TMI Tax Updates - e-Newsletter
June 15, 2015

Case Laws in this Newsletter:

Income Tax Service Tax Central Excise CST, VAT & Sales Tax

Articles

1. Section -147 Reopening of Assessment / Reassessment

   By: CA ombir Singh Panwar

2. Director Report - An overview

   By: CA Akash Phophalia

3. Annual Returns - Companies Act, 2013

   By: CA Akash Phophalia

Notifications

Companies Law

1. F. No. 1/40/2013-CL-V - dated 12-6-2015 - Co. Law

The Companies (Cost Records and Audit) Amendment Rules, 2015 - Substitution of Forms CRA - 2 and CRA - 4

Circulars / Instructions / Orders

DGFT

1. 02/2015-20 - dated 12-6-2015

Clarification regarding clearance of goods after expiry of Nominated Agency Certificate - Eligibility need to be checked on the date of shipment/ dispatch of goods evidenced by Bills of lading, actual date of arrival of the consignment in India is irrelevant for this.

Companies Law

2. 08/2015 - dated 12-6-2015

Extension of time for filing of Notice of appointment of the Cost Auditor for the F.Y. 2015-16 in Form CRA-2 and filing of cost audit report to the Central Government for the F.Y. 2014-15 in form CRA-4 - Date extended upto 30th june, 2015 & 31st August, 2015 respectively.

Highlights / Catch Notes

Income Tax

• Section 271C Penalty: Failure to Deduct Tax at Source Leads to Penalties; Non-Payment After Deduction Can Lead to Prosecution.

  Case-Laws - HC : Penalty levied u/s 271C - failure to deduct tax at source should be made liable to liable to levy of penalty, while the second part of the default, i.e., failure to pay the tax deducted at source to the Govt. which is a more serious offence, should continue to attract prosecution - HC
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• Court Rules Family Shares Not Clubbed for Deemed Dividends Under Income Tax Act Section 2(22)(e.

  Case-Laws - AT : Deemed dividend u/s 2(22)(e) - holding or ownership of voting rights of the shares held by the family - inclusion/clubbing of beneficial ownership of family members with that of Shri Anand Prakash Srivastava is not mandated by the provisions of the Act and thus tantamount to reading a condition which is not there - no additions - AT
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• Penalty Orders u/ss 271D and 271E Barred by Limitation Due to Late Issuance Beyond September 30, 2010 Deadline.

  Case-Laws - AT : Penalty U/s 271D and 271E - period of limitation - violation of conditions of conditions of section 269SS - Cash receipts - it had to complete by 30th September, 2010 whereas actual penalty orders were passed on 30/3/2012 which got barred by limitation. - AT
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• Court Rules No Tax on Non-Accrued Income; Section 40A(2)(b) Not Applicable in Excess Interest Payment Case.

  Case-Laws - AT : Excess payment of interest to the sister concern - there was no provision in the Act to tax income which has not accrued and further it was not a case of Section 40A(2)(b). - AT
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• Trustees' Protest Participation Shouldn't Affect 80G Renewal; Protest Not Illegal or Anti-National.

  Case-Laws - AT : Application for renewal u/s.80G rejected - Merely because some of the trustees who were present or past nurses have participated in the protest conducted by the Nurses Federation, the same in our opinion cannot be treated as an agitation by the trust itself. Further such agitation has not been declared illegal or anti national - renewal of exemption u/s.80G(5) should not be denied - AT
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• Penalty for eTDS Filing Delay Canceled: Reasonable Cause Accepted u/s 273B, Overruling Section 272A(2)(k) Penalty.

  Case-Laws - AT : Delay in filing of of eTDS return - Penalty U/s.272A(2)(k) - There is reasonable cause for delay in filing ETDS return U/s 273B - levy of penalty cancelled - AT
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• Excess Provision in Section 80IA is Part of Profit, Not Separate Income, Allowing Eligible Deduction.

  Case-Laws - AT : Deduction u/s 80IA -`Excess provision written back’ - it cannot be characterized as anything other than part and parcel of profit derived from eligible enterprise. In reality, the excess provision written back is not an income in itself, but, a reduced amount of eligible deduction in the computation of profits derived from eligible enterprise - deduction allowed - AT
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• AO's Addition of Unpaid Excise Sales as Income Deemed Incorrect; Tax Additions Deleted.

  Case-Laws - AT : AO concluded that the alleged sales, on which the excise duty was allegedly not paid by the assessee, was income chargeable to income-tax, and has escaped the assessment under the Income Tax Act - Action of AO is not correct - additions made by AO deleted - AT
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• Franchisee hotel royalty income taxed at 15% under DTAA due to lack of specific payment agreement.

  Case-Laws - AT : Royalty income from franchisee hotels - there is no agreement in terms of which the assessee was paid royalty is legally and factually correct, and therefore, the beneficial rate of tax will not apply. - A.O. has rightly charged the tax rate of 15% as given in the DTAA instead of 11.33% - AT
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Central Excise

• CENVAT Credit Approved for Fuel in Electricity Generation Sent to Power Grid, Compliance with Rule 4(5)(a) Confirmed.

  Case-Laws - AT : CENVAT Credit - fuel used in the generation of electricity - Electricity sent for synchronization to power grid, would be treated as job worker. There is no dispute that the electricity was returned back to the Appellant s factory, and there is a substantial compliance with the provisions of Rule 4(5)(a) of the Rules - Credit allowed - AT
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• CENVAT Credit Valid for Defective Inputs in Watch Manufacturing and R&D Process; Modvat Credit Cannot Be Denied &D.

  Case-Laws - AT : CENVAT Credit - inputs were issued for manufacturing of watches and the same were found defective during the process of manufacture or during the course of Research and Development process which is integral part of the manufacturing process. - when float glass has been put to use and it was found defective, modvat credit cannot be denied. - AT
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• Installing a Digital Telephone Exchange Isn't Manufacturing: No New Commercial Identity or Goods Created.

