TMI Tax Updates - e-Newsletter
August 31, 2012

Case Laws in this Newsletter:

Income Tax Customs Corporate Laws Service Tax Central Excise Indian Laws

Articles

1. EDUCATIONAL SERVICES

   By: DR.MARIAPPAN GOVINDARAJAN

2. Service Tax on Construction activity- Part-II

   By: RadheyShyam Mangal

News

1. Expanding Use of Electronic Payment System by Banks.

2. Steps to Increase Availability of Credit to Rural Areas.

3. Additional Services Exempted from Service Tax.

4. RBI Agreement with UK on Black Money.

5. Steps to Attract FIIs.

6. Measures to Check Fall in Saving Deposits.

7. Ranking by World Bank.

8. Registration of a Company.

9. Anand Sharma Arrives in Siem Reap for Asean Meet.

Notifications

Customs

1. 40 /2012-Customs (ADD) - dated 30-8-2012 - ADD

Seeks to levy anti-dumping duty on imports of Metronidazole, originating in, or exported from People’s Republic of China, for a further period of five years

2. Corrigendum - dated 24-8-2012 - Cus

Corrigendum of Notification No. 47/2012-Customs.

DGFT

3. 15 (RE-2012)/2009-2014 - dated 29-8-2012 - FTP

Amends Schedule-I (Imports) of the ITC(HS) Classifications of Export and Import Items, 2009-14,Chapter-90.

4. 14 (RE-2012)/2009-2014 - dated 28-8-2012 - FTP

Amendment in Notification No. 5 dated 02.07.2012 regarding conditions for export of Carpets, Handicraft items and Silk items.

5. 13 (RE-2012)/2009-2014 - dated 28-8-2012 - FTP

Amendment in ITC (HS) 2012 Schedule 1 – Import Policy.

Income Tax

6. 33/2012 - dated 24-8-2012 - IT

Income-tax (Dispute Resolution Panel)(first amendment) Rules, 2012 - Amendment in Rule 3.

Circulars / Instructions / Orders

FEMA

1. 20 - dated 29-8-2012

Non-resident guarantee for non-fund based facilities entered between two resident entities .

2. 19 - dated 28-8-2012

Issue of Indian Depository Receipts (IDRs) - Limited two way fungibilty.

DGFT

3. 04 (RE-2012)/2009-14 - dated 30-8-2012

Policy Circular No. 2 (RE-2012)/2009-14 dated 19.7.2012 - Corrigendum thereto

Customs

4. 23/2012 - dated 30-8-2012

Applicable rate of CVD on imported Fertilizers-regarding.

5. F.No.442/12/2004-Cus.IV (Pt.) - dated 28-8-2012

Procedure for disposal of unclaimed/ uncleared cargo under section 48 of the Customs Act, 1962, lying with the custodians – regarding

Highlights / Catch Notes

Income Tax

• Overseas Subcontracting Payments Exempt from Tax Deduction at Source u/s 195, Rules Advance Rulings Authority.

  Case-Laws - AAR : Payments to overseas subsidiary towards sub contracting charges will not be liable for deduction of tax at source u/s 195 as there is no income chargeable to tax in India - AAR
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• US Court-Approved Settlement Faces 30% Income Tax Deduction Upon Transfer to Escrow Account.

  Case-Laws - AAR : Taxability on the Settlement Amount payable under the Stipulation pursuant to the judgment and Final approval of the US Court - applicant is required to deduct income-tax @ 30% when the settlement amount moves from the segregated account to the initial escrow account. - AAR
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• Supreme Court Rules on Tax Benefits for Leasing TV and Film Rights u/s 80IA of Income Tax Act.

  Case-Laws - SC : Entitlement to the benefit of Section 80IA - the profit derived form realization of TV/Films rights given on lease - SC
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• High Court Rules on TDS Obligations: Statutory Provisions Supersede Supplementary Instructions u/s 194H of Income Tax Act.

  Case-Laws - HC : Assessee in default - non deduction of TDS u/s 194H - Instructions and Rules can only supplement but can never supplant or limit the width of the statutory powers - HC
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• Commissioner Not Required to Register Trust Based on Objectives Alone u/s 12AA; No Activity Needed.

  Case-Laws - HC : Statute does not prohibit or enjoin the Commissioner from registering Trust solely based on its objects, without any activity, in the case of a newly registered Trust u/s 12AA - HC
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• Minister's Speech Insufficient for Import Action Arguments Without Legal Enactment.

  Case-Laws - HC : Unless and until there is a definite enactment made one could not take advantage of the Minister's Speech to buttress the argument that the import was made consequent on the speech made by the Minister - HC
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• Court Rules on Tax Impact of Revaluating Non-Moving Ink Inventory Due to Quality Decline u/s 145A.

  Case-Laws - HC : Revaluation of stock - non moving stock - deterioration in quality of the ink resulting in erosion of its value - HC
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• Tax Law Restricts Business Loss Carry Forward Due to Shareholding Change u/s 79 of Income Tax Act.

  Case-Laws - AT : Set off of brought forward business loss and unabsorbed depreciation - denial - invocation of provisions of Section 79 - change in shareholding - AT
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• Non-Compete Fees Ruled as Revenue Expenditure, Supporting Ongoing Business Operations Over Acquisition Costs.

  Case-Laws - AT : Payment of Non-compete fees - revenue expenditure vs capital expenditure - Said payment was made for the purpose of running the business and not for the purpose of acquiring the business. - held as revenue in nature - AT
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• Deemed Dividend Taxable Despite Loan Repayment u/s 2(22)(e) of Income Tax Act.

  Case-Laws - AT : Deemed dividend – amount advanced to assessee who holds 10% of voting rights – Even though the loan was repaid within a short period the factum of the loan being granted cannot be denied. - taxable u/s 2(22)(e) - AT
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• Agricultural land within Hyderabad Municipal Corporation is taxable u/s 45, not exempt u/s 2(14).

  Case-Laws - AT : Mere fact that the land in question was agricultural land cannot be a ground to claim for exemption u/s 2(14) as the land is situated within the local limits of Hyderabad Municipal Corporation, and consequently, tax leviable u/s 45 - AT
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• Interest Deduction Denied: Borrower Fails to Prove Loan Used for Property Purchase, Says Court.

  Case-Laws - AT : Interest on borrowings in respect of house let out – Assessee has not produced any evidence to show that the loan has been taken for acquisition of property. - dis-allowance confirmed - AT
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• Section 54 Tax Deduction: Claim Based on Possession Date, Not Purchase Agreement, for New Flat Construction.

  Case-Laws - AT : Deduction u/s 54 - Purchase of the new flat by the assessee will be treated on the date when the assessee has received the possession after it is constructed and not on the date of agreement for purchase when the flat itself was not in existence. Claim u/s 54 allowed - AT
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• Swiss Partnership Not Resident Under India-Switzerland DTAC, Legal Fees Taxable in India.

  Case-Laws - AAR : Swiss Partnership will not be treated as a resident under the India Switzerland DTAC. - legal fees received by the Swiss Partnership will be taxable in India - AAR
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• Tax Withholding Required on Technical Service Fees Under Income Tax Act Section 194J for Transmission Charges.

  Case-Laws - AAR : Transmission involves the rendering of technical services and the consideration paid towards transmission charges partakes the applicant is obliged to withhold tax thereon under section 194J of the Act - AAR
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• India-Saudi Arabia DTAC: AAR Rules O&M Charges Not Technical Fees, Altering Tax Treatment Between Nations.

  Case-Laws - AAR : India and Saudi Arabia DTAC - share of the annual operations and maintenance charges - cannot be treated as fees for technical services - AAR
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• Section 214: No Obligation for Revenue to Compensate Assessee with Refund Order Issued.

  Case-Laws - SC : Section 214 does not provide for payment of compensation by the Revenue to the assessee in whose favour a refund order has been passed - SC
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• AAR Rightly Rejects Application; Past Practices Not Grounded in Law Cannot Override Statutory Authority.

  Case-Laws - HC : The argument that the AAR erred in not following a so called past practice is unpersuasive as no practice, without its roots in the law, but based on an unchallenged understanding can be pursued, holding otherwise would be creating an estoppel against a statute - thus AAR was correct in rejecting the application for ruling. - HC
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• Amendment to Rule 3 of Income-tax Dispute Resolution Panel Rules 2012 to Streamline Tax Dispute Processes.

  Notifications : Income-tax (Dispute Resolution Panel)(first amendment) Rules, 2012 - Amendment in Rule 3. - Notification
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• Loan to Society Complies with Income Tax Act: No Violation of Sections 13(1)(d) and 11(5) Found.

  Case-Laws - AT : Assessee while giving the loan to another society did not violate the provisions of section 13(1)(d) read with section 11(5) as the loan was neither an investment nor a deposit - AT
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Customs

• Drawback Claim Denied for Exports Under DEEC Scheme as per Section 74 of Customs Act, 1962.

  Case-Laws - CGOVT : Drawback claim – as per Notification No. 40/94-C.E. Drawback of duty under Section 74 of Customs Act, 1962 can not be allowed since the goods are exported in discharge of export obligation under DEEC Scheme - CGOVT
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• Customs can issue a speaking order on assessed Bill of Entry, allowing appeal for machine import under EPCG license.

  Case-Laws - AT : EPCG licence - imported of machine - Even if the assessment made under Bill of Entry is an appealable order, the same does not prevent the department from passing a speaking order to enable the petitioner to file an appeal - AT
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DGFT

• DGFT Amends ITC(HS) Schedule-I Import Classifications for 2009-14, Focusing on Chapter-90; Key Tax Implications Highlighted.

