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TMI Tax Updates - e-Newsletter
September 30, 2015
Case Laws in this Newsletter:
Income Tax
Customs
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
TMI SMS
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
Income Tax
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Grant of exemption u/s 10(23C) (vi) and (via) - running of a school - Merely because some profit is generated does not ipso facto imply that the educational institution is existing for profit motive - HC
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Revision u/s 263 - assessee has chosen/adopted the Project Completion Method of accounting - It is not open to the revenue to reject a method because according to the Assessing Officer another method is prefereable. - HC
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Extension of due date u/s 139(1) - where accounts are required to be audited u/s 44AB - it is considered appropriate to extend the due date for e-filing of returns upto 31st October 2015 for which the CBDT shall issue appropriate notification/instructions u/s 119 - HC
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CIT(A) allowed the carry forward of loss to the appellant instead of setting it off against the exempt income u/s.10(38) - In view of specific provisions of section 74 A.O was not entitled to reduce the loss, from the income exempt u/s 10(38) - order of CIT(A) is correct - AT
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Higher rate of Depreciation - CIT(A) allowed depreciation @ 80% for the reason that the assessee has not restricted the depreciation on Cylinders, Valves and regulars, but has claimed depreciation on LPG gas plant - conclusion reached by the ld. CIT(A) is liable to be supported - AT
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Levy of fees under section 234E - Late filing of TDS return - No 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 - No penalty - AT
Customs
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Duty Entitlement Pass Book - Use of forged DEPB – No dispute that, appellant availed credit on basis of said DEPB scrip, which was issued by Customs authorities – Thus, at time of import of goods, DEPB scrips were not found forged - extended period cannot be invoked - AT
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Levy of CVD on the basis of MRP - Evasion of duty by mis-declaring RSP - Merely because importer effected sale of some goods at price higher than RSP declared, Revenue cannot demand differential duty on entire import done as per various B/E - AT
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Ownership of Seized goods – Legitimate transaction – Source of seized gold biscuits were traced out to genuine purchase from authorised Bank –Under existing matrix, it cannot be said that Appellant failed to explain licit acquisition of seized gold bars, when he was regularly buying such gold bars in past - AT
Service Tax
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Appellant were under a genuine misconception that turnkey projects, i.e. Works Contract projects were not leviable to the service tax as Works Contract came into the fold of service tax on 1/6/2007. - Levy of penalty was rightly waived u/s 80 - AT
Central Excise
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Since Commissioner (Appeals) has not followed the law declared by the Larger Bench, exemplary cost of ₹ 2500/- imposed for burdening the appellant for unnecessary litigation costs, for burdening the Tribunal as also for showing scant respect for the law declared by the higher authorities - AT
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Denial of rebate claim - export of duty paid goods (Sugur) from warehouse - petitioner has not proved by adducing satisfactory documentary evidence that the goods cleared from the factory on payment of duty and the goods exported through the merchant exporter were one and the same - No refund - HC
VAT
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Demand and recovery of purchase tax after 5 years - period of limitation - Once a period of limitation prescribed by law expires, the right to sue or pass an order comes to an end. Resultantly, a vested or an accrued right arises in favour of a party. - HC
Case Laws:
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Income Tax
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2015 (9) TMI 1307
Extension of due date for filing returns due by 30.9.2015 where accounts are required to be audited in terms of Section 44AB - the forms were not available to the said categories of tax payers as on 1.4.2015. - petitioners inter alia submitted that it was only after 1.8.2015, 2.8.2015 and 7.8.2015 that the income tax return Forms No. 4, 5 and 6 respectively were available for downloading by the assessees In such circumstances, the last date fixed for e-filing of income tax return for the assessment year 2015-16 by the assessees, being 30.9.2015 is unreasonable and is liable to be extended. Held that:- A Single Bench of the Delhi High Court in Avinash Gupta vs. Union of India and others, [2015 (9) TMI 1123 - DELHI HIGH COURT], had the occasion to consider the issue relating to extension of time for e-filing of return beyond 30th September 2015. The writ petition was dismissed but certain observations were recorded therein that the prescribed format to be filed alongwith the return should be notified by Ist day of the assessment year. - We are in agreement with the above observations but express our dissent with regard to rejection of prayer for extension of time in e-filing the returns beyond 30th September 2015. As noticed above, we have already expressed our dissent with the order passed by the Delhi High Court qua dismissing the writ petition with regard to extension of time for e-filing of the income tax returns. Accordingly, we are unable to concur with the view expressed by the Rajasthan High Court which relied upon the decision of Delhi High Court. Taking the totality of facts and circumstances of the case, it is considered appropriate to extend the due date for e-filing of returns upto 31st October 2015 for which the CBDT shall issue appropriate notification/instructions under Section 119 of the Act. Direction is also issued to the respondents to ensure that the forms etc. which are to be prescribed for the audit report and for e-filing the returns should ordinarily be made available on the first day of April of the assessment year. - Decided in favor of petitioners.
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2015 (9) TMI 1306
Grant of exemption u/s 10(23C) (vi) and (via) rejected - educational institute - profit motive - Held that:- The inquiry conducted by the Director General with regard to the application of funds and generation of profit is to be conducted post the grant of approval. If the above conditions are satisfied, in the first instance, the Competent Authority is to grant approval. The Competent Authority is empowered to impose conditions while granting such approval. The inquiry whether the conditions had been complied with or not, as envisaged by the third proviso to Section 10(23C), is to be conducted post grant of approval and not as a condition precedent to grant of approval. Further, merely because some profit is generated does not ipso facto imply that the educational institution is existing for profit motive. We are of the view that the impugned order cannot be sustained inasmuch as the Competent Authority went to the stage post grant of approval for considering whether approval can be granted in the first instance or not. It is an admitted fact in the present case that the only activity of the petitioner is that of running of a school and the petitioner is not indulging in any activity for the purposes of profit and these are the only requirements for grant of approval and, therefore, in the same manner as in the case of Digambar Jain Society (2009 (10) TMI 61 - DELHI HIGH COURT), we issue a writ of mandamus directing the respondents to grant approval to the petitioner under Section 10(23C) (vi) of the said Act for the Assessment Years 2011-12 onwards. However, we are making it clear that the assessing authority can go into the question as to whether the conditions stipulated in the third proviso and the 13th proviso to Section 10(23C) (vi) of the said Act have been met and appropriate orders can be passed by the Assessing Authority in accordance with law. - Decided in favour of assessee.
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2015 (9) TMI 1305
Reopening of assessment - additions on account of section 40(a)(ia), under section 14A and on account of extra depreciation claimed on computer peripherals - whether the interest payments were to be on the revenue account or the capital account? - Held that:- As can be seen from the reasons, the assessing officer has done nothing but to re-examine the records which were already available and has arrived at a different conclusion in stating that the interest expenses ought to have been capitalised. This, by itself, to our mind does not amount to any failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment. It has not been indicated as to what particulars were not disclosed by the assessee. All the relevant accounts and records were available for consideration and the assessing officer had considered the entire material and he gave a detailed assessment order running into five pages. It cannot be inferred from these facts that the petitioner had not made a full and true disclosure of the material particulars necessary for assessment. With regard to the second point we find that the assessing officer has not even indicated the extent of the alleged escapement of income. Furthermore, the assessing officer has once again stated that on “perusal” of the notes to the accounts of the assessee and particularly the note at serial number 9 of the auditor’s report, it is seen that the assessee has booked the professional fees less than the job in progress brought forward from the last year on the ultimate completion by an amount of ₹ 3,21,21,550/-. Nothing further has been indicated apart from this fact which was there on record even in the original assessment. Therefore, once again we are of the view that the allegations of the assessing officer in the purported reasons that the assessee had failed to disclose full and true particulars of his income, is without any basis. Consequently, in view of the provisions of the first proviso of section 147 the revenue cannot be permitted to reopen the assessment as the necessary pre-condition for doing so in a case which is beyond four years from the end of the relevant assessment year has not been fulfilled. - Decided in favour of assessee.
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2015 (9) TMI 1304
Revision u/s 263 - Tribunal held that the assumption of jurisdiction u/s. 263 by the CIT is not valid - whether the assessee has not committed any legal error by uniformly and consistently following 'Project Completion Method' when he should have followed 'Percentage Completion Method' as per Accounting Standard 9? - whether the Tribunal was justified in law in not appreciating that the order passed by the assessing officer in this case is prejudicial to the interest of the Revenue as the assessee has not recognized revenue as per Accounting Standard 9 from its Link Corner Project which was 88.78% complete in which case, the assessing officer should have recognized the revenue from this project? - Held that:- The revenue has accepted the Project Completion Method in respect of Gym View Project of the respondent-assessee. Further as recorded by Commissioner in his order dated 27 March 2012, the respondent-assessee has offered to tax the income earned on Link Corner Project by following the Project Completion Method in respect of subsequent assessment year i.e. A.Y. 2008-09. It is a settled position of law that where the revenue has accepted a particular method of accounting over several years, the same is not to be lightly substituted unless the revenue is able to show that the same distorts the profit for a particular year. As held by the Apex Court in UCO Bank Vs. CIT [1999 (9) TMI 4 - SUPREME COURT], the choice of method of accounting is of the assessee. The respondent-assessee has chosen/adopted the Project Completion Method of accounting and has been consistently following it over the years. It is not open to the revenue to reject a method because according to the Assessing Officer another method is prefereable. In view of the above settled position, no fault can be found with the impugned order of the Tribunal. Moreover, the most appropriate method of accounting to correctly reflect the true financial statement is a matter of opinion and debate. Issues of debate are not amenable to Revisional jurisdiction under Section 264 of the Act. So far as the alternative submission viz. the Link View Project should have also been brought to tax under the Project Completion Method is concerned, the same does not arise for our consideration as Commissioner in his order dated 27 March 2012 has specifically directed adoption of Percentage Completion Method of accounting to subject the income arising on Link Corner Project to tax. In any view of the matter, the profits on Link Corner Project has been offered to tax and accepted in the subsequent Assessment Year i.e. A.Y. 2008-09. See CIT Vs. Nagri Mills Co. Ltd. [1957 (9) TMI 30 - Bombay High Court] - No substantial question of law - Decided in favour of assessee.