  Case-Laws - AT : Manufacture - digital local telephone exchange - Whether assembly, installation and commissioning of switching system along with power plant, inverter etc. would amount to manufacture - Held No - on installation of a switching system, no new goods with distinct commercial identity and distinct characteristics or uses have emerged - AT
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Case Laws:

• Income Tax

• 2015 (6) TMI 399
  Penalty levied under Section 271C - tax was deducted at source and was remitted belatedly - Held that:- It is the admitted case of the parties that the tax was deducted at source and the same was remitted belatedly, though with interest. In such a case, the provisions of Section 271C are fully applicable. Insertion of a new Section 271C to provide for levy of penalty for failure to deduct tax at source. Under the old provisions of Chapter XXI of the Income Tax Act no penalty was provided for failure to deduct tax at source. This default, however, attracted prosecution under the provisions of Section 276B, which prescribed punishment for failure to deduct tax at source or after deducting, failure to pay the same to the Govt. It was decided that the first part of the default, i.e. failure to deduct tax at source should be made liable to liable to levy of penalty, while the second part of the default, i.e., failure to pay the tax deducted at source to the Govt. which is a more serious offence, should continue to attract prosecution. The Amending Act, 1987 has accordingly inserted a new section 271C to provide for imposition of penalty on any person who fails to deduct tax at source as required under the provisions of Chapter XVIIB of the Act. The penalty is of a sum equal to the amount of tax which should have been deducted at source. Reading of this paragraph also shows that the provisions thereof have no relevance in so far as the case of the appellant is concerned. The authorities were fully justified in levying penalty under Section 271C and in the facts and circumstances of the case. - Decided against assessee.

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• 2015 (6) TMI 398
  Revision u/s 263 - Held that:- Reading of the impugned order itself show that the Commissioner has passed the order on the issues specified finding that there was no application of mind by the Assessing Officer. In such circumstances, following judgment of this Court in Appollo Tyres Limited (2013 (10) TMI 1233 - KERALA HIGH COURT a), we confirm the order passed by the Tribunal confirming revision order of CIT(A) - Decided against revenue.

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• 2015 (6) TMI 397
  Deemed dividend u/s 2(22)(e) - holding or ownership of voting rights of the shares held by the family - FAA deleted addition - Held that:- AO is of the view that that whether a person has a substantial interest in the company or not, the holding of the family members including the APS is to be seen and clubbed together and as such the share holding receipts of 20% in all the companies or concerns, the provisions of section 2(22)(e) of the I.T. Act gets attracted. In the impugned order the Ld. First Appellate Authority held that there is nothing in section 2(22)(e) of the Act or section 2(32) of the Act so as to suggest that the holding or ownership of voting rights of the shares held by the family can be taken into consideration for the purposes of determining substantial shareholding of a person/shareholder. The words used are "such shareholder is a member or a partner and in which he has a substantial interest" as appearing in section 2(22)(e) of the Act and "a person who is the beneficial owner of the shares, not being shares entitled to a fixed rate of dividend whether with or without a right to participate in profits, carrying not less than 20% of the voting power" as appearing in section 2(32) of the Act. Thus it is the ownership of the shareholder alone in the company to which the loan/advance is made by the company, and not his or her relative or family members, which is the determinative factor. Accordingly, inclusion/clubbing of beneficial ownership of family members with that of Shri Anand Prakash Srivastava is not mandated by the provisions of the Act and thus tantamount to reading a condition which is not there. We find that Ld. CIT(A) has also held that the loan/advance given by the assessee company cannot be termed as having been made for and on behalf or for the individual benefit of APS, as envisaged by the provisions of section 2(22)(e) of the I.T. Act. The intention behind enacting the provisions of section 2(22)(e) is that closely held companies (i.e., companies in which public are not substantially interested), which are controlled by a group of members, even though the company has accumulated profits would not distribute such profit as dividend because if so distributed the dividend income would become tax-able in the hands of the shareholders. Instead of distributing accumulated profits as dividend, companies distribute them as loan or advances to shareholder or to concern in which such shareholders have substantial interest or make any payment on behalf of or for the individual benefit of such shareholder. In such an event, by the deeming provisions such payment by the company is treated as dividend. The intention behind the provisions of section 2(22)(e) is to tax dividend in the hands of shareholder. The deeming provisions as it applies to the case of loans or advances by a company to a concern in which its shareholder has substantial interest, is based on the presumption that the loan or advances would ultimately be made available to the shareholders of the company giving the loan or advance.d. First Appellate Authority has deleted the addition in dispute by respectfully following the judgment of the Hon'ble Supreme Court in the case of Nalin Behari Lall Singha (1969 (7) TMI 2 - SUPREME Court) and Bhaumik Colour (P.) Ltd. (2008 (11) TMI 273 - ITAT BOMBAY-E ), which does need any interference on our part, hence, we uphold the impugned order by dismissing the Appeal filed by the Revenue. - Decided against revenue.

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• 2015 (6) TMI 396
  Penalty U/s 271D and 271E - period of limitation - violation of conditions of conditions of section 269SS - Cash receipts - Held that:- For imposition penalty U/s 271D and 271E is covered U/s 275(1)(c) of the Act. As per Section 275(1)(c) of the Act, this order was to pass after the expiry of financial year, in which the proceeding, in the course of which action for imposition of penalty has been initiated, or completed, or within six months from the end of the month, in which action for imposition of penalty is initiated, whichever period expire later. The Assessing Officer initiated the penalty proceeding under both the Sections on 30/12/2009. As per this section, it had to complete by 30th September, 2010 whereas actual penalty orders were passed on 30/3/2012 which got barred by limitation. Accordingly, we delete the penalty imposed U/s 271D and 271E of the Act. On merit also, these cash receipts are not covered U/s 269SS of the Act as there was no loan or deposit envisaged U/s 269SS as these are the business transactions. The ld CIT(A) wrongly held on the basis of quantum appeal decided by the CIT(A) as well as the ITAT that these are the loan and deposit in cash as covered by Section 269SS of the Act. - Decided in favour of assessee.

