Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
June 16, 2017
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Service Tax
Central Excise
CST, VAT & Sales Tax
Articles
News
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GST Council to vet e-way, anti-profiteering rules on Jun 18
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Reduced Liability of Tax on complex, building, flat etc. under GST
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Reduced Tax Liabilities under GST regime in comparison to present combined Indirect Tax rates
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The Union Finance Minister to chair the 17th Meeting of the GST Council on Sunday, 18th June, 2017
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Paytm, 1mg offer discounts ahead of GST
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Change in Tariff Value of Crude Palm Oil, RBD Palm Oil, Others – Palm Oil, Crude Palmolein, RBD Palmolein, Others – Palmolein, Crude Soyabean Oil, Brass Scrap (All Grades), Poppy Seeds, Areca Nuts, Gold and Silver Notified
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Public Procurement (Preference to Make in India), Order 2017
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Draft Notification of exception, modification and adaptation in respect of foreign company said to be resident in India under Section 115JH of the Income-tax Act, 1961– comments and suggestions-reg.
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Task Force on Innovation
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Exchange Rate of Foreign Currency Relating To Imported and Export Goods Notified
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RBI Reference Rate for US $
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States shortlisted by NITI for transformative change in Health and Education
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CCI issues order against Hyundai Motor India Limited (HMIL) for anti-competitive conduct, imposes penalty of ₹ 87 crore for the anti-competitive conduct
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The Minister for Finance, Corporate Affairs and Defence, Shri Arun Jaitley reached Seoul, Republic of Korea; Co-chaired the Fifth India-Korea Financial Dialogue with newly-appointed Deputy Prime Minister and the Finance Minister of the Republic of Korea, Mr Kim Dong-yeon;.
Notifications
Companies Law
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F. No. 1/2/2014-CL-I - dated
13-6-2017
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Co. Law
Exemption to Section 8 Companies under section 462 of CA, 2013
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F. No. 1/1/2014-CL-V - dated
13-6-2017
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Co. Law
Exemption to Private Companies under section 462 of CA, 2013
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F. No 1/2/2014-CL-V - dated
13-6-2017
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Co. Law
Exemption to Government Companies under section 462 of CA, 2013
Customs
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29/2017 - dated
14-6-2017
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ADD
Seeks to impose anti-dumping duty on "Soluble Salt Double Charge, GVT and PGVT, Porcelain/ Vitrified Tiles with less than 3% water absorption and All sizes"originating in or exported from the China PR for a period of five years (unless revoked, amended or superseded earlier) from the date of imposition of the provisional anti-dumping duty, that is, the 29th March,2016, imposed vide Notification number 12/2016 dated the 29th March, 2016
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28/2017 - dated
14-6-2017
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ADD
Seeks to impose ADD on the imports of "Hydrogen Peroxide" originating in or exported from Bangladesh, Taiwan, Korea RP, Pakistan and Thailand for a period of five years
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54/2017 - dated
15-6-2017
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Cus (NT)
Tariff Notification in respect of Fixation of Tariff Value of Edible Oils, Brass Scrap, Poppy Seeds, Areca Nut, Gold and Sliver
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53/2017 - dated
15-6-2017
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Cus (NT)
Rate of exchange of conversion of the foreign currency with effect from 16th June, 2017
Circulars / Instructions / Orders
Highlights / Catch Notes
Income Tax
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Recovery proceedings u/s 221 - It is true that, the petitioner ought to applied to the Assessing Officer or to the Appellate Authority for keeping the additional tax demand in abeyance, which the petitioner did not do. Nevertheless, this would not enable the authorities to ignore the legal requirements before affecting the recovery. - HC
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Recovery proceedings u/s 221 - withdrawing a sizeable sum from such bank account unilaterally - Filing of appeal before CIT(A) without seeking stay - Revenue directed to retain 15% and refund 85% of the amount with 8% interest - HC
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Reopening of assessment - mere disclosure of transaction at the time of original assessment proceedings cannot be said to be a disclosure of the “true” and “full” facts in the case and the Income-tax Officer would have the jurisdiction to reopen the concluded assessment in such a case. - HC
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When the assessee incurred expenses towards consultancy charges in order to make investment, the Assessing Officer was not justified in treating and considering the expenses incurred towards consultancy charges as capital expenditure, disallowable u/s 37 - HC
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Taxability of Remittances of salary into NRE Account maintained with an Indian Bank - There is a distinction between receiving money and transfer of money. - The latter remittance would be outside the purview of provisions of section 5(2)(a) - AT
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Refund of excess appeal fees paid by the assessee at the time of filing of appeal before the CIT(A) - AO directed to verify this aspect and refund the excess appeal fees paid by the assessee following due process of law - AT
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TPA - As per TNMM study filed by the appellant, the margin on total cost earned by AE is 4.52% which is less when compared with 5.18% in case of other eleven comparable companies. This is within arm's length. Therefore, otherwise also no transfer pricing adjustment is called for by the safe harbor clause. - AT
Corporate Law
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Exemption to Government Companies under section 462 of CA, 2013 - Notification
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Exemption to Private Companies under section 462 of CA, 2013 - Notification
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Exemption to Section 8 Companies under section 462 of CA, 2013 - Notification
Service Tax
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Reversal of CENVAT credit - If, the appellant has accepted before us that he was not paying service tax on an activity, then the credit of services vis-a-vis input services could only be taken on a pro-rata basis, as per the formula stipulated in Rule 6(3)(c) - HC
Central Excise
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CENVAT credit - fake invoices - it was alleged that AEPL were claiming CENVAT credit by fraudulent means on the basis of invoices against which no goods were actually received by them - revenue successfully proved its case - credit denied - AT
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Refund of CENVAT credit and interest paid due to wrong direction of the audit authorities - appellant allowed to take recredit of the CENVAT credit reversed along with interest - AT
Case Laws:
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Income Tax
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2017 (6) TMI 606
Recovery proceedings u/s 221 - assessee in default - withdrawing a sizeable sum from such bank account unilaterally - validity of recovery proceeding where notice was not served - Filing of appeal before CIT(A) without seeking stay - Held that:- the respondent affected recovery from the bank account of the petitioner without following due process. It is true that, the petitioner ought to applied to the Assessing Officer or to the Appellate Authority for keeping the additional tax demand in abeyance, which the petitioner did not do. Nevertheless, this would not enable the authorities to ignore the legal requirements before affecting the recovery. Under the circumstances, the recovery of ₹ 19,22,770/- made by the respondent is declared to be illegal. The respondent has not setup a case that the petitioner is a chronic defaulter, a person who may ultimately not be able to pay the dues if the appeal is dismissed or that there are other assessment or appeals pending, in which sizeable tax demands are held up. - Revenue directed to retain 15% and refund 85% of the amount with 8% interest. - Decided partly in favor of assessee.
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2017 (6) TMI 605
Reopening of assessment - scrutiny assessment concluded - reasons to believe - tangible material - figures of sale of teakwood trees for year consideration were not genuine if, at all, exaggerated - as trees were planted some 8 to 10 years back and the agricultural operations were carried out under the personal supervision of the partners themselves, thus it was for the re-opening - Held that:- The reasons recorded during inquiry reveal that three entities to whom the sale was supposed to have been made belong to Shri Saket Jain, a Chartered Accountant. All the entities had a common address at Ashram Road, Ahmedabad. It was noticed that Shri Sunil Agrawal was unable to adduce necessary evidences to prove that the sales figures of the teakwood were genuine. Assessing Officer further noted that on account of such discrepancies, Shri Sunil Agrawal had voluntarily disclosed unaccounted income from such sales as part of total disclosure of ₹ 23.5 crore broken into the hands of separate entities with respect to year under consideration. The reasons referred to the refusal of Shri Sunil Agrawal to comment on the genuineness of the sale of teakwood for Assessment Year 2009-2010 stating that during such period ownership of the firm and the partners were different. It was recorded that there is a similarity of pattern in sale of teakwood during a year under survey i.e. 2013-2014 and the year under consideration i.e. 2009-2010. It was on the basis of such material that the Assessing Officer formed a belief that the assessee had failed to disclose true and full facts necessary for assessment. It can thus be seen that the Assessing Officer had recorded elaborate reasons to prima facie demonstrate that the figures of sale of teakwood trees for year consideration were not genuine if, at all, exaggerated. This would have direct link to the failure on the part of the assessee to disclose true and full necessary facts. It is by now well settled that for re-opening of the assessment, Assessing Officer had to form a bonafide belief that the income chargeable to tax has escaped the assessment. Such belief would be on the basis of such tangible material. However, this sufficiency of reasons would not be a subject matter of minute judicial scrutiny. As long as material exists on record and a bonafide belief has been found by the Assessing Officer, the Court would maintain a healthy restrain. It is also well settled that in cases of sham transactions, the assessee cannot avoid the re-opening on the ground that earlier the issue was scrutinized In the case of Pal Jain v. Income-Tax Officer and Another [ 2004 (3) TMI 59 - PUNJAB AND HARYANA HIGH COURT] wherein found that upon availability of subsequent material the very transaction which was subject matter of the original assessment was found to be bogus transaction and it was therefore observed that mere disclosure of transaction at the time of original assessment proceedings cannot be said to be a disclosure of the true and full facts in the case and the Income-tax Officer would have the jurisdiction to reopen the concluded assessment in such a case. Decided against assessee.
