TMI Tax Updates - e-Newsletter
June 6, 2015

Case Laws in this Newsletter:

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

TMI SMS

• SSI Exemption - permission to use brand name by the owner shall not make the manufacturer owner of the brand name -exemption not allowed -SC

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• Additions u/s 68 - gift - assessee cannot be asked to prove the source of source - bank certificate & gift deed produced - No addition - HC

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Articles

1. Freight and other costs is includable in value of goods where transfer of property takes place at buyer's premises

   By: Bimal jain

2. PLACE OF REMOVAL UNDER CENVAT CREDIT

   By: Dr. Sanjiv Agarwal

News

1. Government of India-Floating Rate Bonds (FRB) Issued on 2nd July 2004 are due for Repayment on 2nd July 2015

2. Government Sets-up Task Force for Laying the Road Map for Setting-up of Financial Redress Agency (FRA) as Recommended by the Financial Sector Legislative Reforms Commission (FSLRC)

3. RBI Reference Rate for US $

4. Exchange Rate of Foreign Currency Relating to Imported and Export Goods Notified

Notifications

Central Excise

1. 32/2015 - dated 4-6-2015 - CE

Seeks to further amend notification no 12/2012 - Central Excise dated 17/03/2012 - Ethanol produced from molasses generated from cane crushed in the sugar season 2015-16 and supplied to specified public sector oil marketing companies exempted from duty of central excise

Customs

2. 36/2015 - dated 4-6-2015 - Cus

Seeks to amend Notification No. 60/2011 – Customs, dated 14th July 2011, so as to include Kamalasagar (Tripura) on the India-Bangladesh Border, in order to extend exemption from the whole of the duty of Customs leviable thereon under the First Schedule to the Customs Tariff Act, 1975 to specified goods traded in the Kamalasagar (Tripura) Border Haat, with effect from the 06th day of June, 2015.

3. 60/2015 - dated 4-6-2015 - Cus (NT)

Appointing officers of the rank of Commissioner of Customs

4. 59/2015 - dated 4-6-2015 - Cus (NT)

Appoints the Joint or Additional Commissioner of Customs, Mundra

5. 58/2015 - dated 4-6-2015 - Cus (NT)

Appoints the Joint or Additional Commissioner of Customs, Vishakhapatnam-I

6. 56/2015 - dated 4-6-2015 - Cus (NT)

Appointment of Principal Commissioner of Customs, Chennai

7. 55/2015 - dated 4-6-2015 - Cus (NT)

Appointment of Principal Commissioner of Customs, Air Cargo Complex, Sahar, Andheri, Mumbai

8. 54/2015 - dated 4-6-2015 - Cus (NT)

Appointment of Principal Commissioner of Customs, Chennai

9. 53/2015 - dated 4-6-2015 - Cus (NT)

Appointment of Principal Commissioner of Customs, 15/1, Strand Road, Kolkata

10. 52/2015 - dated 4-6-2015 - Cus (NT)

Rate of exchange of conversion of the foreign currency with effect from 5th June, 2015

11. 51/2015 - dated 4-6-2015 - Cus (NT)

Seeks to rescind the Notification No. 47/2015-Customs (N.T.), dated 21st May 2015

Circulars / Instructions / Orders

DGFT

1. 01/2015-16 - dated 1-6-2015

Formulation of Committee on Quality Complaints & Trade Dispute (CQCTD)

Companies Law

2. F. No. 2/19/2011-CL-V - dated 4-6-2015

Constitution of Companies Law Committee

Highlights / Catch Notes

Income Tax

• Transaction of Share Application Money Proven Genuine; No Addition u/s 68 Required.

  Case-Laws - AT : Addition u/s 68 - assessee has substantiated the transaction regarding share application money received by it was genuine transaction and the same were not accommodation entries - No addition - AT
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• Tax Department Must Pay 9% Interest for Wrongful Retention of Money After Search and Seizure.

  Case-Laws - HC : Interest on Refund - search and seizure - assessee is entitled to be compensated for such wrongful retention of the money by the department. The assessee is entitled to be compensated at the same rates i.e. 9% - HC
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• High Court Upholds Special Audit Validity u/s 142(2-A) Due to Assessee's Non-Objection to Show Cause Notice.

  Case-Laws - HC : Validity of special audit under Section 142(2-A) - assessee had the opportunity to raise objections in the matter of appointment of special auditor by responding to the show cause notice. He has chosen not to do so - No interference - HC
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• Nonresident Indians not required to verify donor's fund origin for gifts under Gift Tax Act.

  Case-Laws - HC : Receipt of gift by a nonresident Indian - assessee cannot be asked to prove the source of source. Moreover, Gift Tax Act nowhere provides that a gift by somebody who is not creditworthy is not a gift. - HC
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• Rental Income from Leasing Commercial Spaces Classified as 'Income from Business' for Tax Purposes.

  Case-Laws - AT : Income earned from letting out of commercial spaces, amenities and maintenance - rental income received from leasing out of the building properties would fall under the head ‘Income from Business’ and not ‘Income from House Property’ - AT
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• Court Rules Assessing Officer Cannot Adjust Book Profit After Auditor Certification u/s 115JB Depreciation Change.

  Case-Laws - AT : Computing the book profit u/s 115JB - MAT - additional depreciation arisen as a result of change in the method of depreciation from Straight Line method (SLM) to Written Down Value (WDV) - once the amount of depreciation actually debited to the profit and loss account is certified by the auditors, AO cannot make book adjustment - AT
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Customs

• DGCA to Assess Helicopter Import Breach; Determines Compliance with Licensing Conditions.

  Case-Laws - AT : Import of helicopters - breach of Condition - DGCA being the appropriate licensing authority, is the best judge to decide as to whether the activity of the importer comes within the ambit of the license issued to the appellant by it - AT
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Wealth-tax

• Land Under Construction Not Taxed as Vacant: No Wealth Tax on Developing Properties.

  Case-Laws - AT : Wealth Tax assessment - once construction activity commenced in the land ceases its character as a vacant land and it cannot be treated as a nonproductive asset and such land cannot be brought to wealth tax - AT
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Service Tax

• Website Photo Browsing Service Ruled as "Online Information and Database Access" for Tax Purposes.

  Case-Laws - AT : Classification of service - number of photographs are available on the website for a viewer to see and choose from the same after browsing - whether the services rendered by the appellant would fall under the category of Online information and Data base access or Retrieval service - Held yes - AT
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• CENVAT Credit Denied for GTA Services: Place of Removal is Factory Gate, Not Depot.

  Case-Laws - AT : CENVAT Credit on GTA services - Place of removal in this case is factory gate of the appellant, and not the depot of other person - service tax paid on the GTA services availed for transportation of goods from the factory of the appellant to the depot of other person has been correctly denied - AT
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Central Excise

• Interpretation of "Other Than" Affects Tax Exemptions for Natural Gas Under Central Excise Rules.

  Case-Laws - SC : Classification of goods - Benefit of exemption - the expression “other than” appearing after the words “gaseous hydro carbons” and before the words “natural gas” would qualify only the words “natural gas” - SC
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• Small Scale Industry exemption denied in Central Excise case for using non-owned third-party brand name despite permission.

