TMI Tax Updates - e-Newsletter
September 29, 2015

Case Laws in this Newsletter:

Income Tax Customs Corporate Laws PMLA Service Tax Central Excise CST, VAT & Sales Tax Wealth tax Indian Laws

Articles

• CREDIT OF REFUND CLAIMS TO CONSUMER WELFARE FUND
• REFUND CLAIM IN SERVICE TAX

News

• Finance Minister Arun Jaitley : New Law on Anvil for Fast Track Arbitration in Order to Address the Stressed Areas of the Banking Sector; Reiterates the Government’s Commitment to Give Operational Freedom to the Public Sector Banks (PSBs); Efforts are on to Give Shape to the Banking Bureaus and to Professionalize all Personnel Issues

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• RBI Reference Rate for US $

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• Finance Minister Arun Jaitley Formalizes Merger of Forward Markets Commission (FMC) with SEBI; FM: Amalgamation of FMC And SEBI would bring Convergence of Regulations in the Commodities and Equity Derivatives Markets;

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• No Extension in Due Date of Filing of Returns and Audit Report; Due Date Continues to be 30th September, 2015; Tax Payers and Practitioners are Advised not to give any Credence to any Fake or Fraudulent Order about Extension of Date

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Notifications

Income Tax

• 75/2015 - dated 23-9-2015 - IT
  Income-tax (Thirteenth Amendment) Rules, 2015

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• 214/2015 - dated 20-7-2015 - IT
  U/s. 35AC, IT ACT, 1961 - Eligible Projects Or Schemes, Expenditure On – Palana Reddy Memorial Charitable Trust, Hyderabad

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• 212/2015 - dated 20-7-2015 - IT
  U/s. 35AC, IT ACT, 1961 - Eligible Projects Or Schemes, Expenditure On – Calcutta Rescue, Kolkata

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• 211/2015 - dated 20-7-2015 - IT
  U/s. 35AC, IT ACT, 1961 - Eligible Projects Or Schemes, Expenditure On – Bharat Sevashram Sangha, Kolkata

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• 210/2015 - dated 20-7-2015 - IT
  U/s. 35AC, IT ACT, 1961 - Eligible Projects Or Schemes, Expenditure On – Share Society to Heal Aid Restore Educate, Mumbai

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• 209/2015 - dated 20-7-2015 - IT
  U/s. 35AC, IT ACT, 1961 - Eligible Projects Or Schemes, Expenditure On – H.B.S. Trust, (Human Benefits Service Trust), Jodhpur

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• 208/2015 - dated 20-7-2015 - IT
  U/s. 35AC, IT ACT, 1961 - Eligible Projects Or Schemes, Expenditure On – Kherwadi Social Welfare Association, Mumbai

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• 207/2015 - dated 20-7-2015 - IT
  U/s. 35AC, IT ACT, 1961 - Eligible Projects Or Schemes, Expenditure On – Jeevan Jyot Cancer Relief & Care Trust, Mumbai

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• 206/2015 - dated 20-7-2015 - IT
  U/s. 35AC, IT ACT, 1961 - Eligible Projects Or Schemes, Expenditure On – Sevalaya, Thiruninravur

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• 205/2015 - dated 20-7-2015 - IT
  U/s. 35AC, IT ACT, 1961 - Eligible Projects Or Schemes, Expenditure On – Indian Centre for Plastics in the Environment, Mumbai

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• 204/2015 - dated 20-7-2015 - IT
  U/s. 35AC, IT ACT, 1961 - Eligible Projects Or Schemes, Expenditure On – Iskcon Food Relief Foundation, Mumbai

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• 203/2015 - dated 20-7-2015 - IT
  U/s. 35AC, IT ACT, 1961 - Eligible Projects Or Schemes, Expenditure On – Deepak Foundation, Vadodara

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• 202/2015 - dated 20-7-2015 - IT
  U/s. 35AC, IT ACT, 1961 - Eligible Projects Or Schemes, Expenditure On – SEWA-Rural (Society for Education, Welfare and Action-Rural), Bharuch

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• 201/2015 - dated 20-7-2015 - IT
  U/s. 35AC, IT ACT, 1961 - Eligible Projects Or Schemes, Expenditure On – ALERT-INDIA (Association for Leprosy Education, Rehabilitation and Treatment-India), Bombay

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• 200/2015 - dated 20-7-2015 - IT
  U/s. 35AC, IT ACT, 1961 - Eligible Projects Or Schemes, Expenditure On – Mahila Seva Samity, Kolkata

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• 199/2015 - dated 20-7-2015 - IT
  U/s. 35AC, IT ACT, 1961 - Eligible Projects Or Schemes, Expenditure On – Vatsalya Trust, Mumbai

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VAT - Delhi

• No. F.3(14)/Fin(Rev-I)/2012-13/DS-VI/794 - dated 17-9-2015 - DVAT
  Appointment of Assistant Commissioner cum VATO

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• No.F.3(11)/Fin(T&E)/2009-10/DS-VI/768 - dated 14-9-2015 - DVAT
  Appointment of Addl Commissioner / Joint Commissioner

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Highlights / Catch Notes

Income Tax

• Dismissal of application for additional evidence as well as the appeal - disallowance of development expenses - Explanation appears to have manufactured for the purpose of furnishing an explanation - application was rightly rejected - HC
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• Only because some of the doctors have admitted of receiving the payments mentioned in the seized material or the fact that the hospital’s application before the Settlement Commission has been admitted, in no way proves that the assessee has actually received the amount mentioned in the seized document, unless there are other corroborative material to prove such fact. - Suspicion however strong cannot be a substitute for evidence - AT
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• Registration u/s 12AA/12A - To ask for documentary evidence in the form of a resolution or some credible proof for the amendment in the aims and objects of the Trust, created as back as in 1159 AD, is uncalled for - AT
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• From the provisions of Section 80, Section 32(2) and Section 72(2) of the Act, it is evident that loss of the earlier years other than the unabsorbed depreciation shall not be allowed to be carry forward unless the return of income is filed within the due date specified U/s.139(3) - AT
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• Disallowance u/s 37(1) - expenditure on abandoned films - Rule 9A - assessee has shown the expenditure incurred towards the film ‘Shabari’, as his closing stock of the relevant financial year and has not claimed it as expenditure. When there is no claim, there can be no disallowance of the same. - AT
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• Penalty U/s. 271(1)(c) - claim of exemption u/s 10(38) whereas sale of shares was not through stock exchange - company adopted LIFO method where as AO adopted FIFO method for valuation of shares - LTCG claimed as STCG and setting off to the business loss claimed - this is not a fit case for levying penalty - AT
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• TDS u/s 194C on Freight - booking only net profit out of the transaction - trucks are hired from open market to provide GTA service and freight is being paid by the assessee at lesser rate - disllowance u/s 40(a)(ia) confirmed - AT
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Customs

• Valuation - Misdeclaration of value - import of Mencozeb Technical 85 % at US$2.10 per kg., CIF - sole distributor - rejection of value - No evidence of any nature whatsoever is brought on record to show that they were contemporaneous sales/transactions at high price - No demand - SC
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• Undervaluation of import of electronic components - department has built up its case on the basis of export declarations filed by the suppliers of the goods - A department had discharged the burden of proof - appellants have failed to bring any evidence on record to substantiate that the value declared by them is correct - demand confirmed - AT
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• Valuation of goods - import from the group companies is covered under Sales Promotion Agreements. - adjudicating authority simply considered the difference in price, which he states wrongly to be 55%, without examining the reasons for the price difference in proper prospective. - No demand - AT
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Corporate Law

• Rectification in the Register of Members - the period of limitation of 3 years would start from the date, on which these documents were signed - petition came to be filed after expiry of 3 years - the petition is barred by limitation - CLB
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Service Tax

• Refund claim - input services used in export of goods - debit notes - notification No. 41/2007 - merely because the documents are debit notes the refund cannot be denied at the end of the service recipient - AT
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• Refund claim - input services used in export of goods - notification No. 41/2007 - exporter should not be unduly burdened with a condition to establish that the service provider was registered under port services. - AT
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• Business Auxiliary Services - intention to evade service tax - In the show cause, neither any period has been specified nor any amount of demand quantified. - demand set aside - AT
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• Claim of refund claim by the recipient of services - service provider had paid the service tax wrongly - assessee who filed a refund claim was driven from one Officer to another for granting refund - The rejection by both Commissionerates is unsustainable - refund allowed - AT
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Central Excise

• MRP based Valuation - Revenue was of the view that since the face wash gel is sold free along with dandruff shampoo, the value / price of face wash gel should also be included and raised demand in this behalf applying the provisions of Section 4A - contention of revenue has no merit - SC
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• Classification of goods - whether the product manufactured out of stone aggregates, cement, water, sand - the classification of ready mix concrete was under Chapter Heading 68 for the period prior to 01.03.1997 - SC
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• Classification of goods - milk shake mix and soft serve mix - the additives which can be added while making the product are illustrative only and merely because stabilizer is not mentioned therein would not mean that after adding the stabilizer the product in question ceases to be dairy produce - SC
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• CENVAT Credit of CVD paid through DEPB - after a specific prohibition was introduced under the Scheme from 1.4.2000 onwards, it is not possible for the appellant to claim the benefit in respect of the Bill of Entry of the year 2003 - HC
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• Utilization of CENVAT credit of the Additional Excise Duty - restriction applied only in the payment of BED and SED, which alone is payable under the Excise Tariff Act and not to AED payable under Section 3 of Act 58 of 1957 - HC
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• Import of goods meant for granite quarry - whether Consumables and Tools - scope of the term "consumables" - 100% EOU - procurement of the items domestically in CT-3 - appellants are not eligible for spares for excavators, tyres and tubes, button bits. - AT
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VAT

• Levy of VAT on MRP - deduction of discount - Bihar VAT - The State Legislature not being competent to provide for levy of tax on the first point of sale on the basis of MRP or any other notional value, there could be no question of the legislature providing for the same even by way of exercise of option by the dealer concerned - HC
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Case Laws:

• Income Tax

• 2015 (9) TMI 1248
  Exemption u/s 11 - accumulation of income upto 25% - Held that:- where CIT (Appeals) has gone wrong is that he ignored the provision which entitled the assessee to exercise such an option only to the extent of 25%. In the instant case, the assessee had exercised the option of setting apart an amount of ₹ 32 lacs which was more than 25%. The total income was ₹ 99,41,221/- and 25% thereof would be ₹ 24,85,305/-. Thus, the entire amount of ₹ 32 lacs could not have been allowed as directed. This aspect has not been noticed by the High Court as well. No further amount could be allowed as deduction and we do not understand as to how the entire income is treated as exempted from income tax. We, accordingly, allow this appeal by setting aside the order of the High Court and direct the Assessing Officer to recompute the taxable income in accordance with this judgment.

