Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
July 14, 2016
Case Laws in this Newsletter:
Income Tax
Customs
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
TMI SMS
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
Income Tax
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Reopening of assessment - Addition u/s 68 - What was received from these companies was loan, which was also repaid within a short time and there was no share application money in any form. If this be so, the very foundation of the reason recorded by the Assessing Officer for reopening the assessment fails - HC
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Deemed speculation loss u/s 73 - it could be safely concluded that the entire business of the stock broker constituted as one single composite indivisible business and therefore income or loss cannot be artificially bifurcated. - AT
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Claim of deduction u/s 54F denied - assessee is not able to get the title of the flat registered in his name or unable to get the possession of the flat, which is under construction - assessee has invested almost the entire sale consideration of land in purchase of this residential flat - exemption allowed - AT
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Disallowance of commission payment to agents - even though the assessee made the commission payment by way of cheques and deducted the TDS and tax paid to the Government by the recipients is not a conclusive evidence to come to the conclusion that the persons have rendered the services for improvement of business of the assessee - AT
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Genuineness of expenditure - The assessee has neither demonstrated the necessity to incur this expenditure to establish bonafide nor has demonstrated the actual expenditure incurred. Notwithstanding, the aforesaid claim in the nature of revenue expenditure when the project itself has apparently not commenced cannot be approved - AT
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Revision u/s 263 - corpus donations received by the assessee-trust - there is a clear contradiction in the order of assessment and non-application of mind on the material aspect of the issues raised by the show cause notice u/s 263 - revision sustained - AT
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Addition u/s 68 - There is no proper explanation in this regard as to why the cash was deposited in the account of payee just one or two days before the transaction. - Addition confirmed. - AT
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Addition on account of undisclosed sales of 258 liters injectable - whether the data of cost audit report can be relied for the purpose of making the addition and without having any flaw in the audited financial data of assessee? - In the instant case, there is no defect in the financial year data of the assessee and therefore, the addition made by AO deserves to be deleted. - AT
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Loss on sale of land - ‘Business Loss’ or ‘Capital Loss’ - The present land transaction may be the first transaction of the assessee firm but the sister concern of the assessee is already engaged in similar business. - held as business loss despite the fact that co-owner of the assessee in its return of income has declared loss as capital loss. - AT
Customs
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Mandatory pre-deposit before filing an appeal - rejection of appropriation of amount deposited during investigation - Commissioner directed to decide the representations of the petitioner assessee once again, after giving him an opportunity of hearing, by a detailed speaking order. - HC
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Confiscation of gold jewellery brought in commercial quantity - Benefit of Baggage Rules denied - istake of not obtaining the export certificate from the Customs authorities in respect of impugned gold jewellery. - in the present case the duty free allowance is not applicable to the applicant as per Baggage Rules, 1998 - CGOVT
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Confiscation of goods - redemption fine and penalty - Import of second hand Cannon MFD (Digital Multifunctional devices) printers - in view the fact that the Chartered Engineer Certificate has certified that the goods imported are not e-waste, we hold that goods, in question, were not restricted for import and as such no import licence was required for their import - AT
Indian Laws
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Voluntary confession - NDPS - It is true that before acting solely on confession as a rule of prudence the Court requires some corroboration, but, it can not be said that conviction can not be recorded on sole confession, if the confession has voluntarily been made - HC
Service Tax
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Failure to deposit first installment of 50% under the VCES, 201 - petitioner-declarant has committed a breach of section 107(3) of the VCES, 2013 in making the payment of first instalment and hence, he is not entitled to get the benefits provided under this scheme. - HC
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Intellectual Property Service (IPR) - import of services - taxability - subject transfers of 'right to intellectual property', if any, covered by those transactions do not come within the definition of 'Intellectual Property Service' given in Section 65(55b) of the Finance Act, 1994 - AT
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Cenvat Credit - Export of services by the 100% EOU - As per Rule 4A of Service Tax Rules, 1994, there is no requirement that the premises of the service recipient has to be registered. Therefore, the denial of refund on this ground is unjustified. - AT
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Refund claim of accumulated cenvat credit - export of services - admissibility of input service being services utilised at the unregistered premises and also some other services namely chartered accountant service, carpet cleaning service, home plant service, interior decorator service, et cetera - credit allowed - AT
Central Excise
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Refund - manufacturing of Gutka - Abatement in case of non-production of goods - closing of the factory - the benefit of abatement cannot be denied on the ground that intimation of less than three working days’ prior to closure. - AT
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Cenvat Credit - input services - AMC of air conditioners - The air conditioners are installed in the office as well as manufacturing area to maintain adequate temperature for manufacture of good. This service can be treated an activity of modernization of factory and office of the factory premises - credit allowed - AT
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Suppression/mis-declaration - under valuation of the scraps - comparable goods by another supplier at a much higher price available - In the instant case there is no evidence that the appellants have recovered any price higher than the declared in the invoice - demand set aside - AT
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Cenvat Credit - Damage compensation given by the supplier of capital goods - There is no evidence on record that the supplier of the capital goods obtained any refund with respect to the duty paid on capital goods, indicated in the invoices, on which Cenvat Credit is taken - full credit allowed - AT
VAT
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Entitlement of composition scheme - conditions and restrictions imposed under Rules 135 and 144 of the KVAT Rules, 2005 - they were "goods in stock" - Tiles purchased from the State of Gujarat on payment of Central Sales Tax and fixed in the floor of the Restaurant in question, cannot be said to be "goods in stock" while they can definitely be said to be "goods" as such - HC
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Demand of VAT @14.5% on commission receipt treating the same as sale proceeds - receipt of commission against the indenting agency business is shown under the head 'other income' reported in Form WW for 2013-14 - TNVAT - matter remanded back - HC
Case Laws:
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Income Tax
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2016 (7) TMI 540
