Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
August 20, 2012
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Service Tax
Central Excise
CST, VAT & Sales Tax
Wealth tax
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
Income Tax
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Denial of entitlement of u/s.10(23FB) - assessee is engaged in the business of providing venture capital by way of investment in equity capital - exemption u/s.10 (23FB) allowed - AT
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Capital expenditure vs Revenue expenditure - expenditure on payment of lease rent and maintenance of the pipeline as per Build, Own, Operate, Transfer (BOOT) contract - held as revenue in nature - AT
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Provisions of section 40(a)(ia) are applicable only to amounts of expenditure which are payable as on 31st March every year and it cannot be invoked to disallow expenditure which has been actually paid during the previous year, without deducting TDS - AT
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Addition u/s 68 - assessee has requested either estimate the commission income on such accommodation transactions or tax peak of the cash deposits - AT
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Repayment of loan to be treated as deemed divided - Addition under the head “other sources” invoking the provisions of section 2(22)(e) - AT
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Disllowance of set off of losses - as derivate trading itself is treated as a non- speculative business, and losses of any non- speculative businesses can be adjusted profits of any non-speculative business - AT
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The Dividend if any received in India from foreign company is not exempt from tax as it will not be a Dividend covered u/s.115-O which alone is exempt u/s.10(34). - AT
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Wen there is no express provision limiting issuance of notice u/s 142 (1) within the period of one year from the end of the relevant assessment year, no such limitation can be read into the provision - AT
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Section 71(2A) bars set off of business loss against salary income and does not bar setting off of the business loss against the house property income. - AT
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Constitution of a Committee for redressal of the demands/issues raised by ITGOA and ITEF - Order-Instruction
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Transfer pricing - Computation of Arm's length price - Notified percentage under second proviso to section 92C(2) - Notification
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DTAC between India and USA - secondment of the employees by the U.S. Principal - the same is income in hands of US Principal subject to withholding of taxes u/s 195 - AAR
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Deduction u/s 80IC - Revenue contending adjustment of losses of Delhi unit against profit of Baddi unit before providing deduction u/s 80IC - HC
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Computation of depreciation while computing deduction under Section 32AB - HC
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Shortfall of T.D.S - The contract with them by the assessee was one of contract `for service' and `not of service' - tax was being rightly deducted at source under section 194J and section 192 of the Act had no application - HC
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Denail of registration u/s.12A - while providing facilities like Telephone calls, Xerox etc., the society collects charges to meet the expenses. - cannot be termed as involving carrying of any activity in the nature of trade/commerce or business - AT
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Disallowance of claim u/s 80 IB - The watchmen performing the duties like packaging, preparing gate pass, maintaining attendance register etc included in computation of limit of 10 workers - AT
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Depreciation - asset concerned was not actually used for the purpose of business during the relevant previous year – Disallowance of lay up cost - AT
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A gift by a corporation to another corporation is a strange transaction. To postulate that a corporation can give away its assets free to another even orally can only be aiding dubious attempts at avoidance of tax payable under the Act. - AAR
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Embezzlement of cash by employee in AY 84-85 - loss claimed in the year 1990-91 - dis-allowance - cannot be allowed as deduction u/s 36 or 37(1). - HC
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Business discount claimed at 2.81% of the total sales - partial dis-allowance - The companies do not offer discounts on adhoc basis. The amount was substantial and could not be given on adhoc treatment at the time of assessment. - HC
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Withdrawal of benefit u/s 11 on ground that main donor is the Government of Andhra Pradesh and application included expenses towards supply of equipment to Government Sector - AT
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Exemption u/s 10(10CC) - Whether tax paid by the employer on the salaries of the employees would constitute non-monetary benefits exempt u/s 10(10CC) - HC
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Estimation of income u/s 44AD of the Act - the depreciation allowance should be deducted therefrom - authorities should be guided by the binding circular of the Board - HC
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Scope of the term 'thereon' - Jurisdiction of the Tribunal - favorable decision - adverse findings - provisions of Rule 27 and the provisions of Sec. 253(4) do not over-lap each other; rather operate in two different situations. - AT
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Validity of a decision where reasons are not recorded - Failure to give reasons amounts to denial of justice. - AT
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Whether upfront fee paid will fall within the definition of “rent“ as given under Explanation to Section 194-I of the Act - held yes - AT
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Carry forward of unabsorbed depreciation – The provisions of sections 80 and 139(3) of the Act are applicable to business losses and not to unabsorbed depreciation governed by section 32(2) of the Act. - AT
Customs
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Invalid jurisdiction - appeal against order of first appellate authority setting aside order passed by the adjudicating authority on the refund claims - Since the authorisation granted to the lower authorities is without jurisdiction, appeal rejected - AT
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Denial of benefit of Project Import Regulations, 1986 - increase of more than 25% in the installed capacity is not achieved - AT
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Fiscal Penalty on nominee directors - failure to fulfill the export obligation under DEPB licenses - HC
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Amends in the Notification No. 12/2012- Customs. - Notification
Corporate Law
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Winding up – alleged that company unable to pay its debts - respondent could not take advantage of its own breach and withhold balance amount on plea of loss and damages having been incurred - HC
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Clarification on Para 46A of Notification Number G.S.R. 914(E) dated 29.12.2011 on Accounting Standard 11 relating to “The effects of changes in Foreign Exchange Rates”. - Circular
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Company law board (second amendment) regulations, 2012 - Amendment in regulations 14, 29 & Annexure-III and omission of regulation 36 - Notification
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Winding up – If the company refuses to pay, without good reason, it should not be able to avoid the statutory demand by proving at the statutory demand stage, that it is solvent. - HC
Wealth-tax
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Rejection of application for registration as a valuer of plant and machinery u/s 34AB of the Wealth Tax Act - HC
Service Tax
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Alleged training of employees outside India as well as in India through availing services of parent company - demand imposed under the reverse charge mechanism for the services availed from foreign service provider - AT
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Refund Claim of Service Tax paid on services consumed within the SEZ and services which were used in the authorized operations of the SEZ units - AT
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Whether Appellate Tribunal does not have jurisdiction to entertain the appeals filed against revisionary orders passed u/s 84 by Commissioners after 19.8.2009 - AT
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Rejection of refund claim in terms of Notification No.41/2007-ST dated 6.10.2007 - AT
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Manufacturing of Ready Mix Concrete - revenue contended the same to be Commercial & Industrial Construction Services - contract between the parties was to supply ready mix concrete (RMC) but not to provide any taxable service. - AT
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Exemption relating to management, maintenance or repair of roads introduced by section 97(1) of the Finance Act, 2012 - AT
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Transportation of cargo by air - default in payment of service tax - assessee contested against invoking the extended period of limitation - penalties set aside u/s 80 - AT
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Rejection of refund claim in terms of Notification No.41/2007-ST dated 6.10.2007 - appellants did not submit the requisite documents before the sanctioning authority for examination - power of the commissioner (appeal) to remand - AT
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Rejection of refund claim in terms of Notification No.41/2007-ST dated 6.10.2007 - appellants did not submit the requisite documents before the sanctioning authority for examination - power of the commissioner (appeal) to remand - AT
Central Excise
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Alleged suppression of assessable value of the goods - the facts were within the knowledge of the Revenue - SCN could not have been issued as it was time barred. - HC
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Refund - The appellants are entitled for interest on delayed sanction of rebate / refund claim. - AT
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Violation of the principles of natural justice - alleged wrong availment of cenvat credit since inputs received indicated in specified invoices were never received - AT
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Captive Consumption - the benefit of exemption Notification No.67/95-CE cannot be denied to the sponge iron manufactured in one unit and consumed in the manufacture of billets in another unit. - AT
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Claim for remission of duty for the breakage and losses - it is not the case of the department that the loss due to breakage etc. was over and above the limit prescribed by the Board. - remission allowed - AT
VAT
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Regarding Tax rate wise details of closing stock as on 31st March of every year - Notification
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If the Legislature in its wisdom has included the sunglasses within the category of “Medical Devices and Implants” covered under entry C-107(8) by issuing a notification on 23rd November, 2005, it would not be open to the Commissioner of Sales Tax to hold that non prescriptive sunglasses are not medical devices - HC
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Waiving off the mandatory requirement of 'No Objection Certificate' from landlord for registration under the DVAT Act, 2004. - Circular
Case Laws:
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Income Tax
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2012 (8) TMI 497
Assessment framed u/s 153A in case of search based on evidence gathered in the course of search of another assessee for AY 2003-04 to 2008-09 - assessment framed u/s 144 for AY 2009-10 - assessee contesting assessments u/s 144 on ground that Section 153A or Section 153C has no application on assessment for the AY 2009-10 - assessment u/s 153A(1) on the ground of non-recording of satisfaction by AO who conducted search - Held that:- Best judgment assessment u/s 144 was for failure of the assessee to file return for the said AY and its validity is not in any way affected just on ground that AO by mistake has quoted Sections namely Sections 153C and 153A wherein it is also stated that the said assessment is made u/s 144. Assessment is one made exclusively u/s 144 after issuing notice to the assessee. Transfer of recovered books of accounts, evidence or materials is only a procedural formality to be complied with by the AO who searched an assessee and recovered materials pertaining to another assessee, and the AO who takes up assessment u/s 153C against the latter will have full jurisdiction to appreciate evidentiary value of the books of accounts or materials or goods received from the other officer and proceed to make assessment in his own way. Therefore, satisfaction is not required to be recorded by the AO, who conducted the search before transferring materials found belonging to another assessee - Decided against assessee
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2012 (8) TMI 496
Undisclosed income - Search and seizure - addition u/s 68 made of difference in value of property purchased at Rs 71.35 lacs and seized document in the handwriting of the father of the assessee showing the property valued at Rs.80.00 lacs - Held that:- Document found during the search has been explained satisfactorily viz. that it is the resale value of the property and the figures were recorded only for the purpose of distribution of the property within the family. Gifts - addition - assessee furnished copies of the pass books, income tax details and PAN of the donors - Held that:- Respondent has sufficiently discharged the onus casts upon her to establish the source of gifts and credit worthiness of the donors. Genuineness of gift held by appellate authorities. Both the findings being pure findings of fact are not alleged to be perverse. Consequently no substantial question of law arises - Decided against Revenue
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2012 (8) TMI 495
Disallowance on Expenditure towards Non-Compete Fees & depreciation on leased premises - re-assessment order passed u/s. 147 - Held that:- Learned Third Member u/s. 255(4)on difference of opinion between the Ld. Members constituting the Division Bench in respect of validity of the re assessment order decided that the assessment order passed by AO is illegal and void abinitio - in favour of assessee.
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2012 (8) TMI 494
Denial of entitlement of u/s.10(23FB) - assessee is engaged in the business of providing venture capital by way of investment in equity capital - Held that:- Condensing the assessee's chart in its submission where it is shown that when the management and administration expenses are reduced from the corpus figure then the eligible investments in Venture Capital Undertakings have achieved the stipulated minimum percentage of 66.67% in two other years apart from the current Assessment Year i.e., during F.Y. 2006- 2007 and 2007-2008. Under the circumstances, the appellant’s contention that the stipulated condition under SEBI Regulation 12(d) for being eligible to exemption under 10 (23FB) of the Income Tax Act have been fulfilled, is acceptable, and the assessee is entitled to exemption u/s.10 (23FB). AO's reliance on CIT (A)'s order for AY 2004-05 is erroneous to the extent that the term ‘investible funds’ has not been examined and wrongly considered to mean the corpus, whereas, in fact the term ‘investible funds’ have been defined under SEBI regulations in regulation (hh) as ‘investible funds’ means corpus of the fund net of expenditure for administration and management of the fund;’ and taking into consideration the same if the working is made as has been done herein above, it can be seen that the assessee had already achieved the conditions prescribed - Following this decision of CIT (A)-II for the Assessment Year 2004-2005, it is held that the exemption u/s.10 (23FB) is available to any income of the assessee, be it interest, dividend, etc. - in favour of assessee.
