TMI Tax Updates - e-Newsletter
July 31, 2013

Case Laws in this Newsletter:

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

Articles

1. The Department cannot force assessee to avail a particular exemption Notification when benefit of other exemption Notification is available

   By: Bimal jain

News

1. Change in Tariff Value of Crude Palm Oil, RBD Palm Oil, Others – Palm Oil, Crude Palmolein, Rbd Palmolein, Others – Palmolein, Crude Soyabean Oil, Brass Scrap (All Grades), Poppy Seeds, Areca Nuts, Gold And Silver Notified

2. Opening Statement of the Union Finance Minister Shri P Chidambaram at a Press Conference Today

3. RBI Reference Rate for US $ and Euro

4. As a Measure of Taxpayers Convenience, Last Date of Filing of Returns Extended to 5th August, 2013

5. Rate of Interest Subvention Increased from 2% to 3%

6. RBI to issue Rs. 100 Banknotes with Rupee symbol Rs. and Inset Letter 'A'

7. Overwhelming Response for e-filing from Every Corner of the Country; More than 82 Lakh Returns E-Filed till 29th July, 2013 which is More than 40% of the Returns e-filed during the Same Period Last Year; Record Peak of more than 85,000 Returns Per Hour Achieved

Circulars / Instructions / Orders

VAT - Delhi

1. F.7/T&T/PB/SCTT (PR/Coordn.)/1916-20 - dated 24-7-2013

Constitution of Delhi Trade Board for National Capital Territory of Delhi

Income Tax

2. F. No. 225/117/2013/ITA.II - dated 31-7-2013

Extension of due date for filing of Returns of Income from 31.07.2013 to 05.08.2013

DGFT

3. 06/2013 - dated 31-7-2013

Inviting Suggestions to prevent unintended benefit under Incremental Export Incentivisation Scheme

Highlights / Catch Notes

Income Tax

• High Court Rules Assessing Officer Cannot Adjust Minimum Alternate Tax u/s 143(1)(a) of Income Tax Act.

  Case-Laws - HC : Tax payment u/s 115JA - Minimum Alternate Tax (MAT) - Whether the Assessing Officer could have made prima facie adjustment and held that minimum alternative tax under Section 115JA was payable by the assessee and compute and calculate the same under Section 143(1)(a) - Held No - HC
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• Court Overturns Authority's Refusal to Rule, Citing Lack of New Evidence Violates SEBI Guidelines.

  Case-Laws - HC : Jurisdiction of Authority for Advance Ruling - Refusal to give ruling on final hearing - Whether there was any contravention of SEBI guidelines - Authority is not correct in refusing to give a ruling at the time of final hearing in the absence of any fresh material, merely on the basis of the suspicion - HC
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• Court Criticizes ITAT for Ignoring Key Facts on Investment Source, Shifting Burden of Proof to Revenue Authorities.

  Case-Laws - HC : Peak credit - unaccounted transactions - ITAT has ignored relevant and material facts and has gone on a tangent without examining the real issue and the controversy, i.e., has the assessee explained the source of funds required for making investment to have turnover - passing the burden on revenue is not correct - HC
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• High Court Rules "Shaman Shulk" Payment to Excise Department Is Deductible u/s 37(1) of Income Tax Act.

  Case-Laws - HC : Deduction u/s 37(1) - Nature of payment - Whether shaman shulk paid to Excise Department is penal in nature - The amount cannot be treated to be penalty, which can be disallowed - HC
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• Court Rules Bank Guarantee Encashment for Non-Performance is a Legitimate Business Expense u/s 37(1) of Income Tax Act.

  Case-Laws - HC : Business expenditure u/s 37(1) - Encashment of bank guarantee - compensation for non performance - whether in the nature of penalty - It can be said to be compensatory in nature and not penal in nature - HC
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• Assessing Officer Must Issue Section 143(2) Notice Timely for Valid Block Assessment Under Income Tax Act.

  Case-Laws - HC : Block assessment - where the AO in repudiation of the return filed u/s 158BC proceeds to make an enquiry he has to necessarily follow the provisions of section 142, 143(2) and 143(3)- the issuance of notice u/s 143(2) within the prescribed time limited is mandatory - HC
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• Reopening Tax Assessment u/s 147 Not Justified by AO's View of Insufficient Evidence from Assessee.

  Case-Laws - HC : Reopening of assessment u/s 147 - merely because the AO finds the proof submitted by the assessee at the time of assessment proceedings to be not sufficient for the purpose of admitting the claim - it cannot be said that there was any failure on the part of the assessee so as to invoke the provisions of section 147 - HC
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• Taxpayer Wins: Revenue Dept's Procedural Lapses Can Be Used as Defense in Income Tax Block Assessments.

  Case-Laws - AT : Undisclosed income - Block assessment - If the Revenue Department had failed to take appropriate measures then the assessee is at liberty to take the legal advantage of those fallacies. - AT
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Customs

• Assessee Denied Interest on Delayed Refund Due to Undefined 'Relevant Date' u/s 27; Central Excise Differentiated.

  Case-Laws - HC : Interest on delayed refund - In the absence of any definition of expression 'relevant date' u/s 27 as it was found in the Central Excise enactment – assessee was not eligible for the interest. - HC
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• Court Requires Comprehensive Assessment for Import of Waste Tyres Without License; Pollution Control Board Report Insufficient.

  Case-Laws - HC : Import of restricted goods without a licence - Waste pneumatic tyres - Pollution Control Board to determined goods to be not hazardous - report could not be accepted as categorically speaking on the condition of the tyres as required for the purpose of their release - HC
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Service Tax

• Reimbursements Excluded from Taxable Services: Not Considered Remuneration or Commission per Revenue's Argument.

  Case-Laws - HC : Gross value of taxable services - the mere act of reimbursement, per se, would not justify the contention of the Revenue that the same, having the character of the remuneration or commission, deserves to be included in the sum amount of remuneration / Commission - HC
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• Appellant Without Recognized Engineering Degree Not Liable for Service Tax as Consulting Engineer.

  Case-Laws - AT : Service tax - Consulting Engineer's Service - appellant is only a matriculate and does not hold any professional degree in Engineering, recognized by law. - Therefore, the appellant does not qualify as a Consulting Engineer as defined in law - AT
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• Service Tax Paid Correctly at Applicable Rate on Service Date, Complying with Prevailing 5% or 8% Rate.

  Case-Laws - AT : Rate of service tax - 5% or 8% - The respondent has rightly paid the service tax as applicable on the date of providing the service - AT
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Central Excise

• Interest on Delayed Tax Refunds Starts After 3 Months Per Section 11BB; Special Cases Consider Finance Bill, 1995.