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2015 (9) TMI 1303
Disallowance u/s.14A r/w rule 8D - Held that:- As regards the claim of adequacy of capital or interest-free funds (held in current deposit accounts), we have already clarified of there being no finding of fact qua the specific source/s of financing, even as the Hon’ble Court has in Godrej & Boyce (2010 (8) TMI 77 - BOMBAY HIGH COURT) clarified that even the fact that the assessee has utilized its own funds in making the investments would not be dispositive of the question as to whether the assessee has incurred expenditure in relation to earning of such income. Even if, therefore, as explained by it, the assessee had utilized its own funds for making investments which have resulted in income which does not form part of the total income under the Act, the expenditure which is incurred in the earning of that income would have to be disallowed, which is to be determined by the A.O. In the facts of the present case, it is the admitted position that the investment in securities has been made out of common pool of funds. Funds in the business, it may be appreciated, are always in a state of flux, so that the proximate or the immediate source of funds may not and, in any case, not generally, reflect the real or the effective source. The same can be assessed on the basis of a fund flow statement (for the period) coupled with the legal obligations incident, if any. As an example, where a business assumes working capital advance from bank, maintaining net current assets at the prescribed level, it could safely be assumed that the borrowed funds have financed its current assets to that extent, precluding an apportionment of the expenditure by way of bank interest - a direct expenditure, against any other income of the assessee. Similar would be a case of (say) a term loan for machinery, all of which fall in the category of dedicated funds. Can, excepting dedicated arrangements, a particular asset of the business be said to be financed in a particular manner? The assets being of the business, it is only the funds of the business as a whole, save dedicated funds, that can be said to finance its activities. Accordingly, we uphold the application of section 14A r/w rule 8D in the facts and circumstances of the case, dismissing the assessee’s Gd. # I. - Decided against assessee. Disallowance of the amortized Employee Stock Options Plan (ESOP) expenses - Held that:- We direct the allowance of the discount on the shares issued to the employees, as held by the larger bench of the tribunal in Biocon Ltd. (2013 (8) TMI 629 - ITAT BANGALORE), subject to the same being reckoned with reference to issue price of the shares issued to the public during the relevant year. All other parameters, including the adjustment to the discount, shall be in terms of the said order, having regard to the terms and conditions of the assessee’s employee issue. - Decided partly against assessee. Disallowance of ESOP expenses - as claimed equity shares (3056.34 lac) other than ESOP shares (340.97 lac) have been issued during the year. As such, no disallowance of ESOP expenses, i.e., the expenditure under reference, is called for - Held that:- We are unable to understand the purport of the argument in-as-much as the ESOP expenses are only in relation to ESOP shares, i.e., shares issued to the employees under an optional scheme designed to benefit them. It is a share issue nevertheless, and the expenses thereon, share issue expenses all the same. They thus bear the same character. In fact, we have already answered Gd. II by stating, as indeed informed the decision by the larger bench, that no doubt the ‘expenditure’ inures in the form of a shortfall in the capital raised, the purpose in foregoing the same is to allow an incentive to its employees, i.e., a business purpose, so that the capital to that extent stands deployed thus, and further clarified that it is only the stated business purpose which qualifies the same to be considered as an expense and, in any case, as a revenue expenditure. The said Ground, which is in the nature of an alternate ground and/or argument, not pressed separately before us, stands, accordingly, dismissed as not pressed. - Decided against assessee.
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2015 (9) TMI 1302
Disallowance of difference in the account of sundry creditor - assessee’s pleaded that though credit notes had been issued by ITC aggregating to ₹ 21,99,867/-, but in its books of a/c it did not account for the same because assessee had lodged the claim for ₹ 26,32,303/-, which the assessee continued to show in its stock register as a separate item - Held that:- The assessee, admittedly, was distributor of M/s ITC Ltd., and, therefore, had regular dealings with M/s ITC Ltd. Considering the nature of assessee’s business, the explanation given by assessee cannot be faulted, because the greeting cards are always year specific and the old stock become obsolete and cannot be used. This practice, therefore, is commercially prevalent in this line of business. Further, as regards the credit entries being not accounted for in assessee’s books of account, keeping in view the commercial practice, it cannot be denied that the assessee had to account for the credit notes because it is not that only ITC was required to confirm the balance, but even assessee could also be called upon by the AO to confirm the balance relating to ITC Ltd. in assessment proceedings of ITC. Therefore, it cannot be concluded that assessee was deliberately not accounting for the credit notes. Under such circumstances, normal commercial practice assumes significance and that has to be given due credence. In the stock register, maintained by assessee, the stock lying with ITC has separately been mentioned. Under such circumstance, we are of the opinion that the assessee’s explanation was quite reasonable, considering the business practice and, therefore, should have been accepted. In view of above, the addition made on this count is deleted. As regards the assessee’s explanation in respect of difference of ₹ 3,03,393/-, that the cheques issued were not presented by ITC, we restore this issue to the file of AO for verification of assessee’s claim with reference to the bank account, which has been filed in the paper book before us. Ground is allowed for statistical purposes.
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2015 (9) TMI 1301
Disallowance of legal & Professional Expenses - CIT(A) deleted the addition - Held that:- We respectfully note the ratio of the judgement of Hon’ble Supreme Court in the case of Ashish Plastic Industries vs ACIT (2015 (4) TMI 16 - SUPREME COURT) wherein it was held that if the appellant assessee is able to prove that the tax on the penalty from sale of material has been paid by the payee, then the benefit thereof should be extended to the appellant assessee. Ld. CIT(A) further noted that the impugned amount has been offered to tax by the payer M/s DLF Home Developers Ltd. as its income and has paid taxes thereon and both the companies viz. the assessee company and the payee company are assessed to tax and paying taxes on the same rate, therefore, there was no case of evasion of tax or diversion of income by the payer assessee company. On careful consideration of aforesaid observations and conclusion of the CIT(A), we are of the opinion that the view taken by the first appellate authority finds support from the ratio of the judgment of the Hon’ble Apex Court in the case of Ashish Plastic (supra) hence the legal preposition adopted and followed by the CIT(A) is correct and uphold the same. However, we find it appropriate that this issue requires examination and verification at the end of the AO as to whether the payee recipient Co. M/S DLF Home Developers Ltd. had paid tax on the receipts. The issue is restored to the file of the AO for limited purpose as indicated above - Decided in favour of revenue partly for statistical purposes. Disallowance of Internal Development Cost Expenses - CIT(A) deleted the addition - Held that:- CIT(A) was right in holding that the assessee has incurred impugned amount on IDC and the same has been claimed in the P&L account as actual expenditure incurred. We are also in agreement with the observations of the CIT(A) that where one follows project completion method or percentage of completion method, the element of cost cannot change and once IDC is accepted to be an element of cost, then whichever method one applies, it has to be allowed as a cost of the project for working out the true profit and loss account in respect thereof. Under above noted facts and circumstances, we are inclined to hold that the AO was not justified in disallowing the IDC cost incurred during the year for carrying out facilities like roads, sewage, lighting, park, water supply line etc. The Budgeted IDC was a part of cost and the same has to be accepted for recognizing revenue as per POCM method which was consistently accepted by the department in the assessee’s case. We cannot ignore that similar claim of the assessee group company in similar facts and circumstances was accepted by the Tribunal and in the present assessee’s own case, assessee also allowed similar claim for subsequent assessment years and the rule of consistency requires to be followed unless there are substantial changes in the facts and circumstances and in law position for taking a deviated or different view - Decided against revenue. Disallowance u/s 40(a)(ia) - CIT(A) deleted the addition - Held that:- We are in agreement with the view taken by the CIT(A) that when it is established that the brokerage expenses of ₹ 1,15,90,431 have actually been claimed by the assessee in the profit and loss account and the same amount was disallowed in the computation of income on the ground that the TDS was not paid on the same, then further addition of ₹ 10 lakh was not justified and the same was rightly deleted by the CIT(A) - Decided against revenue.
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2015 (9) TMI 1300
Long term capital loss - investment in shares - exemption u/s 10(38) - CIT(A) allowed the carry forward of loss to the appellant instead of setting it off against the exempt income u/s.10(38) - Held that:- Clause (b) of sub section (1) of section 74 provide that in so far as capital loss relate to capital asset, it shall be set off against income, if any, under the head “Capital gains” assessable for that assessment year in respect of any other capital asset not being a short term capital asset and arising in the following assessment year. Law makes it amply clear that long term capital loss can be set off only against assessable capital gains and not otherwise. However, while giving effect to the order of the ld. CIT(A) on 21st March, 2011. ld. AO set off the loss from the long term capital gain, not assessable to tax during the year under consideration. In view of specific provisions of section 74 as noted hereinabove ld.A.O was not entitled to reduce the loss, from the income exempt u/s 10(38) of the Income Tax Act, 1961. We do not find any infirmity in the order passed by the Ld. CIT(A) in allowing the carry forward of loss in view of the discussion above. - Decided against revenue.