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2017 (6) TMI 604
Deduction u/s 80IB (10) - Claim not made in original return or even the revised return - Held that:- The claim made by the assessee company does not form part of the original return or even the revised return, it could still be considered, if, the relevant material was available on record, either by the appellate authorities, (which includes both the CIT (A) and the Tribunal) by themselves, or on remand, by the Assessing Officer. In the instant case, the Tribunal, on perusal of the record, found that the relevant material qua the claim made by the assessee company under Section 80IB (10) was placed on record by the assessee company during the assessment proceedings and therefore, it deemed it fit to direct its reexamination by the Assessing Officer. In our opinion, the view taken by the Tribunal is unexceptionable and therefore, does not merit any interference. View taken by the Tribunal is unexceptionable and therefore, does not merit any interference.
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2017 (6) TMI 603
Reopening of assessment - reasons to believe - nature of land sold - agriculture land or capital gain - change of opinion - Held that:- As upon perusal of the very first response issued by the petitioner to the 148 notice served upon him, which was received by the Department on 01.05.2015, that he had indicated in no uncertain terms that no specific reasons had been furnished for issuing the said notice. This was reiterated by the petitioner in his communication dated 02.02.2016. The respondent, instead of placing on record, the communication, whereby, reasons were furnished, in his communication dated 04.02.2016, simply states that reasons for reopening the communication were furnished to the AR of the petitioner. The petitioner, by a return communication dated 17.02.2016, which was issued via his Chartered Accountants, refuted this fact. It was stated that nothing was furnished by the respondent by way of reasons in writing and that, this fact was brought about to the notice of the respondent orally by the AR at the time of his appearance before the respondent. The counter affidavit filed in this Court, as well, does not shed any light on this aspect of the matter. Specific ground, i.e., ground No.VII, has been raised in that behalf by the petitioner. The respondent, in its counter affidavit, has not been able to refute this assertion of the petitioner. The respondent has violated the mandate of law, as enunciated by the Supreme Court in the matter of : GKN Driveshafts [2002 (11) TMI 7 - SUPREME Court] as clearly, expounds that once, notice under Section 148 of the Act is received by an Assessee, he is entitled to seek reasons for issuance of such notice, and that, the Assessing Officer is bound to furnish reasons within a reasonable time. The respondent's stand that reasons were communicated to the AR is, really, sidestepping the issue. For a moment even one were to accept the stand taken by the respondent that the petitioner was told that income received by him, upon the sale of Kovalam property would be treated as capital gains, because, the nature of the said land was not agricultural, in my view, would not suffice, as the reasons, which, the respondent was obliged to furnish, due to the mandate of law, would, ordinarily, have to state as to why he had proposed to treat the Kovalam property as non-agricultural land. The purpose of furnishing reasons is to enable the Assessee to effectively meet the charge levelled against him. Therefore, in so far as this aspect is concerned, the submission advanced on behalf of the Revenue cannot be accepted. The record shows that, it is only thereafter, the assessment order dated 30.11.2010, was passed under Section 148 of the Act. Therefore, quite clearly, the queries were raised to which, the petitioner had furnished his answers. The respondent, now, oblivious to the queries raised and answers received, chooses to tax the gains made by the petitioner qua his share of the sale consideration on the ground that the Tahsildar, had reported that between 2003 and 2007, that, no agricultural activity was carried out on the Kovalam property. The aforesaid facts, clearly, establish that the respondent is having a second shot at unravelling the tax impact of the subject transaction. Since, the petitioner furnished all the information which was available with him, qua the Kovalam property and the subject transaction, the respondent was, distinctly, acting beyond the ambit of the provisions of Section 147 of the Act, which vested upon him the power to reassess the income and not "review" the subject transaction. Thus even with regard to the second aspect, the stand on behalf of the respondent that this was not a case of change of opinion cannot be accepted. - Decided in favour of assessee.
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2017 (6) TMI 602
Revision u/s 263 - eligibility to claim under Section 54F - Held that:- A perusal of the impugned order would show that the respondent has set aside the order and directed the Assessing Officer to revisit the issue, as he, according to him, had faulted to take into account the fact that the subject flats had been purchased via two separate sale deeds, and had separate electricity meter connections. Accordingly, it appears that the respondent was unnecessarily burdened by the fact that the subject flats were purchased by two separate sale deeds and had separate electricity meter connections. The issue at hand, before the Assessing Officer, in opinion, was whether or not the subject flats form a single residential unit. The size of the flat, or, that they had separate electricity meter connections would not, necessarily, lead to a conclusion that they were two separate residential units. The Assessing Officer was required to look at other attendant circumstances, which included the survey report, in reaching a conclusion in the matter. Notably, what was available on record, was not only the survey report, but also the material provided by the concerned housing society. The survey report, as it appears, did advert to the fact that the subject flats formed a single residential unit. The Revenue has not assailed the survey report before me. Therefore, quite clearly, there was material available to the Assessing Officer to come to a possible view, if not, definite view that the subject flats formed a single residential unit. If, that be the conclusion, then, clearly, the respondent had no jurisdiction to initiate proceedings under Section 263 of the Act and thereupon, proceed to pass the impugned order. In view of the conclusion reached the preliminary objection taken by Ms.Hema Muralikrishnan, that the writ petition ought not to be entertained, would have to be rejected. It would be trite to say that an order passed without jurisdiction can be interfered with in Writ proceedings. The existence of an alternative remedy, as is articulated time and again by Court is not an absolute bar. Superior courts often relegate parties to alternative remedy by way of self-limitation. As a matter of fact the law, as declared by the Supreme Court, now, clearly, sets out that in appropriate cases, the writ court has jurisdiction to entertain a petition, even involving disputed questions of fact, notwithstanding the fact that they arise out of contractual obligations. Thus the impugned order is set aside. - Decided in favour of assessee.
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2017 (6) TMI 601
Disallowance of expenditure in respect of interest and administrative expenses under Section 14A - Held that:- The assessee was already having its own surplus fund and that too to the extent of ₹ 1981.55 Crores against which investment was made of ₹ 144.51 Crores, there was no question of making any disallowance of expenditure in respect of interest and administrative expenses under Section 14A of the Act, therefore, there was no question of any estimation of expenditure in respect of interest and administrative expenses under rule 8D of the Rules. - Decided in favour of assessee. Disallowance of expenditure incurred towards consultancy charges - Held that:- When the assessee incurred expenses towards consultancy charges in order to make investment, the Assessing Officer was not justified in treating and considering the expenses incurred towards consultancy charges as capital expenditure, disallowable under Section 37 of the Act. Under the circumstances, the learned Tribunal has rightly deleted the disallowance incurred by the assessee towards consultancy charges. We are in complete agreement with the view taken by the learned Tribunal.- Decided in favour of assessee.
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2017 (6) TMI 600
Validity of reopening of assessment - Whether it is right in law to initiate parallel proceedings u/s.148 when proceedings u/s.142(1) is still pending? - Held that:- In the affidavit dated 22.06.2016 filed on behalf of the revenue, it is stated that a notice u/s.148 of the Income Tax Act was issued on 23.9.2011 for the assessment year 2009-10 and no notice was issued under section 142(1) of the Income Tax Act for the assessment year 2009-10. The Letter dated 29.07.2011 was a covering letter addressed to the assessee. No notice u/s.142(1) was enclosed for the assessment year 2009-10 and it was only for the assessment year 2010-11. Therefore, the contention of the appellant that there are parallel proceedings – one under section 148 and another under section 142(1) of the Income Tax Act is untenable. It is also pertinent to note that no such ground was raised either before the appellate authority or Income Tax Tribunal. Existence of reasons to believe - information received from a third party - Held that:- AO is empowered to re-open the assessment if he has reasons to believe that the income has escaped from the assessment. It is not required by the revenue to show that income which has escaped assessment was due to the failure on the part of the appellant to disclose fully and truly all the materials relevant to the assessment. Both the appellate authority and the Income Tax Tribunal has found that the assessing officer was empowered to re-open the assessment in the instant case. It is an admitted fact that the assessee had failed to file his return of income for the assessment year 2009-10. Pursuant to the survey conducted under section 133A of the Act in the business premises of Smt.Leela Surana, a Share Sub-Broker, on 25.11.2009, it came to light that the assessee had made cash payments of ₹ 6,80,000/- on 17.09.2008 and ₹ 30,000/- on 24.9.2008 to Smt. Leela Surana for purchase of shares and had obtained 'back dated' contract note for the purchase of 4,700 share of 'Shyam Star'. Subsequently, the assessee had sold these shares on 17.9.2008 and 24.9.2008 for ₹ 6,75,838.61 and 27,378.47 and remitted the sale proceeds to his bank account. Therefore, the assessing officer had the reasons to re-open the assessment of the assessee. Hence, in our view, the Tribunal was justified in assessing the correctness of the notice for reopening the assessment under Section 148 on the basis of the reasons which were disclosed by the Assessing Officer. - Decided against assessee.