Reopening of assessment - addition u/s 68 - Held that:- The petitioner has been vehemently contending that the amount received from the said three companies was only for the purpose of allotment of shares. It was only a loan which was received through Account Payee cheques and was also repaid during the same period relevant to the assessment year in question. The Assessing Officer, while disposing of these objections, never disputed these factual assertions of the petitioner. He merely reiterated that the share capital and share premium both are credit entries in the books and are subjected to the test of identity, genuineness of transaction and creditworthiness of the investor under Section 68 of the Act. With respect to this legal proposition, there can be no quarrel. As when the petitioner pointed out that no amount was received by the petitioner from these three companies by way of share application money, the question of applicability of legal proposition would pale into insignificance. If the Assessing Officer was in a position to rebut the petitioner's factual assertions that no funds were received from these companies by way of share application money, the issue would stand on a different footing. However, no such rebuttal has come-forth in the order disposing of the petition or even in reply filed before us in response to the present petition. The petitioner has, on the other hand, produced supporting material establishing its contention that what was received from these companies was loan, which was also repaid within a short time and there was no share application money in any form. If this be so, the very foundation of the reason recorded by the Assessing Officer for reopening the assessment fails. - Decided in favour of assessee
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2016 (7) TMI 539
Deemed speculation loss u/s 73 - assessee is a member of National Stock Exchange and conducts trading in listed shares and securities - CIT(A) deleted the addition - Held that:- Both in share broking as well as in proprietary share trading, the underlying business transactions giving rise to income involved only purchase and sale of shares of other companies and therefore in terms of Explanation to Section 73 of the Act, the entire business of the stock broker assessee came within the ambit of Explanation to Section 73 of the Act. We find that once these profits (i.e 97,70,575 + 8,76,950 + 60,12,948) are set off with the loss incurred on share trading business, there would be only resultant gain from speculative business and hence there would be no scope to apply the provisions of Explanation to Section 73 of the Act in the absence of speculation loss. We are in agreement with the arguments advanced by the ld AR that in the case of a stock broker, there is a common terminal, one membership of the stock exchange, common bank account and the common work force with the help of which the business of proprietory trading as well as trading on behalf of the clients are conducted. Therefore it could be safely concluded that the entire business of the stock broker constituted as one single composite indivisible business and therefore income or loss cannot be artificially bifurcated. The provisions of Explanation to Section 73 of the Act would not be applicable in the instant case in the absence of speculation loss if consolidated business income is considered and accordingly we find no infirmity in the order passed by the ld CITA on this issue Alternatively, even if Explanation to section 73 is to be applied, we hold that the assessee’s case falls under the exception provided in the first limb of Explanation to Section 73 of the Act where the gross total income of the assessee comprises of income from other sources which is much more than the speculation loss of ₹ 1,02,12,277/- - Decided in favour of assessee
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2016 (7) TMI 538
Claim of deduction u/s 54F denied - assessee is not able to get the title of the flat registered in his name or unable to get the possession of the flat, which is under construction - Held that:- It is a fact that the assessee has invested this amount of ₹ 18,60,000/- in purchase of residential house within the stipulated period prescribed u/s 54F of the Act. But, it is not in the assessee’s hand to get the flat completed or to get the flat registered in his name, because it was incomplete. The intention of the assessee is very clear that he has invested almost the entire sale consideration of land in purchase of this residential flat. It is another issue that the flat could not be completed and the matter is pending before the Hon’ble Bombay High Court seeking relief by the assessee by filing suit for direction to the Builder to complete the flat. It is impossible for the assessee to complete other formalities i.e. taking over possession for getting the flat registered in his name and this cannot be the reason for denying the claim of the assessee for deduction u/s 54 of the Act. In view of the above facts of the case, we are of the view that the assessee is entitled for deduction u/s. 54F of the Act, because the assessee has already invested a sum of ₹ 18.60 lakhs in the residential property under construction within the time limit prescribed u/s. 54F of the Act - Decided in favour of assessee.
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2016 (7) TMI 537
Disallowance of commission payment to agents - assessee could not produce any evidence for the services rendered by the said three persons/agents - Held that:- The burden heavily lies on the assessee to establish that the said persons/agents have introduced clients/customers to the assessee company. Admittedly, in this case, the assessee fails to establish the names of the clients/customers, who were introduced by the agents to the assessee. In this case, there is no such evidence placed before the Assessing Officer or ld. CIT(A) or even before us. Therefore, in the absence of such evidences, we are unable to agree with the submission of the assessee even though the assessee made the commission payment by way of cheques and deducted the TDS and tax paid to the Government by the recipients is not a conclusive evidence to come to the conclusion that the persons have rendered the services for improvement of business of the assessee. Therefore, in the absence of any evidence on the services rendered by the above said persons to the assessee company, the ld. CIT(A) has rightly confirmed the disallowance made by the Assessing Officer. - Decided against assessee.
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2016 (7) TMI 536
Genuineness of expenditure - Disallowance of business promotion expenses as revenue expenditure - Held that:- The manner in which the transactions has been executed in a regular interval over a period of time clearly gives an impression that these payments were made as well as received back as a part of accommodation to the sister concern. The CIT(A) has demonstrated in its order that the building permission was granted by the HMDA on 25.09.2012 i.e., much later to the MOU giving raise to the purported obligation of sales promotion expenses. We do not find any answer to the purport of incurring such huge expenses as claimed at the stage when the project itself is yet to make any serious headway. The facts do not coincide. The assessee could not support the need for such exorbitant expenditure at the stage when no permission for construction was available at its disposal. Some meager expenditure of ₹ 7.7 lakhs and ₹ 6.06 lakhs have been stated to be actually incurred in the subsequent years. In the circumstances, a mere journal entry and MOU with sister concern to convert advance already lying with the sister concern into revenue expenditure of this magnitude is highly unpalatable. We find ourselves in complete agreement with the observations and findings of the CIT(A) for dismissal of the claim of the assessee. The assessee has neither demonstrated the necessity to incur this expenditure to establish bonafide nor has demonstrated the actual expenditure incurred. Notwithstanding, the aforesaid claim in the nature of revenue expenditure when the project itself has apparently not commenced cannot be approved. - Decided against assessee
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2016 (7) TMI 535
Revision u/s 263 - corpus donations received by the assessee-trust were not examined in view of the provisions of Act as the trust was not registered under the provisions of sec.12A - Held that:- Provisions of sec.12 clearly lay down that any voluntary contributions made to a trust shall be treated as the income of the property held under trust which is exempt u/s 11(1) of the Act. Further the provisions of sec.11(1)(a) of the Act, income in the form of voluntary contributions made with a specific direction that they shall form part of the corpus of the institution, shall be exempt from tax only if the trust is recognized u/s 12A of the Act. It is undisputed fact that the AO had not examined the issue from this angle. Furthermore, the AO, having rejected the contention of the assessee-trust that the amount of ₹ 25 lakhs was received from International Construction Ltd., as loan, had failed to bring to tax. Thus, there is a clear contradiction in the order of assessment and non-application of mind on the material aspect of the issues raised by the show cause notice u/s 263. Therefore, the ratio laid down in the case of Malabar Industrial Co.Ltd. Vs. CIT (2000 (2) TMI 10 - SUPREME Court ) is clearly applicable wherein it was held that non-application of mind on the issue, renders the assessment order erroneous and prejudicial to the interests of revenue. Furthermore, in the case of CIT vs. Infosys Technologies Ltd. (2012 (2) TMI 132 - KARNATAKA HIGH COURT ) has clearly laid down that by exercising power u/s 263, if the order is set aside, there was no prejudice caused to the assessee. Hence, order u/s 263 is maintainable. Respectfully following the decisions, we hold that the order of the CIT dated 30/07/2013 is valid in law and CIT is justified in exercising revision power u/s 263 of the Act. - Decided against assessee.