  Case-Laws - HC : Section 11BB - liability to pay interest on delayed refunds starts on expiry of three months from the date application for refund is filed or in cases covered by the proviso to sec.11BB, on expiry of three months from the date Finance Bill, 1995 received the assent of the President - HC
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• CENVAT Credit Approved for Underground Telephone Cables Under Sub Heading No. 8544.90.

  Case-Laws - HC : CENVAT credit on capital goods - Underground Telephone Cable falling under Sub Heading No.8544.90 - credit allowed - HC
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• Court Grants Stay on Pre-Deposits Due to Similar Facts in Line with Andhra Pradesh High Court Precedent.

  Case-Laws - AT : When there are different views on the very same issue, there is convention, that stay on pre deposits needs to be granted if facts are akin, and the facts in this case, are akin to the facts of the case wherein Hon'ble High Court of Andhra Pradesh has decided the issue - AT
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• No Show Cause Notice Needed for Fraudulent TR-6 Challans u/r 8(3); Duty and Penalty Demand Confirmed.

  Case-Laws - AT : Bogus TR-6 challans – Since in the case of default covered by Rule 8(3) even if involving fraud, neither any Show Cause Notice u/s 11A(1) is required to be issued, nor any order u/s 11A(2) is required to be passed, the provisions of Section 11AC and its provisos would not be attracted - Demand of duty and penalty confirmed. - AT
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VAT

• Assessing Officer must independently evaluate accounts and inform assessee, not rely solely on higher authority reports.

  Case-Laws - HC : Law is well settled that the AO has to apply his own mind for making the assessment on the basis of the books of account maintained and any material in his possession after confronting the same to the assessee. He should not mechanically complete the assessment and abdicate and surrender to the report of any higher authority. - HC
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Case Laws:

• Income Tax

• 2013 (7) TMI 857
  Tax payment u/s 115JA - Minimum Alternate Tax (MAT) - Prima facie adjustment - Whether the Assessing Officer could have made prima facie adjustment and held that minimum alternative tax under Section 115JA was payable by the assessee and compute and calculate the same under Section 143(1)(a) - Held that:- Assessee claimed that he was not liable to pay minimum alternative tax under Section 115JA. The contention may be wrong or incorrect but it has to be dealt with and examined. Further computation has to be made under Section 115JA of the Act, which is not possible without examining and considering several aspects - Computation under minimum alternative tax is cumbersome and at that time, involved several debatable issues. The assessee himself had not done any computation under Section 115JA - Prima facie adjustment is not possible - Decided in favour of assessee.

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• 2013 (7) TMI 856
  Jurisdiction of Authority for Advance Ruling - Refusal to give ruling on final hearing - Whether there was any contravention of SEBI guidelines - Held that:- Authority has proceeded to refuse to give a ruling on the basis that the petitioner had contravened the SEBI Guidelines - agreement entered into in 2004 between TIL and AT&T was not acted upon due to commercial reasons and that the Draft Prospectus filed with SEBI in 2006 while coming out with the IPO had disclosed the agreement entered into by it with AT&T. From the above, it is clear that on examination of the facts of the Petitioner's case SEBI has concluded that there has been no breach of SEBI guidelines. In case there had been any breach of its guidelines and/or an illegal act as suggested by the Authority in its impugned order, SEBI would have issued to the petitioner a notice to show cause - Decided in favour of petitioner. Refusal to pass ruling - whether the Authority after having admitted the questions can refuse to give a ruling on the question of law formulated at the final hearing without there being any change in facts or circumstances - Held that:- Authority has a discretion to refuse to give a ruling on a question of law even in respect of matters outside the proviso to Section 245R(2) of the Act, yet this discretion of refusing to rule on a question cannot be arbitrary. The Authority can exercise its discretion not to give a ruling only in cases where fraud and/or illegality is ex facie evident or the fraud or illegality has been established in some proceedings. Such a discretion is not to be exercised on a mere suspicion of illegality or fraud having taken place - Authority is not correct in refusing to give a ruling at the time of final hearing in the absence of any fresh material, merely on the basis of the suspicion. The Authority may be entitled to consider questions of public interest and not answer the questions when the foundation of the transaction is on the face of it coloured by illegality/or mis-representation of facts in making the application to the Authority - Decided in favour of Petitioner.

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• 2013 (7) TMI 855
  Unaccounted sales - A.O. adopted G.P. rate of 53.76% - Tribunal deleted addition made by A.O. and adopted G.P. rate of 2.25% - Held that:- GP rate of the recorded transactions of various years was a fair indicator of the gross profit, which would have been earned by the respondent in unrecorded transactions - Assessee did not challenge amount of unrecorded sales - Decision in case of VIJAY PROTEINS LTD. Versus ASSISTANT COMMISSIONER OF INCOME TAX[2002 (2) TMI 349 - ITAT RAJKOT] cannot be followed as in the said case assessee had not been able to produce any evidence regarding purchases made from 33 parties. The books of account were rejected in the said case, with the tribunal holding that 25% of the purchase price accounted for in the books through invoices could be disallowed for working out the income - Decided against Revenue. Unaccounted investment - Tribunal held that assessee did not maintain day-to-day stock record/register and, therefore, it cannot be said that unrecorded sales could not have been of accounted stock - Held that:- no evidence of unaccounted investment was found at the time of search. Once the stock register was not there as recorded by the tribunal in its order, the said finding itself apparently is contradictory - it was for the assessee to explain and state the source/funds for conducting and entering into the said transaction - Transactions of high value do require investment. Plea of the assessee that existing or available investment in the books was sufficient, has to be made good with material and proof by the assessee. The assessee had to explain that purchases recorded in the books were sufficient after adjustment of the recorded sales. In cases of unaccounted sales and purchases all documents may not be available and certain amount of guess work is always required as noticed earlier but a realistic and common sense approach is required - Unaccounted sales may result and can contribute towards the investment, but there has to be initial investment. Profits and income earned are also used for personal needs and are taken out of business - Decided in favour of Revenue. Peak credit - whether the peak credit should be added and brought to tax -Held that:- Profit earned from unaccounted transactions can be and are used and consumed by the assessee for their own personal uses - Tribunal placed the onus on the Revenue to explain the source of investment made by the assessee though there were unaccounted sale transactions - It has ignored relevant and material facts and has gone on a tangent without examining the real issue and the controversy, i.e., has the assessee explained the source of funds required for making investment to have turnover - Following decisions of Municipal Committee, Hoshiarpur v. Punjab SEB[2010 (10) TMI 932 - SUPREME COURT], Dhirajlal Girdharilal v. CIT[1954 (10) TMI 8 - SUPREME Court], CIT v. Daulat Ram Rawat Mull[1972 (9) TMI 9 - SUPREME Court] and CIT v. S.P. Jain[1972 (9) TMI 10 - SUPREME Court] - Decided in favour of Revenue.

