set back which may occur as a result of a premature death, to the business or professional organization. There is no rational basis to confine the allowability of the expenditure incurred on the premium paid towards such a policy only to a situation where the policy is in respect of the life of an employee. The said policy when obtained to secure the life of a partner against a disruption of the business is equally for the benefit of the partnership business which may be affected as a result of premature death of a partner. Thus, the premium on the 'Keyman Insurance Policy' of partner of the firm is wholly and exclusively for the purposes of business and is allowable as business expenditure - Decided in favour of assessee 2016 (5) TMI 1154 Reopening of assessment - sale price of the shares - certain shares were held by the Assessee for a period less than 12 months - Held that:- The queries raised by the AO and the submissions made by the Assessee in response thereto amply bear out that the AO had examined the WSSPA, the revised WSSPA and the letter dated 27th December 2006 issued by SEBI to revise the public offer price for PLL shares from ₹ 152 per share to ₹ 190 per share. In these given facts, there could be no dispute that the AO had examined all relevant facts with regard to the sale price of the shares in question and had made the assessment accordingly. Insofar as the allegations that certain shares were held by the Assessee for a period less than 12 months is concerned, the same is disputed by the Assessee. During the course of proceedings, Mr Salil Aggarwal, learned counsel for the Assessee has handed over a statement of shareholding as enclosed with the Assessee's letter dated 12th August, 2009. This statement clearly discloses various dates on which subject shares were acquired by the Assessee. This indicates that certain shares had been acquired by the Assessee by way of a gift. Undisputedly, for the purposes of considering whether the same were long-term capital assets or not, the date on which the donor acquired the shares is relevant and not the date on which the Assessee aquired the shares in question. In any view of the matter, it is not disputed that the statement of shareholding indicating the dates on which the subject shares were acquired was provided to the AO in response to the queries raised by him. Thus, it cannot be accepted that the AO did not consider the same while making the assessment order. Thus, it is apparent that the present case is one where the issuance of the impugned notice is occasioned by a change of opinion, which given the scope of Section 147-148 of the Act, is impermissible. - Decided in favour of assessee. 2016 (5) TMI 1153 Deduction u/s 80P(2)(a)(i) denied - interest received from employees who are not the members of the assessee-Society - Held that:- The Tribunal while accepting the appeal of the revenue and adjudicating the issue against the assessee had clearly noticed that the benefit under Section 80P(2)(a)(i) of the Act is available to the assessee where the interest is earned from the core activity of the assessee-Society and the interest earned from employees would not fall for such deduction under Section 80P(2)(a)(i) of the Act. Even the interest earned from employees cannot be said to be core activity of the society and, therefore, in our opinion, interest earned from employees is not eligible for deduction u/s 80P(2)(a)(i) - Decided against assessee 2016 (5) TMI 1152 Disallowance of interest relatable to investment in capital-work-in-progress - ITAT deleted the addition - Held that:- Under the proviso to Section 36(1)(iii) of the Act inserted by Finance Act, 2003 w.e.f. 2004-05, it is provided that such amount of interest paid in respect of capital borrowed for acquisition of assets for the period beginning from the date on which the said capital was borrowed for the acquisition of assets till the date the same are first put to use, such interest is required to be disallowed as deduction. Examining the factual matrix herein, the total work in progress as on 31.3.2005 was ₹ 364.44 lacs which comprised of ₹ 331.68 lacs as the opening balance in the account and ₹ 32.76 lacs was added during the year. There was no loan which was outstanding as on 31.3.2004 and 31.3.2005 and none of the interest bearing funds were utilized for the investment in the said opening work in progress. Similar issue of disallowance of interest on account of investment in the capital work in progress had come before the Tribunal in assessee's own case relating to assessment year 2004-05 and the Tribunal upholding the order of CIT (A) held that no interest bearing capital was invested in the aforesaid capital work in progress, which is opening balance for the year under consideration. In view thereof, the Tribunal upheld the order of CIT(A) by recording that there is no merit in disallowing the interest attributable to the opening capital work in progress of ₹ 331.68 lacs. Further, the Tribunal also recorded that the assessee during the year had made an addition of ₹ 36.27 lacs to the said capital work in progress and claimed not to have borrowed any fresh loan during the relevant period. Nothing was produced by the revenue to show to the contrary. Thus, the deletion of addition of ₹ 56,48,840/- by the CIT(A) was upheld by the Tribunal correctly - Decided against revenue 2016 (5) TMI 1151 Validity of assessment - whether time period specified under Section 144(C) (4) read with Section 144(C)(3) adhered or not - penalty u/s 271(1)() - Petitioner's specific case is that the final assessment order was not passed on the date mentioned therein, i.e., 22nd April, 2014 and was probably antedated in order to avoid the expiry of the period of limitation as stipulated under Section 144(C)(4) of the Act read with Section 144(C)(3) of the Act - Held that:- In the instant case, when the Assessee sought to inspect the file to see whether there was any entry in the despatch register, he was not allowed such inspection. It now transpires that there was no such despatch register available which would have shown the date of despatch of the final assessment order and proof of service of such assessment order. Therefore, going by the ratio of the decision of the Supreme Court in Collector of Central Excise, Madras v M.M. Rubber and Co. (1991 (9) TMI 71 - SUPREME COURT OF INDIA), in the instant case it was incumbent on the Department to demonstrate that the AO who passed the assessment order ceased to have any control over such order and that it left his hand soon after it was passed. The Department having failed to do so, a presumption has to be drawn that the final assessment order was not passed within the time period specified under Section 144(C) (4) read with Section 144(C)(3) of the Act. In that view of the matter, the impugned assessment order dated 22nd April, 2013 under Section 143(3) of the Act and the consequent penalty order dated 26th June, 2013 under Section 271(1)(c) of the Act and the notice dated 22nd April, 2014 under Section 221 of the Act are hereby quashed. - Decided in favour of assessee 2016 (5) TMI 1150 Addition on account of cessation of liability under Section 41(1) - Held that:- Examining of the facts of the present case reveals that, it is not the case of the Department that, any benefit in respect of such trading liability was taken by the assessee but, the Revenue contends that since the burden was not discharged of existence of the liability, it be treated as cessation of the liability and therefore, Section 41(1) could be invoked. Further, stand of the Revenue is that, when in respect of debt in question, confirmation was called for, a letter was produced of the creditor with its address but, when the same was verified, the report was that, party could not be traced and therefore, it was not verifiable. In our view, even if we accept the contention of the Revenue that the party could not be traced and therefore debt could not be verified then also, by no stretch of imagination can it be held that it would satisfy the requirement of cessation of liability. In legal parlance, merely because the creditor could not be traced on the date when the verification was made, same is not a ground to conclude that there was cessation of the liability. Cessation of the liability has to be cessation in law, of the debt to be paid by the assessee to the creditor. The debt is recoverable even if the creditor has expired, by the legal heirs of the deceased creditor. Under the circumstances, in the present case, it can hardly be said that the liability had ceased. If the liability had not ceased or the benefit was not taken by the assessee in respect of such trade liability, in our view, the conditions precedent were not satisfied for invoking Section 41(1) of the Act in the instant case. - Decided in favour of assessee. 2016 (5) TMI 1149 TDS u/s 194J - whether analysis and distribution (SLDC) of electricity by KPTCL from generation point to the consumers of the assessee involving utilization of sophisticated machineries, involvement of technical expertise, application of science, services of Engineers, engagement of qualified technicians and trained, skilled personal/manpower doesnot amount to technical services? - Held that:- The scheme of the Act contemplates mechanism to set right the error, if any committed by the Assessing Officer. We cannot give our acceptability to the arguments advanced by the revenue contrary to the well established machinery provided under the Act. It is an attempt to deviate from the scheme of the Act, having noticed that the substantial questions of law raise d in these appeals are answered against the revenue in identical cases referred to above i.e., nature of services or transaction entered into between the assessee and KPTCL are not in the nature of technical services to attract the provisions of Section 194-J of the Act. It is not a chance litigation to switch over to a different provision alien to proceedings initiated. It is also discerned that this point was at no point of time raised, considered and examined by the authorities. Sections 194-J and 194-I are two independent provisions which operate in different fields. It is not possible to import the existence or the consideration of any point not raised and adjudicated before the authorities or the Tribunal, much against the principles of natural justice and that too at this juncture in the appeal proceedings under the fiscal statute. The arguments advanced on behalf of the revenue deserve to be rejected and accordingly they are rejected. 