TMI Tax Updates - e-Newsletter
June 11, 2012

Case Laws in this Newsletter:

Income Tax Customs Corporate Laws Service Tax Central Excise Wealth tax

Articles

1. INDIRECT TAX OMBUDSMAN SCHEME – An Overview

   By: Dr. Sanjiv Agarwal

News

1. Relocation to India - Impact of transaction entered before relocation.

2. Union Finance Minister to Inaugurate the Annual Conference of Chief Commissioners and Directors General of Income Tax.

3. Anand Sharma Addresses National Seminar on Foreign Trade Policy.

4. Exchange Rates Relating to Imported and Export Goods Notified.

Notifications

Companies Law

1. F.NO. 1/1/2011-CL-V - dated 5-6-2012 - Co. Law

Form DIN 1 amended.

Customs

2. 32/2012 - dated 7-6-2012 - ADD

Seeks to levy provisional anti-dumping duty on import of Plain Gypsum Plaster Boards of all thicknesses and dimensions, originating in or exported from China PR,Indonesia, Thailand, and UAE.

3. F.No.437/64/2010-Cus. IV - dated 7-6-2012 - Cus (NT)

Appointment of Common Adjudicating Authority in respect of M/s Steel Exchange India Limited, Visakhapatnam, M/s Rashtriya Ispat Nigam Limited, Visakhapatnam and M/s Gangadhara Steels Private Limited, Visakhapatnam.

4. F.No. 437/28/2012-Cus. IV - dated 7-6-2012 - Cus (NT)

Appointment of Common Adjudicating Authority in respect of M/s Ratnamani Metals & Tubes Limited, Ahmedabad and others.

5. F.No. 437/27/2012-Cus. IV - dated 7-6-2012 - Cus (NT)

Appointment of Common Adjudicating Authority in respect of Shri Gopal Agarwal & Others by the Additional Director General, Directorate of Revenue Intelligence, New Delhi.

6. F.No. 437/26/2012-Cus. IV - dated 7-6-2012 - Cus (NT)

Appointment of Common Adjudicating Authority in respect of M/s Welspun Corporation Limited (formerly M/s JSW Steel Limited, Mumbai and others.

7. 49/2012 - dated 7-6-2012 - Cus (NT)

Rate of exchange of conversion of each of the foreign currency with effect from 8th June, 2012.

8. 48/2012 - dated 7-6-2012 - Cus (NT)

Amends Notification No. 36/2001-Customs(N.T) - Palm oil, Palmolein, Soyabean Oil (Crude) and Brass Scrap (all grades) - Traiff Values.

DGFT

9. 02 (RE – 2012)/2009-2014 - dated 8-6-2012 - FTP

Amendment in policy for export of Skimmed Milk Powders.

Circulars / Instructions / Orders

Service Tax

1. 09 - dated 11-5-2012

Designation of CPIO in Service tax Commissionerate, New Delhi under RTI Act, 2005.

2. 07/ST/2012 - dated 25-4-2012

Procedure & documents required in respect of Single/Centralised Registration under Rule 4 of Service Tax Rules,1994

3. 06/ST/2011 - dated 18-4-2012

Clarification on Point of Taxtion Rules, -regarding.

4. 05/ST/2012 - dated 16-4-2012

Meaning of the expression ‘gross amount’ appearing in Rule 3(1) of the Works Contract (Composition Scheme for payment of Service Tax) Rules, 2007, as it stood prior to 07th day of July 2009 – regarding.

FEMA

5. 132 - dated 8-6-2012

Money Transfer Service Scheme.

DGFT

6. 04 (RE-2012)/2009-14 - dated 8-6-2012

Amendments in the Vishesh Krishi and Gram Udyog Yojana (VKGUY) of Chapter 3 of Foreign Trade Policy 2009-14 - Appendix 37A of Handbook of Procedure (Vol. I).

Companies Law

7. 13/2012 - dated 6-6-2012

Extension of time in Filing Annual Return by Limited LiabilityPartnerships.

Highlights / Catch Notes

Income Tax

• India-Singapore DTAC: Business Needs Local Entity for Permanent Establishment Status in India.

  Case-Laws - AAR : DTAC between India and Singapore - permanent establishment - When a business cannot be carried on exclusively in so far as it relates to customers in India without intervention of another entity, a subsidiary, normally that entity must be deemed to be the establishment of the group in that particular country. - AAR
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• India-France DTAA: Consortium Contract Income Non-Divisible, Fully Taxable under Income-tax Act and Double Taxation Avoidance Convention.

  Case-Laws - AAR : DTAA between India and France - Contract the Consortium of which the applicant is a member, cannot be split - income from is taxable as a whole both under both Income-tax Act and under the Double Taxation Avoidance Convention - AAR
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• Income Tax Act: Section 40A(3) Amendment on Payment Fragmentation Not Retrospective, Excludes Pre-2009 Assessment Years.

  Case-Laws - HC : Disallow the benefits of section 40A(3),(3A) - fragmented payments made in a day more than Rs. 20,000 – in the year 2009, the Parliament had amended the provision and added word “aggregate” in the section 40(3) - Since the benefit of the amended provision was not available during the assessment year and is not retrospective in nature no point of disallowance - HC
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• Reassessment Violated Mandatory Income Tax Provisions; Sections 139 and 144 Ignored, Cannot Be Fixed by Section 292B.

  Case-Laws - AT : Reassessment - all the provisions of the income-tax that is applicable to the regular assessments that is subsequent to section 139 including that laid down by 144 has to be followed. - It has not been followed and this is clear violation of the mandatory requirement. - Violation of mandatory requirement cannot be cured by taking the shelter u/s.292B - AT
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• High Court Affirms ITAT Ruling: Items Under Rs. 5000 Get 100% Depreciation, Not 25%, as Separate Units.

  Case-Laws - HC : Whether ITAT is legally correct in holding that each item below Rs.5000/- is a self unit and, therefore, the depreciation @ 100% is allowable in place of 25%, ignoring the fact that these items are parts of a bigger composite unit where all expenditure to bring the assets into working conditions is to be included in determining the actual cost of fixed asset for the purpose of grant of depreciation - held yes - HC
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• Assessee in Default for Not Deducting TDS on Security Services; Not Technical u/s 9(1) Explanation 2.

  Case-Laws - AT : Non deduction of TDS - Assessee in default - Technical service - Circular No. 715 dated 8.8.1995 - the services provided by security personal under a contract with the agency cannot be categorized as technical service unless the provisions of Clause (vii) to Explanation 2 to Section 9(1) are fulfilled - AT
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• Converting a partnership into a company may trigger tax implications, but exemptions exist u/s 47A and 47(xiii).