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• 2013 (7) TMI 854
  Validity of reassessment - Declaration filed under VDIS 1997 - CIT held that full disclosure not done therefore reassessment necessary - Tribunal held that A.O. not applied mind independently therefore, reassessment unnecessary - Held that:- It is no doubt true that under the circular issued by the Commissioner, the declaration made by the assessee was to be placed for the information of the Assessing Officer for the purpose initiation of proceedings under Section 147 of the Income Tax Act. But that, by itself, would not lead to an automatic mechanical exercise of jurisdiction under Section 147 of the Income Tax Act - when the Assessing Officer had had the necessary materials indicating the concealment of income or income which had escaped assessment irrespective of the source from which it had come, it being the information and the material indication of escapement of income from assessment for the Assessing Officer to reopen the assessment, rightly the Assessing Officer assumed jurisdiction under Section 147 of the Income Tax Act and no exception could be taken to this by the assessee, contending that the Assessing Officer had no jurisdiction under Section 147 of the Income Tax Act - Decided in favour of Revenue.

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• 2013 (7) TMI 853
  Deduction u/s 37(1) - Nature of payment - Whether shaman shulk paid to Excise Department is penal in nature - Held that:- By way of settlement or compromise entered into with the department to be relevant provisions of law to avoid assessment for payment of the duty. The amount cannot be treated to be penalty, which can be disallowed - no adjustment should be made on book profit as computed by assessee except those provided under that section. No exception can be taken to this position of law, which has been upheld by this Court in several cases - Decided against Revenue.

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• 2013 (7) TMI 852
  Credit under Amnesty Scheme of 1985 - CIT rejected to grant credit - Held that:- . It was not disputed that in the proceedings relating to assessment year 1982-83 wherein the assessee had claimed Amnesty scheme relating to assessment years 1976-77 and 1977-78 was available in its books of account. The said amount was also held to be available with the petitioner relating to the assessment year 1984-85 - Following decision of M/s Ghuna Ram and Sons, New Grain Market, Patiala v Commissioner of Income Tax, Patiala and another [2013 (7) TMI 734 - PUNJAB & HARYANA HIGH COURT] - Decided in favour of assessee.

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• 2013 (7) TMI 851
  Business expenditure u/s 37(1) - Encashment of bank guarantee - compensation for non performance - whether in the nature of penalty - Held that:- ONGC encashed the bank guarantee, which was furnished by the assessee (performance guarantee) due to the non-fulfillment of the contract by the assessee. It can be said to be compensatory in nature and not penal in nature, the ITAT has rightly held that the assessee would be entitled to the deduction of the same as business expenditure under section 37(1) - Following decision of Prakash Cotton Mills P.Ltd. vs. Commissioner of Income-Tax [1993 (4) TMI 3 - SUPREME Court] - Decided against Revenue.

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• 2013 (7) TMI 850
  Addition u/s 153A - Tribunal deleted addition made by A.O. due to lack of evidence - Held that:- on the basis of search carried out in the premises of the son of the assessee and diary seized and on the basis of noting in the said diary, the assessee made disclosure for the A.Y. 2006-07 with respect to the sale transactions which took place during the A.Y. 2006-07 and applying same ratio and ratio relating to A.Y. 2006-07 and A.Y. 2007-08, the Assessing Officer determined the income for the A.Y. 2005-06 and considering the fact that the regular assessment was framed under section 143(3) and there was no any seized material with respect to A.Y. 2005-06, considering the aforesaid fact and observing that no incriminating material was found with respect to A.Y. 2005-06 and during the assessment, the Assessing Officer did not find any defect in the books of accounts maintained by the assessee and considering the fact that even no any material was found during the search relating to assessment year - Assessing Officer can reopen and/or reassess the return with respect to six preceding years. However, there must be some incriminating material available with the assessing officer with respect to the sale transactions in the particular assessment year - Decided against Revenue.

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• 2013 (7) TMI 849
  Block assessment - Limitation period of notice u/s 143(2) for the purpose of assessment u/s 158BC - whether service of notice on the assessee u/s 143(2) within the prescribed period of time is a pre-requisite for framing the block assessment under Chapter XIV-B - Held that:- There is a clear omission on the part of the assessing authority to issue notice under section 143(2) is not a procedural irregularity and the same is not curable – If there is violation of the mandatory provision then the assessment order passed is illegal and liable to be set aside - the requirement of notice u/s 143(2) cannot be dispensed with in respect of the block return filed the AO must necessarily issue notice u/s 143(1) within the time prescribed in the proviso to section 143(2) - Even for the purpose of Chapter XIV-B for determination of the undisclosed income for the block assessment under the provisions of section 158BC, the provisions of section 142 and sub-sections (1) and (3) of section 143 are applicable - No assessments could be made without issuance of notice u/s 143(2) where the AO in repudiation of the return filed u/s 158BC proceeds to make an enquiry he has to necessarily follow the provisions of section 142, sub-sections (2) and (3) of section 143 - the issuance of notice u/s 143(2) within the prescribed time limited for the purpose of making assessment u/s 143(3) is mandatory – appeal decided in favour of assesse.

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• 2013 (7) TMI 848
  Penalty u/s 271(1) - Whether the Tribunal was justified in confirming the levy of penalty in the absence of recording of satisfaction within the meaning of section 271(1)(c) before initiation of the proceedings under section 271(1)(c) - the contention of the appellant that recording of a satisfaction is absent in the instant case is wholly without reason - section 271(1B) the satisfaction being a deemed satisfaction the question of recording of satisfaction within the meaning of section 271(1)(c) does not arise for consideration – decided in favour of revenue. Validity of Penalty - Whether the Tribunal is justified in confirming the penalty even though the discrepancy alleged was on March 22, 1999 (date of survey) relating to the assessment year 1999-2000 and the impugned penalty was levied for the assessment year 1995-96 even though no discrepancy whatsoever was found relating to the year, under challenge - From the replies of the assessee it is evident that a substantial discrepancy was found for the assessment year 1995-96 - assessee has also admitted to the same - the Tribunal was justified in confirming the penalty – decided in favour of revenue. Validity of revised return - Whether the appellant having filed the revised return of income voluntarily and the penalty u/s 271(1)(c) was exigible - The assessee admitted the concealment and, consequently, filed a revised return wherein the admitted undisclosed income as well as the undisclosed stock was disclosed in the return - it cannot be considered as a return of income having been filed voluntarily – thus the assessee is liable for penalty – decided in favour of revenue. Following precedents - Whether the Tribunal was justified in contradicting from its own findings given in the cases relied upon before it - Tribunal was justified in applying the law to the facts and circumstances of the present case - the questions of law and the decisions are necessarily based on the facts and circumstances of each of the cases - the said question of law is answered with reference to and in terms of the facts and circumstances of the relevant cases - therefore when the facts in two cases are different, applying the cited decision to another case would be highly erroneous – decided in favour of revenue – appeal decided against assessee.