2016 (5) TMI 1148 Genuity of gift from father - transaction routed from Bahrain to Singapore to India - Held that:- Tribunal was satisfied that the assessee had not discharged her burden by proving the creditworthiness of her father, the identity of the parties and the genuineness of the transaction and on facts, we fully endorse that conclusion. One is also at a loss to understand why, if her father was stationed in Bahrain as claimed by the appellant and if he wanted to gift his salary income earned in that country to his daughter living in India, he should transfer the amount to Singapore and then to India, instead of directly transferring the amount from Bahrain itself. It was in the aforesaid circumstances that the Tribunal confirmed the order of the Commissioner of Income Tax (Appeals), upholding the addition. The findings entered into by the Tribunal are entirely factual and on facts, once the theory of gift by father is rejected, the question of Section 56(2) of the Act does not arise at all. Unexplained bank deposit - Held that:- Tribunal has noted that in the absence of any details with regard to earning of income and the persons from whom the money was received, the Assessing Officer has rightly treated the entire amount as income. Insofar as the unexplained credit to the extent of ₹ 10,77,219/- is concerned, the Tribunal has taken note of the fact that the assessee has shown the same as loan from others in the cash flow statement. However, having regard to the fact that the assessee had not explained the identity of the persons from whom the loan was allegedly availed of, the creditworthiness of his creditors and the genuineness of the transaction, the Tribunal confirmed the order of the Assessing Officer, taking the aforesaid amount as income of the assessee. Tribunal has also confirmed the repayment made to the HDFC Bank, as income of the assessee, for the reason that even such payment could not be explained by the assessee before the lower authorities. Insofar as ₹ 2,91,600/- is concerned, the Tribunal agreed with the assessee that the same cannot be added to his income. With respect to ₹ 5,00,000/- incurred by the assessee towards foreign travel expenses is concerned, the Tribunal has held that the source of such expenditure was neither disclosed before the Assessing Officer nor disclosed in his cash flow statement. It was for that reason the Tribunal confirmed the addition to the extent of ₹ 5,00,000/-. Addition on account of unexplained investment - Held that:- The Tribunal has held that the said issue had already been contested in the appeal in relation to the assessment year 2002-03, where the Tribunal has ordered deletion of amounts withdrawn from the bank. Since facts were identical, similar view was taken with respect to these assessment years also and accordingly the Tribunal has ordered deletion of addition to the extent of amounts withdrawn from the bank. We are satisfied that the aforesaid being the factual background, the findings in Tribunal's order are entirely factual and these appeals do not give rise to any question of law 2016 (5) TMI 1147 Repayment of liabilities of the donor - allowability u/s 24(b) - whether borrowed capital was not utilised for acquiring the property? - Held that:- Mortgage loan and other liabilities repaid by the assessee, to the extent it has improved his right to title and interest in the property should be considered as cost of improvement incurred by the assessee. The government valuer has fixed the value of the property at ₹ 47,62,000/-, as mentioned at page 29 para 9 of the registered gift deed. The factors which went into the valuation are not known. The principle laid down by the Hon’ble Supreme Court in RM. Arunachalam Versus Commissioner of Income-Tax [1997 (7) TMI 5 - SUPREME Court ] that, amounts paid by the donee to discharge the liabilities which resulted in his right, title and interest of the assessee in the property being improved has to be taken as cost of improvement is to be applied and this ground of the assessee should be allowed. No contrary decision is brought to our notice by the Ld.D.R. Submissions made by the assessee that the loans and liabilities repaid was only to improve and perfect his title to the property, and not otherwise, and that all these loans and other liabilities are attached to this property is not factually disputed by the Revenue. Keeping in view the legal position laid down by the Hon’ble Apex Court, we direct the A.O. to consider the repayment of liabilities of the donor, made by the assessee as that which is incurred to perfect his title of the property and thus it is cost of improvement and consequentially the borrowings made for the same is to be taken as that which is for incurring the cost of improvement of the property and consequentially the interest expenditure incurred should be allowable u/s 24(b) of the Act. - Decided in favour of assessee. 2016 (5) TMI 1146 Addition u/s 69A - whether the assessee has explained source and genuineness of the seized amount having been belonging to its sister concern during the assessment proceedings? - Held that:- No plausible explanation has come on record during the assessment proceedings or thereafter as to why the cash book, subsequently relied upon by the assessee, has not been produced before the AO particularly when the assessee company along with its sister concern was operating from the aforesaid office Moreover when the cash book of the year under consideration was suppressed by the assessee intentionally at the time of search and seizure, as is evident from the copy of panchnama, nor produced the same during the assessment proceedings, earlier cash books produced by the assessee company are of no support to its case. The assessee has failed to prove the source of the cash of ₹ 70,00,000/- found and seized from its premises on the basis of search and seizure conducted on 12.08.2007. So, the CIT (A) has rightly dismissed the assessee’s appeal. 2016 (5) TMI 1145 Penalty u/s 271D - Held that:- No penalty can be levied u/s 271D of the Act, when the loan is accepted by acknowledgement of debt by passing journal entries in the books of accounts. In the present case on hand, on perusal of the facts available on record, we find that the A.O. has not doubted the genuineness of the transactions. The firm has accepted loan from the partners and also explained sources. Moreover, the repayment of loan is made to a nationalized bank. Under these circumstances, the A.O. was not correct in levying penalty u/s 271D of the Act. Therefore, we direct the A.O. to delete the penalty levied u/s 271D of the Act. - Decided in favour of assessee 2016 (5) TMI 1144 Reopening of assessment - salary income - addition on repayment of sign on bonus back - whether the provision of Act permit deduction were the assessee voluntarily resigned from Barclays Bank and joined Deutsche Bank violating the pre-conditions of employment to stay with Barclays Bank for a period of one year? - Held that:- The assessee has received the amount during his employment and there exists employer and employee relationship and sign-inbonus cannot treated as capital receipt. We found on the basis of submissions that the assessee has voluntarily resigned from Barclays Bank and was not a forced termination of employment. As per service certificate of bank and the assessee has left the bank on his own accord. The submissions of the Revenue being the amount repaid by the assessee to the Barclays Bank was reimbursed by new employer Deutsche Bank. The assessee joined Deutsche Bank due to attractive pay package and separate amount was provided for refund of sign-on-bonus. On the perusal of provisions of Sec. 17(1) of the Act, there are no explanation were assessee should reduce refund of sign-on-bonus. Considering the apparent facts, terms of employment, characteristic of sign on bonus and the service certificate of Barclays Bank were assessee has voluntarily left the service. We are of the opinion that ld. Commissioner of Income Tax (Appeals) has examined the issue in detail based on the observations of the Assessing Officer and the provisions of law. Therefore, we are not inclined to interfere with the order of Commissioner of Income Tax (Appeals) and uphold the same. - Decided against assessee. 