TMI Tax Updates - e-Newsletter
May 29, 2018

Case Laws in this Newsletter:

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

Articles

1. GST ISSUES REQUIRING ADDRESS BY GST

   By: Dr. Sanjiv Agarwal

News

1. No change in the GST law and taxation relating to farmers since July, 2017; Support Services to agriculture, forestry, fishing or animal husbandry are exempt from GST; Agriculturists are also exempted from taking GST Registration

2. Auction for Sale (Re-issue) of Government Stocks

3. Stakeholder engagement by the Task Force drafting the ​New Direct Tax Law extended by a period of three months up to June 15, 2018

4. RBI Reference Rate for US $

5. Chairperson, IBBI, Dr. M. S. Sahoo: Institution of Insolvency Professionals (IPs) needs to be robust and efficient to inspire the confidence of stakeholders; Profession of IPs is a key institution of the Insolvency and Bankruptcy regime; The 2nd IPs Conclave organised by the Insolvency and Bankruptcy Board of India (IBBI) in Mumbai

Notifications

DGFT

1. 09/2015-2020 - dated 28-5-2018 - FTP

Amendment in the Chapter-1 of FTP 2015-2020

Income Tax

2. 24/2018 - dated 24-5-2018 - IT

Relaxation from the conditions of issue of shares at premium in excess of Fire Market Value u/s 56(2)(viib) where approval has been granted by the Inter-Ministerial Board of Certification

3. 23/2018 - dated 24-5-2018 - IT

Income-tax (6th Amendment), Rules, 2018 - Determination of FMV of shares and securities - Now only merchant bank can give the valuation report for the purpose of section 56.

Highlights / Catch Notes

Income Tax

• Relaxation of Share Premium Conditions Under Income Tax Act Section 56(2)(viib) with Inter-Ministerial Board Approval.

  Notifications : Relaxation from the conditions of issue of shares at premium in excess of Fire Market Value u/s 56(2)(viib) where approval has been granted by the Inter-Ministerial Board of Certification
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• Only Merchant Banks Authorized for FMV Valuation of Shares Under Income-tax Rule 56 (6th Amendment) 2018.

  Notifications : Income-tax (6th Amendment), Rules, 2018 - Determination of FMV of shares and securities - Now only merchant bank can give the valuation report for the purpose of section 56.
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• Taxpayer Avoids Penalty for Property Sale Due to Bona Fide Conduct, Exempt u/s 271(1)(c) Provisions.

  Case-Laws - AT : Penalty u/s 271(1)(c) - failure to pay tax paid on sale of property - the conduct of the assessee is bonafide which takes it out from exigibility of penalty within mandate of penalty provisions - AT
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• Stock Valuation Dispute Resolved: No Additions Made u/s 145A Due to Incorrect Tax Inclusion by AO.

  Case-Laws - AT : Valuation of stock - addition u/s 145A - following the accounting standard, assessee has adopted exclusive method of accounting with regard to the recording of purchase, sale and inventory of the goods - AO erred in including the element of taxes only in the closing stock of inventories - No additions.
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• Limitation Period for Penalty u/s 271E: Case Falls Under Clause (c) of Section 275(1) of Income Tax Act.

  Case-Laws - AT : Penalty levied u/s 271E - period of limitation - The order of reassessment was not subject matter of revision proceedings u/s 263 or 264 of the Act. Hence the assessee’s case squarely falls under clause (c ) of section 275(1).
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• Revocable Trust Income Taxed to Beneficiaries Due to Overriding Title Doctrine on Revocable Transfers.

  Case-Laws - AT : Doctrine of diversion of income by overriding title - Tax liability on interest income of the trust - since assessee was a revocable trust and contribution by beneficiaries was a revocable transfer, income would be taxed in the hands of the beneficiaries.
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• Assessee Not Liable for Tax Deduction if Unaware of Lenders' Identity u/s 194A of Income Tax Act.

  Case-Laws - AT : TDS u/s 194A - identity of the lenders were not known - in the event it is ultimately found that at the time of paying the borrowing fee to NSCCL or even prior to it, the assessee was unaware of the identity and other details of the lenders, then it cannot be fastened with the liability of deduction of tax under section 194A - AT
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• Foreign Company Compensation Not Taxed in India; No TDS u/s 195 Due to Lack of Permanent Establishment.

  Case-Laws - AT : TDS u/s 195 - compensation received for loss of business - the foreign company does not have permanent establishment in India - thus payments are not liable for taxation in their hands in India and no TDS shall be deducted u/s 195 - AT
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• Reopening of Assessment Valid u/s 147 Due to Incorrect Jurisdiction Filing of Income Return.

  Case-Laws - AT : Validity of reopening of the assessment u/s 147 - ROI not filled - When the return of income was not filed with the AO then the alleged return of income filed with the wrong jurisdiction cannot be considered for the purpose of deciding the validity of reopening as the AO
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Central Excise

• EOU's Cenvat Credit Refund Denied Due to Lack of Physical Exports u/r 5 Clarification.

  Case-Laws - AT : 100% EOU - Refund claim of cenvat credit - no physical exports - during the period in question, the definition of export under Rule 5 which was inserted by an explanation requires that there should be physical exports of the goods and nothing else - AT
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• Refund Claims for Wrongly Availed CENVAT Credit Require Notice u/r 14, Not Rule 5.

  Case-Laws - AT : Refund claim - where the cenvat credit is availed wrongly which needs to be recovered, then such amount should have been recovered through a notice under Rule 14 of CENVAT Credit Rules, 2004 - Rule 5 of CENVAT credit Rules is not an instrument for the purpose - AT
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• CENVAT Credit Denied for Dry Ice Vehicles Used Outside Factory; Not Classified as Capital Goods Under Regulations.

  Case-Laws - AT : CENVAT credit - ‘Dry ice Vehicle’ - capital goods - the goods should be used in the factory premises whereas in the present case, the motor vehicles are used by the appellant for delivering the finished goods to their customers, hence, cannot be said to be eligible to the credit of excise duty paid on such vehicles - AT
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Case Laws:

• Income Tax

• 2018 (5) TMI 1607
  Addition u/s 68 - additional income disclosed before the Settlement Commission - addition of peak balances - Held that:- While arriving at the additional income disclosed before the Settlement Commission, the peak balances in various undisclosed bank accounts were worked out by the assessee and the revised balance sheets in question were prepared. Thus, the claim of the assessee made before the Settlement Commission was accepted by the Assessing Officer. For the financial year ending 31/03/2008, the closing cash balance is 30,23,746/-. This figure was not disturbed by the Assessing Officer and the additional income declared by the assessee before the Settlement Commission was taken as income. Hence the submission for the assessee has force. We accept the same and consider that the source of funds for deposits aggregating to 20,62,298/-, made during the year, as explained by the opening cash balance of the year. - Decided in favour of assessee Provision for bad debts allowability - Held that:- What was created was a provision for doubtful debts. It is not a case where the bad debts were written off in the accounts. On the contrary, the provision for doubtful debts continues to be in the accounts and is reflected in the balance sheet. The decision in the case of Vijaya Bank V. CIT [2010 (4) TMI 46 - SUPREME COURT ] as a case where the loans and advances, which was provisioned for, were actually written off and this figure of loans and advances were reduced from the asset side of the balance sheet. No such netting off is done in the case on hand. Though the provision is made for an identified debt, these debts were not written off and do appear in the balance sheet of the assessee.- Decided against assessee

