TMI Tax Updates - e-Newsletter
August 4, 2012

Case Laws in this Newsletter:

Income Tax Customs Corporate Laws Service Tax Central Excise

Articles

1. NOTHING IN THE COMPANIES ACT PROHIBITS THE SWAPPING OR INTERCHANGE OF NAME OF COPMANY IN AN ARRANGEMENT.

   By: DR.MARIAPPAN GOVINDARAJAN

2. GENERAL ANTI AVOIDANCE RULE.

   By: DR.MARIAPPAN GOVINDARAJAN

News

1. India Sri Lanka to Double trade to USD 10 billion by 2015 Anand Sharma Inaugurates India show in Colombo Assures Sri Lanka of Preferential Access to Indian Market

2. Anand Sharma Urges AWDC and Indian Diamond Facilities to Strengthen Linkages India-Belgium Bilaterla trade Touches USD 17.75 billion

3. First India - Sri Lanka CEOs Forum Meeting to be held in Colombo on August 4

4. India Signs Tax Information Exchange Agreement with Monaco

Notifications

DGFT

1. 09 (RE – 2012)/2009-2014 - dated 1-8-2012 - FTP

Ban on export of edible oil in branded consumer packs.

Circulars / Instructions / Orders

Income Tax

1. 06/2012 - dated 3-8-2012

Relaxation from compulsory e-filing of return of income for assessment year 2012-13 - for representative assessees of non-residents and in the case of private discretionary trusts –regarding.

FEMA

2. Press Note No.3 (2012 Series) - dated 1-8-2012

Review of the Foreign Direct Investment policy - permitting investments from Pakistan.

Companies Law

3. 20/2012 - dated 1-8-2012

Investor Education and protection Fund(uploading of information regarding unpaid and unclaimed amount lying with companies) Rules 2012

Highlights / Catch Notes

Income Tax

• E-filing exemption granted for 2012-13 income tax returns for representative assessees of non-residents and private trusts.

  Circulars : Relaxation from compulsory e-filing of return of income for assessment year 2012-13 - for representative assessees of non-residents and in the case of private discretionary trusts –regarding. - Circular
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• Taxpayer's Derivative Trading Loss Can Offset Short-Term Capital Gains in Same Year per Section Rules.

  Case-Laws - AT : Transactions in derivatives - loss suffered by the assessee during derivative trading should be allowed as short term capital loss and the same can be set off against the short term capital gain during the year - AT
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• Court Rules Sales Acceptance Confirms Validity of Purchases; Profit Suppression Claims on Bogus Purchases Rejected.

  Case-Laws - AT : Suppression of profit of bogus purchases - held that:- when the sales have been accepted, there is no question of disputing the purchases because no sales could be made without purchases. - AT
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• Compounding Fee Deduction u/s 37(1) of Income Tax Act Questioned; Penal Nature Debated and Remanded for Review.

  Case-Laws - AT : Deduction u/s 37(1) - Payment of compounding fee in lieu of an offence - whether or not penal in nature - After analyzing and referring various case laws matter remanded back to CIT(A) with the directions - AT
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• AO Rightly Initiates Reassessment with Notice u/s 148, No Scrutiny Assessment Possible.

  Case-Laws - AT : When no scrutiny assessment could have been completed in this case, AO is perfectly justified to invoke reassessment proceeding by issuance of notice under section 148 of the Act. - AT
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• CIT(A) Validly Assumed Jurisdiction u/s 264; Assessing Officer Overlooked Clause (f) of Explanation 1, Section 115JB.

  Case-Laws - AT : Justification of CIT(A) assuming jurisdiction u/s.264 - No infirmity into the order passed by CIT as is evident from the records that AO has not applied his mind whether clause (f) of the Explanation 1 of Section 115JB was applicable or not - AT
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• Assessee disputes accountant's error on Capital Account entries for immovable property gifts.

  Case-Laws - AT : Addition in respect of gifts of immovable properties - assessee submitted that mistake of the accountant as journal entries were wrongly made to the credit side of the Capital Account - AT
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• Allocation of Expenses Between DTA and EOU Essential for Section 10B Benefits and Reassessment u/ss 147 and 143(3.

  Case-Laws - AT : Allocation of expenses between the DTA and EOU unit - expenses are to be charged to the EOU also in order to compute the benefit u/s 10B - Re assessment made u/s 147 r.w.s. 143(3) - AT
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• Mumbai Rent Control Act Limits Annual Property Valuation per Income Tax Act Section 23(1)(a) to Standard Rent Levels.

  Case-Laws - AT : Addition on account of annual letting value of the house property - the Rent Control Act is applicable in Mumbai thus the annual valuation u/s 23(1)(a) cannot exceed the standard rent under the Rent Control act. - AT
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• Income Tax Authority Bound by Commercial Tax's Stock Valuation; Assessing Officer Can't Reassess Accepted Value.

  Case-Laws - AT : Excess stock - difference in value of stock assessed by sales authority and income tax authority - return accepted by the Commercial Tax Department is binding on the I.T. authorities and the A.O. has no jurisdiction to go beyond the value of the closing stock declared by the assessee and accepted by the Commercial Tax Department - AT
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• Deduction Denied: Section 80IB Requires Independent Formation of Industrial Undertaking, Not Reconstructed or Split Business.

  Case-Laws - AT : Denial of claim of deduction u/s 80IB - the “industrial undertaking” should not be formed by “splitting up” or “re-construction” of a business already in existence - AT
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• Taxpayer Shielded from Prolonged Scrutiny Due to Delayed Action by Tax Authorities u/s 158BD.

  Case-Laws - AT : Block assessment - action u/s.158BD - period of limitation - if the Authorities failed to utilize and communicate such information on time, then the Assessee could not be penalized and kept in the loop of the Authorities for such a long period of 7 (seven) years - AT
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Customs

• CBEC Circular Allows Export Oriented Units to Supply Goods to Other EOUs or STP Units with Valid Licenses.

  Case-Laws - AT : According to CBEC Circular No. 49/2000-Cus dated 22.5.2000 that EOU trading units were allowed to supply the goods to other EOU/STP units against valid advance license or specific customs entitlements - AT
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• Confiscated Left-Hand Drive Vehicle for License Violation; Warehousing Permitted Under Chapter 87 Explanatory Note.

  Case-Laws - AT : Imported vehicle has been confiscated for violation of licence on the ground that vehicle is Left Hand Drive and is not permissible under the explanatory note to Chapter 87 - warehousing of the goods allowed - AT
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DGFT

• DGFT bans export of edible oil in branded consumer packs to stabilize domestic supply and prices.

  Notifications : Ban on export of edible oil in branded consumer packs. - Notification
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FEMA

• India Revises FDI Policy to Allow Investments from Pakistan; Changes Notified Under FEMA Guidelines.