  Case-Laws - AT : Capital gains - Conversion of partnership firm into company - exemption - conversion of balance in capital account of a partner into loan - transfer - Section 47A r.w.s section 47(xiii) - AT
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Customs

• Proposed Anti-Dumping Duty on Gypsum Plaster Boards from China, Indonesia, Thailand, and UAE to Protect Local Industry.

  Notifications : Seeks to levy provisional anti-dumping duty on import of Plain Gypsum Plaster Boards of all thicknesses and dimensions, originating in or exported from China PR,Indonesia, Thailand, and UAE. - Notification
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• New Foreign Currency Exchange Rates Effective June 8, 2012 for Customs and Tax Calculations.

  Notifications : Rate of exchange of conversion of each of the foreign currency with effect from 8th June, 2012. - Notification
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DGFT

• DGFT Amends Skimmed Milk Powder Export Policy, Impacting Trade Practices and Compliance for Exporters.

  Notifications : Amendment in policy for export of Skimmed Milk Powders. - Notification
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• VKGUY Scheme Amended: New Guidelines for Agricultural and Rural Industry Trade Incentives in Foreign Trade Policy 2009-14.

  Circulars : Amendments in the Vishesh Krishi and Gram Udyog Yojana (VKGUY) of Chapter 3 of Foreign Trade Policy 2009-14 - Appendix 37A of Handbook of Procedure (Vol. I). - Public Notice
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FEMA

• FEMA Circular introduces major changes to Money Transfer Service Scheme; impacts compliance and tax obligations for providers.

  Circulars : Money Transfer Service Scheme. - Circular
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Corporate Law

• Citizens must adhere to established procedures and fees for public information; RTI Act cannot be used to bypass them.

  Case-Laws - HC : RTI - a citizen cannot by-pass the procedure, and avoid paying the charges prescribed for accessing the information placed in the public domain, by resort to provisions of the RTI Act. - HC
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• Amendments to Form DIN 1 Announced: Key Changes to Enhance Compliance Under Companies Law

  Notifications : Form DIN 1 amended. - Notification
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• LLPs Get Extended Deadline for Annual Returns Filing Under Companies Law to Ease Compliance Pressures.

  Circulars : Extension of time in Filing Annual Return by Limited LiabilityPartnerships. - Circular
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Indian Laws

• New Exchange Rates for Imports and Exports Announced, Impacting Valuation for Taxation and Customs in International Trade.

  News : Exchange Rates Relating to Imported and Export Goods Notified.
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Service Tax

• Service Tax Exemption for Foreign Exchange Commissions Received Up to July 2004 Clarified.

  Case-Laws - AT : Commission received from an up country person - receipt in foreign exchange on 28.05.2004 - up to July 2004, any amount received, which is as a commission either in Indian rupees or in foreign exchange, was exempted from the levy of service tax. - AT
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• Commission from Print Media Not Taxable as Business Auxiliary Services, Decision Favors Assessee.

  Case-Laws - AT : Taxability of commission received from the Print Media under the head business auxiliary services - Decided in favour of assessee. - AT
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• Refund Claim Approved: Chartered Accountant Eligible After Initial Rejection Due to Unjust Enrichment Concerns.

  Case-Laws - AT : Refund claim rejected on ground of unjust enrichment - Practising chartered account - amount was not collected from the customers. - appellant is eligible for the refund claimed - AT
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• Tribunal to Review Charges and Taxable Services in Adjudication Order for CHA Services and Expense Reimbursement.

  Case-Laws - HC : Gross value of taxable services - CHA service - Reimbursement of expenses - When detailed adjudication order is challenged before the Tribunal wherein every receipt and expenditure are considered in assessment, it was the duty of the Tribunal to consider in detail the nature of charges collected by the assessee and to see whether those are for taxable services rendered, and if so to sustain it. - HC
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• Deadline for Service Tax Refund Claims on Export Services from March-June 2008 Extended to December 31, 2008.

  Case-Laws - AT : Refund claims of service tax on specified taxable services used for exports of goods made in the quarter Mar-Jun 08 could be filed till 31st Dec 08 - AT
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• Appellants Must Pay Service Tax on Turnkey/EPC Contracts Executed After June 1, 2007, as Works Contract Services.

  Case-Laws - AT : Works Contract Service - Turnkey Contract - What matters is the fact that the contracts were executed by the appellants and payments received by them after 01/06/2007 and therefore they are liable to pay service tax on the taxable service tax under the head 'works contract service' on the turnkey/EPC contracts in question. - AT
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• Penalties Waived for Short Payment of Service Tax Due to Clerical Error Over Several Months.

  Case-Laws - AT : Short payment / delayed payment of service tax - The clerical errors which crept in a few months has resulted in a short-payment - Penalty waived - AT
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Central Excise

• Aviation Turbine Fuel on International Flights May Be Classified as Exports, Affecting Tax Exemption Status.

  Case-Laws - AT : ATF loaded in international flights, may qualify as exports. - AT
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• Additional Commissioner's Authority in Cenvat Credit Refund Adjudication u/r 5 Explained in Central Excise Context.

  Case-Laws - AT : Refund of Cenvat credit - Rule 5 – Power of Additional Commissioner to adjudicate refund claim - AT
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• CBEC Circulars Binding on Department, Cannot Be Contested Even If Inconsistent With Law Provisions.

  Case-Laws - AT : Circulars issued by the CBEC are binding on the department and the department is precluded from challenging the correctness of the circulars even on the basis that the same is inconsistent with the statutory provision - AT
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Case Laws:

• Income Tax

• 2012 (6) TMI 187
  DTAC between India and Singapore - permanent establishment - applicant (Singapore Company) being part of Aramex group of companies who is in the business of international express, entered into an agreement dated 1.4.2010 with AIPL(Indian subsidiary of Aramex International Ltd ) - key features of the agreement are that the applicant appointed APIL as a non-exclusive service provider and APIL undertakes the international express business of the applicant - contract on principal to principal basis Held that:- Aramex group cannot successfully conduct its business of transporting and delivering articles from and in India without AIPL performing its role in India. When a business cannot be carried on exclusively in so far as it relates to customers in India without intervention of another entity, a subsidiary, normally that entity must be deemed to be the establishment of the group in that particular country. In a case where a 100% subsidiary is created for the purpose of attending to the business of the group in a particular country, here, in India, that Indian subsidiary must be taken to be a permanent establishment of the group in India. AIPL may have an independent existence as a subsidiary, however, authority over it of the principal, vertical or persuasive, cannot be in doubt. Therefore, there exists a permanent establishment of the applicant in India in connection with its international express business under the DTAC between India and Singapore and receipts by the applicant from outbound and inbound consignments attributable to the permanent establishment in India is taxable in India. Whether the transaction between the applicant and AIPL as per agreement dated 1.4.2010 is on arms-length basis has to be verified to determine whether any income can still be attributed to the permanent establishment in India. Receipts by the applicant from AIPL would be subject to withholding tax under Section 195 of the Income-tax Act.