  Notifications : Amends Schedule-I (Imports) of the ITC(HS) Classifications of Export and Import Items, 2009-14,Chapter-90. - Notification
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• DGFT amends Notification No. 5, revising export conditions for carpets, handicrafts, and silk items to streamline trade.

  Notifications : Amendment in Notification No. 5 dated 02.07.2012 regarding conditions for export of Carpets, Handicraft items and Silk items. - Notification
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• ITC (HS) 2012 Schedule 1 Import Policy Amended by DGFT: Changes in Classification and Duty Rates for Goods.

  Notifications : Amendment in ITC (HS) 2012 Schedule 1 – Import Policy. - Notification
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FEMA

• Non-resident guarantees now allowed for non-fund based facilities between resident entities under updated FEMA guidelines.

  Circulars : Non-resident guarantee for non-fund based facilities entered between two resident entities . - Circular
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• New Guidelines on Indian Depository Receipts: Limited Two-Way Fungibility and Tax Implications Under FEMA.

  Circulars : Issue of Indian Depository Receipts (IDRs) - Limited two way fungibilty. - Circular
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Corporate Law

• Court Rules Against Winding Up Company Amid Genuine Debt Dispute Likely to Succeed on Legal Grounds.

  Case-Laws - HC : When there is a bona fide dispute with regard to debt as claimed by the petitioner and when the dispute is likely to succeed in a point of law, it would be highly inappropriate to wind up the respondent-company. - HC
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Service Tax

• Court Rules Interest Due on Late Service Tax Payments Even If Tax Was Not Initially Applicable.

  Case-Laws - HC : Payment of service tax though not applicable - If that amount is to be voluntarily permitted to be utilized towards CENVAT Credit, it is apparent that for late payment of service tax, interest amount needed to be paid - HC
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• Completion and finishing services ineligible for benefits under Notification No. 1/2006-S.T. or 12/2003, despite VAT payment.

  Case-Laws - AT : Completion and finishing services – benefit of Notification No. 1/2006-S.T. as well as 12/2003 not allowed even if VAT has been paid on material involved - AT
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• Authority for Advance Rulings Rejects Service Tax Application, Deems It Maintainable u/s 96C.

  Case-Laws - HC : Application of Advance ruling under service tax was rejected by AAR on various grounds - The applications filed by the petitioners before the AAR under section 96C were maintainable. - HC
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• Farmers Transporting Sugarcane Not Classified as Goods Transport Agencies, Exempt from Service Tax Due to No Consignment Notes Issued.

  Case-Laws - AT : Individual farmers for transportation of sugarcane from collection centres to the factory - payment of charges for such transportation. - can not be held as GTA as not issuing consignment notes - AT
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• Service Tax Shortfall: Penalty Leniency Invoked u/s 80 of Finance Act Due to Reasonable Cause.

  Case-Laws - AT : Demand and penalty - Short payment of service tax – sufficient cause for invoking the provisions of Section 80 of the Finance Act - AT
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• Service Tax on Pipeline Laying Clarified: Not Classified as Plant or Equipment, Exempt from Typical Tax Categories.

  Case-Laws - AT : Demand of service tax - Laying of pipelines cannot be construed as a plant, machinery or equipment or structure. - AT
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• Section 76: Authorities Can't Start Proceedings for Penalty Recovery Under the Act.

  Case-Laws - HC : Penalty under Sec. 76 of the Act – authorities have no authority to initiate proceedings for recovery of penalty under Sec. 76 of the Act. - HC
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Central Excise

• Court Rules Reversed Credit Entry Equals No Credit Taken; No Interest on Delayed Duty Payment if No Duty Owed.

  Case-Laws - HC : Demand of interest – if the entry is reversed it amounts to not taking the credit at all and therefore when admittedly no duty is payable, the question of payment of interest on the delayed payment of duty would not arise - HC
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• Tax Exemption for Machinery and Equipment in Water Supply Plants Supports Agriculture and Industry Development.

  Case-Laws - AT : Exemption Notification No. 3/2004 – Water supply plants for agricultural and industrial use - Exemption to machinery, instruments, equipments and pipes used therein - AT
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• Settlement Commission's Immunity for Main Defaulter Extends to Co-Noticees, Preventing Penalty Imposition on All Parties.

  Case-Laws - HC : Where against main noticee/defaulter, the Settlement Commission has granted immunity from payment of any penalty, no penalty can be imposed upon other co-noticees - HC
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• Applicant Denied Duty Payment on Exempted Goods: No Cenvat Credit Available u/r 6(1) of Cenvat Credit Rules 2004.

  Case-Laws - CGOVT : Cenvat credit – applicant was not allowed to pay duty on the exempted goods as per proviso to Section 5A(1A) of Central Excise Act, 1944 and no Cenvat Credit on the input services is available under Rule 6(1) of the Cenvat Credit Rules, 2004. - CGOVT
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Case Laws:

• Income Tax

• 2012 (8) TMI 787
  Reopening of assessment - non inclusion of loss from trading goods for calculating of deduction u/s 80HHC - Held that:- As on the issue of excess deduction allowed under section 80HHC, the assessee has given his consent for making addition - Close perusal of the reasons recorded would immediately establish that, quite apart from no suggestion in the reasons regarding any attribution on the part of the assessee in fully and truly not disclosing material facts, all facts necessary for framing the assessment with respect to the said issue were very much before the AO when he previously took the return of the assessee for scrutiny assessment. - Decided in favor of assessee. Attempt, on the part of the Assessing Officer to rope in question of deemed dividend under section 2(22) needs to be noted only for rejection out of hand as in view of the settled legal position, if the reopening of assessment fails, on account of non-existence of reasons for such reopening, the Revenue cannot either sustain such reopening or bring within the assessment proceedings any other head of escaped income not mentioned in the reasons for reopening - in favour of assessee.

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• 2012 (8) TMI 781
  India and Australia DTAA - applicant acquired 100% equity of an Australian company - whether the payments made to Infosys Australia for the sub-contract work is chargeable to tax in India, OR under the DTAC - Held that:- The source of income of Infosys Australia has to be fixed as India as no services are performed in India by Infosys Australia the source could be the payer. It cannot be held under the circumstances, on the materials available, that Infosys Australia is making available any technical service to the applicant so as to satisfy the requirement of clause (g) of paragraph 3 of Article 12 of the DTAC. As what is paid by the applicant to Infosys Australia is fees for technical services, the question of the existence of a Permanent Establishment does not arise. What is paid to Infosys Australia is fees for technical services under section 9(1)(vii) of the Act, but it is not royalty in terms of Article 12 of the DTAC between India and Australia in terms of the requirements of paragraph 3(g) of the said Article. Payments to overseas subsidiary towards sub contracting charges will not be liable for deduction of tax at source u/s 195 as there is no income chargeable to tax in India.

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• 2012 (8) TMI 780
  Taxability on the Settlement Amount payable under the Stipulation pursuant to the judgment and Final approval of the US Court - whether the applicant is required to deduct income tax u/s 195 at the time of deposit of the Settlement Amount into the Initial Escrow Account to the final Escrow Account - Held that:- Under the terms of the settlement subsequently approved by the Court,three stages in this transaction of IC (Indian Company), First, when IC deposits the amount in the segregated account in India in its own name, second when it goes from the segregated account to the initial escrow account in New York and third, when it moves from the initial escrow account to the final escrow account to be treated as Qualified Settlement Fund (QSF)- The segregated account stood in the name of IC (Indian Company)and the interest earned on the deposit belonged to IC and the principal deposited stood transferred to the initial escrow account at the conversion rate prevailing on the date of transfer of the fund. The interest was to the benefit of IC and the title to it did not pass to QSF. The right to sue arose out of the misrepresentation of IC, by the alleged manipulating of the financial statements of IC with the alleged connivance of A and B, followed by the confession of the Managing Director of IC about the inaccuracy of the financial statements. All these took place in India. The suit could be filed in India - On a settlement of the class action, the sums were agreed to be paid and the source of the compensation is the alleged tort perpetrated in India. Therefore, the right to the compensation arose in India. The source of the compensation is the alleged tort in India - Once it is found chargeable to tax in India, IC will have the obligation to withhold tax on the amount under section 195 on the transfer of the fund from the segregated account in India to the initial escrow account in the U.S. When a settlement is arrived at subject to the approval of Court and steps are taken thereunder, then the approval of court will be approval of each step taken as part of the settlement. That would mean that IC would lose its title to the fund from the date of deposit once the court approved the settlement subject to the terms of the settlement, like the stipulation regarding interest earned in the segregated account and the right to withdraw the taxes that may be found payable in India from the initial escrow account, thus the amount deposited by IC as part of the settlement of the class action dispute with Lead counsel is income from other sources in the hands of Lead counsel or the QSF and that income arises in India - the applicant is required to deduct income-tax @ 30% when the settlement amount moves from the segregated account to the initial escrow account.