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• 2015 (6) TMI 395
  Disallowance of expenditure towards purchase of software - Held that:- AO at least in the case of one of the software, viz., MPC 4 data preparation software has observed that it enhances the technical capacity of the computers. If that is the case, then it cannot be said that it brings in a radical change to the operations of assessee or part of the profit making apparatus. Further, though, AO has observed that software packages are going to give benefit to the assessee in the ensuing years, hence are of enduring nature, but he has not examined the exact life span of the software packages. Ld.CIT(A) has also not examined these aspects. In our view, without examining the nature of software purchased by applying the tests laid down by the Special Bench of ITAT, Delhi in case of Amway International Vs. DCIT (2008 (2) TMI 454 - ITAT DELHI-C ), it cannot be condusively said that expenditure incurred on software is capital in nature. As the departmental authorities have not done the aforesaid exercise, we are inclined to remit the matter back to the file of the AO for deciding afresh keeping in view the decision of the Special Bench of ITAT, Delhi referred to above. Needless to say AO must afford a reasonable opportunity of being heard to the assessee in the matter. - Decided in favour of assessee for statistical purposes. Disallowance of expenditure incurred on repairs and maintenance - Held that:- On examining the details of expenditure, we are of the view that expenditure incurred towards replacement of flooring cannot be considered to be a 'Capital Expenditure' as no new asset comes into existence as a result of such expenditure, rather, the expenditures incurred is more in the nature of maintenance of a capital asset. However, as far as false ceiling and partition charges are concerned, admitted fact is these were not existing earlier. Thus, the expenditure incurred by the assessee has brought into existence certain new assets. Therefore, the expenditure incurred being of enduring nature, it has to be treated as 'Capital Expenditure'. Similarly, the expenditure of Rs. 16,100/- has not been explained by the assessee with proper evidence. Therefore, on over all consideration of facts and materials on record, we direct the AO to allow the expenditure incurred towards replacement of flooring. - Decided partly in favour of assessee. Disallowance of depreciation on Plant & Machinery due to foreign exchange fluctuation - Held that:- It is manifest from record that deduction claimed by the assessee is on the basis of notional loss due to foreign exchange fluctuation. In our view, no addition or deduction can be made to the cost of the asset on account of such notional loss/gain on account of foreign exchange fluctuations as the assessee has not made any payment during the year. Only when the assessee makes payment any loss or gain on account of foreign exchange fluctuations can be adjusted towards cost of the asset. In that view of the matter, we do not see any reason to disturb the finding of the Ld.CIT(A). - Decided against assessee. Disallowance of expenditure towards subscriptions - Held that:- On verifying the details of expenditure incurred, we are of the view that the subscription fees paid on behalf of the Directors cannot be allowed as expenditure at the hands of the assessee-company. However, as far as the amount of Rs. 50,000/- claimed to be towards insurance payment relating to earlier years is concerned, we are of the view that the same requires examination by the AO. Therefore, to the limited extent of verifying the payment of Rs. 50,000/-, we remit the issue back to the file of AO to verify and allow the expenditure if assessee's claim is found to be correct. - Decided partly in favour of assessee for statistical purposes. Disallowance of 'Miscellaneous Expenditure' - Held that:- As can be seen from the explanation of the assessee before the departmental authorities, assessee has claimed that such expenditures were incurred on employees when they were sent out station. However, considering the fact that the expenditures incurred were not supported by any authentic bills/vouchers, some amount of inflation by the assessee while claiming this expenditure cannot be ruled out. In these circumstances, disallowance of 25% of the expenditure claimed in our view is reasonable and need not be interfered with. - Decided against assessee.

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• 2015 (6) TMI 394
  Rental income - taxable income from house property or business income - Held that:- No reasons to take any other view of the matter than the view so taken by us for the assessment year 2009-10 wherein held that is true that the commercial or office complex is on the same plot on which the hotel is situated but it is undisputedly distinct from, even if somewhat attached to, the hotel itself, and, therefore, the fact of the commercial complex being on the same plot does not help the case of the revenue. The physical proximity of the hotel and the commercial complex does not really matter as long as the character of arrangement has distinct character, and there is no dispute on that aspect. It is a case of renting simplictor and the services incidental to letting out do not constitute such complex character so as to be render it as a business by itself. Respectfully following the said order, we uphold the plea of the assessee and direct the Assessing Officer to tax the impugned rental income under the head 'income from house property'. - Decided in favour of assessee. Disallowance of brand building expenses - CIT(A) deleted disallowance - Held that:- No reasons to take any other view of the matter than the view so taken by us for the assessment year 2009-10 wherin genuineness, revenue nature and business expediency of these expenses is accepted by the Assessing Officer himself. Respectfully following the said order, we uphold the stand of the CIT(A), hold that he rightly deleted the impugned disallowance and decline to interfere in the matter. In the result, the appeal of the Assessing Officer is thus dismissed. - Decided in favour of assessee.

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• 2015 (6) TMI 393
  Excess payment of interest to the sister concern - CIT(A) deleted the addition - Held that:- The net rate charged from Kamala Associates was determined after taking into consideration all the aspects of commercial expediency, the rate difference given by Assessee were in the nature of discounts which were reduced from receipts and the net receipts were credited to Profit and Loss account and that provisions of Section 40(A(2) are applicable only in case of expenditure. We further find that ld. CIT(A) by a well reasoned and detailed order has deleted the made by A.O . Before us Revenue has not placed any material on record to controvert the findings of ld CIT(A). We therefore find no reason to interfere with the order of ld. CIT(A) - Decided against revenue. Suppression of job charges received from sister concern - CIT(A) deleted the addition - Held that:- In the present case, we find that A.O on the basis of rate charged by Assessee to others for dyeing and printing activities done by it, had estimated the dyeing and printing charges that the Assessee should have earned from Kamala Associates, its sister concern. We find that ld. CIT(A) by a well reasoned and detailed order has deleted the made by A.O by holding that there was no provision in the Act to tax income which has not accrued and further it was not a case of Section 40A(2)(b). Before us Revenue has not placed any material on record to support its contentions or controvert the findings of ld. CIT(A). We therefore find no reason to interfere with the order of ld. CIT(A) - Decided against revenue.