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• 2018 (5) TMI 1606
  Disallowance on interest payment claimed U/s 57 - Assessee has availed housing loan from State Bank of India - denial of claim as the assessee has claimed the same U/s 57 against the interest income received by him and not under the head of income from house property - Held that:- Before allowing the interest expenditure against the interest income, the burden is on the assessee to prove that the amount so borrowed has been actually and directly used for the purpose of advancing loan on which interest income has been earned. One to one link is required to be established in respect of utilization of interest bearing funds so borrowed. Merely because the loan was sanctioned for housing purpose, it cannot be said that the assessee cannot use it for advancing loans to others for earning interest. It may amount to violation of terms and conditions of the agreement so entered with the bank while sanctioning of the loan, but there is no contravention under the Income Tax Act for advancing such funds for earning interest income. There is no finding by the lower authorities that the interest earned out of advances were not out of interest bearing funds taken from bank. Restore this issue back to the file of the Assessing Officer for deciding afresh and the assessee is directed to demonstrate one to one use of borrowed funds for advancing loan on interest.

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• 2018 (5) TMI 1605
  Imposition of penalty u/s 271(1)(c) - Held that:- the show cause notice u/s 274 does not specify the charge against the assessee as to whether it is for concealing particulars of income or furnishing inaccurate particulars of income - show cause notice u/s 274 does not strike out the inappropriate words - thus imposition of penalty cannot be sustained - appeal of revenue is dismissed - Decided in favor of assessee

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• 2018 (5) TMI 1604
  Addition made on account of undisclosed investment in house property - Held that:- land was allotted to the assessee by ADDA on 23.08.1976 and the construction thereon was carried out by the assessee out of his salary savings, loan from LIC and retirement benefits - thus the sources for investment in land and building stands duly explained - thus the addition is deleted - Decided in favor of assessee. Value of closing stock of fuel - Held that:- the stock statement submitted to the bank did not take into account the evaporation loss and handling loss of fuel - due to this, naturally value of closing stock shown to the bank would always be higher when compared to that in the balance sheet -thus the appeal of revenue is dismissed - Decided in favor of assessee. Disallowance of expenses incurred on advertisement and publicity - Held that:- the expenses incurred and giving of various gifts to customers have not been proved by the assessee with supporting documents - In petrol pump business, there is no necessity of incurrence of this expenditure - thus expenses are disallowed - Decided against the assessee.

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• 2018 (5) TMI 1603
  Penalty u/s 271(1)(c) - no tax paid on sale of property - Held that:- It is the claim of the assessee that he was ill advised by counsel and the assessee being illiterate was having no knowledge of nitty-gritty's of the complex provision of 1961 of the Act. It was claimed that assessee was told by his tax practitioner that since he has purchased new residential properties and hence there is no need to pay tax on the sale of properties. The assessee has claimed that once he came to know that he is liable to pay tax he came forward and deposited income-tax after declaring the said income during the course of assessment proceedings Thus assessee has come forward with a bonafide explanation and the conduct of the assessee is bonafide which takes it out from exigibility of penalty within mandate of penalty provisions as are contained in section 271(1)(c) and hence no penalty is exigible on the assessee - Decided in favour of assessee.

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• 2018 (5) TMI 1602
  Penalty u/s. 271AAB - income from commodity profit has been found during search u/s. 132 of the Act which is not reflected in the regular books of account - assessee’s transactions (in this case, the speculative transaction) has been found to be recorded in the “other documents” which is (retrieved from the assessee’s accountant’s drawer) - Held that:- Since the assessee is not engaged in business or profession, he does not require to maintain the books of account as per sec. 44AA or sec. 44AA(2) of the Act As relying on DCIT VERSUS MANISH AGARWALA [2018 (2) TMI 972 - ITAT KOLKATA] we note that since the income under question was in fact entered in the “other documents” maintained in the normal course relating to the AY 2013-14, which document was retrieved during search, hence, the amount offered by the assessee does not fall in the ken of “undisclosed income” defined in Sec. 271AAB of the Act - Decided in favour of assessee.

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• 2018 (5) TMI 1601
  TDS u/s 195 r.w.s 40(a)(i) - commission expenses for the services rendered by the foreign commission agents in connection with its business - non deduction of tds - identification of the parties, details of payment & services rendered not furnished - Income accrued in India - Held that:- It is not the case of Revenue that payment was made by assessee on account of technical services rendered by the foreign agents - Commission income in the hands of foreign agent is not chargeable to tax in India - income shall be not deemed to accrue or arise in India as there in no business connection in India - CIT vs. Farida Leather Co [2016 (2) TMI 798 - MADRAS HIGH COURT]. Once an income is not chargeable to tax in India then the question of deducting TDS under the provision of section 195 of the Act does not arise. Accordingly, we do not find any reason to interfere in the order of ld. CIT-A. - Decided in favour of assessee.

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• 2018 (5) TMI 1600
  Allowance of deduction u/s 80P - Held that:- assessee is a cooperative bank a - as per the amended section 80P with the insertion of clause (4) it is made clear that deduction shall not be admissible to a co-operative bank - thus cooperative banks are now specifically excluded from the ambit of Section 80P - decided against the asessee. Disallowance of professional fees as TDS is not deducted u/s 194J - disallowance u/s 36(1)(va) - Held that:- the matter is restored to the file of AO then allow the deduction where the payment to PF is made within the due date of filing of return of income u/s 139(1) - also matter for TDS is also restored to AO to verify if the tax has been deducted by the assessee at source or the recipients has paid tax on it by including the same in their income tax return

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• 2018 (5) TMI 1599
  Valuation of stock - Disallowance of addition made by AO u/s 145A - inclusion of taxes in the value of stock - assessee has adopted exclusive method of accounting - disallowance of Provision of Warranty against the supply of the goods - Held that:- AO erred in including the element of taxes only in the closing stock of inventories - provisions of Section 145A requires to include the amount of tax in the value of purchase, sale and inventory - assessee has been following its method of valuation for the inventory, purchase and sale consistently for the last several years and no defect in the method of accounting for the inventories was recorded by the AO in his assessment order - appeal filed by the Revenue is dismissed Expenses towards provision for guarantee - whether the same is un-accrued/un-ascertain/contingent liability - Held that:- the provision is created on scientific basis can be claimed as deduction against the profit determined under the head business and profession - the assessee was eligible to create the provision of 16,08,926/- being 10% of purchase order. However, the assessee has created provision of 30,00,000/- - issue is restored to AO for fresh adjudication - allowed for statistical purposes.