  Case-Laws - SC : SSI Exemption - Use of third party brand name - permission to use the brand name by the brand name owner shall not make the respondent owner of the brand name - benefit of exemption denied - SC
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• CENVAT Credit on Capital Goods Unaffected by Ownership or Financing Agency Involvement.

  Case-Laws - HC : CENVAT Credit - capital goods - For taking credit of duty paid on capital goods, it would not be necessary that capital goods shall either be owned by the assessee or those shall be acquired by finance from financing agency - HC
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• Refund Approved: No Evidence to Contradict Chartered Accountant's Certificate, Detailed Costs Deemed Unnecessary.

  Case-Laws - AT : Denial of refund claim - unjust enrichment - There is no material available on record to discard the Chartered Accountant certificate. Hence, in my considered view, there is no need to furnish the cost of material and pricing of the contract - refund allowed - AT
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• Ethanol from 2015-16 cane molasses supplied to public oil companies exempt from central excise duty.

  Notifications : Ethanol produced from molasses generated from cane crushed in the sugar season 2015-16 and supplied to specified public sector oil marketing companies exempted from duty of central excise - Notification
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Case Laws:

• Income Tax

• 2015 (6) TMI 163
  Addition u/s 68 - money claimed to have been received as share capital - FAA deleted the addition - Held that:- As in CIT VS. Lovely Export (2008 (1) TMI 575 - SUPREME COURT OF INDIA) which held that once the identity of the share holder have been established, even if there is a case of bogus share capital, it cannot be added in the hands of company unless any adverse evidence is not on record. Ld. First Appellate Authority has examined the documentary evidence filed by the assessee before the Assessing Officer as well as before him and held that the assessee has provided confirmations from all the parties as well as various evidences to establish the genuineness of the transaction, assessee has also relied upon the judgment of Nemi Chand Kothari Vs. CIT (2003 (9) TMI 62 - GAUHATI High Court) wherein it has held that it is a certain law that the assessee is to prove the genuineness of transaction as well as the creditworthiness of the creditor must remain confined to the transactions which have taken place between the assessee and the creditor. It is not the business of assessee to find out the source of money of creditors. Similar observation has also been given in the case of Hastimal (1962 (12) TMI 60 - MADRAS HIGH COURT) and Daulatram Rawatmal (1972 (9) TMI 9 - SUPREME Court). Thus the assessee has substantiated the transaction regarding share application money received by it was genuine transaction and the same were not accommodation entries. He did not find any evidence collected by the AO which could prove otherwise and deleted the additions in dispute. As regard to the addition of Rs. 12,500/- made on account of commission which was presumed to have been allowed by the assessee for obtaining the Hawala entry in dispute, the ld. CIT(A) observed that the Assessing Officer was not able to brought anything on record that it was assessee’s own money which was rooted in the form of share application money and has rightly deleted the same. - Decided against revenue.

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• 2015 (6) TMI 146
  Entitlement to claim deduction under Section 80-IA - Held that:- The business undertaking of the assessee is wind mill power generation/hosiery goods, etc., and it has claimed the benefit of deduction under Section 80IA of the Income Tax Act for the assessment year in question and for the subsequent years as well. Having exercised its option and its losses have been set off already against other income of the business enterprise, the assessee in this appeal falls within the parameters of Section 80IA of the Income Tax Act. There appears to be no distinction on facts in relation to the decision reported in Velayudhaswamy Spinning Mills case (2010 (3) TMI 860 - Madras High Court). - Decided in favour of the assessee

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• 2015 (6) TMI 145
  Capitalisation of rent - Held that:- In respect of the first property Tribunal noted that no comparable sale instance had been given and that there was no incriminating material which could justify the addition made. The Assessing Officer had added an amount of only Rs. 46,916/-. The Tribunal rightly deleted the addition. Second property, Tribunal rightly observed that the DVO had valued the property on 18.11.2008 ignoring the vital fact that the property was acquired in the year 2003 and registered on 03.03.2004 with the constructed house thereon. There was no evidence to support the addition. The same was, therefore, rightly set aside. Third property Tribunal found merit in the argument that the PWD rates should have been adopted instead of the CPWD rates and that no rebate had been given for self-supervision and adopted a rebate of 15% on account of difference between the CPWD rates and the PWD rates and 5% on account of self-supervision. The Tribunal, therefore, after balancing the factors reduced the addition to Rs. 1,61,542/-. There is no warrant for interfering with the discretion. Last property the rent was taken as prevalent in the year 2007-2008. It was noted that by then the locality had become more prominent and had started fetching commercial value. The rent was fixed in respect of a lease granted in favour of a Multi National Company (MNC). The Tribunal rightly noted that the estimated cost of the acquisition ought to have been considered with respect to the relevant assessment year, namely, 2003-2004. At that time, the rent was about 1/10th of the rent in the year 2007-2008. The addition was, therefore, rightly deleted. - Decided against revenue.

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• 2015 (6) TMI 144
  Genuineness of the purchases made - CIT(A) deleted the addition as confirmed by ITAT - Held that:- The CIT (A) had in the course of its order not only permitted additional evidence but also called for a remand report. The remand report comprised of various materials including the PAN Number, TIN Number and assessment orders secured from the sales tax authorities. The genuineness of the underlined transactions claimed by the assessee – on having purchased goods from its vendors, could not be doubted. An isolated reliance placed upon the ITAT's order to say that the point is left moot is under the circumstances not accurate. - Decided against revenue.

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• 2015 (6) TMI 143
  Eligibility for export market development allowance u/s. 35B - interest paid on packing credit - Held that:- The question of law is answered in favour of the Revenue and against the assessee. The weighted deduction cannot be granted on the interest paid on packing credit. Mere obtaining of a packing credit loan or payment of interest thereon in India cannot be said to entail the performance of any service outside India. This expenditure is, therefore, not deductible. See KEC International Ltd. vs. Commissioner of Income Tax, Central Range-II (2009 (1) TMI 5 - BOMBAY HIGH COURT)- Decided against assesse.

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• 2015 (6) TMI 142
  Interest on Refund - Unexplained inordinate delay in payment of interest within the statutory period by the department - Held that:- It is apparent that the assessee became entitled to payment of interest at least for the pre-assessment period from the date his appeal by CIT was allowed and the liability was reduced to 3,15,415/- only. This payment of interest has been denied to the assessee without any justifiable cause even after expiry of 9 years from the date interest was payable. Similarly, we find that for the post-assessment period, the assessee should have been paid interest on the sum of Rs. 37 lacs refunded to him on 2.2.2007 from the date of the appellate order till the date of money was so returned. It has taken nearly 8 years for the department to make the payment of the interest and that too on wrong calculation. Thus the department was legally not justified in retention of the amount of interest which was payable to the assessee both under Section 132B (4) as well as under Section 243 / 244A for the period of nearly 9 and 8 years respectively. Thus the case of the assessee falls within the category of cases where there has been inordinate delay on the part of the department to pay the statutory interest, therefore, the assessee is entitled to be compensated for such wrongful retention of the money by the department. The assessee is entitled to be compensated at the same rates i.e. 9% as was provided for by the Apex Court in the case of Sandvik Asia Ltd (2006 (1) TMI 55 - SUPREME Court). - Decided in favour of assesse.