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2015 (9) TMI 1299
Addition u/s 68 - unexplained cash credit and unaccounted cash paid for obtaining accommodation entries - CIT(A) deleted the addition - Held that:- The assessee has filed some additional evidences before the Ld. CIT(A) which has been verified by the AO and the Ld. CIT(A) on the basis of the additional evidence, after giving full opportunity to the AO has deleted the addition in dispute. Ld. CIT(A) has taken the Remand Report from the AO and also examined all particulars/ details of the share application form, copies of PAN cards, income tax returns, bank particulars and bank statements, the complete address of the share applicants and deleted the addition in dispute. Ld. CIT(A) has also cited various decision rendered by the Hon’ble Jurisdictional High Court as well as the Hon’ble Supreme Court of India which includes CIT vs. Lovely Exports Pvt. Ltd. [2008 (1) TMI 575 - SUPREME COURT OF INDIA]; CIT vs. Divine Leasing & Finance Ltd. (2006 (11) TMI 121 - DELHI HIGH COURT) and CIT vs. Value Capital Services Ltd. (2008 (4) TMI 263 - DELHI HIGH COURT ) - CIT(A) has rightly deleted the addition - Decided in favour of assessee. Validity of reassessment proceedings u/s. 147 - Held that:- On the issue of validity of reassessment proceedings u/s. 147 of the Income Tax Act, 1961, we are of the view that on the specific information the case of the assessee has been reopened. We are of the view that the material in possession of the AO is a fresh material which has been examined by the AO, came to be valid reasonable believe that the income of the assessee has escaped assessment. After conducting the detailed investigation to prove that the income has escaped assessment in the hands of the assessee, the reassessment proceedings have been initiated by the AO. Therefore, in our considered opinion, there was existence of correct information which prompted to the AO to proceed to issue notice u/s. 148 of the I.T. Act and hence, this reassessment proceedings could not be declared as null and void.- Decided in favour of assessee.
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2015 (9) TMI 1298
Late deposit of employer’s contribution to PF - entitlement to any deduction under section 43B(b) read with section 36(1)(va) and 2(24)(x) denied - CIT(A) deleted the addition - Held that:- The record shows that the employer’s contribution to PF has been deposited by the assessee with a delay of 1 to 3 days, which certainly fall within the statutory grace period of five days. The stand of the Assessing Officer is, therefore, not sustainable because five days grace period has been allowed to the employer’s for payment of provident fund contributions under clause (iii) of CPFC’s Circular No. E. 128(1) 60-III dated 19.03.1964 as modified by circular No. E11/128 (section 14-B Amendment)/73 dated 24.10.1973. Moreover, the Assessing Officer has quoted the provisions of section 36(1)(va) and section 2(24)(x) of the Act which deal with the employees contribution to PF and not the employer’s contribution. We, therefore, find no material on record to interfere with the order of the learned CIT(A) on this issue - Decided against revenue. Disallowance of depreciation on various assets at various rates - Held that:- As regards the depreciation on Cylinder, valves & regulators, the learned CIT(A) has allowed depreciation @ 80% in respect of gas cylinders including valves and regulators. He observed that the assessee had claimed depreciation on CO2 gas plant and has not restricted it to the cylinders valves and regulators. While allowing depreciation on these assets, the ld. CIT(A) has considered clause (x) of sub-clause (viii) of clause (3) )Part A. The learned DR could not be able to rebut the findings reached by the learned CIT(A) in the impugned order. We, therefore, find no material on record to interfere with the order of ld. CIT(A) on this count. As far as the depreciation on water treatment plant is concerned, the AO restricted the depreciation to 25% observing that the rate claimed by assessee is applicable in the case of effluent Treatment Plant and the assessee is not an infrastructure company u/s. 80IA. The learned CIT(A) has examined the issue in detail and allowed depreciation on this asset at the rate of 80% after considering the note No. 4 given below the depreciation chart in the Rules and has categorically observed that water treatment plant refers to Effluent treatment plant only. This finding of the learned CIT(A) does not stand rebutted on behalf of the Revenue before us. We, therefore, do not find any good reason to interfere with the findings of the ld. CIT(A) on this account also. In respect of depreciation on Racks, Bins & Trolleys, CIT(A) allowed depreciation @ 25% on these assets after considering the contention of assessee that the racks are placed in the workshop to place the WIP components and bins and trolleys are meant for movement of components inside and outside the workshop. These assets are used in a very rough manner, thus rightly allowed depreciation on these assets at the rate of 25% as against 15% allowed by the AO, particularly when the assessee has been claiming the same rate of depreciation under the category of plant & machinery since inception and there has been no litigation on this point in the history of the assessee. We, therefore, do not find any material to support the conclusion arrived at by the Assessing Officer and to interfere with the impugned order on this count. AO had restricted the depreciation to 25% as against 100% claimed by the assessee on sewage treatment plant for the reason that some of the bills as mentioned in the impugned order were not available. The learned CIT(A) allowed the depreciation at the rate of 100% on these assets observing that the deficit bills are available, for submission of which the AO did not give reasonable opportunity to the assessee. No contrary evidence could be adduced on behalf of the revenue to contradict the finding of fact recorded by the learned CIT(A). We, therefore, endorse the view expressed by the ld. CIT(A) on this account. As regards the depreciation on LPG gas plant including cylinders, valves & regulators in Speedomax Unit, the learned CIT(A) allowed depreciation @ 80% for the reason that the assessee has not restricted the depreciation on Cylinders, Valves and regulars, but has claimed depreciation on LPG gas plant. While doing so, the ld. CIT(A) appears to have accepted the contention of the assessee that the LPG gas plant is nothing but a plant to regulate the functioning of gas cylinders and therefore, such LPG gas plant is covered in sub-clause (x) of sub-clause 8 of Item III (Part A) which consists of gas cylinders including valves and regulators. The learned DR failed to place any contrary material before us to contradict the findings of the learned CIT(A) that the assessee has claimed depreciation on LPG Gas Plant and has not restricted it to the cylinders, valves and regulators. Therefore, the conclusion reached by the ld. CIT(A) is liable to be supported. - Decided against revenue.
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2015 (9) TMI 1297
Rectification of mistake - Estimation of sales and profit - as objected tribunal has estimated the sale by applying the multiplier of 2.5 times to the licence fee/bid money whereas the facts of the case are quite identical with the case of Govind Pd. Krishan Kumar vs. Jt. CIT (Spl.), Agra but the Assessing Officer has not followed the same and repeated previous assessment order Held that:- Undisputedly, in the instant case, the sale rates are neither notified by the State Government nor fixed by the Excise Department. Therefore, the Tribunal has rightly held that the formula laid down by the Tribunal in the instant case, following the order of the Tribunal in the case of Govind Pd. Krishan Kumar vs. Jt. CIT (Spl.), Agra cannot be applied in the instant case. Therefore, the direction issued by the Tribunal could not be applied with. But in that case, the sales are to be estimated and the Assessing Officer has estimated the sales by applying the multiplier of 2.5 times of licence fee/bid money of ₹ 3,14,53,860/-. Therefore, we are of the view that the Tribunal has correctly applied the formula in the light of the orders of the Tribunal and also the judgment of the Hon'ble M.P. High court in the case of Badri Prasad Bhagwandas & Co vs. CIT (1994 (10) TMI 268 - MADRAS HIGH COURT ), of which reference was made in the case of Govind Pd. Krishan Kumar vs. Jt. CIT (Spl.), Agra (supra). Since the Tribunal has adjudicated the issue in the light of the facts available before it, no error as suggested by the ld. counsel for the assessee, is crept in the order of the Tribunal. No merit in this Miscellaneous Application of the assessee, as no error apparent in the order of the Tribunal is pointed out. The ld. counsel for the assessee has tried to dispute the findings of the Tribunal and seeking a review of the order of the Tribunal which is not permissible under section 254(2) of the Act and we accordingly reject the Miscellaneous Application. - Decided against assessee.
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2015 (9) TMI 1296
Disallowance of expenses out of the improvement expenses to the property - CIT(A) restricted disallowance to 50% - Held that:- The proprietor of M/s Verma Associates though appeared before the AO and accepted the fact of carrying out work however, he failed to substantiate his oral statements with documentary evidence in the form of books of account. The proprietor of M/s Vinayaka Trade and Agency who supplied the Air Conditioners, on one hand admitted to have sold the Air Conditioners to the assessee but on the other hand stated that he did not install the same. Further, the assessee has not claimed any separate expenses on installation of Air conditioners. M/s Nutech Engineering Corporation did not comply with the summon issued by the AO. On perusal of the Bill of M/s M/s Nutech Engineering Corporation which is filed at page no. 104 of paper book of the assesee, it is seen that 250 number of plastic moulded furniture items have been supplied but exact nature of item is not mentioned. Further the registered sale agreement though contains the clause that sale price of the said property include the cost and expenses for fitting and all other facilities provided in the said property, however, there is no specific mention that plastic moulded furniture was part of any fittings. Moreover, the buyer has specifically denied to receive any Air Conditioner or fittings. In view of the above findings, the action of the CIT(A) in restricting the disallowance to 50% of its improvement expenses does not seem proper. In view of the above, in the interest of natural justice,find it appropriate to send the matter back to the file of the Ld. CIT(A) to examine the issue alongwith expenses on repair, air conditioned plastic moulded further after giving due opportunity to the assessee. I hold and direct accordingly. - Decided in favour of assessee for statistical purposes.