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2012 (8) TMI 493
Capital expenditure vs Revenue expenditure - expenditure on payment of lease rent and maintenance of the pipeline as per Build, Own, Operate, Transfer (BOOT) contract with M/s Dodsal - Held that:- In present case, assessee company, by making lump sum payment to Dodsal has not acquired any capital asset but has acquired only the right to operate and maintain the said pipeline for its business purpose and got rid of making monthly payment. The assessee company has stated that even when the BOOT agreement was in operation, the assessee was neither the owner of the pipeline nor after making the lump sum payment to Dodsal on terminating the BOOT agreement the assessee became the owner of the pipeline. Since, assessee has not acquired any capital asset but has only got the right to use the said pipeline for its business purposes and has not acquired any capital right in the said pipeline, therefore, the same is to be considered as revenue in nature. See Madras Auto Service (P.) Ltd (1998 (8) TMI 1 - SUPREME COURT ) - Decided in favor of assessee Further, claim of the assessee which is otherwise allowable as revenue expenditure, cannot be denied merely on the ground that the assessee has capitalized the said expenditure by making entries in its books of account. Sales tax incentive being exemption granted by the State Government of Gujarat on ground of industry being situated in the backward area - capital receipt or revenue receipt - assessee contended that incentive available is based on the capital invested in the aforesaid project, hence capital receipt - Held that:- Sales tax incentive to be constituted capital receipt. See DCIT v/s Reliance Industries Ltd [2003 (10) TMI 255 (Tri)] - Decided in favor of assessee Business Expenditure - Donation/contribution to various organisations/ Community Welfare Expenses - dis-allowance - Held that:- Tribunal in assessee' case in earlier year allowed such expenditure by holding that just because the expenses are voluntary in nature and are not forced in the assessee by a statutory obligation, these expenses cannot cease to be a business expenditure. Dis-allowance deleted - Decided in favor of assessee Expenditure on registration fee, stamp duty of lease transactions - Held that:- By incurring the said expenditure, the assessee has not acquired any assets of enduring nature and the said expenditure could not be disallowed as of capital nature. Same is held revenue in nature. See Hoechst Pharmaceuticals Ltd (1977 (11) TMI 55 - BOMBAY HIGH COURT) - Decided in favor of assessee Expenditure incurred on account of repairs - designing and re–location of the reactor purchased in year 1999 - Held that:- Incurring the expenditure to relocate the reactor from its existing place to a new place to make use of it does not create any new asset to the assessee. Same is held revenue in nature. See Abbott Laboratories (I) Pvt. Ltd. (1993 (2) TMI 83 - BOMBAY HIGH COURT) - Decided in favor of assessee Rejection of claim of deduction u/s 80HHC for the purpose of computing book profit u/s 115JB on ground that deduction u/s 80HHC is NIL under normal provisions of law - Held that:- Issue is now covered in favour of assessee by judgment in case of Bhari Information Tech. Sys. P. Ltd.(2011 (10) TMI 19 - SUPREME COURT OF INDIA , wherein it was held that deduction u/s 80HHE is required to be worked out on the basis of adjusted book profits u/s 115JA and not on the basis of profit computed under regular provisions of law applicable to the computation of profits and gains of business. Section 80HHC as well as section 80HHE falls in the same Chapter and provisions u/s 115JA are also in pari material with the provisions of section 115JB. Consequently, decided in favor of assessee by reversing the orders of the authorities below. Lease rent paid on boilers - dis-allowance of amount attributable to re–payment of principal amount - Held that:- Same is allowed in view of order of Tribunal in favor of assessee in respect of earlier years Dis-allowance u/s 40A(9) of contribution to various clubs run by and meant for the staff and their families - Dis-allowance of prior-period expenditure - Held that:- Issue on identical fact is covered in favour of the assessee by the earlier decision of the Tribunal Adjustment for provision of bad and doubtful debts while computation of book profits u/s 115JB - Held that:- In view of the amendment made by the Finance (no.2) Act, 2009, by inserting clause (i) to Explanation (1) of section 115JB(2), with retrospective effect from 1st April 2001, the provisions made for bad and doubtful debt is to be disallowed. Dis-allowance confirmed - Decided in favor of Revenue Depreciation in respect of jetties constructed by the assessee and used for the purpose of its business - dis-allowance - assessee constructed jetty for and on behalf of Gujarat Maritime Board (GMB) - exclusive ownership being vested in GMB - assessee being afforded the facility for preferential use of jetty over other users and licence to use jetty - depreciation being allowed since AY 1997–98 - assessee contended the same to be acquisition of commercial right or license and intangible asset within the meaning of section 32(1) - Held that:- Tribunal considered similar issue in the case of Reliance Ports and Terminals Ltd., and allowed the claim for depreciation on the cost incurred by the assessee on construction of jetties. Since aforesaid case squarely applies to this case, depreciation at the rate as applicable on the cost incurred for construction of jetty at Dahej is directed - Decided in favor of assessee Addition on account of unavailed CENVAT credit u/s 145A - Held that:- If the closing stock to be increased on account of unutilised MODVAT credit, the corresponding opening stock of that year is also to be increased, as the Department has not disputed the fact that the purchases have been debited exclusive of the excise duty element i.e., by adopting net method of purchases. If the value of closing stock is increased by the MODVAT, the purchases should also be increased by a similar amount. Whenever there is change in the valuation at one end, there must necessarily be a corresponding change at the other end otherwise the true picture would not be reflected. Addition is deleted - Decided in favor of assessee.
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2012 (8) TMI 492
Disallowance on account of Voluntary Retirement Scheme (VRS) - Held that:- The assessee has come out with VRS forced by commercial reasons and the liability is well supported by the actuary valuation the right of employees are supported by the agreement with the company and employee as the actual valuation certificate and the agreements between the company and the employees - as all the documents were not examined by the AO in the interest of justice and fair play this matter is restored back to the file of AO - in favour of assessee for statistical purposes. Disallowance of provisions of expenses made at year end - Held that:- CIT(A) has rightfully directed the AO to look into the contention of the assessee that in view of the method of accounting followed by them in which provision for expenses made at the end of the year are credited to the respective expenses heads in the subsequent year ought to be reduced to that extent and see that the same amount is not doubly taxed and has rightly confirmed the addition of Rs. 40,90,453 - against assessee. Disallowance of expenses as being in the nature of capital expenditure - Held that:- As decided in CIT Versus M/s. Geoffrey Manners & Co. Ltd. (Now known as Wyeth Limited) [2009 (2) TMI 13 - BOMBAY HIGH COURT] the claim of the assessee to treat the expenditure on production of films as revenue expenditure - in favour of assessee. Disallowance being the depreciation on Kandla plant - Held that:- Depreciation is allowed if the plant was actually in operation and which fact has not been brought on record, the issue deserves to be restored back to the file of AO to verify whether the plant was actually in use during the year under consideration and if satisfied the depreciation may be allowed - in favour of assessee for statistical purposes. Disallowance of 20% on foreign travel expenses - Held that:- As on identical facts the Tribunal has deleted the disallowance sustained by CIT(A) no point to disallow the claim in period under question - in favour of assessee. Disallowance of expenses for impending union settlement - Held that:- When there was a memorandum of settlement dt. 29.2.1988 and thereafter dt. 7.1.1991 why the assessee had not made any provision either on the basis of MOS dt. 29.2.1988 or on the basis of charter of demand dt. 7.1.1991 - as the facts being identical of AY 1992-93 with the current year and also considering the settlement which is executed on 23.8.1993 relates to A.Y. 1994-95 and the Ld. CIT(A) has rightly held that deduction in the year under consideration does not arise - against assessee. Disallowance of hotel expenses and air fare on foreign visitors coming to India - Held that:- Considering the details of foreign travel expenses submitted by the assessee and respectfully following the decision of the Tribunal in assessee’s own case for A.YT. 1992-93 no dissallowance of the claim of expenses incurred by the assessee for the purpose of business is warranted - against revenue. Disallowance for expenditure incurred on transit houses maintained at Goregaon and Goa - Held that:- Considering the decision of Tribunal in assessee's own case in AY 1991-92 wherein Tribunal has held that expenditure of food and beverages have to be allowed - thus as in the year in question AO is directed to consider the details filed by the assessee giving break-up of expenses incurred on guest house maintenance and allow the expenses incurred on food and beverages - in favour of assessee for statistical purposes. Apportionment of expenses - Lunch expenses, canteen expenses, business meeting expenses and expenses on AGM - Held that:- Considering the assessee's submission direct the AO to allow the business meeting expenses and expenses on AGM which expenses cannot come under the category of entertainment expenses and to add only Rs. 2,00,000/- out of total canteen expenses which is in the line of the finding of the Tribunal in assessee’s own case for assessment year 1992-93 - partly in favour of assessee. Inclusion of sales tax and trade discount from the figure of total turnover for the purpose of computing deduction u/s. 80HHC - assessee also took an additional ground by which asked to exclude excise duty element - Held that:- As decided in CIT Versus Lakshmi Machine Works [2007 (4) TMI 202 - SUPREME COURT] excise duty and sales tax were includible in the "total turnover", which was the denominator in the formula contained in section 80HHC(3) as it stood in the material time - in favour of assessee. Disallowance of expenses for the A.Y. 1992-93 - Held that:- Considering the submissions of the assessee it can be concluded that as this liability was incurred for earning the profits and gains for the A.Y. 1992-93, therefore the same is allowable against the profits and gains for A.Y. 1992-93 and confirm the disallowance made by AO - against assessee. Disallowance of deduction u/s. 80HH - Organic Phosphates and Phosphites unit situated at Goa - Held that:- On submissions of assessee that there are no brought forward losses available as they have been set off from the profit of other units of the assessee need to be verified, it is desirable to restore this matter back to the file of AO - in favour of assessee for statistical purposes.
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2012 (8) TMI 491
Disallowance of expenditure on account of advertisement u/s 37(1) - reopening of assessment proceedings u/s 148 - Held that:- A.O. has power to re-open the assessment provided there is tangible material to come to the conclusion that there was escapement of income from assessment & reason must have a live link with the formation of the belief - in the instant case no findings of reasons having any link with the formation of the belief since the A.O. while reopening the assessment for A.Y. 2004-05 has relied on the assessment order for 2005-06 on the issue of disallowance of advertisement expenses which are completely different from the A.Y. 2004-05 in view of the findings of the Third Member in assessee’s own case for A.Y. 2005-06 - the reassessment proceedings are invalid - in favour of assessee.
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2012 (8) TMI 490
Penalty u/s 271(1)(c) - dis-allowance of deduction u/s 80HHC during reopening proceedings, relying on decision in case of IPCA Laboratories (2004 (3) TMI 9 - SUPREME COURT) - assessee contended that where two views are possible, penalty cannot be levied - Held that:- This is a simple case of disallowance of deduction because of a later judgment from the Apex Court, and has nothing to do with either inaccurate particulars or concealment of facts. Revenue is unable to point any omission, concealment or inaccurate and certainly nothing has been found to be “false”, in any case, issue of penalty being not exigible in such circumstances, is now squarely covered by the recent decisions of Apex Court in CIT vs Reliance Petro Products Pvt. Ltd.(2010 (3) TMI 80 - SUPREME COURT). CIT(A) order of cancelling the penalty is upheld - Decided in favor of assessee.
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2012 (8) TMI 489
Non deduction of tax at source on clearing and forwarding charges - Held that:- As if there is one single consolidated bill then the provisions of section 194J would be attracted but here it is found that four bills raised by party at periodic intervals, which does not mean that there was one / single bill - Considering decision of the CIT(A), who has restored the issue to the file of the AO with certain directions it need to be modified by adding that the AO shall examine the issue in detail with reference (i) to the amounts that are covered by TDS, (ii) which the assessee has himself disallowed in his computation and (iii) the extent of reimbursement of expenses, which, do not get covered by the provisions of TDS. As a part of the amount on which TDS is not deducted is suo-moto disallowed by the appellant in his return of income filed, provisions of section 40 (a) (ia) are applicable only to amounts of expenditure which are payable as on 31st March every year and it cannot be invoked to disallow expenditure which has been actually paid during the previous year, without deducting TDS - in favour of assessee for statistical purposes.
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2012 (8) TMI 488
Interest on borrowed funds - proportionate dis-allowance attributing the same towards Capital Work In Progress - Held that:- There is opening WIP of Rs. 3.16 crores in relation to which no disallowance of interest had been made in the preceding year which means that capital WIP to that extent had been accepted by the department as explained from own funds. Therefore no disallowance of interest can be made in relation to the opening WIP. The addition during the year is only Rs. 66.50 lakh. The capital and reserve of the assessee had increased during the year of Rs.10 crores and increase in loans during the year was only of Rs. 3 crore. Moreover, the assessee during the year had earned profit of Rs. 14 crores. Therefore, capital addition during the year is easily explained out of own funds. Dis-allowance deleted Depreciation on UPS - Revenue contending 15% whereas assessee contended 15% - Held that:- Depreciation @ 60% has to be allowed in case of UPS. See CIT vs BSES Rajdhani Powers Limited (2010 (8) TMI 58 - DELHI HIGH COURT) Interest income received from fixed deposits kept as margin money for LCs / Bank Guarantee and also as security deposit with Maharashtra State Electricity Board (MSEB) - Business Income or Income from other sources - Held that:- Interest income has to be considered as incidental business income. See CIT Vs Indo Swiss Jewels Limited And Another (2005 (9) TMI 47 - BOMBAY HIGH COURT) - Decided in favor of assessee
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2012 (8) TMI 487
Disallowance of deduction u/s 10A - assessee had not allocated the common headquarter expenses aggregating to the 10A unit - Assessee has argued that attribution of expenses of the head office on turnover basis is not correct - Held that:- The head office caters to the needs of all the units and therefore the head office expenses are required to be attributed to the various units and attribution of expenses based on turnover is quite appropriate. While working out the profit of the unit, the indirect expenses incurred in the head office have therefore, been correctly attributed on the basis of turnover - against assessee. Disallowance of expenses under section 14A r.w.r. 8D - Held that:- Rule 8D is applicable only from assessment year 2008-09 and, in respect of prior years, expenses relating to exempt income both direct and indirect have to be computed on a reasonable basis after allowing opportunity of hearing to the assessee - as in this case, CIT (A) has directed the AO to compute the disallowance after allowing opportunity of hearing to the assessee no infirmity in the order of CIT(A) of disallowance - against assessee.
