TMI Tax Updates - e-Newsletter
June 26, 2014

Case Laws in this Newsletter:

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

Articles

1. Comparative statement of Companies Act 2013 Vs 1956

   By: JAGANNATH PADHY

2. EXEMPTION TO FACTORY CANTEENS

   By: Dr. Sanjiv Agarwal

News

1. Issue of Rs. 20 Banknotes with incorporation of Rupee symbol ( Rs.) with inset letter 'E'

2. RBI Reference Rate for US $ and Euro

Notifications

Central Excise

1. 06/2014 - dated 25-6-2014 - CE

Seeks to amend notification No. 12/2012- Central Excise dated 17.03.2012

Circulars / Instructions / Orders

Companies Law

1. 22/2014 - dated 25-6-2014

Clarification with regard to format of annual return applicable for Financial Year 2013-14 and fees to be charged by companies for allowing inspection of records.

Highlights / Catch Notes

Income Tax

• Double Taxation on Joint Development Agreement Deemed Improper; Already Taxed Under HUF Ownership Transfer.

  Case-Laws - AT : Transfer of land - ownership - Joint development agreement - Already offered for tax in the hands of HUF - it is not proper to tax the same in the hands of the assessee in any assessment year which amounts to double taxation - AT
  Visit to Get Source

  ---

• Transactions Between IJMII and Associated Enterprise Exempt from Transfer Pricing Adjustments u/s 92B(2.

  Case-Laws - AT : Transfer pricing adjustments - associated enterprise - the transactions between the assessee [ IJMII Integrated Township Development Co. Pvt. Ltd] and IJMII do not fall u/s 92B(2) - AT
  Visit to Get Source

  ---

• IPLC Payments Classified as 'Royalty' u/s 9(1)(vi) of Income Tax Act; TDS Applicable Per Section 195.

  Case-Laws - AT : Royalty u/s 9(1)(vi) - TDS u/s 195 – hiring of International Private Leased Circuits [IPLC] - the consideration being for the use and right to use of the process, it is ‘Royalty’ - AT
  Visit to Get Source

  ---

• Revenue's Interpretation of 'Members' in Section 80P(2)(a)(i) Challenged for Creating Unsupported Classification in Tax Statute.

  Case-Laws - AT : Denial of deduction u/s 80P(2)(a)(i) - objections of the Revenue that the ‘members’ defined in sub-clause(i) of section 80P(2) should only include voting members would amount to a classification within classification which is beyond the purview of tax statute - AT
  Visit to Get Source

  ---

• Section 80IB(10) Deduction: Developers' Land Ownership Not Required for Tax Deduction Eligibility.

  Case-Laws - AT : Disallowance of claim of deduction u/s 80IB(10) - simply because the land was not owned by the developers it has consistently been held is not a relevant criteria to disallow the deduction claimed - AT
  Visit to Get Source

  ---

• Section 271(1)(c) Penalty Deletion: Acceptance of Assessment Order Doesn't Imply Admission of Interest Disallowance Correctness.

  Case-Laws - AT : Deletion of penalty u/s 271(1)(c) - when the assessee has accepted the assessment order and did not file any appeal, it cannot be presumed that assessee has admitted that the disallowance of interest was correct - AT
  Visit to Get Source

  ---

• Court Rules Surrender of Tenancy Rights as Capital Gains, Not Other Income, Eligible for Exemption u/s 54EA.

  Case-Laws - AT : Exemption u/s 54EA - income on account of surrender of tenancy rights – Income from other sources or capital gains – there was no justification in treating the same as income from other sources - AT
  Visit to Get Source

  ---

• Reassessment Unfair if AO Lacks Due Diligence: Section 148 Proceedings Shouldn't Penalize Assessee for AO's Oversight.

  Case-Laws - AT : Reassessment - if at all there is non application of mind on the part of the AO on the earlier occasion the assessee should not be made to suffer in the form of initiation of proceedings u/s 148 - AT
  Visit to Get Source

  ---

Customs

• Civil Judge Lacks Authority to Determine Duty Payability in Court Decision.

  Case-Laws - HC : Whether the learned Judge, sitting in civil jurisdiction, could draw a conclusion, no duty was payable. - Held no - HC
  Visit to Get Source

  ---

• Waiver of Pre-Deposit for Marble Slabs Under Exemption Notifications No. 4/2006 and 78/2006-Cus Affects Customs Duties.

  Case-Laws - AT : Waiver of pre deposit - marble slabs and tiles - Benefit of exemption under Notification No. 4/2006 and 78/2006-Cus. - Notification specifically allows benefit of exemption to marble slabs - AT
  Visit to Get Source

  ---

Service Tax

• Court Rules Distillery Product Makers Not Liable for Service Tax on Business Support Services Under Tax Law.

  Case-Laws - AT : Manufacture and sale of products of the distillery unit - the appellants had not provided any service which can be termed as 'business support service' - AT
  Visit to Get Source

  ---

• Appellant's Failure to File Returns Justifies Extended Limitation Period u/s 73(1)(a.

  Case-Laws - AT : In this case during the period of dispute the appellant were not filing any return and had not even taken any registration and hence in terms of the section 73(1)(a) as it stood during that period, longer limitation has been correctly invoked. - AT
  Visit to Get Source

  ---

• Service Tax Applies to Contracts with Both Services and Goods, Even Without Specific Computation Rules for Material Costs.

  Case-Laws - AT : Valuation - inclusion of cost of material - Merely because no rules are framed for computation, it does not follow that no tax is leviable - Service component of any contract involving service with sale of goods could be levied service tax - AT
  Visit to Get Source

  ---

Central Excise

• Court Advocates for Liberal Delay Condonation, Emphasizes Leniency with Cost Payment for Absentee Responsibility.

  Case-Laws - HC : Condontaion of delay - Person attending legal matters remained absent from office - liberal principles ought to have been applied and delay deserved to be condoned with a appropriate direction of payment of costs - HC
  Visit to Get Source

  ---

• Dispute Over Paper Valuation: Duty Calculation Based on Sale Price to Buyers, Pre-Deposit Waiver Denied, Revenue Supported.

  Case-Laws - AT : Waiver of pre-deposit - Valuation - paper and paper boards - Job work - demand of duty on the price at which sheets were sold to the ultimate buyers - prima facie case is in favor of revenue - AT
  Visit to Get Source

  ---

• Issuance of Multiple Show Cause Notices Invalid Due to Lack of Fact Suppression by Assessee.