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• 2018 (5) TMI 1598
  Disallowance of expenses by the AO - CIT(A) allowed the claim of assessee - Held that:- initiation of proceedings made u/s 148 by issuing notice cannot be held to be invalid merely stating that it was issued after passing of 7 days from the date of survey operation - assessee objected to issue of notice which needs to be disposed off in the light of decision of Hon Tale Supreme Court in the case of M/s GKN Driveshaft Co. Ltd. - assessee has attended the course of re-assessment proceedings - thus appeal is dismissed Addition on account of difference in FDR as per bank and as per balance sheet - Held that:- AO was not justified in issuing the letter dated 06.03.2014 which was received at 01:30PM and the appellant was asked to submit the details of FDR by 05.00 PM on same date itself - thus addition made by the AO is hereby deleted - decided in favor of assessee Additions on the ground that the shares were held by a non-existent company - Held that:- assessee have enclosed the company master data in his submission, but failed to provide these requisite details at the time of assessment proceedings before the AO - thus AO was justified in adding 2,00,000/- on account of unexplained share capital - Decided against the assessee Chargeable of interest u/s 234B - Held that:- as per the decision of Hon’ble High Court in the case of Ajay Prakash Verma in TA no. 38 of 2010 reported in 2013(1) TMI 140, AO is directed to modify the interest calculation u/s 234B - appeal is partly allowed.

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• 2018 (5) TMI 1597
  Disallowance u/s 40A(3) - addition on account of undisclosed purchase - Held that:- the assessee made payment against purchases an amount exceeding 20,000/- in a day and thereby violating provision of section 40A(3) - issue is squarely covered in favour of the assessee by the decision of the Coordinate Bench of ITAT, Kolkata in assessee’s own case, in ITA No. 1034/Kol/2016 - revenue was unable to produce any material to controvert the findings - thus addition is deleted - decided in favor of assessee. Undisclosed purchases - Amount of TDS deducted - Additions as per form 26AS - Held that:- the total purchases debited in P 48,35,023/- whereas the amount shown in the Form No.26AS excluding TCS is to the tune of 47,31,926/- - thus the difference of 1,03,095/- is being added to the income of the assessee - since the assessee is not able to reconcile the difference - hence appeal filed by the assessee is partly allowed.

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• 2018 (5) TMI 1596
  Addition u/s 68 - assessee received gift from her daughter - whether AO and CIT(A) have doubted the creditworthiness of assessee’s daughter or assessee? - Held that:- It is irrelevant for the assessee to prove as the assessee has brought on record not only the source but source of source also. It is for the revenue to initiate proceedings in the case of T. Veena, if they are not satisfied with the submission of Ms. T. Veena. As far as the assessee is concerned, she had received the gift from her daughter through banking channel, hence, she has proved identity and genuineness of the transaction and for creditworthiness, she had brought on record the bank statement & PAN of her daughter. Therefore, assessee has discharged her part of duty. The sum received as gift from a close relative who was man of means and who had also confirmed the said transaction, could not be added as cash credit - See CIT Vs. Dr. Kodela Siva Prasada Rao [2013 (1) TMI 232 - ANDHRA PRADESH HIGH COURT] - Decided in favour of assessee

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• 2018 (5) TMI 1595
  Unexplained cash deposits - Determination of income - consider the peak balance of all the seven bank accounts - assessee entitlement to offer income u/s 44AE - Held that:- It is not in dispute that the assessee owns less than 10 vehicles and is accordingly entitled to offer income u/s 44AE - Since the income of the assessee is offered u/s 44AE of the Act, there is no need to make addition towards cash deposits when the same were duly explained to be business proceeds. We direct the AO to delete the addition made towards unexplained cash deposits in the bank accounts made on peak credit theory. The repayment of loan to Sundaram finance Ltd were made only in respect of trucks used in the transport business which were purchased out of loan from the said company. The cash withdrawals made from the bank accounts and the cash sales of the assessee from transport business duly explain the source for making repayments to Sundaram finance ltd. Hence there is no need to make any separate addition - Decided in favour of assessee.

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• 2018 (5) TMI 1594
  Whether the goodwill created in the books of account is liable to be taxed in the hands of assessee as short term capital gain? - Held that:- firms were having self generated goodwill which was valued by them during the present AY - there has been no transfer of such goodwill by the said firms - mere creation of goodwill in the books does not mean any transfer, which could be charged as short term capital gain - thus CIT(A) was not justified in holding goodwill created in the books of account is liable to be taxed as STCG - Decided in favor of assessee.

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• 2018 (5) TMI 1593
  Penalty levied u/s 271E - Genuineness of the loan transactions - period of limitation - last date for imposition of penalty - Held that:- The order of reassessment was not subject matter of revision proceedings u/s 263 or 264 of the Act. Hence the assessee’s case squarely falls under clause (c ) of section 275(1). In this case, penalty could be imposed on or before 30.11.2011 or on or before 31.3.2012 whichever is later. The later period is 31.3.2012. Hence the last date for imposition of penalty u/s 275(1)(c ) of the Act is 31.3.2012. In the instant case, even the first show cause notice (ie wrong notice u/s 271D of the Act ) was issued on 5.12.2012 which itself is barred by limitation. Hence we hold that the CIT-A had rightly deleted the penalty u/s 271E of the Act as barred by limitation. See CIT vs Narayani and Sons (P) Ltd - 2016 (9) TMI 449 (Calcutta High Court) - Decided in favour of assessee

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• 2018 (5) TMI 1592
  Addition u/s 14A r.w.r. 8D - Held that:- We delete the addition 1,71,253/- under Rule 8D (2) (ii) as there is no interest expenses debited in the profit and loss account. After setting off interest expense with interest income, the resulted amount of 52,54,469/- comes as a net interest income which can not be disallowed under Rule 8D (2) (ii) of the Income Tax Rules. Therefore, we note that there is no interest expenditure in the assessee s case under consideration, interest received is more than the interest paid and the net result is interest income, therefore, no disallowance should be made under Rule 8D(2)(ii) of the I.T. Rules. For addition of 1,90,049/- under Rule 8D (2) (iii) of the Income Tax Rules, 1962, we direct the assessing officer to compute the disallowance @0.5% only taking into account the investments which yield dividend income, during the previous year, as per the discussion made in the case of REI Agro Ltd. (2013 (9) TMI 156 - ITAT KOLKATA). TDS credit disallowance on mobilization advance and not entire contract receipts were received in the relevant Assessment Year - Held that:- We direct the assessing officer to examine the income offered the tune of 6,00,000/- in the Assessment Year under consideration, and allow the TDS credit proportionately to the amount of 6,00,000/- and balance TDS credit on the remaining sum of 20,48,000/- (that is, 26,48,000 6,00,000) should be allowed in subsequent years in accordance with law. Hence, we allow this ground of the assessee for statistical purposes.