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• 2015 (6) TMI 141
  Software expenses - revenue v/s capital expenditure - ITAT holding software expenses as revenue in nature - Held that:- Tribunal notes that the facts and circumstances in the previous assessment year and the assessment year in question are identical. There is absolutely no distinction pointed out by the departmental representative. Rather the departmental representative has conceded that the issue was covered in favour of the assesse. Merely because the revenue effect or the tax amount is found enormous, we are not required to take a contrary stand. There is sanctity to a judicial process and any Commissioner in hierarchy cannot disrespect and disregard the Tribunal's order passed on clear concession from the revenue or department and on facts. No substantial question of law. - Decided against revenue. Disallowance made under section 14A - ITAT deleted the addition - Held that:- Question answered by a Division Bench of this Court in the case of Godrej & Boyce Manufacturing Co. Ltd. V/s. DCIT reported in [2010 (8) TMI 77 - BOMBAY HIGH COURT] - Decided against revenue

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• 2015 (6) TMI 140
  Applicability of Rule 8D(ii) - Held that:- The figures under the head "Investment" could be taken and some charges apportioned for the purpose of computing the expenses. The Commissioner found from such figures, that only 10% of the income earned could be apportioned towards expenses for earning the dividend income. CIT(A) therefore, made a revised disallowance been accepted by Tribunal. No substantial question of law - See Godrej & Boyce Mfg. Co. Ltd. vs. Dy.CIT [2010 (8) TMI 77 - BOMBAY HIGH COURT] - Decided in favour of assesse.

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• 2015 (6) TMI 139
  Validity of special audit under Section 142(2-A) - Held that:- As on the date fixed, for examination of the account books etc. nobody on behalf of the assessee appeared before the Assessing Officer, although the case was adjourned on the request of Chartered Accountants of the assessee on an earlier occasion. What we further find is that the assessee did not deem it fit and proper to respond to the notice dated 07.12.2006 wherein complex discrepancies in respect of books of account etc. were noticed by the Assessing Officer. Reasons for such non-appearance/nonresponse to the show cause notice have not been stated in the present writ petition. In our opinion the assessee had the opportunity to raise objections in the matter of appointment of special auditor by responding to the show cause notice. He has chosen not to do so. Therefore, there is hardly any scope, under Article 226 of the Constitution of India, to permit such an assessee to question the order before the writ Court. Thus no good reason to interfere with the order directing special audit under Section 142(2-A) of the Income Tax Act. - Decided against assesse.

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• 2015 (6) TMI 138
  Entitlement to the exemption under Section 54EC - Held that:- The present Tax Appeal is ADMITTED to consider the following substantial question of law - Whether the ITAT is justified in law as well as on facts in coming to the conclusion that the assessee is entitled to the exemption under Section 54EC of Rs. 1 Crore instead of Rs. 5 lakhs ignoring the amendment in Section 54EC by Finance Act (2) of 2014, which is clarificatory in nature? Deduction from long term capital gain and short term capital gain - Held that:- while considering the aforesaid issue the learned Tribunal has relied upon the decision of the Division Bench of this Court in the case of CIT Vs. Himalaya Machinery (P) Ltd reported in 2012 (12) TMI 607 - GUJARAT HIGH COURT] and CIT Vs. Polestar Industries reported in (2013 (11) TMI 910 - GUJARAT HIGH COURT). The learned Counsel appearing on behalf of the revenue is not in a position to show any contrary decision to the aforesaid decisions - Decided against revenue. Disallowance of expenditure - ITAT allowed the claim - Held that:- The learned CIT(A) has given independent and elaborate reasons while restricting the disallowance of expenditure of Rs. 10,90,223/- and granted the relief to the assessee to the extent of Rs. 6,09,870/- on each item. We see no reason to interfere with the finding recorded by the learned CIT(A) confirmed by the learned Tribunal restricting the disallowance of expenditure to Rs. 10,90,223/- It is required to be noted that the Assessing Officer disallowed the expenditure of Rs. 17,00,093/- against which the learned CIT(A) has restricted the disallowance of expenditure to Rs. 10,90,223/-. - Decided against revenue.

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• 2015 (6) TMI 137
  Reopening of assessment - bifurcation of income - the entire income from receipt against non-supply to AH Department as the income of the assessee, whereas the income from admitted supply to AH Department was to be treated as 10 per cent of the supply made - Held that:- As the figures of supplies are concerned, the same are derived from the audited accounts and the figures of the CBI by the Assessing Officer as well as the Appellate Authorities and the same are not in dispute. Once it is accepted that the assessee had earlier made supplies to private parties, the reasons adopted by the CIT (Appeals) and Tribunal appear to be unassailable. No substantial question of law - Decided against revenue.

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• 2015 (6) TMI 136
  Reopening of assessment - deduction u/s. 80HH - Held that:- On the facts and circumstances of the case, the Tribunal was not justified in upholding the validity of the Reassessment Order dated 3.6.93 passed u/s. 143(3) r.w.s. 147 of the Act especially when the original assessment order passed u/s. 143(3) of the Act on 15.12.1989 was cancelled by C.I.T., Amritsar vide his order dated 28.2.92 passed u/s. 263 of the Act and no fresh order was passed pursuant thereto. In view of the decision of Commissioner of Income-tax vs. Greenworld Corporation [2009 (5) TMI 14 - SUPREME COURT OF INDIA] once we answer question No.1 in favour of the appellant-assessee, it is held that the Tribunal was not right in holding that assessment was validly reopened u/s. 147 of the Act, in spite of the fact that all primary facts were disclosed by the appellant in the return of income and after considering the same, deduction u/s. 80 HH was allowed on interest income, dividend income and rental income in the original assessment and hence mere change of opinion does not constitute information within the meaning of Section 147 of the Act . - Decided in favour of assesse.

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• 2015 (6) TMI 135
  Receipt of gift by a Non resident Indian - Unexplained income of the assessees - Held that:- We are bound by the decision of in the case of Murlidhar Lahorimal [2005 (11) TMI 32 - GUJARAT High Court] wherein it is held that the assessee cannot be asked to prove the source of source. Moreover, Gift Tax Act nowhere provides that a gift by somebody who is not creditworthy is not a gift. The Tribunal instead of addressing itself to the requirement of Section 68 of the Act, has adopted an approach which is unwarranted in law. The assessee pointed out that it had received a gift from Shri Chinubhai Thakkar produces the bank certificate and gift deed. The gift is given by way of a cheque. The revenue does not dispute any of these facts. - Decided in favour of the assessees.