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• 2015 (6) TMI 392
  Depreciation on the BSE Membership card - Held that:- This issue is covered against the assessee by the decision of CIT vs. Techno Shares and Stock Ltd. & Others [2009 (9) TMI 18 - BOMBAY HIGH COURT ], wherein held that depreciation is not allowable on the BSE Membership Card as it does not fall in any of the categories specified in section 32(1) of the Income Tax Act 1961 (the Act). - Decided against assessee. Disallowance of non-compete fee - Held that:- AR has expressed his satisfaction only with grant of depreciation as has been allowed by Ld. CIT(A)and also in view of the fact that Ld. DR could not cite any decision to contradict that proposition, we are of the opinion that Ld. CIT(A) did not commit any error in holding that assessee was entitled to get depreciation on the amount paid by it as non-compete fee. - Decided in favour of assessee. Bad debts written off in the P&L account - CIT(A) allowed claim - Held that:- The value of the shares transacted by the assessee as stock broker on behalf of his clients was as much a part of the debt as was charged brokerage by the assessee on the transaction. The brokerage having been credited to the P&L account of the assessee, it was evident that a part of the debt was taken into account in computing the income of the assessee. The fact that the liability to pay brokerage may arise at a point in time anterior to the liability to pay the value of the shares transacted would not make any material difference to the position. Both constitute a part of the debt which arises from same transaction involving the sale or, as the case, purchase of shares. Since both form a part of component of debt, the requirement of section 36(2)(i) are fulfilled, where a part thereof is taken into account in computing the income of the assessee. Therefore, it was held that assessee is entitled to deduction by way of bad debt under section 36(1)(viii) r.w.s. 36(2) in respect of amount which could not be recovered from its clients in respect of transactions effected by him on behalf of his clients. - Decided against revenue. Bad debts as trading loss being unrecoverable from the clients - CIT(A) allowed claim - Held that:- Right from the assessment proceedings it was the case of the assessee that the impugned loss has occurred to the assessee in respect of error trade. Due to dispute with the clients, for the transaction, it does not change the relation of principal and the agent. The assessee for business consideration chooses not to recover the losses. These losses are in the course of business and should be allowed as such under section 28 of the Act. All these contentions of the assessee have been recorded in the assessment order. The AO has not brought any material on record to suggest that these contentions of the assessee are either false or incorrect. No material has also been brought on record that these losses are on account of assessee’s own trading in shares. If it is so, the loss accrued to the assessee will be governed by the aforementioned decisions of Tribunal where consistent view has been taken that loss occurred to share broker on account of client disowning transaction is business loss and not speculative loss. Therefore, we are of the opinion that Ld. CIT(A) did not commit any error in accepting the claim of the assessee.- Decided against revenue. Disallowance u/s 14A - applicability of Rule 8D - Held that:- There is no infirmity in the order passed by Ld. CIT(A) vide which he has directed the AO to recompute the disallowance in view of the submissions of the assessee as well as the decision of Hon’ble Bombay High Court in the case of Godrej &Boyce Mfg. Co. Ltd. (2010 (8) TMI 77 - BOMBAY HIGH COURT). - Decided against revenue.

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• 2015 (6) TMI 391
  Application for renewal u/s.80G rejected - Held that:- It is an admitted fact that the 12A registration granted to the assessee is subsisting till date and the same has not been cancelled. The assessee trust was also granted the 80G benefit for the period from 01-04-2005 to 31-03-2009. The assessee has filed the audited accounts for the last 3 years and none of the objects of the trust are non-charitable in nature. Merely because some of the trustees who were present or past nurses have participated in the protest conducted by the Nurses Federation, the same in our opinion cannot be treated as an agitation by the trust itself. Further such agitation has not been declared illegal or anti national. We find the Delhi Bench of the Tribunal in the case of Mayo College Old Boys Association (2010 (11) TMI 933 - ITAT DELHI) while dealing with an identical issue has held that when the certificate granted to the assessee u/s.12A treating it as a charitable institution is subsisting and has not shown to have been withdrawn till date, then in that case, renewal of exemption u/s.80G(5) should not be denied to the assessee. - Decided in favour of assessee.

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• 2015 (6) TMI 390
  Addition in respect of opening capital balance as on 1st April, 2004 - Held that:- The assessee appears to be partnership firm as per the balancesheet, but filed the return for the year under consideration in the status of HUF. In the account of the partners, there is Addition of opening capital balance as on 1st April, 2004 - Held that:- Opening balance but the assessee did not file the return of the partnership firm for Assessment Year 2004-05, though the return was filed by Shri Navnitbhai B Patel, as Proprietor of M/s. Patel Beverages for Assessment Year 2004-05. However, the CIT(A) has recorded the finding that in such return there is no closing balance in the account of partners amounting to Rs. 4,04,469/- each. On these facts, the onus was heavy upon the assessee to justify how he has shown the opening credit balance for the Assessment Year 2005-06 when there was no closing balance in Assessment Year 2004-05. In these peculiar facts, the decision of the Hon’ble Jurisdictional High Court in the case of Pankaj Dyestuff Industries (2005 (7) TMI 601 - GUJARAT HIGH COURT ), would not be applicable to the case of the assessee. Considering the facts of the case and the arguments of both the sides, we do not find any justification to interfere with the order of the CIT(A) on this point and the same is sustained. - Decided against assessee. Disallowance of expenses - Held that:- CIT(A) considered each and every expenses and has sustained the disallowance only when the expenditure was not allowable. The ld. Counsel for the assessee was unable to controvert the findings recorded by the CIT(A). - Decided against assessee. Disallowance of expenses - CIT(A) confirmed part disallowance - Held that:- When all the expenses debited to the profit and loss account have been considered for disallowance, the disallowance sustained at 20% of all the expenses is excessive. We, therefore, reduce the same to 10% and direct that the disallowance be restricted to Rs. 7,53,987/-. - Decided partly in favour of assessse.

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• 2015 (6) TMI 388
  Disallowance of freight expenditure - Held that:- Income of assessee has not been estimated by rejecting the books of account, rather a particular item of expenditure claimed by assessee was found to be not allowable due to lack of supporting evidence and also for violation of provisions contained u/s 194C read with section 40A(3) and 40(a)(ia) of the Act. In these circumstances, assessee’s contention that once books of account are rejected, net income has to be estimated and no disallowance u/s 40(a)(ia) and 40A(3) is to be made, is not acceptable. For this very reason, decision of ITAT in case of M/s Hycons Infrastructure (India) Ltd. (2013 (12) TMI 56 - ITAT HYDERABAD) is not applicable to the facts of the present case. Considering the fact that assessee was in transport business and the entire business activity could not have been carried out through his own vehicles but he must have engaged vehicles of third parties payment of freight charges is believable. However, since the expenditure is not supported by bills and vouchers and since possibility of inflating the expenditure cannot be totally ruled out, it will be reasonable to allow 80% of the freight expenditure in respect of which assessee could not produce any evidence, subject to condition that such expenditure is not hit by section 40(a)(ia) and 40A(3) of the Act. As far as balance freight expenditure of Rs. 52,86,145 is concerned, though, it is supported by bills and vouchers but ld. CIT(A) on the basis of remand report of Addl. CIT disallowed an amount of Rs. 34,29,875 u/s 40(a)(ia), which also includes the amount of Rs. 14.92,500 representing cash payments exceeding Rs. 20,000 made in violation of section 40A(3). It is the contention of ld. AR before us since the entire payment was made during the relevant PY and nothing remained payable, no disallowance can be made u/s 40(a)(ia). It appears, this argument has not been advanced by assessee before the Departmental authorities. However, keeping in view the principle laid down by the ITAT Special Bench in case of Merlyn Shipping Transport and others (2012 (4) TMI 290 - ITAT VISAKHAPATNAM ), we direct Assessing Officer to verify this aspect and if it is found that the entire payment was made during the relevant PY and nothing remained payable at the end of PY, no disallowance u/s 40(a)(ia) can be made. As far as violation of section 40A(3) is concerned, we remit this issue back to the file of Assessing Officer for affording an opportunity to assessee to explain as to whether the payments come within the exception provided under Rule 6DD. - Decided partly in favour of assessee for statistical purposes.