  Case-Laws - AT : First SCN was issued and pending - while issuing the second and third show cause notices the same/similar facts could not be taken as suppression of facts on the part of the assessee - AT
  Visit to Get Source

  ---

• Cenvat Credit Case Remanded for Verification After Submission of Invoice Copies Initially Denied by Anti Evasion Wing.

  Case-Laws - AT : Cenvat credit - non production of copies of Invoices at the time of visit of officers of Anti Evasion Wing - now these copies produced - matter remanded back for verification - AT
  Visit to Get Source

  ---

• Goods Cleared Under Notification No. 43/2001 Excluded from DTA Clearance Calculation u/r 19 of Central Excise Rules.

  Case-Laws - AT : 100% EOU - inclusion of goods cleared under Notification No. 43/2001 under Rule 19 of Central Excise Rules, 2002 for the purpose of computation of DTA clearance - prima facie value not includible - AT
  Visit to Get Source

  ---

VAT

• Tax Assessment Reopened: Non-Disclosure of CD Turnover u/s 21 Impacts Exemption Eligibility Determination.

  Case-Laws - HC : Reopening of case u/s 21 - Since turnover of the recorded CD had not been disclosed separately, the assessing authority had no occasion to examine whether such recorded CD would be eligible for exemption under the eligibility certificate - HC
  Visit to Get Source

  ---

Case Laws:

• Income Tax

• 2014 (6) TMI 710
  Transfer of land - ownership - Joint development agreement - main plea of the assessee is that the property is a subject matter of transfer u/s. 2(47)(v) does not belong to the assessee and it belongs to the HUF u/s 153A - Already offered for tax in the hands of HUF – Held that:- Following Narasimha Reddy, Hyderabad And Others Versus The Asst CIT Cent. Circle-1, Hyderabad[2014 (6) TMI 587 - ITAT HYDERABAD] - once the Department accepted the return of income declared by the HUF arising out of transfer of capital asset vide development agreement - it is not proper to tax the same in the hands of the assessee in any assessment year which amounts to double taxation - the lower authorities are not justified in taxing the capital gain arising out of transfer of capital asset vide development agreement. The entire control over the property was with the assessee inasmuch as the licence to construct the property was also in the name of the assessee - It was found that execution of the agreement could not amount to transfer as contemplated u/s 53A of the Transfer of Property Act – Decided in favour of Assessee. Addition of value of gold and jewellery – Held that:- Following Narasimha Reddy, Hyderabad And Others Versus The Asst CIT Cent. Circle-1, Hyderabad [2014 (6) TMI 587 - ITAT HYDERABAD] – assessee rightly contended that the jewellery found at the residence of the assessee is not only belongs to the assessee but also belongs to the family members of the assessee and the same should be considered as per the CBDT circular 1916 dated 11.5.1994 - thus, the matter is required to the be remitted back to the AO to give credit to gold and jewellery to each member of the assessee's family members in terms of CBDT circular No. 1916 dated 11.5.1994 if they are living under single roof as supported by documentary evidence – Decided partly in favour of Assessee. Addition of undisclosed consideration – Purchase of agricultural land – Held that:- The addition was made on the basis of a statement recorded from the assessee u/s. 132(4) of the Act at the time of search - the assessee filed a letter dated 15.12.2010 ad stated that the consideration paid was only Rs. 8.92 lakhs - There was no other evidence other than the statement recorded u/s. 132(4) of the Act – revenue also examined the vendor who has also confirmed that the consideration received is Rs. 8.92 lakhs only – assessee aged about 70 years - the pattern of answering giving minute details with cheque numbers at the odd hours of the day by a person of 70 years old is itself unusual and it cannot be considered as conclusive evidence - The addition cannot be made on presumptive basis – thus, the addition cannot be confirmed in the absence of corroborative evidence – Decided in favour of Assessee.

  ---

• 2014 (6) TMI 709
  Deduction u/s 80IB of the Act – Requirement to file completion certificate – Held that:- The housing project for which deduction is claimed by the assessee u/s 80IB(10) was approved by the competent authority in the year 1999 - the assessee has claimed that the housing project was complete in all respect during the FY 2005-06 relevant to the AY 2006-07 - Relying upon CIT Vs. CHD Developers Ltd. [2014 (1) TMI 1542 - DELHI HIGH COURT] -for a housing project which is approved by the competent authority prior to 01/04/2005 there is no requirement under the un amended provision u/s 80IB(10) to furnish a completion certificate from the local authority because law requiring furnishing of such completion certificate was brought into the statute only with effect from 01/04/2005 and would apply prospectively - the assessee is following percentage of completion method the assessee cannot be expected to furnish a completion certificate in each year of continuation of the project, but, only on completion of the project. Assessee is not required to furnish completion certificate in terms with Explanation - (ii) to clause (a) of section 80IB(10) - the AO cannot insist upon the assessee to furnish the completion certificate from the local authority for allowing claim of deduction u/s 80IB(10) of the Act - the assessee is able to prove that the housing project is complete in all respects within the prescribed period as provided u/s 80IB(10) and the assessee has fulfilled all other preconditions of the provision then the assessee will be entitled to claim deduction u/s 80IB(10) of the Act - the AO has disallowed deduction u/s 80IB(10) only for the reason that assessee has not furnished completion certificate from the local authority - all other conditions of section 80IB(10) are fulfilled by the assessee except the fact of completion of housing project - if the assessee will be able to prove completion of housing project within stipulated time by providing any other evidence, then claim of deduction u/s 80IB(10) cannot be denied to the assessee – thus, the AO is directed to verify the completion of the project without insisting upon a completion certificate from the local authority and thereafter decide the issue accordingly after affording reasonable opportunity of being heard to the assessee in the matter – Decided against Revenue.