  Circulars : Review of the Foreign Direct Investment policy - permitting investments from Pakistan. - FDI GUIDELINES
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Corporate Law

• Companies Must Disclose Unpaid Claims Under Investor Education and Protection Fund Rules, 2012 to Boost Transparency and Trust.

  Circulars : Investor Education and protection Fund(uploading of information regarding unpaid and unclaimed amount lying with companies) Rules 2012 - Circular
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• Court Can Dissolve Company if Official Liquidator Can't Continue Winding-Up Due to Lack of Funds or Other Reasons.

  Case-Laws - HC : When the Official Liquidator cannot proceed with the winding up of the Company for want of funds or for any other reason, the Court can make an order dissolving the Company - HC
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Service Tax

• Finance Arrangement Deemed Business Auxiliary Services for Service Tax Purposes in Recent Decision.

  Case-Laws - AT : Services provided was to arrange finance - it is settled that the appellant's activities shall fall within the category of BAS - AT
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• Cenvat Credit Unavailable for Input Services in Trading Activities for Service Tax Credit Purposes.

  Case-Laws - AT : Cenvat credit – Input service - Service Tax credit in respect of input service attributable to trading activities is not available. - AT
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Case Laws:

• Income Tax

• 2012 (8) TMI 70
  Claim of expenditure incurred for foreign education of company's ex director's son - Held that:- Considering material placed on record that Shri Siddharth Chhajlani was an employee of the assessee Company not only before going but even during the period he was undertaking studies in printing technology at London and also on his return from London which was directly related with the business of the assessee Company. Interest on unsecured loan in view of Section 14A and 36(1) (iii) - Held that:- As the assessee had properly utilized the amount of interest bearing funds for the purpose of its business only and there was no diversion of such interest bearing funds for non-business purposes while allowing the interest expenditure - appeals do not involve any question of law.

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• 2012 (8) TMI 69
  Transactions in derivatives - Short term capital loss in respect of speculation business - Held that:- As that speculation loss from derivatives can be set off against the income earned from derivatives after amendment in the Act with effect from 1.4.2006 thus assessee is entitled to the relief and the loss suffered by the assessee during derivative trading should be allowed as short term capital loss and the same can be set off against the short term capital gain during the year - in favour of assessee. Disallowance of commission paid to foreign agents - Held that:- As decided in Bharat Earth Movers Versus Commissioner of Income-Tax [2000 (8) TMI 4 - SUPREME COURT ] if a business liability has definitely arisen in the accounting year, the deduction should be allowed although the liability may have to be quantified and discharged at a future date what should be certain is the incurring of the liability - As the liability to pay commission has arisen by virtue of sales in the financial year 2004-05 relevant to the assessment year 2005-06. The realization of sale amount in the next financial year will not make much difference as the liability to pay commission had crystallized in the financial year 2004-05 itself after sale - in favour of assessee.

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• 2012 (8) TMI 68
  Addition as unaccounted cash credits - Held that:- Once the assessee has paid the tax on the amount which was alleged to be introduced as cash credit in the books of account, therefore the Revenue should have examined this aspect on those lines as per the provisions of law - the cash credit amount was subject to tax by invoking section 68 but those figures were ultimately recorded as sales and paid tax thereon by the assessee himself in the subsequent financial year and if the addition is hereby sustained, then in consequence thereupon the said amount shall get reduced from the sales amount of the subsequent year - the AO was not justified in adding the impugned amount as the taxable income of the assessee for the year under consideration. Penalty levied u/s.271(1)(c) - Held that:- Penalty was imposed in respect of the impugned addition made u/s.68 and since in quantum appeal the said addition has already deleted there was no basis for levy of penalty, hence we hereby direct to delete the same - in favour of assessee.

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• 2012 (8) TMI 67
  Confirming he assessment order u/s.144 by CIT(A) - Decline in Gross Profit rate in comparison to the ratio of profit disclosed in the past - Held that:- As the assessee is not a habitual defaulter because the admitted factual position is that the accounts have been duly audited and thereupon a return has also been filed within the prescribed period - the AO has admitted that the notices were complied with and representative of the assessee as well as one of the Director of the assessee attended the assessment proceedings - inability of AO to allow assessee to present his case on many occasions informed of the assessment having been finalized ex-parte u/s.144 - the assessee deserves reasonable opportunity of being heard - case is remitted back to AO - in favour of assessee for statistical purposes.

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• 2012 (8) TMI 66
  Allowing the deduction u/s.80IB(10) - not granted approval by the local authority to carry on the business of an undertaking developing and building housing projects - Held that:- The issue is restored back to his file to look into the agreement entered into by assessees with the landowner and decide whether the assessee has in fact purchased the land for a fixed consideration from the landowner and has developed the housing project at its own cost and risks involved in the project - in case the AO finds that the Developer has acted on behalf of the landowner and has got the fixed consideration from the landowner for the development of the housing projects, the assessee should not be allowed deduction u/s.80IB(10) - it has to be ascertained whether it was a “work contract” or a “Development Contract - in favour of revenue for statistical purposes.

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• 2012 (8) TMI 65
  Addition u/s.69C being unaccounted expenditure & unaccounted investment - Held that:- As opening cash balance was Rs.6.93 lakhs and Books of account were not written up-to-date because the partner could not explain the cash balance and cash utilized. The admission made by the partner appears to be in fear and without any evidence. The assessee has retracted the disclosure by the affidavit which A.O. has not considered the affidavit in framing of the assessment. The case is audited. The assessee had claimed that some of the expenses were paid through demand draft prior to date of survey. The Books of account has not been rejected by the A.O. at the time of assessment - CIT(A) was correct in deleting the addition - in favour of assessee. Addition being unaccounted expenses on machinery - not supported by the vouchers - Held that:- CIT(A) was correct in scaling down the addition of Rs.25,000/- to Rs.15,000/- goning through the reply of the assessee and order of the authority below that payments were made in cash and bills are not verifiable, therefore, we confirm the order of the CIT(A).