2016 (5) TMI 1143 Addition on account of undisclosed income - Held that:- Revenue failed to collect any other material during the course of survey, and accordingly, on the basis of the statement given without oath, addition cannot be made. Therefore, the ld.CIT(A) has rightly deleted the addition. Exclusion of undisclosed income from the book profit computed under section 115JB - Held that:- This ground deserves to be rejected simply for two reasons, viz. addition of ₹ 2.00 crores has already been deleted, therefore, there cannot be any adjustment, and (b) the accounts of the assessee are prepared in accordance with Part-II of the Schedule-IV of the Companies Act, 1956. Any adjustment can be made in the book profit only with regard to the items provided in clause (a) to (ha) appended with Explanation to section 115JB. No adjustment has been provided in section 115JB. The AO has no power to tinker with the accounts of the assessee, which have been prepared in accordance with Part-II of schedule-VI to the Companies Act. The ld.CIT(A) has assigned these two reasons, for buttressing his conclusion on the second reasoning, the ld.CIT(A) put reliance upon the judgment of the Hon’ble Supreme Court in the case of Apollo Tyres Ltd. Vs. CIT, (2002 (5) TMI 5 - SUPREME Court ). In view of the above discussion, we do not find any merit in this appeal of the Revenue 2016 (5) TMI 1142 Penalty levied under section 271(1)(c) - provision for bad and doubtful debts created - whether penalty order was time-barred? - Held that:- The assessee has raised this plea on the ground that the orders served upon the CIT-II is to be construed as sufficient service, because, taking of the order is an internal mechanism between different officials of the Department. As far as this proposition is concerned, we do not find any merit in the contentions of the ld.counsel for the assessee. The order of the ITAT ought to have been served on CIT-III who has jurisdiction over the AO having jurisdiction over the assessee. If the order was served to a different CIT, who did not have the jurisdiction over the assessee, then it could not be assumed that service was effected properly, and the limitation commence from the service of that order. The ld.CIT(A) has rightly rejected this contention of the assessee. The assessee had created provision for bad and doubtful debts. This provision was created on the strength of Hon’ble Gujarat High Court’s decision in the case of Sarangpura Cotton Mfg. Co. Ltd.Vs. CIT, (1982 (6) TMI 23 - GUJARAT High Court ). It has filed its return on 31.12.1999. The amendment was applied with retrospective effect. By operation of this amended law, the claim of the bad debts cannot be made by creating a provision for bad and doubtful debts. Accordingly, the claim of the assessee becomes untenable, and the claim was withdrawn during the course of assessment proceedings. In such situation, there cannot be any allegation against the assessee that it has furnished inaccurate particulars. The AO has not specified charge against the assessee either in the assessment order or in the penalty order, whether the assessee has furnished inaccurate particulars or concealed the income. For the purpose of reference, we have drawn an inference that impliedly it is furnishing of inaccurate particulars, otherwise, the AO has not charged he assessee with specific allegation. The assessee has taken a specific plea to this effect before the ld.CIT(A). The ld.CIT(A) has recorded a finding that the claim of the assessee became untenable by virtue of retrospective operation of law, otherwise, the assessee could have demonstrated the allowance of its claim. According to us, the assessee has not furnished any inaccurate particulars, which can expose it to the penalty proceedings under section 271(1)(c) of the Act. The ld.CIT(A) has rightly deleted the penalty - Decided in favour of assessee. 2016 (5) TMI 1141 TDS u/s 194H - payments in the form of discounts/rebates/incentives on MRP given by the assessee to the distributors in the course of selling its goods - whether the relationship between the assessee and distributors is in the nature of principal to principal and that therefore the assessee-company was not liable to deduct tax at source under section 194H? - Held that:- Following the decision of the Coordinate Bench of the Tribunal in the assessee’s own case for assessment years 2009-10 & 2010- 11 we hold that the discount on MRP granted by the assessee to distributors at the time of sale of the drugs/medicines (i.e. goods) does not fall within the ambit of section 194H of the Act and therefore no tax was required to be deducted at source thereon and therefore the assessee cannot be held to be an assessee in default under section 201(1) of the Act and charged interest under section 201(1A) of the Act.- Decided against revenue TDS u/s 194J - ‘Assessee in default’ for not deducting tax at source on sitting fees paid to the Directors - Held that:- We find that the issue of whether or not the assesseecompany is liable to deduct tax at source (TDS) under section 194J(ba) of the Act in respect of sitting fees paid to Directors as per the amendment thereto w.e.f. 01.07.2012 has been considered and held in favour of the assessee by the Coordinate Bench of this Tribunal in the assessee’s own case for assessment years 2009-10 and 2010-11, thus we hold that since the instant appeal is for A.Y. 2010-11 which is prior to A.Y. 2013-14, from when the amendment to section 194J(ba) comes into force w.e.f. 01.07.2012, we hold that no tax is deductible at source on payment of sitting fees to Directors and the assessee cannot be held as ‘assessee in default’ under section 201(1) of the Act or be charged interest under section 201(1a) of the Act. - Decided against revenue 2016 (5) TMI 1140 Rejection of books of accounts - Computation of gross business receipts - Held that:- A.O. rejected the books of accounts and estimated income at 10%. The Ld. CIT(A) reduced it to 6.5% without recording any reasons, simply by following the Tribunal decision, which is not relevant. In the case of estimation, of facts and circumstances of each case has to be examined. In the present case after considering the assessment order as well as CIT(A) order and also details filed before us, we are of the opinion that estimation at 8% on gross receipts instead of 6.5% on gross receipts is to be adopted. In view of the above, we set aside the order passed by the Ld. CIT(A). We direct the A.O. to adopt estimation at 8% on gross receipts for the assessment year 2008-09 as well as 2009-10 also. Treatment of interest receipts on FDRs as ‘income from other sources’ - CIT(A) by considering the submissions of the assessee, he has treated it as a business income - Held that:- The assessee is not able to substantiate before us to show that the deposits made by the assessee are for the purpose of business. Therefore, it cannot be said that the interest income received by the assessee from the bank deposits is income from business. Therefore, we hold that interest received by the assessee is ‘income from other sources’ and we accordingly reverse the order of the CIT(A). Excess claim of expenditure under head “Seigniorage & Sales Tax” disallowed - Held that:- The books of accounts of the assessee are not relied, it was rejected by the Assessing Officer and now, based on the reliance on the same books for the purposes of making further additions is improper and unjust. The estimation of income takes care of irregularities committed by the assessee, but making further additions amount to double addition which is not permitted by law. The Ld. CIT(A) after considering the explanation of the assessee, he has observed that once the income is estimated, no other addition is permissible on the basis of rejected books and as such the impugned addition made by the A.O. is set aside and allowed the claim of the assessee. 2016 (5) TMI 1139 Treatment of grant-in-aid towards salary & PF as taxable - received for the payment of arrears of PF of the employees, salary and wages of employees - Held that:- AO made the addition of grant in aid for ₹ 48,22,698/- in the assessment year 2003-04 but the AO in the assessment year 2004-05 has allowed the relief of grant-in-aid for ₹ 44 Lacs. From the facts of the case we find that grant in aid for ₹ 48,22,698/- pertaining to the assessment year 2003-04 was allowed in the immediate subsequent assessment year 2004-05 for ₹ 44 Lacs. The learned AR has produced the copies of the assessment orders for the AYs 2003-04 and 2004- 05 in support of its claim and the same are placed on the record. Similarly, we also find that the grant-in-aid received by the assessee in the assessment year 2004-05 was not disallowed by the AO. The ld. DR failed to bring anything on record contrary to the argument of the ld. AR and he left the issue to the discretion of the Bench. In view of above and in the interest of justice, we are inclined to treat the grant-in-aid as capital in nature therefore it is not liable to tax. Accordingly we reverse the order of the lower authorities and ground raised by the assessee is allowed. Disallowance of employees contribution under the PF Act - Held that:- We find that the AO has made the addition of the amount of the employee contribution as there was a delay in payment to PF authorities. However, from the assessment order we find that all the payment of employees contribution were made before the due date of filing of Income Tax Return as specified u/s.139(1) of the Act. Now, this issue stands covered in favour of assessee and against the Revenue by the decision of Hon’ble jurisdictional High Court in the case of CIT v. M/s Vijay Shree Limited [2011 (9) TMI 30 - CALCUTTA HIGH COURT] Disallowance of interest paid for delayed deposit of PF - Held that:- Interest paid on the late deposit of PF is compensatory in nature therefore it should not be disallowed on the ground of treating the same as penal in nature, therefore, it is entitled for deduction while computing the profit under the business head. In this view of the matter, we reverse the action of Authorities below and ground raised by assessee in appeal is allowed. 