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• 2015 (9) TMI 1247
  Interest earned from Fixed Deposits before business actually commenced - 'interest from other sources' OR 'business income' - Held that:- We are not going into this issue inasmuch as this appeal can be disposed of on the ground that consistency does demand that there being no change in circumstances, the income for the year 1993-94 would also have to be treated business income as for the previous three years. - Decided in favour of assessee.

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• 2015 (9) TMI 1246
  Dismissal of application for additional evidence as well as the appeal - disallowance of development expenses - Held that:- The appellant could have easily told the Assessing Officer or the Commissioner of Income Tax (Appeals)- 1, Ludhiana that the vouchers were in possession of another Director who had left the company. The explanation appears to have manufactured for the purpose of furnishing an explanation. The vouchers are not signed by and on behalf of the assessee and there is no evidence as to whether these payments were made for business purposes etc and, therefore, even otherwise, irrelevant. The substantial question of law based upon a judgment of the Hon'ble Supreme Court in Tek Ram (dead through LRs) Vs. Commissioner of Income Tax, [2013 (8) TMI 459 - SUPREME COURT ] is meaningless as documents produced by the assessee in the said case as additional evidence were found to be relevant. Reference to another judgment of this Court in CIT vs. Mukta Metal Works [2011 (2) TMI 250 - PUNJAB AND HARYANA HIGH COURT] is not tenable as additional evidence produced in the aforesaid case was held to be necessary for adjudication of the pending lis. - Decided against assessee.

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• 2015 (9) TMI 1245
  Waiver of interest as provided under section 220 (2A) - single Judge upheld the claim of the respondent and directed him entitled to the benefit of waiver of interest for the period up to the date provided for payment of tax under the revised order and demand issued on the basis of the Tribunal's order - Held that:- Though the Commissioner has accepted that the three conditions provided for in section 220(2A) are satisfied, he has chosen to limit the benefit of waiver to a particular period. While examining the validity of that order, what is relevant to be examined is whether the reason assigned by the Commissioner for restricting waiver is valid or not. On such examination, it is seen that in March, 1996, though this Court decided the case of Narayanan (1996 (3) TMI 81 - KERALA High Court), the favourable appellate order obtained by the assessee herein in an appeal filed by them, entitling them for assessment treating the firm as a registered one, was remaining valid. That order was invalidated by the Tribunal only on 20.5.1998, in the appeal filed by the Revenue. In other words, it was only on 20.5.1998, the assessee became disentitled to assessment on the status of a registered firm. The fact that this court has decided the issue in the case of Narayanan (supra) is of no consequence at all till 20.5.1998 when the appeal was decided by the Tribunal. This, therefore, shows that the reason which weighed with the Commissioner to restrict the benefit of waiver till March, 1996 is absolutely untenable. It was in the aforesaid circumstances that the learned single Judge interfered with the order and directed that the assessee be given the benefit of waiver up to the date provided for payment under the revised order and demand issued on the basis of the Tribunal's order. In our view, this conclusion of the learned single Judge does not suffer from any illegality justifying interference in appeal.

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• 2015 (9) TMI 1244
  Penalty levied u/s 271 (1) (c) - AO disallowed the claim by referring to the Explanation under Section 80I A (13) - ITAT deleted the penalty - Held that:- In the facts of the present case, the view taken by the ITAT that the deduction claimed was bona fide and on the basis of the certificate of the auditors appears to be a plausible one and cannot be said to be suffering from any perversity. This was not a case whether the Assessee had not disclosed the full details. It had claimed the deduction only on the basis of the report of the auditors as required by the Act.- Decided in favour of the Assessee.

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• 2015 (9) TMI 1243
  Deemed dividend u/s 2(22)(e) - loan or advance - difference between the amount paid and received during the year - Held that:- The AO has simply proceeded on the assumption that since there is an opening debit balance in the account, it should be treated as an outstanding loan and that every payment thereafter made by the Assessee to DIPL should be taken to be in the nature of repayment of the loan. The stand of the Assessee that the opening debit balance cannot be treated as a starting point for considering the nature of the payments made during the year finds support in the decision of the High Court of Madras in Sunil Kapoor v. Commissioner of Income Tax [2015 (3) TMI 812 - MADRAS HIGH COURT]. One of the questions considered by the Madras High Court in the said decision was whether the Tribunal in that case was right in not taking into consideration the opening balance in the Assessee's loan account as a starting point of the transactions carried on during the year. The High Court answered the question in the affirmative holding that it is only the relevant entries during the year in question that had to be looked into and that only those amounts paid to the Assessee by the company during the relevant year, less the amount repaid by the Assessee in the same year, should be deemed to be dividend. No legal infirmity in the order of the ITAT. No substantial question of law arises - Decided against revenue.

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• 2015 (9) TMI 1242
  Reopening of assessment - maintainability of the writ petition - Held that:- In the facts of the present case, where the jurisdiction of issuance of notice under section 148 of the Income Tax Act was itself under challenge, we are of the opinion that the learned Single Judge has rightly held that the writ petition, in the said circumstances, would be maintainable. No interference is called for with such part of the order of the writ court challenged in this appeal.

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• 2015 (9) TMI 1241
  Assessments u/s 153A - Held that:- In cases where the assessment or reassessment proceedings have already been completed and assessment orders have been passed, which were subsisting when the search was made, the Assessing Officer would be competent to reopen the assessment proceeding already made and determine the total income of the Assessee. The Assessing Officer, while exercising the power under Section 153A of the Act, would make assessment and compute the total income of the Assessee including the undisclosed income, notwithstanding the Assessee had filed the return before the date of search which stood processed under Section 143(1)(a) of the Act.Keeping the principles laid down on the subject and the provisions of law, we are of the opinion that there is no merit in assessee’s contentions raised in the above grounds. - Decided against assessee. Un-explained Loans - Held that:- As far as the credit is concerned, assessee has filed necessary confirmations, statement of return of income for respective assessment years together with statement of facts. It is also a contention that a further loan of ₹ 5 Lakhs advanced by the same person in the subsequent year has been accepted by the AO as genuine credit. Considering these facts, we are of the opinion that the credit received long back has to be accepted as genuine one. Like-wise, in the case of D Venumadhav also there is no dispute with reference to the identity of the person and employment with M/s. Aditya Hospital. AO cannot base his satisfaction why assessee has to borrow from one of the employees in Financial Year 2003-04. AO has to examine whether the credit is genuine or not. The fact that said person has confirmed the advance and is a genuine person has to be considered in verifying the creditworthiness of the person. Considering the facts of the case and amount involved, we are of the opinion that credit from Shri D. Venu Madhav also has to be considered as genuine one. AO also did not make any enquiries with the said persons nor having any incriminating material in the course of search proceedings. In view of this, AO is directed to delete the additions so made. Assessee’s grounds on this issue in AY. 2004-05 are allowed. - Decided in favour of assessee. Disallowance of Expenditure - Held that:- There is no need to disallow any expenditure claimed in the course of assessee’s profession. Considering that assessee is a consultant surgeon and the hospital also certified that assessee is employing his own para-medical staff, which factor is also agreed by the Ld. CIT(A) we are of the opinion that there is no need to disallow any expenditure which was claimed in the original returns of income. There is no incriminating material found and assessee cannot be expected to produce the vouchers and persons after lapse of sufficient time when assessee’s returns originally filed were accepted without any scrutiny. In view of this, we are of the opinion that no expenditure can be disallowed out of the salary claimed and accordingly, assessee’s grounds are allowed. AO is directed to delete the disallowance so made in all the impugned assessment years.- Decided in favour of assessee. Disallowance of vehicle maintenance and depreciation - Held that:- As far as depreciation in AY. 2006-07 is concerned, since the date of purchase is required to be examined for allowing depreciation in that year as directed by the CIT(A), AO is directed to examine the date of purchase and allow depreciation as per law either at 100% of the claim or 50% of the claim if it is purchased and used for less than 180 days in that year. To that extent, CIT(A) direction is upheld. However, with reference to disallowance of 50% of depreciation claim in respective assessment years, the same cannot be upheld. As far as depreciation is concerned, even if vehicle is used for one single day, the entire depreciation as per the rules has to be allowed. Since assessee’s vehicles are used for the profession on which there is no dispute, disallowance of depreciation U/s. 32 cannot be considered except on the basis of usage in the year whether use of full year or part of the year as per the provisions of Section 32. Since depreciation is allowable U/s. 32, the general provision of 37(1) cannot be invoked. In view of this, disallowance of 50% of depreciation for personal use cannot be done as per the provisions of the Act. - Decided in favour of assessee. Disallowance of 50% of the vehicle maintenance - Held that:- Assessee is a doctor and also a public figure some use of vehicles for personal use cannot be ruled out. Consistent with the view taken by co-ordinate Benches in number of cases, we are of the opinion that the disallowance for personal use can be restricted to 10% of the vehicle maintenance claimed in respective assessment years. Even though we are aware that these are re-assessments, we are of the opinion that AO can re-examine the issues which are not examined in the original assessment and in this case, there seems to be no assessments U/s. 143(3) earlier. Following the principles laid down by the Hon'ble Allahabad High Court in the case of Rajkumar Arora [2014 (10) TMI 255 - ALLAHABAD HIGH COURT] we are of the opinion that AO can examine the vehicle maintenance claimed in the re-assessment. Accordingly, we restrict the expenditure disallowance to 10% being personal in nature U/s. 37(1). Balance of the expenditure is allowable - Decided partly in favour of assessee. Additions made on the basis of Hospital Management System package - Held that:- only because some of the doctors have admitted of receiving the payments mentioned in the seized material or the fact that the hospital’s application before the Settlement Commission has been admitted, in no way proves that the assessee has actually received the amount mentioned in the seized document, unless there are other corroborative material to prove such fact. Suspicion however strong cannot be a substitute for evidence. No addition can be made only on the basis of presumptions and surmises. In the facts of the present case, we are of the view that adequate evidence or material have not been brought on record to conclusively prove the fact that the assessee has received cash payments as mentioned in the seized material. Accordingly, addition cannot be sustained. - Decided in favour of assessee.