  ---

• 2014 (6) TMI 708
  Transfer pricing adjustments - associated enterprise - Nature of assessee company – Subsidiary of M/s IJM Corporation, Berhad or not – Transaction to be fall u/s 92B(2) of the Act or not – Held that:- Following M/s. Swarnandhra IJMII Integrated Township Development Company Pvt. Ltd. Versus The Deputy CIT Circle-3(3) Hyderabad [2014 (6) TMI 595 - ITAT HYDERABAD] - the transaction taken place is with domestic enterprises and at least one among the AEs are not non-resident - Both the assessee and IJMII are the residents for the purpose of Indian Taxation as they are Indian companies - Any transaction between them will not constitute an international transaction - The primary condition for attracting transfer pricing provisions is that there should be a transaction between two or more associated enterprises - Section 92A defines the term "associated enterprise" - Section 92A(1) provides the broad parameters on satisfaction of which two or more enterprises constitute associated enterprises - These parameters are participation in the management or control or capital of the other enterprise - Sub-section (2) of section 92A enlists specific situations which make two or more enterprises associates of each other for the purposes of sub-section (1). A transaction between associated enterprises satisfying the prescribed criteria becomes an international transaction - one of the essential limbs/constituents of an international transaction is "associated enterprise" - Section 92B(2) outlines the circumstances under which a transaction between two persons would be deemed to be between associated enterprises - Such deeming fiction is in addition to the one created u/s 92A(2) - The deeming fiction u/s 92A(2) are limited to the parameters of management, control or capital - Section 92B(2) travels beyond these parameters - Transaction between an enterprise and a person which is not an associated enterprise u/s 92A, may be deemed to be transaction between associated enterprises for the purposes of section 92B(l) if the conditions contained in section 92B(2) are attracted. Section 92B(2) embodies a legal fiction - It deems a transaction to have been entered into between two associated enterprises - section 92B(2) is a part of section 92B with the heading "Definition of international transaction", it is to be read as an extension of section 92A(2) and not as an extension of section 92B(1) - There is a difference between associated enterprises defined u/s 92A and transaction deemed to be between associated enterprises u/s 92B(2) – u/s 92A, two or more enterprises once determined to be associated enterprises remain so for the entire financial year - Their relationship will not change for different transactions between them - They will remain associated enterprises even if they do not have any transaction during the previous year - a transaction between an enterprise and another person can be deemed to be transaction between associated u/s 92B(2) only in respect of transactions specified and not otherwise - This fiction is transaction specific and does not apply to all transactions between the enterprise and person, on the basis that one transaction attracts section 92B(2). The intermediary would facilitate the transfer of services or goods from one enterprise to its associate enterprise with no value addition or insignificant value addition - The intermediary is used to break a transaction into two different parts, which parts when viewed in isolation would not satisfy the requirements of section 92A - The legal form of the transaction in such circumstances is ignored - The substance of the transaction is given effect to, not by disregarding the existence of the intermediary but by deeming the transaction with the intermediary itself to be one with an associated enterprise - The legal fiction created in respect of the specified transaction can be used only for the purpose of examining whether such transaction constitutes an 'international transaction' u/s 92B(1). The primary condition for attracting transfer pricing provisions is that there should be a transaction between two or more AEs in terms of section 92A(1) and 92A(2) of the Act – the transactions between the assessee and IJMII do not fall u/s 92B(2) of the Act - the DRP simply wants to keep the matter alive, though they agreed with the assessee's counsel, and confirmed the order of the TPO (AO) – Decided against Revenue.

  ---

• 2014 (6) TMI 707
  Royalty u/s 9(1)(vi) - TDS u/s 195 – hiring of International Private Leased Circuits [IPLC] - Nature of Remittance made to Non-resident Company – Whether the services provided by the overseas company constitutes ‘Royalty’ or not - Held that:- Following Verizon Communications Singapore Pte Ltd. (formerly MCI Worldcom Asia Pte Ltd.) Versus The Income Tax Officer International Taxation – I [2013 (11) TMI 1058 - MADRAS HIGH COURT] - even if the payments were treated as non-relating to the use of equipment, they should be considered as payment for the use of the process provided by the assessee, whereby through the assured bandwidth, the customer is guaranteed the transmission of data and the voice - the bandwidth is shared with others, but it has to be seen in the light of the technology governing the operation of the process and this by itself does not take the assessee out of the scope of royalty - the consideration being for the use and right to use of the process, it is ‘Royalty’, within the meaning of Clause-(iii) of Explanation-2 to section 9(1)(vi) of the Act – Decided in favor of Revenue. Computation of deduction u/s 10A of the Act - Exclusion of foreign currency expenditure from export turnover and total turnover – Exclusion of telecommunication expenses - Held that:- Following Patni Telecom P. Ltd., Vs. ITO [2008 (1) TMI 452 - ITAT HYDERABAD-A ] - expenses incurred in foreign exchange, as part of the export carried out by the assessee, cannot be excluded from the export turnover – thus, the AO is directed to include foreign currency expenditure to form part of export turnover of the assessee in computing deduction u/s.10A of the Act - Decided against Revenue. Disallowance u/s 14A of the Act – Held that:- Following GODREJ AND BOYCE MFG. CO. LTD. Versus DEPUTY COMMISSIONER OF INCOME-TAX AND ANOTHER [2010 (8) TMI 77 - BOMBAY HIGH COURT] - the provisions of Rule 8D are applicable w.e.f. AY.2008-09 - The newly introduced provisions of Rule 8D have no retrospective applicability, the authorities below have erred in applying the same - The Tribunal in assessee’s own case for the AY.2005-06 has upheld the action of the Assessing Officer in making the dis-allowance @2% of the exempt income - the profit for the purpose of section 10A will be enhanced to the extent of dis-allowance - proportionate enhancement will be in the amount of deduction available u/s.10A – thus, the AO is directed to dis-allow 2% of the exempt income u/s.14A and further make proportionate enhancement in the amount of deduction available u/s.10A – Decided partly in favour of Assesseee. Deletion of dis-allowance of various expenses – Held that:- Following Bharat Earth Movers Vs. CIT [2000 (8) TMI 4 - SUPREME Court] - assessee is providing provision for expenditure incurred in the previous year itself - The amount was not paid by the end of the year and in certain cases bills were not received by the end of the year and in such cases the assessee is making a provision for such expenditure already incurred during the relevant previous year. In the course of the next previous year the assessee is making the payment and the differential amount, if any, is adjusted in its profit and loss account - This is a consistent practice followed by the assessee - The provision for unpaid expenses is not in the nature of contingent expenditure - It is a provision made against actual expenditure – Decided against Revenue.

  ---

• 2014 (6) TMI 706
  Denial of deduction u/s 80P(2)(a)(i) of the Act – Loan for non-agricultural activities – Scope of term Member u/s 2(16) of Societies Act, 1983 – Held that:- The authorities cannot go beyond their jurisdiction and make classification within a classification of members to deny the benefit of deduction – Relying upon M/s. SL(SPL) 151, Karkudalpatty Primary Agricultural Co-operative Credit Society Ltd. Versus The Income Tax Officer [2014 (5) TMI 556 - ITAT CHENNAI] - the ‘nominal’ members also enjoy statutory recognition as per the Act - once the ‘nominal’ members or non-voting members are themselves included in the definition of ‘members’, they satisfy the relevant condition imposed by the legislature u/s 80P(2)(a)(i) - the objections of the Revenue that the ‘members’ defined in sub-clause(i) of section 80P(2) should only include voting members would amount to a classification within classification which is beyond the purview of tax statute - unless provided specifically by the legislature - under the very provision that for the purpose of impugned deduction, it is irrelevant so far as classification of the members in ‘A’ or ‘B’ category is concerned - the assessees are eligible to claim benefit of deduction u/s.80P(2)(a)(i) of the Act – Decided in favour of Assessee.