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2012 (8) TMI 486
Addition u/s 68 - assessee has requested either estimate the commission income on such accommodation transactions or tax peak of the cash deposits - Held that:- As it is not in dispute that the assessee was providing accommodation entries an admitted fact that the assessee could not produce any of the beneficiaries to whom he was providing “accommodation” and at the same time the assessee has not discharged the initial onus cast upon him and therefore fails in succeeding in this ground of appeal. As the assessee’s has agreed that he has no objection in estimation of profit from hawala business the income of the assessee can be enhanced on the basis of the peak credit statement submitted by the assessee during the course of the appellate proceedings is to be accepted as held in assessee's own case in A.Y. 2002-03 - the entire cash deposit for the year under consideration cannot be added as deemed income of the assessee and at the most the peak deposit in all the bank accounts taken together should be taken for the addition u/s. 68 - restore this issue back to the file of the AO directing to verify the peak deposits of all the bank accounts together - partly in favour of assessee.
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2012 (8) TMI 485
Disallowance of TDR transaction on account of inflated sales - transaction claimed to have been entered by the assessee with a sister concern - Held that:- Assessee had purchased TDR from KHPL, its sister concern, who has claimed the purchase of TDR from original vendor company and finally sold by assessee resulting in profit of Rs. 3,59,750/- which is claimed to be offered for tax and not disputed by Revenue - sister concern has claimed to have paid tax @ 30% on profit from above transaction which has not been disputed on behalf of revenue, thus in case KHPL has suffered tax, then it cannot be said that tax planning device adopted by assessee by inflating its purchase price of TDR. As decided in CIT Vs. Indo Saudi Services (Travel) Pvt. Ltd. [2008 (8) TMI 208 - BOMBAY HIGH COURT] if sister concern with whom transaction was entered was also assessed to tax in such situation no disallowance has to be made u/s. 40A(2) in respect of the payment made to the relatives and sister concern where there was no attempt to evade tax - in favour of assessee.
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2012 (8) TMI 484
Repayment of loan to be treated as deemed divided - Addition under the head “other sources” invoking the provisions of section 2(22)(e) - Held that:- In order to attract the provisions of section 2(22)(e) there should be loan/advance by a company to its shareholder with an every amount paid must make the company a creditor of the shareholder of that amount. At the same time, it is to be borne in mind that every payment by a company to its shareholders may not be loan/advance. In the present case, the amount was withdrawn by the assessee from the company only to meet her short term cash requirements. By virtue of offering personal guarantee and collateral security for the benefit of the company, the liquidity position of the assessee had gone down, thus if it is to be construed the amount forwarded by the company to the assessee was not in the shape of advances or loans. The arrangement between the assessee and the company was merely for the sake of convenience arising out of business expediency. In the facts and circumstances of the case, it is not appropriate to hold that the amount withdrawn by the assessee partakes the character of deemed dividend under the provisions of section 2(22)(e) - in favour of assessee.
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2012 (8) TMI 483
Disllowance of set off of losses - loss from transactions in futures & options against short term capital gain derived from transactions in shares and mutual fund units - Held that:- As a result of the amendment in Section 43(5) with effect from 1st April 2006, losses incurred in derivative trading are held to be eligible for being set off against normal business profits, as derivate trading itself is treated as a non- speculative business, and losses of any non- speculative businesses can be adjusted profits of any non-speculative business - the case of the assessee is squarely covered by the amendment in the Act As decided in CIT Vs. Shri Bharat R.Ruia [2011 (4) TMI 37 - BOMBAY HIGH COURT] future & option are one of the categories of derivatives and loss suffered by the assessee during future & option transactions is not a speculative loss thus, the same can be set off against short term capital gains by the assessee during the relevant assessment year - in favour of assessee.
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2012 (8) TMI 482
Disallowance of deduction of diminution in value of investments written off - Held that:- The assessee has not brought on record any material to show that the shares of Shriram Asset Management Co. Ltd. are held as business assets and required to make provision for diminution in value of investment in the books of account. As the assessee reversed this provision in its books of account and offered to tax in the assessment year 2007-08 disallowing the same provision during the assessment year under consideration amounts to double disallowance AO is directed to verify the details - in favour of assessee for statistical purpose.
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2012 (8) TMI 481
Disallownace of Interest incurred on borrowed funds - assessee invested in its fully owned subsidiary in Switzerland - show cause to assessee why the said amount should not be allowed u/s.36(1)(iii) read with section 14A - Held that:- The Dividend if any received in India from foreign company is not exempt from tax as it will not be a Dividend covered u/s.115-O which alone is exempt u/s.10(34). Further the Long Term profit on sale of shares is also not exempt since it is not covered u/s.10(38). Hence there is no application of section 14A in the present case. Except for making arguments the funds borrowed are for commercial expediency and incurred for the purpose of business of the assessee, no evidence whatsoever was produced by the assessee before the lower authorities - remit the issue of allowance of expenses back to the file of the AO to decide the matter afresh in accordance with law - in favour of assessee for statistical purposes.
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2012 (8) TMI 480
Disallowance of an expenditure incurred on interiors and furnishings - Held that:- The AO is carried away by the size of the expenditure claimed, and not examined the capital or revenue nature of the each of the item of expenditure. This approach of the Revenue authorities is not correct and cannot be approved - it cannot be adjudicate the ground meaningfully without having facts as to description, use, function of each of the items, which is under dispute - restore the matter to the file of the AO with a direction to examine the nature of the item-wise expenditure claimed by the assessee. Non deduction of tax u/s 194C - Disallowance of expenditure in terms of S.40 (a) (ia) - Held that:- The word ‘payable’ used in section 40 (a) (ia) has to be given its natural meaning & is applicable only to expenditure which is payable as on 31st March of every year and cannot be invoked to disallow the amounts which have already been paid during the previous year, without deducting tax at Source - no dispute the payments in question were made by the assessee during the year under consideration - in favour of assessee. Direction to apply Rule 8D - Held that:- As the provisions of Rule 8D should be made applicable even to the assessment years prior to the amendment to the said rule no mistake in the direction of the CIT(A) to AO to apply the Rule 8D for determination of disallowable expenditure attributable for earning of exempt income on a reasonable basis mentioning the express reasons - against assessee.
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2012 (8) TMI 479
Addition on account of unexplained investment - assessee contested against notice u/s. 142 (1) as issued beyond the prescribed time - Held that:- As per Proviso to S.142 (1)(i) it is clear that any notice served on the assessee after the end of the relevant assessment year shall be deemed to have been served in accordance with the provisions of S.142 (1) - Provisions u/s. 142(1) contain the operative expression, i.e. ‘any notice has been served…, such notice issued to him’ only qualify the conditions issue and service of any notice. The expression ‘any’ in our opinion should cover the impugned notice issued with the delay of 15 months of the end of the relevant assessment year 2005-06 - when there is no express provision limiting issuance of notice u/s 142 (1) within the period of one year from the end of the relevant assessment year, no such limitation can be read into the provision - no substantial force in the argument of assessee that notices u/s 142 (1) cannot be issued when no return of income was filed Notice u/s. 148 - arguments of assessee about applicability of the provisions of S.148 are of no use as it is a separate proceedings and is not the case here that proceedings under S.144 read with S.142 (1) (i) are simultaneously initiated, while the other proceedings under S.148 are in force or vice versa - set aside the matter to the file of the CIT (A) to dispose of the appeal on merits in accordance with law - Revenue’s appeal is allowed for statistical purposes.
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2012 (8) TMI 478
Allowability of set off of the business loss brought forward arising out of banking business, income from which is eligible for deduction u/s 80P, against the house property income - Held that:- It is observed that S71(2A) bars set off of business loss against salary income and does not bar setting off of the business loss against the house property income. Further, CIT(A) has passed a non-speaking order and reference made to non-eligibility of exempt nature of the income for set off, whereas provisions of S.80P falls under category of deduction which is different from being exempt. It is settled position of law that the assessee is entitled for such set off of current year’s business loss against current year’s income from house property as held in the case of CIT V/s. Mughneeram Bangaru and Co.(1980 (8) TMI 12 - CALCUTTA HIGH COURT ). Since, CIT(A) is not specific to the issues raised before him. Therefore, matter should be referred back to the file of the CIT(A) with a direction to adjudicate the grounds and the issues raised in the grounds of appeal and the specific arguments advanced before him, qua the grounds raised.
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2012 (8) TMI 466
DTAC between India and USA - secondment of the employees by the U.S. Principal based on the U.S. principal's global mobility policy to applicant being fully owned Indian subsidiary - chargeability to tax of secondment charges paid by Indian subsidiary to its US Principal which applicant contends to be reimbursement of charges - taxability of payroll processing charges under relevant DTAA - withholding of taxes - Held that:- It is observed that seconded employees even after providing their services to the applicant, their salaries and other service benefits are paid by the US company. The right of dismissal rests or continues to rest with the US Principal. The relationship of the employees with the US Principal never ceased so as to enable them to claim that they have become the employees of the applicant. The absence of a right to terminate the employment as distinct from the right to terminate the secondment is significant. The applicant having no obligation to pay the salaries, what the US Principal collects from the applicant cannot be reimbursements. It is compensation or fees paid by the applicant to the US Principal for making available to it the services of the employees of the Principal. Therefore, the same is income in hands of US Principal subject to withholding of taxes u/s 195 Payroll processing charges - Held that:- It is seen that the employees seconded to the applicant are required to have a particular level of expertise in their respective roles. Neither the agreements nor the application, specified what are the duties to be performed by the seconded employees in India. In the absence of adequate material, it will be hazardous to give a ruling, hence this question is left open for a decision by the assessing authorities as and when called upon to do so.
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2012 (8) TMI 465
India-Mauritius DTAA – chargeability to tax of the proposed transaction of sale of shares of GSKAPL, the Indian company, to GSK Pte. Singapore by applicant company being Mauritius resident and part of GSK group – Held that:- It is observed that shares were held by the applicant from the year 1996 and were held as an investment. Hence, it is ruled that the shares held would be considered as ‘capital asset’ Taxability of capital gains arising from transfer of shares in India – Held that:- Proposed sale will generate a gain that would qualify to be capital gains under the Act. However, capital gains that would arise would not be chargeable to tax in India in view of paragraph 4 of Article 13 of the DTAC between India and Mauritius. Applicability of transfer pricing provisions from Section 92 to Section 92F – Held that:- Section 92 to section 92F will be attracted since there is an international transaction between related parties. Whether that exercise is needed or would be fruitful is a different matter. Hence, Sections 92 to 92F would apply if the transaction is one coming within those provisions. Liability to withhold taxes u/s 195 – Held that:- Since there is no chargeability to tax in India there will be no obligation on the applicant to withhold tax u/s 195 Requirement to file return of income u/s 139 – Held that:- Since the income is not taxable in this country, under the Act, there is no obligation on the applicant to file a return of income u/s 139 Applicability of provisions of Section115JB – Held that:- Section 115JB overrides section 34 to 48 of the Act. Application of Section 115JB(1) is not confined to domestic companies alone, it would equally apply to a foreign company
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2012 (8) TMI 464
Dis-allowance u/s 40A(3) - purchase of old bottles through cash - non-confirmation from suppliers - Held that:- A perusal of the records reveals that majority of suppliers had not furnished the information sought for, which renders that assessee had failed to discharge the onus to prove the existence of the parties/suppliers. However, the Tribunal had held that the Commissioner, having accepted that transactions with nine parties were not genuine, ought not to have applied the provisions of section 40A(3) and remitted the matter back to the AO. On re-appreciation of the entire materials available on record, we do not find that the Tribunal had committed any error in passing the said order. Sales promotion expenses - dis-allowance by AO on finding of fact that said payments were bribe paid to TASMAC employees and failure of assessee to substantiate the claim - Held that:- CIT(A) as well as the Tribunal had concurred with the said finding rendered by the AO. Interference in the concurrent finding of fact is unwarranted. Hence, no ground to interfere with the order under challenge - Decided against assessee
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2012 (8) TMI 463
Deduction u/s 80IC - assessee having 3 units; 2 located in Delhi and third at Baddi, Himachal Pradesh, latter being eligible for benefit u/s 80IC - Revenue contending adjustment of losses of Delhi unit against profit of Baddi unit before providing deduction u/s 80IC - Held that:- Section 80-IA(5) begins with a non-obstante clause, providing that quantum of deduction is to be computed as if the industrial undertaking were the only source of income of the assessee during the relevant years. Section-80IC(5) and Section-80IC(7) expressly provides that provisions contained in sub-section (5) and subsections (7) to (12) of section 80-IA shall, so far as may be, applied to the eligible undertaking or enterprises under this section, meaning thereby that same provision would be applicable in section 80-IC. Therefore, each unit will be considered independently and adjustment of losses of Delhi Unit is not required while computing the eligible profit in respect of Baddi Unit for granting deduction u/s 80-IC. See Dewan Kraft Systems (P) Ltd(2007 (2) TMI 149 - HIGH COURT , DELHI) - Decided in favor of assessee.