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• 2015 (9) TMI 1240
  Registration u/s 12AA/12A denied - trust was created in the year 1159 AD - absence of (Execution of Trust deed and its Registration - genuineness of the activities - trust is a private religious body - whether DIT(Exemption) has allowed his decision to be influenced by suspicion - Held that:- It was declared in the declaration of the Trust that the trustees stand possessed of the “Trust Fund” comprised of the moneys and other properties, both movable and immovable, which are duly accounted for in the books of accounts of Tsurphu Labrang and is carried forward every year on its balance sheet and the income arising there from is applied to the administration or execution of the aims and objects of the Trust. We hold that in accordance with the provisions of the Income-tax Act, 1961 and rules made there under, the execution of a formal deed of trust was not necessary for grant of registration u/s 12AA/12A of the Act. It is not necessary that the aims and objects presently being followed by the assessee Institution/Trust should be the same at the time of establishment of the Institution or the creation of the Trust itself. The aims and objects of the trust may be amended and some new aims and objects may be added or deleted in accordance with changing time and as per the requirement of the mankind at large. To ask for documentary evidence in the form of a resolution or some credible proof for the amendment in the aims and objects of the Trust, created as back as in 1159 AD, is uncalled for - it is held that the aims and objects and purposes of the assessee trust were charitable in nature, qualifying the trust for registration u/s 12AA/12A of the Act. Expenditure for the benefit of trustees / head of the trust - Held that:- The food and clothes and similar expenditure are the basic needs of a person for survival and the expenditure incurred for fulfillment of these basic needs of the supreme head of the institution/trust could not be held as violative of the provisions of Section 13 of the Act. In this view of the matter, the issue is decided in favour of the assessee and it is held that the supreme head of the trust taking food and clothes and similar basic needs from the funds of the trust were not violative of the provisions of Section 13 of the Act. Genuineness of the activity - DIT(E)/CIT(E) could not go into the issues relating to the income and expenditure account of the assessee, which were the subject-matter of assessment and they are not relevant for the purpose of granting or otherwise of registration u/s 12AA/12A of the Act. DIT (Exemptions) directed to grant registration to the assessee trust u/s 12AA/12A of the Act with effect from assessment year 2011-12 onwards - Decided in favour of assessee.

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• 2015 (9) TMI 1239
  Repairs and replacements - whether amount of repairs and replacements claimed in the original return was allowed to assessee under the depreciation head or in the absence of the same allowable as revenue expenditure as was done by the Ld. CIT(A)? - Held that:- Even though the Revenue relied on certain depreciation schedules and assessee also furnished certain schedules, same could not be verified by us in the absence of the original claim of depreciation schedules, the AO’s working of depreciation, submissions of assessee in the course of assessments. As already stated above, there is no separate repairs and replacement expenditure in the schedules to the P&L A/c as verified by us. Whether it was part of any other head of account and claimed in the computation or from balance sheet amounts or from any other schedules of expenditure could not be verified as assessee has not placed the complete certified P&L A/c copies. Assessee being a public limited company, the annual reports filed with the Company Law Authorities and also the Income Tax computations at the time of assessments required to be examined. Since they are not placed before us, we cannot give any finding on this issue at the moment. As seen from the orders of CIT(A), he has considered that the amount was not allowed to assessee in the depreciation schedule and allowed in his order and made further disallowance of 0.5% of the claim as he considered the amount as part of production expenses, disallowed that amount on the basis of orders of ITAT in earlier years as well in the impugned year. To that extent, CIT(A)’s order is to be confirmed. However, in case the same amount was already added in the depreciation schedule as an addition during the year but claimed as revenue expenditure at 100% under the head ‘Repairs and Replacement’, the same cannot be allowed as it will be a double claim. In case the claim of repairs and replacement is in addition to the additions to assets shown in the schedule and those two figures are entirely different, then Revenue’s contentions that there is a double claim, cannot be accepted. However, these require deeper analysis with entire assessment record and unfortunately, neither party placed complete details before us even though written submissions are given, relying on their own stated positions. Therefore, we are of the opinion that this issue requires examination by the AO afresh. Accordingly, he is directed to 1. Examine the claim of repairs and replacement and the original accounts from which the amounts were claimed in the computation of income at the time of filing original return. 2. Whether the amounts claimed under the head ‘Repairs and Replacement’ is same as that of additions shown in the balance sheet as new assets which the AO has considered and allowed depreciation. AO is directed to examine all the depreciation schedules and also account schedules and determine whether the amount is different from the amounts considered in depreciation schedule or not? In case the same amount was taken in the depreciation schedule, AO is directed to exclude the same and allow the amount as revenue expenditure as per the directions of Ld. CIT(A). In fact the entire claim of ‘Redundant Animation Project’, ‘Redundant Software Project’ was directed to be examined and allowed by ITAT but AO allowed partly as revenue expenditure. Therefore, we do not see any reason that balance of the amount should be capitalized. Accordingly, AO is directed to exclude the same, if it is claimed and allowed in the depreciation schedule also. With these directions, while upholding the orders of the CIT(A) to that extent, AO is directed to re-examine the above issues on the basis of the record and schedules of P&L A/c and give a finding whether there is any double claim? In case the amount was also included in the depreciation schedule, he is directed to exclude the same and re-work out the depreciation on the balance amount. The amount is eligible for deduction as revenue expenditure subject to disallowance as directed by CIT(A). - Decided partly in favour of revenue for statistical purposes. Bad debts claim - Held that:- Whether the revised financial statements were only filed for the purpose of Income Tax or the company revised the accounts, not only in this year but also in later year, was not placed on record. In case assessee has written off the amounts in the revised financial accounts in this AY, the claim of assessee is allowable. To that extent, order of CIT(A) is to be upheld. AO is directed to examine and if revised financial schedules are accepted, Assessee’s claim is allowable. - Decided in favour of assessee for statistical purposes.

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• 2015 (9) TMI 1238
  Reopening of assessment u/s.148 - Held that:- The fact that the assessee had changed its method by treating the accrued interest on cash basis as against mercantile basis came to light only during the assessment proceeding for the assessment year 2007-08. Therefore, there was a valid reason for the Assessing Officer to believe that the certain income had escaped assessment. In these circumstances, we find that the Ld. CIT (A) was justified to reopen the assessment of the assessee invoking the provisions of section 147 & section 148 of the Act. - Decided against assessee. Disallowance of bad debts - Held that:- The assessee is entitled to the claim of deduction on account of bad debts even for the loss incurred due to irrecoverable loans and advances made during the course of money lending business of the assessee. Therefore respectfully following the decision of the in the case All Growth Finance & Investment Pvt Ltd., Vs. CIT [2011 (5) TMI 920 - DELHI HIGH COURT] we hereby direct the Ld. Assessing Officer to allow deduction to the assessee for its claim of bad debts on account of irrecoverable interest income which was treated as the income of the assessee during the earlier years and loss incurred due to irrecoverable loans and advances made by the assessee during the course of its money lending business subject to verification of the fact that the interest income were actually offered to the income of the assessee during the earlier years and the loans and advances were made during the course of the money lending business of the assessee. Accordingly, this issue is remitted back to the file of the Ld. Assessing Officer. - Decided in favour of assessee for statistical purposes. Disallowance of the claim of set-off of unabsorbed business losses of the earlier year - Held that:- From the provisions of Section 80, Section 32(2) and Section 72(2) of the Act, it is evident that loss of the earlier years other than the unabsorbed depreciation shall not be allowed to be carry forward unless the return of income is filed within the due date specified U/s.139(3) of the Act - Decided against assessee.

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• 2015 (9) TMI 1237
  Disallowance u/s 37(1) - expenditure on abandoned films - Rule 9A - huge loss pertaining to new projects - Held that:- Hon'ble Madras High Court in the case of CIT vs. Prasad Productions (P) Ltd (1989 (1) TMI 38 - MADRAS High Court ), wherein it was held that even if expenditure relating to positive prints is not allowable under rule 9A, the same can be allowed u/s 37(1) of the Act as it is incurred in connection with the business of film production. As the decision of the Coordinate Bench is on similar set of facts, we, respectfully following the same, allow the assessee’s ground of appeal as far as the claim of expenditure on abandoned films is concerned. As regards the CIT (A)’s directions to the AO to verify whether the conditions prescribed under Rule 9A are satisfied in the case of film Shabari, we find that the said movie was released subsequently and therefore, provisions of Rule 9A are very much applicable. However, the assessee has shown the expenditure incurred towards the film ‘Shabari’, as his closing stock of the relevant financial year and has not claimed it as expenditure. When there is no claim, there can be no disallowance of the same. - Decided in favour of assessee.

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• 2015 (9) TMI 1236
  TDS liability - u/s 194J or 192 - whether employer and employee relationship exists between deductor and the deductee? - Held that:- , Dr. Kulbhushan S. Dagar was paid an amount of ₹ 10 Lakhs for his services rendered in the month of February 2008 and March 2008 (Rs. 5 Lakhs p.m.). Dr. Kulbhushan S. Dagar has filed his return of income for the AY. 2008-09 showing the said amount of ₹ 10 Lakhs as 'income from profession'. Therefore, it clearly indicates that Dr. Kulbhushan S. Dagar received consultation fee from the assessee. No infirmity in the orders passed by the Ld. CIT(A) holding that Dr. Kulbhushan S. Dagar was a consultant with assessee-hospital and tax was deducted at source U/s. 194J of the Act for the year under consideration. Therefore, this appeal is liable to be dismissed. See DEPUTY COMMISSIONER OF INCOME TAX Versus M/s QUALITY CARE INDIA LTD [2014 (6) TMI 608 - ITAT HYDERABAD ] - Decided in favour of assessee.

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• 2015 (9) TMI 1235
  Penalty U/s. 271(1)(c) - furnishing of inaccurate particulars - concealment of income - claim of exemption u/s 10(38) whereas sale of shares was not through stock exchange - company adopted LIFO method where as AO adopted FIFO method for valuation of shares - Long Term Capital Gains claimed as ‘Short Term Capital Gain’ and setting off to the business loss claimed - Held that:- The principles laid down by the Hon'ble Supreme Court in the case of Price Waterhouse Coopers Pvt. Ltd., Vs. CIT [2012 (9) TMI 775 - SUPREME COURT] certainly applies to the facts of the case. Since AO has re-computed the computation by following FIFO method as against the average cost price method adopted by assessee, it cannot be stated that assessee is guilty of furnishing inaccurate particulars. Mere making of a claim by way of wrong method of computation by itself will not amount to furnishing of inaccurate particulars of income and said method claimed in the return of income cannot amount to furnishing inaccurate particulars of income. As already stated, assessee had admitted the mistake it committed in claiming exemption, by filing revised computation and setting off to business loss, on the very first date of hearing itself before the same was noticed by the AO. Therefore, assessee has neither furnished inaccurate particulars nor concealed income. In fact it is not the case of Revenue that assessee has concealed any income. this is not a fit case for levying penalty. - Decided in favour of assessee.

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• 2015 (9) TMI 1234
  Reassessment proceedings - assessment order by CIT (A) by recording a perverse finding that the earlier Assessing Officer has applied mind to the royalty expenses being revenue in nature, was not justified - Held that:- In response to the queries raised by the ld AO, the assessee in its submission dated 5.9.2008, has filed the details in respect of payment of royalty on sales along with agreement entered in respect of royalty, copy of challans of TDS on royalty and copy of approvals received from Ministry of Industry etc. Thus, at the time of scrutiny assessment the ld AO deemed to have applied his mind and he did not choose to make any addition on the issue. In the ‘reason recorded’ the ld AO has not mentioned as to what is the material or information which has come to his possession or to the notice , on the basis of which he is making his belief that the royalty expenses should be treated as capital expenditure. Therefore respectfully following the judgment of the Hon’ble Supreme Court in the case of Kelvinator (2010 (1) TMI 11 - SUPREME COURT OF INDIA) and decision of jurisdictional High Court in the case of Munjal Showa Ltd (2012 (4) TMI 239 - DELHI HIGH COURT ), the ld. AO cannot be permitted to change his opinion without any new facts before him. We find that the ld. CIT(A) has analyzed all the material which was submitted by the assessee before the ld. AO in response to queries raised during assessment proceedings u/s 143(3) of the Act and thereafter has given categorical finding on the issue of change of opinion by the Assessing Officer. Therefore there is no perversity in the order of the ld. CIT (A). It may be noted that on merit also the issue has been decided in favour of the assessee by the jurisdiction High Court in AY 2008-09. No error in the order of the ld. CIT(A) and therefore no interference is required in finding of the ld. CIT(A) quashing the reassessment proceeding. - Decided against revenue.