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• 2012 (8) TMI 64
  Addition on account of profit earned from unaccounted sales – Held that:- Central Excise Department conducted enquiry at business premises of assessee and the partner admitted before them, that the assessee had made sales and which remained unrecorded in the books of accounts - On the basis of information received from Excise, the A.O. estimated unrecorded sales and estimated net profit by applying the net profit rate of the recorded sales - CIT (A) has erred in deleting the addition

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• 2012 (8) TMI 63
  Taxability of Income - income of deceased husband was taxed in the hands of his wife - Held that:- The date of death of “KKP” late husband of the assessee ” is 8.3.1999 and the receipts of the monies were by “KKP” during his lifetime and there is no evidence or material brought on record to suggest that the assessee (the widow) has ever received these amounts of monies - The assessee as well as her late husband are clearly separate legal entities, assessable to tax separately. If any action was called for, the department should have initiated the same in the hands of the late “KKP” through his legal heirs and not in the personal assessment case of the widow of the deceased - the balance addition of Rs.5,98,568/- is also not maintainable since there is no material brought on record by the Revenue to suggest that the amount relates to the assessee and was in the nature of the income in the hands of the assessee - decided in favour of assessee. Addition of Rs.65,000/- made only on the basis of two receipts in the name of the assessee found from the premises of the third party - Held that:- AO has wrongly mixed up Shreeji Corporation and Shivshakti Consultancy which are distinct and separate entity and the assessee has no connection with them as she was neither a shareholder nor director of the above entities - AO has not examined the office bearers of the said two entities - in the absence of any evidence brought on record to show that the amount belongs to the assessee, no addition on this count could be made - in favour of assessee. Addition of Ras.3,31,215/- in the hands of the assessee as the scheme Kana Apartment - Held that:- From a perusal of the details of the amounts alleged to have been received from “kana” scheme launched by late husband of the assessee, “KKP”, all the payments totaling to Rs.3,31,215/- related to the period prior to 8.3.1999, the date of death of husband of the assessee, no action for the payments during the life time of the husband of the assessee could be made in the individual assessment of the assessee - in favour of assessee. Addition of Rs.4,76,000/- various amounts deposited in bank account - Held that:- Assessee has tried to explain the source by giving a general explanation that it is out of agricultural income earned by the assessee but has not shown any evidence of having agricultural income and nexus between the income and the deposits made in the bank account, thus sustain the addition of Rs.3,54,500/- on account of entries in the bank accounts with the SBI out of total addition of Rs.4,76,000/- for which assessee has given satisfactory explanation - Partly in favour of assessee. Addition of Rs.1,24,000/- deposited in various accounts consist of small amounts of deposits made in the names of sons and daughters of the assessee, for which no adverse view could be taken in the hands of the assessee. There is no material brought on record to suggest that the amounts belonged to the assessee, and accordingly addition made is deleted - in favour of assessee. Addition of Rs.15,85,000/- made on the basis of a small telephone diary which was not books of accounts nor a document before confirming such amounts the identity of the said persons was not established in this case - pre-dominance of probability was in favour of the assessee as there is no corroborative evidence placed on record to suggest that the figures mentioned in the column found was in fact the income of the assessee - favour of assessee. CIT(A)deleted the addition of Rs.2,00,000/- made on account of unaccounted receipts - Held that:- Assessee has claimed that the cheques in question found at the time of search were seized by the department is still lying with them and could not be encashed till date and since money was never transferred to the account of the assessee, no addition could be made in the hands of the assessee - in favour of assessee. Addition of Rs.91,400/- made on account of undisclosed rental income - CIT(A) deleted the addition - Held that:- Revenue could not controvert to the submissions of the assessee that the amount in question has already taxed in the hands of the firm and therefore, the same could not be taxed in the hands of the assessee even on protective basis - in favour of assessee. Deletion of the surcharge levied u/s.113 as directed by CIT(A) - Held that:- Issue is covered in favour of the Revenue by the decision of Hon’ble Supreme Court in the case of CIT Vs. Suresh N. Gupta [2008 (1) TMI 396 - SUPREME COURT]

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• 2012 (8) TMI 62
  Disallowance u/s 14A - CIT(A)restored the issue back to the file of the AO for recalculation - Held that:- Neither the assessee submitted any computation for disallowance in terms of section 14A nor the AO pinpointed any specific item of expenditure incurred for earning the dividend income. The CIT(A) merely followed the aforesaid decision in Godrej Boyce Mfg. Co. Ltd. (2010 (8) TMI 77 - BOMBAY HIGH COURT ) and restored the matter to the file of the AO. However, the extent provisions of section 251 do not bestow any power on the CIT(A) for setting aside the issue in an assessment - the order passed by the CIT(A) is cryptic and grossly violative of one of the facets of the rules of natural justice that every judicial/quasi- judicial body/authority must pass reasoned order - Section 14A remained an empty shell until the introduction of Rule 8D on 24.03.2008 - the impugned order suffers from lack of reasoning and is not a speaking order on the issue restore the mater to CIT(A) file for deciding the issue, afresh - in favour of revenue. Claim of depreciation on UPS @60% by assessee - @15% as allowed by the AO - Held that:- As decided in ITO vs.v.Omni Globe Information Technologies India (P.) Ltd.[2010 (4) TMI 769 - ITAT, DELHI ] that if peripherals such as printers, scanners and servers etc. form integral part of the computer system, UPS will also be an integral part of the computer system and cannot be used without the computer, entitled for deduction of depreciation at the rate of 60 per cent - against revenue. Disallowance of legal and professional charges - AO treated the amount capital in nature while the ld. CIT(A) reduced the disallowance by 50% - Held that:- CIT(A) without analyzing the basis of allocation of each of the job undertaken by M/s Wadia Gandy & Co. vis-à-vis assessee and other entities, attributed 50% of the amount in relation to merger of the company as capital in nature. The CIT(A) nowhere adduced the basis of such allocation nor the DR could throw any light on this aspect - CIT(A) did not make elaborate discussion on the scope of study undertaken by the consultants nor the ld. DR submitted a copy of the agreement with consultants, if any - complete facts in relation to scope of study are not available restore the matter to his file for deciding the issue. Dis allowance of prior period expenditure - CIT(A)accepted the submissions of the assessee placed before through certain additional documents - Held that:- Once the assessee invokes Rule 46A and prays for admission of additional evidence before the CIT (A), then the procedure prescribed in the said rule has to be scrupulously followed - as in the instant case, there is nothing in the impugned order of the CIT (A) to suggest as to whether or not any opportunity was allowed to the AO before concluding on the issue nor the CIT(A) refers to any additional evidence in terms of rule 46A of the IT Rules,1962 it is necessary to vacate the findings of the CIT(A) and restore the issue back with the directions to follow the mandate in terms of Rule 46A - in favour of revenue.

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• 2012 (8) TMI 61
  Penalty u/s 271(1)(c) - the assessee showed gain of sale of 23,90,000 shares of HQR as STCG. This stand was changed in the course of assessment proceedings and it was claimed that the shares were long – term capital asset, therefore, the gain was LTCG. Such a claim , if accepted by the AO, would permit the assessee to set off other LTCG loss against this gain. - On the basis of this date of acquisition, the gain has to be qualified as STCG, which cannot be set off against other loss in the form of LTCG. The question is whether the assessee is liable to be penalised u/s 271(1)(c) on these facts ? Held that:- It is a case of false claim rather than a wrong claim. In such a situation, the decision of jurisdictional High Court in the case of Zoom Communication Pvt. Ltd. (2010 (5) TMI 34 - DELHI HIGH COURT) clearly applicable. Further since particulars furnished for ascertaining the nature of capital gain are inaccurate, the decision in the case of Reliance Petro Products (2010 (3) TMI 80 - SUPREME COURT) is not applicable. In the light of this finding, it is clear that the explanation is not bonafide. Accordingly, the levy of penalty on this amount is upheld.