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• 2012 (6) TMI 186
  DTAA between India and France - Consortium Contract - taxability of amount receivable under project by appellant (foreign company) - contract awarded by Bangalore Metro Rail Corporation Limited to implement the design, manufacture, supply, installation, testing and commissioning of signaling/ train-control and communication system – assessee contended it to be divisible, off shore contract of sale and services - Held that:- Purpose for which the tender was invited by BMRC was for installing the signaling and communication system for the metro rail. It was not for supply of offshore equipments independently of the installation and commissioning. Nor was it for independent installation and commissioning, divorced from the design and supply of the equipments necessary. The consortium parties agreed to be jointly and severally liable to BMRC for the performance of all obligations under the contract. Such a contract has necessarily to be read as a whole and is not capable of being split up. Status as AOP - The contract was for performing the entire work at the joint responsibility of the four Members of the Consortium who came together to perform the contract. Members of the Consortium were all in business and they came together in pursuance of an intention to promote their businesses. There was a common purpose and there was concerted action. Thus, applicant, along-with the other members of the Consortium, formed an Association of Persons liable to be taxed as such. Hence, Contract the Consortium of which the applicant is a member, cannot be split up to treat a part of it as confined to offshore supply of equipment not capable of being taxed in India, and that the income from it is taxable as a whole both under both Income-tax Act and under the Double Taxation Avoidance Convention relied upon.

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• 2012 (6) TMI 185
  Levy of interest on non deduction of TDS - payment of Tax by the deductee - Circular No 8/2009 issued by the Board on 24 November, 2009 - held that:- The grievance is in respect of the said Circular instead of calculating the interest till the date of payment of the tax by the deductees, the interest is calculated up-to-the due date of filling of return. In fact this Court had an occasion to consider this question in the case of SOLAR AUTOMOBILES INDIA (P) LTD., Vs DEPUTY COMMISSIONER OF INCOME TAX [2011 (9) TMI 637 (HC)] - payment of interest under the Act is compensatory in nature. - The authorities shall re-do the exercise of calculating the interest and thereafter issue a fresh demand if they choose to recover the same.

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• 2012 (6) TMI 184
  Manner of determination of capital gain on sale of land and building - scope of the term 'May' - assessee contested that Revenue adopted the Stamp duty value of land and building as The total sale consideration without referring the matter to the Valuation Officer – Held that:- In terms of Sec 50C(2)(a) where an assessee claims before the AO that the value adopted or assessed by the Stamp valuation authority under sub-section (1) exceeds the fair market value of the property as on the date of transfer, then the Assessing Officer may refer valuation of the capital asset to the Valuation Officer - it is evident that the assessee had claimed in the return of income itself that the value adopted by the Stamp valuation authority exceeded the fair market value as on the date of transfer as provided in section 50C(2)(a) of the Act - notwithstanding the presence of the expression "may" in section 50C(2)(a), Assessing Officer ought to have referred the matter to the Valuation Officer instead of straightaway deeming the value adopted by the Stamp valuation authority as the full value of consideration – in favour of assessee. Provision for leave encashment – ITA held that the provision for leave encashment of could not be reduced from "book profits" while computing tax liability under section 115JB as while preparing such Profit & Loss account, the assessee company did not enter such amount in it and instead, the same formed a part of the Notes forming part of the accounts annexed to its annual accounts – Held that:- On a conjoint reading of sub-sections (2),(3A) of section 211 and Part II of Schedule VI to the Companies Act, 1956 and the Accounting Standard 15 once it is clear that the information towards incremental liability of leave encashment which has not been provided in the Profit & Loss account is otherwise disclosed in the Notes to the accounts, it would clearly fall within the ambit of Explanation 1 to the second Proviso to section 115JB of the Act which defines "book profits" to mean "net profit" as "shown" in the Profit & Loss account for the relevant previous year prepared under sub-section (2) of section 115JB - in favour of assessee. Charging of interest under sections 234B and 234C - the appellant contested that the total income was computed under section 115JB of the Act and in such a situation interest under sections 234B and 234C are not leviable – Held that:- As decided in Jt. CIT v Rolta India Ltd[2011 (1) TMI 5 (SC) ]held that Interest under Sections 234B and 234C shall be payable on failure to pay advance tax in respect of tax payable under Section 115JA/115JB – against assessee. Deletion of the addition of bad debts – Held that:- as assessee explained that the amount in question represented cost of corrugated boxes charged by the assessee to client to whom certain goods were sold and he did not receive this amount from the said concern, the same was claimed as bad debt in the current year - since the cost of boxes as charged to client constituted a part of income of the assessee company for financial year 2000-01, the condition for claiming bad debt had been fulfilled - the reason cited by the Assessing Officer for making the disallowance that the amount was in the nature of reimbursement which had not been included in the income of the assessee for any previous year, was not factually correct – against revenue.

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• 2012 (6) TMI 183
  Disallow the benefits of section 40A(3),(3A) - fragmented payments made in a day more than Rs. 20,000 – Assessee is the liquor contractor – Held that:- Expenditure incurred by assessee though payment is not exceeding Rs. 20,000 but multiple or fragmented payment is made in a day or short span of time more than Rs 20,000 - the interpretation made of the fact that in the year 2009, the Parliament had amended the provision and added word “aggregate” in the section 40(3) - Since the benefit of the amended provision was not available during the assessment year and is not retrospective in nature no point of disallowance – in favour of assessee.