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2015 (9) TMI 1295
Addition of refund of flat booked as unexplained sources of the appellant - addition on unexplained credits - Held that:- Allotment letters etc. from the society were not easily available because the same were old records and i.e. why the same could not be filed before CIT(A). He made a prayer that since documents go the route of the addition, therefore, the same may be admitted.We are of the opinion that these documents go to the route of the matter and therefore in the interest of justice the same should be admitted as additional evidence. However, at the same time we do not find any force for admission of additional evidence in respect of documents N-5 i.e. gift deed because no particular reason has been given before us why this gift deed could not be obtained earlier. Therefore, we admit to the documents. Thus we set aside the order of Ld. CIT(A) and remit the matter back to the file of Assessing Officer to reexamine the issue in the light of the additional evidence and then decide the same in accordance with law Addition of deposits in bank during the year as unexplained credits - Held that:- Surplus cash is available with the assessee. The sum of ₹ 10,000/- can be said to be easily available from withdrawals of ₹ 2,85,000/- on 22.5.2006. Similarly, deposit of ₹ 50,000/- on 7.2.2007 can be easily explained from the withdrawals of ₹ 50,000/- on 15.1.2007. Therefore, in our opinion this addition is required to be deleted and accordingly we set aside the order of CIT(A) and delete the same. Addition on deposits in bank during the year as unexplained credits - Held that:- CIT(A) has not given detailed reasons for rejection of these two items. Once the confirmation was filed and if Assessing Officer had any doubt he could have asked for further information. Therefore, in the interest of justice, we set aside the order of Ld. CIT(A) and remand the matter back to the file for reexamination of these entries. The Assessing Officer should decide the issue in respect of these two entries after obtaining confirmation etc. in accordance with law. Addition on deposits in bank during the year as unexplained credits - assessee submitted that CIT(A) has already accepted the another gift of ₹ 5 lakhs from the sister then he should have accepted this gift also. - Held that:- We do not find any force in the submissions of Ld. Counsel for the assessee. First of all, we have already rejected the admission of additional evidence in the form of gift deed in respect of this gift deed because Ld. Counsel could not give any reason why the same was not produced before Assessing Officer or CIT(A). Secondly, wherever the assessee has filed proper certificate, Ld. CIT(A) has already deleted the addition and if no confirmation is available for a particular gift, then same cannot be allowed simply because the other gifts have been accepted. Therefore, we upheld the order of Ld. CIT(A) in this respect and confirm the addition
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2015 (9) TMI 1294
Revision u/s 263 - whether the CIT in exercise of his powers vested under Section 263 can revise that reassessment order with the intention of bringing into the tax some other items which do not form part of the reasons recorded at the time of issuing notice under Section 148? - Held that:- The identical issue had come up before the Hon’ble Jurisdictional High Court in the case of CIT Vs. Software Consultants, [2012 (2) TMI 18 - DELHI HIGH COURT] wherein the Hon’ble Jurisdictional High Court after considering the ratio laid down in the case of Ranbaxy Laboratory Ltd. [2011 (6) TMI 4 - DELHI HIGH COURT] and CIT Vs. Jet Airways (I) Ltd., [2010 (4) TMI 431 - HIGH COURT OF BOMBAY] and CIT Vs. Shri Ram Singh, [2008 (5) TMI 200 - RAJASTHAN HIGH COURT ] held that when no addition was made regarding the item in respect of which reasons were recorded for reopening of the assessment, the Commissioner could not exercise his jurisdiction under Section 263 of the Act in order to bring to tax other items of additions. Respectfully following the ratio laid down in the above case, we hold that in the present case also the Commissioner of Income Tax is not justified in exercising the power under Section 263 of the Act. - Decided in favour of assessee.
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2015 (9) TMI 1293
Levy of penalty under section 271(1)(c) - appellant tendered an explanation saying that the additions were as a result of bona fide mistaken occurred at the time of preparation of return of income - Held that:- We are of the considered opinion that the appellant had no intention of concealing the particular of the claim made, having regard to the fact that full disclosure was made of the items written off in the schedule XI financial statement, and the appellant on its own before the detection of the same by the Assessing Officer had offered the same to tax. This goes to prove that mistake is bona fide and therefore no penalty can be levied under the provisions of Section 271(1)(c) of the Act. In this regard, we also place reliance on the decision of Hon’ble Supreme Court in the case of Price Water House Coopers (P.) Ltd., [2012 (9) TMI 775 - SUPREME COURT] Thus we hold that no penalty is leviable in the facts and circumstances of the case under Section 271(1)(c) of the Act. Hence, the appeal filed by the assessee is allowed in full. - Decided in favour of assessee.
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2015 (9) TMI 1292
Penalty levied by the AO u/s 271(1)(c) - CIT(A) deleted the levy - revision of computation of income - Held that:- In the present case, it is an admitted fact that the assessee wrongly computed the short term capital gain to be carried forward due to some wrong formula entered into computation sheet used to work out the short term/long term capital gains / loss and when the mistake came to his notice, the assessee corrected the figures and filed the revised details of short term capital loss before the AO vide letter dated 24.10.2011, much before the completion of the assessment on 22.12.2011. The AO accepted the figures of short term capital loss to be carried forward at ₹ 30,27,277/- in place of the earlier claimed loss of ₹ 62,09,653/-. However, he levied the penalty u/s 271(1)(c) of the Act. From the aforesaid narrated facts of the present case, it is crystal clear that the intention of the assessee was not mala fide because he himself corrected the figure, revised the computation and paid the due tax on the income of the succeeding years because the claim of carried forward of short term capital loss had affected the future tax liability. See Price Water House Coopers (P.) Ltd., [2012 (9) TMI 775 - SUPREME COURT] Thus we hold that no penalty is leviable in the facts and circumstances of the case under Section 271(1)(c) of the Act. Hence, the appeal filed by the assessee is allowed in full. - Decided in favour of assessee.
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2015 (9) TMI 1291
Proceedings u/s 153C - rework the addition after giving credit for proportionate expenditure on account of pending works for this year and also giving credit for appellant’s returned income on account of sale of flats as directed by CIT(A) - Held that:- We have considered the submissions of the learned DR. We find that additional cost on incomplete project, based on photograph, may not be acceptable. No reasons were adduced for not filing the evidence filed before CIT(A),before the AO. We, therefore, direct the AO to rework the addition if any, after careful consideration of cost records from the assessee. The assessee is, therefore, directed to submit the factual information and proper cost records to the Assessing Officer, not merely the photograph, so as to substantiate its claim. The assessee is also given liberty to file proper estimation from registered valuer. To carry out the above direction of the bench, the entire issue is restored on the file of the AO - Decided in favour of Revenue for statistical purpose.
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2015 (9) TMI 1290
Levy of fees under section 234E - intimation issued under section 200A in respect of processing of TDS for the Assessment Year 2013-14 - Held that:- The issue in appeal is now squarely covered in favour of the assessee by the decision of ITAT Amritsar Bench in the case of Sibia Healthcare Private Limited vs. DCIT [2015 (6) TMI 437 - ITAT AMRITSAR]. No 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, I hereby delete the levy of late filing fees under section 234E of the Act by way of impugned intimation issued - Decided in favour of assessee
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2015 (9) TMI 1289
Taxation on interest whether interest income received by the assessee has already been transferred to the beneficiaries? - Held that:- We find it appropriate to remit the issue back to the Assessing Officer to consider the issue afresh, particularly, whether, the assessee has transferred the income earned by it to the beneficiaries or not? If the very same income is taxed in the hands of beneficiaries, then it cannot be taxed in the hands of the assessee. Further, if the assessee has not able to produce relevant details to satisfy the Assessing Officer that the interest amount is transferred to the beneficiaries, the same amount may be taxed in the hands of the assessee as its income in accordance with law. We further direct the Assessing Officer that if the assessee has incurred any expenditure relating to earning the interest income, the same may be allowed as business expenditure, if the activity of the assessee is treated as business activity. Decided in favour of assessee for statistical purposes.
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2015 (9) TMI 1288
Rectification of mistake - claim for bad and doubtful debts under section 36(1)(vii) - Held that:- The issue before the Tribunal was whether the provisions for bad and doubtful debts can be allowed under section 36(1)(vii) on the basis of approval of the Board of Directors of the assessee-company. The Tribunal has examined this issue in para 9 of its order and has given a categorical finding that the assessee has claimed deduction for bad and doubtful debts under section 36(1)(vii) of the Act; whereas this section deals with only actual claim of deduction. Since the Tribunal has taken into account all the arguments of the assessee while adjudicating the issue, we find no error apparent in the order of the Tribunal. The Tribunal has given a categorical finding that the provisions for bad and doubtful debts cannot be claimed under section 36(1)(vii) of the Act, as it deals with actual claim of deduction. The Tribunal has also taken cognizance of the provisions of clause (vii)(a) of section 36(1) of the Act, which deals with the issue of claim of provision for bad and doubtful debts made by the Scheduled Bank, non-Scheduled Bank or Corporation Bank, etc. Therefore, it cannot be said that the Tribunal has not dealt with the issue in the light of assessee’s contentions. Since the Tribunal has taken a particular view in the light of assessee’s contentions, the findings of the Tribunal cannot be reviewed under the garb of rectification. No merit in this Miscellaneous Application of the assessee, as no error apparent in the order of the Tribunal is pointed out. The ld. counsel for the assessee has tried to dispute the findings of the Tribunal and seeking a review of the order of the Tribunal which is not permissible under section 254(2) of the Act and we accordingly reject the Miscellaneous Application. - Decided against assessee.
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2015 (9) TMI 1287
Penalty u/s 271(1)(b) - Held that:- Making additions and partly confirming them we find that both authorities have not passed speaking orders and moreover the necessary clarifications stated by assessee were not properly examined. Assessing Officer has also completed assessment u/s 144 of the Act. Therefore in view of the substantial justice we are of the view that appeals confirming the assessment and confirming the penalties needs to be looked after again by AO. The AO will provide sufficient opportunity to the assessee of being heard. - Decided in favour of assessee for statistical purposes.