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• 2015 (6) TMI 387
  TDS u/s 194H or 194C - nature of payment - outstanding liability at the end - Disallowance u/s 40(1)(ia) - non deduction of taxes on payments made to M/s. Usha Kiron Movies Ltd - Held that:- . If any payment is made towards purchase of articles on which VAT is leviable, then section 194C will not apply for the same. Even if it is assumed that the entire tax is to be taken as a single one and the purchases on which VAT was paid should not be segregated, even then the assessee has paid TDS of Rs. 4,38,590 which is in excess of the required rate u/s 194C on the total value of the contract amounting to Rs. 1,27,66,093. Further the assessee has paid the entire amount of Rs. 38,66,773 before the closure of the year and no part of the same is outstanding as on 31.3.2011. The said amount has been accounted by the payee in its regular books of accounts and considered for computing income for the impugned A.Y. Hence applying the decision of the Special Bench in the case of Merilyn Shipping & Transports vs. Additional CIT (A) (2012 (4) TMI 290 - ITAT VISAKHAPATNAM ), we hold that the disallowance u/s 40(a)(ia) cannot be made in respect of the amount which has also been paid during the year. In view of the above discussion, we delete the disallowance of Rs. 38,66,773 u/s 40(a)(ia) for non deduction of TDS and allow the appeal of the assessee. - Decided against revenue. Disallowance of dividend/interest paid on subscription paid to the subscribers without deducting tax u/s 194H - Held that:- Decided in favour of the assessee by the jurisdictional High Court for the A.Y 2008-09 in assessee’s own case. -Decided against revenue. Proportionate expenses apportioned on the basis of collection were disallowed - Held that:- ue is covered by the decision of the Hyderabad Bench of the ITAT in assessee’s own case for A.Y 2010-11 [2015 (5) TMI 743 - ITAT HYDERABAD] wherein it was held that only the expenditure incurred for collection of subscription of the other group companies should be proportionately disallowed in that year. The CIT (A) disallowed an expenditure of Rs. 2.00 lakhs on the ground that very little expenditure were deployed for collection of subscription from other group companies. Thus collection was done as minor additional work along with regular employment. In this view of the matter, the disallowance of Rs. 2.00 lakhs was confirmed by the Tribunal. Thus no hesitation in accepting the disallowance of Rs. 3.00 lakhs made by the CIT (A) and dismiss the appeal of the Revenue seeking a higher disallowance - Decided against revenue.

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• 2015 (6) TMI 386
  Penalty under section 271(1)(c) - inaccurate particulars of income in respect of “on money’’ received from each member for booking 108 flats - Held that:- No inaccuracy in the particulars of income of Rs. 7.80 crores being "on money" could be established by the Assessing Officer by bringing on record any relevant material. The amount of income and the nature of income as disclosed by the assessee was accepted by the Assessing Officer on assessment. Thus no inaccuracy or falsity in the particulars furnished by the assessee was found by the Assessing Officer. The case of the Assessing Officer is that further more details in respect of the income which was desired by the Assessing Officer could not be furnished by the assessee and therefore for this failure of the assessee he levied penalty under section 271(1)(c) of the Act. In our considered view for such a failure penalty under section 271(1)(c) cannot be levied. Penalty under section 271(1)(c) can be levied only for either concealment of income or for furnishing inaccurate particulars of income. Therefore, the Commissioner of Income-tax (Appeals) was not justified in confirming above levy of penalty. Further explanation 4 to section 271(1)(c) explains the procedure to calculate the quantum of tax sought to be evaded and therefore, in a case where returned income and assessed income are same, no penalty under section 271(1)(c) can be levied with the help of provisions of explanation 4 to section 271(1)(c) of the Act. - Decided in favour of assessee.

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• 2015 (6) TMI 385
  Deduction u/s 80IA -`Excess provision written back’ - CIT(A) allowed the claim - Held that:- This amount represented reversal of excess provision of salary made in the past in respect of pay revision which was implemented during the previous year under consideration. There is hardly any need to emphasize that salary paid by an undertaking is part of expenditure otherwise deductible in computing the income derived from the eligible undertaking. If in the preceding year, the deduction was claimed for a higher sum, which reduced the eligible profit with such higher amount of deduction and the actual expenditure turned out to be less with the result that the excess provision gets written back in the instant year, it cannot be characterized as anything other than part and parcel of profit derived from eligible enterprise. In reality, the excess provision written back is not an income in itself, but, a reduced amount of eligible deduction in the computation of profits derived from eligible enterprise. We, therefore, approve the view taken by the ld. CIT(A) on this issue. - Decided against revenue. Late payment charges - The character of this receipt has not been disputed by the ld. DR. In essence, the late payment charges are nothing, but, part of sale consideration which cannot be viewed differently. Once deduction is available on sale consideration, there can be no reason to deny deduction on such late payment charges, which are part and parcel of such sale consideration. We, therefore, uphold the impugned order allowing deduction u/s 80IA on this amount. -Decided against revenue. Interest on employees - disallowance of deduction u/s 80IA - Held that:- There is no direct nexus of such interest income with the eligible undertaking inasmuch as the immediate source of such income is not the eligible undertaking. Such income may be attributable to the business of the eligible undertaking, but, cannot be held as derived from the eligible undertaking - Decided against assesse. Machines hire charges - Held that:- The assessee received hire charges in respect of certain machines which were given on hire to its contractors who were engaged in the erection and construction of the power generation facility. We fail to appreciate as to how such machine hire charges can be considered as derived from eligible undertaking. These do not have any direct nexus with the eligible undertaking. The source of such income is hiring of machines, which is step away from the eligible undertaking - Decided against assesse. Rent Receipt - Held that:- The assessee received rent from its employees’ quarters as well as temporary sheds given to contractors at project sites. Even though such income may be considered as attributable to the eligible undertaking, but, it can by no stretch of imagination, be described as `derived from’ the eligible undertaking.- Decided against assesse. Sundry Receipts - Held that:- These amounts are in the nature of electricity charges, guest house receipts, subsidized transport and miscellaneous receipts from the employees and contractors. The reasons given by us hereinabove for not allowing deduction in respect of the items mentioned above apply with full force in respect of such sundry receipts as well. These receipts cannot be considered as ‘derived from’ the eligible undertaking - Decided against assesse

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• 2015 (6) TMI 384
  Penalty under Section 271(1)(c) - additions of unexplained cash credits under Section 68 - Held that:- The original notice dt.28.3.2005 issued by the Assessing Officer. A perusal of the notice issued under Section 274 r.w.s. 271 of the Act dt.28.3.2005, reveals that the Assessing Officer has not deleted the inappropriate words and parts of the notice, whereby it is not clear as to the default committed by the assessee; i.e. whether it is the concealment of particulars of income or furnishing of inaccurate particulars of income that the penalty under Section 271(1)(c) of the Act is sought to be levied. We find that the Hon'ble High Court of Karnataka in its order in the case of M/s. Manjunatha Cotton & Ginning Factory [2013 (7) TMI 620 - KARNATAKA HIGH COURT] has held that such a notice, as has also been issued in the case on hand, is invalid and the consequential penalty proceedings are also not valid. - Decided in favour of assesse.