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• 2012 (6) TMI 182
  Setting off the claim of brought forward speculation loss against the speculative income - AO rejected the claim of assessee on the ground that such a claim was not made in the return of income – Held that:- AO has not assigned any reason for not granting the set off of income against brought forward losses - simply observing that assessee has not made this claim in the original return filed by him cannot disallow setoff as this income was duly declared by him but under a different head – in favour of assessee. Short term capital gain disclosed by the assessee relates to those transactions where assessee has taken delivery of the shares submitting all the details before the AO and if the revenue wants to tax these amounts carried on sale of shares during this year and shown as short term capital, as business income then revenue has to allow the deduction in respect of STT paid by the assessee

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• 2012 (6) TMI 181
  Whether Tribunal was justified in law in cancelling the penalty u/s 271(1)(c) without appreciating that the surrender of income on account of bogus gift by the assessee partly by filing a revised return and partly by surrender before the Ld. CIT(A) was not voluntary but was only after the scam of giving and accepting bogus gifts was detected by the Investigation Wing of the Department - Held that:- assessee-respondent had produced Smt. Usha Jain. She accepted having made a gift to the assessee-respondent and proved the source of the gift by furnishing statement of her saving bank account. assessee is not a person who has failed to offer an explanation or the explanation offered by her was found to be false or that she was unable to substantiate the explanation or that the transactions were not bona fide so as to attract the deeming provision contained in Explanation 1(B) to Section 271(1)(c) of the Act. tribunal has come to a conclusion and recorded a finding that there is no primary evidence to establish that the assessee has concealed her income or furnished inaccurate particular, no exception to the same can be taken. it cannot be held that the surrender/disclosure on the part of the assessee-respondent was not voluntarily. - Decided in favour of the assessee-respondent and against the revenue.

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• 2012 (6) TMI 180
  Reassessment u/s 147/148 read with section 143(3) - Held that:- all the provisions of the income-tax that is applicable to the regular assessments that is subsequent to section 139 including that laid down by 144 has to be followed. - It has not been followed and this is clear violation of the mandatory requirement. - Violation of mandatory requirement cannot be cured by taking the shelter u/s.292B There was a return in response to notice u/s.148 before the Assessing Officer and the Assessing Officer also had acted upon such return, it is crystal-clear legal position that the Assessing Officer ought to have issued notice u/s. 143(2) before passing the order u/s. 143(3) r.w.s. 147.

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• 2012 (6) TMI 179
  Valuation of stock – valuation of stock at less than average price - 50% stock of marble slabs and marble tiles was considered to be fresh and balance 50% was considered to be of inferior quality - Stock that was considered to be of inferior quality was valued at 25% rate of value applied for fresh stock. - This, according to assessing officer, was without any basis – AO rejected books of accounts and valued the stock at average rate – CIT reduced addition - revenue preferred appeal before ITAT and assessee filed cross-objections – Held that:- FIFO method of valuation can be followed only when items purchased/manufactured are identical in nature while in the case of assessee there is sizable difference in the valuation for block to block, slab to slab and tiles to tiles. - valuation method if adopted, it has to be followed consistently and entire stock could not be sold at same price and obviously at the time of sale when the buyer picks up the best available stock then the assessee is entitled to value part of the stock at reduced price particularly when it has also proved that the same was sold in immediate succeeding period at a lesser rate fixed from best of the stock. No question of law arise, appeal dismissed

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• 2012 (6) TMI 178
  Whether ITAT is legally correct in holding that each item below Rs.5000/- is a self unit and, therefore, the depreciation @ 100% is allowable in place of 25%, ignoring the fact that these items are parts of a bigger composite unit where all expenditure to bring the assets into working conditions is to be included in determining the actual cost of fixed asset for the purpose of grant of depreciation – Held that:- assessee purchased certain items which were debited to plant and machinery account as the cost of which was less than Rs. 5000/-each. - Assessing Officer disallowed the depreciation on such items on the ground that it is the composite value of all items is to be taken which will be determinative of the cost of assets and not the item wise cost of these items. assessment order even the Ld. Assessing Officer has mentioned that the assessee filed the details of the additions to the plant and machinery as these are below Rs. 5000/-. There is specific finding in the assessment order that as per the table shown in the (A) & (B) in the assessment order, the assessee is entitled to depreciation at 100%. - appeal filed by revenue dismissed.

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• 2012 (6) TMI 160
  Deffered revenue expenditure - The facts are that the expenditure has been incurred for promoting "Bacardi" brand which is not owned by the assessee but by the BIL. The advertisement on TV channels is also accessible to persons outside India who are not the customers of the assessee - the expenditure has been incurred for the purpose of the business of the assessee - assessee could have claimed the whole of the expenditure as revenue expenditure in this year as advertisement expenses are in the nature of revenue expenditure. However, it has claimed only 1/5th of the expenditure in this year and the balance expenditure has been claimed and allowed in assessment years 2004-05 to 2007-08 - Decided in favor of the assessee

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• 2012 (6) TMI 159
  Capital gains - Conversion of partnership firm into company - exemption - conversion of balance in capital account of a partner into loan - transfer - Section 47A r.w.s section 47(xiii) - Held that: merely because the partners credit balance lying as their capital was converted into their loan and which was repaid to them, it cannot be said that there was any undue benefit directly or indirectly to the partners - Decided in favor of the assessee

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• 2012 (6) TMI 158
  Addition u/s 14A - Rule 8D of I.T. Rules - Held that: assessee failed to discharge the onus placed upon them in establishing that the borrowed funds had indeed been utilized for the purpose of their business purposes nor the assessee proved that the aforesaid investment had been made in the shares out of their own interest free fund - Decided in favor of the revenue by way of remand to CIT(A) Regarding disallowance of excess depreciation on computer peripherals - in the case of Income Tax Officer vs. Samiran Majumdar (2005 -TMI - 60148 - ITAT CALCUTTA-B), held that the printer and scanner are integral part of the computer system and, therefore, entitled to higher rate of depreciation @ 60 per cent - Decided in favor of the assessee

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• 2012 (6) TMI 157
  Write back sundry credit balances - AO disallowed the credit as the assessee on the doubt on genuineness of the books of accounts prepared by the assessee - not even got its accounts audited - imposed the penalty – Held that:- A mere making of the claim which is not sustainable in law will not amount to furnishing inaccurate particulars regarding the income of the assessee - there is nothing to indicate incorrectness of particulars beyond unacceptability of the claim of deduction the impugned penalty to the extent relatable to write off of Rs. 60,54,678, cannot be sustained – in favour of assessee. Penalty in respect of long-term capital gain - assessee's contention that the returned loss was understated by Rs. 44,70,437 vis-a-vis the loss stated originally as this aspect of the matter has not been examined by any of the authorities below by way of a speaking order– Held that:- Matter deserves to be remitted to the file of the AO for fresh adjudication give a fair opportunity of hearing to the assessee