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• 2015 (6) TMI 134
  Deemed dividend u/s 2(22) - CIT(A) deleted the addition - Held that:- CIT(A) while examining the material and substance brought on record, particularly the statement of the Executive Director of Ludhiana Stock Exchange, who in unambiguous terms stated that the forms bearing Sr.No.64001 to 68000 and 68001 to 72000 were sent to the Registrar of Companies on 29.1.2007 and 6.2.2010 respectively. Admittedly, the share transfer forms bearing No.65672 and 65673 were issued in the lot dated 29.1.2007 and, therefore, the erroneous and perverse opinion formed by the Assessing Officer, to the effect that the said share transfer forms were submitted in February, 2010, does not have any basis much less any substance once the provisions of the Companies Act permit the Company to file a revised annual report, Income Tax authorities cannot sit over the statutory provisions which permit the Company to file a revised annual report and form a different opinion that too on the basis of suspicion. CIT(A) and as well as ITAT correctly found that the Assessing Officer did not comply with the statutory provisions of law, inasmuch, as that the assessee was not given sufficient opportunity to rebut the report of the Assessing Officer. Not only this, even the assessee was not confronted with letter obtained from the office of Ludhiana Stock Exchange in order to enable him to rebut or lead evidence in support of his stand, particularly when it has come on record that the forms were issued during the relevant period when the annual returns were filed on 3.3.2007, on a duly stamped form, submitted by the Registrar of Companies on 29.1.2007. The effect of the same was also duly recorded in the board meeting of the Company held on 10.3.2007. There was no occasion for the Assessing Officer to disbelieve the explanation submitted by the assessee before the Assessing Officer. The clarification sought from the office of the Ludhiana Stock Exchange during the appellate proceedings leaves no manner of doubt that the entire transaction by the Company was done in accordance with the provisions of the Companies Act and there was no deviation from the Act, which could have led the Income Tax authorities to form an opinion different from the decision of the Registrar of Companies. The Commissioner of Income Tax (Appeals) in its order also extracted the statement Mrs.Pooja Kohli, Executive Director of the Ludhiana Stock Exchange which leaves no manner of doubt that the share transfer forms were purchased and submitted on 29.1.2007 and the share holding pattern was effected on 3.3.2007, which was duly approved by the Company on 10.3.2007 in the meeting of the Board of the Directors. - Decided against the revenue.

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• 2015 (6) TMI 133
  Demutualization Scheme of the Bombay Stock Exchange - protective addition was made on the issue of BSE membership card and A.O. held that the original cost of card is allotted on computing capital gain of sale of card - ITAT deleted the addition - Held that:- The conceded position is that the card has not been transferred in the year under consideration. That it would be or it may be transferred in future is the assumption on which the A.O. and the Commissioner have proceeded. The Tribunal has held that if what has been transpired in the year under consideration viz. the assessment year in question is the acquisition of 10,000 shares of BSEL in lieu of the membership card, then, that is by itself and without anything more not a case of transfer in the year under consideration. If the transfer has not taken place now but may occur in future then all the issues that have been raised and considered by us in the appeal of Walfort (2014 (10) TMI 184 - BOMBAY HIGH COURT) are identical. It is precisely this basis on which we have proceeded and, therefore, as held in the other case of Walfort Shares and Stock Broking Private Limited that the question of law had projected is purely academic. - No substantial question of law - Decided against revenue. Disallowance made under section 14A - ITAT deleted the addition - Held that:- Question answered by a Division Bench of this Court in the case of Godrej & Boyce Manufacturing Co. Ltd. V/s. DCIT reported in [2010 (8) TMI 77 - BOMBAY HIGH COURT] - Decided against revenue

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• 2015 (6) TMI 132
  Transfer pricing adjustment - Transactional Net Margin Method - selection of comparable - Held that:- Infosys Technologies Ltd., cannot be treated as comparable with the assessee company considering the giantness of Infosys Ltd., in terms of risk profile, nature of services, number of employees, ownership of branded products and brand related profits, etc. See CIT vs. Agnity India Technologies (P) Ltd. 2013 (7) TMI 696 - DELHI HIGH COURT KALS Information Systems Ltd. (seg.) company is into the business of software products and also software development and has merged the revenue from both the streams under the overall segment of ‘Application software’, which has been taken by the TPO for inclusion in the final set of comparables, this company loses the tag of comparability vis-a-vis the assessee company which is exclusively engaged in providing software development services on a contract basis to its AEs as a captive unit. It is manifest that under the circumstances prevailing in the case of this company, the impact of the profit from the sale/licence of software products on the overall profitability of the ‘Application software’ segment cannot be segregated. To what extent the overall profits of this company have been influenced by the revenues from software products, cannot be precisely ascertained. In view of the aforegoing distinguishing facts, this company ceases to be comparable. Persistent Systems Ltd. has been held to be functionally different from a software development service provider company. See FCG Software Services (India) (P) Ltd. Vs. ITO [2014 (12) TMI 681 - ITAT BANGALORE] Tata Elxsi (Seg.) company offers integrated hardware and packaged software solutions, the same cannot be considered as comparable with the assessee company, which is simply providing software related services. Wipro Ltd. (Seg.)A company which does not own any IPRS and carries on the activity of rendering software development services at its own cannot be compared with a company which provides software development services by using its own IPRS in the form of patents of software. Under such circumstances, we hold that this company cannot be considered as comparable at segment level. The same is ex consequenti directed to expelled from the set of comparables.

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• 2015 (6) TMI 131
  Non-service of notice u/s. 143(2) - Held that:- No assessment u/s 143(3) can be said to have validly made where notice u/s 143(2) is not served or where such notice is served beyond the prescribed period or improperly served. The consequences flowing from such non / belated / improper services of notice are that the assessment so made become void ab initio. In the present case AO has not issued any notice u/s 143(2) of the I.T. Act to the assessee. During the entire assessment proceedings, the assessment order in dispute is invalid, void abnitio and against the provisions of the law and the impugned order is not sustainable in the eyes of law and hence, we cancel the same by accepting the appeal filed by the Assessee. - Decided in favour of assesse.

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• 2015 (6) TMI 130
  Transfer pricing adjustment - Advertising, Marketing and Promotion (AMP) expenses - selection of comparable - Held that:- TPO/AO have followed the Special bench decision in LG Electronics (2013 (6) TMI 217 - ITAT DELHI) for determining the ALP of AMP expenses. There is no discussion about the AMP functions carried out by the assessee or comparables. Now since the Special bench order has been partly modified by the Hon’ble Delhi High Court, including the non-applicability of the bright line test, and no material has been placed on record by the ld. AR to, firstly, demonstrate the AMP functions carried out by the assessee and then, to compare such functions with those done by comparables, this issue cannot be decided at our end. Under such circumstances, we set aside the impugned order and remit the matter to the file of the AO/TPO for deciding it afresh as per law. In this fresh exercise, the TPO will follow the parts of the judgment in Sony Ericson (2015 (3) TMI 580 - DELHI HIGH COURT) as are common to both Manufacturers and Distributors; apply the parts of the judgment as are applicable to a `Manufacturer’; and ignore the parts of the judgment which pertain exclusively to a `Distributor’. Needless to say, the assessee will be allowed a reasonable opportunity of hearing in such fresh proceedings. - Decided in favour of assessee for statistical purposes.

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• 2015 (6) TMI 129
  Income earned from letting out of commercial spaces, amenities and maintenance - ‘Profits and Gains from Business’ OR ‘Income from House Property’ - Held that:- The deciding factor is not the ownership of the land or the leases thereof, but the nature of the activity of the assessee and the nature of the operations in relation to them. In the case on hand, considering the nature of the assessee's dealings with the property, apart from letting them out and the manner and extent of its activities, inter alia, like providing of ward and watch, security, maintenance of common area and lighting thereof, fire safety, supply of water, providing lifts, installation of electric transformers, generators, water tanks, etc. go to clearly establish that the entire activity is conducted in an organized manner to earn profits out of the investment made by the assessee as a commercial venture. Thus the operations of the assessee in earning the rental income received from leasing out of the building properties would fall under the head ‘Income from Business’ and not ‘Income from House Property’ as held by the authorities below - Decided in favour of assesse. Interest under Section 234A and 234B - Held that:- The charging of interest is consequential and mandatory and the Assessing Officer has no discretion in the matter. This proposition has been upheld in the case of Anjum H Ghaswala (2001 (10) TMI 4 - SUPREME Court) and we, therefore, uphold the action of the Assessing Officer in charging the said interest. - Decided against assessee.