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• 2012 (8) TMI 779
  Entitlement to the benefit of Section 80IA - the profit derived form realization of TV/Films rights given on lease - Held that:- As ITAT on the basis of the rule of consistency and has remitted the case to the AO for Assessment Year 1999-2000 as no material was brought on record indicating the process undertaken or the activity undertaken by the assessee which would constitute manufacture or processing of goods under the Explanation to Section 33B the assessee has succeeded before the Assessing Officer on the matter being remitted back to the Assessing Officer for the Assessment Year 1999-2000 in respect of other assessment years also and it has been held that the activity undertaken by the assessee constituted manufacture under the Explanation to Section 33B - in favour of assessee. This case is remitted to the High Court to consider whether the Revenue has accepted the order of the Assessing Officer/CIT(A) for the Assessment Year 1999-2000 in favour of the assessee

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• 2012 (8) TMI 778
  Assessee in default for non-compliance with Section-194H - imposed a TDS liability on Commission or brokerage - Held that:- The use of the expressions “discretion” and “subject to such conditions as he may think fit to impose in the circumstances of the case” imply that AO is under a duty to apply his mind and after taking into account the necessary and appropriate circumstances, pass the most suitable order as may be warranted on the facts before him. The Instructions relied upon only reinforce the element of discretion; by no means can it be construed as limiting the choice of the AO who may have a greater latitude in taking into account other circumstances depending on the facts of the given case. It is a cardinal principle of construction that when a legislation confers power, its amplitude cannot be cut down by instructions or rules or regulations made by subordinate authorities. Instructions and Rules can only supplement but can never supplant or limit the width of the statutory powers - In this case, the AO as is evident from a reading of the impugned order has not applied his mind at all to the facts much less considered what are the circumstances which either justify the grant of relief or its refusal. Furthermore, even the petitioner does not appear to have been given any opportunity to make even a briefest submission in support of its case - writ petion allowed - in favour of assessee.

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• 2012 (8) TMI 777
  Denial of registration as charitable trust under Section-12AA (1)(B) - no charitable activity had in fact taken place since the society was a newly established one - Held that:- Considering the procedure for registration as lead in Section 12AA the statute does not prohibit or enjoin the Commissioner from registering Trust solely based on its objects, without any activity, in the case of a newly registered Trust. The statute does not prescribe a waiting period, for a trust to qualify itself for registration. When the society/trust of assessee itself was formed on 30.05.2008 with the money available with the trust, one cannot expect them to do activity of charity immediately and because of that situation the authority cannot come to a conclusion that trust was not intending to do any activity of charity. In such a situation the objects of the trust have to be taken into consideration by the authority and the objects of the trust could be read from the trust deed itself - in favour of the assessee

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• 2012 (8) TMI 776
  Disallowance of deduction u/s. 80M - addition of gross dividend without deducting estimated expenses there from - Held that:- Section 20 refers to deduction from interest on securities in the case of banking company whereas Section 80M comes under Chapter VI-A of the Income Tax Act referring to special deduction in respect of inter corporate dividends - deductions contemplated by section 80M referred to actual expenditure whereas, deductions contemplated by section 20(1) are estimated proportionate expenses and interest, therefore, one cannot import deductions from interest on securities in the case of a banking company under section 20(1) into the deductions contemplated by section 80M - as decided CIT Vs. United Collieries ltd. [1992 (4) TMI 18 - CALCUTTA HIGH COURT ] the special deduction u/s 80M is allowable on the net dividend which is arrived at after taking into account actual expenditure incurred by the assessee in earning the dividend income and that there was no scope for any estimate of expenditure being made and there was no scope for allocation of notional expenditure unless the facts of a particular case so warranted - in favour of assessee. Unaccounted expenses under the head making up charges - Held that:- As payments were made by account payee cheque on bills raised by the contractor/job workers and tax at source had also been deducted in respect of the aforesaid payments made for making up charges to the contractor/job workers, it is not necessary that in every case expenses are to be allowed only upon confirmation letters being filed from the recipients of the amounts - as the expenditure is backed by considerable evidence, including the registers maintained as per the requirement of the Central Excise Authorities the claim is to allowed - in favour of assessee. Change in the method of valuing closing stock - Held that:- Any change in the method of valuing closing stock was not done to undervalue profit and there was no mala-fide intention on the part of the respondent-assessee and the Accounting standard issued by the Institution of Chartered Accountants of India made it mandatory that the inventories should be valued at the lower of costs or the net realizable value - there is no need to change the valuation of the opening stock for the year when there is change in value of the closing stock due to a change in the method - the valuation of closing stock on the basis of cost or net realizable value which is lower, done by the assessee which is mandatory requirement of law cannot be faulted - in favour of assessee.

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• 2012 (8) TMI 775
  Unexplained investment in Gold - assessee contested against no nexus or proximity between the alleged acquisition of primary gold and the investment in Gold Bond Scheme - Held that:- It is no doubt true that all that was seized was only Gold Jewellery from the premises of the assessee and there is hardly any explanation from the assessee as regards the import of gold using the services of two persons about whom the assessee was not in a position to say anything - There is equally no explanation as regards the keeping of the gold for the period of nine months except for the Finance Minister's speech proposing a Scheme on Gold Bond investment in the course of his Budget Speech on 29.2.1992 for the year 1992-93 but unless and until there is a definite enactment made one could not take advantage of the Minister's Speech to buttress the argument that the import was made consequent on the speech made by the Minister - against the assessee

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• 2012 (8) TMI 774
  Disallowance of Guest House expenditure u/s 32 - Held that:- As decided in Britannia Industries Limited Versus CIT And Another [2005 (10) TMI 30 - SUPREME COURT]disallowance of a sum, which was claimed by the assessee as expenses towards rent, repairs, depreciation and maintenance of a guest house which was purportedly used in connection with the business of the company - against assessee. Deduction u/s 80HH, 80I and 80IA are not allowable in view of Section 80AB - Held that:-when separate books of accounts are maintained by these Units and there was no mixing up of accounts of one unit with the other and there was no inter-dependency, the income earned from export goods from the Bangalore Unit merited to be considered independently for 100% relief as one falling under Section 80HHC(3)(a) of the Income Tax Act, the question of applying the formula did not arise - the assessment on the relief under Chapter VIA be set aside and the matter be remanded back for working out the relief, keeping however in the background that the relief under Chapter VIA cannot exceed the business income arrived at by the Officer.

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• 2012 (8) TMI 773
  Depreciation on Motor cars - ITAT entitled the assessee to depreciation at the rate of 50% as against 20% fixed by AO - Held that:- As it is agreed that the vehicles in the present case are light motor vehicles (LMV) Rule 5(1) of the Income Tax Rules, 1962 defines that Depreciation on it subject to the provisions of sub-rule(2), the allowance under clause (ii) of sub-section (1) of section 32 in respect of depreciation of any block of assets shall be calculated at the percentages specified in the second column of the Table in Appendix-I. As per APPENDIX-I PART-A (TANGIBLE ASSETS), III MACHINERY AND PLANT (3) (vi)Note 6 of the table “Commercial vehicle” means …............. “light motor vehicle” , thus vehicles in respect whereof depreciation has been claimed by the respondent at 50% per annum are light motor vehicles and that the above provisions of the Act and the Rules apply in the present case - in favour of assessee.

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• 2012 (8) TMI 772
  Revaluation of stock - non moving stock - deterioration in quality of the ink resulting in erosion of its value - Held that:- As accepted by both the authorities i.e. CIT (A) and the Tribunal the assessee's valuation of closing stock after having reduced the amount attributable to loss on account of slow moving/ non moving stock. It is not alleged that the finding of the authorities is perverse - as it is not disputed that the valuation of the closing stock has been taken as the valuation of the opening stock in the subsequent assessment year and also that the valuation of the inks gets depreciated due to passage of time as a consequence of deterioration of quality being evident of the Chemical Engineer to support its contention that value of some chemicals in stock had eroded and consequently they had to be revalued - ITAT was correct to delete the addition - in favour of assessee.

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• 2012 (8) TMI 771
  Set off of brought forward business loss and unabsorbed depreciation - denial - invocation of provisions of Section 79 - change in shareholding - shares of the company carrying more than 51% of the voting power were beneficially held by the new shareholders - Held that:- There is no dispute to the fact that the shareholding pattern has changed on 10-09-2003 and the assessee had accumulated business losses on that date. It is also found that various exceptions provided in the said provisions are not applicable to the facts of the case. Therefore, no infirmity found in the order of CIT(A) denying set of brought forward business loss and unabsorbed depreciation - Decided against assessee

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• 2012 (8) TMI 770
  Validity of revisionary order passed u/s 263 - proceedings initiated on ground that assessee had claimed a sum of Rs. 3.47 crores towards “loss of fixed assets sold, written off, discarded, etc under the head “Manufacturing and other expenses” - though the said amount was added back, depreciation on same was wrongly allowed even though they were not put to use - CIT(A) alleged non-allowability of depreciation on ground that assets are not used and non-verification by AO - assessee claimed that once an asset become part of the block of assets then it loses its individual identity and depreciation is allowable on the entire block Held that:- It is found that proper enquiry was made by AO during assessment proceedings. So far as issue of depreciation allowed on assets which have entered into the block of assets but not used during the year is concerned, the same in our opinion is a debatable issue. Allegation of CIT of inadmissible depreciation on assets not used in the business in our opinion is a possible view. For assuming jurisdiction u/s.263 the twin conditions namely (i) the order is erroneous and (ii) the order is prejudicial to the interest of the revenue must be satisfied. In the instant case the order may be prejudicial to the interest of the revenue because of higher allowance of depreciation but cannot be said to be erroneous since the AO has taken a possible view. See Malabar Industrial Company Ltd. (2000 (2) TMI 10 - SUPREME COURT ). Therefore, CIT in our opinion is not justified in assuming jurisdiction u/s 263 - Decided against Revenue