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• 2012 (6) TMI 156
  Deduction/s 80IB - Exclusion of DEPB benefit - this issue is now settled against the assessee by the decision of the Hon'ble jurisdictional High Court in the case of Commissioner of Income-tax v. Kalpataru Colours and Chemicals reported in (2010 -TMI - 76895 - BOMBAY HIGH COURT) - Decided against the assessee Regarding capitalization of trademark related expenses - ld AR of the assessee has pointed out that though this issue was considered by the Tribunal in assessee's own case for the AY 2004-05 and 2006-07; however, during the year under consideration, apart from the expenditure on registration of trademark, the assessee has also incurred the expenses regarding legal fee, processing fee for renewal of the existing trademark - the expenditure incurred, which is common for the year under consideration as well as in the AY 2006-07, the same is disallowed As regards the expenditure on renewal of the trademark is concerned, the same is required to be examined and if found that any part of the expenditure has been incurred by the assessee for renewal of the existing trademark or in connection with the existing trademark, then the same shall be allowed - Held that:Assessing Officer is directed to verify and decide this issue, after giving reasonable opportunity of being heard to the assessee

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• 2012 (6) TMI 155
  Whether the incomes made by the assessee in his own name and in the name of family member through the loan taken are to be assessed in the hands of the assessee, as individual or as HUF - Revenue appeal dismissed

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• 2012 (6) TMI 154
  Addition of Rs. 50,00,000 on account of share application money - Addition of Rs. 9,75,668, on account of interest earned on bank deposits - In the absence of confirmation and copy of application submitted for allotment of share, the nature of money received by the assessee cannot be held to be money received as share application money. In the present case there is complete absence of linkage of the amount credited by the assessee in its books of account and the amount having been paid by those creditors and, therefore, it cannot be said that the identity has been established vis-a-vis the deposits received by the assessee from those companies - The initial burden cannot be said to be discharged by simply placing on record the information of creditor which is obtained from the Registrar of Companies website - The amount has ultimately been credited by the assessee in its profit and loss account and it has neither returned to those parties nor is any share allotted to them - Held that: the contention that the assessee has a strained relationship with the creditors is wholly unsupported and cannot be accepted Regarding business income or other sources - assessee in the present case was running a hotel which was temporarily closed for the renovation - Held that: link between the amounts borrowed for purchase of capital asset and development of infrastructure before commencement of business and the amount invested in fixed deposit receipts is absent in the present case as no document whatsoever has been brought on record to show that whatever was invested in fixed deposit receipt was actually out of the amount received by the assessee for acquiring capital asset or for development of infrastructure - In the absence of such link, the amount has to be assessed separately as income from other sources - Decided against the assessee

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• 2012 (6) TMI 153
  Revision u/s 263 - ad-hoc disallowance - the assessee had shut down business more than five years back and also the fact that these workers such as fitters, carpenters, electricians, etc., are not stationery in a given address and pleadings of the assessee expressing her difficulties on the facts and circumstances of the case, to produce evidence, we are of the considered opinion that the interest of justice would be made if the disallowance is restricted to Rs. 2,00,000 on ad-hoc basis, as the fact that the assessee would have been incurred expenditure cannot be disputed - assessee's appeal is partly allowed.

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• 2012 (6) TMI 152
  Whether tribunal was legally justified in holding that the receipts in by way of interest were incidental to the main business of the assessee and the receipts are to be taken as capital receipts and not income of the assessee from any independent source despite assessee's failure to adduce any evidence in this regard – Held that:- in Tuticorin's case (1997 - TMI - 5601 - SUPREME Court - Income Tax) interest income is always of a revenue nature unless it is received by way of damages/compensation. questions as formulated in the present appeals are answered against the Revenue and in favour of the assessee; and the appeals are dismissed

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• Customs

• 2012 (6) TMI 177
  Differential duty imposed, calculated on the basis of higher density of the furnace oil declared and found - Revenue contended that if any difference in the density of the furnace oil which has been declared and as found in the test report is noticed, the assessee has received the higher quantity based on volume of the furnace oil and thus liable for differential duty - Held that:- Duty liability for the goods imported in a country will depend upon the invoice value at the time of importation of the goods, irrespective of their being shortage of quantity or otherwise, therefore, first appellate authority rightly waived differential duty imposed. See Mangalore Refinery & Petrochem Limited vs CCE (2006 (2) TMI 518 - CESTAT, BANGALORE)- Decided in favor of assessee

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• 2012 (6) TMI 151
  Claim of refund - notification No. 102/2007-Cus dated 14.9.2007 - learned C.S. attendance was ignored on behalf of the appellant without proper Power of Attorney executed by the company - Held that:- If the respondent satisfy the authority, there is no hurdle to grant refund, if permissible by law - Documentary evidences in support of satisfaction of the notification are to be filed before the adjudicating authority within 6 weeks of receipt of this order or reference to the documents already filed - since burden of proof lies on the respondent to show that conditions of notification are satisfied.

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• Corporate Laws

• 2012 (6) TMI 176
  Whether information in relation to a company can be sought from PIO of the ROC in garb of information sought under Right to information (RTI) Act - Held that:- Information which could be accessed by any person by resort to Section 610 of the Companies Act is information which is already placed in the public domain, and it cannot be said that the said information is "held by" or is "under the control" of the public authority. It was contended that such information, as has already been placed in the public domain, does not fall within the scope of the RTI Act and a citizen cannot by-pass the procedure, and avoid paying the charges prescribed for accessing the information placed in the public domain, by resort to provisions of the RTI Act. Present petition is allowed and impugned orders passed by Central Information Commissioner are thereby quashed.

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• 2012 (6) TMI 175
  Winding up – lease agreement - lessee had a right to sub-lease - petitioning creditor was of a lessee holding over under section 116 of the Transfer of Property Act - petitioning creditor was letting out a part of the properties to the respondent-company - respondent-company stopped paying rent after few months – Held that:- sub-lessee has long expired. Therefore, the position of the petitioning creditor from 1997 is very precarious. petitioning creditor did not have the title to enter into the agreement dated September 22, 2004, with the company. Winding up petition is not a legitimate means of seeking to enforce payment of a debt which is bona fide disputed by the company. Claim of the petitioning creditor is seriously disputed, cannot be entertained in this winding up application and is to be properly adjudged in an appropriate civil proceeding decided by trial on evidence. Winding up applications are dismissed

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• 2012 (6) TMI 150
  Winding up - petitioning creditor entered into these agreements as the owner of vessels. The Indian company was the charterer. It appears that the petitioning creditor became entitled to demurrage. The parties agreed to pay demurrage – but company did not paid full amount - company says that the power of attorney was required to be stamped under section 3(c) read with section 18 of the Indian Stamp Act, 1899. Since it was not properly stamped, the court should impound it under section 33 of the Act. Therefore, the winding up petition filed on the basis of such power of attorney was not admissible under section 35 of the said Act – Held that:- endorsement recognises it as stamp duty received by the State of Maharashtra. The payment is authenticated by a seal and the emblem of India. presumption of regularity of the Government actions unless the contrary is proved (see section 35 read with section 114 of the Indian Evidence Act, 1872). No evidence to rebut the presumption is on record. company is indebted to the petitioning creditor for a sum of US$ 300,000, company unable to pay said amount. winding up application is admitted.