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2016 (7) TMI 534
Addition u/s 68 - Held that:- CIT(A) has rightly deleted the addition of ₹ 15,00,000/- on the basis of this fact that the HUF has given loan to one Shri Bhushan Nemlekar in A.Y.2003-04 and 2004-05 of ₹ 15,00,000/- which were reflected in balance sheet. The bank statement also speaks about the entry on various dates. Mr. Bhushan Nemlekar has repaid ₹ 15,00,000/- to the HUF on 13.11.2009 and the same amount has been transferred by account payee cheque from the HUF A/c. to Shri Subodh Nemlekar on the same day. Therefore, the source of credit is the loan which were given by the HUF to one Mr.Bhushan Nemlekar. Immediately after receipt of the same amount, the amount was transferred in the accounts of the assessee. The creditworthiness and genuineness of the loan has duly been proved on record. Therefore, in the said circumstances the CIT(A) has rightly deleted the addition of ₹ 15,00,000/- u/s.68 of the Act. So far as the question of deletion of remaining amount i.e. ₹ 5,00,000/- added u/s.68 of the Act is concerned. There is no explanation on behalf of the assessee. The fact remains the same as stated by the Assessing Officer in his order. - There is no proper explanation in this regard as to why the cash was deposited in the account of payee just one or two days before the transaction. - Addition confirmed.
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2016 (7) TMI 533
Addition on account of undisclosed sales of 258 liters injectable - CIT(A) deleted the addition - whether the data of cost audit report can be relied for the purpose of making the addition and without having any flaw in the audited financial data of assessee? - Held that:- We find that AO has not brought anything on record in the financial audited accounts of assessee. The AO merely has relied on the cost audit report of assessee. In our considered view, AO before making the addition was to reconcile the data found from the cost audit report with the financial data of assessee and if he finds same difference then he should proceed for making the addition / disallowance. In the instant case, there is no defect in the financial year data of the assessee and therefore, the addition made by AO deserves to be deleted. Accordingly we are not inclined to interfere in the order of Ld. CIT(A). - Decided against revenue Addition on account of ad hoc cost allocation - CIT(A) deleted the addition - Held that:- AO has made the addition on the basis of cost audit report where the product-wise detail for sale and manufacturing cost were not specified. However the AO has not pointed out any defect in the financial audit report furnished by assessee. The AO has made the addition merely on the ground of non-disclosure of the cost of the items manufactured and at the same time accepted the sale declared by the assessee. In our considered view, the addition made by AO is based on whimsical ground and therefore we find no reason to interfere in the order of Ld. CIT(A). - Decided against revenue Addition made on account of interest on the loan and advances given to the Directors of assessee-company - Held that:- The interest free loan given to Directors was assumed by the AO as this money was advanced to directors out of interest bearing borrowed fund. Accordingly, AO disallowed the proportionate interest claimed by assessee. However, the Ld. CIT(A) has granted relief to assessee on the ground that there was no nexus between the money borrowed by assessee and loan advanced to the directors. Ld. CIT(A) also relied on co-ordinate bench in assessee’s own case for AY 2001-02. We also find that the assessee’s own funds are sufficient enough to advance the interest free loan to the directors. After considering the facts in totality we find no merit in the ground of appeal raised by Revenue. As such, we are not inclined to interfere in the order of Ld. CIT(A). - Decided against revenue
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2016 (7) TMI 532
Loss on sale of land - ‘Business Loss’ or ‘Capital Loss’ - Held that:- Revenue has not disputed the fact that the assessee in its books of account right from beginning has shown the land as stock in trade. During the scrutiny assessment proceedings for the assessment year 2005-06 the Assessing Officer accepted that the assessee is engaged in land development business and no query was raised for treating the land as stock in trade. The principle of consistency in treating the land as stock in trade has to be followed. The ld. AR of the assessee has placed on record a copy of the Memorandum and Article of Association of M/s. T.K. Infrastructure Pvt. Ltd., a sister concern of the assessee. A perusal of Memorandum & Articles of Association show that one of the main objects of the company was land development. The proprietor of the assessee firm is one of the promoter Director of the aforesaid company. Thus, the findings of the Assessing Officer that the assessee is not engaged in the land development business are not based of proper appreciation of the facts. The present land transaction may be the first transaction of the assessee firm but the sister concern of the assessee is already engaged in similar business. Therefore, it cannot be said that the assessee was not connected in any way with land development activities. The second ground for making addition by Assessing Officer was that the co-owner of the assessee in its return of income has declared loss as capital loss. As has been stated earlier that a close scrutiny of Development Agreement clearly shows that the assessee had entered into Development Agreement for construction of residential and commercial building on the land in question. The co-owner of the assessee may have shown the loss arising from sale of Development Rights as capital loss inadvertently or out of ignorance, but it would not bind the assessee to give the same treatment in its books of account, when the facts on record distinctly indicate that the Development Rights were acquired by assessee as business venture. We do not find any infirmity in the findings of Commissioner of Income Tax (Appeals) admitting the claim of the assessee on this issue. Hence, no interference is called for in the impugned order. - Decided against revenue
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2016 (7) TMI 531
Commission receipt - Enhancement of income - Held that:- Tribunal held that the addition of ₹ 70 lacs to the income of the assessee and the enhancement to the already assessed income of the assessee for having received commission to the tune of ₹ 8.60 lacs for the assessment year 2007-08 was not justified and resultantly, these additions were directed to be deleted. On going through the record of the case, we are of the view that the decision of the Tribunal, which is impugned before us, essentially decides questions of fact and does not raise for our consideration any question of law, much less a substantial question of law, and therefore, requiring no interference on our part. Resultantly, the present appeal is dismissed with no order as to costs. - Decided against revenue
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2016 (7) TMI 530
Addition on account of suppressed sales - Addition on unexplained cash credit - ITAT allowed the claim - Held that:- As is apparent from the facts noted hereinabove, it is an admitted position that during the course of search no material had been found to show any undisclosed income of the assessee. No evidence had been found to indicate that assessee had realized sale consideration other than that recorded in its books of accounts. For the purpose of holding that the assessee had sold goods to fictitious parties at a price 25% higher than that shown in the bills, the Assessing Officer had mainly placed reliance upon the statement of Shri Mahendra H. Shah recorded under Section 132 (4) of the Act. However, as noted hereinabove, Shri Mahendra H. Shah had not specifically mentioned the name of assessee. Thus, no material had been found at the time of search to indicate that the assessee had sold goods at a price higher than that recorded in the books of accounts regularly maintained by it. In the circumstances, the Tribunal was justified in holding that in the facts and circumstances of the case the provisions of Chapter XIVB of the Act could not have been resorted to as block assessment cannot take place of regular assessment. See Sachdeva Steel Products case [2010 (9) TMI 1173 - GUJARAT HIGH COURT] In light of the above discussion, it is not possible to state that the Tribunal has committed any legal error so as to warrant interference - Decided in favour of assessee
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2016 (7) TMI 529
Reopening of assessment - nature of adventure in trade OR investment - Held that:- The reasons recorded by the Assessing Officer there is no averment of any failure on part of the assessee to disclose truly and fully all material facts. The reasons referred to material already on record and referred to the sale and purchase transactions of shares by the assessee. On the basis of such materials, the Assessing Officer recorded that frequency and volume of transaction was quite substantial. The assessee had sold 82% of its total purchases during the year itself. The balance unsold shares were purchased before two to three months of the year ending. The assessee had not held any stock for more than six months. According to the Assessing Officer, he therefore concluded that the assessee had made purchase and sale of shares with the motive to earn profit and the activity was, therefore, in the nature of adventure in trade and not by way of investment. We are not required to judge the validity of the Assessing Officer's prima facie conclusion that the petitioner was trading in shares and not investing to earn dividend. We only find that, in absence of failure on part of the petitioner-assessee to disclose truly and fully all materials facts, reopening of assessment, which was previously framed after scrutiny, could not have been done. Only on this count, the keeping petitioner's contention of change of opinion aside, impugned notice is quashed. - Decided in favour of assessee.