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2012 (8) TMI 462
Method of valuation of closing stock - assessee consistently following method of taking cost or market price whichever was lower - revenue seeks to arrive at value of the closing stock by adopting an average method by valuation while the assessee seeks to arrive at the valuation of closing stock on the basis of quality of the stent and its costs as available on actual basis - Held that:- In the present case, assessee has adopted the method of valuing stock which gives the value of the closing stock depending upon the quality of the stents which are in its possession. The method adopted by the revenue of seeking to multiply the number of stent with the average costs by stents in the possession of the respondent would lead not only to estimated cost of closing stock but also distort the profit and/or loss obtained. This is so as the method employed by the revenue completely ignores the valuation of the individual stent. Therefore, on merits, we find no fault with the method adopted by the assessee of valuing closing stock which has been upheld by the CIT(A) and the Tribunal - Decided in favor of assessee.
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2012 (8) TMI 461
Validity of reopening of assessment u/s 148 beyond a period of 4 years - offshore supply contracts and offshore service contracts - Russian company - tax on offshore service contracts paid applying S44BBB however assessee contended that offshore supply contracts were not chargeable to tax in India - assessment reopened on ground that Section 44BBB refers to turnkey project and hence offshore supply contracts are subject to tax - AY 04-05 - Held that:- In the present case, the reasons recorded for reopening of the assessment by the notice dated 28/3/2011 itself records that the receipts on account of the four offshore supply contracts was treated as exempt in the assessment proceedings. Further, though the reasons record that the petitioner had not disclosed proper income in his return of income, it does not allege that there was any failure on the part of the petitioner to fully and truly disclose all material facts necessary for the assessment. This is particularly so as the four offshore supply contracts were the subject matter of consideration and were duly considered while passing the order dated 31/12/2008 under Section 143 r.w.s. 147. Therefore, the impugned notice u/s 148 is merely on account of change of opinion as no fresh tangible material was available with the AO to issue the impugned notice - Decided in favor of assessee
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2012 (8) TMI 460
Computation of export profit allowable for deduction u/s 80HHC - appellant claimed deduction of export profit u/s.80HHC on the export profit calculated with reference to the export turnover and total turnover of one unit alone - assessee has two units - Held that:- The appellant being engaged in the business of tea, is not involved in the business of any other goods. The tea produced by the assessee is subjected to export as also local sale. The "goods" which would assume significance by the words employed in Section 80HHC is "tea" alone. In arriving at the allowable deduction under Section 80HHC, the export turnover to be taken is of tea. The total turnover is also of tea; since the goods, subject to export, is exclusively tea. The distinction or division now attempted by the assessee with respect to the estates in Assam and South India is artificial and not permissible under the provision - there cannot be any option for the lower denominator being the total turnover of the one unit alone as the proportion of business profits to be computed for arriving at the allowable deduction has to be made on the proportion of export turnover over of tea to the total turnover of tea. There can be no distinction between tea produced in two different units - what is applicable would be sub-section (3)(b) and that too the total turnover will be entire business turnover - against assessee. Computation of relief u/s 32AB - Tribunal's finding that interest income cannot be treated as "profit" for the purpose of computation of relief - Held that:- As decided in Parry Agro Industries Limited Versus CIT [2006 (7) TMI 128 - KERALA HIGH COURT] the assessee was not entitled to include interest income as profits of eligible business or profession for computing the deduction under Section 32AB - against assessee. Computation of depreciation while computing deduction under Section 32AB - assessee contested to take period of 32 months - Held that:- Under Section 32AB eligible profits are arrived at after deducting depreciation computed in accordance with the provisions of Section 32(1) - The amount that had been computed u/s 32(1) for the relevant assessment year with respect to the previous year comprising of 21 months is the depreciation for a period of 21 months. In such circumstance, the depreciation for the purpose of Section 32AB cannot be limited to 12 months. The assessee's contention is that depreciation allowable under Section 32(1) is to be to the depreciation determined for 21 months. However, in computation of Section 32AB, the same shall be limited to 12 months. The contention is only to be rejected - against assessee. Disallowance to expenditure incurred to accommodate touring employees - Held that:- Considering the facts of case in the years 1989-90 and 1990-91 where the claim was allowed it can be concluded in the period in question the facts would clearly show that in the said year the assessee had maintained two guest houses, named as "Rochdale House" and "Mounmion House". It was in such circumstance that expenditure was disallowed as it has been covered under Section 37(3) - against assessee.
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2012 (8) TMI 459
Shortfall of T.D.S - Claim of the payment by assessee hospital to be professional fees to 15 doctors - AO held that there existed a relationship of employer and employee and payments made to the doctors were in the nature of `fixed salary and guaranteed money to consultant/doctors' - Held that:- The Tribunal took into account all the relevant aspects from the material on record that the 15 consultant-doctors in question were not entitled to any service benefits and further they were required to take professional indemnity insurance on their own to arrive at a conclusion that the consultant doctors were not getting salary, but the payment to them was in nature of professional fees. The contract with them by the assessee was one of contract `for service' and `not of service'. Therefore, tax was being rightly deducted at source under section 194J and section 192 of the Act had no application As the consultant doctors had filed their individual returns of their income showing professional fees received from the assessee and on that they had paid tax there was no loss to the Revenue. In such facts and circumstances, the Tribunal correctly concluded that charging interest was not justified - in favour of assessee.
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2012 (8) TMI 458
Non deduction of TDS on Charter hire payments to Foreign Shipping Company - Reopening of assessment u/s 147 - Held that:- The assessee has paid hire charges for the services rendered by the foreign shipping companies which is income in the hands of foreign shipping companies for the services rendered in India. The assessee has not placed on record any document to show that foreign shipping companies were exempted by DTAA from payment of tax. As per the provisions of section 195 it was the duty of the assessee to deduct tax at source before making payment to the foreign shipping companies/(non-resident) - against assessee. As the assessee cannot be considered as “assessee representative” under the provisions of section 163 but at the same time is also not complying with the provisions of section 195 against which the department has already initiated proceedings under the provisions of section 201 - The assessee cannot be allowed to take benefit of both the provisions of the Act to get away from the tax liability. Period of Limitation - as notice issued within the time limit but served after expiry of the time limitation cannot be held to be invalid - the Assessing Officer had valid reasons for reopening the assessment, as the income chargeable to tax had escaped assessment - against assessee.
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2012 (8) TMI 457
Denail of registration u/s.12A - Held that:- The assessee has come up into existence in pursuance of decision of Government of Maharastra to provide certain assistance to the public at large in the matter of various administrative works in various Government Offices at a nominal charge as a social obligation - while providing facilities like Telephone calls, Xerox etc., the society collects suitable service charges from the beneficiaries of such services to meet the expenses. Such service charges cannot be termed as involving carrying of any activity in the nature of trade/commerce or business or any activity of rendering any services in relation to any trade/commerce or business so as to disentitle the assessee society the benefit of registration u/s.12A/12AA. As no orders were passed by CIT on application filed on 04-05-2006 within a period of six months, the registration is deemed to have been granted to the appellant and in the circumstances the learned CIT ought to have granted registration to the appellant from date of its inception - in favour of assessee.
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2012 (8) TMI 456
Unexplained investment u/s 69 - Held that:- Considering the additional evidence submitted by the assessee that the investment in the flat has been made from the disclosed bank account & the deposits in the said bank account are out of sale proceeds of agriculture produce it is necessary to examine the credits in the bank account and agriculture income derived by the assessee - as the said bank account was not examined either by the A.O. or by the ld. CIT(A) it fair and reasonable that the matter should go back to the file of the A.O.to decide the same afresh - in favour of assessee for statistical purposes. Addition made on account of low withdrawal - Held that:- No dispute that the A.O., without providing any opportunity to the assessee in respect of the Inspector’s report, estimated the household expenses as Rs. 1,20,000/- per year and has not considered the fact that the assessee got married on 18-11-2005 it fair and reasonable that the matter should go back to the file of the A.O. to decide the same afresh - in favour of assessee for statistical purposes.
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2012 (8) TMI 455
Disallowance of expenses - salary, professional fees, compensation amount etc. - Held that:- The A.O. without pointing out any specific item of disallowable nature has made disallowance of Rs. 2 lacs on estimate basis and for the balance expenses, the A.O. enhanced the same in the work-in-progress. Since the expenses have been incurred for the purpose of business expenses and genuineness of the same has not been doubted the CIT(A) was fully justified in deleting the same. The grounds taken by the Revenue are therefore rejected - in favour of assessee. Addition to the income as not incidental to development activity of the uncompleted project - receipts on account of rent, maintenance charges and sale of scrap - Held that:- In the absence of any nexus in respect of rent from tenants and scrap sales of the project the ld. CIT(A) was not justified in treating the same as part of the work-in-progress thus accordingly the rent from tenants and scrap sales are to be treated as income of the year under consideration - against assessee.
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2012 (8) TMI 454
Treatment to sales tax set-off/refund & interest refund - part of business profit or not while calculating deduction u/s 80HHC ? - Held that:- As decided in Alfa Laval India Ltd. Versus Deputy Commissioner of Income-Tax [2003 (9) TMI 43 - BOMBAY HIGH COURT] the interest from customers and sales tax set off received by the assessee being assessed as part of the business profits under the head ‘profits and gains of business or profession’, the same could not be excluded while calculating deduction under section 80 HHC - in the absence of any distinguishing feature brought on record by the Revenue direction to the AO not to exclude the sales tax refund while calculating the deduction under section 80HHC of the Act - no mistake in the order of the Tribunal in terms of section 254(2) of the Act and accordingly the Misc. Petition filed by the Revenue is rejected - in favour of assessee.
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2012 (8) TMI 453
Disallowance of claim u/s 80 IB - the assessee does not fulfil the requirement of employing 10 or more workers in the manufacturing process during the relevant financial year - assessee has employed 11 persons in the factory including 2 Watchmen, 1 Accountant–cum-Factory Manager - Held that:- The watchmen in their statement recorded by the AO had stated that they are also performing the duties like packaging, preparing gate pass, maintaining attendance register etc., clearly shows that they are engaged in the activity of manufacturing process carried out by the assessee in the factory. Similarly, the factory manager performing the activity of supervising and managing the manufacturing process and therefore, the same are integral part of manufacturing process - assessee has complied with the conditions of employing 10 workers - in favour of assessee.
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2012 (8) TMI 452
Treating the sale consideration as bogus cash credits - Held that:- Not only that assessee also had number of transaction including speculation profits in stock market and conduct of assessee shows that he is a regular investor. In the absence of any specific information about assessee’s transactions being bogus, the general inquiry made by the Department in a particular broker’s case cannot be accepted at face value that assessee’s transactions are also bogus - There were letters about the delivery of shares and sub Division of Shares and these evidences against the same broker cannot be ignored. As the CIT (A) extracted the cross examination, incidentally by the same AR, in another case with reference to another broker who is not at all connected to assessee’s transactions and confirmed the action of AO. Therefore it is a fit case to restore the matter to the file of AO to examine the contentions - in favour of assessee for statistical purposes.
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2012 (8) TMI 451
Disallowance of commission paid against the exports - Held that:- Unable to agree with the action of AO for disallowance for the reason that he did not disprove the contention that the commission was paid as part of the export sales and invoice do contain the rate of commission. It was also not in dispute that the rate of commission has been decided at the time of shipment of goods and is reflected in the corresponding shipping bill - the commission agents have rendered the services and commissions are being allowed in earlier years thus it is unable to understand why the commission was disallowed on adhoc basis, just because on few of the export invoices commission was paid at 6% - against revenue. Disallowance of expenditure - Held that:- As assessee has not produced supporting evidence no reason to interfere with the orders of AO and the CIT (A) - there was similar disallowances in all those years also - against assessee.