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• 2013 (7) TMI 847
  Reopening of assessment u/s 147 - issuance of notice beyond 4 years - Held that:- the original assessment came to be framed u/s 143(3) the assessment is sought to be reopened after the expiry of a period of four years from the end of the relevant assessment year - hence the proviso to section 147 of the Act would clearly be attracted - for the purpose of assumption of valid jurisdiction on the part of the AO he should have reason to believe that income chargeable to tax has escaped assessment by reason of failure on the part of the petitioner to disclose fully and truly all material facts necessary for his assessment – merely because the AO has sought to reopen the assessment finds the proof submitted by the assessee at the time of assessment proceedings to be not sufficient for the purpose of admitting the claim - it cannot be said that there was any failure on the part of the assessee so as to invoke the provisions of section 147- the notice u/s 148 cannot be sustained – appeal decided in favour of assessee

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• 2013 (7) TMI 846
  Disallowance of commission paid - CIT(A) confirmed additions - Held that:- CIT(A) has not followed the principles of natural justice because he has not provided due opportunity of cross- examination of witnesses and other material collected by DIT(Inv), Kolkata. Also the replies, evidence in the form of affidavit, confirmation and reconfirmation submitted by the assessee has also not been confronted to the AO while taking the same into consideration by the CIT(A). Accordingly, the impugned order is not sustainable and restored back to file of AO to readjudicate the issue. In favour of assessee for statistical purposes.

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• 2013 (7) TMI 845
  Addition on account of capital gain - AO has made the addition by invoking the provision of section 50C - Held that:- As assessee has submitted that AO should have referred the matter to the DVO in terms of section 50C(2) as the assessee has objected to the valuation by the stamp valuation authority & provision of section 50C are not applicable to the lease hold property. This ground was not raised before the authorities below, thus matter is remitted to the file of AO to consider the issue afresh. Addition on account of low GP - Held that:- As there is a fall in the GP rate in the current year, but, it is not a very significant one. Assessee has given explanation for the reasons of the fall in GP, but the authorities below have summarily rejected it without putting any cogent basis for rejecting the submissions of the assessee. Further, as regards the purchase from the sister concern is concerned, if AO was not satisfied with the rate of purchase, he should have brought on record appropriate materials for proposition that the said purchases which were at higher rates. However AO has not been able to bring on record any such data. Furthermore, assessee has submitted that the assessee has given all the details which as per AO not submitted some of the details - matter remitted to the file of AO to consider the issue afresh. Appeal filed by the Assessee stands allowed for statistical purposes.

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• 2013 (7) TMI 844
  Unexplained cash credit on account of sale of shares - Addition u/s 68 - CIT(A) allowed part relief - Held that:- The issue involved in deletion of addition on account of sale of shares of M/s MP Investment and Quest Financial Services Ltd. respectively and expenditure for arranging these bogus entries has been affirmed by the ITAT in the proceedings u/s. 143(3) earlier. No new material has been brought forward to make these additions revenue appeal dismissed. As regards addition sustained by CIT(A) on sale of shares of M/s Nagehswar Investment Ltd. and for obtaining accommodation entries @ 2% interest of justice requires that assessee be confronted with the material on which CIT(A) is making reliance. The source of these additions have also to be brought on record and assessee be confronted in this regard. As decided in Kapurchand Shrimal Vs. CIT [1981 (8) TMI 2 - SUPREME Court] appellate authority has the jurisdiction as well as duty to correct he errors in all proceedings under appeal and issue appropriate direction to the authority whose order is in appeal before it. In favour of assessee for statistical purposes.

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• 2013 (7) TMI 843
  Transfer pricing adjustment - adjustment in the arm's length price of the international transactions related to contract - IT-enabled service contract software developments services entered into by the appellant with its associated enterprises - TPO conducted a fresh economic analysis for determination of ALP - selection of comparable - Software Services Segment - Held that:- As assessee has objected to the inclusion of Infosys and WIPRO on account of huge difference in size and turnover and functional difference. As there are tribunal decisions both in favour of the proposition as well as against the proposition that huge difference in turnover affects comparability. Now it has come to notice that a Special Bench has been constituted to consider the impact of turnover on comparability, thus when the Special Bench is seized with the matter, it would not be appropriate for us to adjudicate this issue. Hence, remit the issue of inclusion of these comparables to the files of TPO to consider the same afresh, after the decision of Special Bench is available. IT ENABLED SERVICES - Accentia Technologies Limited (ATL) - Held that:- Agreeing with the contention that companies with extraordinary events such as merger and amalgamation should be rejected, if because of merger, de-merger the company becomes functionally different. However, as held in Wills Processing (2013 (3) TMI 415 - ITAT MUMBAI) if the merger of the two functionally similar companies took place, the event of merger itself cannot be taken as a factor for exclusion of the said comparable. Accordingly direct the AO /TPO to verify this fact and accordingly decide the comparability of this company namely Accentia Technologies Ltd. (ATL). Acropetal Technologies Limited & eClerx Services Ltd. - Held that:- As per the Notification of CBDT dated 26.9.2000 the various products and services are notified in the category of IT enabled products and services engineering and design services are very much included in the said list. These services are in the nature of ITES. Thus, no cogency in the assessee's submissions that these companies KPO Services are distinct from BPO services and not comparable. Hence inclusion of these two comparables confirmed. Genesys International Limited - Held that:- Geographical Information System are very much included in the CBDT Circular NO. SO 890(E) dated 26.9.2000 which has given a detailed list of product and services which could be claimed under ITES for the purpose of Section 10A and 10B. The assesses argument that CBDT Notification as mentioned above should be considered only for the purpose of determining eligibility for tax exemption is not acceptable.TPO was correct in adding this as a comparable. Vishal Information Information Technologies Ltd. Now Known as Coral Coral Hub Limited. - Held that:- Outsourcing of routine non-discretionary functions, call centre, data entry, claim processing etc. to other parties is very common feature of ITeS industry. There is no dispute that the assessee derives its entire revenue from ITeS industry. The financial results shows that the company earns income from single revenue stream of IT Enables services. Thus inclusion of this comparable confirmed. HCL COMNET SYSTEMS & SERVICES LTD - Held that:- Assessee's grievance regarding the inclusion of the above comparable is that it had a related party transactions in excess of 25% which is a filter which has been applied by the assessee and accepted by the TPO and DRP. Assessee could not take this plea earlier. But now based on information currently available, assessee has pleaded that the Company be excluded the concerned filter in this case has already been accepted by the Revenue remit this issue to the file of the TPO. The TPO shall examine if the Company is having related party transaction in excess of 25%, if the same is found to be true, the Company would be liable to be excluded. Assessee's appeal is partly allowed for statistical purposes.