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• 2012 (8) TMI 769
  Penalty u/s 271(1)(c) - dis-allowance of management fee - business expediency - Held that:- Confirming the quantum addition or acceptance of the quantum addition itself cannot be a reason for levy of penalty. Assessment proceedings and penalty proceedings are two different proceedings and one is not substitute to the other. To levy penalty u/s. 271(1)(c), there should be conclusive evidence to prove that there is concealment of income or furnishing of inaccurate particulars of income. Where the assessee came forward with additional income though after deduction on account of that the assessee was not in a position to explain properly, and express remorse, in its conduct un-hesitantly, the Assessing Officer might have to exercised the discretion in favour of such assessee as otherwise the expression ‘may’ in section 271(1)(c) of the Act remains redundant. If it is to be understood that in a case of admitted concealment penalty is not automatic. The case before us is most befitting case to exercise such discretion, particularly there is divergence of opinion about the issue. Payment of Non-compete fees - revenue expenditure vs capital expenditure - Held that:- Payment was made to a rival company to ward off competition in business. However, by making this payment, the assessee has not derived any advantage of enduring nature to hold the expenses as capital in nature. The agreement was only for a limited period of 3 years. Said payment was made for the purpose of running the business and not for the purpose of acquiring the business. The expenditure incurred was not related to the acquisition of an asset or a right of permanent character or an advantage of enduring nature. Such expenditure cannot be, therefore, held as capital expenditure and has to be allowed as revenue expenses u/s 37 - Decided in favor of assessee

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• 2012 (8) TMI 768
  Dis-allowance of Revenue expenditure holding them to be Capital Work in Progress – assessee(SPV) engagd in development & construction services - commencement of business in AY 06-07 itself – Held that:- It has been agreed in principle that the business of the assessee has commenced, hence, we direct the AO to allow expenditure which are not directly attributable to the development of project but are expenses incurred from year to year for general running of the business. Directly attributable expenses shall be capitalised and added to the WIP. Interest received from Bank on certain deposits – capital receipt vs Income from other sources – Held that:- Since it has been held for AY 06-07 that assessee has set up the business and the revenue expenditure are allowed. That being so interest income cannot be considered as a capital receipt for AY 07-08. Also it is held in the case of M/s. Tuticorin Alkali Chemicals & Fertilisers Ltd v CIT (1997 (7) TMI 4 - SUPREME COURT) that interest income from deposits even during preoperative period is assessable as income from other sources.

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• 2012 (8) TMI 767
  Deemed dividend – amount advanced to assessee who holds 10% of voting rights in company – company having accumulated profits as on the date of granting of the loan, which was more than the amount lent – assessee contended inapplicability of S 2(22)(e) on ground that amount has not been provided out of accumulated profits and it is out of amount withdrawn from CC A/c - Held that:- All the requirements of sec 2(22)(e) have been satisfied in the present case. The Assessee holds more than 10% of equity shares in M/s HFP (P) Ltd. The Company had lent Rs. 40,00.000/- at the instance of the assessee and in the books of accounts of the company the Assessee is shown as the debtor. Even though the loan was repaid within a short period the factum of the loan being granted cannot be denied. Therefore, amout of loan given to the Assessee is taxable as deemed dividends in the hands of the Assessee – Decided against assessee. On issue of granting of additional depreciation from accumulated profits in the hands of the company the CIT(A) has held that the issue does not arise for consideration as the company had not claimed additional depreciation

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• 2012 (8) TMI 766
  Capital assets u/s 2(14) - assessability of capital gains on sale of land situated at Rajendra Nagar Mandal, within municipal limits of Rajendra Nagar – assesee contended that Rajendra Municipality is not notified by the Central Government and therefore land cannot be considered as capital asset u/s 2(14) - Held that:- Issue is covered by decision in case of Ghousia Begum and others (2011 (11) TMI 475 - ITAT HYDERABAD) wherein it has been held that impugned land is in fact urban land akin to the Hyderabad Municipality situated within 8 KM from the local limits of Hyderabad Municipal Corporation, liable for tax on capital gains irrespective of the fact whether it falls under the limits of Rajendra Nagar Mandal or otherwise. Further, mere fact that the land in question was agricultural land cannot be a ground to claim for exemption u/s 2(14) as the land is situated within the local limits of Hyderabad Municipal Corporation, and consequently, tax leviable u/s 45. Order of CIT(A) set aside and matter restored to file of CIT(A) – Decided against assessee-

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• 2012 (8) TMI 765
  Interest on borrowings in respect of house let out – dis-allowance on ground of failure to furnish supporting evidence of same – Held that:- Interest payable on borrowings in respect of let out properties, the interest will be allowable only if the loan is taken for the acquisition of the house or for repaying a loan taken for acquisition of the property. Assessee has not produced any evidence to show that the loan has been taken for acquisition of property. Therefore, order of CIT(A) confirming dis-allowance is confirmed Various cash deposits in Bank – Held that:- Assessee had filed particulars of rent received and credited to the bank account. In the interest of justice, we remit this matter to the file of the AO for deciding the issue de-novo

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• 2012 (8) TMI 764
  Penalty u/s 271(1)(c) - deduction u/s 80-IB claimed even after the expiry of 10 consecutive AYs - withdrawal of claim u/s 80IB suo-moto by filing revised statement of income during assessment proceeding and payment of requisite tax voluntarily - Held that:- Assessee has disclosed all the necessary particulars in the return. The assessee was allowed the deduction u/s 80-IB in the earlier years and accordingly it claimed deduction. The moment the assessee has taken legal advice, he withdrew the claim by paying the taxes due on withdrawal of the claim suo mottu and voluntarily. The bona fide of making the claim for deduction u/s 80-IB and withdrawal thereof, is duly proved. "Inaccurate particulars" means that particulars have not been furnished in correct/exact manner as is required to be furnished to determine the correct income chargeable to tax. A mere making of claim, which is not sustainable in law, by itself, will not amounting to furnishing inaccurate particulars regarding income of assessee - more particularly in present case of respondent wherein the claim of deduction u/s 80-IB was withdrawn and tax duly paid on the same. CIT (A) is justified in deleting the penalty - Decided against Revenue

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• 2012 (8) TMI 763
  Penalty u/s 271(1)(c) - consideration for transfer of ownership rights of a film received in AY 2006-07 - agreement signed in 2007-08 - assessee disclosed the consideration amount in AY 2006-07 - CIT (A) vide order for AY 06-07 held that the said amount could only be taxed in next AY 2007-08 - assessee filed revised computation of income for AY 07-08 before finalization of assessment of said AY, not accepted by AO - Held that:- Aforesaid factual matrix nowhere proves that the assessee had either concealed the income or furnished any inaccurate particulars. The very fact that it had duly mentioned the consideration in year of receipt itself proves its bonafides. Even otherwise also, every instance of addition in the assessment proceedings does not ipso facto led to conclusion that an assessee is guilty of concealment etc. as the penalty proceedings are altogether different in nature. Deletion of penalty stands confirmed - Decided against Revenue

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• 2012 (8) TMI 762
  Deduction u/s 54 - capital gain on sale of property on 27.12.04 - new flat purchased on 04.07.03 - deduction denied on ground that new flat purchased on 4.7.2003, is beyond one year from the sale of the flat on 27.12.2004 - full consideration paid and possession taken on 29.04.05 - Held that:- As per the provisions of S2(47)(v), the transaction of transfer is deemed to be completed at the time when the conditions u/s 53A of the Transfer of Property Act are fulfilled. One of the essential conditions is handing over of the possession and part payment of consideration. Since in present case, new flat to be purchased by the assessee was not in existence at the time of agreement dated 5.7.2003; but was to be constructed by the builder, therefore, the transaction of purchase cannot be said to have been completed. Purchase of the new flat by the assessee will be treated on the date when the assessee has received the possession after it is constructed and not on the date of agreement for purchase when the flat itself was not in existence. Claim u/s 54 allowed - Decided in favor of assessee

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• 2012 (8) TMI 754
  Reopening of assessment u/s 147 - assessee has a business loss or speculative loss - Held that:- As the assessee has disclosed full details in the Return of Income in the matter of its dealing in stocks and shares the loss incurred was a business loss - re-opening the assessment was not maintainable as decided in assessee's own case in ICICI Securities Ltd. Versus Asstt. Commissioner of Income Tax 3(2), Mumbai & Anr. [2006 (8) TMI 512 - BOMBAY HIGH COURT] - in favour of assessee.

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• 2012 (8) TMI 747
  Multiparty 'Option Agreement' - an outstanding obligation on the part of Mahindra-British Telecommunications Ltd. (now, Tech Mahindra) to allot shares to SBC Services Incorporated, a US company (now AT&T Limited) would have stood in the way of Tech Mahindra making a public issue - public issue - denial of ruling - Held that:- If the right to exercise the option remained outstanding, there could not have been a public issue. So the share purchase agreement dated 23.6.2005 was entered into between Tech Mahindra and the applicant providing for investment by the applicant in Tech Mahindra and for getting shares allotted in its name. The shares to be allotted was of the numbers considered adequate to meet the obligation incurred by Tech Mahindra to AT&T in exercise of its option. The applicant as adopted process did not result in any avoidance of tax. If it had been a case of allotment of shares by Tech Mahindra to AT&T as per the option available to AT&T, that allotment would not have attracted capital gains tax since an allotment by a company was not a sale of shares. Hence, the constitution of the applicant had no motive of tax avoidance. The issue of capital gains has now arisen only because the applicant after getting the allotment of shares is selling them resulting in a gain giving rise to a question of chargeability to tax of that gain. The aim was to speed up the public issue. The public issue by Tech Mahindra was in the year 2006. If the route now adopted had not been adopted, Tech Mahindra would have had to wait till the year 2010 before it could come out with a public issue. The object of the Guideline 2.6.1 SEBI (Disclosure and Investor Protection) Guidelines, 2000 as relied is clearly to protect the investing public by ensuring that while a company makes a public issue, it is not burdened with any outstanding financial instruments or a right which would entitle the existing promoters or shareholders any option to receive equity share capital after the initial public offering, thus on such a transaction, it does not appear to be proper for this Authority to give a ruling on the basis that this Authority is not concerned with public interest or violation of a provision over which another authority would alone have jurisdiction to take penal action.