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• 2012 (8) TMI 60
  Penalty - Suppression of profit of bogus purchases - held that:- when the sales have been accepted, there is no question of disputing the purchases because no sales could be made without purchases. - Since the party has confirmed the purchases and the purchases have been supported by bills and vouchers, therefore, the explanation of the assessee has been rightly accepted by the ld. CIT(A) for the purpose of deleting the addition. Penalty u/s 271 on surrender of income to buy peace - retraction of statement - held that:- Such a retraction is, therefore, not valid and the assessee cannot be permitted to deny the statement made in the course of survey. Further, the assessee has already made surrender of amount and paid taxes voluntarily and the assessee cannot be allowed to withdraw the amount, on which taxes have already been paid voluntarily. Considering the totality of the facts and circumstances, we do not find any justification to interfere with the order of the ld. CIT(A) in confirming the addition of Rs.28,20,240/-. Reassessment u/s 147 - non issurance of notice u/s 143(2) - held that:- AO rightly computed the income of the assessee as per original return in which notice u/s. 143(2) has been validly issued and as such, there was no need to issue any further notice u/s. 143(2) on the invalid revised return filed on 29.12.2008 which was also not taken into consideration by the AO while framing the assessment in the matter. Considering the totality of facts and circumstances, we are of the view that the notice u/s. 143(2) has been correctly issued in this case on the original return of income, on the basis of which the assessment order has been framed by the AO. May be, the AO has wrongly mentioned section 147 in the body of order would not make the assessment order u/s. 143(3) as invalid. - Decided against the assessee.

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• 2012 (8) TMI 59
  Reassessment - There is no dispute to the fact that the return filed on 12-09-2001 was processed u/s. 143(1) and no order u/s.143(3) was passed as mentioned by the AO as well as the CIT(A). Therefore, there was no application of mind by the AO. We find the notice u/s.148 was issued on 03-02-2004 which is within a period of four years from the end of the relevant assessment year. Therefore, in view of the decision of the Hon’ble Supreme Court in the case of CIT Vs. Rajesh Jhaveri Stock Brokers Pvt. Ltd. (2007 (5) TMI 197 - SUPREME COURT) the re-assessment proceedings initiated by the AO is legally valid. Unexplained credit - addition u/s 68 - held that:- Once the assessee discharges the initial burden cast on him by giving the details and the other party having confirmed the outstanding balance, the assessee in our opinion cannot be held responsible for lapse or omission on the part of the other assessee. Addition u/s 41(1) - old liabilities - CIT(A) deleted the addition on account of 5 parties and sustained the addition made by the AO on account of other parties - following the decisionin the case of T.V. Sundaram Iyengar and Sons Ltd., (1996 (9) TMI 1 - SUPREME COURT), order of CIT(A) sustained - decided against the assessee.

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• 2012 (8) TMI 58
  Deduction u/s 37(1) -Payment of compounding fee in lieu of an offence - whether or not penal in nature - legal principles, namely, “ratio decidendi” and the doctrine of stare decisis “Stare decisis et non quieta movere” - held that:- After analyzing and referring various case laws matter remanded back to CIT(A) with the directions to decide the same in accordance with law requiring him to call for and examine the provisions of the Specific Scheme which empowered the GDA to collect the compounding fee.

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• 2012 (8) TMI 57
  Reassessment - jurisdiction u/s 147 - whether the income derived from letting out of the property be treated as ‘income from business’ as against ‘income from house property’ - held that:- As the expenses claimed being not allowable and the AO had reasons to believe that the income escaped assessment because the assessment of such income had to be under the head ‘income from house property’. Accordingly, as rightly pointed out by the learned CIT (A), while concluding the assessment, the AO had not travelled beyond the reasons recorded and, therefore, there was no merit in the allegation of the assessee that the assessment was bad in law. When no scrutiny assessment could have been completed in this case, and when the Assessing Officer realizes that the income has escaped assessment, he is perfectly justified to invoke reassessment proceeding by issuance of notice under section 148 of the Act. AO, vide his orders u/s 143 (3) r.w.s. 260A of the Act dated 25.11.2010 had held the status of the assessee as AOP and also the income derived by the assessee from the subject property was assessed under the head ‘income from house property.’ - the assessee has not come up with any documentary evidence to rebut the Revenue’s stand convincingly. - Decided against the assessee.

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• 2012 (8) TMI 44
  Addition made u/s 68 - non genuine loan / advance - Held that:- The assessee had placed on record a confirmation from the creditor and that the amount was received by account payee cheque and subsequently repaid by account payee cheques - no inquiry has been made by AO from the bank or from the creditor on the contrary he had asked the assessee to furnish the copies of return of income, financial statement and bank statement of the lender. No independent inquiry through Inspector or by issuing summons to the creditor was made for verification of veracity of claim of assessee before making addition, the action of the A.O. treating the receipt of loan/advance as income of the assessee is not justified - in favour of assessee. Addition made in closing stock - building materials purchased in the month March not shown as stock - Held that:- Considering assessee's explanation that it is a common practice that the material is supplied to the supplier as and when it is required, however, bill is sent later on & that even otherwise also an addition of closing stock is revenue in nature since the closing stock of this year becomes the opening stock of the next year - this issue is restored back to the file of Ld. CIT(A) for fresh adjudication - in favour of assessee for statistical purpose. Disallowance u/s. 40(a)(ia) - Held that:- The payments made to transporters will attract the provisions of section 40(a)(ia), wherein, the appellant was bound to deduct the TDS and remit the same in Govt. account before the due date - as it is evident that the tax was deposited in the government account on -7-04-2006 well before filing of income tax return and that the AO has wrongly computed figure of TDS which is paid in time - this issue is restored back to the file of AO who is directed to verify the claim of the assessee, if the tax is deposited before filing of income tax return such amount shall be deleted from the addition and rest other amount be decided afresh as per law after giving opportunity of being heard - in favour of assessee for statistical purpose. Disallowance of interest notionally charged - Held that:- Considering assessee's submission that AO has ignored to appreciate that the assessee has not given loan from interest bearing fund was given out of accumulate profits - restored back to the file of Assessing Officer who is directed to verify the claim of assessee - in favour of assessee for statistical purpose.