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• 2018 (5) TMI 1591
  Imposition of penalty u/s 271AAB on account of income from commodity profit that has been found during search u/s 132 - Held that:- commodity transactions are not carried out by the assessee in the course of his business and hence he is not required to maintain the books of account - assessee has admitted u/s 132(4), the income from commodities trading and later returned the same as his income under the head "Income from Other Sources" - hence the amount of 1,32,44,000/- offered by the assessee does not fall in the ken of "undisclosed income" u/s 271AAB - thus no penalty can be levied against the assessee - Decided in favor of assessee.

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• 2018 (5) TMI 1590
  Whether the waiver of loan amount to be treated as trading receipt or capital in nature - Held that:- view taken by this Court in the case of (CIT Vs Santogen Silk Mills Ltd [2015 (4) TMI 225 - BOMBAY HIGH COURT]) - waiver would not come within the purview of Section 28(iv) - the loan was a capital receipt and has not been claimed as deduction from the taxable income in the earlier years and would not come within the purview of Section 41 (1) - Thus AO is directed to delete the addition on account of waiver of the loan amount treating it as capital in nature - Decided in favor of assessee

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• 2018 (5) TMI 1589
  Levy of penalty u/s 271(1)(c) - Held that:- AO had failed to strike off the irrelevant default in the show cause notice - assessee is not informed and rather is left guessing of the default/defaults for which he is being proceeded against for - thus AO had clearly failed to discharge his statutory obligation of fairly putting the assessee to notice as regards the default/defaults for which he was being proceeded against - hence penalty cannot be sustained - decided in favor of assessee Rejection of books of account u/s 145(3) - disallowance of exemption u/s 10B relating to interest income from fixed deposits, sale of scrap and other miscellaneous business receipts- addition u/s 41(1) on account of non-genuine creditors - Held that:- assessee has treated the said income as business income and claimed deduction u/s 10B - relying on the judgment of Apex Court in the case of Pandian Chemicals Ltd. 2003 (4) TMI 3 - SUPREME COURT -assessee's claim is denied - Decided against the assessee Additions u/s 41(1) - balances lying with the sundry creditors - Held that:- assessee is directed to file the required evidences to demonstrate the credit balances of the sundry creditors - AO shall grant reasonable opportunity of being heard to the assessee in accordance with set principles of natural justice - allowed for statistical purposes.

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• 2018 (5) TMI 1588
  Doctrine of diversion of income by overriding title - Tax liability on interest income of the trust - Held that:- the assessee-trust was formed vide Trust Deed settled by IL&FS Trust Co. Ltd. (ITCL) - the beneficiaries to the trust were seven Mutual Funds - The beneficial interest of those Mutual Funds in the trust was proportionate to their contribution in the assessee-trust - since assessee was a revocable trust and contribution by beneficiaries was a revocable transfer, income would be taxed in the hands of the beneficiaries i.e. Mutual Funds - also money was always intended to be passed on to PTC holders, i.e. Mutual Funds - thus principle of diversion of income at source by overriding title was attracted - interest income was not liable to tax in the hands of the assessee -Decided in favor of assessee

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• 2018 (5) TMI 1587
  Revision u/s 263 - Foreign Exchnage(FE) loss disallowance - Held that:- The loss on account of a FE fluctuation was not a contingent loss, as held by the CIT. The loss was not arising out of any speculative business. The FE loss was due to purchase of capital asset and same was not claimed by the assessee while computing the income under the normal provisions of the Act. We are of the opinion that order of the AO is neither erroneous not prejudicial to the interest of the revenue. We further hold that the loss is not of contingent nature and the direction of the CIT is contrary to the decision of the Hon'ble Supreme Court delivered in the case of in Woodward Governor India private Ltd. (2009 (4) TMI 4 - SUPREME COURT ). Accordingly, we allow second ground of appeal. MAT - Disallowance of production u/s. 80 IC in respect of voluntary transfer pricing adjustment undertaken by the assessee, invoking the provisions of section 92C(4) - Held that:- After considering the computation of total income under the normal provisions and the MAT provisions, we find that the order of the AO was not prejudicial to the interest of the Revenue, as disallowance of deduction u/s. 80 IC to the extent of 9, 86, 657/-did not affect the tax calculation. Therefore, we decide this ground of appeal in favour of the assessee.

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• 2018 (5) TMI 1586
  TDS u/s 194A - Non deduction of TDS on borrowing fees - assessee in default - borrowing fee paid to the lenders through NSCCL - it is the contention of the assessee from the very beginning that since the identity of the lenders are not known to the assessee it could not have deducted tax at source while making such payment. Thus, the TDS provisions become unworkable. - Held that:- on a reading of the Scheme as a whole, it appears that the lender and borrower of securities have no contact with each other as the entire transaction is regulated through NSCCL. Keeping in perspective the aforesaid facts, the contention of the assessee that, while making payment of borrowing fee it was not aware of the identity and other details of the lender, assumes importance. Neither the Assessing Officer nor the learned Commissioner (Appeals) have conducted any enquiry with the NSCCL for ascertaining the fact as to whether at the time of making the borrowing fee or prior to it assessee was in knowledge of the identity and other details of the lender. Matter restored before AO - in the event it is ultimately found that at the time of paying the borrowing fee to NSCCL or even prior to it, the assessee was unaware of the identity and other details of the lenders, then it cannot be fastened with the liability of deduction of tax under section 194A

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• 2018 (5) TMI 1585
  Depreciation - Whether the acquisition of gala at Mumbai should be included in the block of assets - Whether the assesse is entitled for depreciation - Held that:- AR himself had fairly considered that assessee was not entitled to claim depreciation - allotment letter from developer is equal to acquisition of an asset-is not tenable, especially when it had not submitted the basic documents like approval of Municipal/ Panchayat authorities approving the plan of the proposed gala or the commencement certificate - it would not entitle the assessee to claim benefit of section 50 - as it has claimed deduction for non-existent asset - Decided against the assessee. Disallowance of set off of brought forward losses - Held that:- as per the provisions of section 74 of the Act brought forward losses from long-term capital asset could be set off only against long-term capital gains, that there was no provision for allowing set off of brought forward losses, arising out of transfer of long-term capital assets, against STCG - as per AO STCG could not be treated as profit and gains of business or profession - that brought forward business losses could not be allowed to be set off against STCG - issue of carry forward of loss needs further verification by the AO - appeal stands partly allowed

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• 2018 (5) TMI 1584
  Transfer pricing addition - comparable selection criteria - functional similarity - Held that:- The assessee was engaged in business of software development, thus companies functionally dissimilar with that of assessee need to be deselected from final list.