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2017 (6) TMI 599
Reopening of assessment - donation to an educational institution - approval from competent authority - Held that:- The Form for recording the reasons for initiating the proceedings under Section 148 for obtaining approval of the CIT/Additional CIT itself proceeds on the erroneous basis that the quantum of income which had escaped assessment was ₹ 28,75,000/- whereas the assessee had filed income returns of merely ₹ 20,56,145/- and it is on this basis that the Additional CIT and the CIT granted their approval. However, the CIT's date of approval is not recorded in the Form even though it is mentioned in the letter dated 28th January, 2016. The Petitioner had highlighted this fundamental error at the initiation of the case by stating that his income was mentioned as ₹ 20,56,145/- instead of ₹ 69,71,191/-. This was summarily rejected by the Respondent by an order dated 14th October, 2016 stating that the amount of ₹ 20,56,145/- instead of ₹ 69,71,191/- being mentioned as the income of the Petitioner was a clerical mistake and that the latter figure would be treated as his income. It is evident that the sanction of the Principal CIT as disclosed with the letter dated 25th May 2016 was obtained ex post facto. The Court is, however, of the view that if the correct income i.e. ₹ 69,71,191/- had been put before the CIT at the time of seeking his approval, he might perhaps have taken a different view. There is nothing on record to show that the clerical mistake of substituting ₹ 20,56,145/- for ₹ 69,71,191/- was ever brought to the notice of the CIT either before or after the so called approval/sanction under Section 151(1) of the Act. The initiation of the case for reopening of the assessment was erroneous and without application of mind especially since the AO had not examined the return filed, which if he had would have revealed that the Assessee had filed regular returns, had sufficient opening balance in his account and the withdrawals therefrom substantiated the donation made. - Decided in favour of assessee.
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2017 (6) TMI 598
Estimating the profit @ 1.5% of the total turnover - best judgment assessment - Held that:- Admittedly, the assessee failed to produce the books of account at the time of assessment. It is also a fact to determine the actual income the books of account play the crucial role. In the absence of books of account, we find that Ld. CIT(A) had to resort to accept to determine the income to the best of his judgment. However, the income in the case of best judgment assessment should be worked out reasonable and scientific manner. The income on estimated basis should be. 80% to the gross turnover of the assessee. It is because the amount of profit shown by assessee in the earlier years cannot be set aside while determining the income on the basis of best judgment. Therefore after considering the trend of the assessee’s business we direct the AO to re-compute the profit @. 80% of the turnover. This ground of assessee’s appeal is partly allowed. Addition on account of difference between the creditors shown by assessee vis-à-vis shown by the respective parties - Held that:- Though the assessee has filed the re-conciliation the difference by stating that certain bills were raised at the fag-end of the year which was accounted for in the subsequent year. In such situation, if the differences are added to the total income of assessee then this will lead to double taxation in the hands of assessee. Therefore, we find that the impugned order passed by Ld. CIT(A) by estimating the income in the aforesaid facts and circumstances is reasonable enough to determine the actual tax liability. Thus, we do not find any infirmity in the order of Ld. CIT(A). Thus appeal of the Revenue is dismissed.
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2017 (6) TMI 597
Disallowance of leasehold / refurbishment expenses - revenue or capital expenditure - Held that:- The assessee may have received benefit of enduring nature but the same was not sole and decisive factor of determining the nature of impugned expenditure. The impugned expenses were only to conduct the business more profitably and therefore, allowable to the assessee as revenue expenditure. Therefore, after considering all the factors as discussed above and noting that the impugned expenditure did not bring into existence any capital asset, we see no reason to interfere with the findings of the Ld. CIT(A) and hence, the expenditure being revenue in nature and incurred towards refurbishment of leasehold properties were allowable to the assessee as revenue expenditure. The revenue’s appeal stands dismissed with a direction to Ld. AO to verify the fact that the assessee has disallowed depreciation against the same in succeeding years and the assessee, in turn, is also directed to demonstrate the same before Ld. AO. Addition of certain income accrued on preference share capital - Held that:- The preference shares being held as Long Term Investments as capital assets were assessable to tax under the head ‘capital gains’ u/s 45. The revenue could not bring any material to establish the fact that any dividend was actually declared by these companies during the impugned AY. Further, the capital gains offered by assessee upon sale of preference shares has been accepted by the revenue in succeeding years in Section 143(3) proceedings and therefore, we find no reason to interfere with those assessments. Certain additional evidences in the form of paper-book dated 24/10/2013 has been produced before us in support of calculations of accrual of income on preference shares/ maturity value etc., which require, appreciation at the level of Ld. AO since the Ld. AR has asserted that whatever dividend / income has been accrued / received on these instruments, the same has been inbuilt into the maturity value and there is no revenue leakage. Therefore, in principal, while upholding the claim of the assessee that the income on these shares was assessable under the head ‘capital gains’ upon their maturity, we remit the matter back to the file of AO for the purpose of verifying the fact whether all income accrued / received on these shares was inbuilt into the maturity / redemption / sale value and there was no revenue leakage. The assessee, in turn, is directed to substantiate the same forthwith, failing which the Ld. AO shall be at liberty to dispose-off the issue on the basis of material available on record. The assessee’s ground of appeal stands allowed for statistical purposes. Disallowance of Debt issue expenses and employees contribution to provident fund - Held that:- We find that since the contribution has been deposited by the assessee before due date of filing of return of income, no disallowance is called for in terms of Section 43B. The impugned addition stands deleted
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2017 (6) TMI 596
Addition of bogus purchases - ‘unexplained expenses’- denial of natural justice - Held that:- From the order passed by Ld.CIT(A), it is seen that it is an ex-parte order and has been passed on the basis of material on record by Ld.CIT(A). Before us, Ld.A.R. has submitted that he had originally filed appeal before Ld.CIT(A), Thane. Before the transfer of appeal before Ld.CIT(A), Aurangabad, no opportunity of hearing was given and further since notice was not received by him he could not appear before Ld.CIT(A), Aurangabad. The aforesaid submissions have not been controverted by Revenue or found to be untrue. On the prayer of the assessee to grant one more opportunity of hearing, we are of the view that in the interest of natural justice, assessee has to be granted one more opportunity of hearing. We therefore restore the issue back to the file of Ld.CIT(A), Aurangabad to decide the appeal de novo. Appeal of the assessee allowed for statistical purpose.
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2017 (6) TMI 595
Reopening of assessment u/s 147 - Held that:- We find no merit in the ground of appeal No.1 raised by the assessee, where the original return of income filed by the assessee was processed under section 143(1) of the Act. Thereafter, on the basis of information received, the Assessing Officer had reason to believe that there was escapement of income and accordingly, recorded reasons for reopening the assessment under section 147 of the Act. Following the ratio laid down by the Hon'ble Supreme Court in ACIT Vs. Rajesh Jhaveri Stock Brokers Pvt. Ltd. (2007 (5) TMI 197 - SUPREME Court) action of Assessing Officer is upheld and the ground of appeal No.1 raised by the assessee is dismissed. Addition by applying GP rate on the alleged bogus purchases - Held that:- Undoubtedly, the assessee has established the trail of goods but since the goods are purchased through hawala dealer, then margins of profit for such goods needs to be added in the hands of assessee. Following the decision in bunch of appeal in M/s. Chhabi Electricals Pvt. Ltd. Vs. DCIT (2017 (6) TMI 514 - ITAT PUNE ), the Assessing Officer is directed to apply GP rate of 10% on the goods purchased from hawala dealers, over and above the GP rate declared by the assessee.
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2017 (6) TMI 594
Reopening of assessment u/s 148 - Held that:- The proceedings under section 148 of the Act were initiated against the assessee. However, where the assessee had failed to furnish any return of income in response to the said notice issued under section 148 of the Act and in response to 142(1) /143(2) of the Act then, the assessee at this juncture cannot raise issue against re-opening of assessment. Hence, the ground raised by the assessee is dismissed. Addition on account of unexplained investment u/s 69 - co-ownership - Held that:- In view of the submission of the assessee, the addition on account of unexplained investment for purchase of plot u/s 69 of the Act is upheld in the hands of the assessee, as the said plot is purchased in the name of two persons. The Ld. AR for the assessee has fairly conceded that balance sum of ₹ 5,00,000/- is to be added in the hands of other partner, Shri Arun Chachad. In the said case, appeal is pending before the CIT(A). Accordingly, Arun Chachad. In the said case, appeal is pending before the CIT(A). Accordingly, addition of ₹ 5,00,000/- is upheld in the hands of the assessee. - Decided against assessee Disallowance of transport charges - Held that:- Since the assessee did not file details of the expenses, the Assessing Officer asked the assessee as to why reasonable disallowance should not be made on this account. During course of hearing, CA & AR of the assessee stated that only 5% disallowance would be accepted. However, the Assessing Officer made ad-hoc addition by disallowing 7.5% of the total lorry hire expenses and made addition. The CIT(A) restricted the same to 5% of the total expenses against which the assessee is in appeal. There is no merit in the plea of the assessee in this regard wherein the Ld. AR of the assessee had already accepted 5% of disallowance out of total lorry hire charges paid.- Decided against assessee Addition on account of cash introduced in the firm’s account by the partners - Held that:- As in the case of Jagatsingh Pratapsingh Jadhav, addition of ₹ 5,00,000/- on the same ground is upheld and accordingly, no other addition on the same transaction is to be made in the hands of the firm and the same is deleted. In respect of other partner, Shri Arun Chachad, addition of ₹ 5,00,000/- has been made and appeal is still pending before the CIT(A). The Ld. AR for the assessee has proposed that the addition made in the hands of the partners on account of their cash contribution be upheld. In case no addition is confirmed in the hands of Shri Arun Chachad, the balance addition of ₹ 5,00,000/- would be upheld in the hands of the assessee’s firm. Otherwise, in case it is added in the hands of the partner, no addition in the hands of the assessee, is valid. Disallowance of contract work charges, supervision charges and office expenses, vehicles expenses - Held that:- In respect of expenses, these additions are upheld in the hands of the assessee on the ground that some of the expenses are supported by self made vouchers
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2017 (6) TMI 593
Remuneration received - amount directly remitted from foreign to the NRE account of assessee by the foreign company could be brought to tax - Remittances of salary into NRE Account maintained with an Indian Bank - binding nature of circular - Held that:- There is a distinction between receiving money and transfer of money. - The latter remittance would be outside the purview of provisions of section 5(2)(a) of the Act, as what is remitted is not "salary income" but a mere transfer of assessee's fund from one bank account to another which does not give rise to "Income". It is not clear as to whether the expression "merely because" used in the Circular refers to the former type of remittance or the latter. To this extent the Circular is vague. In the instant case, the employer has directly credited the salary, for services rendered outside India, into the NRE bank account of the seafarer in India. In our considered opinion, the aforesaid Circular is vague in as much as it does not specify as to whether the Circular covers either of the situations or both the situations contemplated above. Hence we deem it fit to give the benefit of doubt to the assessee by holding that the Circular covers both the situations referred to above. The result of such interpretation of the Circular would be that the provisions of Sec.5(2)(a) of the Act is rendered redundant. Be that as it may, it is well settled that the Circulars issued by CBDT are binding on the revenue authorities. This position has been confirmed by the Hon'ble Apex Court in the case of Commissioner of Customs v. Indian Oil Corporation Ltd (2004 (2) TMI 66 - SUPREME COURT OF INDIA) wherein their Lordships examined the earlier decisions of the Apex Court with regard to binding nature of the Circulars and laid down that when a Circular issued by the Board remains in operation then the revenue is bound by it and cannot be allowed to plead that it is not valid or that it is contrary to the terms of the statute. Accordingly, the grounds raised by the assessee are allowed.