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• 2015 (6) TMI 128
  Disallowance u/s 40A(2) - 25 per cent of the total increase in the salary of the managing director - Held that:- A plain reading of the provisions of sec. 40A(2) of the Act, suggest that for making the disallowance under the provisions, the Assessing Officer is required to form an opinion that the claimed expenditure is excessive or unreasonable having regard to (a) fair market value of the goods, services or facilities for which the payment is made; or (b) the legitimate need of the business of the assessee; or (c) the benefits derived by or accruing to the assessee on receipt of such goods, services or facilities, then the Assessing Officer shall not allow a deduction so much of the expenditure as is so considered by the Assessing Officer to be excessive or unreasonable. In the present case before us, when the Assessing Officer had asked for explanation of the assessee to justify the payment in dispute in view of the provisions under sec. 40A(2) of the Act, it was duty of the assessee to cooperate the Assessing Officer to arrive at a just conclusion by furnishing the required explanation to the Assessing Officer. Even before the Learned CIT(Appeals), it does not appear that the assessee had furnished the required explanation to justify the payment. In such a situation, the only option left with Assessing Officer was to estimate the disallowance taking note of some comparable instances. No such effort has been made by the Assessing Officer. Thus set aside the matter to the file of the Assessing Officer to decide the issue afresh - Decided in favour of assesse for statistical purposes. Disallowance of management support expenses of - as per CIT(A) such expenses falls within the definition of “fee for technical services” and accordingly tax is required to be deducted on the same - application for allowing the additional evidence - Held that:- As relying on CIT v/s TEXT HUNDRED INDIA PVT. LTD. [2013 (6) TMI 72 - DELHI HIGH COURT] wherein the Hon’ble High Court has been pleased to approve the order of the Tribunal to allow such documents to be produced for substantial cause. In the present case before us, it has not been seriously disputed that the additional evidence for which the assessee seeking permission for consideration are relevant to decide the issue raised in Grounds No. 2 and 3 to ascertain the nature of the services rendered for which payment was made and there is no reason to disbelieve the explanation of the assessee that these documents could not be filed before the authorities below due to technical problem i.e. non retrieval of these additional evidence in the shape of emails in the form of correspondences in furtherance to the agreement between the parties, showing nature of the services rendered to the assessee by the other parts of the agreement. Thus set aside the matter to the file of the AO to decide the issue afresh as per law, after affording opportunity of being heard to the assessee and considering the documents available on record - Decided in favour of assesse for statistical purposes. Computing the book profit under section 115JB - whether the claim of additional depreciation arisen as a result of change in the method of depreciation from Straight Line method to Written Down Value, is not justified - Held that:- As relying on case CIT vs. Hindustan Pipe Udyog Ltd. (2013 (12) TMI 866 - ALLAHABAD HIGH COURT) answered the issue as to whether it is opened to the Assessing Officer to make adjustment to the book profits beyond what is authorized by the definition given in Explanation to section 115J of the Income-tax Act, 1961, if the accounts are prepared and certified to be in accordance with Parts-II and III of Schedule-VI to the Companies Act, 1956 in favour of the assessee as discussing the decision of Kinetic Motor Co. Ltd. (2003 (1) TMI 47 - BOMBAY High Court ) and followed the decision of Hon'ble Supreme Court in the case of Apollo Tyre Ltd. (2002 (5) TMI 5 - SUPREME Court) holding that while computing the income under sec. 115J of the Act, the Assessing Officer has only power to examine whether the books of account were certified by the authorities under the Companies Act as having been properly maintained in accordance with the Companies Act. Assessing Officer thereafter has limited powers of making increases and reductions as provided for in the Explanation to the said section and does not have the jurisdiction to go beyond the net profits shown in the profit and loss account, except to the extent provided in the Explanation to sec. 115J of the Income-tax Act, 1961. It is not in dispute that under the Companies Act, 1956, both straight line method and written down method are recognized, therefore, once the amount of depreciation actually debited to the profit and loss account is certified by the auditors, then, the issue has to be answered in favour of the assessee. Thus set aside the matter to the file of the Assessing Officer to decide the issue afresh - Decided in favour of assesse for statistical purposes

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• 2015 (6) TMI 127
  Agricultural income - income received from undisclosed sources - Held that:- It is alleged that the assessee could not produce before the AO any details and evidences to substantiate that the expenses such as seeds, khad and water etc. were incurred for cultivation. The assessee also did not furnish the details of the crops grown and the details of sales. She simply stated that an agreement was entered with Shri Jai Prakash wherein it was mentioned that he will grow vegetables and will incur all the expenses. In the present case, no doubt the assessee furnished a certificate dated 20.08.2010 from the tehsilpatwari wherein it is stated that on the agricultural land vegetables were grown for the last few years. However, neither the details of crops were given nor it is mentioned that who is the owner of the land and in which year which type of vegetables/crops were grown by whom. The assessee also did not furnish copy of the Jamabandi. However, the ld. CIT(A) accepted the claim of the assessee. It is well settled that the powers of the ld. CIT(A) and the AO are co-terminus but in the present case, it appears that the ld. CIT(A) failed to discharge the duty to perform those function which ought to have been but not done by the AO, and simply on this basis that the AO did not examine the cultivator or the tehsilpatwari, he directed the AO to treat the impugned income as agricultural income. Thus set aside this issue back to the file of the AO to be decided afresh in accordance with law after providing due and reasonable opportunity of being heard to the assesse - Decided in favour of revenue for statistical purposes. Share trading - Short term capital gain v/s income from other sources - Held that:- In the present case, it appears that the ld. CIT(A) had not given cogent reason while accepting the claim of the assessee. He simply stated that the AO did not ask the assessee to bring the broker and that the assessee had furnished documents relating to transaction of shares. On the contrary, the AO categorically stated that the assessee was asked to furnish copy of D-mat account, details of share holding, details of Short Term Capital Gains with confirmed ledger account from brokers in respect of share trading. The AO clearly mentioned at page no. 6 of the assessment order that the assessee failed to furnish contract note, delivery/transfer of shares in D-mat account or any supporting evidence which could prove that shares were transferred in D-mat account of the assessee and that simply filing of ledger account/bills of broker did not prove that delivery of shares was made. On the said observations of the AO, the ld. CIT(A) is silent and had not discussed how the assessee overcome those shortcoming which were specifically pointed out by the AO. Thus remand this issue back to the file of the AO to be adjudicated afresh - Decided in favour of revenue for statistical purposes.

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• Customs

• 2015 (6) TMI 152
  Seizure of goods - provisional release of the goods - whether the conditions imposed for provisional release of the seized goods are excessive - Held that:- Similarly placed goods have been allowed to be provisionally released by executing a bond equivalent to the value of seized goods without insisting for any Bank Guarantee/ Cash security. - The office of the Principle Commissioner of Customs, Mundra has also provisionally released the seized goods on execution of a Bond with respect to similarly placed exporters. Therefore, in the interest of justice, it will be proper to allow the appeals filed by the appellants by modifying the conditions of provisional release of the seized goods. - Decided conditionally in favour of assessee.