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• 2018 (5) TMI 1583
  Granting exemption u/s 54 in respect of reinvestment made by the assessee in three houses - year of assessment - modified occupancy certificate issued to the assessee considering the entire building as a combined single building - Held that:- Prior to the amendment in section 54 with effect from Asst Year 2015-16 onwards, as long as the investment is made in residential house/(s), then the assessee would be eligible for exemption u/s 54 for the entire reinvestment subject to the maximum of long term capital gains amount. Only after Asst Year 2015-16, the exemption u/s 54 would have to be restricted to reinvestment in one residential house only and the said amendment cannot be applied retrospectively. - Decided in favour of the assessee.

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• 2018 (5) TMI 1582
  Revision u/s 263 - Addition u/s 68 towards share application money - AO had not enquired into the source of the share capital and premium infused into the assessee company by verifying the identity, genuineness and creditworthiness of the shareholders - Held that:- AO admittedly did not resort to make enquiries in the manner stated by the CIT u/s 263 inspite of the fact that all the necessary details were very much available before him. CIT had directed the AO to investigate into multiple layers of the investment in shares made by respective shareholders and identify the ultimate person holding controlling interest including the change in shareholding, directorship etc and then take the entire matter to its logical conclusion to bring out the facts on record. From the perusal of the assessment order, we find that this has not been done by the AO. Thus remand the matter back to the file of the ld AO for de novo assessment and to decide the matter as mandated by the ld CIT in section 263 order, after giving sufficient opportunity of being heard to the assessee. Decided in favour of assessee for statistical purposes.

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• 2018 (5) TMI 1581
  Penalty u/s. 271(1)(c) - non specifying the limb as to whether the assessee has concealed his income or has furnished any inaccurate particulars - Held that:- As observed that the show cause notice issued in the present case u/s 274 of the Act does not specify the charge against the assessee as to whether it is for concealing particulars of income or furnishing inaccurate particulars of income. The show cause notice u/s 274 of the Act does not strike out the inappropriate words. In these circumstances, we are of the view that imposition of penalty cannot be sustained. See JEETMAL CHORARIA VERSUS A.C.I.T., CIRCLE-43, [2017 (12) TMI 883 - ITAT, KOLKATA] - Decided in favour of assessee.

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• 2018 (5) TMI 1580
  Disallowances of consultancy charges - disallowance of losses debited in the P 12, 75, 462/-, after due verification and in accordance with law - allowed for statistical purposes.

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• 2018 (5) TMI 1579
  Estimation of income @12.5% on gross receipts - Held that:- As per the findings of the AO and as per the evidences found during the course of search with regard to inflation of expenditure, suppression of income and suspicious nature of sub contracts, we hold that the estimation of income at 12.5% is reasonable and accordingly we decline to interfere with the order of the Ld. CIT(A). Estimation of profits on sub-contracts - AR during the appeal hearing argued that estimation of income @12.5% on sub contracts is unreasonable and unjustified - Held that:- Estimation of income @8% on sub contract works is reasonable. Accordingly we direct the AO to estimate the income @8% on sub contracts and estimate the income @12.5% on own contracts. While estimating the income on sub contracts the A.O. is directed to exclude the sub contract payments in respect of the sub contracts in para No.14 of this order which are held to be name lenders. Allowance of depreciation - gross or net income estimated - Held that:- In the instant case the AO has not disbelieved the purchase of assets or the use of assets for the purpose of business. Therefore, as relying on case of Awasthi Traders [2016 (11) TMI 894 - SUPREME COURT] we hold that CIT(A) has rightly directed the AO to grant the deduction for depreciation out of gross income estimated

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• 2018 (5) TMI 1578
  Method of determination of arm’s length price for international transactions - Held that:- It is trait law that the transactions have to be independently benchmarked applying the appropriate method in benchmarking of the transactions - reasons for rejection of the CUP and RPA methods should be given to the assessee and the same is part of the submissions - onus is kept on the assessee by mentioning that the assessee agreed for substituting the TNMM method as an appropriate method, which is not proper - Considering the deficiencies, we are of the opinion the matter should be set aside to the file of the TPO/AO for fresh adjudication - AO/TPO shall grant a reasonable opportunity of being heard to the assessee as per the set principles of natural justice - thus allowed for statistical purposes Disallowance of compensatory payment to foreign companies for non deduction of TDS - Held that:- assessee has made impugned payment to the foreign companies in the form of “compensatory payment” as per agreement - in order to compensate such loss compensation is paid - the impugned payment shall constitute business receipts in the hands of the recipient companies - in the nature of compensation received for loss of business - the foreign company does not have permanent establishment in India - thus payments are not liable for taxation in their hands in India and no TDS shall be deducted u/s 195 - decided in favor of assessee

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• 2018 (5) TMI 1577
  Penalty u/s 271(1)(c) - non specification of charge - Held that:- As perused the assessment orders for both the years wherein AO has also not levied any specific charge on the additions made but has simply stated that he is satisfied that the penalty proceedings under section 271(1)(c) should be initiated against the assessee company. Therefore we find that there is no specific charge levied by the assessing officer in the assessment orders as well as in the penalty notices but has levied the penalty on the assessee holding that assessee has furnished inaccurate particulars of his income. - Decided in favour of assessee.

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• 2018 (5) TMI 1576
  Validity of reopening of the assessment u/s 147 - ROI not filled - jurisdiction of AO - Held that:- When the return of income was not filed with the AO then the alleged return of income filed with the wrong jurisdiction cannot be considered for the purpose of deciding the validity of reopening as the AO at the time of initiation of proceedings under section 148 has to form the belief on the basis of the material available with the AO which is sufficient for coming to the conclusion that prima facie the income assessable to tax has escaped assessment. As regards the objection against the approval of reasons for re-opening, we note that no such objection was raised before the authorities below. Thus it is clear that the approval was granted by due application of mind. Hence we do not find any infirmity in the approval. Therefore, we do not find any merit or substance in the objection of the assessee against the reopening of the assessment. Addition u/s 2(14) as Long Term Capital Gain - whether distance of the property in question was situated within the distance of 8 KM from the Jaipur Municipal Limits or beyond 8 KM? - Held that:- As per the language of section 2(14)(iii)(b) the distance has to be between the Municipal limits and the area in which the property is situated. Thus the distance is required to be considered from the Municipal limits and the area and not the particular property. Since the assessee has raised an issue which is factual in nature as to whether the area in which the property is situated within the distance of 8 KM from the Municipal limits of Jaipur or beyond it as on 6th January, 1994, therefore, the same is required to be verified at the level of the AO by conducting a proper enquiry. Accordingly having regard to the facts and circumstances, we set aside this issue to the record of the AO for consideration and deciding the same afresh in the light of above observations.