  ---

• 2014 (6) TMI 705
  Disallowance u/s 14A of the Act – Held that:- Following Godrej Boyce Mfg. Co. Ltd. vs. DCIT [2010 (8) TMI 77 - BOMBAY HIGH COUR] - Rule 8D of the Income Tax Rules is applicable only prospectively i.e., from AY 2008-09- The AY pertaining to the case in hand is 2006-07 to which the Rule is not applicable - the authorities below are not justified in making the disallowance by invoking Rule 8D of the Income Tax Rules. Disallowance out of the interest expenses – Held that:- Borrowings have actually been reduced though investments have significantly increased - the own funds of the assessee is sufficient to cover the investments - the authorities are not justified in disallowing out of expenditure involved on account of interest. Percentage of the exempt income can constitute a reasonable estimate for making disallowance in the years earlier to the AY 2008-09 - disallowance ranges between 2 to 5 percentage of the dividend income – thus, it would be just and reasonable that 2% of the exempt income would constitute a reasonable disallowance on account of indirect expenses for earning the exempt income u/s 14A of the Act – Decided in favour of Assessee.

  ---

• 2014 (6) TMI 704
  Disallowance of claim of deduction u/s 80IB(10) of the Act – Housing project – Held that:- As decided in assessee’s own case for the earlier assessment year, it has been held that the appellant has satisfied all the three conditions required for deduction u/s 80IB of the Act - in the case of contractors who have been held to be entitled to deduction u/s 80IB which has been denied solely on the ground that the land was not owned by the developer - The activity of the development has been carried on by the contractor-developer as per the agreement entered into with the land owners which carried on the developmental activity in terms of the agreement - simply because the land was not owned by the developers it has consistently been held is not a relevant criteria to disallow the deduction claimed – Relying upon Commissioner of Income-tax Versus Radhe Developers [2011 (12) TMI 248 - GUJARAT HIGH COURT] – the order is set aside and the assesse is entitled for the claim of deduction u/s 80IB(10) of the Act – Decided in favour of Assessee.

  ---

• 2014 (6) TMI 703
  Deletion of penalty u/s 271(1)(c) of the Act – Inaccurate claim of interest – Held that:- Following CIT Vs. Reliance Petroproducts Pvt.Ltd. [2010 (3) TMI 80 - SUPREME COURT] - even if there is a wrong claim of deduction, it will not amount to concealment of income - a mere making of a claim which in the opinion of the AO is not sustainable in law by itself will not amount to furnishing of inaccurate particulars regarding the income of the assessee - The assessee is a government undertaking which is running in huge losses year after year - the assessed loss by the AO is more than a thousand crore - when the assessee has accepted the assessment order and did not file any appeal, it cannot be presumed that assessee has admitted that the disallowance of interest was correct - even if the disallowance of interest is correct, that, per-se, will not make the assessee liable for penalty u/s 271(1)(c) because, for penalty to get attracted, the conditions stipulated in the concerned provisions are required to be fulfilled – Decided against Revenue.

  ---

• 2014 (6) TMI 702
  Accrual of interest earned on KYP/NSC – Investment in KVP/NSC found during search and seizure - Held that:- The total investment in KVP / NSC was of Rs.5,65,000/- which has not been disputed by the revenue - interest @ 8% comes to Rs.45,200/- CIT (A) has rightly allowed the relief of Rs.18,120/- out of the total addition on account of interest accrued on KVP / NSC of Rs.63,320 – Decided against Revenue. Deletion of share trading through broker – Held that:- CIT (A) has granted the relief on the basis of a statement of account showing sales and purchase of shares through Credential Stock Broker Limited for the period 01.04.2007 to 31.03.2008 - there was additional evidence filed by the assessee which has been considered by the CIT (A) for granting the relief to the assessee - the CIT (A) has violated the Rule 46A of the Income-tax Rules, 1962 – thus, the matter is remitted back to the CIT(A) for fresh adjudication – Decided in favour of Revenue. Deletion of unexplained bank deposits – Held that:- The amount is not a cash deposit in the bank account of assessee - The narration in the bank statement itself shows that it was an amount credited in the bank account of the assessee by clearing - CIT (A) was justified in deleting this addition - the amount in the bank account of the assessee in the name of Manoj Joshi - credit entries in the bank account of the assessee were explained by the bank account itself or by narration – Decided against Revenue. Deletion of unexplained investment in jewellery – Held that:- Income taxable in the hands of Anshu Mittal for the AY 2007- 08 to cover the jewellery weighing 800 grams found with Sanjeev Kumar - the jewellery weighing approximately 800 grams. kept with Shri Sanjiv Kumar (brother of Mrs. Anshu Mittal) for design change/repairs included in Rs.24 lacs disclosed - The surrendered amount has been accepted by the Income-tax Department which is evident from the assessment order in the name of Anshu Mittal – Decided against Revenue.

  ---

• 2014 (6) TMI 701
  Estimation of income from Rent and not according to TDS certificate - Disallowance of expenses – Ratio based work on from own assumption – Held that:- The AO has increased the rent received from Corporation bank by 10% without any basis - as there is no basis for increasing the rent, there was no reason for making the addition of Rs. 2,75,400 – the AO is directed to delete the same – Decided in favour of Assessee. The order of the CIT(A) is upheld that the assessee has no other income other than the rental income – there was no reason for claiming the expenditures – Decided against assessee.

  ---

• 2014 (6) TMI 700
  Levy of penalty u/s 271(1)(c) of the Act – LTCG on sale of flat – Failure to furnish accurate details - Held that:- The assessee had shown the indexed cost at Rs. 7. 36 lakhs, during the assessment proceedings before the AO, he revised the claim of indexation and same was rejected by the AO - the revision of indexation claim was one of the arguments taken by the assessee during the assessment proceedings - During the assessment proceedings, assessee can plead various things – the contentions cannot be compared with filing of inaccurate particulars or concealing the particulars of income - the disallowance/addition of any amount during the assessment proceeding they are confirmed by the appellate authorities do not justify the automatic levy of penalty - Penalty proceedings are totally different from the assessment proceeding though they are directly related with the assessment - assessee had requested to take on record hire claim of indexation – the assessee had not furnished inaccurate particulars or had concealed his income – thus, the order of the FAA is reversed – Decided in favour of Assessee.