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2012 (8) TMI 450
Rate at which tax is leviable - AO's action of taxing the Appellant at the rate normally applicable to non-resident companies - Held that:- As assessee’s appeal is stated to be covered against the assessee by the decision of the Tribunal in assessee’s own case as charging of the assessee as foreign banking company at higher rate applicable to non-domestic company was not hit by non-discrimination clause of Article-25 of DTAA - Insertion of Explanation to section 90 makes it clear that a higher rate of law for foreign companies is not to be regarded as violating non-discrimination clause - against assessee. Disallowance of interest payable on inter office accounts - non deduction of tax at sources - Held that:- The interest paid to the head office of the assessee bank by its Indian branch cannot be taxed in India in the hands of assessee bank, a foreign enterprise being payment to self which cannot give rise to income that is taxable in India as per the domestic law - as interest paid by the Indian branch is not chargeable to tax in India, it follows that the provisions of section 195 would not be attracted and there being no failure to deduct tax at source from the said payment of interest made by the PE - in favour of assessee. TP Adjustments - Held that:- Considering the assessee submission that direct salary cost should be considered and indirect overhead cost should not be considered as concerned employees performed insignificant role for the credit monitoring assistance done for the overseas associate enterprises. However no fresh ECB loans have been granted during the year under consideration but services indeed have been rendered by the assessee to its overseas entities. The cost of the two employees for this has been evaluated at ₹ 1,49,767/-, which is even admitted by the assessee. The question remains only for the allocation of indirect expenses which have been estimated by CIT(A) at ₹ 2,50,000/- and on the aggregate of salary and indirect expenses 10% mark up has been applied - partly in favour of assessee. Liability u/s.234b & 234C - Held that:- CIT(A) has deleted the interest levied on the assessee under section 234B & 234C on the ground as that the entire income of the assessee was subject to deduction of tax at source under section 195 therefore, there was no liability to pay advance tax under section 208/209 (1)(d) - in favour of assessee.
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2012 (8) TMI 449
Disallowance of claim of revenue expenditure - charges for shifting of the windmill - Held that:- It is an admitted position that the expenditure in question relates to payment of fee to TNEB and not of shifting expenses as stated by AO - as both the parties have not brought the copy of the agreement entered into by the assessee with TNEB the lower authorities have not looked into the purpose for which the expenditure in question was incurred and has not brought relevant materials on record - restore this issue back to the file of the Assessing Officer for proper verification - in favour of assessee by way of remand.
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2012 (8) TMI 448
Rejection of registration under section 12AA - the activities of the trust are partly religious and partly charitable - Held that:- Section 12AA does not make any difference between the Trusts created with the object of Charitable and religious purposes and even if the Trust is not created with both the objects, law does not make any disqualification for the trust to make an application for registration. The assessee-trust had applied for initial certificate of exemption under section.80G(5) on 09.03.2011 along with application for grant of registration under section.12AA the CIT’s order that only ground for rejecting the assessee’s application has been that under section 12AA as well, the application for registration has been rejected vide order of even date - in favour of assessee.
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2012 (8) TMI 447
Depreciation - asset concerned was not actually used for the purpose of business during the relevant previous year – Held that:- Depreciation is an allowance towards wear and tear of plant and machinery and it spreads over to a useable life for which depreciation rates have been provided under the rules. Once the asset has been purchased and is ready for use, the same is entitled to depreciation - The individual asset looses its identity and for allowing depreciation the entire block has to be considered. The ownership and the user of 'block of assets' are the criteria for claim for depreciation. The user criteria gets fulfilled at the time when the assets form part of the block of assets and once the assets are part of block of assets, they loose their individual cost or written down value. The depreciation is allowable in the entire block of asset - depreciation on dredgers is to be allowed. Disallowance of lay up cost - assessee was unable to get a contract or a business after the agreement was terminated in the year 2003 – Held that:- Expenditure which has been incurred on maintenance of plant and machinery or asset so that it is ready for use, cannot be disallowed on the ground that no business was actually done and no income has been earned. Such an expenditure has to be treated as incurred wholly and exclusively for the purpose of business
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2012 (8) TMI 434
Gift by foreign company incorporated in Singapore of shares held in Indian company to its Indian subsidiary without consideration - transfer effected before the coming into force of section 56(2)(viia) – applicant contending non-taxability u/s 45 r.w.s. 48 since the transfer was one without consideration whereas Revenue questioning genuineness of the transaction and contending the same to be with purpose of avoiding tax – Held that:- The shares dealt with are shares of a public limited company governed by the Companies Act, 1956. It is claimed that, what can be called an oral gift, was made by one corporation to another corporation. Such a form of transfer appears to be strange, unless it be one which has been set up for some purpose. It is necessary for the applicant to demonstrate before this authority that the transfer was authorized by the Articles of Association and was effected in the mode prescribed by the Articles of Association and meeting the requirements of section 82 of the Companies Act. Hence, proper enquiry by AO into the question of the genuineness and validity of the transaction is necessary. Hence forth, ruling declined Further, Section 47(i) and (iii), applies to gift by individual or a HUF or a Human Agency. A gift by a corporation to another corporation (though a subsidiary or an associate enterprise, which is always claimed to be independent for tax purposes) is a strange transaction. To postulate that a corporation can give away its assets free to another even orally can only be aiding dubious attempts at avoidance of tax payable under the Act.
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2012 (8) TMI 433
India-Mauritius DTAA – chargeability to tax of the proposed transaction of sale of shares of GSKPL, the Indian company, to GSK Pte. Singapore by applicant company being Mauritius resident and part of GSK group – Held that:- It is observed that shares were held by the applicant from the year 1993 in one and from the year 1996 in the other and had no intention to trade in those shares and they were held as investments. Hence, it is ruled that the shares held would be considered as ‘capital asset’ Taxability of capital gains arising from transfer of shares in India – Held that:- Once the asset is held to be a capital asset, its proposed sale will generate a gain that would qualify to be capital gains under the Act and under the India-Mauritius DTAC. However, capital gains that would arise would not be chargeable to tax in India in view of paragraph 4 of Article 13 of the DTAC between India and Mauritius. Applicability of transfer pricing provisions from Section 92 to Section 92F – Held that:- Even if section 92 to section 92F are machinery provisions, without resort to them, the capital gains from an international transaction cannot be determined. Only on determining whether capital gains have arisen, would the question arise whether the gain is chargeable to tax or not under the Act. The application of Section 92 cannot be kept at bay by jumping to the second stage straight away. Therefore, whether ultimately the gain or income is taxable in the country or not, Sections 92 to 92F would apply if the transaction is one coming within those provisions. Liability to withhold taxes u/s 195 – Held that:- In cases where there is no chargeability to tax, there will be no obligation to withhold. Requirement to file return of income u/s 139 – Held that:- Since the income is not taxable in this country, under the Act, there is no obligation on the applicant to file a return of income u/s 139 Applicability of Section 112 when the proposed transfer or sale of shares is not through a recognized stock exchange – Held that:- Section 112(1) would be attracted when the income of an assessee includes income chargeable under the head capital gains under the Act. In the present case, the income of the applicant would be capital gains. Once it is, Section 112 of the Act is attracted. Applicability of provisions of Section115JB – Held that:- Section 115JB overrides section 34 to 48 of the Act. So by reading section 115JB as confined in its operation to domestic companies alone, one may be doing violence to the special scheme of taxation adopted for taxing certain companies. There is no compelling reason to jettison the scheme of taxation adopted by the Act by reading down section 115JB as confined in its application to domestic companies alone. Therefore, Section 115JB(1) would equally apply to a foreign company Theory of precedents may not have strict application in proceedings before this Authority. This Authority is bound only by the decisions of the Supreme Court. The decisions of High Courts have only persuasive value. This Authority is not subordinate to any High Court for even Article 227 of the Constitution to apply. While the AAR should be slow in disagreeing with propositions of law laid down in earlier rulings, it should not be deterred from taking a contrary view if it is convinced that the earlier view is not correct.
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2012 (8) TMI 432
Validity of revisionary order passed u/s 263 dis-allowing deduction u/s 10A, invoking sub section 9 of Section 10A on ground of change in ownership - I.T. enabled services and BPO - Tribunal in AY 03-04, upheld the order passed u/s 263 on same ground - assessee contending retrospective omission of Section 10A(9) - Held that:- Purpose of Section 10A(9) was to curb the trading in incentives by shell companies, and to discourage unscrupulous shopping of EOUs and STPs. In the present case, in the year 2002, there was a change in the holding pattern by way of global re– orginasation of the business and nothing has been brought on record that such a re–orginazation was non–genuine or was solely for the purpose of shopping of STP for claiming the exemption. Also, sub–section 9 to section 10A, which has been omitted from the statute w.e.f. 1st April 2004, has to be read to be obliterated from the statute book or at least it will not have any effect from the year in which it was omitted. Thus, even if there was any change in the ownership through acquisition of shares in earlier year 2003–04, exemption u/s 10A, cannot be denied on this ground in the AY 2004–05. Further, in the present AY, no such provision was appearing in the statute and the AO was obliged to follow the law which was in force as on the first day of AY i.e., 1st April 2004; we hold that there was no error of law by the AO while allowing exemption u/s 10A in AY 2004–05 and the impugned order passed u/s 263 setting aside the assessment on the ground that deduction allowed u/s 10A is neither a correct finding nor correct in law. Order of Commissioner set aside - Decided in favor of assessee.
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2012 (8) TMI 431
Embezzlement of cash by employee in AY 84-85 - loss claimed in the year 1990-91 - dis-allowance - Held that:- Tribunal on the findings that appellant is not in the business of handling of cash; if there was any embezzlement by any employee, apart from lodging of FIR, steps could be taken to recover the amount, which is not done. Further, letter of termination of the employee, or ; any notice or ; suit to recover the amount from him was not produced. Also, there was no relationship of debtor or creditor nor the amount was lost in the course of business. Hence, Tribunal has rightly held that same cannot be allowed as deduction u/s 10(1), 36 or 37(1). Interest paid on loan taken for the purpose of business - assessee contending allowance u/s 57 - Held that:- Each item of expenditure had been discussed by CIT(A). In the absence of verification of details, such expenses could not be allowed at the appellate stage. Further, expenses were not shown in the P/L A/c and was thus not allowable - Decided against the assessee.
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2012 (8) TMI 430
Business discount claimed at 2.81% of the total sales - partial dis-allowance - revenue contended that following the past history the discount @ 2% of the sale was made admissible for deductions - Tribunal deleted the dis-allowance - Held that:- In order to claim discounts, which had increased for AY in question from 2% to 2.8% and which turned down to Rs 63,59,106/-, the insistence of the AO to verify such discounts by making an independent enquiry was justified. The discounts are offered after the scheme is prepared in accordance with the policy of the company, which may vary from year-to-year and may also depend upon the business strategy adopted to meet the market conditions. The companies do not offer discounts on adhoc basis. The amount was substantial and could not be given on adhoc treatment at the time of assessment. Matter restored to the file of AO to conduct enquiry - Decided in favour of Revenue.