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2015 (9) TMI 1286
Levy of penalty u/s.271(1)(c) - addition on account of adjustment u/s.145A with regard to difference in closing stock and unutilized MODVAT, disallowance of foreign travel expenses amounting to ₹ 1,35,750/- and disallowance to bonus payment to labourers - Held that:- So far as the imposition of penalty for addition made on account of adjustment u/s.145A of the Act and foreign travel expenses are concerned, the Coordinate Bench of this Tribunal has deleted the penalty in assessee's own case for AY 2004-05.[2011 (12) TMI 517 - ITAT AHMEDABAD] In respect of addition made on account of disallowance of bonus payment to labourers in quantum appeal, this Coordinate Bench for AY 2005-06 [2012 (11) TMI 1077 - ITAT AHMEDABAD] had restored this issue back to the file of AO for de novo assessment. Under these facts, the penalty levied on this amount does not survive. - Decided in favour of assessee.
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2015 (9) TMI 1285
Penalty u/s 271(1)(b) - bonafide belief - CIT(A) deleted penalty in part - Held that:- CIT(A having been satisfied to quash penalty in two out of the 7 years infact should have quashed the penalty proceedings in all the years. When the admitted facts are that the seized documents were common to all the group cases numbering 120 in all and at the relevant point of time the cases were partially in Nagpur and partially in Delhi and the counsels infact were facilitating in the process of centralizing the entire group of cases at Delhi from Nagpur the occasion to willfully default does not arise. In fact there is more than sufficient evidence on record to hold that the penalty u/s 271(1)(b) in these admitted facts was not warranted. We have seen that the assessments are concluded u/s 143(3)/153A thereby meaning that shortcoming if any was made good in the assessment proceedings. Thus we quash the penalty of ₹ 10,000/- imposed u/s 271(1)(b) for each of the years and allow the appeals of the assessee. - Decided in favour of assessee.
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2015 (9) TMI 1284
Rejection of declared valuation of closing stock - Held that:- Find considerable cogency in the assessee's contention mentioned in the Ld. CIT(A) order that all the purchases and direct expenses under different heads and also sales were verifiable and supported by documentary evidence. The correctness of the declared profit as reflected in the Trading account was well proved and substantiated by the method of accounting regularly employed was not disputed. Thus on facts and in law there was no warrant and legal justification for rejection of declared valuation of closing stock. Find force in the assessee's contention that AO was wrong to hold that the closing stock was not correctly valued on the basis of which by applying FIFO method he made an addition of ₹ 2,11,326/- on the basis of difference in value of unsold closing stock by that method and also rejected the account books which were duly audited by applying the provisions of section 145 on the sole basis of difference in unsold closing stock. Further, the AO has violated the provisions of law by adopting the FIFO method on his own without pointing out the defects in LIFO method which is a prescribed method without pin pointing the defects in the method constantly applied by the assessee on the basis of which if proper profit cannot be deduced. AO has wrongly applied the FIFO method and wrongly rejected the LIFO method as applied by the assessee - Decided against revenue. Disallowance of expenditure under the head Job Work - Held that:- Expenditure on job work was genuinely incurred in the course of business. Such expenditure being incidental and relating to job work receipts did not warrant any disallowance as the same had been claimed in the preceding as well as succeeding years, which was accepted by the Department, therefore, the impugned disallowance is not sustainable in the eyes of law - Decided against revenue. Expenditure under the head Trade Tax on purchases disallowed - Held that:- As regards addition incurred under the head trade tax on purchase was genuinely incurred in the course of business, hence, the same is also not sustainable in the eyes of law, hence, delete the same. - Decided against revenue. Carry forward of loss not claimed by the assessee in computation of income - assessee has submitted this was a mistake - Held that:- The assessee made application u/s. 154 of the I.T. Act which has not been disposed off by the AO. As find that Ld. CIT(A) in his finding has observed that this carry forward of loss cannot be allowed at appellate stage because the same was not claimed in the assessment and this matter is still pending u/s. 154 before the AO, therefore, Ld. CIT(A) has rejected the said ground, which is in my opinion is contrary to the law and principle of natural justice. In view of above, in the interest of justice,direct the AO to decide the Application u/s. 154 filed by the assessee first and then decide the issue in dispute by passing a speaking order, after giving adequate opportunity of being heard to the assessee. - Decided in favour of assessee for statistical purposes.
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2015 (9) TMI 1283
Claim of deduction u/s 80IB denied - treatment to both the units as one and the same - Held that:- Merely because the second unit was shown as branch unit or expanded unit, it cannot be said that the branch unit is not an independent unit. In fact, the injection moulded plastic components are manufactured at 55-D, SIDCO Industrial unit. This method is not used in the main unit. This Tribunal is of the considered opinion that both units are functioning differently even though the end product in both units are plastic components. Therefore, both the authorities below are not justified in treating both the units as same unit. Merely because one unit is treated as branch unit for administrative convenience, it does not mean that both the units are one and the same. In view of the above, both the authorities below are not justified in treating both the units as one and the same. This Tribunal is of the considered opinion that both main and branch unit are separate and independent one, therefore, the authorities below are not justified in rejecting the claim of the assessee u/s 80IB of the Act. Accordingly, the orders of the authorities below are set aside and the Assessing Officer is directed to allow the claim of the assessee u/s 80IB of the Act. - Decided in favour of assessee.
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2015 (9) TMI 1282
Claim of the assessee u/s 10B - claim of the assessee was rejected by AO on the ground that the approval from the Board as required under the provisions of section 10B was not obtained - assessee made an alternative claim u/s 10A - only contention of the ld. DR is that the assessee cannot make a claim unless the same was made in the return of income - Held that:- As gone through the judgment of the Apex Court in M/s Goetze (India) Ltd (2006 (3) TMI 75 - SUPREME Court) wherein held that for the purpose of making a claim, the same has to be made in the return of income. In the very same judgment, the Apex Court found that however, it will not deprive the authority of the Tribunal to entertain additional ground or alternative ground. Therefore, when the assessee is eligible for alternative claim u/s 10A, this Tribunal is of the considered opinion that the CIT(A) has rightly allowed the claim of the assessee. This Tribunal do not find any infirmity in the order of the CIT(A) on this issue. - Decided in favour of assessee. Setting off of losses of non 10B unit against profits of 10B unit - Held that:- The Special Bench of this Tribunal in Scientific Atlanda Tec P. Ltd.(2010 (2) TMI 658 - ITAT, CHENNAI) found that the brought forward losses and depreciation need not be set off for computing deduction u/s 10B of the Act. - Decided in favour of assessee. Exclusion of foreign travel and communication expenses from the export turnover - Held that:- It is not in dispute that the foreign travel and communication expenses were included in the total turnover. Once it was included in the total turnover, in view of the decision of Special Bench in Sak Soft Ltd. (2009 (3) TMI 243 - ITAT MADRAS-D), the same are also to be included in the export turnover. The Special Bench in Sak Soft Ltd found that the denominator and numerator shall be of the same factor. The CIT(A) has followed the decision of the Special Bench of this Tribunal, therefore, we do not find any infirmity in the order of lower authority - Decided against revenue. Disallowance u/s 14A - AO admittedly, disallowed 10% of the dividend income. However, the CIT(A) deleted the same. Asseessee submitted that 2% of the dividend income may be disallowed - Held that:- The Assessing OfficerAssessing Officer is directed to disallow 2% of the dividend income as expenditure relatable to exempted income. The order of the CIT(A) is set aside and the Assessing Officer is directed to disallow only 2% instead of 10% of the dividend income. - Decided partly in favour of revenue.
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Customs
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2015 (9) TMI 1316
Duty Entitlement Pass Book - Use of forged DEPB – Extended period of limitation – it was contended that, they are bonafide purchaser of the DEPB scrips from the open market, as per the provisions of the Policy and payment was made by cheques. There is no material available of fraud, collusion etc against the Importer and therefore, the extended period of limitation cannot be invoked. - Held that:- No dispute that, appellant availed credit on basis of said DEPB scrip, which was issued by Customs authorities – Thus, at time of import of goods, DEPB scrips were not found forged – Importer imported goods on basis of documents, which were valid at time of importation and therefore, such document was valid, till it was not set-aside – Thus, extended period cannot be invoked – Demand of duty along with interest was not sustainable as barred by limitation – No material available that appellant abetted exporter for their gain and therefore, it would not come within ambit of imposition of penalty – Therefore, demand of duty along with interest and penalty being barred by limitation, hereby set aside – Decided in favour of Assesse.
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2015 (9) TMI 1315
Levy of CVD on the basis of MRP - Evasion of duty by mis-declaring RSP - On enquiry it was found that appellants sold imported goods to NCCF/KB at price higher than RSP declared at time of import – Demand of differential duty – Imposition of penalty – Held that:- sale of goods at price higher than RSP declared can only lead to conclusion that appellants mis-declared RSP of such goods at time of import – Appellants are therefore liable to pay differential duty. RSP is only upper limit of sale price which importer can charge from consumer – Appellant is free to sell goods at any price lower than RSP declared – Merely because importer effected sale of some goods at price higher than RSP declared, Revenue cannot demand differential duty on entire import done as per various B/E – Adjudicating authority adopted price quoted to NCCF/KB as basis of calculation of differential duty and applied same to entire sale of imported goods for disputed period – Demand so raised is not acceptable – Allegation of collection of higher price is confined to sales effected to NCCF/KB therefore, demand of differential duty, has also to be confined to sales effected to NCCF/KB only. Admittedly appellant sold imported goods not only to NCCF/KB but to other customers also – Goods sold to other customers were sold at RSP or prices lower than RSP declared – In such circumstances imposition of penalty of ₹ 25 lakhs is slightly on higher side – Therefore penalty reduced – Appeal partly allowed – Decided partly in favour of Assesse.