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• 2015 (9) TMI 1233
  Addition u/s. 68 - unaccounted cash paid for obtaining the accommodation entries - CIT(A) deleted the addition - Held that:- The creditworthiness is reflected through sources of funds in the balance sheet, the details of which were made available by the assessee during the assessment/ remand and appellate proceedings, on the basis of which it can be concluded that the lenders had sufficient funds to make the investment and to advance loans and those investments / loans have been duly disclosed in its Balance Sheet. We further note that in the Remand Report the AO has confirmed that he had examined the Director of Charm Investments Pvt. Ltd. and also recorded his statement on 19-08- 2009.In view of the above, we are of the considered view that the A.O. was not justified in making addition on account of unsecured loans to the extent of ₹ 17,50,000/- from the loan creditors. Therefore, the Ld. CIT(A) has rightly deleted the addition made on account of unsecured loans from the loan creditors and as a natural consequence, the additions on account of commission to the extent of ₹ 35,000/- was also rightly deleted. Since the Ld. CIT(A) has passed a well reasoned order and therefore, no interference is called for in the impugned order on our part, hence, we uphold the impugned order dated 03.12.2010 passed by the Ld. CIT(A) and accordingly dismiss the appeal of the Revenue. - Decided in favour of assessee. Treating the interest earned on Margin Money Deposits as income from other sources - denial of deduction u/s. 80IB - Held that:- We have seen that the decision of the Hon’ble Delhi High Court for the Assessee in the case CIT vs. Jaypee DSC Ventures Ltd. (2011 (3) TMI 309 - Delhi High Court) has not been considered by the Ld. CIT(A) while deciding the issue involved in ground no. 1, therefore, we are of the view that the Hon’ble Delhi High Court has considered all the decisions mentioned by the Ld. CIT(A) in the impugned order and decide the issue in favor of the assessee. As submitted by the Ld. DR that the issue may be set aside to the file of the Ld. CIT(A) to decide the same afresh, after considering the decision of the Hon’ble Delhi High Court. In view of the above, we think it proper that request of the Ld. DR seems to be genuine and should be accepted, therefore, we set aside the issue involved to the file of the Ld. CIT(A) to decide the same afresh, under the law, after considering the decision of the Hon’ble Delhi High Court decision in the case of CIT vs. Jaypee DSC Ventures Ltd. [2011 (3) TMI 309 - DELHI HIGH COURT]. Needless to add that the assessee should be given adequate opportunity of being heard. - Decided in favour of assessee for statistical purposes.

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• 2015 (9) TMI 1232
  Disallowance of interest - whether the amounts advanced by assessee to its sister-concerns was for commercial expediency? - Held that:- In order to reduce the litigation, assessee has charged interest on Natco Organics Ltd., in AY. 2008-09 and accounted for an amount of ₹ 5,96,29,676/-, by way of Board resolution in that year. Since Board resolution was passed subsequently and at the time of advance no interest was provided, the amount cannot be considered as accrued interest and this principle was also accepted by the ITAT in assessee’s own case in AY. 2007-08, when such amount was brought to tax on notional accrual basis in that year. As far as advances to Krishnapatnam Port Co. Ltd., is concerned, assessee charged an amount of ₹ 60,82,000/- as interest and was accounted which was not even reduced by the AO in AY. 2006-07, while notional accrued interest was taxed in earlier year. Keeping these factors in mind and consistent with orders of ITAT in earlier years and later year, we are of the opinion that the amounts cannot be disallowed in this year, when assessee has offered amounts in a later year considering all the years for calculation of interest. The fact that assessee has business interest in various concerns which helps in its own business by way of supply of raw-material for critical products and also for transportation of goods for export, we are of the opinion that the advances are for the purpose of business and commercial expediency is established. For these reasons, we uphold assessee’s contentions and reverse the orders of the AO and CIT(A) on this issue. AO is directed to delete the disallowance of interest, claimed on other borrowals, so made in these two assessment years. - Decided in favour of assessee.

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• 2015 (9) TMI 1231
  Levy of fees under section 234E - late filing of TDS returns - proceedings u/s 200A - Held that:- All the appeals is now squarely covered in favour of the assessee by the decision of ITAT in the case of Sibia Healthcare Private Limited vs. DCIT [2015 (6) TMI 437 - ITAT AMRITSAR] . When the above judicial precedent was brought to the notice of the ld. Departmental Representative, he did not have much to say except to place his reliance on the orders of the authorities below. He fairly did not dispute that the provisions accepting levy of late filing fees under section 234E have indeed been brought to the statute w.e.f. 1st June,, 2015 and the impugned order was passed much before that date. In view of the above discussions and bearing in mind entirety of the case, hereby delete the levy of late filing fees in all these three appeals under section 234E of the Act by way of impugned intimation issued. The assessee gets the relief accordingly. - Decided in favour of assessee.

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• 2015 (9) TMI 1230
  Addition towards disallowance of expenses for earning the commission receipts - Held that:- The assessee has not placed necessary evidence for support of the claim. Whenever the assessee incurs any expenditure, it is the duty of the assessee to prove that expenditure was incurred wholly and exclusively for the purpose of business and also the assessee shall produce relevant evidence for the same. Since, the assessee has not produced required evidence, the lower authorities are justified in disallowing the claim of the assessee. - Decided against assessee. Addition towards investment in Spny Stones Pvt. made out of income and savings - Held that:- The assessee has pleaded that the amount was contributed from own capital and reserve and surplus. However, the assessee has not filed a copy of the balance sheet for my consideration. Hence, not in a position to appreciate the argument of the assessee counsel. Accordingly, this issue is remitted back to the file of the Assessing Officer for fresh consideration with a direction to the assessee to file the balance sheet as on 31.03.2007 before the Assessing Officer explaining the investment and the Assessing Officer would decide the issue afresh. - Decided in favour of assessee for statistical purposes.

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• 2015 (9) TMI 1229
  Disallowance made under section 40A(3) - Held that:- The observations made by the Ld CIT(A) with regard to the date of entering into MOU are not material to the issue under consideration, since the sale of plots so purchased by the assessee has been accepted and the assessee is showing the same as his business income. Further, the question of disallowance u/s 40A(3) would arise only, if the purchases are accepted, i.e., with regard to the expenses with are otherwise allowable under the Act. Further, we notice that the assessing officer did not examine the recipients of the cash in order to disprove the claim of the assessee as well as the confirmation letters given by them. Hence, we are of the view that the disallowance made u/s 40A(3) of the Act is not justified. Accordingly, we set aside the order of Ld CIT(A) on this issue and direct the assessing officer to delete the impugned addition. - Decided in favour of assessee. Disallowance on purchase of land from M/s Laxman Mhatre and others - Held that:- We notice that the AO has accepted the cheque payment of ₹ 6.65 lakhs, which means that the assessing officer believes a portion of purchases and hence, in our view, he is not justified in disbelieving the remaining part. We may state here that the AO could have examined the said claim of purchases, by ascertaining the market value and accordingly proved that the payment of ₹ 22.00 lakhs made by way of cash is in excess of the prevailing market value, in which case, there could have been some justification. We notice that the AO did not make any such enquiries. In fact, as stated earlier, the AO has proceeded with the misconceived notion that there is no MOU, which was factually incorrect. It is well settled that the AO cannot be given a chance for mistake committed by him. Accordingly, we are of the view that the AO has made the disallowance of ₹ 22 lakhs on misconceived notions, without properly examining the documents. We also notice that the Ld CIT(A) has also committed error in confirming this disallowance. Accordingly, we set aside the order of Ld CIT(A) on this issue and direct the assessing officer to delete this addition.- Decided in favour of assessee. Disallowance made under section 14A of the Act - Held that:- The dividend received from mutual funds has not been claimed to be exempt, but offered to tax. The AO has worked out the disallowance by considering the investments made in mutual funds also. Since, the disputed disallowance is only about ₹ 82,000/-, considering the smallness of the amount and also considering the various submissions made, we are of the view that this issue may be put at rest by sustaining the addition to the extent of ₹ 50,000/-. Accordingly, we set aside the order of Ld CIT(A) on this issue and direct the AO to restrict the disallowance to ₹ 50,000/-. - Decided partly in favour of assessee. Adhoc Disallowance made out of expenses - Held that:- With regard to car and telephone expenses, we also agree with the view of the AO that the involvement of personal element cannot be ruled out. However, with regard to the Business promotion expenses, we are of the view that the AO should have analysed the nature of expenses before coming to such a conclusion. We notice that the Ld CIT(A) also did not examine this aspect. Accordingly, we set aside the order of Ld CIT(A) and direct the AO to make disallowance out of Car and Telephone expenses only. - Decided partly in favour of assessee.

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• 2015 (9) TMI 1228
  Disallowance u/s 14A r/w rule 8 - CIT(A) deleting part of the addition - Held that:- As perused the Balance-sheet of the Assessee it is noticed that the investments are carry forward investments right from 2008-09. There is no new investment during the relevant assessment year. The assessment order for the A.Y 2008-09 was also found which also says there is no disallowance made u/s 14A. Further, it is noticed that the Assessee does not have any exempt income much less dividend income. Consequently, we are of the view that in view of the decision of Delite Enterprises [2009 (2) TMI 498 - BOMBAY HIGH COURT ] no disallowance u/s 14A can be made in the hands of the Assessee. - Decided in favour of assessee. Disallowance of expenditure of interest paid on loans taken at interest and advances to sister concerns without charging any interest - CIT(A) deleting the addition - Held that:- As it is noticed that the advances to the associates has actually reduced during the relevant assessment year when compared to the earlier assessment year, it shows that these advances were of the earlier years and substantial portion of the advances have been returned. Admittedly, there is no disallowance on this count in the earlier year also. In the circumstances, following the principles of consistency, no disallowance can be made for this year also in view of the decision of the Hon'ble Karnataka High Court in the case of Sridev Enterprises [1991 (1) TMI 52 - KARNATAKA High Court]- Decided in favour of assessee. Disallowance of interest paid to the partners and relatives by invoking the provisions of Sec. 40A(2) - CIT(A) deleting the addition - Held that:- Admittedly, when invoking the provisions of Sec. 40A(2) of the Act comparable case is one of the requirement. Here, in the present case the AO has not been able to show any comparable case where the interest payments were lower than the rates paid by the Assessee. In the circumstances, we are of the view that the finding of the ld. CIT(A) was on a right footing and does not call for any interference. - Decided in favour of assessee. Addition on account of taxing of profits on the basis of percentage completion method on the construction of villas - Assessee was booking profits of villas by following the completed contract method - CIT(A) in deleting the addition - Held that:- CIT(A) has followed the decision of V.S. Dempo & Co. Pvt. Ltd. [1993 (9) TMI 346 - BOMBAY HIGH COURT] wherein held that the completed contract method is an acceptable method and that consistency is to be followed and also the decision of Realest Builders and Services Ltd. [2008 (5) TMI 6 - SUPREME COURT] and as the Assessee has offered the income on the completion of the villas and this fact is not disputed by the Revenue, we are of the view that the order of the ld. CIT(A) on this issue is on a right footing and does not call for any interference - Decided in favour of assessee.