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2012 (8) TMI 429
Setting aside of order of CIT passed u/s 263 making addition u/s 68 - alleged concealment of income detected during raid conducted - assessee explained the surrender of the income which he has subsequently retracted - Held that:- Tribunal has considered the relevant principles of law in interfering with the order of CIT. The Tribunal found that the assessee-respondent had sufficiently explained the retraction of his statement given on 12.12.1994. It also found that the CIT could not point out as to whether the AO had failed to work out the amount of concealed income correctly. The AO had made additions on estimate basis for all the assessment years. There was no material indicating suppression of receipts. Hence, Tribunal has not committed any error of law in setting aside the order of CIT passed u/s 263 - Decided against Revenue
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2012 (8) TMI 428
Charitable institution - withdrawal of benefit u/s 11 on ground that main donor is the Government of Andhra Pradesh and application included expenses worth of ₹ 488,49,585/- towards supply of equipment to Government Sector - Revenue contended application of income or property of the trust for the benefit of any person mentioned in Section 13(3) - Held that:- Definition of "person" u/s 2(31) includes legal authority but not Government itself. See CIT v. Dredging Corporation of India (1988 (3) TMI 29 - ANDHRA PRADESH HIGH COURT). Contention of the Revenue that by giving the machines to the Government Hospitals sec. 13(1)(c) has been violated is not correct not only because State Government is not a person, but also government cannot be said to have benefited by the machines out of the grant given by the government and given to the government Hospitals. The benefit accrues to the General Public. Non-registration under A.P. Charitable & Hindu Religious Institutions and Endowments Act, 1987 - Held that:- Once an institution is approved and granted registration u/s 12A, the department cannot refuse the registration except for violation of sec 11, 12 or 13. Therefore, eligibility for exemption u/s 11 has to be independently considered based on the provisions of the Income tax Act and not anything else. Hence, exemption u/s 11 cannot be denied merely because it is not registered under said Act Validity of reopening of assessment on suspicion based on report of C& AG (Civil) for the Govt. of AP - Held that:- AO cannot reopen the assessment merely on the basis of roving enquiry and since there is no addition with respect to the purchase of equipments the initial reason given for reopening cannot survive and the AO cannot go beyond the reasons given by him for reopening - Decided in favor of assessee
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2012 (8) TMI 427
Dividend income earned by investment company from the shares held as stock in trade - Business income or Income from other sources - set off of business loss against dividend Income - Held that:- In Investment Ltd vs CIT (1970 (4) TMI 15 - SUPREME COURT), it has been held that method of accounting regularly employed by the assessee can be discarded only if the taxing authority is of the opinion that the income earned cannot be properly deduced therefrom. The method employed by the company in valuing stock at cost and describing such stock in the balance-sheet as "investments", were held to be not decisive of the fact that the stock valued was not stock-in-trade. The finding of the first appellate authority as well as the Tribunal that the shares held by the assessee, which earned dividend income, constituted stock-in-trade; does not necessarily give rise to a question of law. The appellate authorities having concurred on facts that the dividend income earned by the assessee was eligible to be brought forward as loss of the previous years, in our opinion, cannot be interfered with in this appeal - Decided in favor of assessee.
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2012 (8) TMI 426
Exemption u/s 10(10CC) - Whether tax paid by the employer on the salaries of the employees would constitute non-monetary benefits exempt u/s 10(10CC) - Held that:- Despite prohibition contemplated in the Section 200 of Companies Act for payment of tax free remuneration to an employee, Section 10(10CC) of the Income Tax Act provides for exemption of amount which is not a monetary payment to employee and is also provided as perquisite u/s 17(2) and thereby has acknowledged that remuneration plus tax payable thereon is permissible. Therefore, the payment of tax on account of salaries of the employees not by way of monetary payment to the employees concerned, but for or on their account to the Department and the same being one of the perquisites included in Section 17(2), such payment was to be excluded from the income of the employees - Decided in favor of assessee.
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2012 (8) TMI 425
Disallowance of deduction claimed u/s 80IA - AO considered the sale price of the wind power sold by the Assessee to the TNEB at the rate of Rs.2.70 per unit through an agreement for calculating the deduction as against Rs.3.50 per unit as taken by assessee - Held that:- The rate at which the State Electricity Board supplies power to its consumers is to be considered to be the market value for transfer of power by the assessee’s electricity generating undertaking for captive consumption for the purposes of section 80IA(8) and not the price at which power is supplied by the assessee to the Board as decided in Additional Commissioner of Income-tax, Hisar Range, Hisar Versus Jindal Steel & Power Ltd. [2007 (6) TMI 308 - ITAT DELHI] - Thus the value of the power generated and consumed by the assessee will be that value that should have been paid by the assessee if the power was bought from open market. As Tamil Nadu Electricity Board sells power to the assessee in the usual course of its business and the assessee buys the power like any other consumer in the market the question of market price arises & in such a scenario the price collected by the Tamil Nadu Electricity Board is Rs.3.50 per unit and it is obvious that the market price of the power generated by the assessee is Rs.3.50 per unit as opted by assessee - in favour of assessee.
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2012 (8) TMI 424
Reopening of assessment u/s 147 - capital gains had arisen because of a sale deed executed on 13.3.1994 belongs to the AY 19994-95 & not in AY 1997-98 - Held that:- As no valid notice u/s 143(2) was issued within one year of filing of the return of income and AO without even dealing with the factual aspect of the plea has declined it by citing ‘ principle of estoppel' the same is not sustainable because the plea challenging the validity of the assessment goes to the root of the case and if the assessment itself is held to be bad in the eyes of law nothing further survives - in favour of the Assessee
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2012 (8) TMI 423
Interest income – netting of interest payment against income of fixed deposits - assessee clarified that the assessee earned interest income which also includes interest earned on fixed deposits – Held that:- CIT rejected the assessee’s claim of not only it being a business receipt/expenditure and in the alternative, he granted relief as per the provisions of S.56 of the Act - decision of the CIT is fair and it does not call for any interference Prior period expenditure - whether the said prior period expenses should be adjusted to the net profit for the purposes of S.115JA of the Act, considering the contents of parts II and III of Schedule VI of the Companies Act, 1956 – Held that:- Assessing officer directed to examine the items mentioned in said Part II and III of Schedule VI of the Companies Act, 1956 and decide afresh as to the correct treatment to be given to the impugned prior period expenses for the purposes of computing the book profit, and its adjustment for the purposes under S.115JA of the Act - Revenue’s appeal is partly allowed for statistical purposes
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2012 (8) TMI 422
Denial exemption u/s 11 of the Act – whether because of these violations as mentioned by the Assessing Officer (a) whether the appellant forfeits the entire exemption available to it or (b) whether the denial of exemption should only be proportionate to the diversion of the funds made by the appellant. - held that:- the assessee is not eligible for exemption u/ss 11 and 12 of the Act.
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2012 (8) TMI 421
Income deemed to accrue or arise in India - TDS u/s.195 of the Act – DTAA agreement - expenditure on advertisements - assessee remitted the amount towards expenses to the advertising agencies of Russia through its parent company NPS which is a resident of Switzerland – Held that:- Entire advertisement activity had been carried out outside India. There are no facts brought on record that NPS has a PE in India. Considering above facts and also the fact that there is a DTAA agreement between India and Switzerland and also between India and Russia, the said amount remitted by the assessee towards advertisements even if assessable could be assessed as business profits as per section 9 of the Act but having regard to the fact that these non-resident companies i.e. recipients and/or advertising companies have no PE in India - amount could not be taxed in India under section 5(2) of the Act - assessee has not committed any default in not deducting TDS u/s.195 on the amount remitted by it to NPS in respect of advertisement campaign launched in Russia. Whether the expenditure incurred on TV films and commercial and other promotional films is capital in nature or not – Held that:- Onus lies on the assessee to prove that the expenditure has been incurred wholly and exclusively for the purposes of its business. It is observed that said expenditure has been incurred by NPS and paid by assessee on the basis of invoices raised - no document has been brought on record that the said expenditure was incurred by NPS at the instance of the assessee wholly and exclusively for the purposes of assessee's business - expenditure cannot be allowed to have been incurred by the assessee for the purposes of its business unless assessee proves that expenditure was incurred in connection with assessee's business with some documentary evidences – matter restored to the file of the AO to decide afresh with the liberty to assessee to place such document Disallowance on account of repairs to buildings - renovation of R&D Centre - Assessing Officer did not accept the contention of assessee that expenditure represents expenses of revenue nature such as civil modifications, ceiling repairs, electrical modification, partitions, etc – Held that:- If the advantage consists merely in facilitating the assessee's trading operations or enabling the management and conduct of the assessee's business to be carried on more efficiently or more profitability while leaving the fixed capital untouched, the expenditure would be on revenue account, even though the advantage may endure for an indefinite future - expenditure incurred by assessee under the head "repairs" is on the existing assets by renovating the buildings and is revenue in nature – disallowance deleted Disallowance of deduction under section 80 HHC of the Act - assessee has not brought in sales proceeds of an amount of Rs. 1,19,06,264 within the extended period which was granted to the assessee and same is to be reduced from export turnover as per clause (b) of Explanation to Section (4C) of Section 80HHC of the Act., while computing the deduction to be allowed under section 80HHC of the Act - direct cost in respect of which goods which have been exported but the sales proceeds have not been brought in India in specified period, should be reduced while computing the deduction u/s.80HHC of the Act – addition confirmed – In favor of revenue
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2012 (8) TMI 420
Principles underlying section 44AD of the Act - Civil contractor - contract work from Government departments - Assessing Officer applied the proviso to section 145(3) and calculated the net profit at the rate of 8 per cent. of the gross contract receipt after consideration of expenses debited in the trading and the profit and loss account, depreciation and interest salary paid to the partners - as per the circular of the Board dated August 31, 1965, the gross profit should be estimated and the deductions and allowance including the depreciation allowance should be separately deducted from the gross profit. If the net profit is required to be estimated, it should be estimated subject to the allowance for depreciation and the depreciation allowance should be deducted therefrom - authorities should not apply the principles emanating section 44AD of the Act but should be guided by the binding circular of the Board - matter is remitted back to the Assessing Officer for passing a fresh order of assessment
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2012 (8) TMI 419
Scope of the term 'thereon' - Jurisdiction of the Tribunal - favorable decision - adverse findings - held that:- Hon'ble Courts have removed this confusion by explicitly mentioning that the judgment being favourable but could have an adverse finding or reasoning and that ground though against the respondent can be defended in Rule 27, nevertheless by supporting the final verdict. The interpretation of the word "grounds" is in wider sense because the same is not at par with the "ground" of appeal. The word "thereon" restricts the jurisdiction of the Tribunal to the subject matter of appeal. If this word "thereon" is to be read in conjunction with Rule 27, then the respondent is to support the order appealed against but required to confine to the subject matter of the appeal. Interestingly, in the present case though the first appellate authority has decided the issue of the applicability of the provisions of section 153C of IT Act, which was one of the ground of appeal raised by the assessee before ld. CIT(A), but even after an adverse decision of the CIT(A) on the said legal ground, no appeal was preferred by the assessee. Because of this reason, the Tribunal is not empowered to pass an order "thereon" on the subject matter which is not in appeal as per the appeal memo to be adjudicated upon. In any case, provisions of Rule 27 and the provisions of Sec. 253(4) do not over-lap each other; rather operate in two different situations.
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2012 (8) TMI 418
Validity of a decision where reasons are not recorded - held that:- Recording of reasons is a part of fair procedure. Reasons are the harbinger between the mind of the maker of the decision in the controversy and the decision or conclusion arrived at. They substitute subjectivity with objectivity. Failure to give reasons amounts to denial of justice. - Decision of Apex court in Mangalore Ganesh Beedi Works Vs. CIT and another [2005 (1) TMI 15 - SUPREME COURT] followed. Unaccounted scrap sales - alleged unaccounted scrap sales was found in the course of survey and the assessee could not produce any evidence for the argument that the same is included in the scrap sales already shown in the books of accounts – Held that:- One of the reasons for making the addition was that the assessee did not furnish any evidence to substantiate its claim that the income had already been offered to tax in the earlier years - it is not clear as to whether the earlier record which was available with the AO had been considered while taking a view that no evidence was produced by the assessee - issue back to the file of the Assessing Officer for fresh adjudication Disallowance of the travelling expenses incurred by the wife of Managing Director - AO made the disallowance by observing that the directors and their spouses travelled abroad and that travel was personal in nature - claim of the assessee is that the director of the company travelled for business purposes and his wife accompanied him – Held that:- Facts are not clear as to whether the director traveled for the business purposes - issue is remanded back to the Assessing Officer for fresh adjudication in accordance with the law, after providing due and reasonable opportunity of being heard to the assessee. Capital gains on the transfer of immovable property - possession of the land is not given as per the terms of agreement and will be handed over to the developer only after completion of the work – Held that:- claim of the assessee was that amount was received as an advance, would be offered for taxation when the sale deed gets executed - nothing is brought on record to suggest that M/s. IDEB had taken possession of the property either physically or constructively - matter remanded back to the file of the Assessing Officer for fresh adjudication
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2012 (8) TMI 417
Denial of benefit of sec. 80IB(10) – Held that:- Assessee made the contribution of his capital in the shape of land and incurred the initial expenses for development and building of housing project like sanction of plan, getting the electricity and water connection by making the payments to BWSSB and KEB etc. Therefore, merely on this basis that the assessee did not construct himself was not a ground to deny the deduction u/s 80IB(10), particularly when the assessee had undertaken the other work like making the land useful by getting it converted into non agricultural purpose and getting plan sanctioned - assessee contributed the land, undertook the developmental activities in the said land and thus complied with all other conditions which have to be fulfilled before claiming the benefit u/s 80IB(10) of the Act - assessee entitled for the benefit of deduction u/s 80IB(10) of the Act
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2012 (8) TMI 416
Whether upfront fee paid will fall within the definition of "rent" as given under Explanation to Section 194-I of the Act - upfront charges paid by the assessee for allotment of land as rent advance – Held that:- Definition of "rent" given under Explanation to Section 194-I of the Act will squarely cover the payment made by the assessee to M/s SIPCOT Ltd. and render such payment as something on which assessee was obliged to deduct tax at source. Interest under Section 201(1A) of the Act – Held that:- A.O. directed to calculate interest under Section 201(1A) of the Act, after considering the advance tax payment effected by M/s SIPCOT Ltd. and the time period involved in effecting such payment when compared to dates on which assessee was to deduct tax at source in accordance with Section 194-I of the Act - appeal filed by the assessee is dismissed
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2012 (8) TMI 415
Carry forward of unabsorbed depreciation – Held that:- The assessee having claimed the set off and carry forward of allowance of depreciation unadjusted against the profits of the current previous year cannot be denied such set off or carry forward of the unabsorbed depreciation allowance as the provisions of section 139(3) of the Act are not applicable. The assessee having filed return of income, though belatedly but within the extended period allowed under the Statute is entitled to the benefit of carry forward and set off of unabsorbed depreciation allowance as part of depreciation of the succeeding year in view of the provisions of section 32(2) of the Act and section 72(2) of the Act. The provisions of sections 80 and 139(3) of the Act are applicable to business losses and not to unabsorbed depreciation governed by section 32(2) of the Act.