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2015 (9) TMI 1314
Ownership of Seized goods – Legitimate transaction – appellant argued that seized goods were properly accounted for in the registers and Appellant has discharged the burden of proof under Section 123 of the Customs Act, 1962 - Appellant alongwith on other was intercepted and 115 foreign marked Gold biscuits were recovered from eight packets carried by the said two persons – Whether seized goods were purchased and/or owned by appellant. Held that:-It was observed from case records that Appellant claimed ownership of seized goods –Retraction made by Appellant was not acceptable – Supreme Court’s judgment in case of Vinod Solanki Vs UOI [2008 (12) TMI 31 - SUPREME COURT], specifically ruled that evidence brought out by confession if retracted must be corroborated by other independent and cogent evidences – In view of circumstances there was corroboration and justification for retraction on part of Appellant –Employee of Appellant confirmed to have prepared paper found alongwith seized packet –All others who were investigated denied ownership of seized gold bars – Thus, Appellant was rightful owner/claimant of seized goods. Adjudicating authority held that no payments were made by Appellant for seized gold bars – Appellant brought on record letter under which order was placed for 3000 gold bars before branch manager of Allahabad bank – As per cross-examination Bank has sold gold bars to M/s Amrapali Industries Ltd – Source of seized gold biscuits were traced out to genuine purchase from authorised Bank –Under existing matrix, it cannot be said that Appellant failed to explain licit acquisition of seized gold bars, when he was regularly buying such gold bars in past – Appeal allowed – Decided in favour of appellant.
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2015 (9) TMI 1313
Restoration of Appeal – Non-fulfilment of Pre-deposit condition within time specified – Tribunals jurisdiction to restore appeal – Difference of opinion – Question as to Whether Tribunal has jurisdiction to restore appeal of appellant despite violation of High Court's order to make pre-deposit as held by Hon'ble Member (Judicial), referred to Third Member to resolve difference of opinion.
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2015 (9) TMI 1312
Waive of pre deposit - Penalty u/s 112(a) and 112(b) - mis-declaration of the imported goods - mis-declaration of the importd goods declared as suit cases, which were later found to comprise of different types of goods, namely, mens wear, spectacle frame, mobile battery, T-Shirt etc. - Held that:- Commissioner analyzing the evidences brought on record against the applicant recorded a detailed finding at para 34.1 to 34.3 in Appeal No.70452 and at para 44.1 to 44.3 in Appeal No.70453 in imposing penalty. - At this stage, we do not find that the applicant could able to make out a prima facie case for total waiver. Considering the financial hardship expressed on behalf of the applicant by the ld.Adv., it is appropriate at this stage, to direct the applicant to deposit ₹ 1.50 Lakhs in both the appeals - Partial stay granted.
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2015 (9) TMI 1311
Denial of DEPB credit - appellants have willfully obtained the DEPB by mis-declaration - Held that:- Appellant had imported raw materials duty-free under Notification No. 32/97-Cus. which allowed such import for jobbing purpose. The job worker was required to export the final product to the overseas supplier of raw materials. In this process, it was open to the job worker to make a value addition to the extent of not less than 10% CIF value of the imported raw material. The Tribunal has held that if at all benefit of drawback/DEPB could not be denied to the importers if they are jobbing and exports made using such imports but the benefit of the notification is admissible subject to their having fulfilled the condition of achievement of value addition. - No reason to interfere with the order of the adjudicating authority. - Decided against assessee.
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2015 (9) TMI 1310
Rejection of application for customs broker licence - Violation of principles of natural justice - Held that:- As per the Regulation 21 of CBLR, 2013 only Customs broker can file the appeal under Section 129A of the Customs Act, 1944 (sic) before the CESTAT. We find that in the present case the applicants are not customs brokers and under section 146(2)(f) of the Regulations appeal can be made only against the order of suspension of revocation of licence - Present applicants are firstly neither custom broker nor order impugned is order for revocation or suspension. appeal against rejection of application for custom broker licence does not lie before this Tribunal - Therefore, the issue is to be decided on its maintainability first.
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2015 (9) TMI 1309
Waiver of pre deposit - Imposition of penalty - Held that:- Predeposit of penalty was called for after considering the arguments made by the appellant. Appellant neither appeared nor made any deposit to comply with the order. Only after issuance of notice on 18.5.2015, appellant has come with a prayer for modification of stay order. In spite of sufficient opportunity granted, appellant has not complied with stay order. We do not find any merit in the submissions of appellant and the citations referred to in the written submissions are not applicable to the case. - Decided against assessee.
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Service Tax
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2015 (9) TMI 1335
Denial of CENVAT Credit - outdoor catering service - Held that:- In view of the judgments of Larger Bench in the case of the GTC Industries Ltd (2008 (9) TMI 56 - CESTAT MUMBAI) and also in the judgment of this Tribunal in the appellant own case, the appellant is entitled for the credit of Service tax paid on outdoor catering service. However, Cenvat credit shall not be allowed on the amount attributed to the service charges which is collected from the employees. Extended period of limitation - Appellant have submitted the copies of input service invoices on which Cenvat credit was availed. The annexure of such invoices clearly shows that they have availed Cenvat credit in respect of outdoor catering service. I have also gone through the annexure which has been filed alongwith monthly return by the appellant to their Jurisdictional Range Superintendent wherein description of service, amount of Cenvat credit have been clearly disclosed. - demand pertaining to the period beyond one year from the date of show cause notice is not sustainable being time barred. - Decided in favour of assessee.
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2015 (9) TMI 1334
Denial of CENVAT Credit - Outdoor Catering Service, Housekeeping, Commission to Agents, and Repair of Motor Vehicles service - services have no nexus with the business activity of the Appellant - Held that:- A canteen was installed in their factory premises and supplied various food articles including tea, coffee, snacks, break-fast etc to their staff members, employees and workers to run their business activity of production and sale of goods. It is essential to maintain the Factory & Office Premises, clean & neat, with the help of the Housekeeping Agency and this being the position, the Service of a Housekeeping Agency, is said to have been availed of, by them, in connection with the Business Activity of Production and Sale of finished goods. - So, the Appellant is eligible to avail input service credit of housekeeping service, which is related to the better maintenance and pollution control of the factory premises. Dispute relating to demand of tax on commission agent was decided by Hon'ble Gujarat High Court in the case of Cadila Healthcare Limited (2013 (1) TMI 304 - GUJARAT HIGH COURT). Hence, the Appellant availed the CENVAT credit on a bonafide impression. Denial of CENVAT Credit on the extended period of limitation cannot be sustained. Credit availed on repair or maintenance service of vehicles used by their staff members and therefore, there is no reason to deny the Service Tax credit on repair or maintenance service. - Decided party in favour of assessee.
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2015 (9) TMI 1333
Waiver of pre deposit - CENVAT Credit - credit on the basis of supplementary invoices for payment of service tax - revenue contended that since service provider has paid the service tax on account of non-levy or non-payment or short payment or short levy of service tax by the reason to fraud, collusion, wilful mis-statement or suppression of facts or contravention of any provisions of the Finance Act, 1944 Held that:- CENVAT Credit of service tax paid by the service providers is sought to be denied to the appellant by invoking clause (bb) of Rule 9 (1) of the CENVAT Credit Rules, 2004. - neither the show cause notice while making this allegation, gives details of the show cause notices issued to the service providers and of the adjudication order confirming service tax demands under proviso to section 73 (1) against them nor such documents had been provided to the appellant. Even the order-in-original besides repeating the allegations contained in para 4 of the show cause notice does not give any details. On the other hand, the appellant have made inquiries with certain service providers which have been placed on record which indicate to the contrary. - appellant have strong prima facie case in their favour, and hence, the requirement of pre-deposit of CENVAT Credit, demand, interest and penalty is waived for hearing of the appeal and recovery thereof is stayed. - Stay granted.
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2015 (9) TMI 1332
Waiver of pre deposit - associated enterprises - payment of service tax on the basis of debit / credit entries in the accounts - appellant contended that, the amendment carried out in Section 67 of Finance Act, 1994 cannot be taken to mean that service tax will have to be paid on the amount shown as outstanding from association enterprises - Held that:- Court is in full agreement with the order of the Tribunal in [2014 (7) TMI 410 - CESTAT NEW DELHI] - Pre deposit waived.
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2015 (9) TMI 1331
Manpower Recruitment and Supply Agency service - Held that:- appellant-assessee in this case has been engaged by sugar factories for harvesting sugarcane, transporting and unloading the same at the sugar factories which according to Revenue authorities would fall under the category of Manpower Recruitment or Supply Agency Services. We find that the issue is no more res integra as in the case of Bhogavati Janseva Trust vs. CCE - [2014 (9) TMI 482 - CESTAT MUMBAI] this Bench had allowed the appeals filed by various appellants and engaged in the very same activity. Since the issue is already decided by this Bench, we find that the appeal filed by Revenue against the Order-in-Appeal is liable to be rejected and the appeal filed by the appellant-assesssee against order-in-original needs to be allowed. - Decided against Revenue.