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• 2012 (6) TMI 149
  Whether in a pending proceedings before the company court if any application is filed, does it require to be accompanied by a judge's summons as per rule 11(b) of the Companies (Court) Rules, 1959 and whether summons will have to be issued afresh to all the respondents/opponents on such application/s though respondent/s being same and having appeared, represented and contesting the proceedings – Held that:- in a situation where in a pending proceedings, the parties are served and were unrepresented and any application or IA is made seeking additional prayer or further orders against those persons, then notice has to go to those persons necessarily as otherwise it would be in violation of the principles of natural justice and no order can be passed behind their back or without hearing them. In such a situation, it would be incumbent upon the registry to insist on the applicant to furnish the requisite number of applications/affidavits along with the judge's summons and pre-paid registered post for issuing summons/notices on such application to those parties who had been served and had remained unrepresented, since any order that may be passed on such application is likely to affect them. Issuance of notice of the application/s by post or otherwise on those respondents, who are already represented and contesting the matter in a pending proceedings would not arise since they are already on record and represented by learned advocates and carrying out such an exercise would lead to prolonging the proceedings and results in delay and this is not the intention of the Legislature. The Registry is directed to comply with these directions henceforth

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• Service Tax

• 2012 (6) TMI 192
  Commission received from an up country person - receipt in foreign exchange on 28.05.2004 - Held that:- It is evident from advice received from BOB that foreign exchange has been converted and credited in the appellant's account in Indian currency. If the amount is received by the appellant from an up country person and has to be treated as commission, the moment it is received from convertible foreign exchange, it goes out of the purview of service tax liability during the relevant period in question. We find that up to July 2004, any amount received, which is as a commission either in Indian rupees or in foreign exchange, was exempted from the levy of service tax. Order set aside - Decided in favor of assessee.

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• 2012 (6) TMI 191
  Taxability of commission received from the Print Media under the head business auxiliary services - Held that:- In view of decision rendered in case of P.Gautam & Co. [2011 (9) TMI 392 (Tri)] it is held that the discounts/incentives received by the assessee from the print media will not be liable for service tax under the category of advertising agency services. If that be so, the said discounts/incentives itself cannot be considered for the purpose of taxability under the head business auxiliary services as the amounts which are received are in respect of the services provided under the category of advertising agency services and the amount are discounts and incentives and not as charges for services - Decided in favour of assessee.

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• 2012 (6) TMI 190
  Refund claim rejected on ground of unjust enrichment - Practising chartered account - Held that:- It is observed that appellant was rendering different types of services during the relevant period and wherever the service rendered was a taxable service, the invoice was showing the service tax separately and paying the same to the department. Where the appellant felt that the service was not liable to service tax, no service tax was collected. This itself is sufficient to show that the appellant had not collected the amount from the customers. Further, appellant has rightly shown it as an expenditure since the amount was not collected from the customers. Therefore, appellant is eligible for the refund claimed - Decided in favor of assessee.

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• 2012 (6) TMI 189
  Application for rectification - there is no statutory provision for filing application for rectification in case of service tax appeals - contention of the Ld. Counsel that since Section 74 of the Finance Act, 1994, provides for a two year period of limitation for rectification of an error by a Central Excise Officer, the same period of limitation should be applied in the case of orders passed by the Tribunal also, in the absence of any express statutory provision for filing application for rectification in orders in services tax appeals, ROM application is therefore dismissed

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• 2012 (6) TMI 188
  Waiver of pre-deposit - appellant requested for provisional assessment which was allowed by the department with effect from April 2005 - short payment of tax and the bank did not pay the interest on such short payment, interest has been demanded in the impugned orders – In respect of interest for December 2007, show cause notice was issued in December 2009 and in respect of demand of interest for March 2008, show cause notice was issued in February 2010 – Held that:- appellant had filed ST-3 returns during the period of demand and the details were actually shown therein, limitation under Section 11A would apply for demand under Central Excise, requirement of pre-deposit of interest demands in the impugned orders is waived and stay of recovery is granted

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• 2012 (6) TMI 170
  Gross value of taxable services - CHA service - Reimbursement of expenses - Whether Tribunal after issuing an open remand order leaving all issues open should not hold the earlier order against the Revenue - Tribunal just vacated the orders stating that the adjudication order itself contains inconsistent findings – Held that:- Tribunal's approach itself is not correct because the respondent assessee is engaged in two lines of business both are taxable services under the Finance Act. Therefore, essentially it is a matter of considering as to which are the activities or charges levied that do not constitute consideration for taxable service and only such of the items calls for elimination. When detailed adjudication order is challenged before the Tribunal wherein every receipt and expenditure are considered in assessment, it was the duty of the Tribunal to consider in detail the nature of charges collected by the assessee and to see whether those are for taxable services rendered, and if so to sustain it. Matter remanded to Tribunal. The Tribunal should address all the issues raised against fresh adjudication orders issued after remand.

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• 2012 (6) TMI 166
  Refund claims of Service Tax paid in respect of input services used in the manufacture of export goods, exported during period April 08 to June 08 - claim filed on 08.09.2008 - denial on ground that claim should have been filed within 60 days from the last date of the quarter i.e. before 30.08.2008 under Notification No.41/2007-ST - Held that:- Board s circular No.112/6/2009-ST, dt.12.3.2009 clarifies that consequent upon revision of limitation period, any refund claim that is filed within such revised limitation period would be admissible if it is otherwise in order. Therefore, refund claims of service tax on specified taxable services used for exports of goods made in the quarter Mar-Jun 08 could be filed till 31st Dec 08 - decided in favor of assessee.