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• 2015 (9) TMI 1227
  Addition made on the basis of circle rate u/s. 50C - Held that:- In, the facts and circumstances of the present case attracts the provisions of section 50C(2) of the I.T. Act, 1961, because the assessee has made the objection for invoking the provisions of section 50C(1) of the Act and the AO had not referred the Valuation Report to the DVO, as per provisions of section 50C(2) of the I.T. Act, 1961 and without doing so, the AO had made the addition in dispute which was wrongly been upheld by the Ld. CIT(A). Keeping in view of the facts and circumstances of the case as explained above, the assessee has made out his case for consideration as claimed in terms of provision of section 50C(2) of the I.T. Act, 1961 which has not been done by the Revenue Authorities. Therefore, respectfully following the decisions of the Tribunal including the Hon'ble Madras High Court judgment in the case of Appadural Vijayaraghwan vs. JCIT (2014 (9) TMI 13 - MADRAS HIGH COURT ) set aside the matter in dispute to the file of the AO to work out the capital gain by invoking the provisions of section 50C(2) of the I.T. Act., after providing adequate opportunity of being heard to the assessee. - Decided in favour of assessee for statistical purposes.

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• 2015 (9) TMI 1226
  Disallowance of exemption u/s.54EC - further investment in REC bonds of ₹ 50 lakhs made in the next financial year - CIT(A) deleting disallowance - Held that:- The issue is squarely covered by the decision of Hon’ble Madras High Court in the case of Jaichander, [2014 (11) TMI 54 - MADRAS HIGH COURT ] wherein held from a reading of Section 54EC(1) and the first proviso, it is clear that the time limit for investment is six months from the date of transfer and even if such investment falls under two financial years, the benefit claimed by the' assessee cannot be denied. It would have made a difference, if the restriction on the investment in bonds to ₹ 50,00,000/- is incorporated in Section 54EC(1) of the Act itself. However, the ambiguity has been removed by the legislature with effect from 1.4.2015 in relation to the assessment year 2015-16 and the subsequent years. Also see case of Dr. Kumar M. Dhawale [2015 (2) TMI 624 - ITAT MUMBAI]. Thus no infirmity in the order of CIT(A) for allowing further claim of exemption in respect of investment made in subsequent financial year amounting to ₹ 50 lakhs u/s.54EC of the I.T.Act. - Decided against revenue.

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• 2015 (9) TMI 1225
  TDS u/s 194C on Freight - Assessee is booking only net profit out of the transaction - Since the assessee have got no own trucks, it was seen that freight has been received and credited to the Profit & Loss Account and at the same time, trucks are hired from open market and freight is being paid by the assessee at lesser rate, thereafter, showing the profits. - Addition on account of violation of Section 40(a)(ia) and not admitting the additional evidence. - the auditor has remarked, "It is not possible for us to verify whether payment has been made exceeding ₹ 20,000/- otherwise than by crossed check or DD". Held that:- The issue of paid and payable, as considered under section 40(a)(ia) of the Act have been finally decided by Hon'ble Punjab & Haryana High Court in the group cases of PMS Diesels v. CIT [2015 (5) TMI 617 - PUNJAB & HARYANA HIGH COURT] in which it was held that, "The requirement to deduct tax at source is mandatory and that the provision of Section 40(a)(ia) apply to the assessees who follow the cash system as well as assessees who follow mercantile systems". The question was decided in favour of the revenue and against assessee

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• 2015 (9) TMI 1224
  Exemption under section 10(14)(i) - Held that:- The entire controversy is almost revenue neutral because even if it is held that assessees were not eligible for exemption under section 10(14)(i) in respect of living allowance, then in view of DTAA with USA, the assessees would become entitled to get tax credit in respect tax paid on living allowance in USA. However, as we have already held that living allowance is not taxable in India, therefore, assessees are entitled for exemption under section 10(14)(i). Therefore, they cannot claim tax credit in respect of tax paid in USA on living allowance because as very fairly pointed out by the ld. senior counsel for the assessees, DTAA would come into play only when a particular receipt is taxable in both the countries. - Decided in favour of assessee.

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• Customs

• 2015 (9) TMI 1261
  Valuation - Misdeclaration of value - import of Mencozeb Technical 85 % at US$2.10 per kg., CIF - sole distributor - rejection of value - contemporaneous import - Held that:- On perusal of the transaction between M/s. R & H and the assessee, as it is clear from the reading of agreement, was at arms length. By no stretch of imagination it can be said that M/s. R&H had been controlling the assesee either directly or indirectly. In fact, there was no such allegation in the show cause notice nor any finding in this behalf in the Order-in-Original was rendered by the Commissioner. - before rejecting the invoice price the Department has to give cogent reasons for such rejection. There are no such cogent reasons coming forth in the present case. Moreover, it is to be borne in mind, as stated in para 14 of the said judgment, that the onus is on the Department by leading cogent evidence. No evidence of any nature whatsoever is brought on record to show that they were contemporaneous sales/transactions at high price. Reliance upon the agreement between M/s. Indofil and M/s. R&H is of no avail as admittedly the transaction between the aforesaid two parties were for the period prior to 01.11.1995 and they were not contemporaneous. We, thus, do not find any error in the judgment of the Tribunal - Decided against Revenue.

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• 2015 (9) TMI 1260
  Quashing of detention orders - Non execution of detention order - activities of acquiring, possessing, hoarding, selling and exporting NDPS items - incident took place on 23/24.10.2011 whereas the detention order was passed on 10.9.2013 - Non availability of relevant documents - detention order of the co-accused persons have already been revoked - Held that:- Based on the averments made in the counter affidavit and the supporting documents to show the publication and citation under Section 82 of the Code of Criminal Procedure, we hold that the petitioner is an absconder and he has been intentionally evading the execution of the detention order. - As per the counter affidavit, the officers of respondent no.3 made an attempt to execute the detention order at the Delhi premises of the petitioner on 18.9.2013, however, the landlord informed the officers that the petitioner had left the premises long back. - despite publication of order dated 20.11.2013, the petitioner did not surrender; thereafter the respondents had no option but to file reports dated 8.1.2014 & 28.2.2014 under Section 8 (1) (a) of PIT NDPS Act before the Ld. CMM, New Delhi. On 14.3.2014, the Ld. CMM, New Delhi passed orders for issuing process under Section 82 of the Code of Criminal Procedure qua the petitioner. The process under Section 82 of the Code of Criminal Procedure was published in Indian Express dated 22.5.2014. The said order under Section 82 of the Code of Criminal Procedure qua the petitioner was repeated on 28.5.2014, returnable on 30.8.2014. The process under Section 82 Cr.P.C. was published in Indian Express dated 9.8.2014. The said process under Section 82 of the Code of Criminal Procedure qua the petitioner was again repeated on 2.9.2014. A careful reading of the judgments of Rajinder Arora [2006 (3) TMI 173 - SUPREME COURT OF INDIA] and Subhash Popatlal Dave (2013 (8) TMI 8 - SUPREME COURT) leads to the conclusion that a writ petition at the pre-existing stage or pre-execution of the detention order stage is maintainable, and the Courts are entitled to examine all grounds except the ground relating to sufficiency of material relied upon by the detaining authorities in passing the order of detention, which has been held to be legally the most important aspect of the matter, but cannot be gone into by the Court at the pre-execution stage when the grounds of detention have not even been served on the detenu. The counter affidavit is bereft of any explanation with regard to delay in passing the detention order dated 10.9.2013. The matter has been adjourned from time to time, but no additional affidavit has been filed nor any record has been produced to explain the delay in passing the detention order - entertaining a writ petition against a preventive detention order at a pre-execution stage should be an exception and not the general rule. In this case also the petitioner has successfully evaded the service of the detention order. The Apex Court of India in the case of Deepak Bajaj (2008 (11) TMI 655 - SUPREME COURT) has held that the celebrated writ of habeas corpus has been described as “a great constitutional privilege of the citizen” or “the first security of civil liberty”; and has also held that it is a remedy to safeguard the liberty of the citizen which is a precious right and is not to be transgressed by anyone. In this case the liberty of the petitioner cannot be curtailed by sending him to jail when the detention order of co-accused persons, who are identically placed as the petitioner, stands revoked on the recommendation of the Advisory Board. - Revocation allowed.

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• 2015 (9) TMI 1259
  Undervaluation of import of electronic components - department has built up its case on the basis of export declarations filed by the suppliers of the goods - Admissibility of evidence - Penalty u/s 114A r.w. 112 - Held that:- Export Declarations are obtained from the Customs and Excise Department, Hong Kong under the cover of their letter on letter head and signature, through Commission for India (High Commission/Embassy) in Hong Kong. It is also stated by Hong Kong Customs that they have no objection for the said 25 Export declarations to be used as evidence in judicial proceedings in India. It is also seen that the Export Declarations are signed by Thomas Chan, Merchandiser and Fradu Wang, Accountant on behalf of the Batshita International Limited. It also contains a declaration that he is the exporter and the particulars given in the declaration are accurate and complete. In view the facts and circumstances of this particular case, we find that these Export Declarations are admissible as evidence A perusal of the show cause notice dated 06.5.1998 reveals that appellants have not produced any evidence to substantiate that the invoice value declared by them are correct by way of showing value of contemporaneous imports etc. On the other hand, we find that the Department has brought in evidences such as the export declarations along with the declarations certifying its accuracy, obtained through official channels under the signature and letter head of Customs department, Hong Kong who has also certified that they have no objection of its use as evidence in judicial proceeding in India. Therefore, we find that the Revenue has brought in sufficient evidences to establish huge under valuation. The appellants have failed to bring any evidence on record to substantiate that the value declared by them is correct, even though the Commissioner of Customs in the earlier order-in-original dated 26.09.2000 in the first round of litigation, had categorically held that the department had discharged the burden of proof by way of giving declaration received from the Hong Kong, Customs. No evidence whatsoever in support of the price declared by the suppliers has been brought on record by the appellants at the time of adjudication, or de-novo adjudication or till now. - no reason to interfere with the impugned order-in-original - Decided against assessee.