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• 2015 (6) TMI 383
  Reimbursements at cost to UPS Worldwide Forwarding Inc. (UPSWWF') - treated as taxable income and disallowed under Section 40(a)(i) - Held that:- Invoices raised by UPSWWF on assessee can be matched back-to-back with the invoices raised by Titus, the payment so made was in the nature of reimbursement. However, since payment was made to resident legal firm, same was subject to TDS and liable for disallowance u/s.40(a)(i). However, keeping in view the purpose behind insertion of second proviso by Finance Act, 2012 in Section 40(a)(ia), it can be said to be declaratory and curative in nature and therefore, it should be given retrospective effect from 1-4-2005, being the date from which sub clause (ia) of section 40(a) was inserted by Finance (No.1) Act, 2004.In view of the above discussion, we restore the matter back to the file of AO to verify as to whether the Titus has paid tax on the impugned payments by incorporating the same in their respective income. If the AO finds that the Titus has already paid tax by including such payments in its income, no further tax can be collected from assessee which amounts to double taxation and no disallowance can be made in the hands of the assessee u/s.40(a)(ia) - Decided in favour of assessee for statistical purposes. Disallowance of depreciation - Held that:- Payment has been made by assessee to the custom authority while importing the assets. The payment for purchase of computers so made has been accepted by TPO. We, therefore, do not find any merit in the action of the lower authorities for declining the claim of depreciation on the assets so imported. - Decided against assessee. Advertisement and public relation expenses disallowed under Section 37(1) - Held that:- Assessee has paid a sum of Rs. 20,05,985/- to UPSWWF for advertisement services rendered by Ogilvy. Vide submission dated 25-11-2011 and 7-12-2011, the assessee has submitted all the relevant copies of invoices, articles, media release published in leading newspapers and news channels, demonstrating the advertising services rendered by Ogilvy during the year and the same was for the purpose of assessee’s business. After recording detailed finding at para 6.3, as reproduced above, the CIT(A) has deleted the disallowance. The finding of the CIT(A) has not been controverted by ld. DR by brining any positive material on record. We also found that similar payments were made by the assessee in the A.Y.2007-08 and 2010-11, which was allowed by the AO. Accordingly, we do not find any infirmity in the order of CIT(A) for deleting the disallowance of advertisement expenses of Rs. 20,05,985/-. Decided in favour of assessee.

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• 2015 (6) TMI 382
  Reopening of assessment - suppressed sale - AO has concluded that the show cause notice issued by the Excise Department is foolproof and substantial material evidence of suppression of sales - Held that:- Conclusion of the AO is contrary to the decision of the Futura Ceramics Pvt. Ltd. Vs. State of Gujarat, [2012 (12) TMI 955 - GUJARAT HIGH COURT] wherein, while deciding the issue under VAT Act on a similar show cause notice issued by the Central Excise Authority has held that merely because the Excise Department issued a show-cause notice, that cannot be a ground to presume and conclude that there was evasion of excise duty implying thereby that there was also evasion of tax under the VAT Act. It is not even the case of the Department that such show-cause notice proceedings has culminated into any final order against the petitioner. We wonder what would happen to the order of reassessment, if ultimately the Excise Department were to drop the proceedings without levying any duty or penalty from the petitioner. Further, the show cause notice issued by the Excise Department contains the allegation of the Excise Department that the assessee has suppressed sales for the purpose of making payment of excise duty. A perusal of recorded reasons does not show that the AO verified the particulars declared by the assessee in its income-tax return. Nowhere in the recorded reasons, the sale declared by the assessee in its income-tax return, has been brought on record. The AO, as per the recorded reasons, has not verified the income-tax return of the assessee vis-à-vis the alleged escapement of income to arrive at the satisfaction to the effect that the assessee has not disclosed such income in the return of income, and has concluded that the alleged sales, on which the excise duty was allegedly not paid by the assessee, was income chargeable to income-tax, and has escaped the assessment under the Income Tax Act. - Decided in favour of assesse.

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• 2015 (6) TMI 381
  Deduction under Section 80-IC - CIT(A) allowed the claim - Held that:- A.O., after examining the entire facts and circumstances of the case, has come to a conclusion that the assessee by splitting the Chennai unit, it has established the Haridwar unit. Therefore, the assessee is not eligible under Section 80-IC(4) of the Act and for the reason that the net profit of Haridwar unit is at 26.41% on the total turnover whereas the net profit of Chennai unit is at 2.12% on the total turnover. The assessee has not filed any details with regard to machineries, equipments and assets in respect of newly established Haridwar unit, before the A.O. These details were filed before the Ld. CIT(Appeals). Under these circumstances, we are of the opinion that all the details such as machineries, equipments and other assets purchased/acquired by the assessee, including bills, in respect of Haridwar unit established by the assessee have to be produced before the A.O. The A.O. is directed to decide the issue de novo. Remit the matter back to the file of the A.O. for fresh examination. - Decided in favour of revenue for statistical purposes. Disallowance of mould amortization charges - CIT(A) allowed the claim - Held that:- CIT(Appeals) without discussing anything on the matter simply allowed the ground raised by the assessee. Necessary document like agreement between the assessee and M/s HUL and the life time of the moulds provided by M/s HUL are required to be examined to decide the issue. Therefore we set aside the order passed by the Ld. CIT(Appeals) and remit the matter back to the file of the A.O. to examine the agreement between the assessee and M/s HUL and other details. The A.O. is directed to decide the issue afresh after giving reasonable opportunity of being heard to the assessee. - Decided in favour of revenue for statistical purposes.