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• 2012 (8) TMI 43
  Justification of CIT(A) assuming jurisdiction u/s.264 - wrong carry forward of speculation loss - Held that:- Sec. 73(4) was amended with effect from 1.4.2006 to the effect that “no loss shall be carried forward under this section for more than four assessment years immediately succeeding the assessment year for which the loss was first computed.” The assessee was having brought forward speculation loss pertaining to A.Y. 2000-01 which the AO has allowed to be carry forward. However, in the assessee’s case, the brought forward loss of A.Y. 2000-01 has already expired in A.Y. 2004-05 - set aside with order with direction that the Assessing Officer should verify whether the assessee is eligible to avail carry forward speculation loss pertaining to the A.Y. 2000-01 in view of the amended provisions of sub-section (4) of Sec. 73. Computation of book profit u/s 115JB without adding the amount disallowed u/s 14A - Held that:- As the expenditure disallowed interest of the exempted income was not added back while computing book profit for the purpose of Section 115JB though, it was required to be added back under clause (f) of Explanation 1 of Section 115JB the Order is also set aside to the file of the AO for re-adjudication, as the details and explanations submitted by the assessee during the course of proceedings us. 263 were not adjudicated by the AO - No infirmity into the order passed by CIT as is evident from the records that AO has not applied his mind whether clause (f) of the Explanation 1 of Section 115JB was applicable or not and as also not examined the issue of eligibility of set off of carry forward speculation loss as provided in amended Section 73(4).

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• 2012 (8) TMI 42
  Addition in respect of gifts of immovable properties - assessee submitted that mistake of the accountant as journal entries were wrongly made to the credit side of the Capital Account - Held that:- CIT(A) has given a finding on the basis of remand report of the A.O that no revised balance sheet was produced before AO and also the balance sheet of earlier years to which assessee contented that he was not given opportunity to explain the revised balance sheet - as in the interest of justice this matter is remitted back to the file of AO to adjudicate afresh after giving sufficient opportunity to the assessee - in favour of assessee for statistical purposes. Addition made under Section 68 - Held that:- Considering the assessee submission that if he is afforded opportunity he will furnish confirmation from Sh. Rahul V shah and Shri Naresh V. Shah who gave interest free loan to the assessee and place genuineness and credit worthiness - this issue is remitted back to the file of AO for fresh decision of the transaction - in favour of assessee for statistical purposes. Addition of income in respect of on-money on sale of agricultural land - Held that:- Finding force into the contention of assessee that if it is proved that land was agriculture land, therefore, would not be subject to capital gain tax liability. Therefore, after considering totality of facts, this issue is also remitted back to the file of AO fresh decision. Addition of entire alleged on money involved in the sale of land at village Godhavi as the income of the Assessee failing to appreciate the fact that the land in question was owned and sold jointly by the appellant with his wife - this issue is also restored to the file of AO for fresh adjudication

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• 2012 (8) TMI 41
  Disallowance of bad debts claimed - CIT(A) deleted the disallowance - Held that:- Considering settled law by the decision rendered in the case of T. R. F. Ltd. Vs CIT [2010 (2) TMI 211 - SUPREME COURT ] that it is not necessary for the assessee to establish that debt to have become irrecoverable. Bad debts can be charged to the profit & loss account of the assessee if they are written off in the books of accounts of the assessee as irrecoverable - in favour of assessee. Addition on account of interest invoking section 14A - CIT(A) deleted the addition - Held that :- From the chart imbedded in the assessment order & the balance sheet duly certified by the Chartered Accountants it is evident that the assessee’s capital as on 01-04-2005 was Rs.96,58,043/- and as on 31-03-2005 was Rs.1,14,64,439 clearly established that the investment made by the assessee earning exempt income u/s 10(34) being either Rs.60,78,419/- or Rs.80,56,190/- flows from the own funds of the assessee being Rs.1,14,64,439/- as on the date of such investment - In such circumstances, disallowance u/s 14A made by the AO is not warranted because the assessee had made the investments from his own funds viz. “Own Capital” and not from the “interest bearing funds” - in favour of assessee. Addition on account of agricultural income - CIT(A) deleted the addition - Held that:- CIT(A) has deliberated the issue in detail and after perusing the evidences produced before him has observed that the learned AO had made such addition of Rs.2,56,000/- merely on the basis of conjecture and surmises as AO had failed to make any inquiry on the submission of the assessee and disallowance was made on ad hoc basis - in favour of assessee.

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• 2012 (8) TMI 40
  Allocation of expenses between the DTA and EOU unit - expenses are to be charged to the EOU also in order to compute the benefit u/s 10B - Re assessment made u/s 147 r.w.s. 143(3) - Held that:- It is well settled that if the entire material has been placed by the assessee before the A.O. at the time when the original assessment was made and the A.O. applied his mind to that material and accepted the view taken by the assessee, merely because he did not express this in the assessment order that by itself would not come as a ground to a conclude that assessee has escaped assessment and therefore, the assessment needed to be reopened. On the other hand, if the A.O. did not apply his mind and omitted a lapse, there is no reason why the assessee should be made to suffer the consequence of that laps. The question of such claim was subject matter of enquiry at the stage of original assessment proceedings with a questionnaire dated 18.03.2004 in which A.O. specifically required the assessee to furnish certified copy of the profit and loss accounts and the balance sheet of the unit EOU claiming exemption of income u/s 10B and to furnish the same along with the detail of sales/purchases, other income and major expenses to which assessee replied furnishing complete break up of the profit and loss accounts, as per schedule-VI of the Companies Act, showing separately for EOU and other units, thus the assessment order is sought not to be reopened though within the period of four year as it is case of change of opinion - order of quashing the reassessment proceedings - in favour of assessee.

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• 2012 (8) TMI 39
  Reopening of assessment u/s 147 - Held that:- As under Section 151(2) no notice can be issued u/s 148 by AO who is below the rank of Joint Commissioner after the expiry of 4 years from the end of the relevant AY unless the Joint Commissioner is satisfied, on the reasons recorded by such AO, that it is a fit case for the issue of such notice - as in present case the Additional Commissioner of Income Tax forwarded the proposal submitted by the AO to the CIT. The approval which has been granted is not by the Additional Commissioner of Income Tax but by the Commissioner of income Tax - this is not a fit case for the issuance of a notice under Section 148 & CIT is not a Joint Commissioner within the meaning of Section 2(28C) - the reopening of assessment by the A.O. u/s 147 is not sustainable - in favour of assessee.

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• 2012 (8) TMI 38
  Addition on account of annual letting value of the house property - Held that:- The assessee had chosen Mumbai house for self occupied and for ALV to Ahmedabad house which he submitted before the A.O. even then he had assessed the ALV at Mumbai house - the Rent Control Act is applicable in Mumbai thus the annual valuation u/s 23(1)(a) cannot exceed the standard rent under the Rent Control act. The A.O. had accepted the ALV on the basis of Rent Control Act in earlier years as well as subsequent year in scrutiny assessment whereas in year under consideration, the A.O. had taken basis of capital value of property. Such estimation is not justified - CIT(A) was correct in deleting the addition.