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2017 (6) TMI 592
Initiating action u/s 153A - Held that:- As the documents on the basis of which proceedings u/s 153C of the Act had been initiated in the case of the assessee did not belong to the assessee. Accordingly, we set aside the order of the Ld. CIT (A) and direct the Assessing Officer to delete the impugned additions. - Decided in favour of assessee.
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2017 (6) TMI 591
Short term capital loss - Held that:- We find the Hon'ble Delhi High Court in the case of Shambhu Mercantile Ltd [2009 (2) TMI 478 - Delhi High Court] has held that the conditions prescribed in clauses (a) to (c) of sub-section (7) of section 94 are cumulative in nature. Accordingly, it has been held that it is only when the transaction of purchase and sale is in relation to a security or a unit in respect of which dividend or income received is exempt and it is within stipulated period of three months as prescribed in clauses (a) and (b) of section 94(7) of the Act, the loss, if any, would stand disallowed to the extent of dividend or income received or receivable on such securities or units in computing assessee’s income chargeable to tax. Similar view has been taken by the Hon'ble Bombay High Court in the case of Smt. Alka Bhonsle [2010 (6) TMI 16 - BOMBAY HIGH COURT]. So far as the argument of the ld. DR that FIFO is not an acceptable principle is concerned, we find the CBDT itself vide Circular No. 768 dated 24.06.1998 has held that FIFO is an accepted method. Under these circumstances and in view of the detailed order passed by the ld. CIT(A) on this issue, we find no infirmity in the same. Accordingly, the same is upheld and Ground No. 1 raised by the Revenue is dismissed. Addition to difference between the figures reported to the Sales Tax authorities and the figures as per the Income-tax return - Held that:- We find the ld. CIT(A) deleted such addition on the ground that the assessee is following this method consistently and such difference has already been disclosed in the return filed for subsequent year. We do not find any infirmity in the order of the ld. CIT(A) on this issue. The submission of the ld. counsel for the assessee that the assessee is consistently following this method of accounting and the difference between the value of stock declared to Sales Tax authorities and the Income-tax authorities are offered to tax in the subsequent years could not be controverted by the ld. DR. Under these circumstances and in view of the detailed reasoning given by the ld. CIT(A), we do not find any infirmity in his order deleting the addition by following the rule of consistency. The ground raised by the Revenue is accordingly dismissed. Claim of deduction u/s 80IA - captive power plant of the assessee - Held that:- From the order of the Assessing Officer, it is not clear as to whether he wanted to allow 10% deduction on the total turnover or sustained the same. In the end, the Assessing Officer herein has made addition of ₹ 13.72 crores towards disallowance of deduction claimed under Chapter VIA. From the various details furnished by the assessee in the paper book as well as copy of order of the ld. CIT(A), we find under identical facts and circumstances of the case, the Assessing Officer had allowed similar claim in the preceding year. Submission of the assessee that assets which were purchased out of borrowings were liquidated in the previous years could not be controverted by the ld. DR. Under these circumstances and in view of the detailed order passed by the ld. CIT(A) on this issue, we find no infirmity in his order. Accordingly, the same is upheld and the ground raised by the Revenue is dismissed. Addition towards late deposit of employee’s contribution of ESI - Held that:- Various benches of the Tribunal are consistently taking the view that if the employee’s contribution towards PF and ESI etc are deposited with the concerned authorities before the due date of filing return, then there cannot be any disallowance u/s 43B of the Act. Since the assessee in the instant case has made such deposit before the due date of filing of the return, therefore, the ld. CIT(A) was fully justified in deleting the disallowance made by the Assessing Officer. - Decided against revenue Addition on ad-hoc basis u/s 14A - Held that:- Although, there is no disallowance of interest expenditure for earning tax-free dividend income, however, it cannot be said that no administrative expenditure has been incurred for earning the tax-free income of ₹ 3,60,000/- on the investment of ₹ 15,00,000/-. Since the dividend income is on account of investment in Magnum Global Fund of ₹ 15,00,000/-, therefore, considering the totality of the facts of the case, disallowance of ₹ 50,000/- on ad-hoc basis under the facts and circumstances of the case appears to be on higher side. Although, the ld. counsel for the assessee submitted that no disallowance has been made in the past, however, it was not brought to our notice as to whether the disallowance was not made in scrutiny assessment or summary assessment. Considering the totality of the facts of the case, disallowance of ₹ 25,000/- under the facts and circumstances of the case, in our opinion, will meet the ends of justice. Addition as interest from temporary deployment of surplus loan funds and not allowing it to be reduced from the total interest cost of the loan funds - Held that:- We find the Hon’ble Supreme Court in the case of Rajendra Prasad Mody [1978 (10) TMI 133 - SUPREME Court ] has held hat expenditure laid out or expended wholly and exclusively for the purpose of making or earning such income is an allowable deduction. Following the above decision, we are of the considered opinion that assessee should be given due credit for interest expenditure incurred for earning such interest income. Accordingly, the alternate submission of the assessee is allowed. The Assessing Officer is directed to verify the amount of expenditure apportioned for the investment required for earning such interest income.
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2017 (6) TMI 590
Penalty u/s 271(1)(c) - Held that:- From the plain reading of section 271(1B), it clearly indicates that mere direction of the AO for initiating penalty proceedings under clause (c) of Sub-Section (1) of Section 271 of the Income-tax Act, 1961, is sufficient compliance. It is observed that the assessee’s case pertains to AY 2013-14, and the assessing officer has made the direction in the assessment order for initiation of penalty proceedings u/s 271(1)(c) and it sufficient compliance for recording the satisfaction for initiation of penalty proceedings. Therefore we hold that the Ld.CIT(A) is not correct in cancelling the penalty holding that there was no satisfaction of the AO for initiating the penalty and accordingly we set aside the orders of the CIT(A). The Ld.CIT(A) has not decided the case on merits and during the appeal hearing the Ld.DR did not place the statement recorded during the course of survey and the incriminating material found and seized. Therefore we remit the matter back to the file of the CIT(A) to decide appeal on merits.
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2017 (6) TMI 589
Reopening of assessment - accommodation entries - person non confronted by assessee on whose statement additions made - Held that:- As during the course of search conducted upon the Shri Mukesh Choksi group, statement of Shri Mukesh Choksi was recorded and in his statement he has admitted that he was providing accommodation entries to those who were interested to earn capital gain. As find that there is no finding with regard to the supply of statement of Shri Mukesh Choksi to the assessee. Moreover, nothing is available on record, wherefrom it could be inferred that assessee was ever allowed to cross-examine Mr. Mukesh Choksi. It is settled position of law that statement or the evidence which is being relied upon by the AO for making the addition in the hands of assessee, the same should be confronted to the assessee and the assessee should be allowed to cross-examine the witness in this regard. AO was not justified in making addition in the hands of assessee, without allowing the assessee to crossexamine Mr. Mukesh Choksi, whose statement was relied upon for making the above additions. Thus set aside the order of CIT(Appeals) and restore the matter to the file of AO. Appeal of assessee allowed for statistical purposes.
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2017 (6) TMI 588
Gain/loss on sale of assessee’s share in agricultural land at Aurangabad - section 50C applicability - Held that:- There is no merit in the stand of the Assessing Officer that the gain is to be assessed as short term capital gains and accordingly, the said stand taken by the Assessing Officer is thus rejected. Since the assessee had carried out the said transaction being adventure in the nature of trade then profit/loss arising there from is to be assessed as income from business and once it is so assessed then there is no merit in applying the provision section 50C(1) of the Act. - Decided in favour of assessee.