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• 2015 (6) TMI 380
  Royalty income from franchisee hotels - use of registered trade mark of `Holiday Inn’ and `Crowne Plaza’ in hotel business - whether the royalty income should be taxed at the rate of 11.33% or at the rate of 15%, as per the DTAA? - DTAA with USA - Held that:- From the perusal of the said agreement, it is seen that the agreement is between SC Hotels Inter Continental Hotels Group (Asia Pacific) Pte. Ltd., which has been referred as `guarantor’; and Today Hotels Private Limited, Indian Company, which has been referred as the `owner’. The title of the said agreement is for management of the hotels and the terms and conditions under which the manager on behalf of owner will manage the hotel. Here, neither the owner nor the manager has any reference to the assessee. Even clause 9.5, it is seen that the same only provides that the owner will pay to SC Hotels & Resorts (India) Pte. Ltd. the license fees. Here again, there is no reference of the assessee. Further nothing has been brought on record that there was any kind of correspondence or a letter between the assessee and Today Hotels Private Limited, setting out the terms and conditions for the payment of royalty. Under these facts, it cannot be held that the payment of royalty has been made “in pursuance of an agreement”. Once there is a clear cut provision under the statute, which mandates certain terms and conditions for applying a beneficial rate, then the same has to be applied in a letter and spirit. Thus, we hold that the finding of the CIT(A) that, there is no agreement in terms of which the assessee was paid royalty is legally and factually correct, and therefore, the beneficial rate of tax will not apply. The A.O. has rightly charged the tax rate of 15% as given in the DTAA. - Decided against assessee.

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• Service Tax

• 2015 (6) TMI 407
  Denial of CENVAT Credit - Security services - Held that:- Credit has been taken in respect of services which were availed in the residential colony/club house of the appellant - what is permitted is the input services which are integrally connected with the manufacturing of the final product, and residential colony for the employees and the clubs are welfare activity for the staff undertaken by the appellant while carrying the business but has no nexus with the business of the manufacturing the final product. Under these circumstances, the appeals filed by the appellant are devoid of any merits. - However, penalty is set aside - Decided partly in favour of assessee.

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• Central Excise

• 2015 (6) TMI 405
  Maintainability of appeal - Mandatory pre deposit - Held that:- Pre-existing right of appeal is not destroyed by the amendment if the amendment is not made retrospective by express words or necessary intendment. The fact that the pre-existing right of appeal continues to exist must, in its turn, necessarily imply that the old law which created that right of appeal must also exist to support the continuation of that right. As the old law continues to exist for the purpose of supporting the pre-existing right of appeal that old law must govern the exercise and enforcement of that right of appeal and there can then be no question of the amended provision preventing the exercise of that right. The argument that the authority has no option or jurisdiction to admit the appeal unless it be accompanied by the deposit of the assessed tax as required by the amended proviso to Section 22(1) of the Act overlooks the fact of existence of the old law for the purpose of supporting the pre-existing right and really amounts to begging the question. The new proviso is wholly inapplicable in such a situation and the jurisdiction of the authority has to be exercised under the old law which so continues to exist. Legislature has by implication made retrospective amendment. The learned counsel has also quoted the judgment of the Hon'ble High Court of Bombay in the case of Godrej Industries Ltd.(2014 (10) TMI 447 - BOMBAY HIGH COURT) dated 7th October 2014. We have gone through the said judgment. The facts of the case are entirely different. It was relating to the interest provisions under Section 11DD and is in respect of a period when there was no provision for interest. The facts in the present case are entirely different and we do not find application of the said case law. - Second proviso to amended Section 35F makes it very clear that the pending stay applications and appeals as on the date of commencement of the Finance (No.2) Act, 2014 will be governed by the old Section 35F and by implication, the substituted Section 35F will be applicable to all the appeals filed after the commencement of the Finance (No.2) Act, 2014. In view of the said position, we do not consider it necessary to go into the point made by the learned AR. - Appeal not maintainable - Decided against assessee.

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• 2015 (6) TMI 404
  Demand of CENVAT Credit - fuel used in the generation of electricity cleared to DHBVNL - sending electricity on job work and receiving back - Rule 4(5)(a) - Penalty u/s 11A - Contravention of Rule 2(k) and 3 of the CENVAT Credit Rules, 2004 - Held that:- there is no sale of electricity to the power grid. It is also noted that the electricity sent to power grid was returned back to the Appellant, which was further used in the manufacture of final product. The Hon ble Supreme Court categorically observed that the reversal of credit would be required on the wheeled out of electricity at a price to the joint venture/vendor etc, for manufacture. In the present case, there is no sale of electricity, and the same was returned back to their factory for consumption in their final product. - Adjudicating authority denied the CENVAT Credit on inputs used for generation of electricity supplied to the grinding unit. The Appellant argued that the power plant can be a job worker o the Appellant and that the inputs sent by Appellant to the job worker plant, for generation of electricity brought back to the Appellant for manufacture of final product. The Tribunal held that proportional credit of inputs sent by clinker unit to the power plant under Rule 4(5)(a), corresponding to generation of electricity used in the DMW plant and administrative block will be eligible as CENVAT Credit. Electricity sent for synchronization to power grid, would be treated as job worker. There is no dispute that the electricity was returned back to the Appellant s factory, and there is a substantial compliance with the provisions of Rule 4(5)(a) of the Rules. - impugned order cannot be sustained and accordingly, it is set aside. - Decided in favour of assessee.

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• 2015 (6) TMI 403
  Invocation of extended period of limitation - Revenue neutrality - whether the extended period of limitation under proviso to Section 11A of the Central Excise Act, 1944 is applicable and whether the demand within the period of limitation is demandable from the Appellant in view of the doctrine of revenue neutrality - Held that:- CENVAT Credit by the DTA unit is not required to be reversed/paid when the inputs are cleared under CT-3 certificate by DTA unit to a 100% EOU. - demand has been held to be not sustainable on account of revenue neutrality by relying upon the judgment in the case of Commissioner, C.Ex. & Cus, Vadodara Vs Narmada Chematur Pharmaceuticals Ltd [2004 (12) TMI 93 - SUPREME COURT OF INDIA] and Commissioner of C.Ex., Pune Vs Coca Cola India Pvt.Ltd [2007 (4) TMI 17 - SUPREME COURT OF INDIA]. It is observed from the above case laws decided by the Hon ble Apex Court that it is not clear whether the extended period was invokable in these cases. It is further observed from the provisions of Rule 9(1)(b) of CENVAT Credit Rules, 2004 that CENVAT Credit is not admissible on a supplementary invoices where non-levy or short levy takes place on account of reason of fraud, collusion, or any willful mis-statement or suppression of facts. In case, the extended period is held to be invokable, then the recipient of the inputs will not be eligible for CENVAT Credit and in such a situation, it will not be the case of revenue neutrality. - Decided in favour of assessee.