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• 2013 (7) TMI 842
  Undisclosed income - Block assessment - CIT(A) deleted the addition - Held that:- If the assessee proves that the alleged income is duly recorded on or before the date of search in the normal course in the books of account in respect of an assessment year for which the previous year has not ended then such income is not required to be included in the block period. In the present appeal the case of the Revenue was not that the assessee's personal books of account were seized at the time of search and in those set of books of account there was no entry of deposit of Rs.24,00,000/- on three different dates. The correct factual position was that no search action at all was carried out on the assessee. The assessee was directed to file the return of the block period consequence upon a search conducted on developer, viz., M/s. Vrindavan Developers. In that case of M/s. Vrindavan Developers a search was carried on 21.12.1999 and thereupon it was noted that a land was agreed to be sold by the assessee and in lieu received an advance consideration of Rs.24,00,000/-. That was the start point of action against the assessee. At that point when there was an apprehension of alleged unaccounted transaction in the eyes of Revenue Department then further investigation could have been done then and there. If the Revenue Department had failed to take appropriate measures then the assessee is at liberty to take the legal advantage of those fallacies. Certain measures were taken by the assessee, such as, deposit of advance-tax, entries in the personal set of books of accounts, fixed deposit in the bank, filing of the Income Tax Return and disclosure of capital gain pertaining to the said land, therefore assessee had wisely taken the legal advantage of the provision of the Act, especially when the Revenue had faulted in not taking a timely action. Therefore, in the absence of any cogent material this ground of the Revenue is hereby dismissed.

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• Customs

• 2013 (7) TMI 841
  Interest on delayed refund - Whether the respondents were liable to pay interest on delayed refund of duty erroneously collected and became refundable in pursuant to order made prior to the amendment of Section 27 from the date of deposit or from date of order by which refund became due or in terms of the amended Section 27-A or from the date of final order passed in the refund proceedings – Held that:- In the absence of any definition of expression 'relevant date' u/s 27 as it was found in the Central Excise enactment – assessee was not eligible for the interest. Whether the Tribunal was right in computing the interest payable on the amount of duty to be refunded to the assessee after expiry of three months from the date of receipt of the final order passed in appeal arising out of refund proceeding and not from the date of order passed in the Assessment proceedings by the CC(Appeals)where the assessment order was set aside and declared value was directed to be accepted and consequently the amount became refundable – Held that:- liability of the revenue to pay interest under Section 11BB of the Act commences from the date of expiry of three months from the date of receipt of application for refund under Section 11B(1) of the Act and not on the expiry of the said period from the date on which order of refund is made - following the judgement of Ranbaxy Laboratories Limited V. Union of India and others(2011 (10) TMI 16 - Supreme Court of India) – decided against the assessee.

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• 2013 (7) TMI 840
  Import of restricted goods without a licence - Waste pneumatic tyres - Pollution Control Board to determined goods to be not hazardous - Tribunal referring the report of Pollution Board ordered release of confiscated goods - Held that:- Report of Pollution Board speaks nothing on the absence or presence of any hazardous material or the likelihood of its giving out any hazardous material when put to use even after re-treading - Report merely referred to the earlier two reports as well as the physical condition of the tyres imported - report could not be accepted as categorically speaking on the condition of the tyres as required for the purpose of their release - Matter remitted back for fresh adjudication - Decided in favour of Revenue.

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• 2013 (7) TMI 839
  Inherent power of court u/s 482 Cr.PC - Petitioner Narcotics Control Bureau (NCB) invokes inherent powers of the Court u/s 482 of the CrPC for setting aside of the order passed by the learned Special Judge-NDPS - the court in that order altered the charge and remit the case to the Court for trial for the offences under the Drugs and Cosmetics Act, 1940 (D&C Act) – the same order was in question – Held that:- The contention of the department was devoid of any substance - Section 8 (c) of the NDPS Act prohibits manufacture, possession, transport, inter-state export and import of Narcotic Drugs and Psychotropic Substances except for medicinal or scientific purposes - Section 24 makes the export or obtaining of any Narcotic Drugs and Psychotropic Substances in contravention of section 12 of the NDPS Act to be punishable. Anybody dealing with a psychotropic substance for supplying to any person outside India even if it does not find mention in the NDPS Rules will be punished under the NDPS Act – court relied upon State of Uttaranchal v. Rajesh Kumar Gupta (2006 (11) TMI 542 - SUPREME COURT) – the exception as provided under Section 8 for use of the psychotropic substance as mentioned in the Schedule (under Section 2(xxiii)) of the NDPS Act for medicinal purposes would not be applicable in case of trade or supply of the psychotropic substance outside India – petition decided against the department.

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• 2013 (7) TMI 838
  Duty drawback - department contended that allowing rebate of duty when drawback of Customs portion was availed will amount to double benefit was not valid –Held that:- Commissioner (Appeals) had given his detailed findings in the case - Department in their revision applications had not countered even a single argument and simply stated that double benefit of drawback and rebate of duty cannot be allowed - Notification No. 84/2010 provides that customs component of AIR drawback shall be available even if the rebate of Central Excise duty paid on raw material used in the manufacture of export goods has been taken in terms of Rule 18 of Central Excise Rules - if such raw materials were procured without payment of Central Excise duty under Rule 19(2) of the Central Excise Rules - the content of the circular envisage that the Customs component of AIR drawback shall be available even if the rebate of Central Excise duty paid on raw materials used in manufacture of exported goods had been taken in terms of Rule 18 of Central Excise Rules - The position is made amply clear in the Notification No. 84/2010 – decided against revenue.