2016 (5) TMI 1138 Carried forward depreciation and loss - CIT(A) allowing the business loss to set off against the income of assessment year 2001-02 i.e. beyond eight years without appreciating the provisions of section 72(3) of the Act - whether the mistake committed by the auditor in the assessment year 2000-01 can be rectified in the assessment year 2001-02? - Held that:- AO while framing the assessment on the assessee should apply the provisions of the income tax act correctly. The assessee should not be deprived from the benefit of the provisions of the income tax act on account on the mistake committed by the auditor of the company. In this connection we are also putting our reliance in the decision of Hon’ble Supreme Court in the case of CIT v. Manmohan Das (1965 (11) TMI 33 - SUPREME Court ) wherein has held whether the loss in any year may be carried forward to the following year and set off against the profits and gains of the subsequent year under section 24(2) has to be determined by the Income-tax Officer who deals with the assessment of the subsequent year. A decision recorded by the Income-tax Officer who computes the loss in the previous year that the loss cannot be set off against the income of the subsequent year is not binding on the assessee. Relying on the aforesaid judgments, we have no hesitation in upholding the order of learned CIT(A). Whether unabsorbed depreciation up to the Assessment Year 1996-97 will be added to the depreciation allowance of 1997-98 and that such unabsorbed depreciation could be carried forward for set off for a maximum period of eight years from the Assessment year 1997- 98 - Held that:- Any unabsorbed depreciation available to an assessee on 1st day of April, 2002 (A. Y. 2002-03) will be dealt with in accordance with the provisions of section 32(2) as amended by Finance Act, 2001. And once the Circular No. 14 of 2001 clarified that the restriction of 8 years for carry forward and set off of unabsorbed depreciation had been dispensed with, the unabsorbed depreciation from assessment year 1997-98 up to the assessment year 2001- 02 got carried forward to the assessment year2002-03 and became part thereof, it came to be governed by the provisions of section 32(2) as amended by Finance Act, 2001 and were available for carry forward and set off against the profits and gains of subsequent yeas, without any limit whatsoever. 2016 (5) TMI 1137 Penalty under Sections 271D and 271E - period of limitation - Held that:- The impugned orders levying the penalties under Sections 271D and 271E of the Act are barred by limitation because the penalty order should have been passed not later than 30.06.2012, however, in the present case, the penalty orders were passed by the ld. Addl. Commissioner of Income Tax, Central Range-2, New Delhi on 15.06.2013 - Decided in favour of assessee 2016 (5) TMI 1136 Sales tax incentive and excise incentive treated as revenue receipt - Held that:- CIT(A) did not has erred in law and on facts in deleting the addition treating sales tax incentive as revenue receipt by the Assessing Officer. Non exclusion of debt redemption fund from the book profit for the purpose of computing book profits under section 115JB - Held that:- The mere fact that a Debenture Redemption Reserve is labeled as a reserve will not render it as a reserve in the true sense or meaning of that concept. An amount which is retained by way of providing for a known liability is not a reserve. Consequently, the Tribunal was correct in holding that the amount which was set apart as a Debenture Redemption Reserve is not a reserve within the meaning of Explanation (b) to Section 115JA of the Income Tax Act, 1961. 2016 (5) TMI 1135 Disallowance of commission and ex-gratia paid to the Directors claimed u/s 37(1) by wrongly invoking the provisions of Section 36(1)(ii) - Held that:- Disallowance of remuneration paid to the directors u/s 36(1)(ii) was not justified. Disallowance of royalty paid - revenue v/s capital expenditure - Held that:- The decision of Hon’ble Apex Court in the case of Alembic Chemical Works Co.Ltd. (1989 (3) TMI 5 - SUPREME Court) relied upon by the learned counsel also supports the case of the assessee. Respectfully following the same, we direct that the royalty should be treated as a revenue expenditure and, accordingly, we delete the disallowance made by the Assessing Officer by capitalizing 25% of the royalty expenditure. 2016 (5) TMI 1134 Disallowance of provision for bad and doubtful debts made under section 36(1)(viia)(b) for provisions for Non-Performing Assets - Held that:- CIT(A) has rightly held that the provisions for Non-Performing Assets cannot be equated with provision for bad and doubtful debts and since such provisions was not made, the assessee is not entitled for deduction, we find no infirmity in the order passed by the ld. CIT(A) - Decided against assessee. 2016 (5) TMI 1133 Reopening of assessment - addition made in the hands of assessee in respect of cash and stock of wine - Held that:- Under the provisions of the Act itself, it is provided that where the assessee has failed to furnish return of income for any of the assessment years, then the Assessing Officer, as per reasons recorded in this behalf can initiate proceedings of assessment under section 147 of the Act. Accordingly, we find no merit in the claim of assessee in this regard and the same is dismissed. The claim of assessee before the Assessing Officer was that it had received sum of ₹ 4,43,000/- on account of sale of truck / mini bus and in respect of balance, it claimed that it was cultivating the land of two different persons and receiving agricultural income. However, the assessee failed to establish its claim with any evidence. The statements of persons were recorded, which were at variance with the claim of assessee. Further, the assessee could not produce any proper evidence of leasing out of the agricultural land by the owners of land and in the absence of same, the claim of assessee was not accepted by the Assessing Officer. Similarly, with regard to sale of equipment, the assessee failed to furnish complete evidence and the said claim was also not accepted. The assessee had fabricated various documents produced before the Assessing Officer and the assessee claims to have accumulated cash from sale of agricultural produce as back as 11.05.2009 (Rs.1,97,829/-), 20.04.2009 (Rs.1,25,000/-), 21.04.2009 (Rs.75,000/-) and 01.11.2009 (Rs.1,32,300/-). Similarly, the assessee claims to have received loan of ₹ 2 lakhs on 06.02.2009 and ₹ 2,43,000/- on 23.11.2009 and keeping in view of his social status and financial position of the assessee, the CIT(A) was of the view that it was highly improbable that the assessee would keep the said cash. Further, in the statement recorded before the Police Department on 24.11.2009, the assessee had not explained the source of cash out of agricultural income and loans / advances. The CIT(A) has held that the cash was out of sale of liquor and has confirmed the addition in the hands of assessee. The learned Authorized Representative for the assessee has failed to controvert the findings of authorities below and in the absence of any explanation furnished in this regard or any evidence to prove its stand, we find no merit in the claim of assessee - Decided against assessee 2016 (5) TMI 1132 Penalty u/s. 271(1)(c) - claim of exemption of salary in India as per Article 16(1) of the Treaty disallowed - assessee is a "Resident and Ordinarily Resident" individual - Held that:- Mensrea was a essential requirement of penalty u/s 271(1)(c). If the contention of the revenue is accepted then in case of every return where the claim is not accepted by the Assessing Officer for any reason, the assessee will invite the penalty u/s 271(1)(c). This is clearly not the intendment of legislature. See CIT vs. Reliance Petro Products Ltd.[2010 (3) TMI 80 - SUPREME COURT ]. Mere making the claim which is not sustainable in law, itself would not amount to furnishing of inaccurate particulars of income - Decided in favour of assessee 2016 (5) TMI 1131 Charitable trust - whether the assessee is to be assessed as a charitable trust deriving income from property held under trust wholly for charitable purposes and more specifically for the object of general public utility or to be assessed as a trust carrying on business activities? - Held that:- CIT vs. Gujarat Maritime Board, reported in (2007 (12) TMI 7 - SUPREME COURT OF INDIA ), wherein the Hon’ble Apex Court has observed that the appellant is established for the predominant purposes of development of minor ports within the State of Gujarat, the management and control of the Board is essentially with the State Government and there is no profit motive, as indicated by the provisions of section 73, 74 and 75 of the 1981 Act. The income earned by the Board is deployed for the development of minor ports in the State of Gujarat and therefore, they are entitled to be registered as charitable trust u/s 12A of the Income-tax Act, 1961. Therefore, respectfully following the decision of Hon’ble Apex Court and the Co-ordinate Bench, Ahmedabad in assessee’s own case, we are inclined to believe that the assessee is a charitable trust carrying on activity of advancement of public utility without any profit motive and is required to be assessed as per the provisions of Section 11(1) of the Income-tax Act, 1961. - Decided in favour of assessee Revenue expenditure as application of income by way of payment to the Gujarat Government towards waterfront/royalty charges - Held that:- the assessee, being a charitable trust u/s 12A, was certainly under legal obligation to make payment to the State Government towards waterfront/royalty charges which was inevitable for the functioning of the assessee-trust and such payment was made towards the object of the trust embedded in the Gujarat Maritime Board Act, 1981 and certainly these payments which have been made to the State Government have been applied for the public welfare projects which in this case is waterfront project. Therefore, the assessee is eligible to claim as application of income against the gross income received and the same should be accounted while calculating 85% of the gross income which needs to be applied for charitable activities by the assessee-trust. Applacabilty of provision of sec 43B - Held that:- As profit earned by the assessee are not subject to tax being out of the ambit of provisions of Section 11(4) of the Income-tax Act and the income of the