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2017 (6) TMI 587
Validity of proceedings initiated u/s. 147 - reasons to believe - Held that:- At the time of recording of reasons the AO, since, had no tangible material before him to form a belief that income has escaped assessment, the reopening of assessment on mere suspicion, rumor and gossip is invalid. The AO in case of a particular assessee while initiating action u/s. 147 must form his own belief on the basis of materials/information in his possession and not at the behest of another officer. In the facts of the present case, we are convinced that at the time of recording of reasons there was no material before the AO to form a belief that income has escaped assessment. Though, the AO has referred to the information received from the AO at Madras, however, there is nothing available in the assessment record to throw light on the exact nature of information received from the AO, Madras and the mode of communication of such reasons. We are of the considered opinion that the formation of belief by the AO relating to escapement of income being not on the basis of any tangible material available before him at the time of recording of reasons, the initiation of proceedings u/s. 147 is invalid and without jurisdiction, hence, deserves to be annulled.- Decided in favour of assessee. Refund of excess appeal fees paid by the assessee at the time of filing of appeal before the CIT(A) - Held that:- As per section 246A of the Act, any appeal filed by the assessee should be accompanied by appeal fees of Rs. .1000/-. Undisputedly, the assessee has paid appeal fees of Rs. .10,000/- while filing the appeals before the CIT(A) challenging the assessment orders. The CIT(A) has not disputed the aforesaid factual position. Therefore, when there is no dispute to the fact that the assessee has paid appeal fees in excess of what it was required to pay under the statutory provisions, such excess appeal fees has to be refunded to the assessee. We direct the AO to verify this aspect and refund the excess appeal fees paid by the assessee following due process of law.- Decided in favour of assessee.
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2017 (6) TMI 586
Addition on account of fall in GP rate - sustaining the disallowing supervision charges, travelling and car expenses to some extent and also 50% of the remuneration paid to Puneet Jhalani - Held that:- There is no sufficient material on record to conclude that the assessee had to incur any supervision charges for the current year, more particularly in view of the fact that the entire goods were purchased from the sister concern and the expenditure that was incurred relates to the previous year. We, therefore, do not find any illegality or regularity in the findings of the Ld. CIT (A). We, therefore, dismiss the grounds relating to this aspect. Turning to the travelling and vehicle expenditure here is no clinching record to support the entries in page nos. 174 to 175 and 192 to 196 of the PB. On their own, these entries doe not stand proved. The invoices filed do not establish any connection between the trip and the business purpose. Same is the case in respect to vehicle expenditure. No log book is produced before us. In the circumstances, we are of the considered opinion that the personal expenditure out of these two heads cannot be ruled out. However, having regard to the facts and circumstances of the case and the business needs of the assessee, we restrict the disallowance to 1/6th of the expenditure under the heads of travelling and vehicles. Coming to the commission on sales and consultancy charges paid to one Sh. Puneet Jhalani and Yogesh Jhalani, AO restricted the disallowance to 50%. On this aspect on a consideration of the amounts paid to these two persons over a period of time. As enumerated at page nos. 171 and 172 of the PB, we find that right from the year 2002-03 the assessee has been paying this commission and charges to these persons and for that matter the commission paid to Puneet Jhalani this year is equivalent to only 50% of the amount that was paid for the AY 2006-07. Having regard to the nature of the business and the nature of payments, we are of the opinion that the authorities below are not justified in disallowing the expenditure and this expenditure is allowable. - Decided partly in favour of assessee
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2017 (6) TMI 585
Assessment u/s 153A - addition to income - proof of incriminating material found - Held that :- No incriminating material was found during the search and seizure operation that could justify the addition made by the AO. She has analysed the page number 114 that was seized by the authorised party carrying out the search proceedings. It is very clear that neither the name of the assessee nor the name of the project is appearing in the paper. The assessee had objected before the AO that the statements of the employees were not given to it. We do not know as to whether same were made available to the assessee or not. The statements of the employees, in search and seizure cases, can be used if they are supported by some kind of collaborative evidence. On a specific query by the bench to the DR about supporting evidence proving the receipt of alleged on money, she could not refer to any material. As the assessment for the AY. 2007-08 was not pending, so, without some incriminating material the AO should not have made the addition to the total income of the assessee. - Decided in favour of assessee.
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2017 (6) TMI 584
Addition invoking the provisions of Sec.69 or 69A - revenue has contended that the security deposit in question ought to have been shown in the asset side of the Balance sheet - Held that:- In both the aforesaid provisions, the requirement is that the investments or unexplained money, bullion, jewellery or other valuable article should not have been found recorded in the books of accounts of the Assessee. From the explanation given by the Assessee, which has not been shown to be incorrect by the Revenue, it is clear that the security deposit with M/S.Future Plus Enterprise Pvt.Ltd., is duly reflected in the books of accounts of the Assessee. As we have already seen this has been taken into account by reduction in the liability side of the Balance Sheet and therefore the effect is one and the same. As we have already stated the addition can be made only when the investment is not recorded in the books of accounts. Since the investment is found to be recorded in the books of accounts, I am of the view that there was no reason to interfere with the order of the CIT(A) and hold that the addition was rightly deleted by the CIT(A). - Decided in favour of assessee.
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2017 (6) TMI 583
Disallowance of commission paid - ingenuity - AO concluded that the assessee firm was not able to establish and prove that commission was paid to alleged individual commission agents for services rendered by them - rectification application - Held that:- The onus of services having rendered is on the assessee so as to justify the claim of commission expenditure. When this onus is not discharged, for this reason alone, the claim is not sustainable. We find that this tribunal had already disposed off the first miscellaneous application stating that no mistake apparent from record within the meaning of section 254(2) of the Act warranting any rectification was brought out by the assessee. The ld AR was not able to produce any evidence even at this stage to prove the factum of rendering of services by those commission agents. In any case, we find that the ld AR was not able to bring any mistake in the old order of this tribunal that requires to be rectified within the meaning of section 254(2) of the Act. Hence, we do not deem this as a fit case warranting any rectification to be made in terms of section 254(2) and accordingly have no hesitation in dismissing this miscellaneous application filed by the assessee. - Decided against assessee.
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2017 (6) TMI 582
TPA - MAM - Berry ratio applicability - Held that:- We are of the view that various functions for ship chartering have been outsourced by the AE to one M/s R. M. Martine, since inception of the AE. The AE had its own funds, undertook business risk and many instances of such risk which actually borne by AE pertaining to various vessels have been proved with evidence. The payment of hire charges, bunker charges, port charges have been made by the AE from its own funds evidenced by cash flow statement could not be controverted by revenue. In our studied and considered view the AE has performed proper business functions, assumed business risks by employing its own funds independently without help of appellant and, therefore, in no way AE can be considered as pure distributor. The Berry ratio is not at all applicable in the present case. Our view is fortified by Hon’ble Delhi High Court judgment in the case of Sumitomo Corpn. (2016 (7) TMI 1055 - DELHI HIGH COURT) We are of the considered opinion that Berry ratio is not applicable in this case and therefore, appropriate profit indicator in this case is operating profit 7 total cost i.e. OP/TC. In case of pure distributor, only value added expenses are considered and Berry ratio can be applied. The AE made value addition, assumed various risks of business and also incurred damages and losses in the business, as discussed by me in detail earlier. As per TNMM study filed by the appellant, the margin on total cost earned by AE is 4.52% which is less when compared with 5.18% in case of other eleven comparable companies. This is within arm's length. Therefore, otherwise also no transfer pricing adjustment is called for by the safe harbor clause. Disallowance of Administrative & Selling Expenses - Held that:- Disallowance has been made by ld. AO without pointing out any specific item of disallowance which is in the nature of purely an ad-hoc disallowance. Assessee’s books are audited and the entire expenditure is properly vouched. It is a settled law that business expenditure should not be disallowed without citing specific item and giving reasons for disallowance. In our considered view, ld. CIT(A) has rightly held the disallowance to be ad-hoc and untenable which is upheld. Revenue ground in this behalf is dismissed and assessee’s clarificatory CO ground is allowed.
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2017 (6) TMI 581
Disallowance of 1% of turnover - Held that:- The facts of AY 2007-08 and year in question are clearly distinguishable. The assessee, except summarily relying on ITAT judgment dated 21.06.2013, could not dislodge the factual observations of ld. AO and CIT(A). In considered view, the interest of justice will be served if the disallowance retained by the ld. CIT(A) is further reduced to by 50%. Accordingly, the assessee's appeal is partly allowed
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2017 (6) TMI 580
Denial of request for registration of the Trust u/s 12A - assessee had not incurred any expenditure on the objects of the Trust - invoking the provisions of Sec.13(1)(b) - Held that:- Sec.12AA(1) requires the Commissioner to whom an application is made for the registration of a Trust or Institution to satisfy himself about the genuineness of the activities of the Trust or the Institution as well as the objects of the Trust or Institution and for that purpose Commissioner is vested with power to call for documents or information and is also empowered to make such inquiries as he may deem necessary in that behalf. Commissioner is thereupon empowered to pass an order in writing either registering an Institution or if he is not satisfied about the objects of the Trust or Institution and of the genuineness of its activities, to pass an order in writing refusing to register the Trust or Institution. Thus it can be seen that at the time of grant of registration, the Commissioner is not empowered to examine the application of income. The stage for consideration of the relevance of the object of the Trust and the application of its funds arises at the time of assessment. See Shri Anjaneya Medical Trust Vs. CIT [2016 (3) TMI 30 - KERALA HIGH COURT ] In order to ascertain the true nature and purpose of the Trust, the objectives are to be considered as a whole and not in isolation. In the present case, since the assessee Trust has been created in the year 1916, i.e., before the commencement of the Income-Tax Act, 1961, we are of the view that the provisions of Sec.13 of the Act are not applicable. The rejection of approval for registration u/s 12A was not warranted in present case - Decided in favour of assessee.