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• 2015 (9) TMI 1258
  Determination of market value of the seized goods - applicability of Section 123 - determination of redemption fine - Held that:- There is no direction by the Hon’ble High Court on the issue of applicability of Section 123 of the Customs Act, 1962 and on the aspect that if the documents furnished by the appellant are in order then the goods should be released. It has been observed by Hon’ble High Court that market value of the seized goods has been arbitrarily arrived at by CESTAT. Regarding determination of redemption fine, the same is required to be based on the basis of prevailing market value of the goods. Secondly, redemption fine imposable also has a bearing on the margin of profit (MOP) of the seized goods. Value of seized goods indicated in annexure A dated 17/09/2003 are also basis on the market value prevailing at the time of seizure. However, appellant has furnished certain invoices before the adjudicating authority which also represent the market value of the seized goods. Even if, the documents furnished by the appellant were not considered proper documents to cover the seized goods but the same will also represent the prevailing market price of comparable goods. - Matter remanded back - Decided in favour of assessee.

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• 2015 (9) TMI 1257
  Illegal export - instead of the declared goods as cargo of coir pith, red sander logs were found to be stuffed. - Seizure of goods - Misdeclaation of goods - Clandestine removal of goods - Imposition of penalty - entire case of the Revenue rests upon the sole retracted statement of Shri Antony Morris. - Held that:- Commissioner for arriving at the findings against the appellant had also referred to the statement of one Shri Anil recorded during the earlier seizures of red sanders in an attempted export case. Apart from the fact that the said statement of Shri Anil in those cases is still at the adjudication stage, we are of the view that the said statement recorded in an altogether different case, cannot be adopted as an evidence in the present case. It is well settled that the evidences available in a particular case have to be taken into consideration for deciding disputed issue. No reference can be made to the earlier statements or the statements of any other person so as to conclude against the accused in a particular case, which is not at all connected with the cases in which statements of other persons were recorded. Shipping bill was filed showing the recipient as M/s. C.P. General Trading LLC, Deira, Dubai. There is no attempt by the Revenue to show that the said alleged recipient of the goods has any connection with the appellant. As such when the appellant’s name was not even shown as recipient, the imposition of penalty upon him based upon uncorroborated statement of one of the accused, without there being any independent, admissible and tangible evidence, is neither justified nor warranted. - no reason to uphold that part of the impugned order of Commissioner for which he imposed penalty upon the appellant - impugned order is set aside - Decided in favour of assessee.

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• 2015 (9) TMI 1256
  Valuation of goods - import from the group companies is covered under Sales Promotion Agreements. - price variation between the prices for importer and unrelated buyers - Held that:- order of the adjudicating authority woefully inadequate - difference in prices for the respondent and independent buyers is much less than 55% for most of the products. It is not at all brought forth in the adjudication order as to how the verification is taken as 55% uniformly. In fact, the decision of the adjudicating authority is an apology of an Order and is not a speaking Order. The Commissioner (Appeals) has also noted this fact that the invoices shown by the appellant during the hearing do not indicate that the difference in price is 55% uniformly. In majority of sales, the price to unrelated buyer was higher by 5.5% to 7.5%. - finding of the Commissioner (Appeals) that the difference in commercial levels, quantity levels, cost incurred by the seller (in this case respondent) have to be considered while examining the influence on price by the relationship between the supplier and the importer. Therefore, even if similar goods sold to the unrelated buyer are taken as the basis of value of impugned goods in terms of Valuation Rules 4 & 5, adjustments have to be made on account of such factors as stated in proviso to Rule 3 (3) (b) of the Valuation Rules. In any case, the adjudicating authority simply considered the difference in price, which he states wrongly to be 55%, without examining the reasons for the price difference in proper prospective. In case of Metal and Alloys Industries [1989 (1) TMI 226 - CEGAT, NEW DELHI] the international prices of the same product imported were considered. However in the present case, the situation is of commission being given which is the difference between the prices to the appellant and the unrelated buyer for taking care of after sales service/promotion etc. We find no reason to reject the impugned order. - Decided against Revenue.

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• 2015 (9) TMI 1255
  Condonation of delay - Delay of 152 days - Delay in receipt of order - Held that:- postal authorities have despatched the said OIO on 10.7.2013 and the date of service of impugned order is established. The appellant stated in their COD applications that they received the order only on 19.12.2013 and the same is not supported with any evidence. In the absence of any contrary evidence by appellant, there is no justification for condoning the delay of 152 days. We find that on an identical issue of service of order, the Hon'ble Allahabad High Court in the case of Nanumal Glass Works Vs CCE Kanpur (2012 (12) TMI 96 - ALLAHABAD HIGH COURT) has rejected the plea that unless order is received by assessee in person, it cannot be treated to be communicated to him - The ratio of the Hon'ble High Court is squarely applicable to this case and the delay of 152 days not justified and cannot be condoned - Condonation denied.

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• Corporate Laws

• 2015 (9) TMI 1254
  Petition for winding up of the respondent-company - unable to pay dues - respondent-company has admitted to pay the outstanding liability - Held that:- On perusal of the E-mails, it is irresistibly concluded that the respondent-company had failed to pay the admitted liability. In view of the categoric admission of the respondent-company, this Court is made to believe that the respondent-company is unable to discharge the admitted liability and thus, the present petition is liable to be admitted. - Let the factum of admission of the petition be published in the newspapers

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• 2015 (9) TMI 1253
  Rectification in the Register of Members - period of limitation to challenge the genuineness of transfer of shares - The Share Certificates of the Company were issued in the name of the Trustees/Original Members, namely, the Petitioner, the Respondent No. 2, Mr. Shrikrishna Narhari Inamdar (SNI) and Mr. Dilip Ganesh Karnik (DGK) on behalf of the Trust. Held that:- The Law of Limitation is founded on public policy. Its aim being to secure the quiet of community, to suppress fraud and perjury, to quicken diligence, and to prevent oppression. Its object is to give effect to the maxim, interest re-publicoe out sit finis littum-the interest of the state requires that there should be limit to litigation and to prevent disturbance or deprivation of what may have been acquired in equity and justice by long enjoyment or what may have been lost by a party's own inaction, negligence or laches. The object of the statutes of limitations is to compel a person to exercise his right of action within a reasonable time as also to discourage and suppress stale, fake or fraudulent claims. Keeping in view the aforesaid object and reason as to application of limitation, if it is held that the provisions of the Limitation Act do not apply in the relation to petition filed under Section 111(4) of the Act, in that case, it would imply that an aggrieved party may approach to the CLB even after several years. This cannot be a true intent of the law. As stated above, as a matter of a policy, the purpose of the limitation prescribed in law is to restrict the litigation on the ground of limitation so that the parties can approach the court of law within a reasonable time. Only in the cases, where there is a continuous wrong, the law of limitation become irrelevant. In the present case, there is a definite date of cause of action and, therefore, it is expected that an aggrieved party should approach the court within the prescribed period of time with effect from the date of knowledge/cause of action. The next question then arises as to what is the prescribed period in the instant case. - Held that:- I have already held that the Petitioner had knowledge of having signed the documents with respect to the impugned transfer of share. I am, therefore, not inclined to accept that the Petitioner came to know for the first time in 2011 with respect to the impugned transfer of shares. These documents were admittedly executed in the year 2007. Therefore, the period of limitation of 3 years would start from the date, on which these documents were signed. Undisputedly, the petition came to be filed after expiry of 3 years. I, therefore, hold that the petition is barred by limitation and, therefore, deserves to be dismissed on this ground. Assuming for the sake of arguments, that the provision of the Limitation Act, do not apply to the petition filed under Section 111(4) of the Act, it Is amply clear from the facts and circumstances of this case, that the petition suffers from acute delay and laches. Time and again, it has been held that if a petition suffers from unexplained delay and laches, the petition may be dismissed on this ground also. This point is answered accordingly. Whether the transaction if void ab intio - Held that:- the petitioner has not approached the CLB with clean hands and, therefore, she is not entitled to the reliefs sought for and the petition deserves to be dismissed Decided against the petitioner.

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• PMLA

• 2015 (9) TMI 1252
  Provisional Attachment - Complaint under Section 5(5) of the Prevention of Money-Laundering Act, 2002 - Held that:- the fact remains, challenging the confirmation of Provisional Order of Attachment, the statutory appeal has been preferred by the petitioner and other persons. The impugned notice has been served only on the petitioner and not on any other resident residing and even the name of any other resident has not been given in the said notice. Chapter VI of the Money-Laundering Act deals with Appellate Tribunal and Section 26 provides for appeal to such Tribunal. A perusal of the same would disclose that though there is no specific provision for moving an application for stay, in the considered opinion of the Court, the Statutory Appellate Authority is having an inherent power to decide the application for stay pending disposal of the appeal, also, or he can take the appeal itself and dispose of the same finally, within six months from the date of filing of the appeal, in terms of Sub-Section (6) of Section 26 of the said Act. The writ petition is disposed of and the petitioner and other appellants are at liberty to move the appeal filed by them before the Appellate Authority, for hearing and disposal, or in the alternative, move an application for stay pending disposal of the appeal, within a period of four weeks from the date of receipt of a copy of this order and till such time, the second respondent shall defer the proceedings of the impugned notice dated 26.2.2015.

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• Service Tax

• 2015 (9) TMI 1281
  Refund claim - input services used in export of goods - notification No. 41/2007 - Denial on the ground that the documents issued in respect of services relating to activities at the port of export have not been issued by the port or any person authorized by the port and that the documents being debit notes, refund is not admissible - Held that:- The appellant is correct in submitting that there are no conditions attached to services specified in serial No. 2 of the notification No. 41/2007. However, as column (2) specifies the service as section 65 (105) (zn), only if the services fit into the classification of section 65 (105) (zn) can they be called as Port Services. If the argument of the counsel that the services need not answer the description of sub-clause (zn) of section 65(105) is to be accepted then the description of all other services given in column (2) would be redundant. Such an interpretation is not permissible - exporter should not be unduly burdened with a condition to establish that the service provider was registered under port services. - Decided in favor of assessee. Refund on the basis of debit notes - Held that:- The documents reveal that they contain all the details as required under Rule 4A of the Service Tax Rules, 1994. The purpose sought to be served by specifying the details that are to be contained in the document issued while rendering service is to provide information regarding the registration number and details of service provider details, details of service recipient, description and value of taxable service, and the service tax payable thereon. If the documents provide these necessary particulars, merely because the documents are debit notes the refund cannot be denied at the end of the service recipient. - rejection of refund is unjustified - Decided in favour of assessee.

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• 2015 (9) TMI 1280
  Business Auxiliary Services - Benefit of Notification No.13/2003-ST, dated 20.6.2003 towards commission agent's services - Held that:- The notification exempts business auxiliary services provided by a commission agent. In other words, so long as the appellant provided business auxiliary services (even if such services did not strictly fall within the purview of the role of a commission agents) it was eligible for the benefit of the said notification. - as the appellant qualified to be called a commission agent and admittedly rendered business auxiliary services, it was squarely eligible for the benefit of Notification No. 13/2003-ST even if one resorts to (the so-called) strict interpretation of the said Notification. In our view the wording of Notification No. 13/2003-ST does not suffer from any ambiguity and readily lends itself to plain and straight forward interpretation rendering recourse to interpretational discourse unnecessary. - Impugned order is set aside - Decided in favour of assessee.