organization being exempt as per the provisions of Section 11(1) of the Incometax Act, this ground has become redundant and accordingly the provisions of Section 43B of the Act are not applicable on the payment above Clubbing income under two provisions of Section 22(1) of the Act and also u/s 11(4) - Held that:- From going through the above referred provisions of Section 11(1) and Section 11(4) of the Act, we are able to understand that Section 11(4) of the Act is applicable when the ”property held under trust” includes a business undertaking so held and the Assessing Officer have power to determine the income of such business undertaking in accordance with the provisions of the Act and where any such income so determined is in excess of income as shown in the accounts of the undertaking, then such excess income shall be deemed to have been not applied for charitable purposes. However, in the case of the assessee, we have already decided that the assessee is carrying on charitable activities without profit motive and the income is to be calculated as per the provisions of Section 11(1) of the Act and therefore, ld. CIT(A) has erred in calculating the income u/s 11(1) and 11(4) of the Act and therefore, in our view, subject to our adjudication of other grounds of this appeal, the income of the assessee is to be assessed as per the provisions of Section 11(1) of the Act. Addition as notional income on account of premium of Alang plots - Held that:- As already held that the assessee is not carrying on any business activity, rather carrying on charitable activities in the form of providing services relating to general public utility which in the case before us relates to maintaining of ports in the State of Gujarat. We further observe that both the lower authorities have not appreciated the fact that the accounts of the assessee were being maintained on cash basis upto Financial Year 2001-02 and certainly in the case of the assessee who carries on cash basis of accounting of what is received in a year has to be accounted for and there is no concept of bifurcating or apportioning any advance premium received. Further, it is also undisputed fact that the appellant-Board was covered under the provisions of Section 10(20A) of the Act as a Local Authority upto Assessment Year 2002-03 and the income was exempt under this section and certainly whatever amount which have been received prior to 01.04.2002 gets covered therein. Therefore, in our view, no addition was called for of ₹ 12,92,00,000/- on account of Revenue recognition of the premium received on allotment of plots by way of spreading the revenue for a period of 10/20-25 years on the basis of AG(Audit) Report. Granting deduction for accumulation u/s 11(1) of the Act only on net surplus and not on its gross receipts - Held that:- From going through the decision of the Hon’ble Apex Court in the case of CIT vs. Programme for Community Organization (2000 (11) TMI 4 - SUPREME Court ), it is crystal clear that calculation of 15% as mentioned in provisions of Section 11(1A) have to be applied on the gross income of the assessee and not the net surplus. Therefore, in our view, in the case of the assessee, 15% has to be calculated on gross income for the year, i.e., ₹ 221.19 crores and not on the net surplus of ₹ 64.96 crores. Disallowance of deduction in relation to increase in the fixed assets being application of income - Held that:- There remains no dispute because the ld. CIT(A), while determining the income u/s 11(1) of the Act, has himself allowed the addition to fixed assets at ₹ 20,68,73,986/- as deduction towards application of income and therefore, this substantive ground needs no further adjudication on this ground relating to allowability of deduction in relation to increase in the fixed assets being application of income amounting to ₹ 20,68,73,968/-, as it has already decided in favour of the assessee by ld. CIT(A) and therefore no interference is called for in the ld. CIT(A)’s order for this ground. Eligibility for deduction of depreciation as per Income-tax Act while determining the income under the provisions of Section 11(1) - Held that:- If the depreciation is not allowed as a necessary deduction in computing the income of the charitable/religious trusts, then there would be no way to preserve the corpus of the trust and therefore, a charitable/religious trust is entitled to depreciation in respect of the assets owned by it. In the present case, due to the variation of figures of depreciation as per Income-tax Act in between the assessee as well as Department, it will be appropriate to set aside the matter to the file of the ld. Assessing Officer for the limited purpose of calculating the correct amount of deprecation as per Income-tax Act for the year under appeal. It is needless to mention that proper opportunity of being heard to be given to the assessee and both the parties should arrive at a consonance on the correct figure of depreciation as per Income-tax Act and the same should be allowed as application of income for the purposes of determining income u/s 11(1) of the Act. 2016 (5) TMI 1130 Reopening of assessment - addition u/s 68 - Held that:- prior to reopening of the assessment, the Assessing Officer has to apply his mind to the materials available to conclude that he has reasoned to believe that income of the assessee has escaped assessment. It has been further held that unless that basic jurisdictional requirement is satisfied, a postmortem exercise of analyzing material produced subsequent to the reopening will not rescue an inherently defective reopening order from invalidity. In the present case, the A.O. has not verified the information before banking upon it. We thus respectfully hold that the initiation of reopening proceedings was not valid in the present case in absence of application of mind on the part of the Assessing Officer. As discussed above, the Assessing Officer has initiated the reopening proceedings solely based upon the information received from the Investigation Wing of the Department that the assessee was one of the beneficiaries and two entries from the entry operator. The issue raised in the ground under consideration is thus decided in favour of the assessee with this finding that the Assessing Officer was not justified to acquire jurisdiction to initiate reopening proceedings and the action of the Assessing Officer in this regard was not valid. The assessment framed in furtherance to the said initiation of reopening proceedings is thus also held as void ab initio and is quashed as such. - Decided in favor of assessee 2016 (5) TMI 1129 Reopening of assessment - non-deduction of TDS - Held that:- If the Assessing Officer for whatever reason has reason to believe that income has escaped assessment it confers jurisdiction to reopen the assessment. It is, however, to be noted that both the conditions must be fulfilled if the case falls within the ambit of the proviso to section 147. The case at hand is covered by the main provision and not the proviso. So long as the ingredients of section 147 are fulfilled, the Assessing Officer is free to initiate proceeding under section 147 and failure to take steps under section 143(3) will not render the Assessing Officer powerless to initiate reassessment proceedings even when intimation under section 143(1) had been issued.In our opinion, the assessment was re-opened to consider the issue of non-deduction of TDS and we do not find any infirmity in reopening assessment , which was duly re-opened after recording the reasons, s such we confirm the same. - Decided against assessee. Disallowance u/s.40(a)(ia) - Held that:- The issue in dispute is squarely covered by the decision of Co-ordinate Bench of Tribunal in the case of Shri N.Palanivelu Vs. ITO [2015 (10) TMI 1415 - ITAT CHENNAI] wherein held that section 40(a)(ia) is not applicable when there is no outstanding balance at the end of the close of the year relevant to the assessment year in respect of these payments. However, the assessee has not brought on record, the details of outstanding expenses or schedule of sundry creditors showing whether the impugned amount is outstanding at the end of the close of the previous year relevant to the assessment year either in the name of the party or outstanding expenses. Hence, in the interest of justice, we are remitting the issue back to the file of the Assessing Officer with direction to verify the claim of the assessee and the assessee shall place necessary evidence in support of his claim. Disallowance u/s 14A - Held that:- Assessee has considerable investments at the opening as well the close of the year under consideration. Therefore, the portion of expenditure attributable to the investments made by the assessee has to be computed as per Rule 8D of the I.T Rules. Therefore, the Assessing Officer was of the opinion that it is a clear diversion of interest bearing funds to other purposes. The assessee would be entitled to claim deduction of interest under section 36(1)(iii) of the Act on the borrowed funds utilized for business purpose. The only benefit the assessee derived was the dividend income which was not assessable under the Act, we are of the opinion that the disallowance under section 14A of the Act was squarely attracted and the Assessing Officer has rightly disallowed the claim. - Decided against assessee Treatment to rent received from two properties - income from house property or business income - Held that:- As decided in assessee's own case for assessment year 2005-06 to 2008-09 that income from the above properties to be assessed as business income and not as income from house property. - Decided against revenue 2016 (5) TMI 1128 Disallowance u/s 14A - AO considered the investments yielding taxable income and also investments not yielding taxable income to apply the formula in Rule 8D of I.T Rules - Held that:- The interest paid by the assessee on borrowings, which are used for specific purpose cannot be considered for the purpose of computing disallowance u/s.14A r.w.rule 8D. Similarly investments, which are yielding taxable income also, cannot be considered while applying the ( B ) in the formula specified in Rule-8D. - Decided in favour of assessee. 