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• 2012 (6) TMI 165
  Works Contract Service - Turnkey Contract - whether service provided to the Irrigation and CAD Department of Government of Andhra Pradesh are classifiable under the head "works contract service" - invocation of extended period of limitation - penalty imposable u/s 76, 77 & 78 - Held that:- Scope of work that was executed by Ramky-Murthy JV was a turnkey project in general and an engineering/procurement/construction/commissioning (EPC) project in particular, and what was executed by Maytas-NCC JV for the benefit of the State Government was an EPC project. Hence, services provided satisfy the statutory requirements of "works contract" defined u/s 65(105)(zzzza) inasmuch as (i) transfer of property in goods was involved in the transaction and VAT was paid on such goods, (ii) the contracts were for the purpose of carrying out irrigation projects of the Government through turnkey/EPC mode, and (iii) none of the contracts was in the excluded category of works contracts. Further, appellants have not been able to establish that any "dam" was built in execution of any of the EPC contracts and nothing in the text of the definition of "WC" indicate that turnkey/EPC projects for irrigation are excluded. Retrospective exemption notification - Notification No.41/2009 dated 23.10.2009 exempting works contract in respect of canals is not retrospectively effective. Furthermore, Circular dt. 24/05/2010 also stand unfavorable to appellant. - an exemption notification cannot be given retrospective effect unless it expressly provides for retrospective operation. Non-Taxability in view of introduction of 'Works Contract' w.e.f. 01.06.2007 - Held that:- What matters is the fact that the contracts were executed by the appellants and payments received by them after 01/06/2007 and therefore they are liable to pay service tax on the taxable service tax under the head 'works contract service' on the turnkey/EPC contracts in question. Benefit u/s 67(2) - Held that:- Benefit of Section 67(2) is liable to be granted to the assessees and accordingly the gross amount charged can be treated as cum-tax value and the service tax element can be deducted from it to arrive at the taxable value of works contract service. Deductions of retention money from gross amount charged - Held that:- Retention money was only a deferred payment and the appellants were entitled to receive the gross amount charged in the R.A. Bill. If that be so, there can be no valid claim for deduction of the retention money from the gross amount as rightly held by the adjudicating authority. CENvat credit - Held that:- No entitlement of CENVAT credit on inputs used as this benefit is barred under Rule 3(2) of the Works Contract (Composition Scheme) Rules, 2007. But there appears to be no embargo on taking CENVAT credit on capital goods or input services. Extended period of limitation - Held that:- Since, Ramky, the leading partner of the Ramky-Murthy JV, was registered with the Department under "WCS", filling ST-3 returns and paying service tax in respect of similar turnkey/EPC contracts after 01/06/2007. Hence, Ramky-Murthy JV cannot be assumed to have bona-fide belief that they were not aware of service tax liability under the head "WCS" in respect of the subject contracts - allegation of suppression of facts with intention to evade tax is sustainable - right invokation of extended period. Penalty u/s 78 - Held that:- Section 78 underwent an amendment w.e.f. 10/05/2008 and simultaneous penalty u/s 76 & 78 cannot be imposed. however in present case, since periods of dispute in these two appeals are partly beyond 10/05/2008, hence, matter needs to be examined fresh. Penalty imposed u/s 75, 77 and 76 is sustained.

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• 2012 (6) TMI 164
  Prayer in the application is to dispense with the pre-deposit of Service tax - “Commercial and Industrial Construction Services” and “Maintenance and Repair Services” - It was seen that during the course of audit that the appellants have provided services of construction of pipe lines running within the industrial and commercial establishment, during the period 10-9-2004 to 15-6-2005. However, they have not paid any Service tax on the same – Held that:- CBEC, vide its Circular No. 79/9/2004-S.T., dated 17-9-2004 has clarified that any pipe line other than those running within an industrial and commercial establishments such as factory, refinery and similar industrial establishments are long distance pipe lines. Thus, construction of pipelines running within such an industrial and commercial establishment is within the scope of services levy of Service tax with effect from 10-9-2004, appellants have not pleaded any financial hardship, applicant/appellants directed to deposit an amount of Rs. 35 Lakhs

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• 2012 (6) TMI 163
  Revisionary order - tax demand – Held that:- in the case of UOI v. Inani Carriers reported in 2009 (2008 - TMI - 32322 - RAJASTHAN HIGH COURT - Service Tax) , once the appellate power has been exercised, exercise of revisionary power is not acceptable to law on the same controversy

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• 2012 (6) TMI 162
  Waiver of penalty – short payment - assessee is a hotel run by the public sector undertaking. The clerical errors which crept in a few months has resulted in a short-payment - appellant promptly paid the service tax involved along with interest. Therefore he seeks waiver of penalty invoking the provisions of Section 80 of the Finance Act, 1994 – Held that:- sufficient cause has been shown for invoking the provisions of Section 80 of Finance Act, 1994. appeal is allowed. Penalty waived

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• Central Excise

• 2012 (6) TMI 174
  Plea for waiver of pre-deposit - Bank Guarantee worth Rs 2.71 lacs executed against the duty liability of approximately Rs 10.84 lacs - Held that:- Said amount is enough deposit to hear and dispose the appeal. Accordingly, application for waiver of the pre-deposit of the balance amounts involved is allowed and recovery thereof stayed till the disposal of appeal.

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• 2012 (6) TMI 173
  Whether clearances of aviation turbine fuel made during the period utilized in the flights which were on the international route can be considered as exported goods - Held that:- ATF loaded in international flights, may qualify as exports. Since the documents need to be gone into by the lower authorities to appreciate that clearances made during this period was in fact loaded into the flights which were operating on international route, we deem it fit and let the adjudicating authority to do the exercise. Matter remitted back to the adjudicating authority to reconsider the issue afresh.

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• 2012 (6) TMI 172
  Cenvat credit of the service tax paid on Rent-a-Cab service - Cabs utilised for the purpose of transportation of employees from various places to the place of work and vice-versa - Held that:- In case of CCE v. Stanzen Toyotetsu India (P.) Ltd.(2011 (4) TMI 201 (HC)), it has been held that any service used by the manufacturer whether directly or indirectly in or in relation to the manufacture of final products constitutes input service. The catering service, rent-a-cab and transportation services and the tax paid on the said services are stated as input services. Therefore, issue decided in favour of the assessee.