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• 2012 (8) TMI 37
  Disallowance of Professional fees - that the expenditure either falls u/s 14A or was incurred for earning income taxable under the head capital gain - assessee claimed exemption u/s Section 28(va)(ii)- Held that:- Disallowance of professional fees includes Rs.45 lacs paid as consultancy fees for investment advisory services - the assessee company has invested in fixed assets, debentures, advances, ICD and bank deposits, immovable property and shares and mutual funds etc and therefore, it cannot be said that the services rendered by these two persons is in respect of investment in shares - no income is reported by the assessee under the head ‘income from other sources’ being on account of investment other than investment in shares for which this payment of professional fee was said to have been paid by the assessee - the entire payment of professional fee has to be considered towards earning of dividend income in the absence of any other income from any other investment being shown by the assessee - in favour of assessee. Inclusion of Sales Tax and Excise Duty in total turnover for the purpose of computation of deduction u/s 80HHC - Held that:- As decided in Commissioner of Income-Tax Versus Lakshmi Machine Works [2007 (4) TMI 202 - SUPREME COURT] excise duty and sales tax were includible in the "total turnover", which was the denominator in the formula contained in section 80HHC(3) as it stood in the material time - direction of CIT(A) for excluding it thus warranted - against revenue. Reduction of export shortage from the turnover - Held that:- The export turnover can be verifiable from the report in Form No.l0 CCAC & assessee has also provided invoice wise FOB value realized for the whole year - this proves that the claim of shortage is further paid as compensation which makes the cost of exports higher, but actually does not reduce the export turnover. In fact, this is a normal business practice in all trades where shortage in handling is compensated by payment, but does not mean that the goods were not cleared or payment not received for the full amount of export turnover - against revenue.

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• 2012 (8) TMI 36
  Deemed Dividend u/s 2(22) - held that:- As per the decision of Special bench of the Tribunal rendered in the case of Bhaumik Colour (2008 (11) TMI 273 - ITAT BOMBAY-E), section 2(22)(e) can be invoked only in such a case where the person who has received the loan is having shareholding in the company who has given the loan and such person should be a registered as well as beneficial shareholder of that company which has given the loan. In the present case, this is noted by Ld. CIT(A) on page 1 of his order that the assessee company is a closely held company with Shri Hariprasad Yadav and Shri Anil H. Yadav holding 22.09% & 51.14% of shares respectively and these two people are holding 12.8% and 24.60% shares in the sister company Sai Jyoti Fashions Pvt. Ltd. This goes to show that the loan taker company i.e. the assessee company is neither a registered shareholder nor the beneficiary shareholder of loan giving company and, therefore, as per this decision of Special bench of the Tribunal, the amount received by the assessee company as loan from Sai Jyoti Fashions Pvt. Ltd. cannot be assessed as deemed dividend in the hands of this assessee company by invoking the provisions of Section 2(22)(e) of the Income tax Act, 1961.

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• 2012 (8) TMI 35
  Treatment of long term capital gain as business income - Held that:- Persuing the material on record except of few shares, all the shares were held for 10 years or more, it cannot be said that these shares were held by the assessee as business asset or stock in trade, thus it has to be admitted that the profit earned by the assessee after holding the shares for such a long period cannot be assessed as business income - as decided in Commissioner of Income-Tax Versus Rewashanker A. Kothari [2006 (1) TMI 80 - GUJARAT HIGH COURT ] to treat the gain under the head "Capital gains" and not as "Income from business" - in favour of assessee.

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• 2012 (8) TMI 34
  Addition on account of undisclosed cash credit - CIT(A) deleted addition - Held that:- As per copy of the bank statement it can be concluded that all the withdrawals are on account of payment to LIC of India and all the deposits are cash deposits - the explanation of the assessee cannot be rejected without bringing on record the evidences that these payments to LIC by the assessee from bank account is not on behalf of the customers of the assessee but on assessee’s own behalf as no such material has been brought on record by the A.O. - affidavit filed with the A.O. in which it was stated that the cash deposited in the bank account is assessee’s own income was just one day before her delivering a premature baby was filed under duress belief that once income is admitted, there will be no further I.T. proceedings - as there are no cash withdrawals and no personal expenditure of the appellant was met out of the bank account, AO’s observation that the appellant’s explanation is a concocted story does not stand to reason - in favour of assessee.

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• 2012 (8) TMI 33
  Addition on account of excess stock and cash - survey u/s 133A - Held that:- Sales tax authorities had carried out survey at the assessee’s premises declaring excess stock to the extent of 34.310 mt. whereas IT dept. declared excess stock of 586.826 mt at survey conducted immediately after 3 days of survey by sales tax authorities - These three days included two holidays - as decided in CIT vs. Anandha Metal Corporation (2004 (7) TMI 49 - MADRAS HIGH COURT ) that return accepted by the Commercial Tax Department is binding on the I.T. authorities and the A.O. has no jurisdiction to go beyond the value of the closing stock declared by the assessee and accepted by the Commercial Tax Department - in favour of assessee. Addition on account of sundry creditors & advance against supply though trading liability - Held that:- The assessee shows the advance from customers and sundry creditors as its liability in the balance sheet, thus merely because the liabilities are outstanding for many years, it cannot be inferred that the said liabilities have ceased to exist. The assessee has not written back the amount and the outstanding liabilities are still in existence would prove that the assessee acknowledges its liability as per the books of accounts - the Revenue has also not brought any material on record to prove that the purchases & advance are not genuine and the creditors have remitted the amounts due to them section 41(1)cannot be attracted there is nothing to suggest that the assessee has obtained any benefit either by way of remission or cessation of any liability while the aforesaid liabilities are continually admitted by the assessee in their balance sheet - in favour of assessee. Addition on account of belated payment of Provident fund and ESIC - Held that:- As deduction of statutory liability towards Provident fund and other funds referred to in clause (b) of sec.43B is permissible if the payments are made by the assessee before the due date of submission of return u/s. 139(1) Addition on account of belated payment need to be deleted - in favour of assessee. Initiation of penalty u/s. 271(1) (c ) as the same is consequential the same is not adjudicated

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• 2012 (8) TMI 32
  Denial of claim of deduction u/s 80IB - the “industrial undertaking” should not be formed by “splitting up” or “re-construction” of a business already in existence - Held that:- No evidence with the AO through which it could be demonstrated that the machinery was transferred from old unit to new unit with no iota of evidence to say that it was a case of “ splitting up of the old business”. The old unit was closed down way back in the year 1998 and the new unit had come up in the year 2002 and an entirely new building was constructed with the deployment of new technology to manufacture new type of telephone instrument - as assessee has successfully demonstrated that the new unit was set up with the substantial investment in plant & machinery no force in the grounds of the Revenue for denial claim of deduction - in favour of assessee.