2016 (5) TMI 1127 Validity of assessment under section 153C - addition made under section 69A on account of unexplained gift received by the assessee - Held that:- In the absence of the recording of satisfaction by the AO of the searched person before initiating proceedings against third person u/s 153C, the condition of section 153C has not been satisfied in the present case and there is no jurisdiction to sustain the proceeding under section 153C initiated by the authorities below against the assessee. The order passed under section 153C is therefore set aside and the proceedings under section 153 C are directed to be quashed. Therefore all the additions made in the assessment order also stands deleted. - Decided in favour of assessee 2016 (5) TMI 1126 Reopening of assessment - disallow the expenditure in terms of Section 14A - Held that:- In the present case, it is not the case of assessee that the AO was not made any addition by invoking the provisions of the section 14A of the Act. Being so, the contention of the assessee was that there is no addition for which the assessment was reopened, is not correct. There is an addition by the AO on the reasons recorded that is by invoking the provisions of the section 14A of the Act and being so; the AO can travel beyond he reasons recorded for making the addition as disallowance in re-opening the assessment also. - Decided against assessee Disallowance u/s.80IB - Held that:- The assessee is not entitled for deduction u/s.80-IB of the Act in respect of its unit at Pallavaram unit which is manufacturing rubber contraceptives as the assessee’s produce manufactured is an item covered by Item Nos.27& 28 of Eleventh Schedule of the ‘Act’ being a rubber fitting. Accordingly, we hold that the CIT(A) has rightly upheld the rejection of assessee’s claim of deduction/s 80IB of the Act.- Decided against assessee Customs 2016 (5) TMI 1116 Classification - Parts of Hydraulic Cylinders, i.e. ‘Cylinders’ and ‘Çylinder Barrels’ - Whether to be classifiable under tariff item 8412 90 30 or 8412 90 90 of the CTA - Revenue has no objection to the admission of the matter - Held that:- as the applicant pointed out that the Revenue in its reply has accepted the classification in the Tariff Items 8412 – Other engine and motors; 841290 – Parts; 8412 90 30 – of hydraulic engines & motors; 8412 90 90 for the Other. Therefore, there is no point in proceeding with the hearings of the application. The learned counsel has conveyed its satisfaction on the classification given by the Revenue. - Matter disposed of 2016 (5) TMI 1115 Classification - Whether the goods to be classified as “Compact Media Centre” or “K-Yan Computer Systems” - Tribunal categorizes the goods as “K-Yan Computer Systems - Apex Court viewed that the Tribunal's decision was based on cogent material and does not call for any interference - Apex Court dismissed the revenue's appeal 2016 (5) TMI 1114 Confiscation of goods absolutely - Non-entitlement to redemption fine - Seizure of smuggled 1000 gms imported gold - walked through the green channel at the airport without made declaration - Held that:- since the respondent was not eligible to import gold and that too undeclared and in a substantial quantity, the same cannot be treated as bona fide baggage in terms of section 79. The said gold is imported in violation of the Foreign trade Policy; provisions of section 3(3) and 11(1) of foreign Trade (Development & Regulation) Act, 1962. Government holds that impugned goods constitute “prohibited goods” liable to confiscation under section 111(d) and (I) of the Customs Act,1962. Government finds that the plea is in order keeping in view the conduct of the applicant in not declaring the impugned goods and attempting to pass through the green channel. It is fact on record that even when questioned by officers whether he has any gold or contraband its, he answered in the negative had the applicant desired to import the gold as an eligible passenger, he ought to have approached the Customs and made the requisite declaration. Therefore, government upholds the Department’s contention that absolute confiscation is legally warranted. Whether passenger is a carrier of the impugned goods or not - Held that:- Government finds no merit in the contention of both the Commissioner (Appeals) and the respondent on the ground that the passenger is a carrier is not part of Show cause Notice and, therefore, cannot be raised at a later stage. The subsequent claim of the respondent that the gold of his roommates also belonged to him as they owed money to him is clearly an afterthought. He had already admitted in his voluntary statement that only part of the gold belonged to him and rest had been carried for this roommates for a monetary consideration. Government also notes that the statement recorded before the Customs officers is valid evidence. Government further finds that the provision for re-export of baggage is available under Section 80 of the Customs Act, 1962. However, this Section is applicable only to cases of bonfire baggage declared to Customs, which the applicant failed to do, thus the applicant is not eligible for re-export of impugned goods. Therefore, in view of various decisions the order of Commissioner (Appeals) allowing the request of the respondent for re-export of goods is not legal and proper and cannot be allowed. Government also finds no force in the plea of the respondent that the confiscation of the impugned goods is not valid as any Show Cause Notice for confiscation of the goods is to be issued under Section 124 only and present notice mentions 111 (d) & (I), as the Show Cause Notice clearly mentions in the beginning and in the concluding para that is issued under Section 124 of the customs Act, 1962. Therefore, the Commissioner (Appeals) has erred in allowing re-export of the impugned goods on payment of redemption fine. - Decided in favour of revenue 2016 (5) TMI 1113 Classification and eligibility to the benefit of Notification - Import of chemicals of various descriptions declared them as Pharmaceutical Reference Standards (PRS) classifying the same under Customs Tariff Heading No.38 22 00 90 - claimed benefit of Notification No.21/2002-Cus. dated 1.3.2002 and Notification No.12/2002-Cus. dated 17.3.2012 - Duty demanded alongwith interest and imposition of penalty Held that:- it is found that the appellant had shown that the imported products, which had label and certificate of analysis from United State Pharmacopoeia convention indicating that Pharmaceutical Reference Standards is as per the standard laid down by them. It has to be noted that Pharmaceutical Reference Standards which are accompanied by the certificate issued by US Pharmacopoeia are distinctive product and gets classified under laboratory chemical or under Chapter Heading 3822 read with Chapter Notes of Chapter 38 as reproduced herein above. The conclusion that can be reached is that Pharmaceutical Reference Standard cannot be classified as certified Reference Materials and consequently not extending the scope of applicability of notification to products other than covered under Chapter Heading 28 and Chapter 29 is also not applicable. The adjudicating authority has come to a conclusion that Pharmaceutical Reference Standard can be classified under Chapter Heading 38 22 as well but denied the benefit of Notification of reduced rate of duty only on the ground that the appellant has not passed the conditions of Chapter Note 2A and not produced documents required under the said exemption Notification to avail the benefit. As already reproduced by us, the condition of Notification only requires that the certificate of Physician Reference Samples are issued by an organization accepted by the International Standard Organisation. In the documents produced before us, we find that the US Pharmacopoeia convention is recognized by International Standard Organisation in respect of the quality of the goods and the systems which they are following. As there is no dispute that the products imported being classified under Chapter Heading 3822, Revenue having not filed any appeal against the adjudicating authority's order by holding that the product imported are classifiable under Chapter Heading 3822, we have to draw adverse inference that Revenue has accepted that the Pharmaceutical Reference Samples are classifiable under 38 22. In our considered view, if the products are classifiable under Chapter Heading 38 22, benefit of exemption Notification cannot be denied to the appellant as per the facts in this case, and it is accepted that the goods which are imported are nothing but Pharmaceutical Reference Standard. Applying the World Health Organisation's definition of Reference Standard to the products imported by appellant, it has to be held that imported products are Pharmaceutical Reference Standards, are squarely covered by the benefit of Notification as these Reference Standards imported by the appellants from U.S. Pharmacopoeia Convention or other Pharmacopoeia Convention are for the use of their clients either in the manufacturing of bulk drugs or consumption of bulk drugs. Period of limitation - Held that:- it is found that the adjudicating authority has also not accepted the limitation aspect on the findings that the appellant had not produced any of the documents before the authorities while seeking clearances of the goods by claiming benefit of Notification. In our view this approach of the adjudicating authority on the point of limitation seems to be not in consonance with the law. It