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• 2015 (9) TMI 1279
  Business Auxiliary Services - intention to evade service tax - Held that:- In the show cause, neither any period has been specified nor any amount of demand quantified. The show cause notice does not refer to any agreement between the appellant and the telephone company so as to identify the exact nature of service rendered. It also does not name the taxable services allegedly rendered by the appellant. These deficiencies in a show cause notice are fatal and such a show cause notice is per se unsustainable as it disables the assessee to defend itself, thereby being violative of the principles of natural justice. Further from whatever can be made out from the show cause notice, the issue is fully covered in favour of the appellant vide CESTAT/High Court orders in the cases of R.B. Agencies vs. C.C.E., Calicut - [2007 (7) TMI 200 - CESTAT, BANGALORE] and Martend Foods and Dehydrates - [2013 (6) TMI 339 - CESTAT NEW DELHI ] and Commissioner vs. Daya Shankar Kailash Chand - [2015 (8) TMI 1007 - ALLAHABAD HIGH COURT]. - Impugned order is set aside - Decided in favour of assessee.

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• 2015 (9) TMI 1278
  Denial of refund claim - Business Auxiliary Service - Rule 5 of Cenvat Credit Rules, 2004 read with Notification No.5/2006-CE (NT) dated 14.3.2006 - Refund of unutilized cenvat credit - appeal preferred without approval of the Committee of Commissioners - Held that:- As is evident from sub-section (2) of Section 35B, appeal against the order of Commissioner (Appeals) is to be filed on the recommendation of Committee of Commissioners. In the judgment of Delhi High Court in the case of Commissioner of Central Excise, Delhi I vs. Shri Ram Udyog - [2014 (9) TMI 409 - DELHI HIGH COURT], the Hon’ble High Court essentially held that Committee of Chief Commissioners is not required for filing appeal against the order of Commissioner (Appeals). Thus the said order is no authority to the proposition that recommendation of the Committee of Commissioners is not required for filing of appeal against the Commissioner (Appeals)’s order. - no merit in Revenue’s appeal - Decided against Revenue.

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• 2015 (9) TMI 1277
  Claim of refund claim by the recipient of services - service provider had paid the service tax wrongly - assessee who filed a refund claim was driven from one Officer to another for granting refund of service tax remitted by it to the service provider, for no ostensible reason - Held that:- recipient of the service is also entitled to file a claim for refund is no longer res-integra. The issue stand concluded by the Constitution Bench decision in Mafatlal Industries Limited vs. Union of India - [1996 (12) TMI 50 - SUPREME COURT OF INDIA]. This decision was followed in Indian Farmer Fertilizer Co-op. Ltd., vs. CCE, Meerut-II - [2013 (12) TMI 626 - CESTAT NEW DELHI]. If the appellant which is a recipient of a service which is admittedly not taxable files a claim for refund within the prescribed period of limitation, it is axiomatic that it is entitled to do so before the Commissionerate under whose jurisdiction it pursues its taxable activities, business or is a registrant; or before the Commissionerate having authority over the provider of the service. That would be a matter of a legitimate choice for a claimant of refund. In this case, the appellant had initially filed a claim before the Delhi Commissionerate which rejected the same on the ground that it had no jurisdiction since the appellant was pursuing business outside its jurisdiction. The Bilaspur Commissionerate also rejected the refund claim on the ground that the provider of the service is not within its jurisdiction. The rejection by both Commissionerates is in my view unsustainable. - Decided in favour of assessee.

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• 2015 (9) TMI 1276
  Admissibility of Cenvat Credit - services of House Keeping, Courier Services and Export Freight incurred - Held that:- Both sides agree that the issues involved in the present proceedings are covered by the various judicial pronouncements. According appeals filed by the Revenue are rejected as issues are covered by the Case Laws [2014 (8) TMI 713 - GUJARAT HIGH COURT], [2014 (3) TMI 921 - GUJARAT HIGH COURT], [2013 (6) TMI 618 - ITAT DELHI], [2012 (12) TMI 177 - CESTAT, MUMBAI] and etc. - Decided against Revenue.

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• 2015 (9) TMI 1275
  Admissibility of CENVAT Credit - Service Tax paid on Outdoor Catering Services - Held that:- So far as the admissibility of CENVAT Credit on Outdoor Catering Services is concerned, the issue is already settled by Honble Mumbai High Court in the case of CCE Nagpur Vs Ultratech Cement Ltd (2010 (10) TMI 13 - BOMBAY HIGH COURT) and the jurisdictional High Court in the case of CCE Ahmedabad-I Vs Ferromatik Milacron India Ltd (2013 (8) TMI 77 - GUJARAT HIGH COURT). However, the credit with respect to the cost recovered from the employees of the Appellant will not be admissible as per law laid down by Hon'ble Bombay High Court in the case of CCE Nagpur Vs Ultratech Cement Ltd (supra). Appellant has not disputed reversal of such Service Tax portion which is not eligible as per the law laid down by Honble Bombay High Court. Appeal filed by the appellant to that extent is dis-allowed. So far as the factory of the Appellant having less than 250 workmen is concerned, the Administrator Daman and Diu, Dadra and Nagar Haveli has certified that Appellant situated at Silvassa has more than 250 workmen. The Appellant is maintaining one canteen with respect to their factories situated in Silvassa at the premises of this unit. When the competent authority has given certificate to the Appellant regarding number of employees working in the canteen of the Appellant, there is no reason to deny credit in the absence of another contrary opinion expressed by another competent authority. Therefore, the order passed by the First Appellate Authority is required to be rejected - Decided against assessee.

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• Central Excise

• 2015 (9) TMI 1272
  MRP based Valuation - Section 4A - Revenue was of the view that since the face wash gel is sold free along with dandruff shampoo, the value / price of face wash gel should also be included and raised demand in this behalf applying the provisions of Section 4A of the Central Excise Act. - Held that:- Tribunal has observed that, "Since the Revenue has not contested that the products in question are covered under Section 4A and Standards of Weights and Measures Act, we hold that the products are assessable under Section 4A. In view of the decided case laws, there will not be any duty liability on the gel supplied free, hence there is no merit in the impugned order." - no merit in this appeal which is, accordingly, dismissed. - CESTAT has rightly decided the issue - Decided against Revenue.

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• 2015 (9) TMI 1270
  Duty demand - Bar of limitation - Held that:- it is not even necessary to look into the matter in more details on merits inasmuch as we find that not only the three Show Cause Notices were dropped, but, insofar as fourth Show Cause Notice, i.e., Notice dated 04.05.1994, is concerned, which is for the period between April, 1989, to November, 1992, the CESTAT has rightly held that the said Show Cause Notice was barred by limitation. - Decided against Revenue.

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• 2015 (9) TMI 1269
  Classification of goods - milk shake mix and soft serve mix - Classification under Chapter sub-Heading 0404.90 or under Chapter sub-Heading 1901.19 - Held that:- The Commissioner has himself noted that no chemical name of the stabilizer is used and the role played by the aforesaid ingredients of the stabilizer is to maintain a uniform emulsion of oil in water, throughout the shelf life and to improve the body and texture and to impart smoothness to the products. Thus, as far as the basic product is concerned, it demonstrates the same and the purpose is only to impart smoothness to the product and to maintain the product consistency during storage and transportation and throughout its shelf life - main purpose is to maintain the product consistency during storage and transportation as well as to improve the shelf life. Merely because it improves the body and texture of the product and adds some smoothness thereto, that would not change the basic character of the produce. Description given there is open ended inasmuch as the Chapter Note itself uses the expression "inter alia". Further, while mentioning the products which would be covered under the said Chapter Heading 04.04, and stating about the additions which could be made, the crucial words are "whether or not". Therefore, the additives which can be added while making the product are illustrative only and merely because stabilizer is not mentioned therein would not mean that after adding the stabilizer the product in question ceases to be dairy produce. - view taken by CESTAT is perfectly in tune with legal position and does not call for any interference - Decided against Revenue.

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• 2015 (9) TMI 1268
  CENVAT Credit of CVD paid through DEPB - Whether in the absence of any restriction in the provisions of the Cenvat Credit Rules, 2002 and as in force during the period in dispute, the Tribunal was justified in holding that the appellant was dis-entitled to Cenvat Credit merely on the strength of the Exim policy as in force - Held that:- Under the Exemption Notifications, if the importers produced DEPB scrip and availed the exemption for clearance of goods, the goods become non-duty paid goods. The value of DEPB scrip, once used, gets extinguished and hence there would be no question of seeking Cenvat Credit thereafter. - Commissioner (Appeals) as well as the Tribunal relied upon a Larger Bench decision of the CESTAT in ESSAR Steel Limited v. Commissioner [2004 (8) TMI 123 - CESTAT, NEW DELHI]. The said decision is not overruled so far by any High Court. But according to the learned counsel for the appellant, the decision of the Larger Bench was watered down to a great extent by this Court in Commissioner of Central Excise v. Spic Limited [2013 (9) TMI 93 - MADRAS HIGH COURT]. - Therefore, after a specific prohibition was introduced under the Scheme from 1.4.2000 onwards, it is not possible for the appellant to claim the benefit in respect of the Bill of Entry of the year 2003. Therefore, the decision in Spic, even if it is taken to water down the decision of the Larger Bench in ESSAR Steel Limited, does so only in respect of the period prior to 2000. Therefore, the decision of this Court in Spic is not favourable to the appellant. - Decided against assessee.

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• 2015 (9) TMI 1267
  Utilization of CENVAT credit of the Additional Excise Duty - Assessee used accumulated credit of AED for payment of Basic Excise Duty (BED) and Special Excise Duty (SED) on their final product - Held that:- Reading of the Tribunal's order in CEAT Tyres' case [2010 (3) TMI 621 - CESTAT, MUMBAI] shows that the issues raised in these appeals, were exactly similar and therefore the Tribunal justified in proceeding on the basis that the controversy raised before it was covered by the Tribunal's order in CEAT Tyres case. It is also seen that the order of the Delhi Tribunal in Good Year India's case [2005 (10) TMI 400 - CESTAT, NEW DELHI] was confirmed by the High Court of Punjab and Haryana. Though, SLP was filed by the department against this judgment of the High Court that was rejected by the Apex Court on the ground of delay and keeping the question of law opened, by its order [2008 (3) TMI 672 - SUPREME COURT]. - credit of AED paid on or after 01.04.2000, is permitted to be utilized towards payment of duty of excise leviable under the first schedule or the second schedule to the Excise Tariff Act. In other words, the restriction introduced by the explanation was only in the utilization of the accumulated credit of AED towards payment of duty under the schedules of Excise Tariff Act. This means that this restriction applied only in the payment of BED and SED, which alone is payable under the Excise Tariff Act and not to AED payable under Section 3 of Act 58 of 1957 - Decided against Revenue.