  ---

• 2014 (6) TMI 699
  Exemption u/s 54EA of the Act - income on account of surrender of tenancy rights – Income from other sources or capital gains – Held that:- Following Bhogilal M. Mehta (HUF) C/o. Mehta Trading Corporation Versus The Income Tax Officer [2014 (6) TMI 575 - ITAT MUMBAI] - merely because the correction is made in the agreement would not render entire agreement as non-genuine when all other place the name of the assessee is correctly appearing in the agreement even this is immaterial mistake which has been corrected in the name of the assessee - it does not affect the terms and conditions of the agreement - the rent receipts placed on record are duly signed and also appearing dates and month for which the rent was paid - The rent receipt coupled with the agreement in respect of the premises establish the fact that the assessee was having tenancy right in respect of the premises - tenancy right was surrendered by the assessee in lieu of alternative accommodation to be constructed by the developer under the redevelopment plan. The tenancy right has been recognized as the capital asset u/s 55(2) of the Income Tax Act - there is no doubt that the consideration to be received by the assessee against the surrender of tenancy rights is capital in nature and to be assessed as capital gain - the value of tenancy rights along with the construction cost was converted/substituted into the alternative accommodation to be provided by the builder in the year 2000 - the amount received against the transfer of tenancy is assessable as capital gain and not income from other sources - the amount received by the assessee is against the transfer of capital asset – there was no justification in treating the same as income from other sources - assessee has produced sufficient material to establish the tenancy rights and surrender of tenancy rights and creating the right to have alternative accommodation - the assessee surrendered the right in alternative accommodation and received the amount in question which is capital gain in nature – the amount has been invested in the prescribed units u/s 54EA – thus, the assessee is entitled for deduction u/s 54EA against the receipt – Decided in favour of Assessee.

  ---

• 2014 (6) TMI 698
  Validity of assessment u/s 147 of the Act – Determination of income – Held that:- Reopening is permissible when some information has come to the notice of the AO subsequent to the completion of assessment and where such information was not previously disclosed - the turnover being less than Rs.40 lakhs there is no necessity for the assessee to obtain tax audit report and all these facts were already in the knowledge of the AO while making the assessment u/s 143(3) of the Act and if at all there is non application of mind on the part of the AO on the earlier occasion the assessee should not be made to suffer in the form of initiation of proceedings u/s 148 as such an exercise would amount to giving a premium to an authority exercising quasi-judicial functions, to take benefit of its own wrong. – Relying upon CIT vs. ICICI Bank [2012 (7) TMI 521 - BOMBAY HIGH COURT] - reopening of assessment is bad in law – Decided in favour of Assessee.

  ---

• 2014 (6) TMI 697
  Transfer pricing adjustment – Determination of ALP - Adoption of most appropriate method – Held that:- Following Twilight Jewellery (P.) Ltd. Versus Dy. Commissioner of Income Tax [2014 (4) TMI 200 - ITAT MUMBAI] - if any of the direct methods like CUP, RPM or CPM can be adopted for bench marking the transactions, then they should be given preference and once these traditional methods are rendered inapplicable then only the TNMM should be resorted to as a last measure - this argument of applicability of internal CUP has not been taken up either before the TPO or before the DRP – thus, the matter is required to be remitted back to the TPO for fresh adjudication – Decided in favour of Assessee.

  ---

• 2014 (6) TMI 696
  Fringe Benefit Tax (FBT) - conveyance expenses met out by the assessee for its employees from place of work to place of residence and vice versa – Held that:- Benefit is exempt from FBT from assessment year 2007-08 onwards - The view of the AO has not been accepted by the CIT(A) as amended of section 115WD(3) has been brought vide Finance Act 2006 and thus the contention of the AO that the aforesaid benefit is exempt from FBT from A.Y. 2007-08 on wards only is totally erroneous and untenable – CIT(A) rightly deleted the addition of Rs. 2,42,87,175/ made by the AO – thus, there was no reason to interfere in the order of the CIT(A) – Decided against Revenue. Computation of total value of Fringe Benefit – Whether the assessee is entitled to include only 5% of the conveyance expenses for FBT purposes - Held that:- CIT(A) has noted that out of the gross income of Rs. 271,56,55,082/-, the assessee has earned Rs. 269,19,26,534/- from BPO services - This particular fact establishes that the assessee has to be considered as a company engaged in production of computer software - only 5% of the conveyance expenses should be taken for FBT purposes – thus, there was no infirmity in the order of the CIT(A) in upholding the claim of the assessee – Decided against Revenue.

  ---

• Customs

• 2014 (6) TMI 715
  Whether the learned Judge, sitting in civil jurisdiction, could draw a conclusion, no duty was payable. - Failure to fulfill the export Obligation against the authorization - Cargo handling operation at Haldia Dock Complex. - imported various equipments including Mobile Harbour Cranes, Wheel Loaders, Dumpers etc. under a scheme - Enforcement of bank guarantee - Violation of condition of guarantee - Held that:- the Foreign Trade Department was satisfied with regard to discharge of the export obligation stipulated in the licence that might be one of the support documents to get the Bank Guarantees discharged. - Now that the Bank Guarantees had been released and to the said extent Mr. Bharadwaj conceded, we need not dilate on the issue. Jurisdiction of Civil Court - Held that:- Payment of duty under the Customs Act is determined through a complete procedure prescribed in law. The Civil Court, in our view, would not be competent to hold, no duty was payable. If we closely examine the letter dated March 14, 2013, we would not find any definite assertion, no customs duty was payable. The letter might have a dominant role in the matter of adjudication of the customs duty, it might be otherwise. Observation of the Civil Court would rather foreclose the right of the customs authorities to deal with the issue in accordance with law. In accordance with the provisions of Section 155, no suit does lie against the Central Government for any act done in pursuance of the Customs Act or the Rules or Regulations framed there under. The learned Judge possibly missed out the said provision while observing as such. - Customs Authority would be at liberty to proceed as against H.B.T. in accordance with law if they are so entitled to. - Decided in favour of Revenue.