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• 2015 (6) TMI 151
  Whether the appellant - importer of helicopters, has breached Condition No. 104 contained in Customs Notification No. 21/2002 (as amended by Notification No. 61/2007) rendering it liable to payment of duty on the import of the 2 helicopters, for which it had previously claimed exemption from duty in terms of the said Notification - Held that:- there is no violation by the importer-appellant to the post import condition No. 104 of Notification No. 21/07, as amended. Accordingly, under the undertaking given by the importer, it was required to offer only non-scheduled passenger service. Such service has been defined in Explanation (b) of the said Notification as 'Air Transport Service other than a Scheduled Air Transport (Passenger) Services' with reference to Rule 3 of the Aircraft Rules, 1937. Hence, the one and only source of definition and strictly interpreting the exemption Notification, reliance has to be placed on the said Rule 3, and no other material. The finding of the Revenue that the service provided was not a passenger service as the appellant did not print passenger ticket nor the flights were opened to public is erroneous. We hold that offering the service to public at large includes entering into agreement for providing regular service to a few members of the public on a regular basis over a period of time. The expression person includes the company under various tax laws. Further, company also forms part of the general public. The members of the public (company included) due to requirement of its business enters into the agreement with the service providers for providing of service over an extended period of time, may be weeks, months or years, it cannot be said that the service was not provided to public. Further, printing of ticket is not an essential element and such a requirement is not there, where the services are provided on the basis of published tariff or agreement wherein the hourly charges and flying charges along with other charges are mentioned for providing service for extended period of time. Accordingly, we hold that the services provided by the importer are in the nature of non-scheduled passenger service. In view of the clarification dated 8.8.2008, given by the licensing authority DGCA, while interpreting the importers permit, have clarified that the services offered by the appellant under its various contracts is within the scope of NSOP for passenger permit. DGCA being the appropriate licensing authority, is the best judge to decide as to whether the activity of the importer comes within the ambit of the license issued to the appellant by it. - in the case of the appellant unlike in the case of King Rotors' case(2011 (6) TMI 276 - CESTAT, MUMBAI), there is no surrender of the helicopter in question and all the activities as the service provider, such as maintenance/insurance, salaries to the Pilot etc. have been carried out by the appellant importer. Thus, the facts in this case are clearly distinguishable from the facts in the King Rotors case and as such, we hold that the learned Commissioner has erred in relying on the earlier ruling of the Tribunal in the case of King Rotors case (supra). - Decided in favour of assessee.

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• Corporate Laws

• 2015 (6) TMI 150
  Financial and banking activities undertaken by Credit Cooperative Societies - No licence as per provisions of the Banking Regulation Act, 1949 - Held that:- We are of the view that activities carried out by the respondents Nos.9 to 12 as Cooperative Societies may be within the purview of legitimate business under the Rajasthan Cooperative Societies Acdt, 2001 and the Multi-State Cooperative Societies Act, 2002 and the registered bye-laws, these activities in accepting for the purpose of lending and investment, the deposit from the public, repayment on demand and its withdrawal, fall within the definition of “banking” under Section 5(b) of the Act of 1949. The word “public” in the definition of the word “banking” cannot be restricted to general public. The word “public” will also include those persons who are nominal members, ordinary members and the members of any category under the bye-laws of the Cooperative Society so long as deposits are accepted without any restriction from such members who may be enrolled as members on the same day at the time of accepting deposits. Even the person enrolled as nominal member, does not fall outside the purview of the word “public” and that any deposits from the members on interest and for which amount is to be repayable on demand or otherwise, is an activity which amounts to banking activity. The activities of the Cooperative Societies in the State of Rajasthan have clearly demonstrated that the deposits and investments of general public, who can become nominal members and ordinary members of the Cooperative Societies, and for them lucrative schemes are being floated by the Cooperative Societies are at risk. Their investments are not covered by any protection. The provisions under the Multi-State Cooperative Societies Act, 2002 restrict the deposits upto ten times the paid up capital and the reserve. This condition is not sufficient to protect the deposits if the reserves can be advanced as loans without sufficient security. If such a restriction was sufficient, the entire banking activity could be carried out without obtaining licence under the Act of 1949. The Reserve Bank of India circulars and directives are binding on all the banks which are licensed under the Act of 1949. This protection must apply to all kind of banking activities which is defined under Section 5(b) of the Act of 1949. We do not agree with the submission of learned counsel appearing for the respondent No.9 that under the legislative scheme, Multi-State Cooperative Society is permitted to carry out banking activity which does not fall within the meaning of Section 5(b) of the Act of 1949. He submits that legislative policy provides Multi-State Cooperative Society to carry out the activities of taking deposits from its members on interest and that so long legislative scheme permits such activity, the respondent is not violating the provisions of the Act of 2002. The argument is devoid of any substance. So far as the allegation against the petitioner is concerned, this Court has already directed the Superintendent of Police of the concerned district to enquire about the complaints of the investors. In case the petitioner has committed any misconduct under the Regulation of Bar Council of India, a complaint can be made against him to the Bar Council of Rajasthan. These allegations against the petitioner was not detain us to decide the writ petition in the larger public interest. - Decided partly in favour of appellant.

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• Service Tax

• 2015 (6) TMI 162
  Waiver of pre deposit - Mandatory pre deposit - whether the petitioner would have to deposit the amount of 7.5% of the tax confirmed against him, as a condition for pursuing the appellate remedy before the Tribunal - Held that:- Petitioner, in whose case also the lis commenced in 2013, would not be required to deposit the amount of 7.5%, as required pursuant to the 2014 amendment, and in that respect, he would have an efficacious alternate remedy before the Tribunal where he can file an appeal, together with an application for waiver of pre-deposit and stay of recovery of the amounts confirmed against him by Ext.P1 order. At the time of filing the appeal, he will not be required to make any payment as a pre-condition for the hearing of the waiver application by the Tribunal. I, therefore, relegate the petitioner to the alternate remedy available under the Finance Act, 1994, as amended, of approaching the Appellate Tribunal by way of an appeal against Ext.P1 order. It is made clear that the appeal to be filed by the petitioner would be governed by the statutory provisions, as they stood prior to the amendment introduced with effect from 16.08.2014. - Decided against assessee.

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• 2015 (6) TMI 161
  Classification of service - appellants have website where a number of photographs are available for a viewer to see and choose from the same after browsing - whether the services rendered by the appellant would fall under the category of 'Online information and Data base access or Retrieval service' under Section 65 (75)(zh) or otherwise - held that:- on-line information means providing data or information which is retrieved or otherwise in electronic form through a computer network. It is an admitted fact in the case in hand, that the appellant's client has an access to the image or photograph, which he want to download for the purposes either to place an ad or for research can be done so only through the computer network. Further, we find that the appellant's website allows the access and retrieve the data or information contained therein which are free for the purpose of viewing on the monitor, but has to be paid for downloading in the for further commercial use. - database or the information which is accessed need not be only photograph, it can be strategic, legal and having data wherein graphics are displayed, books and other electronic publications etc. The service as rendered by the appellant would be web-based service providing access or downloading of a digital content inasmuch as the images and photographs are nothing but a digital content stored in website. - impugned order of the first appellate authority is correct and does not require any interference - Decided against assessee.