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• Service Tax

• 2013 (7) TMI 862
  Valuation - Gross value - Reimbursable expenses received by the assessee need not be added to the taxable value related to clearing and forwarding agents service - Rule 6(8) of Service Tax Rules, 1994 stipulates that Gross amount of remuneration or commission should be the taxable value in relation to the services provided by a Clearing and Forwarding Agent – Held that:- Various expenditure includible in the taxable value of Carrying and Forwarding service were reimbursed by the principals on the basis of actuals – Relying upon the judgment in the case of Sri Sastha Agencies Pvt Ltd., Vs. Asst. Commissioner reported in 2006(11)TMI 193- CESTAT, BANGALORE, wherein it is held that no element other than remuneration received by a Clearing that all incidental charges for running of the business would also form part of the remuneration or Commission (by whatever name called). The phrase "by whatever name called" must necessarily have some link or reference or nature to the receipt of remuneration or commission. Thus, if a receipt is for reimbursing the expenditure incurred for the purpose, the mere act of reimbursement, per se, would not justify the contention of the Revenue that the same, having the character of the remuneration or commission, deserves to be included in the sum amount of remuneration / Commission - Rejecting the Revenue's contention – Decided in favor of Assessee.

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• 2013 (7) TMI 861
  Service tax under the head “Consulting Engineer's Service” - Appellant, NagindasJamnadasVora obtained a patent bearing no. 187148 of 08/01/1998 for a new compact oil cooler which was allowed to be used by Vora Exclusive Tools Pvt. Ltd., for which he was entitled to receive royalty - Appellant is liable to pay service tax on the royalty received – Held that:- appellant is only a matriculate and does not hold any professional degree in Engineering, recognized by law. Therefore, the appellant does not qualify as a “Consulting Engineer” as defined in law. Secondly, the appellant was a patentee and transferred the right to use the patent to his client for consideration of royalty payment. The said service merits classification under “Intellectual Property Service' which came into tax net with effect from 10/09/2004. Since the period in dispute is much prior to that, there is no service tax taxability with respect to the services rendered by him – Decided in favor of Assessee.

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• 2013 (7) TMI 860
  Failure to make pre-deposit – Held that:- Appeal stands rejected for non-compliance of order dtd. 09.05.2012, to deposit Rs. 10 Lakh and consequent failure of pre deposit.

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• 2013 (7) TMI 859
  Rate of service tax - 5% or 8% - date of providing service or the date of issue of invoices was mainly in issue – Held that:- The respondent has rightly paid the service tax as applicable on the date of providing the service – as decided in CCE & C, Vadodara vs. Schott Glass India Pvt. Limited (2009 (1) TMI 45 - HIGH COURT OF GUJARAT)- taxable event is providing the taxable service and not the raising invoice or making payment – appeal allowed in the favour of the assessee.

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• Central Excise

• 2013 (7) TMI 837
  Section 11BB of the Central Excise Act,1944 -Date from which the Revenue is liable to pay interest on delayed refund of excise duty - Is it from expiry of three months from the date of application for refund under Section 11B (1) or the receiving of assent of the President to the Finance Bill, 1995 in cases covered by proviso to section 11BB or from expiry of three months from the date of actual order of refund under section 11B (2) of the Central Excise Act, 1944 Held that:- In Ranbaxy Laboratories Ltd. Vs. Union of India reported in 2011(10)TMI 16 Supreme Court of India, the Apex court has concluded as follows, liability of the revenue to pay interest under Section 11BB of the Act commences from the date of expiry of three months from the date of receipt of application for refund under section 11B(1) of the Act and not on the expiry of the said period from the date on which order or refund is made. Similar view was expressed in the case JK Cement Works Vs. Asstt. Commissioner of Central Excise Customs reported in [2004 (2) TMI 78 - HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR]. In the present case , liability to pay interest on delayed refunds starts on expiry of three months from the date application for refund is filed or in cases covered by the proviso to sec.11BB, on expiry of three months from the date Finance Bill, 1995 received the assent of the President and not from the date of passing of actual order for refund under section 11B(2) of the Act - In the instant case, the application for refund was filed on 5.8.1991 and therefore it is a case covered by first proviso to Section 11BB of the Act. Consequently, the petitioner will be entitled to interest after three months from the date the Finance Bill, 1995 received the assent of the President being 26.5.1995. Thus interest is payable to the petitioner from 26.8.1995 till the date of refund Decided in favor of Assessee.

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• 2013 (7) TMI 836
  CENVAT credit on capital goods - Rule 57AA of the erstwhile Central Excise Rules, 1944 in respect of Underground Telephone Cable falling under Sub Heading No.8544.90 - Assessee are manufacturers of cement, falling under Sub Heading No.2502.29 of the Schedule to the Central Excise Tariff Act, 1985 – Held that:- The Apex Court in the case Commissioner of C.Ex., Coimbatore Vs. Jawahar Mills Ltd.[ 2001 (7) TMI 118 - SUPREME COURT OF INDIA] pointed out to the definition of "capital goods" in Clause (c) to the Explanation to Section 57Q that "the goods enumerated in clause (c) need not be used for producing the final product or used in the process of any goods for the manufacture of final product or used for bringing about any change in any substance for the manufacture of final product and the only requirement is that the same should be used in the factory of the manufacturer. Further, the items considered in the cases decided by the Apex Court reported in [2001 (7) TMI 118 - SUPREME COURT OF INDIA] were power cables and capacitors in Jawahar Mills case; control panels, cables, distribution boards, switches and starters and air compressors in the case of Indian Refrigeration Co. Ltd.; electric wires and cables in the case of Kothari Sugar and Vijay Chemicals on appeals preferred by the Revenue. Thus, on a consideration of the provisions of Section 57Q, the Apex Court held that so long as the items in question are used in the factory for the manufacturer, the benefit of MODVAT credit could not be denied – Relying upon the decisions in the abovementioned case, the Cenvat credit was allowed to the appellant – Decided against the Revenue.

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• 2013 (7) TMI 835
  Whether the Commissioner having once determined the Annual Capacity of Production, can, on discovery of new and additional evidence/material, which the assessee failed to disclose or suppressed, can redetermine the same? - Assessee provided the information for being assessed on the basis of certificate from manufacturer of the Furnace about the capacity of furnace to be 2.5 MT to 3.0 MT for melting on that basis annual capacity production was determined provisionally on 9600 TCF vide letter dated 29.09.1997 – Held that:- During investigation by Anti-Evasion, a copy of contract under the influence of respondent between the assessee unit and manufacturer was obtained through the Directorate General of the Central Excise Intelligence (erstwhile DGAE ) from the record under their possession. Technical data of this contract revealed the furnace of type ITM - 4/1500 KW was supplied by the manufacturer M/s ABB Limited to the assessee unit which had capacity of 3390 KG, which was further corroborated from the facts mentioned in the statement of Shri J.S . Rao , DGM of manufacturer, Shri Tushar Mewar , Senior Marketing Manager of the manufacturer, statement of Shri Sunil Bansal , Director of the assessee - Second proviso to Section 3A (2) of the Act of 1944 provides that in a case where the factor relevant to the production is altered or modified at any time during the year, the annual production shall be redetermined on a proportionate basis having regard to such alteration or modification. If there is an altertion or modification in any factor relevant to production specificed , such production shall have to be redetermined as held by the Supreme Court in Para 22 of CCE v. Doaba Steel Rolling Mills [2011 (7) TMI 10 - SUPREME COURT OF INDIA] – Matter remanded to Tribunal.