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Customs
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2012 (8) TMI 477
Penalty imposed u/s 112(a) - violation of the provisions of Section 111(m) for mis-declaration of value and violation of the provisions of Exim Policy u/s 111(d) - import of cars not in the possession of the importers for a period of one year - assessee contesting penalty and confiscation of car - Held that:- Since importers nor other parties on whom the penal proceedings were initiated, have filed any appeal against the adjudication order, therefore, it is presumed that they have no grievances against the order of confiscation and imposition of fine and penalties. It is undisputed that appellant was fully aware that the cars which were being imported were not in the possession of the importers for a period of one year, still he undertook to execute the instructions given by the Dubai supplier and arranged for the CHA. Since, appellant's knowledge and connivance in the entire transaction of importing second-hand cars without fulfilling the terms and conditions of the import stand clearly established. Therefore, penalty imposed on the appellant u/s 112(a) is fully justified - Decided against assessee.
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2012 (8) TMI 446
Refund claim for Redemption find and penalty - Held that:- As Tribunal has ordered for redemption fine and penalty of 10% and 5% of assessed value no room for any interpretation that it does not relate to assessable value of the goods. In case of Sl. No. 7 to 8, the quantum of redemption fine and penalty is more than the quantum of penalty imposed at the initial stage the redemption fine and penalty imposed should be restored to the redemption fine and penalty imposed initially - partly in favour of assessee.
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2012 (8) TMI 445
Denial of benefit of Project Import Regulations, 1986 - increase of more than 25% in the installed capacity is not achieved - Held that:- The appellant filed the memorandum with the Secretariat of Industrial Approval, Ministry of Industry for substantial expansion of the Project Import from 8.63 lacs tons per annum to 11.29 lacs tons per annum on 18.9.1992 as per Project Import Regulations, 1986, they have started substantial expansion of their project in the first phase by procuring indigenous components and later on when they need for imported components they registered themselves with the Customs department as per Regulation 5 of the Project Import Regulations, 1986. In that view the date of installed capacity is to be taken as the date when the appellant filed the memorandum with the Secretariat of Industrial Approval in the Ministry of Industry. If the appellant filed the contract for import of the imported components at the first stage expansion then the appellants are entitled for the benefit of the Project Import Regulations, 1986 under the Customs Tariff Heading 98.01, but if they filed the contract in second phase they are not entitled this is not acceptable, thus the appellants are entitled for the benefit of the Project Import in the second phase also. As appellant has complied with the condition of the Project Import Regulations, 1986 therefore the appellants have not violated the provisions of Section 111 (o) of the Customs Act, 1962. Therefore, the 170 computers against which the duty has been confirmed are not liable for confiscation. When the goods are not liable for confiscation, penalty under Section 112 ibid is not leviable. Accordingly, redemption fine and penalty are also set aside. As the appellant has conceded to the demand of 170 computers which were installed in their factory, therefore the demand against those computers which are in their office is confirmed.
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2012 (8) TMI 414
Fiscal Penalty imposed for alleged violation of provisions of Section 11(2) of the Foreign Trade (Development & Regulation) Act, 1992 on nominee directors - failure to fulfill the export obligation under DEPB licenses - Held that:- It is relevant to note that neither in the showcause notice it is alleged nor in the orders impugned in the petition any finding is recorded to the effect that the petitioner, a nominee director had aided or abeted in contravening the provisions of the Act. In the absence of any such finding recorded, imposition of penalty on the petitioner nominee director on the ground that the petitioner has violated Section 11(2) of the 1992 Act cannot be sustained - Decided in favor of petitioner
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2012 (8) TMI 413
Claim of refund on the differential amount of duty paid - Commissioner (Appeals) re-remanded the matter - Held that:- The power of remand by the Commissioner (Appeals) has been taken away by amendment to Section 128 of Customs Act, 1962 w.e.f. 11-5-2001, thus Commissioner (Appeals) have to decide the issue himself instead of remanding the matter the lower authority.
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Corporate Laws
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2012 (8) TMI 475
Winding up – alleged that company unable to pay its debts - appellant supplied certain goods to a company – Agreement provided for a guarantee clause that defective goods were to be replaced by appellant - Some of goods were rejected by respondent and appellant agreed to replace same but goods were not returned and a balance amount was due to respondent – Held that:- Before service of statutory notice when the company raised dispute with regard to the quality and quantity the same is good enough not to pass an order of winding up - since agreement provided for replacement of inferior quality goods but in instant case after rejection of goods there was no demand for replacement of same, respondent could not take advantage of its own breach and withhold balance amount on plea of loss and damages having been incurred – Company shall furnish security by way of bank guarantee
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2012 (8) TMI 444
Winding up – Held that:- If the company refuses to pay, without good reason, it should not be able to avoid the statutory demand by proving at the statutory demand stage, that it is solvent. In other words, commercial solvency can be seen as relevant as to whether there was a dispute as to the debt, not as a ground in itself, that means it cannot be characterised as a stand alone ground - IBA Health (I) (P.) Ltd. (2010 (9) TMI 229 - SUPREME COURT OF INDIA). Once the legal fiction under section 434(1)(a) of the Act operates, and there is no bona fide dispute regarding the debt due, the necessary consequence is that the respondent-company must be deemed to be unable to pay its debt necessitating - winding up petition admitted.
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2012 (8) TMI 412
Winding up – application for cancelation of sale of the property which is mortgaged to the applicant-Corporation - applicant financed the 1st respondent company - Similarly the 2nd respondent K.S.I.I.D.C, had also financed the 1st respondent – Held that:- Proceedings, the 2nd respondent K.S.I.I.D.C. had filed an application to stand outside the winding up and recover the amounts due to it - K.S.I.I.D.C., initiated steps for sale of the properties belonging to the company in liquidation - applicant cannot make out any grievance in the instant application inasmuch as they have concerned to the entire process of sale by K.S.I.I.D.C. - It is in the presence of the 2nd respondent, this Court disposed of the said application on 15-6-2006 conforming the sale of the property – application dismissed
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Service Tax
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2012 (8) TMI 501
Commercial coaching and training services - alleged training of employees outside India as well as in India through availing services of parent company - demand imposed under the reverse charge mechanism for the services availed from foreign service provider - assessee contended that expenditure incurred in the foreign exchange are not for training purpose but are only towards travel, accommodation and other expenses - Held that:- Contention of the respondent has not been controverted by any supporting evidence by the Revenue. Hence, respondents are not liable to pay any service tax under reverse charge mechanism on the services availed by them from their parent company as they have not paid any remuneration for the training charges. If at all any charges were paid for training outside India is not chargeable to service tax as per provisions of Taxation of Services (Provided from outside India and received in India) Rules, 2006 - Decided against Revenue.
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2012 (8) TMI 500
Refund Claim of Service Tax paid on services consumed within the SEZ and services which were used in the authorized operations of the SEZ units - partial denial on ground of absence of nexus and non-application of Notification No. 09/2009-ST - Held that:- Approval Committee, examined this issue and had issued a specific certificate indicating the various services received by the appellant and justification for use of such services in relation to authorized operations. Once the Approval Committee has given the nexus and the justification, rejection by the lower authorities of the refund claims of the service tax paid on various services on this ground is bad in law and is accordingly set aside. In the case of services which are wholly consumed within the SEZ, there is no necessity to discharge the service tax liability ab initio. That does not mean that in a case where service tax liability has been discharged, the appellant is not eligible or not entitled for refund of the service tax paid under the provisions of Section 11B of the Central Excise Act, 1944 r.w.s. 83 of the Finance Act, 1994. If the appellant is eligible for refund u/s 11B, then the same cannot be denied on the ground that the claim was made under Notification No. 09/2009-ST - Decided in favor of assessee.
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2012 (8) TMI 499
Short payment of service tax and delay in payment - Held that:- The strict procedure of applying for provisional assessments or refund may not be applied in this case considering the facts that this was initial period of service tax levy and procedures had to evolve and settle As the impugned service tax was always collected along with the bill amount and the money was always lying in the account of GOI a Department of GOI during the relevant period, was constrained in its method of collection of bills including service tax and adjustment thereof from one account of the GOI to the account of GOI for receiving service tax due to instructions issued by GOI, thus the amounts paid by customers inclusive of service tax were always in Government account and this is a matter of just adjustment of money from one account of GOI to another account of GOI. The short payment of tax for the disputed period is also very small - as the excess payment of tax deposited by the respondent for subsequent period was admittedly provisional there is no tax due from the respondent in the impugned matter - no need to collect any interest in the case of delay in deposit of service tax by Department of Post - in favour of assessee.
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2012 (8) TMI 498
Revisionary proceedings by the Commissioner under Section 84 of the Act – whether Appellate Tribunal does not have jurisdiction to entertain the appeals filed against revisionary orders passed by Commissioners after 19.8.2009 – Held that:- Order passed by the Commissioner in such revision proceedings under the old Section 84 of the Act would be appealable to this Appellate Tribunal as if the words and figures "or section 84" had not been omitted from sub-section (1) of Section 86 of the Act - lis between the Department and the assessees commenced on the dates of institution of the revision proceedings and the law prevailing on such dates would govern the maintainability of appeals against the orders-in-revision - appeals are maintainable before this Appellate Tribunal
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2012 (8) TMI 470
Rejection of refund claim in terms of Notification No.41/2007-ST dated 6.10.2007 - on challenge Commissioner (Appeals remanded the matter to the lower authority - Held that:- Considering the amended Section 35A w.e.f. 11-5-2001 under the Finance Act, 1994 Commissioner (Appeals) is not empowered to remand the matter and he has to decide the matter by himself, therefore the order of Commissioner (Appeals) remanding the case to the lower authority, is not sustainable. Thus the Commissioner (Appeals) is certainly entitled to set aside order passed by the Adjudicating Authority and thereupon pass an appropriate order on merits by himself but not to remand the matter. Being so, Commissioner (Appeals) dealing with the appeals in relation to the service tax also is not empowered to remand the matter but he has to decide the matter by himself - remand the matter to the lower adjudicating authority making such further inquiry as may be necessary.
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2012 (8) TMI 469
Power of the Commissioner (Appeals) to remand - export of Business Support Service - refund claim under Rule 5 of CENVAT Credit Rules 2004 read with Notification No. 5/2006 dated 14.3.2006 on input services used in the export of output services – Held that:- The Commissioner (Appeals) has examined and found nexus between the input services and the output services and has clearly rendered reasons for the same. In effect, the Commissioner (Appeals) has not remitted any issue on merits to be decided by the original authority. It is basically for quantification purposes as envisaged in the Board's Circular dated 19.1.2010. - Decided against the Revenue.
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2012 (8) TMI 468
Manufacturing of Ready Mix Concrete - revenue contended the same to be Commercial & Industrial Construction Services - assessee contended that this activity is part of the sale transaction and it is not part of any construction services - Held that:- Tribunal in case of GMK Concrete Mixing (P.) Ltd. v. CST (2011 (11) TMI 425 - CESTAT, NEW DELHI) held that contract between the parties was to supply ready mix concrete (RMC) but not to provide any taxable service. Finance Act, 1994 not being a law relating to commodity taxation but services are declared to be taxable under this law, the adjudication made under mistake of fact and law fails. In view of aforesaid we allow the appeal by setting aside the impugned order.