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• 2015 (6) TMI 160
  Imposition of penalty - Installation commissioning and testing service - Revenue classified service as repair service - Held that:- service has been wrongly classified. An amount of Rs. 4,50,504/- was received by the appellant for painting of 220 M.S. towers. The paint was purchased by the appellant and therefore, the contract has to be treated as works contract and the period involved is 16.06.2005 to 31.03.2006. It was submitted that the cost of the raw materials is Rs. 1,80,201/- and this service cannot be considered as repair service. Even though this claim is not acceptable, this service of painting of MS towers was undertaken for AP Transco which is engaged in transmission of power. The services provided for the purpose of transmission of electricity have been exempted retrospectively under Notification No. 45/2010 and therefore the service tax itself is not leviable. - substantial portion of the amount is not liable to tax at all and the amount paid by the appellant covers the entire demand, interest and a portion of the penalty also. Therefore this is a fit case for waiving the balance amount of penalties if any payable by the assessee by invoking the provisions of Section 80 of the Finance Act 1984 - Decided in favour of assessee.

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• 2015 (6) TMI 126
  Denial of CENVAT Credit - Whether the appellant would be eligible for Cenvat credit of Service Tax paid on the GTA service availed for transportation of the biscuits from their factory to the depot of M/s. Parle Biscuits - Held that:- In view of the Tribunal’s judgment in the case of Ultratech Cement Ltd. v. CCE, Chandigarh/Raipur (2014 (3) TMI 159 - CESTAT NEW DELHI), since in this case the assessable value of the goods was being determined not under Section 4 but under Section 4A of the Central Excise Act, 1944, the definition of “place of removal” as given in Section 4(3)(c) cannot be adopted for the purpose of Cenvat Credit Rules, 2004 and accordingly it is the factory gate which would be the place of removal. Moreover, even if the definition of “place of removal” as given in Section 4(3)(c) is treated as applicable to the cases where the duty on the finished goods is payable on the value determined under Section 4A, even then, the depot of M/s. Parle Biscuits cannot be treated as “place of removal” in respect of the goods manufactured by the appellant as the, “place of removal” defined in Section 4(3)(c) is the place of removal for the manufacturer of the goods and in case, the manufacturer after clearing the goods from the factory to his depots [clears] all the goods from those depots, it is those depots which would be the place of removal. However, when the manufacturer clears the goods to the depots of some other persons, those depots cannot be treated as “place of removal” for the manufacturer, unless the sales are on FOR destination basis. “Place of removal” in this case is factory gate of the appellant, and not the depot of M/s. Parle Biscuits. In view of this, we hold that the Cenvat credit of the service tax paid on the GTA services availed for transportation of goods from the factory of the appellant to the depot of M/s. Parle Biscuits has been correctly denied - Cenvat credit demand has been correctly upheld along with interest. - Decided against assessee.

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• 2015 (6) TMI 125
  Denial of CENVAT Credit - credit of service tax paid on freight in respect of transportation of their final product from factory to buyer's premises - High Court dismissed the appeal filed by the assessee against the order of Tribunal [2007 (7) TMI 19 - CESTAT, CHENNAI] since there is no representation on behalf of Assessee. So appeal is dismissed for non prosecution.

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• Central Excise

• 2015 (6) TMI 157
  Benefit of Notification No. 6/2000 dated 01.03.2000 - Classification of goods - Classification under Chapter Heading 2711.12 or under chapter sub-heading 2711.19 - Held that:- Both the authorities below have entered into the various facets of the dispute and gone into the entire gamut of controversy. Many of the findings of the Commissioner in his order have not found favour with the CESTAT in the impugned decision rendered by it. We have heard learned counsel for the parties on all the aspects and have gone through the orders minutely through which we were taken by the learned counsel appearing for the parties. We are, however, of the opinion that it is not necessary to even advert to all those aspects of the matter inasmuch as the fulcrum of the dispute pertains to the interpretation which is to be accorded to the language used in Notification No. 6/2000 which confers, partial exemption. In the Sl. No. 24 of Notification No. 5/2000, there is no comma after the words 'gaseous hydrocarbons'. Therefore, the expression “other than” appearing after the words “gaseous hydro carbons” and before the words “natural gas” would qualify only the words “natural gas”. - Insofar as Indian Oil Corporation is concerned, the only difference is that it is manufacturing a product known as propylene. Since it is also one of the products which qualifies for partial exemption from payment of duty by Notification No. 6/2000 dated 01.03.2000, result in both the cases would be the same. - Decided against Revenue.

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• 2015 (6) TMI 156
  SSI Exemption - Use of third party brand name - goods are different - Benefit of Notification No. 175/86 dated 01.03.1986 and 1/93 dated 01.03.1993 - Held that:- Court fails to understand as to how the CESTAT could still hold that the brand name VETCARE and the logo which were owned by M/s. Tetragon Chemie (P) Ltd., Bangalore registered in their name, belongs to the respondent. - even if the goods are different, so long as brand name or trade name of some other Company is used, the benefit of Notification would not be available. That permission shall not make the respondent owner of the brand name. It is thus, clear that the brand name belongs to M/s. Tetragon Chemie (P) Ltd., Bangalore, which brand name is allowed to be used by the respondent and in these circumstances, following Explanation 8 to the Notification No. 175/86 dated 1.3.1986 would clearly become applicable. - principle of law is no more res integra and has been decided by this Court authoritatively in couple of judgments. - order of the CESTAT is erroneous and warrants to be set aside - Decision in the case of Commissioner of Central Excise, Chandigarh-I Vs. Mahaan Dairies [2004 (2) TMI 73 - SUPREME COURT OF INDIA] - Decided in favour of Revenue.

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• 2015 (6) TMI 155
  Benefit of exemption/concessional rate of duty under Notification No.175/86-CE dated 1.3.1986 - Exemption or concessional rate of excise duty to the SSI units - Use of third party brand name - Held that:- Benefit of exemption would not apply to the specified goods where a manufacturer affixes the specified goods with brand name or trade name (registered or not) of another person who is not eligible for grant of exemption under this Notification. As per this, in order to deny the exemption under this Notification, the Department has to show that on the goods which are manufactured by the manufacturer i.e. the SSI, the brand under or trade name of another person is affixed and that another person is not eligible for grant of exemption in this Notification. In other words, when that other person whose brand name or trade name is used by the SSI is not itself a SSI, then the user is not entitled to exemption under the said Notification. On the packing of goods, brand names of the assessee “INTATEX” and “INTACO” were clearly and prominently printed. In between these two brand names, a hexagonal shape/design, which was claimed by the Department to be the brand of the Marketing Company, was also printed. In this backdrop, the question was as to whether the assessee company was using the said hexagonal shape/design of other person. On the facts of that case, the Court found that there was nothing on record to show that the said hexagonal shape/design belonged to or was owned by the Marketing Company and thus they had permitted the assessee to use the same on the corrugated boxes. The Court also found that the hexagonal design/shape could not be said to be descriptive enough to serve as an indicator of nexus between the goods of the assessee and the Marketing Company. On this basis, it was concluded that the alleged monogram could not be the brand name or trade name of the Marketing Company. Matter is not examined by the authorities below in the right perspective. The factual aspects can be established only before the adjudicating authority. Matter remanded back - Decided in favour of revenue