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2016 (7) TMI 528
Penalty under Section 271(1)(c) - Estimation of net profit for purpose of deduction under Section 80IB read with Section 80IA[10]from 45.39% to 40% - Held that:- The levy of penalty by the Assessing Officer was on unjustified grounds and the Tribunal has rightly allowed the appeal filed by the assessee. The Assessing Officer did not give any finding that inaccurate particulars were furnished by the assessee. It appears that the Assessing Officer has compared the profit estimates of different firms in the same line of business and arrived at the conclusion that the assessee had shown better net profit for claiming deductions which are not permissible under the law. Assessing Officer could not point out any cogent irregularity in the books of accounts which have been audited so as to arrive at the conclusion that the net profits were altered. It is improper to arrive at any such conclusion merely on the basis of comparison, presumption and assumption. The Assessing Officer is wrong in estimating the profit of the assessee at 40% basing the same on the profits of other firms in the same line of business when there is no concrete proof about the errors or irregularities in the books of accounts. We find that the Tribunal has rightly directed the Assessing Officer to take into consideration the net profit shown by the assessee and recalculate the deduction u/s 80IB of the Act. - Decided in favour of the assessee.
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2016 (7) TMI 527
Deduction u/s.80IB(10) r.w.s. 80IB(1)- title of lands not passed - Held that:- Considering the decision of this Court in the case of Radhe Developers (2011 (12) TMI 248 - GUJARAT HIGH COURT) and Swastik Associates (2014 (5) TMI 708 - GUJARAT HIGH COURT), the questions, which are raised in the present appeals are required to be answered in favour of the assessee as held that assessees are entitled to benefit under section 80IB(10) even where title of lands had not passed on to assessees and in some cases, development permissions may also have been obtained in name of original land owners. Since the facts in the present matters are identical, disallowance is required to be deleted and the order of the Tribunal is required to be confirmed. - Decided in favour of assessee
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2016 (7) TMI 526
Entitled to any interest under section 244A denied - Held that:- In view of the decision of the Apex Court in the case of Commissioner of Income-tax v. Gujarat Fluoro Chemicals reported in (2013 (10) TMI 117 - SUPREME COURT ) wherein held The Legislature inserted section 244A in the Income tax Act, 1961, with effect from April 1, 1989, which provides for interest on refunds under various contingencies. It is only that interest provided for under the statute which may be claimed by an assessee from the Revenue and no other interest on such statutory interest. Thus we are of the opinion that the Tribunal has rightly rejected the claim of the assessee. - Decided against the assessee.
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2016 (7) TMI 525
Addition u/s 69C - undisclosed bank account deposits - Whether the Tribunal was justified upholding the addition to the extent of ₹ 16,15,261/- under section 69 when the authorities below had variously relied upon sections 69A and 69C ? - Held that:- There is no dispute on the fact that that the assessee deposited some thing between ₹ 44 laksh and ₹ 49 lakhs with the bank, which he did not disclose in his return. His explanation was restricted to a sum of ₹ 2,65,500/-. Therefore, the assessee could have been made liable for the balance amount under section 69 itself. The learned Tribunal has been lenient and restricted the addition to a sum of ₹ 16,15,261/- for reasons which already we have quoted. - Decided against assessee Whether the Tribunal should have remanded the matter to the Assessing Officer for examination of the source of the said amount? - Held that:- No further enquiry on facts required to be made which could have even remotely necessitated a remand. All the facts were there before the learned Tribunal.- Decided against assessee
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2016 (7) TMI 524
Revision u/s 263 - disallowance under section 14A by applying Rule 8D - Held that:- We find merit in the contention of assessee that the said Rule not being applicable to the year under consideration, i.e. A.Y. 200607, it cannot be said that there was any error in the order of the Assessing Officer in not making disallowance under section 14A by applying the said Rule. At the time of hearing before us, even the ld. D.R. has not been able to raise any material contention to dispute this position. We, therefore, hold that there was no such error in the order of the Assessing Officer calling for revision by the ld. CIT under section 263.- Decided in favour of assessee MAT - Not adding the profit arising from sale of shares while computing the book profit - Held that:- It is observed that such profit was not credited by the assessee to the Profit & Loss Account for the year under consideration and the same was shown as liability in the balance-sheet. The amount of such profit, therefore, was not included in the profit as reflected in the Profit & Loss Account prepared by the assessee, which was duly audited and presented in the A.G.M. As held by the Hon’ble Supreme Court in the case of Apollo Tyres (2002 (5) TMI 5 - SUPREME Court ), the profit reflected in the Profit & Loss Account, which is duly audited and presented before the A.G.M., cannot be tinkered with except by way of adjustments, which are permissible as per Explanation to Section 115JB. It is an undisputed position that the adjustment on account of profit arising from sale of shares, which was not credited to the Profit & Loss Account of the assessee-company is not covered by such Explanation. Moreover, it is also pertinent to note that this issue was examined by the Assessing Officer during the course of assessment proceedings and the claim of the assessee thereon was accepted by the Assessing Officer on such examination by applying his mind, as is evident from the relevant observations recorded by the Assessing Office. Thus we are of the view that there was no error in the order of the Assessing Officer in not including the profit arising from the sale of shares of M/s. Apeejay Finance Group Limited in the book profit as alleged by the ld. CIT in his impugned order calling for revision under section 263.- Decided in favour of assessee Not verifying the quantum of short-term capital gain declared by the assessee on sale of flats as per the relevant section 50 - Held that:- As the assessee has not raised any argument to dispute or challenge the same. We, therefore, uphold the impugned order of the ld. CIT in so far as this issue is concerned. - Decided against assessee
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2016 (7) TMI 523