  ---

• 2014 (6) TMI 714
  Valuation - Sample medical equipments received as Gift - Mis declaration regarding value - Confiscation of goods - Redemption fine - Held that:- There is no restriction in the matter of import of medical equipments. Further, the duty payable on medical equipments is also low as may be seen from the fact that the duty demand is only about 10% of the CIF value. In this type of offence, involving only attempt to evade duty and no attempt to circumvent restrictions on import redemption fine and penalty should be based on duty that would have escaped assessment and not on the value of the item. Profit margin on sale of goods is a proper extension in cases of import of restricted goods without the necessary license. The adjudicating officer has put redemption fine of about 50% of the duty sought to be evaded and penalty of about 25% of duty sought to be evaded and these are reasonable and I do not find any reason to interfere with the impugned order - Decided against Revenue.

  ---

• 2014 (6) TMI 713
  Waiver of pre deposit - marble slabs and tiles - Benefit of exemption under Notification No. 4/2006 and 78/2006-Cus. - revenue contended that marble slabs are classifiable under 6802 21 90 which is not covered under the benefit of exemption notification. - Held that:- applicants have declared their product as polished marble slabs and classified them under 6802 21 10 and claimed the benefit of Notification No. 4/2006 and 78/2006-Cus. as amended. We find that the Notification No. 4/2006 gives benefit to marble slabs and tiles. The Notification specifically allows benefit of exemption to marble slabs. In these circumstances we find that the applicants are able to make out a prima facie case for total waiver of pre-deposit - Stay granted.

  ---

• Corporate Laws

• 2014 (6) TMI 712
  Winding up of company - Inability to pay debts - Held that:- The respondent did not chose to reply to the notice and it is only in this proceedings, after service of notice manually, having entered appearance, had filed statement of objections, while admitting the transactions, though raising objections as to the varying dates in respect of which such liability may be due. The respondent has also stated that the tax authorities had seized the various documents pertaining to the transaction and that the respondents were not in a position to address the claim completely. It is in this manner that the respondent halfheartedly seeks to deny the liability - In any event, there was no compliance with the demand made under Section 434 of the Companies Act, 1956 and the attitude of the respondent to shy away from this court, would indicate on the face of it that the respondent is unable to pay its debts. Therefore the petition is allowed. The respondent is ordered to be wound up - Decided in favour of appellants.

  ---

• 2014 (6) TMI 711
  Winding up of company - Inability to pay debts - Held that:- The facts of this case clearly indicate that there is no dispute that the petitioner had paid a sum of Rs. 2,97,000/- to the respondent. There is also no dispute that the project "Eastern Home" in respect of which the said sum had been accepted by the respondent, had not progressed as scheduled. Even according to the respondent, the said project had not taken off. This is clearly indicated in the letter dated 04.08.2009 sent by the respondent, which states that the project could not take off because of Government policy - It is also not disputed that the petitioner had sought a refund, of the amounts paid by him, from the respondent. The respondent had clearly accepted its liability to refund the amount and had also forwarded an application form, which the respondent required the petitioner to sign for processing the refund. Letters sent by the respondent, subsequently, also unequivocally indicate that the respondent had admitted its liability to pay the amount as claimed by the petitioner. In the given facts, it is indisputable that the amount demanded by the petitioner was due and payable by the respondent to the petitioner. The project for which the money had been collected from the petitioner had, admittedly, not taken off. And, the agreement between the parties had unequivocally provided that the amounts collected would be refunded with interest @ 9% per annum, in such eventuality. In the given circumstances, the contention that the terms and conditions as agreed were limited to only provisional booking cannot be accepted. It is difficult to appreciate the contention that even though the respondent had received funds on account of a contract which it did not perform, yet it could retain the same. - There is no document on record that indicates that such an agreement had taken place between the parties. It is also relevant to note that by a letter dated 12.12.2009, the respondent had attempted to suggest that the settlement between the parties was limited to the respondent repaying only Rs. 50,000/-. This had been refuted by the petitioner in no uncertain terms by its letter dated 18.12.2009 and the petitioner had called upon the respondent to pay the balance sum of Rs. 2,47,000/-. It is only, thereafter, that the respondent had made further payments. It is apparent from the above that this was not the first time that the respondent had attempted to raise such a false plea. The defence that there was a mutual settlement under which the respondent had to pay only a sum of Rs. 1,25,000/- is not borne out by the records or supported by any credible evidence. It is clear that that this defense is a concocted defense with no element of truth in it. It is apparent that the respondent is unable to pay its admitted debt. - Decided in favour of appellants.

  ---

• Service Tax

• 2014 (6) TMI 731
  Demand of service tax - Business Support Services - manufacture and sale of products of the distillery unit - Held that:- The definition of 'business support service' as reproduced above, covers only services of supporting nature for the main business i.e. manufacturing, trading and service like services related to marketing etc. Appellants had undertaken the activity of manufacture and sale of products of the distillery unit itself and profit and loss also is on account of the appellants and not given any support service to M/s. Kolhapur Sugar Mills Ltd. Further we find that on the same agreement, almost for the same period, the Revenue directed M/s. Kolhapur Sugar Mills Ltd. to pay service tax under the category of franchise service vide letter dated 23rd August 2006 and M/s. Kolhapur Sugar Mills Ltd. are paying service tax under the category of franchise service regularly and this fact is not in dispute. In these circumstances, we find that the appellants had not provided any service which can be termed as 'business support service' as provided under Section 65 (104c) of the Finance Act - Decided in favour of assessee.

  ---

• 2014 (6) TMI 730
  Denial of refund claim - CENVAT Credit - Business Support Service, online information and database access or retrieval service, maintenance and repair service, development and supply of content service - Held that:- Respondents are providing three output services out of which two services are classifiable under the category of online information and database access or retrieval service, development and supply of content services which is a separate category altogether and is to be accepted. Similarly the data delivery service provided by the respondent is also a taxable service under the same category. Therefore in respect of these two services, the CENVAT credit availed in respect of input services would be eligible. In respect of IT and system services, both sides agree that credit could not be available during the relevant period to the extent of invoices relatable to this service. The learned counsel agrees to quantify and submit a statement to the original authority giving details under each category which can be verified and decided afresh - Matter remanded back - Decided in favour of Revenue.