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• 2015 (6) TMI 154
  Denial of CENVAT Credit - Capital goods - Whether the Respondent/Assessee is entitled to claim Modvat/CENVAT when Capital goods is not owned/purchased nor taken on lease or hire purchase agreement - Held that:- Respondent assessee is engaged in manufacturer of plastic articles /components and parts by using injection moulding machines and manufactures finished goods as per the requirement of the original equipment manufacturers. It is not in dispute that the moulds supplied by the supplier are capital goods. The moulds used for injection moulding machine to manufacture the goods/finished products were supplied to the respondent assessee by original equipment manufacturer. These were duty paid moulds by the original manufacturer. Credit of the duties on moulds was being taken by the assessee. It is also not in dispute that the moulds supplied by the supplier are capital goods. - duty paid on capital goods moulds, were supplied by the original manufacturer to the assessee. Perusal of rules before and after amendment the requirement of ownership was in the erst while regime upto 1994 as governed by then subsisting rules. After 1994, sub rule 3 of Rule 57R having under gone amendment to it, removed such requirement of ownership/acquisition from financing agency. For taking credit of duty paid on said goods, it would not be necessary that capital goods shall either be owned by the assessee or those shall be acquired by finance from financing agency. Denial of credit based on such ground is unsustainable. - Decided against Revenue.

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• 2015 (6) TMI 153
  Denial of refund claim - unjust enrichment - appellant had not furnished sufficient evidence that the incidence of duty was not passed on to their customers - Held that:- The Commissioner (Appeals) observed that the appellant have not submitted the details as to how they arrived at the pricing of the material at the time of bidding for the award of contract with their customer. He further observed that how the payment of excise duty made by the appellant was treated in computation of their pricing and in their books of accounts. I find that after examining the books of accounts, the auditor by certificate dated 27.4.2004 had certified that no part of duty paid by the appellant has been reimbursed by the customer. The genuinety and authenticity of the certificate was not doubted by both the authorities below. There is no material available on record to discard the Chartered Accountant certificate. Hence, in my considered view, there is no need to furnish the cost of material and pricing of the contract. It will be necessary in the case, when the Auditor s certificate is not accepted as incomplete or any other reason. Nuclear Power Corporation Limited, a Government of India Enterprise had confirmed that they have not reimbursed any Excise Duty to the appellant against the excise duty paid on the invoices of the manufacturer. Thus, the other person in Section 11B(1), has certified that they have not reimbursed the duty. In such situation, in my considered view, there is no requirement to furnish the costing of product and pricing of contract, when the certificate of the other person , particularly a Government of India Enterprise, is found genuine. Hence, there is no reason to reject the refund claim on the ground of unjust-enrichment. - Decided in favour of assessee.

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• CST, VAT & Sales Tax

• 2015 (6) TMI 159
  Security for the balance amount of taxes not paid - Held that:- Court in a similar occasion, while considering an identical circumstances, dealing with a similar impugned order, modified only the second condition to one of directing the petitioner to execute the personal bond instead of furnishing bank guarantee for the balance amount of tax and penalty. - as there has been an automatic charge created in view of Section 24(2) of the TNGST Act and Section 42 of the TNVAT Act read with Section 9 of the CST Act. The petitioner is directed to execute the personal bond within a period of two weeks from the date of receipt of a copy of this order. - Decided partly in favour of assessee.

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• 2015 (6) TMI 158
  Denial of Input tax credit - Held that:- Respondent issued a notice dated 22.7.2013 stating that on verification of the returns filed by the petitioner for the assessment years through departmental website, it is noticed that mismatching transaction had taken place and that such transaction is proposed to be brought under the taxable net element. When the petitioner has filed their monthly returns/furnishing particulars etc., in consonance with Section 19(10)(a) of Tamil Nadu Value Added Tax and Rule 10(2) of Tamil Nadu Value Added Rules, 2007 claiming Input Tax Credit as per Section 19(11) of the said Act, the respondent ought not to have directed the petitioner to furnish the proof for payment of tax by the petitioner's seller for the purpose of allowing input tax credit. - issue is squarely covered by the decision of this Court reported in Sri Vinayaga Agencies Vs. Assistant Commissioner (CT), Vadapalani - I Assessment Circle, Chennai and another (2013 (4) TMI 215 - MADRAS HIGH COURT). - Decided in favour of assessee.

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• Wealth tax

• 2015 (6) TMI 147
  Wealth Tax assessment - Incomplete construction of commercial complex building - Held that:- Assessee has furnished bills and vouchers for the materials purchased such as steel, cement, sand, iron, labour expenses, lorry freight etc. for completing construction of the building. The only reason for bringing to wealth tax of the property is that assessee has applied for construction to the municipal corporation on 4.4.2005 and got approval only on 18.4.2005. In our view, this alone cannot be a ground for bringing the property to wealth tax when in fact the assessee has started constructing the building on the sites earlier, though applied for permission later to municipal authorities - once construction activity commenced in the land ceases its character as a vacant land and it cannot be treated as a nonproductive asset and such land cannot be brought to wealth tax. Thus, we hold that the land situated in survey no.154 and 154/3 is not liable to wealth tax. Therefore, the ground raised by the assessee in both the appeals on this issue is allowed. As regards, Commissioner of Income Tax (Appeals) not being not justified in sustaining the action of the Assessing Officer in bringing to wealth tax assessment a sum of Rs. 2,51,610/- and Rs. 8,16,796/- being value of land and building at Tiruchengode Road and at SIDCO Industrial Estate respectively as both are productive assets and not liable for wealth tax. - issue has not been considered by the Commissioner of Income Tax (Appeals). This ground raised by the assessee before the Commissioner of Income Tax (Appeals) was not disposed off. In the circumstances, we set aside this issue to the file of the Commissioner of Income Tax (Appeals) for disposing off this ground after providing sufficient opportunity to the assessee. Counsel for the assessee has not argued any other issues other than this though grounds were raised. - In favour of assessee.

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• Indian Laws

• 2015 (6) TMI 149
  Dishonour of cheque - Nature of transaction - Discharge of debts or not - Held that:- Court is not required to enter into the arena of disputed facts relating to the nature of transaction of being of assignment or of discharge of guarantee. Whether any specific permission is required from Reserve Bank of India under the FEMA is again a question of fact, which has to be considered in light of nature of transaction between the parties. In any case, this Court is of the considered opinion that no case for dropping of the proceedings against petitioners is made out as prima facie case is made out against petitioners to justify the continuance of proceedings, arising out of these two complaints in question. When the complaints in question are at advanced stage of recording of evidence, then meticulous examination of the averments in these complaints in the exercise of extra ordinary jurisdiction under Section 482 of Cr.P.C. is considered to be inappropriate as it cannot be said that the averments regarding the part played by petitioners in the transaction in question is lacking. - Since, prosecution of petitioners in these two complaints cannot be said to be vexatious or amounting to fishing inquiry against them, therefore, it cannot be said that continuance of instant proceedings against petitioners is an abuse of the process of the law. - Appeal disposed of.

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