Interest levied u/s. 234 B and 234C - Held that:- Interest u/s. 234B and 234C cannot be levied when tax was to be computed u/s. 115JB of the Act. See Kwality Biscuits Ltd. (2006 (4) TMI 121 - SUPREME Court ) and Rolta India Ltd [ 2011 (1) TMI 5 - SUPREME COURT OF INDIA ] Disallwoance u/s 36(1)(viii) - assessee had written off an amount as provision for bad debts - Held that:- We find that the AO and the FAA had lost sight of the basic fact that it was the case of writing back the provisions of bad debts. The assessee had not written off any bad debts during the year under appeal. The mistake committed by them in understanding the basic principle of accountancy lead to the impugned addition. Reversing the order of FAA, we decide first Ground of appeal in favour of the assessee. Addition of short recovery of export proceeds - Held that:- We find that the issue needs further verification as the paper referred to by the AR have to be considered for arriving at the final conclusion. Therefore, in the interest of justice we are restoring the matter back to the file of AO for fresh adjudication who will decide the issue after considering the submissions of the assessee Addition towards software expenses treated as short term capital loss - Held that:- We find that AO did not have the benefit of the claim made before the FAA as well as details of P L account groupings. To meet the ends of justice, we are restoring the issue to the file of the AO who would decide the issue after affording a reasonable opportunity of hearing to the assessee. Addition under the head unexplained credits - Held that:- We are of the opinion that the issue needs further verification at the level of AO. As per the settled principles of taxation jurisprudence opening balances of a particular year cannot be added u/s. 68 of the Act. The pages referred by the AR clearly show that the AO had ignored the vital facts that assessee had shown opening balances of the creditors while filing the explanation before him. Therefore, in the interest of justice we are restoring back the issue to the file of the AO for fresh adjudication as stated earlier. He is directed to afford a reasonable opportunity to the assessee. He is also directed to verify the claim made by the assessee Set off of brought forward losses/unabsorbed depreciation - denial of claim on the ground that the business for which the loss was originally computed had been discontinued - Held that:- We have heard the rival submissions and perused the material before us in our opinion provisions of section 72 would be applicable in the present case and not the provisions of section 71, as held by the AO and the FAA. We further find that the pre-condition of continuation of business has been dispensed with by the Fin bill 1999. Therefore, we are of the opinion that the claim made by the assessee should have been allowed. Reversing the order of the FAA, we decide the issue in favour of the assessee.
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2016 (7) TMI 522
Reopening of assessment - Claim for deduction under section 10A - Held that:- As in the light of the findings rendered by the Coordinate Bench of this Tribunal in the assessee’s own case for A.Y. 2009-10 upholding on merits the eligibility of the assessee’s claim for deduction under section 10A of the Act for A.Y. 2009-10, the basis upon which the AO recorded the reasons for reopening the assessments for assessment years 2005-06 to 2008-09 (extracted supra), being struck down, does not now survive thereby rendering the reasons recorded for the aforesaid four assessment years unsustainable both in law and on facts. In this view of the matter, we find no merit in the grounds raised by Revenue on this count and uphold the quashing of the reassessment orders for assessment years 2005-06 to 2008-09 dated 18.03.2013 for being unsustainable in law. Further, following the decision of the Coordinate Bench of this Tribunal in assessee’s own case for A.Y. 2009-10 we also uphold the orders of the CIT(A) in allowing the assessee’s claim for deduction under section 10A of the Act for assessment years 2005-06 to 2008-09 on merits. It is accordingly ordered. - Decided in favour of assessee.
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Customs
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2016 (7) TMI 547
Confiscation of gold jewellery brought in commercial quantity - Benefit of Baggage Rules denied - confiscated under Section 111 (d),(l),(m) & (o) of the Customs Act, 1962 read with Section 3(3) of Foreign Trade (D&R) Act, 1992 - the applicant tried earnestly to produce all the purchase bills available with her to prove her contention that the jewellery seized by the Customs at Madurai Airport are old jewellery being used by her. - she admitted the mistake of not obtaining the export certificate from the Customs authorities in respect of impugned gold jewellery. Held that:- In terms of Rule 6 a passenger returning to India after a stay of over one year and above shall be allowed clearance free of duty of jewellery in his bonafide baggage to the extent mentioned in Appendix D to the Rules. Jewellery is therefore not a permissible item of duty free Import as personal-baggage under section 79 of the Customs Act, 1962 read with the Baggage Rules issued thereunder particularly if the passenger has lived abroad for less than one year. The applicant has also contended that the goods seized by the Customs authorities did not only belong to her but also belonged to her relatives and free allowances were not given to them by the Customs authorities. In this regard, Government notes that in the present case the duty free allowance is not applicable to the applicant as per Baggage Rules, 1998. In the instant case, the applicant had not stayed abroad within the stipulated time period and hence free allowance for import of jewellery cannot be allowed to the applicant. - Revision application dismissed - Decided against the applicant.
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2016 (7) TMI 543
Mandatory pre-deposit before filing an appeal - rejection of appropriation of amount deposited during investigation - Sec. 129 E of the Customs Act, 1962 - Held that:- No public authority or public servant much less a quasi-judicial authority like the Commissioner of Customs can be allowed or permitted to pass these kind of communications or direct their subordinates to communicate such orders in the aforesaid kingly manner. This Court, therefore, records its displeasure on the tenor of the communication Annexure F dated 12.8.2015 given to the petitioner assessee. To say the least, there was not only a breach of principles of natural justice but the said communication also smacks of arbitrary act and non-application of mind by the learned Commissioner of Customs. The reconciliation of the deposits and the extent of pre-deposit required to be made for maintaining the present appeal in question before the CESTAT under S.129E of the Customs Act itself required the consideration of these facts by the said authority because this Court cannot undertake this exercise here in the present writ petition. Therefore, the matter would essentially require a remand back to the learned Commissioner to decide the representations of the petitioner assessee once again, after giving him an opportunity of hearing, by a detailed speaking order. It is needless to add that the petitioner assessee will have the liberty to avail appropriate legal remedy against such negative order of the Commissioner, if any. - Decided in favor of petitioner.
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2016 (7) TMI 542
Confiscation of goods - redemption fine and penalty - Import of second hand Cannon MFD (Digital Multifunctional devices) printers - contravention of condition laid in para 2.17 of the Foreign Trade Policy. - description of goods shown in Bill of Entry is not photocopiers but it is stated as multifunctional Digital machines, copier, scanner (printer). The department had taken the assistance of a Chartered Engineer for examination of the goods and assessment of its value - hereby the value declared by the appellants was rejected and order was passed enhancing the value basing upon the report/valuation of chartered Engineer. Held that:- in view the fact that the Chartered Engineer Certificate has certified that the goods imported are not e-waste, we hold that goods, in question, were not restricted for import and as such no import licence was required for their import - the confiscation of goods and consequent imposition of redemption fine and penalty is not sustainable. The impugned orders are modified to the extent of setting aside the confiscation of goods and imposition of redemption fine and penalty. - Decided in favor of appellant.