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• 2015 (6) TMI 402
  Denial of MODVAT Credit - Defective goods - inputs found short on the basis of general ledger stock of stock adjustment account - Held that:- On perusal of the Report of Defective Work in this case, the appellant initially availed modvat credit on the inputs/parts of watches, at the time of receipt of the same, before putting to use, the appellant has conducted certain tests to find out whether the inputs to be usable or not. The inputs which did not find fit to be used, the appellant has reversed credit thereon. Rest of the inputs which were found were issued by the appellant for processing or assembling of watches, and during the course of manufacture of watches, certain inputs were found defective and during further test or certain inputs were lost while manufacturing the goods. - The defective goods were found only after inputs were issued for processing or assembling of watches. This fact has not been disputed and on the basis of record it is ascertained that these inputs were issued for manufacturing watches. Therefore, it cannot be said that the inputs were not put to use. Therefore, in terms of Rule 57D of erstwhile Central Excise Rules, 1944, the inputs have become waste during the course of manufacture or used in or in relation not the manufacture of the final product are eligible for modvat credit. - inputs were issued for manufacturing of watches and the same were found defective during the process of manufacture or during the course of Research and Development process which is integral part of the manufacturing process. - when float glass has been put to use and it was found defective, modvat credit cannot be denied. For shortage of inputs, the appellant have explained general ledger of stock adjustment account reflected the shortages of inputs on physical verification. However, in the same general ledgers excesses have also been found over the recorded balances of various inputs. It shows that the inputs have been short accounted in some cases and in some other cases the inputs are in excess, therefore, there is no actual shortage of inputs. The shortages and excesses are due to the fact that stock accounting used to be done on weighment basis since the minute inputs ran into millions and physical counting is not possible. The Commissioner has not given any credence to the defence taken by the appellant for shortages of the inputs have not verified the said fact with cogent evidence. Therefore the defence taken by the appellant is acceptable. Accordingly, I hold that there is no shortage of inputs as explained by the appellant. Further all the shortages/rejections have been supported by the chartered accountant certifying the same which has not been controverted by the Revenue with cogent evidence. - appellant has taken modvat credit correctly and consequently they are not required to reverse the modvat credit taken by them. In the circumstances, the penalty is not imposable on the appellant. Therefore, I do not find any merit in the impugned order and the same is set aside. - Decided in favour of assessee.

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• 2015 (6) TMI 401
  Manufacture - digital local telephone exchange - Whether assembly, installation and commissioning of switching system along with power plant, inverter etc. would amount to manufacture - Held that:- Appellant have purchased the switching equipment and other integral essential parts of the system such as power plant required for producing 48V DC power on which the system is operated, inverters for power break down etc., and assembled these equipments by their own staff at site into a digital local telephone exchange. As stated by Sh. HC Singla, an officer of the appellant company, the telephone exchanges can be shifted from one place to another place, It is in view of the above facts that the Department has alleged that the assembly, installation and commissioning of the switching equipments, power supply, inverter etc., has resulted into emergence of a new goods called 'digital local telephone exchange'. - main component of a telephone exchange is switching system which is an electrical apparatus for line telephony. The power plant and inverter are only auxiliary equipments. Power plant supplies the 48V DC current for functioning the switching system and inverter is required for standby period in case of power break down. Thus, the goods which have been purchased - Switching systems have remained the switching systems only even after installation and in our view no new commodity with distinct commercial identity or character or use has emerged. We find that the same view has been taken by the Tribunal in the case of Fuzitsu Indi Telecom Ltd. vs CCE Chandigarh (2002 (8) TMI 206 - CEGAT, COURT NO. I, NEW DELHI) wherein the Tribunal has held that the when bought out items of telephone exchanges were brought to the site of telephone exchange and assembled, no telephone exchange was manufactured requiring payment of duty. Moreover, from the technical literature produced by the appellant, it is clear that the switching systems are commonly called telephone exchanges and hence, on installation of a switching system, no new goods with distinct commercial identity and distinct characteristics or uses have emerged. The impugned orders, therefore, are not sustainable. - The same are set aside - Decided in favour of assessee.

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• 2015 (6) TMI 400
  Disallowance of Trade Discount - Held that:- Even though the issue of trade discount matter has traveled in past through different phases as above, ultimately that issue was resolved by Tribunal in the decision reported in [2007 (9) TMI 180 - CESTAT, CHENNAI] relating to the present respondent. - It is not necessary to dilate the issue further except ordering that Revenue appeal is dismissed in view of reaching of trade discount issue to finality by Tribunal. Validity of order passed - Non speaking order - Held that:- For the cryptic order passed by learned Commissioner (Appeals) in the present case and innumerable difficulties we faced to trace different past orders with the issues involved therein, before parting with this order, we may state that an order of an appellate authority to meet judicial scrutiny should be in clear terms, stating what is the matter in controversy before him, the points for his decision, the facts in issue, evidence tested, law applicable and reasons for the decision as well as his decision thereon. This is mandate of section 35(4) of the Central Excise Act, 1944 and similar provision enacted in Customs Act, 1962. Any deviation to such process, makes an order cryptic, unreasoned and non-speaking. - Decision in the case of Joint Commissioner of Income Tax, Surat Vs. Saheli Leasing & Industries Ltd. [2010 (5) TMI 9 - SUPREME COURT OF INDIA] - Decided against Revenue.

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• CST, VAT & Sales Tax

• 2015 (6) TMI 406
  Jurisdiction of assessing authority to pass a separate order imposing interest after assessment had concluded - Held that:- A considered appraisal of the facts reveals that during assessment proceedings, a separate notice was served, requiring the appellant to show cause against the proposed levy of interest and penalty. The assessing authority should have, ideally decided the question of penalty and interest along with the assessment order but its failure to do so is, at the most, an irregularity, that does not render the impugned order null and void for want of jurisdiction. - An argument that once assessment stood concluded, the assessing authority could not have passed a separate order demanding interest and should have instead filed an application for rectification of the assessment order and then also within two years, disregards the fact that notice requiring the appellant to show cause against proposed levy of interest, was issued and was pending during assessment proceedings and thus, there was no need to have resort to rectification proceedings under Section 33 of the Act. - Decided against assessee.

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