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Customs
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2017 (6) TMI 616
Refund claim - time limitation - Whether the CESTAT is right in holding that the importer is entitled to get refund claim, even though the importer has made the refund claim beyond the limitation period as prescribed u/s 27 of CA, 1962? Whether the CESTAT is right in holding that periodicity of 6 months as envisaged u/s 27 of CA, 1962 is not applicable to the refund amount realised by the Revenue by enforcing Bank Guarantee as this does not represent any duty u/s 27 of the CA? Held that: - respondent no.2 had been issued three licenses between June, 1995 and October, 1995, for importing capital goods at a concessional rate of duty. This facility could be made available to respondent no.2, by virtue of the provisions of Notification No.110/1995. Admittedly, under the EPCG Scheme, respondent No.2, had a leeway of five years for completing the export obligation. Respondent fulfilled the export obligation, well within the time frame, provided under the EPCG Scheme, but also furnished all documents in that behalf - The delay with regard to the submissions of EODC, in our view, could not be attributed to respondent no.2, as requisite steps had been taken by it, immediately after, fulfilment of export obligation by furnishing other relevant documents, which would have demonstrated that the export obligation in point of fact stood fulfilled. As to the nature of the amount deposited in whichever form. If, the amount deposited, is, towards security, surely, once the Assessee succeeds, he is entitled to seek restitution. Restitution, in such like circumstances, is not covered by Section 27 of the Act. Appeal dismissed - decided against Revenue.
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2017 (6) TMI 615
Confiscation - redemption fine - penalty - valuation - enhancement of value of the imported goods in terms of local Chartered Engineer opinion - Held that: - customs authorities have rejected the opinion of one expert simply on the basis of opinion by another expert. We note that there is no other sufficient independent reason for such rejection. Such rejection has been held as not a valid basis for rejection of Chartered Engineer certificate in the case of Anish Kumar Spinning Mills [2004 (5) TMI 172 - CESTAT, CHENNAI] - Admittedly, the imported goods are more than 10 years old in terms of Import Trade Control Regulations in EXIM 2002-07 read with para 3.3 of the Handbook of Procedures of Vol-I. The importers have violated the provisions of Foreign Trade (Development and Regulation) Act, 1992. The goods are therefore liable for confiscation under Section 111 (d) of the CA 1962 - penalty upheld - the quantum of redemption fine and penalty reduced - appeal allowed - decided partly in favor of appellant.
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2017 (6) TMI 614
Valuation of imported goods - re-assessment of the value of the imported goods as well as confiscation thereof for violation of ITC regulations - the grievance of the appellant is that custom authorities have disregarded the load port Chartered Engineer certificate without valid reasons to reject the same - Held that: - customs authorities have rejected the opinion of one expert simply on the basis of opinion by another expert - there is no other sufficient independent reason for such rejection. Such rejection has been held as not a valid basis for rejection of Chartered Engineer certificate. Confiscation - redemption fine - penalty - Held that: - the imported goods are more than 10 years old in terms of Import Trade Control Regulations in EXIM 2002-07 read with para 3.3 of the Handbook of Procedures of Vol-I. The importers have violated the provisions of Foreign Trade (Development and Regulation) Act, 1992. The goods are therefore liable for confiscation under Section 111 (d) of the CA, 1962 - the importers are liable for imposition of penalty also u/s 112 (a) ibid - however, the quantum of redemption fine and penalty reduced. Appeal allowed - decided partly in favor of appellant.
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2017 (6) TMI 613
Diversion of imported goods - violation of condition of import - the respondent had diverted 8816.134 MTs of imported stainless steel plates/coils in the local market - confiscation - Held that: - we are unable to fathom why the goods imported by the respondent availing duty exemption thereon, on the condition of using them in manufacture and export of stainless steel vessels, should be found in any other place other than the manufacturing premises - there is substance in the allegation raised in the SCN that the M/s. Massey Godown was used only as a intermediate place for the purpose of diversion and sale of the goods - 627.192 MTs of imported stainless steel sheets/coils seized at M/s.Massey Godown are very much liable for confiscation u/s 111(o) of the CA, 1962 - for the limited purpose of considering the quantum of redemption fine under Section 125 ibid, the matter is being remanded to the adjudicating authority. Appeal allowed by way of remand.
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2017 (6) TMI 612
CVD exemption - import of 100% polyester blanket - N/N. 30/2004-CE dated 9.7.2004 - denial of exemption on the ground that the credit availed on inputs - Held that: - reliance placed in the appellant own case Monte Carlo Fashions Ltd. Versus Commissioner of Customs, Amritsar [2017 (2) TMI 526 - CESTAT CHANDIGARH], where it was held that the decision of Hon’ble Madras High Court in the case of HLG Trading [2015 (11) TMI 313 - MADRAS HIGH COURT] was under the challenge of vires of N/N. 34/2015-C.E., dated 17-7-2015 and N/N. 37/2015-C.E., dated 21-7-2015 which substituted the proviso condition relating to eligibility of exemption for Central Excise duty. The proviso afer Para 1 of exemption N/N. 30/2004-C.E. was substituted on 17-7-2015 vide N/N. 34/2015. Such substitution changed the scope of the condition and is subsequent to the decisions of Hon’ble Supreme Court - unamended proviso of the notifications are applicable - appeal allowed - decided in favor of appellant.
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2017 (6) TMI 611
Valuation - export duty on iron ore - Wet Metric Ton (WMT) basis - Held that: - reliance placed in the case of Commr. of Customs (Port), Kolkata Vs. SESA GOA LTD. [2014 (8) TMI 213 - CESTAT KOLKATA], where it was held that the determination of export duty on the basis of dry weight or wet weight is irrelevant as the duty to be computed on the value of the goods in dry weight condition, as agreed by the parties - appeal rejected - decided against Revenue.
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2017 (6) TMI 610
Refund claim - Education cess and higher education cess on the clean energy cess - Benefit of N/N. 28/2010-CE, and N/N. 29/2010-CE, both dated 26.02.2010 - whether the Appellant became successful in satisfying the authorities that the incidence of duty claimed as refund has been borne by them and not passed on to any other person? - Held that: - initially the Adjudicating authority after analyzing the evidences on record, sanctioned the refund, observing that the Appellant could satisfy that the burden of duty has not been passed on to any other person. However, on an appeal by the Revenue, the learned Commissioner (Appeals) arrived at an altogether different finding on which was not communicated to the appellant to explain/rebut the same by material particulars - In these circumstances, the appellant should be given a fair chance to explain the said objection/finding of the learned Commissioner (Appeals) - appeal allowed by way of remand.
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Corporate Laws
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2017 (6) TMI 608
Companies in liquidation - attachment orders - appointment of official liquidator - Held that:- The purpose of considering the claims of the secured and unsecured creditors, the preferential creditors and also the claims of the investors/depositors etc., the properties which are admittedly standing in the name of the companies in liquidation attached by the competent authority under the provisions of the MPID Act are required to be handed over to the Official Liquidator for the purpose of sale and physical control thereof. The competent authority is thus required to be issued an order and direction to handover the physical possession, custody and control of all such properties standing in the name of the aforesaid companies in liquidation which are attached by the competent authority under the provisions of the MPID Act to the Official Liquidator expeditiously. Insofar as moveable and immoveable assets of the company i.e. M/s.City Limouzines (India) Ltd. (in liquidation) are concerned, the said Special MPID Court of Session, Greater Bombay or the competent authority whomsoever is in possession thereof are concerned, the same shall be handed over by them to the Official Liquidator within two weeks from the date of communication of this order. It is made clear that MPID Court / competent authority who is in possession of the properties of the directors and/or agents of the said company M/s.Aryarup Tourism Club Resorts Private Limited (In Liquidation) would be entitled to deal with those properties, including the sale thereof for the purpose of discharging the claims of the investors / depositors and are not required to hand over those properties to the Official Liquidator in view of the fact that no such claims are made by the Official Liquidator in respect of those properties till date. The Official Liquidator shall forward the order of adjudication passed on various claims of investors/depositors made so far in respect of the companies in liquidation which are subject matters of this proceedings before the MPID Court to MPID Court / competent authority. He shall also forward the balance claims which are yet to be adjudicated upon by the Official Liquidator to the MPID Court/competent authority for the purpose of adjudication. The claims which are already adjudicated upon by the Official Liquidator shall be treated as the adjudication of the claims by the MPID Court/competent authority and shall not be adjudicated upon again by the MPID Court for the purposes of making payment.
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2017 (6) TMI 607
Recourse to proceedings under the SARFAESI Act - procedure for recovery of debts due to the Banks - Held that:- In the present case, the petitioners had made a representation to the respondent vide letter dated 27.10.2016, but the respondent/creditor has rejected the same under Section 13(3A) of the SARFAESI Act. The reasons for rejecting the petitioners’ representation have been communicated by the respondent vide its reply dated 17.11.2016. In the case of Mardia Chemicals (2004 (4) TMI 294 - SUPREME COURT OF INDIA) it was clarified that a borrower “may not be entitled to challenge the reasons communicated or the likely action of the secured creditor at that point of time unless his right to approach the Debt Recovery Tribunal as provided under Section 17 of the Act, matures on any measure having been taken under sub- section (4) of Section 13 of the Act”. This being the legal position, as and when the respondent takes any steps under Section 13(4) of the SARFAESI Act, the petitioners will be entitled to approach the Debt Recovery Tribunal for relief under Section 17 of the SARFAESI Act. Given the fact that the Statute lays down a step-by-step procedure for the creditor to take action thereunder and remedies have been provided to the debtor against such action, judicial prudence demands that this Court must refrain from exercising its jurisdiction under Article 226 of the Constitution of India. Any view to the contrary shall derail the procedure contemplated under the Statute and seriously impact the rights of financial institutions like the respondent herein, to recover its dues. Thus the plea of the petitioners that the respondent is amenable to writ jurisdiction of the High Court is repelled. It is held that the present petition is not maintainable against the respondent under Article 226 of the Constitution of India as it is neither a “State”, or “any other person or authority” and nor is it discharging any public or statutory duty. If they have a grievance against the respondent, then the petitioners must seek recourse to proceedings under the SARFAESI Act, which provides for a special procedure for recovery of debts due to the Banks and financial institutions, to be moved at the appropriate stage.