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2015 (9) TMI 1330
Waiver of pre deposit - Outdoor catering service - SEZ - Denial of exemption claim - Non renewal of contracts for a particular period - Held that:- On perusal of agreements, bills, invoices, prima facie appellants are entitled for exemption under above notification. We also find that sale of food in food courts is not covered under catering services but falls under restaurant services. On perusal of the contract, we find that appellants are running food courts either in office premises and other places where the foods are supplied and charges are collected from individual persons and the levy of service tax was introduced on restaurants services extending to all A/C restaurants w.e.f. 1.7.2012. Regarding demand made on unbilled revenue, we find from the Chartered Accountant certificate though it was reflected in balance sheet as per accounting standard, the amount was realised only in the next financial year and during the relevant period the service tax is to be paid only on realisation of amount. Therefore, we are of the considered view that in respect of demands on supplies to SEZ, food courts and unbilled revenue, appellant prima facie has made out a case for waiver of predeposit. - Partial stay granted.
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2015 (9) TMI 1329
Waiver of pre deposit - Commercial & Industrial Construction Service, Construction of Residential Complex Service, Dredging Service, Management & Maintenance Service and Erection & Commissioning service - Held that:- Taking into consideration Tribunal's stay order [2013 (12) TMI 495 - CESTAT CHENNAI] in appellant's own case, and also taking into consideration the value of construction commercial construction activity disputed by the appellant as non-commercial activity, we direct the appellant to pre-deposit a sum of ₹ 25,00,000 within 8 weeks - Partial stay granted.
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2015 (9) TMI 1328
Erection, commissioning and installation service - Penalty u/s 76, 77 & 78 - Turnkey project - Works contract - Held that:- It is common practice while setting up large plants that the selection of supplier is recommended by the consultant who provides both technology as well as Design Engineering. Only because supplier of components is authorized in advance by the consultant does not mean that purchases were made by the consultant. Further we find nothing wrong in modifying and amending an agreement to suit both parties. What needs to be examined is actual service provided by the appellant. In this case, as a result of the amendment, the actual services provided by the appellant related to services of testing and other related service through which gave their expertise to their client. - The issue is the amount actually received from their client i.e. M/s. Shreya Biotech Pvt. Ltd for the service provided by the appellant. At the material time service tax was levied on receipt basis. And appellant have paid service tax on the amount received by them from their client M/s. Shreya Biotech Pvt. Ltd which is confirmed by M/s. Shreya Biotech Pvt. Ltd to the Commissioner. Therefore service tax has been correctly paid by the appellant. Appellant were under a genuine misconception that turnkey projects, i.e. Works Contract projects were not leviable to the service tax as Works Contract came into the fold of service tax on 1/6/2007. Keeping the entire circumstances of the case in view, we find that Commissioner has quite appropriately exercised his discretion under Section 80 on the basis of "reasonable cause” for waving penalties under Section 76, 77 and 78. - Decided against Revenue.
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Central Excise
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2015 (9) TMI 1337
Pending cases since long - Engagement of Advocate by the Commissionerate to plead the case on behalf of revenue - who will argue the case - Held that:- We are nobody to comment on the procedure followed by the Revenue. - When complaints are made that old matters are not being taken up and given priority, then, firstly the Revenue/State should put its house in order. There are many old matters pending and for more than 10 years and having serious revenue implications. In the circumstances, let a copy of this order be sent to the Office of the Chief Commissioner, Central Excise and Customs of each Commissionerate. We would expect high level officers to apply their mind so as to enable this Court to take up the old Appeals for hearing and disposal. They must take immediate steps to replace the old Advocates, else we would be constrained to dispose of them in their absence.
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2015 (9) TMI 1336
Determination of assessable value - Removal of goods to sister concern - Imposition of penalty - Held that:- In case the appellant has sold the goods to independent buyers as also to their sister concern, by adopting the same assessable value, the provisions of Rule 8 of Valuation Rules cannot be invoked in respect of clearances to sister concern. Though the appellant had taken a categorical stand to that effect, the said fact does not stand examined by the lower authorities. For the said limited purpose, we remand the matter to the original adjudicating authority for examining the said factual position and to decide the issue accordingly. Since Commissioner (Appeals) has not followed the law declared by the Larger Bench [2007 (2) TMI 5 - CESTAT, MUMBAI], we deem it fit to impose an exemplary cost of ₹ 2500/- for burdening the appellant for unnecessary litigation costs, for burdening the Tribunal as also for showing scant respect for the law declared by the higher authorities. - Decided in favour of assessee.
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2015 (9) TMI 1326
Denial of rebate claim - export of duty paid goods (Sugur) from warehouse - petitioner has not complied with the conditions and procedure of Notification No. 40/2001- CE(N.T) dated 26.06.2001 - Held that:- Benefit envisaged by the notification No.294/10/1997-CE, dated 30.1.1997 was in the nature of a concession to which any exporter is entitled however it is subject to the strict compliance with the conditions mentioned therein. On a perusal of the entire record as well as the impugned order passed by the authorities, this Court is the considered view that the impugned order does not suffer any illegality or irregularity in order to interfere with the same since as held by the authorities that the petitioner has not proved by adducing satisfactory documentary evidence that the goods cleared from the factory on payment of duty and the goods exported through the merchant exporter were one and the same and thereby the duty paid character of the goods exported remained unsubstantiated. Petitioner has committed serious lapses and miserably failed to comply with the conditions of the notification and the very basic condition that the goods cleared on payment of duty for home consumption are the same which were subsequently exported through the shipping bills and thereby it is proved beyond reasonable doubt that the goods exported are the same which were cleared on payment of duty and this corequirement was not discharged in order to claim refund of the duty. - Decided against assessee.
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2015 (9) TMI 1325
Waiver of pre deposit - Denial of exemption claim - area based exemption scheme vide notification dated 10.6.2003 - Denial on the ground it had failed to commence commercial production till 31.3.2010 - Held that:- Court on 21.2.2015 while issuing notice of motion had directed the appellant to deposit ₹ 10 lacs within one month from that date. We are informed that the amount has since been deposited by the appellant. After hearing learned counsel for the parties and keeping in view the totality of the facts and circumstances of the case, in our opinion, a further sum of ₹ 10 lacs on account of duty be deposited as a condition precedent for hearing of the appeal to meet the ends of justice. - Decided conditionally in favour of assessee.
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2015 (9) TMI 1324
Duty demand - Determination of annual capacity of production - compounded levy scheme - imposition of penalty - Held that:- Revenue did not dispute that the issues raised in these appeals stand concluded by the decision of this Court in [Commissioner of Central Excise, Chandigarh-II v. M/s Pee Iron & Steel Co. (P) Ltd., Derabassi] [2014 (6) TMI 197 - PUNJAB AND HARYANA HIGH COURT], where following the earlier decision of this Court in Bansal Alloys and Metals Pvt. Ltd.'s case (2010 (11) TMI 83 - PUNJAB & HARYANA HIGH COURT), the appeal filed by the revenue was dismissed - no substantial question of law arises - Decided against Revenue.
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2015 (9) TMI 1323
Duty demand - Invocation of extended period of limitation - revenue neutral situation - misstatement or suppression of facts - Held that:- controversy involved in this case is identical to [2014 (2) TMI 770 - ALLAHABAD HIGH COURT] except for the period in question. The decision of the Tribunal as affirmed by this Court, is squarely applicable in this case. Consequently, the show cause notice dated 03.06.2011 cannot be sustained and is quashed - Decided in favour of assessee.
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2015 (9) TMI 1322
Classification of goods - first item is processed rubber compound in sheet form - second item is processed rubber compound which is in the cord form - whether the item is classifiable under 4005.10 or 4005.90 - Held that:- It would be seen from the description of 4005.10 that the primary requirement to classify under the said sub-heading is that in relation to the manufacture, of which no Cenvat credit of duty paid on the inputs used has been availed. In the present case, there is no dispute that credit of duty paid on certain inputs have been availed by the appellant, as is clear from the show-cause notice. It is not disputed either by the ld. counsel for the respondent or not even by the Commissioner (Appeals). We find the Commissioner (Appeals) has taken a view that the respondent had classified the goods under 4005.10 and cleared the goods indicating this classification in their clearance document and their monthly return. This clearly indicates the intention of the respondent not to avail credit of the duty paid on inputs used in the manufacture of such goods. Accordingly, the appellant had not availed the credit on their main input i.e. raw rubber and fillers. However, they had availed on a minor quantity of consumables. Commissioner (Appeals) has thereafter observed that this is unintentional wrong availment of Cenvat credit and same cannot be considered as wrong classification of goods and has agreed with the contention of the respondent. - goods classified by the respondent in 4005.10 would be classifiable under 4005.90. We also note that the respondent has declared in various documents as also, in the form of letter that he is not availing the credit of any of the inputs used in the manufacture of such item which have been found to be factually incorrect on verification. In view of this position, there has been clear cut mis-statement of facts and extended period of limitation would be invocable as far as the first product is concerned. Penalty under section 11AC/Rule 25 will also be imposable. - Decided in favor of revenue. As regards, second item there is no dispute about the fact that for the manufacture of this product the compounded rubber in the primary form i.e. in the form of sheet is used as an input and the said sheet is further extruded through a die of dimension of 10×10 sq.mm. to get compounded rubber of the said dimension in running length. This product is outcome of second time extrusion process and extrusion process is carried out on the compounded rubber. This is a case where the processed compounded rubber in the primary form has been further worked upon and would therefore be classifiable under heading 4006 in view of chapter note 7 As the unit was in existence and producing this item, filing the classification list which had been continuously approved by the appellant and in view of this position, in our view, the extended period of limitation invoked in respect of the second item is not correct, and only the demand which is within the normal period of limitation is upheld - Decided partly in favour of Revenue.