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• 2012 (8) TMI 31
  Addition on account of unaccounted on-money paid for purchase of Shop - assessee contested against inordinate delay in inflation of action u/s.158BD and proceedings u/s.158BD - Held that:- The search u/s.132 was conducted on 29.10.1999 at developers which means that the investment in the properties was made earlier to the said date - proceedings u/s.158BD in the case of the Assessee was initiated 5 (five) years later thus there has been an inordinate delay in initiating and completing the proceedings u/s.158BC r.w.s. 158BD - Explanation regarding the investment in the said properties was furnished by the Assessee and if the Authorities failed to utilize and communicate such information on time, then the Assessee could not be penalized and kept in the loop of the Authorities for such a long period of 7 (seven) years - against revenue.

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• 2012 (8) TMI 30
  Addition on account of unaccounted on-money paid for purchase of flat - assessee contested against inordinate delay in inflation of action u/s.158BD and proceedings u/s.158BD - Held that:- The search u/s.132 was conducted on 29.10.1999 at developers business premises which means that the investment in the properties was made earlier to the said date - proceedings u/s.158BD in the case of the Assessee was initiated 5 (five) years later thus there has been an inordinate delay in initiating and completing the proceedings u/s.158BC r.w.s. 158BD - Explanation regarding the investment in the said properties was furnished by the Assessee and if the Authorities failed to utilize and communicate such information on time, then the Assessee could not be penalized and kept in the loop of the Authorities for such a long period of 7 (seven) years - against revenue.

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• Customs

• 2012 (8) TMI 56
  Import - misdeclaration – goods have been declared as copper dross and the copper content declared is 85% approx. - On actual testing, it is seen that in respect of goods declared as copper dross, the copper content varies between 96 and 97% - Held that:- Mis-declaration on the part of the importer appellant with respect to the copper content under importation - appellant has not placed any purchase orders for the products, especially when the copper content in the product is the main criteria for valuation of the product and the same is much higher than those declared in the import documents - misdeclaration is clearly evident from the records - appellant directed to make a pre-deposit

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• 2012 (8) TMI 55
  Import of vessel - vessel was sent out of the territorial waters for the purpose of repairs – seizure of vessel – provisional release of vessel – petitioner liable to pay duty in respect of the modification/upgradation that has taken place which amount is computed on a provisional basis – Held that:- Petitioners would be required to pay duty assessed provisionally in the amount of Rs. 12.77 crores and for that purpose, they would be at liberty to avail of the credit – Bank guarantee reduced from 20% to 10%

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• 2012 (8) TMI 29
  Penalty – 100% EOU imported goods duty free by availing benefit of Notification No. 53/1997-Cus - these duty free goods against the advance license to another 100%EOU - adjudicating authority has held that the company, being 100%EOU trading unit could not have sold the goods under advance license as per the provisions of Para 9.21 of the Export Import Policy – Held that:- According to CBEC Circular No. 49/2000-Cus dated 22.5.2000 that EOU trading units were allowed to supply the goods to other EOU/STP units against valid advance license or specific customs entitlements - company had cleared the goods imported by them on which the customs duty was foregone to advance license holders EOU – penalty set aside Regarding penalties on the Directors – Held that:- In the absence of any duty liability on the main Company, the provisions of Section 112 and 117 for imposition of penalties on the Directors cannot be invoked - to that extent it imposes penalty on the appellants herein, is liable to be set-aside

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• 2012 (8) TMI 28
  Redemption fine - penalty under Section 112 (a) of the Customs Act – import of 2 Nos Off Road Mining Truck with accessories and filed bill of entry for warehousing - imported vehicle has been confiscated for violation of licence on the ground that vehicle is Left Hand Drive and is not permissible under the explanatory note to Chapter 87 – Held that:- Goods allowed to be warehoused and at the time of ex-bonding the appellants shall produce required licence with endorsement thereon and after it is found in accordance with the law the adjudicating authority shall consider the same and if those are found in order shall release the goods - warehousing of the goods allowed

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• Corporate Laws

• 2012 (8) TMI 54
  Application for dissolution of company by the Official Liquidator - Held that:- When the affairs of the Company had been completely wound up or the Court finds that the Official Liquidator cannot proceed with the winding up of the Company for want of funds or for any other reason, the Court can make an order dissolving the Company from the date of that order. This puts an end to the winding-up process - considering the facts and circumstances of this case, the liquidation proceedings deserve to be brought to an end - permitting the Official Liquidator to make payments to valuer out of the funds of the Company and to transfer the balance fund available in the Company’s account to the Reserve Bank of India after creating provision or making payment towards the government fee, audit fee and liquidation expenses.

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• 2012 (8) TMI 27
  Sanction of the Scheme of Amalgamation - Held that:- In view of the approval accorded by the Shareholders and Creditors of the Petitioner Companies; representation / reports filed by the Regional Director, Northern Region and the Official Liquidator, attached with this Court to the proposed Scheme of Amalgamation, there appears to be no impediment to the grant of sanction to the Scheme of Amalgamation - in terms of the Scheme of Amalgamation, the whole or part of the undertakings, the properties, rights and powers & all the liabilities and duties of the Transferor Company be transferred to the Transferee Company, without any further act or deed be transferred to and vest in the Transferee Company - Petitioner Companies would voluntarily deposit a sum of Rs. 1,00,000/- in the Common Pool fund of the Official Liquidator - scheme ao amalgamation granted.

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• Service Tax

• 2012 (8) TMI 74
  Penalty - payment of entire amount of service tax liability and interest thereof before the issuance of show cause notice – Held that:- Provisions of the section 73(1A) of the Finance Act, 1994 will apply in full force in this case, as there is payment of entire amount of service tax liability and interest thereof before the issuance of show cause notice - penalties under Sections 76 and 78 in excess of the 25% of the amount of penalty paid by the appellant set aside

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• 2012 (8) TMI 73
  Waiver of pre-deposit - telecommunication service - applicant provides SIM cards to their customers through their dealers – Held that:- Amount paid as sales tax cannot be considered as sufficient compliance of Section 35F of the Central Excise Act, read with Section 83 of the Finance Act - Tribunal have no power to adjust such payments as the same is created under the Special Act i.e., Customs Act, Finance Act and Central Excise Act - applicant directed to make pre-deposit - penalties under the Finance Act shall remain stayed during the pendency of the appeal.

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• 2012 (8) TMI 72
  Business Auxiliary Service - activity of providing goods transport agency services to their customers - application for waiver of pre-deposit of demand - Held that:- As the service tax has been paid on the whole activity by the service recipient, no service tax is required to be paid by the applicant - a complete case for 100% waiver of demands adjudged against them - in favour of assessee.