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• 2015 (9) TMI 1266
  Change of cause title - Transfer of appeal - Held that:- OIO has been issued by the jurisdictional Commissioner, LTU falling within the jurisdiction of this Bench falling within the jurisdiction of Hon'ble High Court of Madras. Therefore, the respective appeal will lie in this Bench. Accordingly, the request of Revenue for transfer of appeal is not justified. On perusal of Central Excise Registration Certificate No. AAPCS6078QEM007 dt. 28.6.2013 we also find that appellant has the unit in Chennai and Registration was issued by the Central Excise Chennai-IV Commissionerate. - Change of cause title allowed.

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• 2015 (9) TMI 1265
  Waiver of pre-deposit of duty - clandestine removal of the manufactured goods - Penalty under section 11AC - Held that:- The defense of the appellant for not filing the reply and attend the personal hearing is that all relevant documents were not supplied to them. However, before this Tribunal, the ld. Advocate could not able to explain which documents were relevant, but not supplied to them. - justice cannot be achieved by not affording an opportunity to the Appellant to rebut the allegation leveled against them, we are of the view that the matter be remitted to the adjudicating Commissioner for deciding the issues afresh after affording an opportunity of hearing to the appellant and allow them to file reply to the show cause notice, in support of their defense. However, it is necessary to put some conditions on the appellants before remanding the case to the adjudicating authority. Consequently, the Appellant No. 1 M/s. Sidhi Vinayak Metcom (P) Ltd. is directed to deposit seven and half per cent of the confirmed duty within a period of eight weeks from the date of communication of the order and report compliance directly to the ld. Commissioner. After recording compliance, the ld. Commissioner would proceed with the adjudication, to decide all the issues afresh. He is also directed to consider the request for providing the relevant documents, if the list of such documents necessary for the defense are submitted to the department and these are in possession of the department - Matter remanded back - Decided in favour of assessee.

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• 2015 (9) TMI 1264
  Waiver of pre-deposit of duty - Determination of assessable value of manufactured goods cleared to their sister concern on payment of duty - penalty u/s 11AC - Held that:- Tribunal by its order dated 6th March, 2008 remanded the case to the adjudicating authority for verification of the appellant’s claim on the availability of sale price of goods and to determine the assessable value in accordance with the decision of Larger Bench of this Tribunal in Ispat Industries Ltd. case (2007 (2) TMI 5 - CESTAT, MUMBAI). After carrying out necessary verification, the adjudicating authority dropped the demand wherever the Appellant could produce the evidence of sale to independent buyers but confirmed the demand wherever the appellant could not substantiate the availability of sale price to independent buyers by producing relevant sales invoices. - to meet the end of justice, it is prudent to remand the case to the adjudicating authority for deciding the issue afresh by taking into consideration all the relevant invoices and other evidences that would be produced by the appellant during the course of adjudication so as to ascertain whether during the relevant sale price to independent buyers were available. It is also directed that the appellant would deposit ₹ 5.00 Lacs as offered by them within a period eight weeks and report compliance directly to the Commissioner. - Decided partly in favour of assessee.

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• 2015 (9) TMI 1263
  Rectification of mistake - final order was not dictated in the open court in the presence of the consultant who appeared for the case but only pronounced as dismissed and detailed order was to follow since an abbreviation DOF is recorded against the order recorded in order sheet as dismissed - Held that:- It is appreciable that no one should suffer for the mistake of the court. But this Bench is handicapped to totally reverse the result of the appeal what that was recorded in final order referred to at the outset since the only power vested with the Tribunal is to rectify the mistake apparent from record but not to review its own order without power of review vested with it. Therefore for no rectifiable mistake apparent from the record - Rectification denied.

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• 2015 (9) TMI 1262
  Import of goods meant for granite quarry - whether Consumables and Tools - scope of the term "consumables" - 100% EOU - procurement of the items domestically in CT-3 - Eligibility of Exemption Notification No.58/2000-Cus. dt.8.5.2000 and Central Excise Notfn 37/2000-CE dt. 8.5.2000 - Held that:- The description of items have been listed at Sl.No.1 to 29 which are permissible under the notification whereas Sl.No.30 allows "consumables and tools". We are of the considered view that parts of excavator, button bits, tyres and tubes can by no stretch of imagination be considered as consumables. Therefore, appellants are not eligible for spares for excavators, tyres and tubes, button bits. Accordingly, we do not find any infirmity in the order of Commissioner (Appeals) and the same is upheld - Decided against assessee.

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• CST, VAT & Sales Tax

• 2015 (9) TMI 1274
  Levy of VAT on MRP - deduction of discount - Levy of VAT on supply of medicines free of costs - manufacture and sale of medicines - validity of the provisions contained in Section 15(5) of the Bihar Value Added Tax Act, 2005 - Held that:- providing for measure of tax on the subject of tax by substituting any notional value like the MRP or otherwise, is beyond the legislative competence of the State legislature. - Decision in the case of State of Rajasthan & Anr. Vs. Rajasthan Chemist Association: [2006 (7) TMI 17 - SUPREME COURT OF INDIA] followed. The State Legislature not being competent to provide for levy of tax on the first point of sale on the basis of MRP or any other notional value, there could be no question of the legislature providing for the same even by way of exercise of option by the dealer concerned. The matter goes to the root of the competence of the State Legislature under the Constitution to frame any such enactment and if it is not competent to enact such a measure then it is equally not competent to do the same by way of providing option for levy of tax upon the dealer in such matter. Thus, in the light of the aforesaid discussion Sub-section (5) of Section 15 of the Bihar Value Added Tax, 2005 is declared ultra vires. Consequently, the impugned orders passed by the Commissioner in the revision application as also by the Assessing authority in accordance with the same cannot be sustained and, are accordingly, quashed. - Decided in favor of assessee.

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• 2015 (9) TMI 1273
  Levy of penalty - delay in payment of purchase tax - bonafide mistake - Scheme of concession to new sugar factories permitting conversion of purchase tax into interest-free loan - clubbing of turnover - Karnataka Sales Tax Act, 1957 - AO rectified its earlier order recording a finding that from out of the five units, only one unit at Munavalli was entitled to the benefit and accordingly, on the same day, issued a demand notice. Held that:- The petitioner, though did not establish bona fides over the mistaken belief that all its five manufacturing units producing sugarcane were entitled to the conversion of purchase tax into interest-free loan, nevertheless, did discharge its liability immediately after issue of the demand notice dated January 23, 2010. The contention that at the first instance the assessing authority accepted the petitioner's return for the years 2006-07 and 2007-08, claiming concession followed by the assessing authority rectifying the said order and issuing a demand notice pursuant to which the purchase tax was paid, is acceptable explanation, cannot be countenanced. The facts and circumstances are a pointer to the conscious disregard of the petitioner's obligation to pay the tax, hence disentitled to a concession in the levy of penalty under section 12B(4) of the KST Act, by exercise of discretion. The first appellate authority in exercise of its discretion modified the order of the assessing authority by reducing the penalty to 50 per cent. of the tax. The order admittedly is not challenged by the Revenue and is allowed to rest. In the facts and circumstances, the point raised for consideration is answered in the negative and against the petitioner, and these petitions devoid of merit, are accordingly dismissed. - Decided against the assessee.

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• Wealth tax

• 2015 (9) TMI 1249
  Valuation of the land for Wealth Tax purposes - revenue contended that, there was no restriction concerning construction or development over the land of the assessee, by any Act or Law for the time being in force and the assesssee could have made such construction with permisssion from the appropriate authority. - CWT(A) deleted the addition as land was agricultural land and agricultural operations were being carried out thereat and that so, the land was covered by the exemption in the definition of "asset" in terms of Section 2(ea) of the Wealth Tax Act. Held that:- The learned CWT(A), though, has decided the issue on the basis of certificate dated 27.11.2009 issued by the Town and Country Planning, Shimla, as per which certificate, no construction activity could be started on the land under construction without obtaining prior approval of the Competent Authority. Pertinently, though this certificate, dated 27.11.2009 stands filed before the WTO, this certificate has not been taken into consideration by the WTO while passing the assessment order dated 9.12.2009 for Assessment Year 2002-03. For the other years also, the position remains likewise. The only unescapable conclusion is that the land of the assessee has rightly been held by learned CWT(A) to be exempt from the definition of "asset" within the meaning of section 2(ea) of the Wealth Tax Act, as amended by the Finance Act 2013 with retrospective effect from 1.3.1993. - Decided against the revenue.

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• Indian Laws

• 2015 (9) TMI 1251
  Disciplinary proceedings against the chartered accountant (CA) - non-supply of the written submissions by Respondent No.2 to the Petitioner / CA - principles of natural justice - Held that:- Non-supply of the written submissions by Respondent No.2 to the Petitioner would result in using the material, of which the Petitioner had no opportunity to meet. The same would not be permissible as per the principles of natural justice. However, in order to meet the principles of natural justice, learned counsel for Respondent No.1 fairly conceded that the said error would be rectified and the Petitioner will be given copies of the said statement so that he can meet the contentions raised therein. As per Regulation 16 the disciplinary committee is required to submit its report to the council. As per clause (2) of the Regulation where a finding of the disciplinary committee is against a person against whom the enquiry is conducted, a copy of the report of the disciplinary committee is required to be furnished to such a candidate and he is entitled to be given an opportunity of making a representation in writing to the council. No doubt that clause (2) of Regulation 16 only refers to the Respondent that is the person against whom an enquiry is being conducted for giving a copy of the report of the disciplinary committee so that he has an opportunity of making a representation. However, by now it is settled principle of law that every order which has an adverse effect has to be preceded by principles of natural justice, when the provision expressly or by necessary implication excludes the applicability of the same. In ordinary course we would have very well disposed of the Petition by accepting a fair and reasonable proposal as given by Respondent No.1. However, as Mr. Seervai has insisted upon interpretation of Regulation 16, we have admitted the matter. If the interim relief as sought is granted, it would be forestalling the enquiry proceedings against the Petitioner. In that view of the matter, we are not inclined to grant interim relief as prayed for. However, we make it clear that the further enquiry shall be subject to the result of the Petition.

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• 2015 (9) TMI 1250
  Scope of RTI Act - applicability on RTI Act on deemed universities under the scope of University Grants Commission Act, 1956 - Held that:- When the word “includes” is used in the definition, the legislature does not intend to restrict the definition, it makes the definition enumerative and not exhaustive, that is to say, the term defined would retain its ordinary meaning but its scope would be extended to bring within the term certain matters which in its ordinary meaning, it may or may not comprise. [2007 (4) TMI 354 - SUPREME COURT OF INDIA] In view of above, argument advanced by learned Counsel for petitioners that petitioner No. 2 cannot be included within the ambit of “public authority” as provided under Section 2(h) of the Right to Information Act, 2005, is not acceptable and is devoid of substance. - Decided against the petitioner.

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