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Service Tax
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2016 (7) TMI 560
Failure to deposit first installment of 50% under the VCES, 2013 (Voluntary Compliance Encouragement Scheme, 2013) - the immunity provided under section 108(1) of the Finance Act, 2013 was withdrawn, as this petitioner has not deposited 50% of the tax dues so declared under Section 107(1) and submitted the proof of such payment to the designated authority. - Held that:- so far as the payment of first instalment is concerned, which was minimum 50% of the tax dues so declared was to be paid on or before 31st December, 2013 and there is no provision under the VCES, 2013 for relaxation in the payment of first instalment. So far as second instalment is concerned, it was to be paid on or before 30th June, 2014. However, there is slight leniency in the payment of second instalment, viz. if the second instalment is not paid before 30th June, 2014, the declarant can make the payment on or before 31st December, 2014, but, with interest. Thus, this petitioner-declarant has committed a breach of section 107(3) of the VCES, 2013 in making the payment of first instalment and hence, he is not entitled to get the benefits provided under this scheme. Application was rightly rejected - Writ petition dismissed. - Decided against the assessee.
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2016 (7) TMI 559
Intellectual Property Service (IPR) - IPRs covered under Indian Law in force - import of services - taxability - extended period of limitation - appellants entered into License Agreement with foreign companies and obtained rights to use the technology for manufacture in consideration of which they had paid technical know-how fees and royalty charges - period from 01.01.2006 to 31.12.2006 - The appellants state that these foreign companies transferred licensed use of their technical information, know-how and trade secrets which are not registered under any Indian law for time being in force. - Scope of Section 65(55a) of Finance Act, 1994. Held that:- the subject matter(s) of transfer of various documents/drawings, designs, softwares, catalogues, technical assistance/training documents/symbol numbering system etc., done under respective agreements which are on the record of these proceedings are not covered under the definition of the subject matter(s) of transfer of various documents/drawings, designs, softwares, catalogues, technical assistance/training documents/symbol numbering system etc., done under respective agreements which are on the record of these proceedings are not covered under the definition of 'Intellectual Property Right' as given in Section 65(55a) of Finance Act 1994 and consequently subject transfers of 'right to intellectual property', if any, covered by those transactions do not come within the definition of 'Intellectual Property Service' given in Section 65(55b) of the Finance Act, 1994 and the service(s) if any, provided by the foreign companies by way of transfer of subject matter(s) under respective agreements to the appellants cannot be covered under the taxable service of 'Intellectual Property Service' as defined under Section 65(105)(zzr) of the Finance Act, 1994 'Intellectual Property Right' as given in Section 65(55a) of Finance Act 1994 and consequently subject transfers of 'right to intellectual property', if any, covered by those transactions do not come within the definition of 'Intellectual Property Service' given in Section 65(55b) of the Finance Act, 1994 and the service(s) if any, provided by the foreign companies by way of transfer of subject matter(s) under respective agreements to the appellants cannot be covered under the taxable service of 'Intellectual Property Service' as defined under Section 65(105)(zzr) of the Finance Act, 1994. Demand set aside - Decided iin favor of assessee.
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2016 (7) TMI 558
Cenvat Credit - Export of services by the 100% EOU - eligible input services - Duty paying documents - Held that:- Major portion of the refund is denied for the reason that the invoice is issued to the unregistered premises of the appellant. As per Rule 4A of Service Tax Rules, 1994, there is no requirement that the premises of the service recipient has to be registered. Therefore, the denial of refund on this ground is unjustified. The invoice with regard to Erection, Commissioner and Installation services shows that the woks done is minor work of cleaning and remodeling chairs. The service provider has paid service tax under the category of Erection, Commissioner and Installation services. All the other services detailed above and shown in the table are included in the definition of input service. They have been used by the appellant for providing output service as explained by the learned consultant. - Refund allowed - Decided in favor of assessee.
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2016 (7) TMI 557
Refund claim of accumulated cenvat credit - export of services - admissibility of input service being services utilised at the unregistered premises and also some other services namely chartered accountant service, carpet cleaning service, home plant service, interior decorator service, et cetera. - Held that:- in view of the Registration granted – centralised, including the premises at Mumbai, it is conclusive proof that the appellant is in legal occupation of the said premises, have rendered output services from such premises and have maintained centralised accounting at the Noida Office. I also find that on opening of branch at Mumbai by appellant, an intimation by the director of STPI was given to revenue. I also find that output service have been rendered by Mumbai office, for which bill(s) have been raised. Thus I hold that the appellant is entitled to Cenvat Credit in respect of input services received at the premises other than the premises at Noida. Further, other input services save and except, input services received at guest house, and the amount of ₹ 62/- for which no proper explanation was given, credit allowed. - Decided substantially in favor of assessee.
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Central Excise
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2016 (7) TMI 556
Refund - manufacturing of Gutka - Abatement in case of non-production of goods - closing of the factory - Held that:- The Rule 10 of the Pan Masala Packing Machines Rules specifies that the intimation for closure should be, at least 7 days’ prior to the commencement of the period. The question which arises before us is whether this condition precedent is to be rigidly enforced. The only objection of the department is that the intimation for closure was not given three working days prior to commencement of the period of closure. We are of the view that when the purpose of giving prior intimation three working days prior to commencement of closure, is that the officers have enough time to seal the machines in the manner as prescribed in this rule, and this purpose has been achieved, as the sealing of the machines in the manner prescribed was done on 14-1-2013 in pursuance of the orders given by the Assistant Commissioner on 11-1-2013, the Conditions of the intimation of closure being given at least three working days’ prior to closure lose its significance and the benefit of abatement cannot be denied on the ground that intimation of less than three working days’ prior to closure. - Refund allowed - Decided in favor of assessee.
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2016 (7) TMI 555
Valuation - inclusion of extra packing charges which is in the form of catch covers - valuation of physician samples - Held that:- the appellant has valued the physician sample based upon pro rata basis with the comparable goods available, the comparable goods being sale pack of the physician sample. - Following the decision in the case of Medley Pharmaceuticals vs. CCE, Daman [2011 (1) TMI 13 - SUPREME COURT OF INDIA] decided in favor of assessee.