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Service Tax
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2017 (6) TMI 638
Penalty u/s 77 and 78 of FA - short payment of tax - Architecture Services - Interior Decorator Service - Held that: - the Appellant, though registered themselves with the Service Tax Department way back in 1998, however, the Appellant failed to pay the Service Tax even though the value of service rendered has been collected during the relevant period. Therefore, the penalty u/s 78 of the FA, 1994 equal to the Service Tax evaded i.e. ₹ 11,16,373/- has been rightly been confirmed by the learned Commissioner in the adjudicating order - the Appellants are eligible to discharge 25% of the penalty imposed u/s 78 of Finance Act, 1994 on fulfillment of the conditions laid down thereunder - simultaneous penalty u/s 76 and 78 of FA, 1994 cannot be imposed - appeal allowed - decided partly in favor of appellant.
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2017 (6) TMI 637
Waiver of pre-deposit - Sponsorship of Mumbai IPL Team and M/s.Otago Cricket Association - scope of service - Held that: - the assessee is not liable to service tax for sponsorship service - prima facie the applicant has made a case for complete waiver of pre-deposit on that count, therefore, the demand confirmed on account of sponsorship of Mumbai Indian IPL team of ₹ 1,23,60,000 and sponsorship of M/s.Otago Cricket Association of ₹ 1,05,704/- - pre-deposit waived. Sponsorship of IIFA awards - Held that: - the services provided by way of sponsorship of the IIFA awards i.e. event were organised at Macau, China, Colombo, Sri Lanka and Toronto, Canada respectively. The sponsorship services were received outside India. The sponsorship services do not have an existence separate from that of the event and it is actually the organization of the event through which the sponsorship services are rendered. The event of IIFA awards is organized outside India and therefore, when the services itself have been rendered outside India, there is no question of levy of service tax liability thereon - as the services consumed outside India, therefore is no levy of service tax - appellant have made out a case of complete waiver of pre-deposit on this account. Service tax on membership fee paid to GSM Association - demand on the ground that the applicant that received club or association services from GSM Association - Held that: - The said services under club or association service have been held ultra-vires - prima facie the applicant is not liable to pay service under club or association service. Therefore, the applicant has made out a strong case for waiver of pre-deposit. Cenvat Credit on towers, shelters etc. and the services of constructions, erection and maintenance etc. of the same - extended period of limitation - Held that: - prima facie the applicant is not having a case for waiver of pre-deposit - the show cause notice has been issued by invoking the extended period of limitation, therefore, the amount of credit within the limitation of period is required to be paid by the appellant - applicant directed to make pre-deposit. Cenvat Credit on input services for construction of office - denial on the premises that the services resulted in creation of immovable property, which is neither subjected to Excise duty nor service tax - Held that: - the Hon’ble Punjab & Haryana High Court in the case of Bellsonica Auto Components India Pvt.Ltd. [2015 (7) TMI 930 - PUNJAB & HARYANA HIGH COURT] wherein the Hon’ble Hgh Court has allowed the credit on construction of office which were used for setting up of building which has further given on lease. Therefore, prima facie the applicant has been able to make out a case for complete waiver in respect of credit on construction of office premises. Cenvat Credit on capital goods like chairs, furniture, etc. - Held that: - the applicant has reversed the credit of ₹ 13,20,327/- in respect of the capital goods, like chairs and furniture, therefore, the said reversal of cenvat credit is sufficient in terms of section 35F of CEA, 1944 read with section 83 of FA, 1944. Cenvat Credit taken on the basis of invoices in the name unregistered premises - Held that: - A service provider can avail cenvat credit of service tax paid on various input services as long as the said services are used by the service provider for providing the output service if the other requirement of Rule 9 of CCR,2004 have been met - there is no such condition that the input should be received in the premises of the provider of the output service and Rule 3 of CCR, 2004 provides that cenvat credit can be availed when the inputs and capital goods are received in the factory - As the applicant has taken the credit on the basis of invoices in the name of unregistered premises, therefore, the credit cannot be denied to the applicant. Therefore, the applicant has made out a case for complete waiver of pre-deposit.
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2017 (6) TMI 636
Refund claim - Port Service or Inland Haualge Charges - Road Transport from factory to ICD - CHA Service - Clearing and forwarding Agent Service - denial on the ground that the appellant is claiming duty drawback - Held that: - while calculating the amount of drawback on input service has not been considered, therefore, the services received by the assessee for export of goods have not demanding duty drawback claim - refund allowed. Denial also on the ground that Inland Haulage Charges, CHA Service, Clearing and forwarding Agent Service do not qualify as port service - Held that: - the Inland Haulage Charges, CHA Service and Clearing and Forwarding Agent Service have been received by the appellants for export of goods at port, and are covered under Port Services. In that circumstances, the appellants are entitled to avail claim of refund filed by them on Other Port Services. Denial of refund also on the ground that the appellant has not produced the payment of proof of service tax - Held that: - as the invoices of the above services are on record, wherein the payment of service tax is mentioned. In that circumstances, on this ground refund claims cannot be rejected to the appellant. Refund claim with regard to Road Transport Service - denial on the ground that there is no co-relation of invoices issued by the service provider and the goods transported - Held that: - the adjudicating authority is directed to verify the documents to ascertain co-relation between the services received by the appellants and corresponding invoices issued by the goods transporter. On verification of the said fact, the adjudicating authority is directed to issue refund claims to the appellants. Appeal allowed by way of remand.
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2017 (6) TMI 635
Reversal of CENVAT credit - Whether in the facts and circumstances of the case, Rule 6(3)(c) of Cenvat Credit Rules, 2002, attracted, in cases, where the service tax on input services are not used in respect of trading activity but used only for taxable services? - Held that: - If, the appellant has accepted before us that he was not paying service tax on an activity, then the credit of services vis-a-vis input services could only be taken on a pro-rata basis, as per the formula stipulated in Rule 6(3)(c) - Having regard to the rule position and given the admitted fact that no separate accounts were maintained by the appellant, with regard to the taxable and non taxable services, clause (c) of sub rule 3 of rules 6 of 2004 Rules would apply - appeal dismissed - decided against appellant.
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Central Excise
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2017 (6) TMI 634
CENVAT credit - denial on the ground of shortage detected by Income Tax Department - Held that: - Merely, alleging the shortage of input on the basis of survey conducted by the Income Tax Department, without any corroborative evidence of shortage of inputs, the allegation is not sustainable. Therefore, the CENVAT credit cannot be denied to the appellant - appeal allowed - decided in favor of appellant.
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2017 (6) TMI 633
Waiver of penalties - appellant plea to waive penalties as they had remitted portion of the tax due before issue of demand notice and balance before the adjudication of the case - appellant admitted that they have collected the service tax from the students and the receipts also specifically mention that this service tax is included in the fee - the service tax was not deposited by the appellant on account of financial constraints - Held that: - in the case of Top Security Ltd [2015 (12) TMI 1164 - CESTAT NEW DELHI], the division bench of the Tribunal has rejected the defense of financial constrains for depositing the duty after being collected from the customers - penalties upheld - appeal dismissed - decided against appellant.
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2017 (6) TMI 632
CENVAT credit - fake invoices - it was alleged that AEPL were claiming CENVAT credit by fraudulent means on the basis of invoices against which no goods were actually received by them - Held that: - Bulk of the CENVAT Credit has been availed by AEPL on the basis of the invoices issued by RM. However, RM was required to prove that they have received the goods accompanying the Cenvat Credit invoice which they have failed to establish. Invoice stipulated in Rule 11 of the Central Excise Rules is not only the assessment document but also the transportation document. If the particular statutorily prescribed in the invoice are found to be untrue then the irrebuttable presumption arises about the genuineness of the document and the transaction. CENVAT Credit stands availed by AEPL on the basis of invoices issued by various dealers. In respect of RM, the investigation by Revenue at the end of transporter SSFM has established that no goods moved from Mumbai to RM. The entire supply of RM is shown only to AEPL. Further, most of the vehicles whose numbers are indicated in the invoices of RM have been found to be none existent in the records of transport authorities. Consequently, it is to be held that the particulars given in the invoice regarding the vehicle numbers are untrue which make the entire document as not genuine. The verification with reference to other dealers also have established similar facts with reference to the vehicle numbers. It is very well established that in quasi-judicial proceedings, as in civil cases, the principal to be applied to evaluate the evidence is “preponderance of probabilities”. The standard is whether the proposition is more likely to be true than not true. The evidence brought on record by the Revenue, leads to the conclusion that no goods from the dealers in Mumbai, Bhiwadi and Delhi were received by AEPL. The credit availed by AEPL on the basis of invoices issued by various dealers is not admissible - appeal dismissed - decided against appellant.