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• 2018 (5) TMI 1575
  Penalty levied u/s 271(1)(c) - unexplained cash credits u/s 68, 69 and 69C - validity of notice - absence of specific charge - Held that:- As decided in Sachin Arora vs. ITO [2018 (3) TMI 1026 - ITAT AGRA] the notice u/s 274 is a mandatory statutory notice without which, the initiation of penalty proceedings would be nugatory, nay, non est in the eye of the law. The argument of the Department that where initiation of penalty in the Assessment Order, the levy in the penalty order and the confirmation of such penalty in the first appellate order are on one and the same charge, the contents of the notice u/s 274 are of no effect, the assessee having been duly apprised of the specific charge against them, is not acceptable in law. The notices are nebulous and, therefore, they are not valid in law - Decided in favour of assessee.

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• 2018 (5) TMI 1574
  Disallowance made on account of management training expenses paid to MBA Graduates - allowable busniss expenditure - Held that:- Once profit/income is determined, it is immaterial whether that income is offered for tax under the head "Income from business" or "Income from other sources". As held in the case of United Commercial Bank Ltd. v. CIT [1957 (5) TMI 11 - SUPREME COURT] held that the business income is broken up under different heads only for the purpose of computation of the total income; by that break up the income does not cease to be the income of the business, the different heads of income being only the classification prescribed by the Act for computation of income. The genuineness of impugned expenditure was not in doubt. The expenditure incurred wholly and exclusively for the purpose of business was allowable. Therefore, the assessee was entitled to deduction of salary expenses in question. Disallowance u/s 43B - service tax liability - Held that:- Since these fees were not received by the assessee, naturally service tax liability also did not accrue as per the provision of section 6 of the service tax act hence not disallowable under section 43 B of the Act. Even otherwise disallowance under Section 43B was not warranted in this case, as Service Tax was not claimed as an expenditure, neither it stood debited to the P&L Account by the assessee

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• 2018 (5) TMI 1573
  Disallowance of Voluntary Retirement Scheme (“VRS”) retrenchment compensation - claim under section 35DDA denied - allowable busniss expenses - closure of unit - Held that:- In order to save future losses, Aurangabad unit was closed down by the assessee-company. The closure is approved by the Board of Directors and there was an Agreement executed between the Worker’s Union and the Assessee-Company for retrenchment of its employees on account of closure of the Aurangabad factory. These facts have not been rebutted by the Revenue. Amount in question have been paid by assessee-company on account of retrenchment compensation on closure of the Aurangabad unit of the assessee-company. The amount is thus paid for business purposes only and as such, it was an allowable deduction under section 37 of the I.T. Act. Provisions of Section 35DDA applied by the A.O. are not applicable in this case because assessee-company has not paid any service compensation under any scheme of voluntary retirement. In the absence of any contrary material brought on record, we are of the view that no interference is called for in the matter. - Decided against revenue.

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• 2018 (5) TMI 1572
  Validity of reopening of assessment - Non service of notice - personal liability of every legal representative (LR) for any tax payable by deceases assessee - Held that:- Initiation of reassessment proceedings, in the absence of service of notices under section 148 on all the LRs of the deceased Shanta Kapoor is bad in law, being void ab initio. Nothing further survives for adjudication, as such. - Decided in favour of assessee.

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• Customs

• 2018 (5) TMI 1570
  Rectification of mistake/Review of an order - Reconsideration of the facts/evidences which were neither raised before the authorities below nor argued before this Tribunal earlier - whether amounts to review or not? - power of Tribunal to review an order - Held that: - such an action on the part of the Tribunal would result into re-appreciation of the evidences and review of the order, a power not vested with the Tribunal. Also, the issues not raised during the course of argument cannot be allowed under the garb of rectification of the order. ROM application being devoid of merit, is dismissed.

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• 2018 (5) TMI 1569
  Validity of SCN - case of appellant is that the learned Commissioner has already taken a view about the applicability of issue of jurisdiction, therefore, proceedings further in the matter would cause prejudice to their interest - Held that: - the adjudicating authority has not expressed any view on sustainability of the show-cause notice, only he has allowed another opportunity to the appellant to appear before him on 15.3.2017 and prove their case on various issues including the issue related to jurisdiction raised/ which was not raised in the reply but raised subsequently through letter dated 13.2.2017 - there are no substance in the apprehension of the appellant that the learned Commissioner has already taken view on the issue of jurisdiction and the request made in the letter of the appellant has not been considered by the learned Commissioner. Any direction to stall the proceeding, before the adjudicating authority, by setting aside the communication to appear for personal hearing, would not be appropriate and contrary to justice as the learned adjudicating authority is well within its jurisdiction and exercised the power to complete the adjudication proceeding - appeal dismissed.

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• 2018 (5) TMI 1568
  Jurisdiction - power of DRI to issue SCN - competent authority or not? - Held that: - similar issue come up in the case of Shri Manhindera Dagur vs. CC, New Delhi (Import & General) [2017 (6) TMI 662 - CESTAT NEW DELHI], where it was held that the DRI officers were not proper officers in terms of section 2(34) of the Customs Act, 1962 - appeal allowed by way of remand.

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• 2018 (5) TMI 1567
  Interest on delayed refund - Section 27A of the Customs Act, 1962 - Held that: - the impugned order has recorded that when the refund claim was submitted by the appellant, it was not complete in all respects and further supporting documents were asked for by the Department and after receipt of all supporting documents, the refund has been sanctioned within a period of three months. So the liability of the Department to pay interest in terms of Section 27A is not attracted in this case - appeal dismissed - decided against appellant.

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• Corporate Laws

• 2018 (5) TMI 1571
  Fraudulent issue of 6,715 Nos. of equity shares - direction to company as well as the office of the ROC not to give effect in the Company’s records on fraudulent issue of shares and declare those shares as null and void - validity of Resolutions fraudulently passed by the respondent without the approval of the existing shareholders - regulation of the conduct of the Company’s affairs in future. Whether in seeking relief from this Tribunal, the petitioners came with clean hands? - Held that: - the respondents have produced before the Bench enough materials to show that they were employees of the company but, the company had dismissed them from services. Such dismissal order attains finality. Therefore, in my opinion, the petitioners were duty-bound to disclose such episodes in their petition, since they made claim to the office of the director/MD of the company. Therefore, non-disclosure of such information is certainly one more testimony of the petitioners not coming to the Bench with clean hands - in coming to the tribunal by the way of present petition seeking various reliefs, the petitioners, more particularly petitioner No. 1 and petitioner No.10 never came with clean hands. The infirmities, so pointed out by the respondents running in the petitioners’ case get slips to total insignificance when one compares such infirmities with the illegalities committed by the respondents in running the affairs of the company. Therefore, such infirmities on their own could cause no serious harm to the case of the petitioners. However, most of the decisions, relied on from the side of respondents, could hardly advance the cause which respondents tried to propound in the present proceeding case. Therefore, in the facts and circumstances of the present case, in my considered opinion, such decisions could not turn the table in favor of the respondents. The respondents are also guilty of coming to the court with dirty hands. However, when one compares the illegalities committed by the parties hereto, he would find that the hands of the respondents are more soiled than that of the petitioners. The illegalities committed by the respondents were so huge and enormous that such illegalities reduced shareholders with 64% shareholding in the company to hopeless minority on 15.09.2010 and all these were done in complete disregard to the prescription of law as well as inviolable directions in MOA and AOA. Petition allowed.