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2016 (7) TMI 554
Denial of credit on various input services for the period September, 2011 to July, 2012 - various services including AMC of air conditioners and lifts - services non qualify as input service as per Rule 2(I) of Cenvat Credit Rules 2004 - Held that:- The air conditioners are installed in the office as well as manufacturing area to maintain adequate temperature for manufacture of good. This service can be treated an activity of modernization of factory and office of the factory premises. Therefore, the same qualify as input service as per Rule 2 (I) of Cenvat Credit Rules, 2004. Consequently, the credit on AMC of air conditioners is allowed. AMC of lifts - lifts are used for taking material from lower floors to upper floors and bringing from upper floors to lower floors of the factory premises having three floors. As the usage of lifts has been explained by the appellant that the lifts facilitate in movement of raw material and finished goods manufactured by the appellant. Therefore, the AMC of lifts has nexus with manufacture of excisable goods. Therefore, the appellant is entitled for credit on AMC of lifts as per Rule 2(I) Business tour and hotel boarding and lodging services have been used by the appellant for marketing and sale promotion of finished goods as well as procurement of raw material or capital goods. Therefore, these services are entitled for input service credit as the same is integral part of manufacturing activity. Therefore, the input service credit is allowed to the appellant. Tour and travel service has already reversed the credit on these services, therefore, the credit is disallowed as the service has been excluded from the scope of the input service with effect from 1.4.2011. Customs clearance service has been used in relation to obtaining the export incentives. Therefore, the same has nexus with manufacture and clearance of export of goods. In that circumstance, the appellant is entitled for credit. Construction service has been used for repair and maintenance of factory premises is specified as an admissible input service under Rule 2(I) of Cenvat Credit Rules, 2004, therefore, the same is allowed. Insurance service has been used for insurance of factory premises, plant and machinery and stock of goods. The said service has direct nexus with manufacturing of excisable goods. Therefore, the credit cannot be denied. Consequently the credit on the said service is allowed. Office maintenance service has been used for house keeping/maintenance of factory preemies of factory preemies as well as office of the factory located in the same premises, therefore the same is entitled for input service credit. Consequently, the credit on the said service is allowed. Photography service has been used for taking photocopies of purchase orders for procurement of raw material, despatch of documents of final product and miscellaneous documents pertaining to accounts/audit and fiancé. The said service has direct nexus with manufacturing activity of the appellant. Moreover, audit and accounting service has specifically been allowed as input service. Therefore, the credit cannot be denied. Consequently, the credit on the said service is allowed. Photography service for samples of export goods manufactured by the appellant has been used for taking for photographs of the samples of goods for procurement of export orders. The said service has direct nexus with manufacturing activity, clearance and export of goods for marketing and sale promotion. In that circumstance, the appellant is entitled to avail the credit on the said service. Professional and consultancy service has been used by the appellant for organizing a meeting of M/s. Sarita Handa, Director in foreign for export of excisable goods. The said service is used by the appellant for marketing and sale promotion of goods manufactured by them. Therefore, the said service is having a direct nexus with manufacturing activity. Consequently, the appellant is entitled to avail the credit on the said service. - Decided in favour of assessee
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2016 (7) TMI 553
Suppression/mis-declaration - under valuation of the scraps - comparable goods by another supplier at a much higher price available - Held that:- We find that the show-cause notices issued by the lower authorities do not bring out any facts by which it could be said that the appellants were aware of under valuation of the scraps supplied by M/s.Greaves Ltd. to them. There is nothing on record to establish that the appellants were aware of the similar products being manufactured by another job worker M/s.Transmissions, Bombay and supply of the same was at a higher assessable value. The appellants have clearly declared in their invoices that they are converting the scraps supplied by M/s.Greaves into ingots and the invoices clearly shows the manner in which they arrived at the assessable value for the purpose of Central Excise duty. The Hon’ble Supreme Court in the case of Ujagar Prints (1989 (1) TMI 124 - SUPREME COURT OF INDIA) has held that the valuation of goods produced on job work basis would be done on the basis of cost of material supplied and the processing charges. The invoices issued by the appellants are in consonance with the said decision of the Hon’ble Supreme Court. In these circumstances, we find that there is no express or implies suppression/mis-declaration by the appellant. The argument of the learned AR that the appellants had purchased the material from M/s.Greaves Ltd. also does not help the revenue. So long as it is not established that the appellants were aware of the supply of comparable goods by another supplier at a much higher price. In the instant case there is no evidence that the appellants have recovered any price higher than the declared in the invoice. In these circumstances even if the arguments of the revenue that the appellants had purchased the material from M/s.Greaves Ltd. there is no suppression or mis-declaration forthcoming. Notice is barred by limitation. - Decided in favour of assessee.
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2016 (7) TMI 552
Valuation of physician samples manufactured along with other regular medicament - Held that:- The issue stand decided against assessee by the Honble Supreme Court decision in Medley Pharmaceuticals Ltd. [2011 (1) TMI 13 - SUPREME COURT OF INDIA ], as such, fairly agrees that duty confirmation by the lower authorities is as per the declaration of law In view of the fact that issue on merits stands against the assessee, we uphold the demand confirmed against them but falling within the limitation period. As admittedly, there was confusion in the field and there were various circulars issued by the Board supporting the assesses stand, the demand falling within the limitation period would be recalculated by the original adjudicating authority. As regards the penalty, we find that in similar set of facts and circumstances, Tribunal in the case of M/s. Lupin Ltd. [ 2016 (2) TMI 682 - CESTAT NEW DELHI] have already held that there is no case for penalty. We have also held that extended period of limitation is not available to the Revenue inasmuch as there was no malafide in which case also, no penalty can be imposed
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2016 (7) TMI 551
Cenvat Credit - Damage compensation given by the supplier of capital goods - whether dis-entitled to Appellant taking corresponding credit to the Appellant - Held that:- In view of CBEC vide Circular No.877/15/2008-CX dated 17.11.2008 any reduction in prices will not disentitle the recipient from taking full Cenvat Credit of duty shown in the invoices. In the present case it is not even the case of reduction in prices of the capital goods and the amount received by the Appellant represents compensation given by the supplier of the capital goods for delay in commissioning of the project. There is no evidence on record that the supplier of the capital goods obtained any refund with respect to the duty paid on capital goods, indicated in the invoices, on which Cenvat Credit is taken. In the light of case law relied upon by the Appellant and CBEC Circular dated 17.11.2008 Cenvat Credit availed by the Appellant cannot be reduced on account of damages received by the Appellant from the supplier of capital goods.
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2016 (7) TMI 550
Penalty under Rule 26 of the Central Excise Rules, 2002 - non mention of dimensions of goods supplied - Held that:- The adjudicating authority has imposed penalty of ₹ 1,00,000/- on the appellant. The lower authorities have come to a conclusion that appellant have not mentioned any dimensions of goods supplied hence there was malafide intentions. As find that there may be no malafide intentions but may be due to some genuine reason on the part of the appellant, improper dimensions may have been mentioned on the invoices. This would not mean that the penalty needs to be set aside as there is contravention of rules. While upholding the penalty on the appellant reduce the penalty from ₹ 1,00,000/- to ₹ 50,000/- and dispose of the appeal as indicated herein above.