is undisputed that the bills of entry which are filed by appellant indicated these items as 'Pharmaceutical Reference Standards' and all the relevant documents for clearance of goods were filed with the authorities, at the time of clearance of goods; which was accepted by the department, hence they permitted clearance on final assessment by extending benefit of notification. In our view Revenue cannot today say that appellant had suppressed the facts with intention to avail ineligible benefit of Notification. It was for the Assessing Officers to seek further clarification on the matter, if they find that the appellant had claimed ineligible benefit of Notification. In all probability the Assessing Officers when they cleared the consignments were of the view that the appellant is eligible for the benefit of Notification as the goods imported were Pharmaceutical Reference Standard. Therefore, the demand for the duty liability is not sustainable and is liable to be set aside. Since we are holding that the duty liability is not sustainable, the question of imposing any penalties on main appellant or other appellants does not arise. - Decided in favour of appellant with consequential relief 2016 (5) TMI 1112 Imposition of redemption fine and penalty - Misdeclaration of goods - Import of Heavy Melting Scrap and Re-Rollable Scrap - out of 699.34 MT declared as Heavy Melting Scrap, 81.030 MT was found to be Re-Rollable scrap instead of Heavy Melting Scrap - Differential duty paid before issuance of show cause notice - Held that:- in the international market, the goods are sold as “Used Iron Material” or “Scrap” without any distinction as HMS or Re-Rollable Scrap and therefore there could be small proportion of re-rollable scrap in HMS. The duty is on transaction value. There is no license violation also. The assessee has filed the Bill of Entry in accordance with the documents and subjected the goods to Customs examination before assessment. Under such circumstances, there is force in the argument of the Appellant that the Bill of Entry should have been assessed on the basis of examination of the goods by Customs Officers and at best, differential duty only be demanded from the assessee. Confiscation of the goods, Redemption fine and penalty are not warranted and would amount to too harsh a measure. Therefore, confiscation, Redemption fine and penalty ordered in the adjudication order cannot be sustained. - Decided in favour of appellant Corporate Laws 2016 (5) TMI 1110 Scheme of arrangement of demerger - Held that:- It is seen that approval is accorded by share holders and creditors of the companies, reports are filed by the Regional Director aforesaid and OL before this Court. In view of these reports, it appears that in absence of any objection, there is no impediment to grant sanction to the scheme of arrangement. Resultantly, sanction is hereby granted to the scheme of arrangement under Section 391 to 394 and 100 to 103 of Companies Act, 1956 and Section 52 of Companies Act, 2013. The said scheme shall be read as part of this order. In the aforesaid factual backdrop, reduction of issued, subscribed and paid up share capital of the Demerged Company, the use of the words “and reduced” in the Demerged Companies name is dispensed with. The Demerged Companies may utilize the security premium account and reduce its issued, subscribed and paid up share capital in accordance with the said scheme. In addition, the petitioner companies shall comply with all statutory requirements in accordance with law. Certified copy of this order shall be filed before the Registrar of Companies as per the requirement of the said Companies Act and Rules made thereunder. The Resulting Company is further directed to file the copy of this order along with copy of the scheme of appointment and other relevant documents with concerned Collector of Stamp/Superintendent of Stamp for the purpose of adjudication and payment of appropriate stamp duty in accordance with law. Service Tax 2016 (5) TMI 1156 Whether summons issued by the respondent-authority is devoid of any merit and substance - right to be accompanied by the Lawyers - Petitioner is neither a Director nor a post holder in M/s Netshelter Marketing Limited - Respondent contended that there are several allegations against the petitioner. Several cheques vouchers of payment of service tax have been prepared. Huge amount of cenvat credit has been availed to the tune of ₹ 3.20 crores approximately and so far investigation which has been carried out shows involvement of this petitioner and other persons who are avoiding, coming to the respondent authority under one or other pretext. Held that:- no reason found to entertain this writ petition mainly for the various facts and reasons. Therefore, in view of those facts and reasons, this writ petition is hereby, dismissed with a cost of ₹ 1,00,000/( Rs. one lakhs only). The amount shall be deposited by this petitioner within a period of fifteen days from today before the Member Secretary, Jharkhand State Legal Services Authority, Nyaya Sadan, Doranda, Ranchi. - Decided against the petitioner 2016 (5) TMI 1125 Eligibility of Cenvat credit of service tax - outward freight charges involved for clearance of finished products from the factory and up to the delivery effected at the customer's end/premises as per contractual terms agreed upon between the parties - Non-compliance of CBEC Circular dated 23.08.2007 but no evidence for the same - period involved from January 2005 to November 2007 and December 2007 to November 2008 - Held that:- in view of the decision of Karnataka High Court in the case of CCE Vs. ABB Ltd. [2011 (3) TMI 248 - KARNATAKA HIGH COURT] which is an uphelded decision of Larger Bench of the CESTAT reported in [2009 (5) TMI 48 - CESTAT, BANGALORE], it has been clearly upheld that the service tax paid on GTA services utilized for outward transportation of final product is allowable for the period prior to 01.04.2008 as per the definition of input services as contained in Rule 2(l) of the Cenvat Credit Rules and this appeal pertains to the period prior to 01.04.2008 only and the period after 01.04.2008 the appellant himself has reversed the credit of cenvat on GTA. Therefore, the impugned order is not sustainable. - Decided in favour of appellant Central Excise 2016 (5) TMI 1124 Valuation - additions / deductions from the assessable value u/s 4 - Quantification of duty liability - whether appellant has correctly calculated duty liability of ₹ 6,35,26,796/- based on remittances made to Joint Plant Committee (JPC) or the duty liability should be ₹ 11,17,74,702/- as calculated by the Adjudicating authority? - Held that:- As per the procedure prescribed all the member Steel Plants, including the present appellant were required to remit JPC levies to the Joint Plant Committee. Under this factual matrix department was not right in asking the appellant to provide certain information on production & clearances made or to calculate JPC levies from the figures available in the periodical RT-12 returns filed with the department. What is required to be added to the assessable value is the JPC levies remitted to the JPC. If there was any short payment of JPC levies then JPC could have asked the appellant to remit the same but department can not calculate a figure to add to the assessable value on their own based on RT-12 returns. Appellant has calculated on amount of ₹ 6,35,26,796/- based on remittances made to JPC based on certain receipts issued by JPC without supported by a chartered / cost accountant certificate. It is also observed from Para- 5 of Stay order passed by this bench that department had ample powers under the statute to Summon & Call for necessary documents and that in the absence of any documentary evidence, higher demand is prima facia not sustainable. At the same time appellant should have produced either a certificate from JPC to the effect as to how much JPC levies was remitted by the appellant during the relevant period or produce a chartered / cost accountant certificate indicating the basis of calculating duty liability of ₹ 6,35,26,796/-. For this purpose alone the matter is remanded back to the adjudicating authority as demand of ₹ 11, 17, 74,702/- calculated by the department is not sustainable. Needles to say that an opportunity of personal hearing should be extended to the appellant to substantiate their claim based on documents / certificate suggested above as to how much JPC levies have been remitted to JPC during the relevant period. Appeal filed by the appellant is allowed by way of remand to the Adjudicating authority for deciding the issue of quantification of demand in the light of observations made above. 2016 (5) TMI 1123 Period of limitation - extended period of limitation - whether no willful misstatement/ suppression of facts and therefore the extended period was not invokable and the SCN was issued beyond the normal period of one year? - Held that:- Supreme Court in the case of Continental Foundation (2007 (8) TMI 11 - SUPREME COURT OF INDIA ) has observed that when there was scope for entertaining a bonafide doubt the extended period of limitation was not available. At this juncture, it is pertinent to mention that the suppression of facts/ willful misstatement is a combined question of facts and law, and therefore, precedential value of various judgments on this issue has to be determined in the context of the facts of each case. In case of CCE Vs. Chemphar Drugs Liniments [1989 (2) TMI 116 - SUPREME COURT OF INDIA ], the Supreme Court held that “something positive other than mere inaction or failure on the assessee’s part or conscious withholding of information when assessee knew otherwise is required for invoking extended period”. In the light of the foregoing analysis, the allegation of willful misstatement/ suppression of facts is not sustainable against the respondent. Consequently, we hold that the Commissioner was justified in dropping the impugned demand as time barred. - Decided in favour of assessee. 