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• 2012 (8) TMI 746
  India Netherlands DTTA - contract for supply of machinery, spare and wearing parts and technical documentation - chargeable to tax u/s 195 of Income-tax Act, 1961 OR as per Article 12 para 5 read with para 6.(a) of the DTAA - Held that:- No dispute to the fact that the two contracts were entered into the same day and on going through them, it is clear that the contract was neither for sale of property simplicitor nor for erection and service connected therewith. It was really an indivisible contract for supply, erection, commissioning testing etc. of a project. The applicant and Grasim have chosen deliberately to split up the contract into two. The applicant, according to it, has taken advantage of the splitting up by adopting the stand that the consideration for supply is not chargeable to tax in India. The first contract was for "the supply of machinery, spare and wearing parts and technical documentation for the production of Autoclaved Aerated Concrete" and the applicant has agreed "to undertake the design, engineering, supply and delivery of machinery, spare and wearing parts and technical documentation forming part of the Project". This cannot be taken to be a contract for "the sale of property" - rule on the question formulated that the transaction in question generates fees for technical services in the hands of the applicant and it does not come under the exception in paragraph 6(a) of Article 12 of the DTAC and that it is chargeable to tax in India - against assessee.

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• 2012 (8) TMI 745
  Double Taxation and Prevention of Fiscal Evasion with the Swiss Confederation - Partnership agreement with Switzerland company - residential status of partners - Held that:- As far as the partners are concerned, they are not the recipients of the income. Their right is only to share the profits of the partnership. Since they cannot be said to receive any income from Siemens India Limited on the basis of the agreement relied on, it cannot be said that they being residents of Switzerland could invoke the DTAC to be taxed in terms of Article 14 of the DTAC regarding the particular income - The argument that the partners are residents of Switzerland and their incomes from the partnership are taxable in Switzerland is of no avail since what is involved is not the income, the partners receive from the partnership but the income derived by the firm from an Indian entity - The partnership is not shown to be a person liable to taxation in Switzerland - thus the Swiss Partnership will not be treated as a resident under the India Switzerland DTAC. Taxability on legal fees earned by the Swiss Partnership/Partners - Held that:- As the income received for rendering professional services by the partnership to the Indian company is in India and not elsewhere. The partnership sends its invoices to the Indian company, its client and the payment is remitted from India. The fact that the major part of the services are rendered outside India in respect of a dispute arising in India cannot alter the source of income. On the facts of this case it can be concluded that the source of income is in India, the legal fees received by the Swiss Partnership will be taxable in India.

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• 2012 (8) TMI 744
  Off-shore supplies & services - application by the Revenue for rectifying mistake apparent from the ruling pronounced by the Authority - Held that:- Going through the ruling rendered in CTCI Overseas Corpn. Ltd., In re [2012 (2) TMI 75 - AUTHORITY FOR ADVANCE RULINGS] it is seen that there is a clear omission to consider the impact of the finding that the consortium which has been entrusted with the contract and of which one of the members was an Indian resident, had the status of an AOP under the Act. Once the status of an AOP has been assigned to the consortium, then the consortium can be assessed only as an AOP and not its members individually. Therefore, the logical conclusion to the ruling should have been that the transaction of offshore supplies which was part of the contract undertaken by the consortium, had to be considered on the basis that it was an activity carried on by the consortium - thus the offshore supplies is not liable to tax in India is a ruling inconsistent with the finding that the assessing unit is an AO - the mistake is apparent and it requires to be corrected - allow the application filed by the Revenue to the extent of reopening that part of the ruling which rules that the amount received / receivable from the applicant from the offshore supplies in terms of the contract dated 17.11.2009 is not liable to tax in India

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• 2012 (8) TMI 743
  India Srilanka DTAA - Capacity Sales Agreement - whether the amounts payable by the applicant to SLT (Sri Lanka) under the terms of the Agreement would be in the nature of 'royalty' ? - Held that:- As taking several adjournment by the assessee and unable to submit the Consortium agreement, thus without understanding the right of the grantor of the right to the applicant, it would not be possible to rule on the questions raised satisfactorily - as it would be hazardous to venture to rule on the questions formulated without understanding the contents of the document and comprehending the rights available to SLT decline to rule on the questions formulated and close this application leaving it to the applicant to raise its contentions before the Assessing Officer - against assessee.

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• 2012 (8) TMI 742
  Transmission, Wheeling & SLDC Charges - Whether TDS provisions u/s 194J or 194C will apply ? - Held that:- According to the agreement entered into by the applicant with RVPN and from a survey of the duties and obligations of RVPN viz-a-viz the applicant, it is not possible to accept the argument that for maintaining proper and regular transmission of electrical energy, no rendering of technical services is involved - It is not a mere case of RVPN maintaining its system with the help of its professional and technical personnel. It is also a case of such personnel ensuring regular and consistent transmission of electrical energy at the grid voltage at the distribution point of the applicant - argument on behalf of the applicant that in ensuring due and proper transmission of electrical energy from the generation point to the distribution point of the applicant, the services of technical personnel are not needed cannot be accepted, thus that the transmission involves the rendering of technical services and the consideration paid towards transmission charges partakes the applicant is obliged to withhold tax thereon under section 194J of the Act - against assessee. SLDC Charges are paid to the State Load Dispatch Centre constituted for the purpose of exercising the powers and discharging the functions under Part V of the Electricity Act - The centre is responsible for optimum scheduling and dispatch of electricity within the state in accordance with the contracts entered into with licencee and generating companies. It is to monitor grid operations, to keep accounts of the quantity of electricity transmitted through the state grid and exercise supervision and control over the transmission system, thus considering the nature of the obligations placed in the centre, and the role it performs, it cannot be said that it is rendering any technical services to the applicant - no withholding of tax in terms of section 194J or 194C of the Act is called for on the said charges - in favour of assessee.

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• 2012 (8) TMI 741
  India and Saudi Arabia DTAC - Construction and Maintenance Agreement - assessee made the payments to Saudi Telecom Limited ('STC') under the terms of the EIG Capacity Transfer Agreement, towards acquisition of the EIG capacity - Held that:- The right to use in this case to access the particular segment of a larger system to use the capacity of the system powered by the equipments of the whole system and under paragraph 3 of Article 12 of the DTAC, consideration paid for use of or the right to use a design or model plan, commercial or scientific equipment would be royalty - if the consideration is royalty it is taxable in the country of the prayer according to the laws of the State of the payer. Here, that would be according to the laws of India, thus the ruling on question No.1 is that the payment made by the applicant to STC under the EIG Capacity Transfer Agreement towards acquisition of EIG capacity is chargeable to tax in India as royalty in terms of paragraph 2 of Article 12 of the DTAC between India and Saudi Arabia. As the payment by the applicant would suffer withholding tax under section 195, since the applicant is a resident, the payee is a non-resident and the payment is chargeable to tax in India under the Act. Treatment for Payment of annual operations and maintenance charges - Held that:- As it appears that this is a share of the annual operations and maintenance charges incurred for maintaining the entire system it cannot be treated as fees for technical services and can be treated as the share of costs for maintenance incurred for the right to use the system acquired by the applicant - in favour of assessee.

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• 2012 (8) TMI 740
  Claim of interest payable by the Revenue - aggregate of instalments of Advance Tax/TDS paid exceeds the assessed tax - Held that:- As decided in Modi Industries Limited And Others Versus Commissioner of Income-Tax And Another [1995 (9) TMI 324 - SUPREME COURT] holds that Advance Tax or TDS loses its identity as soon as it is adjusted against the liability created by the Assessment Order and becomes tax paid pursuant to the Assessment Order, thus, the assessee not entitled to interest under the relevant provisions of the Act - for purpose of calculating interest u/s 214, the "regular assessment" means original assessment made u/s 143/144. Section 214 does not provide for payment of compensation by the Revenue to the assessee in whose favour a refund order has been passed and as that Sandvik Asia Limited Versus Commissioner Of Income-Tax And Others [2006 (1) TMI 55 - SUPREME COURT] has not been correctly decided relied by assessee for claim of interest - direction to the Registry to place this matter before Hon'ble the Chief Justice on the administrative side for appropriate orders - against assessee.

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• 2012 (8) TMI 739
  Rejection of application by AAR on barred u/s 245R (2) (1) - Objective of the mechanism of advance rulings - unless the assessing authority specifically raised a question, and issued notice calling the assessee to respond to it, the question would not arise, and consequently, the bar would not apply - the filing of a return of income did not automatically result in a question being "pending" before the Income Tax Authority - Held that:- The proviso to Section 245R(2) creates a bar to the jurisdiction of the Authority if it is seen that any of the conditions are fulfilled as once the assessee proceeds to file a return, or take a similar step, the Authority's jurisdiction to entertain the application for advance ruling is taken away, because the Income Tax authority concerned would then be seized of the matter, and would potentially possess a multitude of statutory powers to examine and rule on the return. Conversely, if the authority is approached before an income tax return is filed, or any other income tax authority is approached, the application can be entertained, and the AAR would be exclusively dealing with the matter before it - thus AAR held that in the case of the applicants, keeping the dates of filing of return in mind, its jurisdiction to entertain the application was barred under Section 245R(2) Proviso (1) - that upon a return of income being filed, the matter is "pending", in the sense that the Assessing Officer has the right to take such steps, including issuance of notice, etc, the further duty cast on the assessee to disclose all facts, including every potential income. The argument that the AAR erred in not following a so called past practice is unpersuasive as no practice, without its roots in the law, but based on an unchallenged understanding can be pursued, holding otherwise would be creating an estoppel against a statute - thus AAR was correct in rejecting the application for ruling.