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2017 (6) TMI 631
CENVAT credit - structural items such as MS angles, channels, joists and beams as capital goods - denial on the ground that the said structural steel items falling under Chapter 72 are used for supporting kiln are not covered under the definition of capital goods in terms of Rule 2(a) of the CCR 2004 - Held that: - In the case of Singhal Enterprises Pvt Ltd [2016 (9) TMI 682 - CESTAT NEW DELHI], the division bench of this Tribunal has held that the structural steel item such as MS angles, channels, TMT bars etc. used in fabrication of support structure for various capital goods are eligible for CENVAT credit - credit allowed - appeal allowed - decided in favor of appellant.
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2017 (6) TMI 630
Refund of CENVAT credit and interest paid due to wrong direction of the audit authorities - time limitation - Held that: - The Original Authority after verification of the records, has come to the conclusion that the appellant had not claimed depreciation and therefore the appellant was not required to reverse the CENVAT credit and to pay the interest thereon - the appellant is entitled to CENVAT credit which the appellant reversed at the instance of the Audit party wrongly along with interest paid by him - appellant allowed to take recredit of the CENVAT credit reversed along with interest - decided in favor of assessee.
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2017 (6) TMI 629
CENVAT credit - MS plates MS angles, MS channels and MS sheets - Held that: - the disputed items have been used in the factory to cover the furnace and the chimney which are used to cover the rolling stand and the part of the furnace and classifiable under sub-heading 8514 - in the case of CCE Vs Jindal Stainless Ltd. [2015 (6) TMI 821 - CESTAT BANGALORE], this Tribunal has held that MS plates, sheets, angles, rounds used in workshop for repair work attained the character of component parts and used in conjunction with certain capital goods/machinery used for upkeep of machinery are held to be eligible for CENVAT credit - appeal allowed - decided in favor of appellant.
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2017 (6) TMI 628
Liability of interest - wrong availment of CENVAT credit - the appellant had taken the credit, but not utilized the same, and reversed the same prior to the issuance of the SCN - Held that: - Board's Circular dated 03.09.2009 states that interest is payable even when credit has not been utilized - the Larger Bench of the Tribunal in the case of J.K.Tyre & Industries Ltd. v. Asst. Commr. of C.Ex., Mysore [2016 (11) TMI 911 - CESTAT BANGALORE] held that wrong availment of CENVAT Credit, interest is not payable, if reversed before utilization - Board's Circular dated 03.09.2009 observed that interest is payable even when credit has not been utilized - interest not sustainable. Penalty was imposed for contravention of the Rules and the same is warranted. Appeal allowed - decided partly in favor of appellant.
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2017 (6) TMI 627
Time limitation - exempted goods cleared without payment of duty - CENVAT credit availed - demand - Held that: - the assessee is filing their regular ER-1 returns, showing the exempted goods cleared without payment of duty and availed the cenvat credit on inputs. Therefore, the contention of the assessee is that some part of the demand barred by limitation is acceptable. In that circumstances, the demand pertaining the period beyond limitation is set aside. Whether the ld. Commissioner (A) is rightly extended the benefit of reversal of cenvat credit on the inputs used in manufacture of exempted final goods or not? - Held that: - the Finance Act, 2010 has given the option to assessee to reverse the cenvat credit attributable to inputs used for manufacture of exempted final goods, therefore, the ld. Commissioner (A) is rightly extended the benefit of reversal of cenvat credit on inputs used for manufacture of exempted final goods. The demand of the normal period of reversal of cenvat credit along with interest is confirmed against the assessee - appeal allowed - decided partly in favor of appellant.
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2017 (6) TMI 626
Refund claim - denial on account of time bar - Held that: - the appellant is not taken CENVAT credit of service tax paid to the loan licensee and the said service tax has shown in their balance sheet recoverable from the department - the appellant has passed the bar of unjust enrichment and is entitled for refund - appeal allowed - decided in favor of appellant.
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2017 (6) TMI 625
CENVAT credit - MS items - denial on the ground that M.S. Angles, Channels & beams used in fabrication of High Back Chair, Tables used in office premises cannot be held input/capital goods and eligible to CENVAT credit - Held that: - the credit availed in relation to M.S. Angles, channals, etc. used in the manufacture/fabrication of furniture, namely Table, High Back Chair used in the office premises of the appellant cannot be held admissible to them - credit of ₹ 1,61,410/- availed on these items used in the fabrication of Table, High Back Chair is recoverable with interest and penalty. Since the appellant was not given option to discharge 25% of penalty imposed under Rule 15 of Cenvat Credit Rules, 2004 read with Section 11AC of CEA, 1944, they are eligible to the same subject to fulfillment of conditions laid down under the relevant provisions - appeal allowed - decided partly in favor of appellant.
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2017 (6) TMI 624
Maintainability of appeal - Held that: - the Revenue has filed this appeal in casual manner which is not permissible and it is an abuse of process of law, therefore, the appeal for the period April’ 1998 to June 1998 is dismissed. Interest and penalty are not imposable on the appellant, and is set aside. Appeal dismissed being not maintainable.
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2017 (6) TMI 623
CENVAT credit - denial on the ground that the appellant is not mentioned in the invoices against which CENVAT credit has been availed - Held that: - the receipt of goods is not in dispute - the old address of the appellant cannot be reason for denial of CENVAT credit to the appellant - appeal allowed - decided in favor of appellant.
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2017 (6) TMI 622
SSI exemption - aggregate value of clearances have to be quantified after taking into consideration of the goods cleared under concessional rate of duty as well as full rate of duty - Held that: - it has been established that the purported clearances of brand name owners have not satisfied the conditionalities provided in the notification, the value of clearances thereof will necessarily have to be added to the aggregate clearances, even if there is mention of the brand name in the invoices - differential duty liability, if any, will start ticking once the value of the clearances already made by thee assessee in availing benefit of notification and value of the disputed brand name clearances are added and the total thereof exceeds the exemption slabs of ₹ 50 lakhs and ₹ 100 lakhs respectively - appeal allowed by way of remand.
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2017 (6) TMI 621
SSI exemption - dummy unit - Held that: - the appeal filed by ABC, as per the intimation given by the ld. Advocate and as per the provisions of Rule 22 of the CESTAT Procedural Rules, 1982, the appeal filed by the ABC, Proprietor Shri P. Prabhakaran shall abate - the appellant was privy to the commission of the offence committed by the main appellant. However, there is no discussion or elucidation of his active role in the whole alleged modus. In any case, since the penalty on the employer DMML has been scrapped by the lower appellate authority, there is no justification for penalty on the employee - appeal allowed - decided in favor of appellant.
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2017 (6) TMI 620
Clandestine removal - Department took the view that the movement/shifting of impugned bonded goods from the licensed warehouse premises to a non-licensed and non-permitted warehouse C amounts to illegal/improper/un-authorized removal of warehoused goods in contravention of the provisions of Section 71of the Customs Act, 1962 - Held that: - allegation is only concerning procedural violation in removal of licensed goods from the bonded warehouse to an adjacent shed. It is not the case that the goods have been removed clandestinely for illicit sale or disposal - it is a case of storing the goods outside the bonded warehouse without malafide intention - penalty imposable - appeal dismissed - decided against appellant.
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2017 (6) TMI 619
Whether the unutilized CENVAT Credit legally earned by the respondent in their distillery division can be allowed for payment of Central Excise duty on Sugar? Held that: - reliance placed in the case of CCE, Patna Vs. New Swadeshi Sugar Mills [2015 (9) TMI 881 - SUPREME COURT], where it was held that CENVAT Credit which was already earned by the assessee, could not have been taken away if the rigors of Rule 6 would be having only prospective effect - appeal dismissed - decided against Revenue.
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2017 (6) TMI 618
SSI exemption - N/N. 8/2003-CentraI Excise dated 01.03.2003 - use of brand name of others - Held that: - similar issue has come up before the Hon'ble Apex Court in the case of Nebulae Health Care Limited [2015 (11) TMI 95 - SUPREME COURT], where it was held that A holistic reading of the Notification, in the light of the other paragraphs, brings into focus the overall scheme. It, inter alia, provides that the clearances bearing the brand name or trade name of third parties which are ineligible for grant of this exemption, for the purposes of determining aggregate value of clearances for home consumption, are not to be included - the appellant is entitled for the benefit of N/N. 8/2003- Central/excuse dated 01.03.2003 for their own manufactured goods - appeal allowed - decided in favor of appellant.
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2017 (6) TMI 617
CENVAT credit - duty paying invoices - denial on the ground that the appellants purchased the goods from the unregistered dealers (appearing as buyers in the invoice) and not from any manufacturer or registered dealers - Held that: - there is no dispute that the appellant availed credit on the basis of the documents as indicated in Rule 9(1) of CCR, 2004. Further, the appellant as manufacturer of the final product maintained the records as provided in Rule 9(5) of the Rules. The Tribunal on an identical issue in the case of Jupiter Alloy & Steel (India) Ltd. v. CCE, Kolkata-IV [2016 (12) TMI 1217 - CESTAT KOLKATA], has held that there is no dispute that both the duty paid inputs and the documents indicating payment of duty were received by the appellant and used in the manufacture of finished goods. It is now a well accepted legal proposition that minor procedural lapses cannot be made as a basis for denying credit to the manufacturer. Appeal allowed - decided in favor of appellant.
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CST, VAT & Sales Tax
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2017 (6) TMI 609
Natural justice - validity of assessment order - case of petitioner is that when the impugned order of assessment was made based on the Web Report, the Assessing Authority is not justified in passing the impugned order of assessment, without furnishing the details of such report and without conducting any enquiry at all levels - Held that: - the assessment order cannot be passed in such a manner - the matter is remitted back to the Assessing Authority to redo the assessment after following the procedures/ directions issued by this Court - petition allowed by way of remand.
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