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• 2012 (6) TMI 171
  Demand imposed on ground that assessee has not reversed proportionate cenvat credit attributable to exempted goods cleared whereas assessee contended reversal of proportionate cenvat credit with interest attributable to the exempted goods cleared - period involved 2006-07 to 2007-08 - Held that:- If the assessee has paid amount of cenvat credit proportionate to the inputs attributable to the exempted goods cleared from the factory premises, that is sufficient for the purpose of the provisions of Rule 6 of Cenvat Credit Rules, 2004. In view of the retrospective amendments in the provisions of Rule 6, amount already reversed by the appellant as proportionate inputcenvat credit attributable to the exempted goods cleared from the factory premises, should be enough compliance of the law. Order set aside - Decided in favor of assessee

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• 2012 (6) TMI 169
  Refund – Cenvat credit – refund claims were sanctioned by Additional Commissioner of Central Excise - Revenue challenged the orders-in-original passed by the Additional Commissioner Power of Additional Commissioner - section 12E of the Central Excise Act, 1944 provides that a Central Excise officer may exercise the powers and discharge the duties conferred or imposed under this Act or any other Central Excise officer who is subordinate to him, but there should be justification for that – Held that:- Additional Commissioner not mentioned anywhere in the order that those orders are being passed by him in exercise of powers under section 12E of the Central Excise Act, 1944. Since under the statute powers of granting refund are with the Assistant Commissioner/Deputy Commissioner of Central Excise, passing of these order in original by the Additional Commissioner has rightly been held as unsustainable. Matter remanded back to the Assistant Commissioner/Deputy Commissioner for deciding the refund claims on merit under the provisions of Rule 5 of the CENVAT Credit Rules read with notification no. 5/2006-CE(NT) dated 14.03.2006 after giving opportunity of hearing to the appellant. The appeals are disposed of by way of remand.

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• 2012 (6) TMI 168
  Transaction value - inclusion of amount towards deferment of sales tax scheme – appellant opted an option to prematurely pay in place of the deferred tax amount, an amount equal to the net present value (NPV) of the deferred tax - department was of the view that the difference between the sales tax collected from the customers and the sales tax paid to the state authorities at NPV should be treated as an additional consideration received from the buyers of the goods and, therefore, they should form part of the transaction value – Held that:- Board vide Circular No.671/62/2002-CX dated 09/10/2002, inter alia, clarified that since the set-off scheme of sales tax does not change the rate of sales tax payable/chargeable on the finished goods, the set-off is not to be taken into account for calculating the amount of sales tax permissible as abatement for arriving at the assessable value u/s. 4. deduction towards sales tax is permissible based on the amount billed or charged from the customers in accordance with the law irrespective of the fact whether the amount is retained by the assessee or incentives are given by the State Government to the assessee in respect of the sales tax so collected. in the case of Paper Products Ltd., (1999 (8) TMI 70 (SC) ) circulars issued by the CBEC are binding on the department and the department is precluded from challenging the correctness of the circulars even on the basis that the same is inconsistent with the statutory provision

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• 2012 (6) TMI 148
  Clandestine removal - absence of corroborating evidence - Held that:- First appellate authority while setting aside the demands held that there was no corroborative evidences regarding the clandestine removal of the goods. Even today also, the Revenue is not in a position to putforth corroborative evidence as regards the clandestine removal of the goods, hence, we do not find any infirmity in the said findings - Appeal of Revenue stands rejected.

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• 2012 (6) TMI 147
  Reversal of CENVAT Credit on the goods cleared after availing the benefit of Notification No.30/2004-CE - refusal to give the copy of the report of Assistant Commissioner - Held that:- As the adjudicating authority relied on the report of the Assistant Commissioner that the appellant has not reversed the correct CENVAT attributable to the inputs utilized in goods wherein the benefit of Notification No.30/2004-CE has been availed it has not followed the principle of natural justice to do not give a copy of the report of jurisdictional Assistant Commissioner to the appellant on repeated request so that they can defend the case before him - remand the matter back to adjudicating authority directing to give a copy of report to all these appellants and decide the issue after getting representation/defence against said report from the assessee.

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• 2012 (6) TMI 146
  Penalty under Rule 25 of Central Excise Rules, 2002 - delay in payment of excise duty - CCE & C vs. Saurashtra Cement Ltd [2010 (9) TMI 422 (HC)]- Held that:- To resolve the controversy and to enable the appellant to have an opportunity to satisfy the adjudicating authority as to whether stringent financial condition was there the matter is remanded back to him for fair hearing and to pass a reasoned and speaking order.

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• 2012 (6) TMI 145
  Application for waiver of pre-deposit of duty,interest and penalty - demand is confirmed on the ground that the applicants are suppressing the value and quantity of the goods manufactured to evade payment of duty – Held that:- Merit in the contention of the applicant that the directions given by the Tribunal in the remand order directing that the documents asked for by the appellant shall be made available and the appellant shall file complete and proper reply to the various allegations were not complied with as the adjudicating authority on 23.3.2010 supplied copies of the documents except the document at serial No. 23 of Annexure E to the Show Cause Notice - as during the pendency of the present appeals the appellant has received all the documents the matter requires reconsideration by the adjudicating authority afresh - impugned order is set aside after waiving pre-deposit of the dues - in favour of assessee.

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• 2012 (6) TMI 144
  Confiscation of the goods and imposition of penalty – Held that:- Since Final Order of the Tribunal declares that said demand of the duty on 28,057 kgs of Aluminum Sections now stand set aside and as when there is no demand, the question of penalty under Rule 26 does not arise - the said rule demands imposition of penalty only when there is knowledge of the liability of confiscation of goods and the question of confiscation of goods arises only when there is liability and evasion of Central Excise duty on clearances of such goods which is not present in this case – in favour of assessee.

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• Wealth tax

• 2012 (6) TMI 167
  Assets under wealth tax - Assets was allotted to the assessee but was not transferred in favor of assessee during the period - Whether ITAT was right in holding that the land was occupied by the assessee itself, particularly when it had shown substantial amounts of rental income as derived from the leasing of sheds constructed on the land in question - Held that:- assessee, in the present case, was allotted the land by the State Government. It constructed shops thereupon and rented out the same and derived income therefrom. The sheds were therefore under the domain and control of the assessee. Even if legal ownership had not passed to the assessee the property in question belonged to it. The assessee was deriving rental income and collecting the same which itself shows that it was the assessee to whom the property belonged. assets in question should be deemed to belong to the assessee and these assets are liable to be included in the assets by the assessee. Clause (iii) of Section 2(ea) indicate that the house to be exempt must be in the occupation of the assessee for the purpose of any business or profession carried on by him. Keeping in view the language of the Section it cannot be said that the assessee was in possession through the tenants. Decided in favour of the Revenue and against the Assessee.

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