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• 2012 (8) TMI 738
  Unaccounted Investments - documents recovered from another assessee's premises - Held that:- Tribunal recorded that the seized documents even contained the signature of the assessee. The dates on which the alleged payments were made towards the partnership firm also tallies with the date on which such partnership was entered into - The first of such payments made by the assessee is on 5.4.1995 and the last is dated 8.5.1995, the partnership deed was entered on 28.4.1995 and the retirement deed on 12.4.1996, thus none of the payments with respect to which the additions were made related to the period after the retirement of the assessee - As the entire issue turns on facts and the Tribunal have elaborately considered the same and the findings cannot at all be termed as perverse - no question of law arises from the order of the Tribunal - against assessee.

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• 2012 (8) TMI 737
  Addition made for bogus purchases – letters issued u/s 133(6) returned as unserved in the case of at least 22 parties - no reply received from at least another 11 parties – cheques encashed by third parties at places, which were not mentioned anywhere in the purchase bills - Held that:- It is observed that in the remand proceedings, creditors send confirmation letters, and confirmed the receipt of cheques on account. In view of aforesaid, we find that the assessee has partially discharged her onus to substantiate the purchases made by her. The purchases have been accounted in the books of account. The sales reported by the assessee have been accepted by the assessing authority. The sales have been made out of the opening stock and purchases made by the assessee. If the purchases omitted by the assessing authority are really excluded from the stock account, it would not have been possible for the assessee to arrive at the sale figures reported by her. It is to be seen that the income generates out of the sales. When all these facts are taken into consideration, it is not possible for us to endorse the view of the lower authorities that the entire such purchases objected to by them should be treated as bogus At the same time, it is also not possible to accept the entire contentions advanced by the assessee, since confirmations have been received only during remand proceedings. Hence, an addition on account of alleged bogus purchases is called for, however with moderation – Decided partly in favor of assessee

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• 2012 (8) TMI 736
  Deduction u/s 10A - dis-allowance in respect of three undertaking located at Chinchwad, Akruti and Millennium Business Park - assumption of them being mere expansion of the existing units - Held that:- Issue stands fully covered in favor of the assessee in assessee’s own case for the AY 2002-03 and 2003-04 wherein it was held that merely because the approval letter received from STPI stated the setting up of the three units as an expansion of the corresponding units, cannot be fatal to the plea set up by the assessee that the three units in question are independent and distinct units liable for an independent claim of deduction u/s 10A, since all the prescribed conditions have been fulfilled - Decided in favor of assessee. It is also directed to allow set-off of the losses of the section 10A eligible units against the normal business income of the assessee while computing income as per normal provisions of the Act. Transfer pricing - adjustments u/s 92CA on account of non charging of interest chargeable on excess period of credit allowed to Associated concerns - Held that:- Issue is covered in favour of the assessee in assessee’s own case for AY 2002-03 and 2003-04, wherein it was held that " a continuing debit balance, is not an international transaction per se, but is a result of international transaction". Residuary clause in the definition of ‘international transaction’ does not apply to a continuing debit balance, for the elementary reason that there is nothing on record to show that as a result of not realizing the debts from associated enterprises, there has been any impact on profits, incomes, losses or assets of the assessee - Decided in favor of assessee Deduction u/s 80HHE - exclusion of turnover of overseas branches from export turnover and not from the total turnover - Held that:- If turnover of overseas branches is excluded from export turnover, same needs to be reduced from total turnover - Decided in favor of assessee Computation of interest u/s 234B without considering credit available under DTAA for taxes paid in USA - Held that:- Issue has been decided in favor of assessee in earlier year wherein it was held that interest u/s 234B has to be computed after considering tax credit in respect of the taxes paid abroad. Also, law has been amended to the effect that Explanation (1) to section 234B by the Finance Act 2006 is clarificatory and, therefore, has retrospective application - Decided in favor of assessee.

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• 2012 (8) TMI 735
  Exemption u/s 11/10(1) - denial on ground of violation of statutory provisions of activities, non agricultural income such as on account of sale of coffee, beedi leaves, cashew, eucalyptus, timber, pepper etc - there were mixed objects other than charity in the case of assessee - Held that:- It is noteworthy that Tribunal has decided in favor of assessee in earlier year. In view of aforesaid and facts of the case, we set aside the impugned order of the CIT(A), and restore the matter to the file of the CIT(A) with a direction to pass a speaking order with regard to the claims of the assessee for exemption under S.11/S.10(1) - Decided in favor of revenue for statistical purposes

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• 2012 (8) TMI 734
  Adjustment to valuation determined by DVO under reference made u/s 142A - Revenue contesting grant of deduction @ 15% on account of rate difference between the CPWD rates and the rates existing in Khothagudem and Khammam and also on account of self supervision @ 10% - assessee firm, engaged in the business of running a hotel at Kothagudem, Khammam, constructed six storied hotel building - Held that:- There is no dispute in the present case with regard to existence of difference in the CPWD rates adopted by the DVO and the local rates prevailing in Kothagudem/Khammam, hence, assessee is entitled for deduction at the rate of 15%. Percentage of deduction on this account depends on the facts of each case and the steel rate differences. Deduction towards self supervision at the rate of 10% - Revenue contending deduction @ 7.5% - Held that:- Considering the size of the town and the asset under consideration( six storeyed hotel building), it is held that assessee was in an advantageous position to bargain the rates to the maximum benefit of the assessee, in which case, higher deduction is justified - Decided against Revenue

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• 2012 (8) TMI 733
  Provision for obsolete stock written back - AY 02-03 - dis-allowance on ground that there is no provision under the Act to allow deduction for obsolete stock, hence provision for same written back would not be reduced from taxable income - assessee explained that though for AY 2001-02, provision for obsolete stock was made, however no deduction was claimed for same while computing total income - in view of no deduction claimed, subsequent reversal shall be deducted from the total income - Held that:- In view of the conflicting claim made by the parties and considering the contentions of assessee that an income which has already been taxed is again being taxed, we think it proper to restore the matter back to the file of the AO who shall examine the issue as to whether the assessee in fact has not claimed deduction of provision for obsolete stock Provision for bad debts written back - AY 03-04 - dis-allowance - assessee explained that though for AY 2001-02, provision for bad debts was made, however no deduction was claimed for same while computing total income - in view of no deduction claimed, subsequent reversal shall be deducted from the total income - Held that:- Since no provision for doubtful debts is allowed in the I.T. Act, if the provision is debited to the P/L A/c, it must be added back while computing total income. However, if it is credited to the P/L A/c as happens when it is written back, then the income is artificially increased while computing the income as per I.T. Act, the provision so credited has to be reduced from the total income. If not reduced would lead to taxing income twice. Since the entire provision created has already been offered to tax in the AY 2001-02, hence it is justified to allow the deduction of same - Decided in favor of assessee.

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• 2012 (8) TMI 732
  Addition towards share capital introduced by HUF of Managing Director of the appellant company – source of the application money along with confirmation being furnished – karta of HUF being in hold of 10 acres of cultivatable land - Held that:- Identity of the person investing in share application is not in doubt who happens to be the MD of the company. When the identity of the investor is not doubted and the fact that he is holding agricultural land to the extent of 10 acres has not been disputed, the AO should not have treated the share application money as unexplained cash credit at the hands of the assessee company only because of a doubt in his mind that this amount could not have been earned from agricultural operations. If at all there was any doubt regarding the source of investment, proceedings should have been initiated against MD in his individual capacityand no addition could have been made at the hands of the assessee company - Decided in favor of assessee

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• 2012 (8) TMI 731
  Stay petition - recovery of outstanding demand – Held that:- DRP passed the directions in its cryptic order of three pages without giving thought to all the objections raised by the assessee - very high pitch addition is made by discarding the comparables given by the assessee and hence, this demand is raised - adjustment made by the TPO and also considered by the DRP in respect of the international transactions with the AEs appears to be without application of mind - assessee made out a prima facie case for grant of the stay - assessee's stay petition is allowed

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• 2012 (8) TMI 730
  Arm’s length price - investment advisory services to assets management companies - transactions between assessee and its associated enterprises were at arm’s length price, an arm’s length analysis was performed by assessee-company and submitted to TPO - TPO rejected two entities that were selected comparables by assessee-company and, on other hand, TPO introduced two fresh comparables to determined arm’s length price – Held that:- Assessee raised several points and contentions before the learned DRP against the proposed adjustment to the amount of transactions entered into by the assessee with its associate enterprises - DRP in a very short and summary order has upheld the TPO’s action without giving the reasons as to why the TPO was justified in suggesting the adjustment to the transfer pricing transactions after selecting various comparables - DRP has failed to ascribe cogent and germane reasons for rejecting the assessee’s several objections, accepting the TPO’s order in summary manner and has failed to consider various points raised by the assessee - matter is restored to the file of the Assessing Officer/DRP for fresh adjudication Disallowance of bonus paid by the assessee to its employees (who are also shareholders of the assessee-company) under section 36(1)(ii ) of the Act by holding that the same would have been payable by way of dividend – Held that:- There was a specific direction by the learned DRP to allow the assessee’s claim if the same was allowed in the earlier year - matter restored to the file of the Assessing Officer for fresh adjudication after verifying as to whether identical claim was allowed in earlier years and if it is found that the same is allowed in the earlier year, the Assessing Officer shall allow the assessee’s claim as so directed by the learned DRP Disallowance of severance cost paid by the assessee-company to one of its employees – Held that:- Issue was pending in appellate proceedings in the earlier years - matter restored to the file of the Assessing Officer/DRP for fresh adjudication after ascertaining as to whether identical issue based on same set of facts has been decided by any appellate authority in earlier years and if it is not so, then learned DRP is directed to decide the issue on merits having regard to the provisions provided under section 37(1) of the Act in the light of the facts of the present case Disallowance out of staff welfare expenses – Held that:- Claim of the assessee was that the get together was held for the benefit of the employees. Since the expenditure was incurred for the benefit of the employees in the course of carrying on business by the assessee, it cannot be said that the amount has not been incurred for the purpose of business. The assessee is in the business of investment advisory services and its business is solely dependent on the skills and expertise of its employees - it is a common practice in the industry to conduct training sessions for its employees and get together – expenditure allowed Disallowance of the payment made by the assessee to Hunt Executive Research Limited under section 40(a)( ia) of the Act – Held that:- Assessee paid a fees to Hunt Executive Research Limited as professional fees - payment on account of professional fees, tax was duly deducted at source under section 194J and thus, no disallowance has been made by the Assessing Officer - reimbursement of expenses would not come under the ambit of payment of professional fees within the meaning of section 194J of the Act - disallowance deleted