  ---

• 2014 (6) TMI 729
  Business Auxiliary Services - Marketing service for ICICI Bank - Invocation of extended period of limitation - appellant contended that ‘as the service tax is comparatively new levy the appellant may not be aware of service tax Rule and Regulations’, it cannot be said that these was intention on the part of the Appellant to evade the tax. Held that:- plea of the appellant with regard to time barred rejected - In this case during the period of dispute the appellant were not filing any return and had not even taken any registration and hence in terms of the section 73(1)(a) as it stood during that period, longer limitation has been correctly invoked. Waiver of penalty - section 80 - Held that:- Commissioner (Appeals) invoking Section 80 has already reduced the penalty under section 76 & 78 of Rs. 50,000/- each on the ground that as the service tax is comparatively new levy the appellant may not be aware of service tax Rule and Regulations - Since the Commissioner (Appeals) has given a finding that the Appellant may not be aware of service tax rules and regulation, his decision to retain even reduced penalty under section 76 and 78 being not compatible with this finding, is not correct. Therefore the penalty under section 76 & 78 is set aside. - Decided partly in favor of assessee.

  ---

• 2014 (6) TMI 728
  Valuation - Maintenance and Repairs Service - Assessee paid tax on labour charges - dispute relates to the demand of tax on material portion - Held that:- After 46th Amendment to the Constitution, composite contracts can be bifurcated to compute value of the goods sold/supplied in contracts for construction of buildings with labour and material. The service portion of the composite contracts can be made subject matter of service tax. Aspect doctrine is applied for bifurcating/vivisect the composite contract - Service tax can be levied on the service component of any contract involving service with sale of goods etc. Computation of service component is a matter of detail and not a matter relating to validity of imposition of serve tax. It is procedural and a matter of calculation. Merely because no rules are framed for computation, it does not follow that no tax is leviable - Service component of any contract involving service with sale of goods could be levied service tax - Following decision of G.D. Builders Vs. UOI [2013 (11) TMI 1004 - DELHI HIGH COURT] - Matter remanded back - Decided in favour of assessee.

  ---

• 2014 (6) TMI 727
  Restoration of appeal - Appeal dismissed for non prosecution - Held that:- Period of filing of appeal is three months and by considering the said fact, the application for restoration also ought to have been filed within the maximum period of three months from the dismissal of appeal, though there is no period of limitation prescribed for filing on application for setting aside the order of dismissal. The same view is also expressed by the Hon’ble Gujarat High Court in the case of L.J. Synthetic Mills (2010 (3) TMI 833 - GUJARAT HIGH COURT). The decision placed by the ld. Advocate would not apply to the present case. We have also noticed that the applicant did not provide any sufficient reason for long delay in filing the ROA application. Hence, we find that the ROA application filed by the applicant is not sustainable - Decided against assessee.

  ---

• 2014 (6) TMI 726
  Demand of service tax - security agency service - Petitioner contends that since the Andhra Pradesh Special Protection Force is a part of the State Government, is a body created under the Andhra Pradesh Protection Force Act, 1991, charges or fees levied by it for providing security services would constitute Revenue of the State beyond the taxing powers of the Union of India qua under Article 289 of the Constitution of India. - Held that:- there is no prima facie persuaded to accept this contention of the appellant. - appellant directed to deposit service tax and interest - pre-deposit of penalty waived - stay granted partly.

  ---

• Central Excise

• 2014 (6) TMI 723
  Condonation of delay - delay of 213 days - business problem and ill-health - Held that:- appellant has produced the Medical Certificate to prove the suffering of hypertension and cardiac problem for about seven months - The Tribunal had disbelieved the said version stating that there is no advise for taking bed rest. A person suffering from cardiac decease or problem must take rest and cannot function as the normal person - In such circumstances, the order of the Tribunal cannot be sustained. Having regard to the Medical Certificate produced by the appellant, which is not fully convincing to accept the version of the appellant, we are of the view that the appeal may be allowed on terms - Delay condoned conditionally.

  ---

• 2014 (6) TMI 722
  Condontaion of delay - Person attending legal matters remained absent from office - Held that:- Tribunal has termed the explanation offered by the Appellant as casual - The Tribunal, in our opinion, has taken a hyper technical view of the matter. It does not hold that the explanation given is false or that the conduct of the Appellants is such that they were utterly negligent, careless and acted malafide, then, there was no need to take such a view. In fact, liberal principles ought to have been applied and delay deserved to be condoned with a appropriate direction of payment of costs so as to compensate the Respondent and balance the rights and equities. Once the explanation given is found to be genuine and not false, then, holding that the delay does not deserve to be condoned because the Appeal was not filed immediately after resumption of duty by Mr. Sanjay Tope or after deposit of the demanded amount, was not in accordance with law. We are of the opinion that the view taken by the Tribunal cannot be sustained - Delay condoned with order of costs to be borne by assessee.

  ---

• 2014 (6) TMI 721
  Waiver of pre-deposit - Valuation - paper and paper boards - Job work - demand of duty on the price at which sheets were sold to the ultimate buyers - Held that:- If the appellant had cleared the paper from their factory in sheet form, they would have been required to discharge the duty liability at the price at which the paper sheets were sold. Merely because the paper was initially cleared to the job-workers for conversion from reels into sheets and thereafter supplied/sold to the buyers, why should the duty liability be discharged on a lower value? If such a view is taken, it will be possible to easily shift the penultimate process of manufacture to a job worker and evade excise duty on the value addition which has significant ramifications. Further, manufacture includes any process incidental or ancillary to the completion of a manufactured product and cutting of paper from reels into sheets is a process incidental or ancillary to the completion of the paper sheet. As per Rule 10A of the Central Excise Valuation Rules, when goods are sent for job-work and the job-worked goods are sold from the job workers premises, duty liability has to be discharged on the sale price of the job-worked goods charged by the principal manufacturer. This change in the valuation Rules came with effect from 1st March 2007. Therefore, the stay orders pertaining to the previous period are not relevant or applicable as there is a change in the legal position. Therefore, the department's claim for discharge of duty on the price at which the goods were ultimately sold to the buyers had merits. - Conditional stay granted.