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2016 (7) TMI 549
Categorisation of grey fabrics - Job work - cenvat credit - duty demand - Held that:- The categorisation of grey fabric will need to be done with reference to the final products cleared from the hands of appellant-assessee. It is not in dispute that the ultimate products which has been exported by the appellant-assessee are processed fabrics and the appropriate duty has been paid at that stage by them. Keeping this in view, we have no hesitation in categorising the grey fabrics as input/ intermediate products. Rule 4(5)(a) of the Cenvat Credit Rules permits such goods to be sent to the job worker for further processing. Under the permission granted by the Commissioner under Rule 4(6), the processed fabric has been cleared directly for export from the premises of the job worker, by the appellant - assessee on payment of appropriate duty. Under the circumstances, we find that the view taken by the Commissioner to consider these goods as finished goods is totally erroneous and the demand of duty itself is without the sanction of law. We accordingly set - aside the order dated 28.09.2007 of the Commissioner. - Decided in favour of assessee.
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2016 (7) TMI 548
Cenvat credit disallowedon various MS Plates, Flats, Channels, Angles and Beams etc. - credit was disallowed mainly on the ground that these are general steel items used as support structures in the factory and cannot be considered either as capital goods or as parts and components of any capital goods - Held that:- Hon’ble Supreme Court in CCE, Jaipur vs. Rajasthan Spinning & Weaving Mills Ltd. reported in [2010 (7) TMI 12 - SUPREME COURT OF INDIA] held in respect of similar type of inputs by applying user test, the credit is available for MS Channels used in fabrication of chimney, categorizing it under the scope of capital goods. Reference can also be had to the decision in CCE, Tiruchirapalli vs. India Cements Ltd. (2013 (1) TMI 5 - Madras High Court ). In the present case on perusal of the certificate given by the Chartered Engineer it is apparent that the specific usage of various MS items relatable to various capital goods have been mentioned. The insistence of learned Commissioner (Appeals) on the drawings and designs of the capital goods is of no relevance considering the above factual position and as supported by Chartered Engineer certificate. - Decided in favour of assessee
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CST, VAT & Sales Tax
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2016 (7) TMI 546
Entitlement of composition scheme - conditions and restrictions imposed under Rules 135 and 144 of the KVAT Rules, 2005 - they were "goods in stock" - demand of regular tax on the sales/turnover as per Section 3 of the KVAT Act, 2003. - Held that:- Rule 135(2) of the KVAT Rules, 2005 clearly talks only about goods in the stock which clearly refers to the goods dealt by the assessee in the regular day-to-day business for which he is registered by the Department. These Rules do not intend to cover the goods purchased for construction or being material to be fixed in the building premises of the assessee like the Vitrified Tiles in the present case. In the present case, the Tiles purchased from the State of Gujarat on payment of Central Sales Tax and fixed in the floor of the Restaurant in question, cannot be said to be "goods in stock" while they can definitely be said to be "goods" as such. The restriction against sale of such goods which were purchased from outside the State stands complied with in the present case, as it is not the case of the Revenue that the Vitrified Tiles purchased by the assessee from the State of Gujarat in this case, were sold in the course of his business. Therefore, the question of violation of condition as specified under Rule 135(2) of the KVAT Rules, 2005 does not arise in the present case. Demand set aside - Decided against the revenue with cost of ₹ 10,000/- to be paid by the respondent assessing authority to the assesse.
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2016 (7) TMI 545
Demand of VAT @14.5% on commission receipt treating the same as sale proceeds - receipt of commission against the indenting agency business is shown under the head 'other income' reported in Form WW for 2013-14 - TNVAT - Held that:- the right to reason is an indispensable part of a sound judicial system; reasons at least sufficient to indicate application of mind to the matter before the Court, Tribunal or Authority and that the affected party has to know why the decision has gone against him. The reasons are not forthcoming as to why the case of the petitioner, as projected by them in the representations, is not found acceptable. Furthermore, an opportunity of personal hearing was not afforded to the petitioner, more so, when the petitioner would state that they are only indenting agents representing national and foreign companies. Hence, on this technical ground alone, the impugned order calls for interference. - Matter remanded back.
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2016 (7) TMI 544
Levy of penalty - seizure of goods being dispatched by the revisionist and a consequential levy of penalty under Section 48(5) of the U.P. VAT Act, 2008 - the revisionist pointed out that during the course of loading and dispatching of consignments, the additional labour inadvertently placed certain consignments and packages meant for a particular truck onto other trucks which upon seizure led to the Department claiming that there was a discrepancy in the "date of manufacture"/"batch number" details mentioned in the tax invoices when compared with the actual consignments loaded on the truck. Held that:- No material or evidence was referred to or relied upon which may have even remotely established intent to evade payment of tax. - The respondents do not rest their orders on any material or evidence, which may have dispelled this assertion. The Court further notes that the Tribunal while coming to the conclusion that the stock register was not properly maintained does not rely upon any evidence or particulars at all. The said conclusion is purely conjectural and based entirely upon the two discrepancies referred to above. The Court has no hesitation to hold that the imposition of penalty upon the assessee on account of a discrepancy in the batch numbers and date of manufacture was clearly unjustified and unwarranted in the facts and circumstances of the case. The orders of the assessing authority, the first appellate authority as also that of the Tribunal sustaining the levy of penalty upon the revisionist, therefore cannot be sustained. - Decided in favor of assessee.
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Indian Laws
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2016 (7) TMI 541
Voluntary confession - conviction under Section 15(c) and 23(c) of the Narcotic Drugs and Psychotropic Substances Act, 1985 for having possession of 266 K.G. of dodda - Held that:- Taking into consideration that the appellant has confessed the guilt in his confessional statement, Exhibit 10, and interrogatories, Exhibit 11, that he was carrying six big and two small bags of dodda and he has not complained that he has not made any such statement, voluntary, and has not reported of having made the statement in voluntary or under threat. Except, in the statement under Section 313 of the Criminal Procedure Code at a belated stage where he has merely made simple denial that he has not made such statement, but, has not given any reason, hence, there is no reason to hold that the confession was not voluntary for non-production of physical evidence, like the seized article and the sample, however, the witnesses supported the prosecution case, the witness, P.W. 2 has also supported prosecution case. It is true that before acting solely on confession as a rule of prudence the Court requires some corroboration, but, it can not be said that conviction can not be recorded on sole confession, if the confession has voluntarily been made. The appellant has made confessional statement and, more over, independent witness deposed that recovery has been made and, further, the official as well as the independent witnesses supported the prosecution case regarding the search, seizure and recovery and his conviction can sustain on the said confessional statement, find and hold that the prosecution has been able to prove the charge beyond all reasonable doubts.
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