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• Insolvency & Bankruptcy

• 2018 (5) TMI 1613
  Continued Failure to make payment for services received - Default in paying Ericsson to the services rendered in terms of Managed Services Agreement (MSA) dated 25.01.2013 - Whether the debt is in existence or not? - Held that: - Ericsson has stated that though the claim against these companies in its books showing more than what has been admitted by these Corporate Debtors, it has claimed only the amounts admitted by Reliance in the confirmation letter sent to the petitioner on 28.04.2017. Even thereafter also, there is not even a whisper from the Corporate Debtors side stating that the Corporate Debtors have dispute in respect to the debt amount claimed by Ericsson, or in respect to the quality of goods or services or in respect to breach of representation or warranty, in this background, the only inference that could be drawn is that debt is in existence as on the date of filing these Company Petitions. Whether occurrence of default is there or not? - Held that: - the basic document for commencement of jural relationship is MSA, in that MSA itself there is a clause (24.1) saying that any alteration or modification to MSA will arise only when a new instrument has been entered into between the parties. Since no such instrument has been executed, it can never be called as novation. Moreover, mere assurance or promise of clearing liability by one party to other party can never become a novation, therefore, this novation argument propounded by the counsel of Corporate Debtors is no doubt novation but bereft of any merit - the default in making repayment has remained the same till date as before, therefore, this Bench hereby holds that Ericsson has proved that not only debt is in existence but also the default. Whether any dispute is in existence as on the date of receipt of section 8 notice by these Corporate Debtors? - Held that: - there are two issues, one is the claim made by the Ericsson against the corporate debtors, another is a dispute before Arbitral Tribunal in respect to termination of MSA. Termination of MSA is subsequent to receipt of section 8 notice, the cause of action for filing Insolvency Bankruptcy cases and the cause of action for invoking arbitration are distinct and separate, the corporate debtor counsel has tried to impress upon this Bench the cause of action for these two disputes are one and the same. Factually it is incorrect because these corporate debtors have never ever disputed the claim made by Ericsson, the only grievance of the corporate debtors is the termination notice given by Ericsson to these corporate debtors saying that Ericsson would not be in a position to further provide any services to the corporate debtors under the MSA because the corporate debtors continuously failed to pay for the services rendered by Ericsson. Whether these petitions are complete as envisaged u/s 9 of IBC or not? - Held that: - it is very clear that if at all secured creditors want to proceed in accordance with law either by initiation of SARFAESI proceedings or by IBC proceeding, they are at liberty to proceed, but having monetisation process through JLF is not binding upon the persons other than members of JLF. Moreover, it is an out and out sale by RCom and its group companies to RJio by bidding or may be by a sale, but what right this applicant has to say that no orders should be passed on the Company Petitions filed by Ericsson i.e. Operational Creditor. When it has been envisaged in the Code as well as held by Hon ble NCLAT and Hon ble Supreme Court stating that the non-obstante clause present in section 238 of the Code governs all other proceedings which are inconsistent with the proceedings pending under IBC - there is no merit in the application moved by SBI, as to the order of Hon ble Supreme Court, SBI is only given liberty to proceed in accordance with law, not to obstruct the proceeding initiated in accordance with law. Henceforth, the contention of this counsel on behalf of this applicant is bereft of any merit; therefore, this application is hereby dismissed without cost. Petition disposed off.

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• Service Tax

• 2018 (5) TMI 1566
  Rebate claims - service tax and education cess paid on input services which are said to have been used in providing the ITSS - N/N. 12/2005-ST dt. 01/01/2005 under Rule 5 of Export of Service Rules, 2005 - rejection on the ground that the appellants have not complied with the conditions as prescribed in notification - Held that: - though the appellant has submitted that they in fact wanted to file the refund claims under Notification No.5/2006 but inadvertently they have used the wrong form of rebate. But this submission is not correct and the original order as well as the first appellate order in the first round of litigation has also considered it as a rebate claim. It is not permitted to treat the rebate claim as refund claim under Rule 5 of CENVAT Credit Rules read with N/N. 5/2006 - in view of the amendment carried out by Finance Act, 2015 dt. 14/05/2015 vide which the jurisdiction to entertain such appeal has been ousted. The present appeals are not maintainable before this Tribunal and the appeal lies before the Revisionary Authority in accordance with the provisions of Section 35EE of the Central Excise Act, 1944 - appeal dismissed being not maintainable.

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• 2018 (5) TMI 1565
  Liability of Interest and penalty - pursuant to the retrospective validation of levy of service tax on renting of immovable property by enactment of Section 77 of the Finance Act, 2010 - Held that: - the issue of liability of interest and penalty before 8 5.2010, on the service tax paid pursuant to the validating provision Sec. 77 of Finance Act, 2010 validating retrospectively levy of service tax on Renting of Immovable Property service has been considered by this Tribunal in D. S. Narayana & Company Pvt, Ltd's case [2017 (4) TMI 897 - CESTAT HYDERABAD], where it was held that The appellant is not liable to pay interest prior to 08.05.2010 and also the penalty. The appellant has paid the interest on the entire demand after 08.05.2010 till payment. Imposition of penalty, on the appellant under 76, and 78 of Finance Act, 1994 and interest liability prior to 08.5.2010 is hereby set-aside - appeal disposed off.

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• 2018 (5) TMI 1564
  Condonation of delay of 214 days in filing the appeal - Held that: - the appellant has given plausible explanation for the delay. However, taking into consideration the fact that the appellant has not been sufficiently diligent to keep track of the matter pending before the authorities below, the appellant has to be put on terms - Cost of 7000/- imposed - application for COD allowed

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• Central Excise

• 2018 (5) TMI 1563
  Pre-deposit under amended Section 35F of Central Excise Act, 1944 - Area Based Exemption - commencement of Commercial production - case pf petitioner is that appeal of the petitioner should be admitted for consideration and heard, without insisting on pre-deposit in view of the earlier orders passed by the Tribunal which have attained finality, upholding stand and stance of the petitioner on claim of exemption under notification dated 10th June, 2003. Held that: - we are inclined to accept the prayer made by the petitioner. The petitioner has already succeeded before the Tribunal on the question of grant of exemption under notification dated 10th June, 2003 in other connected appeals. The said order of the Tribunal has attained finality as no appeal has been preferred by the Revenue before the Supreme Court. Pre-deposit in these circumstances would be a technicality and mere formality for the issue is settled by an earlier order in favour of the petitioner - further, the petitioner has expressed and shown financial hardship and distress by referring to balance sheet and profit and loss account for the year ending 31st March, 2017, which reflects accumulated losses of over 59,918,456.93. Tribunal will admit and hear the appeal preferred by the petitioner without insisting on pre-deposit of 7.5% of the tax and penalty - petition disposed off.