  ---

• 2014 (6) TMI 720
  Issue of subsequent show show cause notice when an earlier show cause notice on the same ground is pending - suppression of facts - extended period of limitation - Held that:- When the first SCN was issued all the relevant facts were in the knowledge of the authorities. Later on, while issuing the second and third show cause notices the same/similar facts could not be taken as suppression of facts on the part of the assessee as these facts were already in the knowledge of the authorities. - Decided in favor of assessee. CENVAT Credit - Common inputs used in the manufacture of dutiable and exempted goods - Non-maintenance of separate records - reversal of credit with interest - benefit of retrospective amendment of Central Excise Rules 1944 and CENVAT Credit Rules 2001/2002/2004 for non compliance of order passed under the aforesaid provision of sections 70 to 73 of the Finance Act, 2010 - Held that:- If CENVAT Credit attributable to inputs used in the manufacture of exempted final products is reversed along with interest subsequent to removal of exempted final products, then the appellant cannot be said to have taken credit of inputs used in or in relation to the manufacture of exempted final products, and they need not pay an amount @ 8% or 10% of the sale price of exempted final products. - matter remanded back to adjudicating officer to verify the facts and reversal of credit - Decided in favor of assessee. Jurisdiction of Tribunal to entertain an appeal - one time opportunity vide sub-sections (2) and (3) of the said Sections 70 to 73 of the Finance Act 2010 - Held that:- Evidently, the applicant has not complied with the provisions sub-section (3) of Sections 70 to 73 of the Finance Act, 2010, as the differential amount of Rs. 60,32,345/- decided by the appropriate authority was not paid within ten days of receipt of the said Order dated 28.12.2010. In these circumstances, the Order No. Section 68 to 72/ F.A./ COMMISSIONER/ 03/ 2010 dated 28.12.2010, passed by the Commissioner of Central Excise Ahmedabad-II, does not exist after the time specified in the relevant sections of Finance Act, 2010. It was a one time scheme. It has to be either accepted or rejected by the concerned parties. Further, since this Order has not been passed in exercise of powers conferred on the Commissioner under the Central Excise Act, 1944 or Rules made there under, this is not an appealable Order under the Central Excise Act, 1944. In this case the Commissioner as well as the applicant was bound to act in accordance with Sections 69 to73 of the Finance Act, 2010. For the same reasons, this Tribunal has no jurisdiction to entertain any appeal against the said Order.

  ---

• 2014 (6) TMI 719
  Cenvat credit - non production of copies of Invoices at the time of visit of officers of Anti Evasion Wing - Held that:- The appellant had enclosed copies of input invoices with their appeal memorandum and the Id. Advocate for the appellant claimed that all these documents were submitted to the adjudicating authority and the same are in the possession of the Department. In these circumstances, we are of the opinion that remanding the matter to the ld. Commissioner (Appeals) would not serve the purpose, but prolong the litigation. Hence, the matter is remanded to the Adjudicating Authority to consider the evidences/input invoices produced by the appellant and to record a categorical findings on the same. - Decided in favour of assessee.

  ---

• 2014 (6) TMI 718
  Waiver of pre-deposit - 100% EOU - inclusion of goods cleared under Notification No. 43/2001 under Rule 19 of Central Excise Rules, 2002 for the purpose of computation of DTA clearance - Held that:- clearance made by the applicant following procedure are laid down under benefit of Notification No. 43/2001-C.E. (N.T.) to the manufacturer-exporter who has obtained the permission from the Jurisdictional Commissionerate to procure the goods from the applicants duty free. In these circumstances, the applicants have made out a prima facie case in their favour. Accordingly, we waive the requirement of pre-deposit of the entire amount of duty, interest and penalty and stay recovery thereof during the pendency of the appeal - Stay granted.

  ---

• 2014 (6) TMI 717
  Waiver of pre-deposit of duty - Classification Zymegold plus - Tariff Heading 3101 00 99 or under Tariff Heading 3808 - Held that:- As per the Chemical Examiner’s report dated 3-9-2010 and as the applicant submitted the write up in respect of the product in question and the applicant admitted presence of technical grade urea in the product in question. Therefore, the product in question cannot be classified as organic fertilizer under Tariff Heading 31 of the Central Excise Tariff. In respect of the limitation, we find that the applicants were regularly clearing the product in question at nil rate of duty by claiming classification under Tariff Heading 3101 00 99 of the Central Excise Tariff and filing statutory returns - The demand for the normal period of limitation as quantified in Annexure to the Show Cause Notice comes to Rs. 36 lakhs. - stay granted partly.

  ---

• 2014 (6) TMI 716
  Waiver of pre-deposit of duty - import of electric bicycles in CKD condition - assembling the electric bicycles by procuring certain indigenous parts such as tyres, tubes and shock absorbers - duty as per Notification No. 6/2006-C.E., dated 1-3-2006 - Held that:- goods were declared as electric bicycles in CKD condition and paid appropriate customs duty by classifying the same under Heading 8711.9091 which covers other electrically operated motor cycle. In view of this, prima facie the applicant has a strong case in their favour. Pre-deposit of the dues is waived and recovery of the same is stayed during the pendency of the appeal - Stay granted.

  ---

• CST, VAT & Sales Tax

• 2014 (6) TMI 725
  Reopening of case u/s 21 - Rejection of books of accounts - Best judgment assessment - Change of opinion - Held that:- Reason, on which the approval has been granted, was relevant and sufficient to form the 'belief' that there was escaped assessment. It is not the case of the change of opinion inasmuch as the issue raised in the proceeding, under Section 21 has not been adjudicated in the original assessment. It is settled principle of law that sufficiency of the material cannot be examined in the writ jurisdiction. Learned counsel for the petitioner has also not made any submission in this regard. - So far as challenge to the appellate order of the Joint Commissioner, remanding back the matter to the assessing authority, is concerned, the same cannot be allowed to be challenged under the writ jurisdiction. It was open to the petitioner to file an appeal against the said order before the Tribunal. No prejudice is caused to the petitioner. The petitioner has full opportunity to represent its case on merit before the assessing authority. - Decided against assessee.

  ---

• 2014 (6) TMI 724
  Reopening of case u/s 21 - assessing authority allowed the benefit of exemption on the disclosed turnover of CDR - Revenue contends that during the year under consideration, the petitioner had sold recorded CD and claimed exemption while the exemption on the recorded CD was not available under the eligibility certificate - Change of opinion - Held that:- there was sufficient material on the basis of which an opinion has been formed that there was an escaped assessment. Since turnover of the recorded CD had not been disclosed separately, the assessing authority had no occasion to examine whether such recorded CD would be eligible for exemption under the eligibility certificate. This aspect of the matter has neither been examined nor any opinion has been formed. Therefore, it cannot be said that it is a case of change of opinion. In writ jurisdiction, the Writ Court can only examine that whether there was any material on which belief of escape assessment can be formed or not. Sufficiency of material cannot be examined. On the facts stated above, we are of a considered opinion that there was material to form opinion that there was an escaped assessment and accordingly approval granted by the Additional Commissioner under Section 21(2) and notice under Section 21 are wholly justified and no interference is called for. - Decided against assessee.

  ---