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• 2013 (7) TMI 834
  Stay application – Waiver of Pre-deposit – Cenvat Credit on service tax paid on the different services which are used in the construction and maintenance of their township which is situated within the factory premises – Appellant deposited an amount of Rs.2.80 crores against confirmed demand of Rs.9.62 crores; amount of deposit which has been made by the appellant works out to approximately 25% of the confirmed demand - Held that:- The facts of the case of ITC Ltd. where in High Court of Andhra Pradesh has upheld the order of the tribunal are more akin to the case in hand, at the same time, judgment of the Hon'ble High Court of Bombay in the case of Ultratech Cement taking a different view in respect of specific services rendered at the residential complex - When there are different views on the very same issue, there is convention, that stay on pre deposits needs to be granted if facts are akin, and the facts in this case, are akin to the facts of the case wherein Hon'ble High Court of Andhra Pradesh has decided the issue - Issue is arguable one and there is claim of financial hardship - Amount deposited by the appellant during proceeding before the lower authorities as enough deposit to hear and dispose the appeal. Accordingly, applications for the waiver of pre deposit of the balance amounts involved are allowed – Decided in favor of Assessee.

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• 2013 (7) TMI 833
  Bogus TR-6 challans – On scrutiny of the ER-I Returns in, it was found that though during certain period the appellant had enclosed TR-6 Challans showing payment of duty of Rs. 3,79,500/-, on verification, those challans were found to be bogus, as no duty had been deposited in any bank under those challans – Held that:- This is a case of fraudulent and deliberate failure to discharge the monthly duty liability for which the penalty would be imposable under Rule 25(1)(d) Section 11AC is attracted, in case of non-levy, short levy, short payment or erroneous refund of duty involving fraud etc. for which duty demand is required to be confirmed under Section 11A(2). In term of Sub-Rule (4) of Rule 8 of Central Excise Rules, 2002, the duty self assessed under Rule 6 ibid along with interest for the period of delay payment can be recovered by the Department from the assessee under Section 11 of the Central Excise Act, 1944 and, thus, no notice under section 11A (1) is required to be issued. Since in the case of default covered by Rule 8(3) even if involving fraud, neither any Show Cause Notice under section 11A (1) is required to be issued, nor any order under section 11A(2) is required to be passed, the provisions of Section 11AC and its provisos would not be attracted – Decided against the Assessee. - Demand of duty and penalty confirmed. Penalty under Rule 26 of the Central Excise Rules, 2002 – Held that:- Director of the appellant company, admitted that he is involved in clearance and sale of excisable goods without discharge of duty liability, penalty has been correctly imposed on him – Decided against the Assessee.

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• 2013 (7) TMI 832
  Input Service - Appellant had availed CENVAT Credit of Service Tax paid by Clearing & Forwarding Agent services and Banking services rendered by the bank - Authorities held credit of Service Tax not to be granted to appellant since service not under definition of input service - Held that:- Following decision of JSW STEEL LTD. Versus COMMISSIONER OF CENTRAL EXCISE, THANE-I [2012 (12) TMI 141 - CESTAT, MUMBAI] and Commissioner of Central Excise, Surat Versus M/s Vishal Malleables Ltd. [2012 (11) TMI 871 - CESTAT AHMEDABAD] - Decided in favour of assessee.

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• 2013 (7) TMI 831
  Clandestine Removal of goods - Appellant is engaged in the manufacture of M.S. Ingots - Appellant was not maintaining any records of purchase of raw materials, production of finished goods etc – Held that:- From the statement of melter and chowkidar, and the evidence collected by the Revenue from the electric Department etc, revealed that the appellant was manufacturing M.S. Ingots without making a proper declaration and without maintaining any record etc – After the provisional release of the goods, the same were cleared on payment of duty - the penalty reduced to 25% - redemption fine of Rs. 1,04,600/-,duty involved in respect of seized goods was to the tune of Rs. 68,256/- and as such, redemption fine imposed is much on the higher side. Accordingly, the same is reduced to Rs. 25,000/-.- penalty upon the Director, as the manufacturing unit has already been penalized, penalty reduced to Rs.10,000/-

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• 2013 (7) TMI 830
  Cenvat credit - Welding Electrodes - Commissioner disallowed cenvat credit - Held that:- Welding Electrodes used for repair and maintenance of plant and machinery are eligible for cenvat credit - Following decision of AMBUJA CEMENTS EASTERN LTD. Versus COMMISSIONER OF C. EX., RAIPUR [2010 (4) TMI 429 - CHHAITISGARH HIGH COURT] and UNION OF INDIA Versus HINDUSTAN ZINC LTD. [2006 (5) TMI 44 - HIGH COURT RAJASTHAN] - Decided in favour of assessee.

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• 2013 (7) TMI 829
  Application of Cenvat Credit Rules, 2004 to SEZ developers - Assistant Commissioner rejected refund claim - Commissioner (Appeals) set aside - Held that:- Following decision of Sujana Metal Products Ltd. Vs. CCE, Hyderabad [2011 (9) TMI 724 - CESTAT, BANGALORE] and Surya Roshini Ltd. Vs. CCE, Rohtak [2013 (1) TMI 500 - CESTAT, NEW DELHI] - Decided against Revenue.

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• 2013 (7) TMI 828
  Initiation of penal provisions after expiry of 5 years - Commissioner held that penal proceedings under Rule 96ZP(3) cannot be initiated after expiry of five years - Held that:- Following decision of CCE, Chandigarh Vs. Hari Concast (P) Ltd. [2009 (4) TMI 170 - PUNJAB AND HARYANA HIGH COURT] and M/S Bhawani Castings (P) Ltd. Mandi Gobindgarh Versus Commissioner Central Excice, Chd. [2010 (4) TMI 284 - PUNJAB & HARYANA HIGH COURT] - Decided against Revenue.