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• 2012 (8) TMI 729
  Rectification or order - typographical error - omission of ‘not’ in the sentence "PE or no PE" - held that:- PE or no PE, since entire repairs and overhauling is carried outside India, the profits arising to assessee from such repairs can not be taxed in India - error corrected. - Decided in favor of assessee. Rectification in respect of consideration for use of replacement components - held that:- By no stretch of logic, our direction constitutes a ‘mistake apparent on record’ liable to be rectified under section 254(2), even if that be a mistake. In any event, there is no mistake in remitting the matter to the file of the C1T(A) for fresh adjudication because none of the authorities below had an occasion to deal with the application of Article 13 of Indo UK tax treaty, on the facts of this case. It is not open to us to revisit our conclusion and place limitations on the powers of the CIT(A] which were not placed in the original order. - Decided against the assessee.

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• 2012 (8) TMI 728
  Exemption under sections 11 and 12 of the Income-tax Act - denial of exemption – alleged that assessee violated the provisions of section 13(1)(d) of the I.T. Act since the assessee trust had given loans – Held that:- Assessee while giving the impugned loan to another society did not violate the provisions of section 13(1)(d) read with section 11(5) of the I.T. Act as the loan was neither an investment nor a deposit - AO never disputed this fact that the assessee as well as Ram Lakhan Shiksha Samiti i.e., the society, who received the loan, were having similar objects, therefore, the temporary loan was given by the assessee to another society having similar object and nothing is brought on recorded by the AO that the said loan was out of the accumulated surplus of the year under consideration set apart - appeal is allowed Decision in DIT v. Acme Educational Society [2010 (7) TMI 159 - DELHI HIGH COURT] followed.

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• Customs

• 2012 (8) TMI 761
  Digital Multifunction Print and Copying machines - assessee pleaded for release as not of restricted category - Held that:- In respect of cases relating to which the authorised chartered engineers had not inspected the goods in question, the customs authorities concerned shall direct the inspection of such goods before they are released. Such goods may be directed to be released, on payment of the appropriate customs duty and on the fulfillment of the conditions prescribed by law - the assessee may plead for for the waiver of the detention and demurrage charges, if any - in favour of assessee.

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• 2012 (8) TMI 760
  Order of suspension of the appellant's CHA license - Held that:- A close reading of the provisions of Regulation 20 (2) of the Customs House Agents Licensing Regulations, 2004 ('CHALR') disclose that the power to direct immediate action is confined to taking it within 15 days from the date of receipt of a report from the investigating authority whereas in this case the report of the investigating agency was received on 09.03.2011 concededly the Commissioner did not seek recourse to the power under Regulation 20 (2). The immediacy or urgency of the situation was allowed to lapse and eventually the Commissioner issued the suspension order on 10.10.2011. The net result is that where immediate suspension is called for, the Commissioner has to take swift action and cannot wait and if he does so suspension can be made only after the full inquiry is held as provided by Regulation 22. In this case the final report of the inquiry was made on 07.05.2012 and the appellant was issued with a show-cause notice on 05.06.2012 - the suspension order impugned in this case cannot be sustained and the authorities are, however, at liberty to proceed with the inquiry and pass any order in accordance with law - in favour of assessee by way of remand.

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• 2012 (8) TMI 748
  EPCG licence - imported of machine - item was assessed to duty under Customs Tariff Heading No. 9030.89 applying the duty rate of 20% + 5% + 13%CVD + 4%SAD - appellant requested for reassessment of the Bill of Entry on the ground that they have an EPCG licence for the same and requested for assessment @ 10% + 5%, which was rejected - refund claim was also rejected on the ground that inasmuch as the request for reassessment was rejected, there is no merit in the refund claim – Held that:- Even if the assessment made under Bill of Entry is an appealable order, the same does not prevent the department from passing a speaking order to enable the petitioner to file an appeal - department should have passed a speaking order as to why the appellant’s claim for exemption under EPCG scheme was not admissible before they rejected the refund claim - matter is remanded to the original adjudicating authority

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• 2012 (8) TMI 727
  Demand for Provisional clearance of goods - Held that:- For provisionally assessing duty the petitioner will deposit 20% of the differential duty in cash while furnishing bank guarantee for the remaining 80% and on fulfilling these conditions and after completing all the other formalities,if any, the goods will be released to him as early as possible and without delay.

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• 2012 (8) TMI 726
  Drawback claim – Held that:- Goods were taken for reprocessing after re-importation and reprocessed goods exported cannot be said to be identified as re-imported goods - as per Notification No. 40/94-C.E. Drawback of duty under Section 74 of Customs Act, 1962 can not be allowed since the goods are exported in discharge of export obligation under DEEC Scheme - no infirmity in the impugned Order-in-Appeal - Revision Application is rejected

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• Corporate Laws

• 2012 (8) TMI 759
  Winding up petition - case of the petitioner based on the Compromise Petition entered into before the CLB, wherein the respondent-company agreed to pay rent at agreed rate, however said payment has not been made - Held that:- Subsequent filing of a suit seeking recovery of rents by the petitioner has not been brought to the notice of this Court. In the said suit, respondent has specifically disputed the relationship of landlord and tenant. When the claim of the petitioner herein is that the sums have not been paid in terms of the deed and the same has been disputed at the earliest point of time even in the suit seeking recovery of rents, the defence taken by the respondent is bona fide and not a moonshine. It is based on facts and material. Therefore, when there is a bona fide dispute with regard to debt as claimed by the petitioner and when the dispute is likely to succeed in a point of law, it would be highly inappropriate to wind up the respondent-company. Petition dismissed.

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• 2012 (8) TMI 725
  Winding up petition - petitioner contending non-payment of debt whereas respondent company contended that petitioner had supplied defective products and even after repeated requests by the respondent, the petitioner failed to rectify the same - respondent reworked on the defective produced with HAL due to which it incurred huge expenditure - delay in delivery of products to the end-customers resulted in loss of business opportunities - Held that:- Notwithstanding the fact that the products were delivered but the same being defective, no claim could be made by the petitioner towards the defective goods. The defect was sought to be rectified by giving it to another agency. Handing over for reworking to another agency was only due to the fact that the products received by the respondent was defective. Therefore, it cannot be held that there is a debt and that has been admitted or the respondent is liable to pay the debts. The dispute raised is bona fide and not a moonshine. There is enough material to show that the goods were defective. The petitioner having accepted the same has also replied stating that it would rectify the defects. Hence the defence is substantiated by the admission of the petitioner. No claim could be made for defective goods. No amount can be held to be due on account of the defective goods. Petition dismissed.

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• Service Tax

• 2012 (8) TMI 786
  Penalty under Section 76 of the Finance Act – Held that:- Appellant had paid the service tax and the interest as soon as the same was pointed out during the adjudication process and paid the penalty under Section 78 to the extent of 25% as per the law and is not contesting the penalty under Section 77 of Finance Act, 1994 - penalty imposed under Section 76 is not sustainable

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• 2012 (8) TMI 785
  Penalty – Held that:- Tax demand has already been discharged with interest - section 80 is invokable - it may not be proper to penalise under section 76 and 78 of the Finance Act, 1994 - to remove hardship, it would be proper to direct the appellant to deposit 25% of the demand towards penalty under section 78 - appeal is allowed partly

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• 2012 (8) TMI 784
  Payment of service tax though not applicable - belated payment has been used towards CENVAT Credit – Held that:- It must be treated as voluntary payment of service tax. If that amount is to be voluntarily permitted to be utilized towards CENVAT Credit, it is apparent that for late payment of service tax, interest amount needed to be paid

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• 2012 (8) TMI 783
  Completion and finishing services – denial of benefit of Notification No. 1/2006-S.T. – Held that:- There is clear provisions in the Notification No. 1/2006-S.T. that 67% abatement would not be available in respect of completion and finishing services and since the activities of the appellant is completion and finishing services in respect of the construction of commercial or industrial complexes, 67% abatement would not be available to them - since the amount on which the VAT has been paid is the value of the material used for providing the services, this material cannot be said to have been sold within the meaning of this terms as defined is Section 2(h) of the Central Excise Act - benefit of Notification No. 12/2003-S.T. would not be available