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• 2018 (5) TMI 1562
  100% EOU - Refund claim of cenvat credit - no physical exports - denial on the ground that they had cleared the vaccines under order of UNICEF but did not physically export the same out of India - Held that: - It is undisputed that appellant had participated in International Competitive Bidding for supply of vaccines to UNICEF, Denmark for immunisation programme in India and the said supplies were made to various locations in India as per the directions of UNICEF, Denmark and the said action was taken to save logistical expenses of movement of goods from India to Denmark and back. The lower authorities have rejected the refund claim on the ground that during the period in question, the definition of export under Rule 5 which was inserted by an explanation requires that there should be physical exports of the goods and nothing else - this is the law for the period in question in the appeal and has been correctly enunciated by the learned 1st Appellate Authority. Refund rightly rejected - appeal dismissed - decided against appellant.

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• 2018 (5) TMI 1561
  Refund claim - rejection on the ground that some input goods or services cannot be deemed to be used for providing the output services - Held that: - Rule 5 of CCR has a formula for sanction of refund of CENVAT credit when goods or services are exported. In this scheme, proportionate refund on the CENVAT credit availed by the appellant during the particular period on input services or goods is available whether or not these goods and services are related to the exported output goods or services. Once input credit is allowed, the exporter is entitled to refund of proportionate amount of CENVAT credit. If the export turnover of the exporter is say 40% of his total turnover during the period, 40% of the net CENVAT credit can be refunded to them. It does not matter which components of the CENVAT credit pertains to which input goods or services. Even if one input service is exclusively used for export and another used for their domestic transactions, the exporter is entitled only the proportionate amount is total CENVAT credit. If the assessee has, in fact availed CENVAT credit on input goods or services wrongly which needs to be recovered, then such amount should have been recovered through a notice under Rule 14 of CENVAT Credit Rules, 2004 and any other relevant provisions and following the appropriate procedure. Rule 5 of CENVAT credit Rules is not an instrument for the purpose. It is proper to remand the matter back to the Deputy Commissioner to decide the refund amount applying the formula given in Rule 5 of CENVAT Credit Rules.

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• 2018 (5) TMI 1560
  CENVAT credit - common input services - Manpower Supply Service, Legal Service, Professional Service, Transportation Service etc., and used the same for manufacturing as well as and trading activities - Rule 6(3) of the CCR, 2004 - Construction Service - Held that: - the imported raw materials received against advance license and had been transferred to their other units, hence does not involve any but 'stock transfer' of goods, Therefore, it cannot be construed as trading sale. Consequently, Rule 6(3) of the CCR, 2004 is not applicable - credit allowed. CENVAT credit - 'Construction Service' used in the repair and maintenance work in the factory premises - Held that: - the issue is covered in the case of M/S ION EXCHANGE I LTD VERSUS COMMISSIONER OF CENTRAL EXCISE, CUSTOMS AND SERVICE TAX, SUARAT-II [2017 (12) TMI 151 - CESTAT AHMEDABAD], where it was held that After amendment to the definition of the input service, a clarification issued by the Board vide Circular No 943/4/2011-CX dt 29.4.2011 dt 29.4.2011 where-under regarding credit of service tax paid on construction service as an input service used in modernization, renovation or repair, it has been clarified that the said services being provided in the inclusive part of definition of input service are definitely eligible to credit - credit allowed. Appeal allowed - decided in favor of appellant.

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• 2018 (5) TMI 1559
  CENVAT credit - ‘Dry ice Vehicle’ falling under Chapter 8716/8701 of CETA, 1985 - credit availed in July/August 2015 on invoices issued during the period from 2009 to 2015 - Held that: - A plain reading of the definition of capital goods reveals that the goods should be used in the factory premises whereas in the present case, the motor vehicles are used by the appellant for delivering the finished goods to their customers, hence, cannot be said to be eligible to the credit of excise duty paid on such vehicles - the appellant has not rebutted the findings of the authorities below that on the disputed capital goods, they had availed the benefit of depreciation under Section 32 of the Income Tax Act, 1961 - credit not allowed - appeal dismissed - decided against appellant.

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• CST, VAT & Sales Tax

• 2018 (5) TMI 1612
  Condonation of delay in filing appeal - grievance of the petitioner in the writ petition concerns the delay on the part of the appellate authority in taking a decision on Exts.P3 and P4 appeals - Held that: - the writ petition is disposed of directing the appellate authority to pass orders on Exts.P5 and P6 applications preferred by the petitioner for condonation of delay in filing Exts.P3 and P4 appeals, within two months from the date of receipt of a copy of this judgment.

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• 2018 (5) TMI 1611
  Principles of Natural Justice - it was alleged that the petitioner has not produced documents evidencing despatch of goods along with the Form-F declarations as provided for under Section 6A of the Act - Held that: - In so far as the assessing authority has no case that the petitioner has not produced the Form-F declarations in respect of the transactions, when it was found that the petitioner has not produced the documents evidencing despatch of goods covered by the Form-F declarations, the assessing authority ought to have given an opportunity to the petitioner to produce the same, before completing the assessments on the basis that the petitioner has not produced the said documents. The writ petitions are vitiated for non-compliance of the principles of natural justice - the assessing authority is directed to complete the assessments of the petitioner afresh, after affording the petitioner an opportunity to produce the documents evidencing despatch of goods covered by the Form-F declarations produced by them - petition allowed by way of remand.

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• 2018 (5) TMI 1610
  Delay on the part of the appellate authority in disposing of Exts.P3 and P4 appeals - Held that: - In so far as the delay in filing the appeals viz. Exts.P3 and P4 are only 32 and 29 days respectively, the writ petition is disposed of directing the appellate authority to condone the delay in filing the appeals and pass orders on Exts.P7 and P8 stay petitions preferred by the petitioner in the appeals.

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• 2018 (5) TMI 1609
  Delay of 68 days in filing the appeal - Held that: - Since the delay in filing the appeal is only 68 days, having regard to the peculiar facts of this case, it is appropriate to dispose of the writ petition directing the appellate authority to condone the delay in filing the appeal and pass orders on the application for stay, within one month from the date of receipt of a copy of this judgment - petition disposed off.

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• 2018 (5) TMI 1608
  Stay application - proceedings have already been initiated for realisation of the amounts covered by the order impugned in the appeal - Held that: - the writ petition is disposed of directing the appellate authority to consider and pass orders on the application for stay preferred by the petitioner in the appeal, within one month from the date of receipt of a copy of the judgment.

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