2016 (5) TMI 1122 Cenvat credit on purchase of raw material - sponge iron being the raw material/inputs purchased from registered dealer - goods received on endorsed invoices - goods were sold in transit - Held that:- From a perusal of the invoices in question, it is find that the so-called certificate (invoices) as mentioned in the Order-in-Original, in the invoices, has been mis-conceived by the adjudicating authority as a certificate by the appellant. In fact, it is certified by the seller of inputs - M/s Chachan Metals Pvt. Ltd., Shamli dated 18/9/2007, certifying that the goods covered by the invoice where received directly from factory/Depot/consignment agent located at Ramchandrapur, Orissa. As find that the adjudicating authority misread the document by interpreting it as this certificate is given by the appellant leading to the illogical conclusion drawn. Thus, find that the impugned orders suffer with mistake of fact and accordingly, the same is fit to be set aside. Further it is the admitted case of Revenue that M/s Chachan Metals Pvt. Ltd., Shamli, received the goods along with the endorsed invoices, which is a normal trade practice where goods are resold during transit. That there is nothing wrong in diverting the goods in transit by the same Company, that is M/s Chachan Metals Pvt. Ltd., Kanpur to their own office at Shamli. Further, find that it is an admitted fact that the revenue have accepted the taking of credit by M/s Chachan Metals Pvt. Ltd., Shamli. Accordingly, allow the appeal in favour of assessee. 2016 (5) TMI 1121 Conversion of DTA unit to an 100% EOU - whether CENVAT Credit lying in balance at the time of conversion can be availed and utilized by the 100% EOU? - Held that:- Appellant had availed CENVAT Credit as per CENVAT Credit Rules and it does not prohibit the domestic unit converted into an 100% EOU, availing and utilizing the CENVAT Credit lying in balance. Prior to amendment of Rule 17 of Central Excise Rules, 2002, an 100% EOU was not allowed to pay duty by utilizing the cenvat/modvat credit. This aspect has been deliberated in detailed in Sun Pharmaceuticals Indus. Ltd case (2009 (5) TMI 849 - CESTAT CHENNAI). Also see GTN Exports Ltd’s case [2008 (7) TMI 377 - CESTAT, CHENNAI ] In view of the above consistent decisions of the Tribunal, we do not see any reason to record a different finding. Consequently, the impugned order is set aside and the appeal is allowed in favour of assessee 2016 (5) TMI 1120 Waiver of penalty imposed - Rule 26 of the Central Excise Rules, 2002 - Main noticee against whom duty, interest and penalty was proposed have paid duty, interest and 25% of penalty within one month from the date of show cause notice, therefore, the proceedings against the present appellant should also stands concluded along with the main assessee Held that:- the duty liability has been discharged after the issuance of show cause notice. In my view, the benefits which are available to an assessee prior to issuance of show cause notice should also be extended after the issuance of show cause notice, if liability is discharged before the adjudication order. Be that as it may, the issue seems to be covered by the Division Bench decision of this Tribunal in the case of Sonam Clock Pvt. Limited & Others v. CCE, Rajkot – [2012 (10) TMI 78 - CESTAT, AHMEDABAD] (wherein I was one of the Member). I do not find any merits in the grounds raised by the Revenue that assessee may seek refund of the amount as that the entire order-in-original is set aside as the first appellate authority has considered the extension of benefits of Section 11A to the assessee only on the ground that he has paid the amount in full. If the assessee would not have paid this amount, this benefit would not have been extended to him. Therefore all the appellants are entitled for the immunity as per proviso to Section 11A (2) and accordingly they are entitled for the waiver of penalty imposed on them under Rule 26 of the Central Excise Rules, 2002. - Decided in favour of appellant 2016 (5) TMI 1119 Entitlement for Cenvat credit - M.S. Angles, M.S. Flat, CTD Bar, M.S. Sheet/Plate - goods used for supporting structure to civil construction work, hence cannot be considered as components, spares and accessories of Capital Goods as per definition of Capital goods specified under Rule 2(a)A of CCR, 2004. Also Cenvat credit was disallowed even for the period prior to amendment made on 7/7/2009 - Held that:- in view of the various judgments, it can be seen that the credit in respect of steel items used for fabrication of Cooling bed, Crane Gantry is allowable. On the similar line steel used for fabrication of other capital goods are also allowed. On the issue of whether the amendment in Cenvat credit Rules of 7/7/2009 is retrospective or prospective the same has been distinguished by the judgment of Hon'ble Chhattisgarh High Court in the case of Scania Steels and Powers Ltd. v. Commissioner - [2011 (9) TMI 972 - CHHATTISGARH HIGH COURT] where in it was held that amendment made on 7/7/2009 in the definition of 'input' cannot be applied retrospectively. For this reason Vandana Global judgment of Larger bench reported in [2010 (4) TMI 133 - CESTAT, NEW DELHI (LB)] stands distinguished. As regard the claim of the appellant on CTD bar, I am of the view that CTD bar invariably used for construction purpose, which cannot be allowed therefore the Cenvat credit is disallowed in respect of CTD bar. Hence, except CTD bar, all other steel material are admissible inputs and credit is allowed. - Decided partly in favour of appellant 2016 (5) TMI 1118 Refund claim - excess duty paid - procedure of provisional assessment not followed - Unjust enrichment - Held that:- the appellant admittedly filed the refund claim within one year. It is also not in dispute that the goods were supplied to the appellant's own unit, therefore the valuation provision of Rule 8 of the Central Excise Valuation Rules, 2000 applies. According to which, the price at the time of clearance of the goods is always provisional price. The final price can be ascertained only on the basis of CAS4, which can be prepared only after completion of the financial year and on availability of the actual data of various overheads, till that time whatever price on which the clearances are made is on estimation basis. In this process, if there is any shortfall in the duty, the same is required to be paid on finalization of valuation on the basis of CAS4. Similarly, if there is an excess payment over and above the final price on the basis of CAS4, the same shall be refunded to the appellant. I am therefore of the view that merely because the appellant have not followed the procedure of provisional assessment, the price at which the duty was paid at the time of clearance cannot be treated as final assessment. Therefore, for this reason refund of excess paid duty cannot be denied by relying on the various judgments. As regards unjust enrichment, it is found that the assessee was under bonafide belief that their stand that since the recipient unit has not availed the Cenvat Credit, the incidence of duty has not been passed on therefore they have not produced any other evidence on this fact. I accept the request of the appellant that the factual aspect on non-passing of incidence of duty should be verified. Therefore the matter is remanded back to the adjudicating authority with a direction that the appellant may be given an opportunity to present their case along with documentary evidence to prove that incidence of excess duty paid has not been passed to any other person. - Appeal disposed of by way of remand 2016 (5) TMI 1117 Reversal of attributable credit on inputs and input services consumed for generation of electricity used in colony, guest house, bank, canteen etc. for non-manufacturing activity or pay an amount equal to 10% of sale price of such electricity sold to U.P.Power Corporation Ltd. - Held that:- as the appellant has already reversed the Cenvat Credit on input/input services attributable to generation of electricity sold to M/s U.P.Power Corporation Ltd. is sufficient in compliance to provisions of Rule 6 of the Cenvat Credit Rules, 2004, therefore, the appellant is not required to pay 10% of the value of electricity - the issue is no longer res-integra and the same is covered by the decision of SMB Bench of this Tribunal in the case of Bajaj Hindustan Ltd. Versus Commissioner of C. Ex. & S.T., Meerut-I [2015 (6) TMI 1011 - CESTAT NEW DELHI]. Therefore, by relying on the same, the impugned order is set aside. - Decided in favour of appellant CST, VAT & Sales Tax 2016 (5) TMI 1111 Whether it is possible to settle a part of a pending dispute under the West Bengal Sales Tax (Settlement of Dispute) Act, 1999 without settling the entire appeal or revision - Held that:- ordinarily, a settlement would amount to the entire dispute being resolved. Though it may even be handy to have some areas of disagreement resolved so that the other arrears do not require much time for adjudication, in the scheme of the said Act of 1999 and the clear words of Section 10 thereof, it is the entirety of the dispute in the appeal or the revision that has to be resolved under the settlement provision or none at all. Since it is the admitted position that the petitioner had attempted to settle only a part of the dispute which was the subject-matter of the pending revision before the West Bengal Commercial Taxes Appellate and Revisional Board , the department cannot be faulted for issuing the showcause notice calling upon the petitioner to explain why the application filed by the petitioner for part settlement should not be dismissed. - Petition disposed of
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