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• 2012 (8) TMI 755
  Demand of interest – Held that:- Though the credit of duty is entered in the account books unless the said credit is duly taken to discharge the duty payable the liability to pay interest for the delayed payment would not arise - In the case of wrong availment before the said duty is taken, if the entry is reversed it amounts to not taking the credit at all and therefore when admittedly no duty is payable, the question of payment of interest on the delayed payment of duty would not arise - in fovour of the assessee

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• 2012 (8) TMI 753
  Claim of Cenvat Credit on the pipes and valves - assessee sought to obtain advance ruling from AAR on eligibility to avail CENVAT Credit of excise duty paid by it on pipes and valves to the manufacturer, against the Petitioner's output service tax liability under the taxable service category of "transport of goods through pipeline or conduit? AAR rejected the application - Held that:- As the petitioners are Government Companies being subsidiaries of Gujarat State Petronet Ltd. The holding company and each subsidiary company are separate and distinct legal entities and every company has an independent right to file an application before the AAR for pronouncement of an advance ruling on the questions raised in the applications. Section 96A(b)(ii) and (iii) support the case of the petitioners that a joint venture company could be an applicant. Further a resident falling within the class of mentioned in sub-clause (iii) could also maintain an application. The petitioners fall within the ambit of section 96A(b)(iii), therefore, we hold that the petitioners being a step-down subsidiary company of a Government Company are covered within the definition of the "applicant" in terms of section 96A(b) of the Finance Act. The applications filed by the petitioners before the AAR under section 96C were maintainable. As the petitioners and the holding company were separate and distinct legal entities and had independent rights and the AAR does not possess absolute discretionary power. Under section 96D(2) proviso (a) the important words used are, “in the applicant’s case”, which clearly explains that if in the applicants own case any matter is pending or had been decided then the AAR could dismiss the application - The AAR could not reject the applications of the petitioners under its discretionary power as there were no exceptional circumstances, or abuse of the legal process or rendering incompatible decisions concerning the same parties or any anomalous situations would have arisen if the AAR would have pronounced advance ruling. The petitioners had not yet entered into any transaction and the advance ruling had been sought on the proposed activity or service, therefore, the petitioners’ applications were maintainable and the AAR was required to pronounce advance ruling under section 96D of the Finance Act. Even assuming that the question pending before the CESTAT in the matter of holding company and the question raised before AAR by the petitioners were similar, if the AAR pronounces advance ruling on the question raised by the petitioners, then, in our opinion, it will not result in conflicting or incompatible decision between the same parties, as the order of the AAR would be binding only on the petitioners and the tax authorities in view of section 96E of the Finance Act - in favour of assessee.

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• 2012 (8) TMI 752
  Demand of service tax - manufacture of VP sugar and molasses - They engaged individual farmers for transportation of sugarcane from collection centres to the factory and paid charges for such transportation. The Appellants were not paying any service tax on such services received by them for transportation of goods – Held that:- Entry in the Act defines "Goods Transport Agency" as one which issues consignment notes and thereafter Rule 4B says that "Goods Transport Agency" has to issue consignment note - That is to say if a goods transport operator does not issue consignment note he does not come within the meaning of "Goods Transport Service" and then the requirement under Rule 4B also is not enforceable – pre-deposit waived

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• 2012 (8) TMI 751
  Demand and penalty - Short payment of service tax – Held that:- Services have been rendered by a retired police officer who was not familiar with the law relating to Service tax - appellant was eligible for availing full exemption from Service Tax in terms of Notification No. 6/2005-S.T., - It is a clear case of ignorance in not opting to avail this exemption - sufficient cause for invoking the provisions of Section 80 of the Finance Act - appellant has chosen to collect Service Tax from parties who were willing to pay the tax and paid the same to the department. He has failed to collect the Service Tax from other clients who were not willing to pay - Service Tax liability is upheld - re-quantification of Service Tax liability by adopting cum-tax benefit in respect of cases where Service Tax has not been collected - The interest liability is also upheld on the re-quantified Service Tax liability - penalty imposed under Section 78 is set aside - amount already paid shall be adjusted towards the Service Tax liability and interest so re-quantified.

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• 2012 (8) TMI 750
  Demand of service tax - Held that:- Laying of pipeline for water supply projects will not come under the category of erection, commissioning and installation service - Board’s Circular dated 24-5-2010 makes it absolutely clear that unless the activity undertaken results in the emergence of an “erected, installed and commissioned plant, machinery, equipment or structure”, the activity will not come under the category of erection, commissioning and installation service. Laying of pipelines cannot be construed as a plant, machinery or equipment or structure.

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• 2012 (8) TMI 749
  Penalty under Sec. 76 of the Act – Held that:- Assessee has paid both the service tax and interest for delayed payments before issue of show cause notice under the Act - after the payment of service tax and interest is made and the said information is furnished to the authorities, then the authorities shall not serve any notice under sub-section (1) in respect of the amount so paid. Therefore, authorities have no authority to initiate proceedings for recovery of penalty under Sec. 76 of the Act.

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• Central Excise

• 2012 (8) TMI 758
  Penalty u/s 11AC - common inputs used for manufacture of dutiable as well as exempted goods - alleged non-payment of duty as per the provisions of Rule 57CC of the Central Excise Rules, 1944 - assessee contended that High Court had set aside demand with reference to the longer period available under the proviso to Section 11A(1) - Held that:- In present case, demand has been raised beyond the normal period of 6 months provided under the provisions of Section 11A at the material time. Now, since the demand itself does not survive, the penalty is not warranted. Order set aside and the Appeal of assessee is allowed.

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• 2012 (8) TMI 757
  Revenue appeal against Order of Commissioner (Appeals) allowing the rebate claim - Held that:- As per the provisions of Sec.35B of the Central Excise Act, the Tribunal has no jurisdiction in respect of the rebate claims where the order is passed by the Commissioner of Central Excise(Appeals) - appeal is dismissed as non-maintainable.

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• 2012 (8) TMI 756
  Whether Tribunal was justified in ignoring the two Notifications on which reliance is placed by the revenue – Held that:- Appeal involves the interpretation of the aforesaid two Notifications - As the order relate to “among other things, the determination of question having a relation to the rate of duty of excise”, it is the Apex Court alone which is competent to adjudicate the said dispute. The jurisdiction of the High Court is ousted - appeal is rejected

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• 2012 (8) TMI 724
  Interest on Refund - revision application by Revenue contested that rebate claim has been paid within three months from the date of sanctioning the claim no interest is payable - Held that:- As in the case of Jindal Drugs Limited (2012 (2) TMI 78 - BOMBAY HIGH COURT ) the rebate claim was admittedly paid within three months of sanctioning the claim and the issue is covered by this decision, no fault can be found with the decision of the Joint Secretary to the Government of India in rejecting the revision application filed by the Revenue against allowance of interest claim.

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• 2012 (8) TMI 723
  Application for waiver of pre-deposit of penalty - Held that:- As Commissioner (Appeals) dismissed appeal for non-compliance with the provisions of section 35F for not making pre-deposit of penalty ignoring that assessee already paid total interest of involved in this case - as Commissioner (Appeals) has not decided the issue on merits Appeal allowed by way of remand.

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• 2012 (8) TMI 722
  Exemption Notification No. 3/2004 – Water supply plants for agricultural and industrial use - Exemption to machinery, instruments, equipments and pipes used therein – whether water which is stored reservoir within thermal power plant is used for the industrial purpose or for other purposes also - whether water is further treated before being used for industrial purposes – Held that:- From “Dahej raw water reservoir, the raw water is pumped to industries and existing industries are treating/processing this raw water at their respective water treatment plant to make it fit for industrial uses - pipes have been laid for carrying water for industrial use and the water has been treated by the respective industries or by Thermal Power plant, as the case may be, to make it fit for the purposes for which it was intended - appellants eligible for the exemption Notification No. 3/2004, dated 8-1-2004 - pre-deposit waived

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• 2012 (8) TMI 721
  Pre-deposit – penalty – Held that:- Main defaulter/MHL has been granted immunity and is not to pay any penalty and, therefore, these appellants should not be called upon to pay the penalty has not been addressed at all - where against main noticee/defaulter, the Settlement Commission has granted immunity from payment of any penalty, no penalty can be imposed upon other co-noticees – pre-deposit waived

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• 2012 (8) TMI 720
  Cenvat credit – rebate claim on export of goods - applicant is a manufacturer of readymade garments - applicant have availed cenvat credit on inputs contrary to the conditions stipulated under Notification 30/2004 – Held that:- When goods are exempted from payment of duty, no cenvat credit is permissible under Rule 6(1) of the Cenvat Credit Rules, 2004. Even the Cenvat Credit on the input services is not allowed for exempted goods - applicant has not declared on ARE-1s that they are clearing the goods under Notification No. 29/2004-C.E., on payment of duty whereas they were clearing the goods for home consumption under Notification No. 30/2004-C.E., at nil rate of duty - applicant was not allowed to pay duty on the exempted goods as per proviso to Section 5A(1A) of Central Excise Act, 1944 and no Cenvat Credit on the input services is available under Rule 6(1) of the Cenvat Credit Rules, 2004.

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• Indian Laws

• 2012 (8) TMI 782
  RTI Act - application sought information and in appeal it was ordered that record which according to appellant was not traceable be reconstituted and then information be given – Held that:- Appellant should not have raised any grievance against such direction because it was a duty of the appellant to immediately make effort for reconstitution of the record when they came to know that record is not lying with them and for that purpose, they could have taken help even from the applicant by obtaining certain information or also the requisite documents from the party to whom the original record was related to - direction to reconstitute the record is only a one step in furtherance of providing the information to the applicant under the Right To Information Act - Single Judge was right in dismissing the writ petition preferred by the appellant

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