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2012 (8) TMI 467
Exemption relating to management, maintenance or repair of roads introduced by section 97(1) of the Finance Act, 2012 - Held that:- In view of the amended provision introduced by the Finance Act, 2012, and since case of the appellants is covered by the special provision for exemption, impugned demand does not survive - Decided in favor of assessee
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2012 (8) TMI 437
Transportation of cargo by air - default in payment of service tax - assessee contested against invoking the extended period of limitation - Held that:- The appellants were liable to pay service tax for the reason that they were not eligible for the benefit of the Export of Service Rules, 2005 based on the reasoning that the service was performed in India & that during the period from 15.3.2005 to 15.7.2005 the period during which the exemption as was available in Notf.No. 28/2004-ST dated 17.9.2004 was rescinded but not re-stored - Thus the appellants could not get waiver from service tax on such services during the period 16.6.2005 (Date on which Notf 28/2005-ST took effect) to 23.6.2005 (Appellant started paying service tax from 24-06-2005). As during the period 15-06-2005 to 23-06-2005, the appellant was not able to collect taxes from the customers cannot a reason to waive the liability or to consider that the appellant had bonafide belief that tax was not payable for the said period, thus the extended period of time can be invoked in this case. Invocation of Section 80 - Held that:- Considering the legislative history of notifications like notification 28/2004-ST dated 17-09-2004, 9/2005-ST dated 03-03-2005 and 28/2005-ST dated 07-06-2005 and Notification 29/2005-ST dated 15-07-2005 would justify invoking section 80 - all the penalties imposed on the appellant is set aside
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2012 (8) TMI 436
Non-registration with the Service Tax Department and failure to pay service tax - Held that:- As Commissioner (Appeals) set aside the order passed by the adjudicating authority confirming the demand & penalty and remanded the matter for denovo adjudication is not correct as that by an amendment to Section 35A of Central Excise Act, 1944 w.e.f. 11.5.2011, the power of remand has been specifically withdrawn by the legislature - the embargo on the power of remand in Section 35A is squarely applicable to the provisions of Section 85 of the Finance Act, 1994.
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2012 (8) TMI 435
Rejection of refund claim in terms of Notification No.41/2007-ST dated 6.10.2007 - appellants did not submit the requisite documents before the sanctioning authority for examination - on challenge Commissioner (Appeals remanded the matter to the lower authority - Held that:- Considering the amended Section 35A w.e.f. 11-5-2001 under the Finance Act, 1994 Commissioner (Appeals) is not empowered to remand the matter and he has to decide the matter by himself, therefore the order of Commissioner (Appeals) remanding the case to the lower authority, is not sustainable. Thus the Commissioner (Appeals) is certainly entitled to set aside order passed by the Adjudicating Authority and thereupon pass an appropriate order on merits by himself but not to remand the matter. Being so, Commissioner (Appeals) dealing with the appeals in relation to the service tax also is not empowered to remand the matter but he has to decide the matter by himself - remand the matter to the lower adjudicating authority making such further inquiry as may be necessary.
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Central Excise
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2012 (8) TMI 474
Alleged suppression of assessable value of the goods - assessee engaged in manufacturing of M.S.pipes undertook job work of fabrication of M.S.pipes at the site provided by Essar Projects Limited - Revenue contended mis-declaration and non-disclosure on ground that goods cleared were exclusive of cost of free facilities provided by the supplier of inputs - extended period of limitation - Held that:- Tribunal observed that it could be seen from the challan/ invoice that the address given therein was c/o Essar Projects Ltd and the description of the goods was specifically stated as 'M.S. Fabricated pipes from your supplied free issue material' on job work basis. Scope of the work of the assessee as well as that of the Essar was indicated in the work order, hence the same was within knowledge of the Revenue. Therefore, SCN could not have been issued as it was time barred. Further, pipes were captively consumed by Essar. In the facts and circumstances, it is confirmed that there was no suppression with intention to evade duty - Decided in favor of assessee.
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2012 (8) TMI 473
Cenvat credit on inputs received from 100% EOU - appellants availing full Cenvat credit of CVD, Education Cess, Secondary and Higher Education Cess - Revenue contending inadmissibility in view of in view of Rule 3 of the Cenvat Credit Rules - Held that:- It is the fact that the SCN was issued on 30.3.2010 demanding the cenvat credit for the period May, 2007 to October, 2008 i.e. beyond the period of one year. The appellants were relying on the decisions in the case of Shreya Pets Pvt.Ltd. vs. CCE, Hyderabad (2008 (9) TMI 351 - CESTAT, BANGLORE ) and others which were issued prior to the issue of SCN. Therefore, appellants were under bona fide belief that Cenvat credit is admissible on Education cess and Secondary and Higher Education cess even for the period prior to the amendment has considerable force. Order set aside - Decided in favor of assessee.
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2012 (8) TMI 472
Entitlement of interest on delayed payment for sanction of refund of the rebate claim by the adjudicating authority - revenue contending that appeal regarding rebate claim is not maintainable before this Tribunal - Held that:- Since it is a case of interest on rebate claim and the same is maintainable before this Tribunal. Further, Supreme Court held in case of Ranbaxy Laboratories Ltd. Vs. UOI (2011 (10) TMI 16 - SUPREME COURT OF INDIA) that interest has to be paid on delayed sanction of refund claim after three months of the date of filing of the refund claim. Therefore, the issue is no more res integra. The appellants are entitled for interest on delayed sanction of rebate claim. Appeal allowed in favor of assessee.
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2012 (8) TMI 471
Penalty u/s 11AC for belated payment of excise duty during the period January, 2009 to March, 2009 - belated filing of returns during period January, 2009 to June, 2009 - assessee pleaded financial crisis - Held that:- It is no doubt that the appellant did not pay duty in time, they also did not file the return in time, but when they filed the return and thereafter they made the payment of entire amount of duty along with interest. Therefore, penalty u/s 11AC is dropped but, as the appellant has contravened the provisions of law, they are liable to pay the penalty under Rule 27 of the Central Excise Rules, 2002 - Appeal is partly allowed with consequential relief.
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2012 (8) TMI 443
Violation of the principles of natural justice - alleged wrong availment of cenvat credit since inputs received indicated in specified invoices were never received - assessee contending that the entire case of the Revenue is based upon the statements of four brokers who were not issued any SCN for imposition of penalty under Rule 26 nor they were made an accused in any proceedings, also no opportunity being given of cross-examination of the said brokers - Held that:- This seems an incorrect proposition of law, as when the appellant has submitted that the main supplier has factory to manufacture and clear the inputs on payment of duty and the goods have been transported through road to the factory, than the only evidence available with the department is the statements of the brokers who are third party and they need to be examined or cross-examined for testing the veracity of the statements. Accordingly, impugned order is set aside and matter remanded back to the adjudicating authority to reconsider the issue afresh and also producing the four brokers for cross-examination.
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2012 (8) TMI 442
GTA Services - dis-allowance of cenvat credit of the service tax paid on GTA Services under reverse charge mechanism - period March 2007 and thereafter - Held that:- It is found that prior to 01.03.08 any service tax paid by the assessee under reverse charge mechanism on GTA services, was eligible for availment of cenvat credit. Reliance placed on Nahar Industrial Enterprises (2010 (5) TMI 608 - PUNJAB AND HARYANA HIGH COURT ). However, in respect of period post 01.03.08, since definition of the output services has undergone a change, and there is no specific quantification post 01.03.08 in the material period in this appeal, matter remanded back for only limited purpose of quantifying the amount of service tax credit availed by the appellant during the period 01.03.08 to 31.03.08. The appellant is required to reverse the said amount immediately as soon as being informed to him by the authority along with interest. Penalty - Since the issue involved in this case is a question of interpretation, no penalties are liable to be imposed on the appellant as major portion of the demand has been set aside.
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2012 (8) TMI 441
Non eligibility to avail cenvat credit of the inputs lying in stocks - non filing of intimation as to declaration filed was a final one - Held that:- As the last date for availment of such credit and filing the declaration has been extended till 30.06.03 - the appellant had filed one declaration on 07.04.03 and subsequent declaration on 29.04.03 and no further declaration filed ,thus the declaration made by the appellant on 29.04.03 should have been considered as the final declaration and the Revenue Authorities should have at least allowed credit of the stocks as declared by him on 29.04.03 - in favour of assessee.
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2012 (8) TMI 440
Condonation of delay of 11 years 2 months in filing appeal - Held that:- The reason shown as pursuing the wrong remedy by filing a Review Application before the Commissioner (Appeals) in spite of being guided in the preamble to the Order-in-Appeal resulting into an inordinate delay is not a sufficient cause warranting condonation - assessee could not able to show their bonafideness nor could able to demonstrate sufficient cause for condonation of delay - against assessee.
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2012 (8) TMI 411
Cenvat credit on input services - manufacture of both taxable and exempted products - non-maintenance of separate accounts - period involved April 2008 to December 2008 - assesee contended application of retrospective amendment in CENVAT Credit Rule (6) done by Section 73 of Finance Act, 2010 to the period involved and reversal of credit attributable to the inputs used in the manufacture of the exempted products as sufficient discharge of their liability - Held that:- Matter has to be re-examined by the adjudicating authority in the light of retrospective amendment in Rules along with the application filed by the Appellants under Section 73 of Finance Act, 2010. Appeal allowed by way of remand
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2012 (8) TMI 410
Captive Consumption - benefit of Notification No.67/95-CE dated 16.03.1995 - denial - assessee engaged in the manufacture of sponge iron and steel billets out of the sponge iron, had taken separate registration for these commodities, though manufactured in the same factory premises but located at different parts in the said factory premises - issue decided against appellant in remand proceedings - Held that:- Even though both these units are having separate Central Excise registration, but being situated in the same factory premises, the benefit of exemption Notification No.67/95-CE cannot be denied to the sponge iron manufactured in one unit and consumed in the manufacture of billets in another unit. Consequently, the order of the Commissioner is set aside and the appeal of appellant is allowed
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2012 (8) TMI 409
Claim for remission of duty for the breakage and losses - rejection - appellants engaged in the manufacture of aerated water under chapter 22 of C.E.T.A., 1985 contended that breakage is ranging from 0.06% to 0.01% which is much less than the limit of 0.5% prescribed by the Board vide Circular No.1D/3/70-CX.8 dated 08.09.1971 - Held that:- It is found that department has not challenged the aspect that the appellants are regularly showing the quantum of loss due to breakage etc. in their periodical return filed by them. Nothing prevented the department to carry out the physical verification and it is not the case of the department that the loss due to breakage etc. was over and above the limit prescribed by the Board. We also find that this Tribunal for the earlier period has already allowed the appeal of the appellant, therefore, the decision of Commissioner is not sustainable and the same is set aside and appeal is allowed.
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2012 (8) TMI 408
GTA Services - dis-allowance of cenvat credit of the service tax paid on GTA Services under reverse charge mechanism - period March 2007 - Held that:- Issue is no more res-integra. It is found that prior to 01.03.08 any service tax paid by the assessee under reverse charge mechanism on GTA services, was eligible for availment of cenvat credit. See Nahar Industrial Enterprises (2010 (5) TMI 608 - PUNJAB AND HARYANA HIGH COURT ) - Decided in favor of assessee.
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CST, VAT & Sales Tax
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2012 (8) TMI 438
Taxability of non-prescription sunglasses - at 4% as under the schedule entry C-107(8) read with Notification dated 23rd November, 2005 or at 12.5% under residuary entry E-1 of the schedule to the 2002 Act - Held that:- As per item 5 of the notification dated 23rd November, 2005 corrective spectacles as also protective spectacles are liable to be considered as medical device - If the Legislature in its wisdom has included the sunglasses within the category of “Medical Devices and Implants” covered under entry C-107(8) by issuing a notification on 23rd November, 2005, it would not be open to the Commissioner of Sales Tax to hold that non prescriptive sunglasses are not medical devices and hence not covered under the notification dated 23rd November, 2005 The decision of the Tribunal that the items in question viz. protective sunglasses covered under notification dated 23rd November, 2005 are liable to be treated as medical device up to the date of its amendment on 27th April, 2011, cannot be faulted as with effect from 1st May, 2011 by notification dated 27th April, 2011 by substituting the words 'corrective spectacles' in place of the words 'spectacles', correctives, protective or other' - in favour of assessee.
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Wealth tax
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2012 (8) TMI 439
Rejection of application for registration as a valuer of plant and machinery u/s 34AB of the Wealth Tax Act - Held that:- The degree in production engineering as possessed by the assessee has been recognized as a qualification equivalent to a degree in mechanical or electrical engineering for appointment to superior services and posts of Central Government as prescribed under Rule 8A (8)(i) of the Wealth Tax Rules, 1957 - The application dated 26th June, 2011 being rejected only on the ground that the previous application had been rejected - being a fresh application, the Chief Commissioner of Income Tax is obliged to consider the same on its merits - in favour of assessee.
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