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• 2013 (7) TMI 827
  Clandestine removal – The respondent paid the disputed amount of duty as mentioned in the show cause notice along with interest and 25% of the duty amount as penalty within 30 days of the show cause notice as per the provision of Section 11A(1A) - Penal proceedings against other noticees were dropped in view of Section 11A (1A) read with proviso to Section 11A(2) – Held that:- When the proceedings against the manufacturer/assessee stand concluded on payment of disputed amount of duty plus interest plus 25% of the duty as penalty, there would be no sense in continuing the proceedings for imposition of penalty under Rule 26 against other persons like traders who had purchased the goods, transporters who had transported the goods cleared by manufacturer/assessee, the Directors/employees of the manufacturer/assessee company – As per Tribunal in case of Shitala Prasad Sharma Vs. Commissioner of Central Excise, Mumbai-I, reported in [2004 (12) TMI 195 - CESTAT, MUMBAI] relying upon Apex Court’s judgment in case of D. P. Kothari reported in [2001 (3) TMI 183 - CEGAT, COURT NO. II, NEW DELHI] has held that when the matter has been settled by the settlement commission against the main party and settlement commission has granted immunity to him from penalty, the co-occured cannot be penalized under Rules, 209A of Central Excise Rules, 1944 as he cannot face a penalty greater than the penalty on the main accused – Decided in favor of assessee.

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• 2013 (7) TMI 826
  Time period for initiation of appeal under Rule 96 ZP (3)/ Rule 96 ZO(3) – Held that:- Hon’ble Punjab & Haryana High Court in the case of Hari Concast reported in [2009 (4) TMI 170 - PUNJAB AND HARYANA HIGH COURT ] had held that with regard to similar provisions of Rule 96 ZO(3), held that though in the Rule, there is no period of limitation - Reasonable to adopt limitation period of five years and as such, after expiry of 5 years, no penal proceedings can be initiated - Tribunal in the case of Bhawani Castings Pvt. Ltd. had taken a contrary view, on appeal being filed before Hon’ble Punjab & Haryana High Court, reversed The Tribunal judgment vide judgment reported in 2010 (4) TMI 284 - PUNJAB & HARYANA HIGH COURT, wherein Hon’ble Punjab & Haryana High Court has followed its earlier judgment in Hari Concast Pvt. Ltd. (supra) and has held that penal proceedings under Rule 96 ZO(3) cannot be initiated after expiry of 5 years – Decided against the Revenue.

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• CST, VAT & Sales Tax

• 2013 (7) TMI 863
  Reopening of assessment - Orissa Value Added Tax Act, 2004 - Whether the assessing officer has passed the impugned assessment order on the dictate of his higher authority i.e. on the basis of the direction of the Special Commissioner as well as the report of the Dean of NIT prescribing the SION method? - whether violation of principles of natural justice? - Held that:- Undisputedly the audit assessment for the period 2006-07 was completed on the basis of books of account maintained by the petitioner relating to purchase of raw material, sales of finished products etc. But in the said assessment order the adverse material utilized against the petitioner in the impugned assessment order had not been utilized. Thus as in earlier assessment order, the adverse material utilized against the petitioner in impugned assessment order had not been utilized. Hence, the question of change of opinion of Assessing Officer does not arise in the facts and circumstances of the case. Law is well settled that the AO has to apply his own mind for making the assessment on the basis of the books of account maintained and any material in his possession after confronting the same to the assessee. He should not mechanically complete the assessment and abdicate and surrender to the report of any higher authority. Perusal of the impugned order clearly reveals that the Assessing Officer after applying his mind and being satisfied that the alleged turnover had escaped from assessment, initiated the reassessment proceeding. See Indure Limited v. Commissioner of Sales tax, Orissa & others (2006 (7) TMI 572 - ORISSA HIGH COURT)and State of U.P. v. Maharaja Dharmandar Prasad Singh (1989 (1) TMI 315 - SUPREME COURT). Also though the AO utilized the adverse materials on the basis of which fraud case report Nos.20/29.04.2009 and report No.51/30.10.2010 were submitted he has not supplied the copy of the said adverse materials to the petitioner before passing the impugned order. Before utilizing the aforesaid two allegations against the petitioner, principle of natural justice demands that the 3rd party must be summoned and confronted with the petitioner and in case the petitioner demands for cross-examination of third party, he must be allowed to do so. Thus in the present case since the applicant had not availed the chance of explaining its position on account of refusal by the authorities to summon certain officials of the Port Trust for which it had filed applications, the principle of natural justice had been violated. From the tax evasion report No.51/30.10.2010, it is further noticed that the Vigilance Officials in course of inspection conducted on 04.05.2010 found a slip from the premises of the petitioner-company wherein Rs. 15,000/- had been written.In the instant case, the Vigilance Officer discovered the said slip from the business premises of the petitioner-dealer and the Assessing Officer drew certain inferences from the noting made on the slip, but failed to establish such inferences. Thus Law is well settled that no demand can be raised in an assessment on suspicion and conjecture. Therefore, before utilizing the said slip against the petitioner, the AO has to prove that through the said noting in the slip, the petitioner has sold materials worth of Rs. 12,15,922/- which was not disclosed in the books of account. In the instant case, the same has not been done. Thus allow the writ petition, set aside the impugned assessment order as well as the demand raised under Annexure-9 and remand the matter to the Assessing Officer to re-do the assessment.

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• Indian Laws

• 2013 (7) TMI 858
  Compounding of an offence under Section 74 of U.P. Excise Act, 1910 – Petitioner was granted licence for retail sale of country liquor in accordance with the provisions of U.P. Excise (Settlement of Licenses for Retail Sale of Country Liquor) Rules, 2002 for the execise year 2010-2011 - Petitioner in fact was selling country liquor, which was issued for sale for the previous excise year i.e. 2009-2010. Under the provisions of Rules, 2002, it is mandatory that the outgoing licencee at the end of the excise year shall surrender all the stocks pertaining to that year and is not entitled to sale the liquor of the previous year, under the licence for current year - Petitioner more or less admitted sale of liquor of the previous year and on that basis the Collector proceeded to cancel the licence of the petitioner – Held that:- Court finds that absolutely no application was made by the petitioner at any point of time under Section 74 of U.P. Excise Act, 1910 for the offence being compounded. Compounding of an offence under Section 74 of Act, 1910 is at the discretion of the licencing authority. If the petitioner has failed to avail the remedy so provided and has contested the proceedings on merit, he cannot now be permitted to turn around and contended that the offence should have been compounded instead of cancelling his licence – Decided against the Petitioner. Forfeiture of security money of licence – Held that:- No such plea had been raised before the State Government. Order of statutory authority cannot be challenged on a ground not raised/pressed before the authority concerned – Decided against the Petitioner

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