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• 2012 (8) TMI 71
  Waiver of pre-deposit duty – denial of benefit of Cenvat Credit on Service Tax paid on the various services utilized by assessee on the ground that the invoices do not reflect the correct name and address of the appellant – Held that:- appellant cannot take shelter under the provisions of the said Rule 9(2) in as much as in terms of Rule 4(a), the basic and primary requirement is that the documents on the basis of which credit is being availed should be in the name of service receiver. Other of units assessee were working from the same premises, is required to be taken into consideration and the fact that appellants have admitted that credit of Rs.9,30,920/- so availed by them was in respect of common services utilized by all the units located in the same premises is indicative of the fact that wrong credit was being availed. appellants are directed to further deposit of Rs.10 lakhs balance amount of duty and entire amount of penalty imposed upon them shall stands waived

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• 2012 (8) TMI 49
  Demand of service tax – alleged that assessee is holder of service tax registration and they did not pay Service Tax on taxable service viz. Banking & Other Financial Services and Business Auxiliary Services - assessee contended that the financial agreements of the assessee is not taxable under the Banking Financial Services (BFS) on the ground that as per the definition of BFS under section 65(12) the assessee has the option or is entitled to own the asset at the end of lease period - as per agreement they are the owner of the asset and there is no clause in the agreement which say that their clients had the option to purchase the asset on expiry of the lease agreement – Held that:- As a lot of factual verification was not done, expert consultation was not made any total demand has been drastically curtailed without adequate verification or analysis, the entire matter may be remanded for de novo adjudication - order set aside and matter remanded to the Original Authority

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• 2012 (8) TMI 48
  Services provided was to arrange finance - Business auxiliary service (BAS) - held that:- in the case of Chambal Motors (P) Ltd & Bhatia & Co.(2008 (7) TMI 69 - CESTAT, NEW DELHI), it is settled that the appellant s activities shall fall within the category of BAS. The appellants are small business entity. Perusal of the adjudication order shows that the confusion of the law at the insertion had caused hardship in determining liability and law was under debate. Law being in infancy stage for the impugned period, the appellants deserve consideration under Section 80 of the Finance Act, 1994. - Penalty waived.

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• 2012 (8) TMI 47
  Consulting Engineers Services - application for waiver of pre-deposit of service tax - Held that:- As the appellants main objective is to undertake construction activities for and on behalf of the serving employees of Government of M.P. in the Police Department, the appellant body consists various working officers of the Police department, who are managing the affairs of the Corporation, neither the corporation nor the individuals handling the said corporation are professionally qualified engineers or an engineering form, in which case they would not be prima facie covered by the definition of consulting engineers as appearing in Section 65 (31) - in favour of assessee.

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• 2012 (8) TMI 46
  Business Auxiliary Services – distributor of garments - small scale exemption in terms of Notification No.6/2005 – Held that:- matter remanded to original adjudicating authority for deciding the issue of applicability of small scale notification, afresh in the light of the observations made by the Tribunal in the case of Peoples Automobiles Ltd. (2011 (8) TMI 903 (Tri))

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• 2012 (8) TMI 45
  Cenvat credit – Input service - input for manufacturing unit as well as for registered dealer for sale were brought in the same truck – appellant taken cenvat credit of whole service tax paid – Held that:- Service Tax credit in respect of input service attributable to trading activities is not available.

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• Central Excise

• 2012 (8) TMI 53
  Direction to 15% of the duty demanded is unreasonable - Held that:- The petitioner has in no way claimed that the direction to pay 15% of the duty demanded which works out to Rs.one crore is unreasonable that results in substantial hardship so as to cause prejudice its right to be heard - no ground to interfere.

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• 2012 (8) TMI 52
  Unconditional waiver of pre-deposit of interest and penalty - Held that:- As the appellant submits that the appellant was in bona fide belief that they have paid the entire amount of Service Tax on the basis of certificate issued by Chartered Accountant has admitted that the appellant has paid only a sum of Rs.6,24,21,219/- out of Rs.18,08,18,228 - direction to make a pre-deposit of balance amount of along with 25% of penalty within a period of eight weeks.

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• 2012 (8) TMI 51
  Cenvat credit - Job worker of the appellant manufactured certain moulds for the former the ultimate use thereof in manufacture of intermediate goods for the appellant – alleged that mould was not received in the premises of the appellant there was no mould further send by the appellant to the job worker – Held that:- Tools retained by it are property of the appellant and used to make components for the appellant - It was to reduce the exercise of movement of goods and no malafide was attributed or attached to the conduct of the appellant - cenvat credit does not appear to have been claimed malafide - appeal is allowed.

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• 2012 (8) TMI 50
  Cenvat Credit - job worker the goods manufactured by it being dutiable in the hands of the ultimate manufacturer - Only because the goods are exempted, cenvat credit was disallowed – Held that:- When the goods was not exempted goods since that was dutiable the intermittent stage the appellant cannot be denied the benefit claimed – In favor of assessee

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• 2012 (8) TMI 26
  Limitation - demand was confirmed after denying the benefit of Notification No. 16/97 – Held that:- Demand is for the period from 30.9.1997 to 1.1.1998 and the show-cause notice was issued on 5.5.1998 by invoking the extended period of limitation on ground of suppression with intent to evade payment of duty - Commissioner (Appeals) has not given any finding on the contention raised by the appellant on the issue of limitation - matter is remanded to the Commissioner (Appeals)

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• 2012 (8) TMI 25
  Cenvat credit on service tax paid on 'Goods Transportation Agencies' beyond the place of removal – Held that:- In the case of ABB Ltd. (2011 (3) TMI 248 - KARNATAKA HIGH COURT ) if service tax is paid on transportation charges, it fell within the phrase "clearance of final products from the place of removal" and therefore, the assessee was entitled to CENVAT credit - in favour of the assessee

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• 2012 (8) TMI 24
  CENVAT credit of service tax paid on GTA service which was used for transportation of their final product from factory to the port for export - place of removal of the goods was the port of export – Held that:- Definition of 'input service' under rule 2(l) of the CENVAT Credit Rules, 2004 will squarely cover the above service which was used by the respondent for transportation of the goods from the factory to the place of removal

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• 2012 (8) TMI 23
  Duty on waste and scrap - SSI exemption - rebate of duty paid on inputs raw material used in the manufacture of goods under the provisions of Notification No. 41/2001 CE(NT) – Held that:- value of clearances during the years in question was below the ceiling limit prescribed in the SSI exemption Notification - benefit of Notification No. 89/95-C.E., dated 18-5-1995 granting exemption from payment of duty on waste and scrap arising in the course of manufacture of exempted goods is available to them as cycle parts exported by them are not liable to duty - in favour of assessee

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