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2015 (9) TMI 1321
Clandestine removal of goods - Shortage of goods found - Imposition of penalty - Held that:- There was shortage of finished goods of bars and rods weighing 36.830 MT on the date of visit of officers on 06.11.1996. The authorized representative of the appellant company clearly admitted the shortage as due to removal without accounting and without payment of duty. The use of parallel invoices for clearing unaccounted excisable goods without payment of duty stands admitted by the authorized signatory. The Director, Shri Laxmandas Manwani while admitting having authenticated the invoice book claimed that he has not given instructions to clear any goods without payment of duty. - authorized signatory has not retracted his statement. The Directors at the time of investigation merely pleaded ignorance of the day-to-day activities relating to production and clearance and that they have not directed Shri Joshi to indulge in clandestine removal. In view of the above, the duty demand amounting to ₹ 39,87,886/-on clearances relating to 1st June 1996 and 31.10.96 as well as demand of ₹ 67255/- on the shortage found are upheld. As regards the penalty imposed, I note that the provisions of procedure of section 11AC are applicable from 26.09.1996 and the amount of demand relating to the period October 1996 having been quantified as ₹ 4,08,866/-. I, therefore, reduce the penalty - Decided partly in favour of assessee.
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2015 (9) TMI 1320
Denial of CENVAT Credit - Availment of Credit on exempted product - appellant reversed the proportionate credit used in the manufacture of the exempted final product alongwith interest - Held that:- Appellant reversed the proportionate credit used in the manufacture of the exempted final product and informed the Department by letter dated 16.01.2012. They have given the calculation sheet as per Rule 6(3A) of the said Rules. The Adjudicating Authority had not examined this letter in proper manner. In our considered view, the Adjudicating Authority is required to examine the reversal of credit alongwith interest as per provision under Rule 6(3A) of the said Rules. - Matter remanded back - Decided in favour of assessee.
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2015 (9) TMI 1319
Denial of SSI Exemption - Enhancement in aggregate value of clearances for the purposes of Notification No.8/2003-CE - Held that:- In the grounds of appeal the Revenue is silent about clear findings of ld. Commissioner (Appeals) in the impugned order regarding the Respondent clearing body built Motor Vehicles with the brand name of TATA to the Regional Sales Office of TATA Motors.Accordingly, the value of branded Motor Vehicle Bodies is not includible in arriving at aggregate value of first clearance of specified goods.He also recorded that value of all excisable goods cleared other than branded goods upto 28.4.2004 comes to ₹ 10,40,542 accordingly he held the demand is unsustainable - Decided against Revenue.
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2015 (9) TMI 1318
Denial of SSI Exemption - Notification No. 8/2002-CE - Whether the respondent is correct in paying full Central Excise duty in respect of PD Pumps on the ground that these were with the brand name of another person - Held that:- Revenues view is that the value of PD Pumps are also to be added to arrive at the SSI exemption limit. We find that the learned Commissioner (Appeals) examined in detail these issues and arrived at the categorical conclusion that the brand name Kalsi used by the respondent for PD Pumps belongs to M/s Kalsi Metal Works, Jallandhar only and that being the case no SSI exemption is applicable in respect of such goods. There is no evidence on record to show that the brand name Kalsi for PD Pumps and spares thereof belonged to the respondent. Regarding classification for sales tax purpose, the learned Commissioner (Appeals) also given his finding discounting the Revenues view. As such, we find no reason to disagree with the findings of the lower Appellate Authority - Decided against Revenue.
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2015 (9) TMI 1317
Duty demand - Clandestine removal of goods - Held that:- Tribunal in an identical matter of M/s. Golden Tobacco and Others [2014 (3) TMI 983 - CESTAT NEW DELHI] has held that such confirmation of demand and imposition of penalties jointly and severally are against the settled principles of law, as declared by the various courts and High Courts and cannot be upheld. Accordingly, the matters stand remanded with directions to decide on the liability of each and every assessee in respect of duties as also in respect of penalties. - Matter remanded back - Decided in favour of assessee.
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CST, VAT & Sales Tax
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2015 (9) TMI 1327
Demand and recovery of purchase tax after 5 years - period of limitation - Punjab Value Added Tax Act, 2005 - the respondent /assessee had intentionally withheld the legitimate purchase tax due to be deposited along with the returns - Held that:- There is no dispute that prior to the amendment of provisions of section 11 of the PGST Act with effect from March 3, 1998 there was no limitation prescribed for assessing the amount of tax due from the dealer on the basis of returns where the Assessing Officer was satisfied that the returns furnished by the dealer were correct and complete. It is well-settled that law of limitation is a procedural law and operates retrospectively unless it has been provided differently in the amending statute. In other words, unless there is a contrary intention manifested by express or necessary implication of the legislation itself, procedural law is generally retrospective. Once a period of limitation prescribed by law expires, the right to sue or pass an order comes to an end. Resultantly, a vested or an accrued right arises in favour of a party. The assessment year involved herein is 1989-90. The assessment under section 11(3) of the PGST Act was framed on August 29, 2003 which is clearly beyond the period of limitation of three years from the date of amendment and thus not sustainable in the eyes of law. - Decided against the revenue.
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Indian Laws
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2015 (9) TMI 1339
Powers to summon a person who is no accused but summon as an accused person - Power of Magistrate - the 2G Spectrum Scam Case - Irregularities in connection with the grant of Unified Access Services Licenses (UASL) - huge losses to the public exchequer - Apprehension of the petitioner was that without such a monitoring by the Court, there may not be a fair and impartial investigation. Delhi High Court dismissed the petition. - Held that:- even if the CBI did not implicate the appellants, if there was/is sufficient material on record to proceed against these persons as well, the Special Judge is duly empowered to take cognizance against these persons as well. Under Section 190 of the Code, any Magistrate of first class (and in those cases where Magistrate of the second class is specially empowered to do so) may take cognizance of any offence under the following three eventualities: (a) upon receiving a complaint of facts which constitute such offence; (b) upon a police report of such facts; and (c) upon information received from any person other than a police officer, or upon his own knowledge, that such offence has been committed. This Section which is the starting section of Chapter XIV is subject to the provisions of the said Chapter. The expression “taking cognizance” has not been defined in the Code. However, when the Magistrate applies his mind for proceeding under Sections 200-203 of the Code, he is said to have taken cognizance of an offence. This legal position is explained by this Court in S.K. Sinha, Chief Enforcement Officer v. Videocon International Ltd & Ors. [2008 (1) TMI 618 - SUPREME COURT OF INDIA] Taking Cognizance” does not involve any formal action of any kind. It occurs as soon as a Magistrate applies his mind to the suspected commission of an offence. - Cognizance of an offence and prosecution of an offender are two different things. Section 190 of the Code empowered taking cognizance of an offence and not to deal with offenders. Therefore, cognizance can be taken even if offender is not known or named when the complaint is filed or FIR registered. Their names may transpire during investigation or afterwards. Person who has not joined as accused in the charge-sheet can be summoned at the stage of taking cognizance under Section 190 of the Code. There is no question of applicability of Section 319 of the Code at this stage. The Magistrate is empowered to issue process against some other person, who has not been charge-sheeted, but there has to be sufficient material in the police report showing his involvement. In that case, the Magistrate is empowered to ignore the conclusion arrived at by the investigating officer and apply his mind independently on the facts emerging from the investigation and take cognizance of the case. At the same time, it is not permissible at this stage to consider any material other than that collected by the investigating officer. A wide discretion has been given as to grant or refusal of process and it must be judicially exercised. A person ought not to be dragged into Court merely because a complaint has been filed. If a prima facie case has been made out, the Magistrate ought to issue process and it cannot be refused merely because he thinks that it is unlikely to result in a conviction. There has to be a proper satisfaction in this behalf which should be duly recorded by the Special Judge on the basis of material on record. No such exercise is done. In this scenario, having regard to the aforesaid aspects coupled with the legal position explained above, it is difficult to sustain the impugned order dated 19.03.2013 in its present form insofar as it relates to implicating the appellants and summoning them as accused persons. - The appeal of Mr. Sunil Bharti Mittal and Ravi Ruia respectively are, accordingly, allowed and order summoning these appellants is set aside. - The appeals arising filed by Telecom Watchdog are dismissed.
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2015 (9) TMI 1338
Scope of extraordinary writ jurisdiction of a High Court under Articles 226/227 of the Constitution of India. - Held that:- It is to be borne in mind how the jurisdiction under the letters patent appeal is to be exercised cannot exhaustively be stated. It will depend upon the Bench adjudicating the lis how it understands and appreciates the order passed by the learned Single Judge. There cannot be a straight-jacket formula for the same. Needless to say, the High Court while exercising jurisdiction under Article 227 of the Constitution has to be guided by the parameters laid down by this Court and some of the judgments that have been referred to in Radhey Shyam [2015 (7) TMI 376 - Supreme Court Of India]. (A) Whether a letters patent appeal would lie against the order passed by the learned Single Judge that has travelled to him from the other tribunals or authorities, would depend upon many a facet. The Court fee payable on a petition to make it under Article 226 or Article 227 or both, would depend upon the rules framed by the High Court. (B) The order passed by the civil court is only amenable to be scrutinized by the High Court in exercise of jurisdiction under Article 227 of the Constitution of India which is different from Article 226 of the Constitution and as per the pronouncement in Radhey Shyam (supra), no writ can be issued against the order passed by the civil court and, therefore, no letters patent appeal would be maintainable. C) The writ petition can be held to be not maintainable if a tribunal or authority that is required to defend the impugned order has not been arrayed as a party, as it is a necessary party. (D) Tribunal being or not being party in a writ petition is not determinative of the maintainability of a letters patent appeal.
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2015 (9) TMI 1308
Appointment of an arbitrator - existence of dispute - respondent-company submitted that, in fact, there is no dispute between the parties and there is no reason for appointment of an Arbitrator - Held that:- As there was a dispute with regard to quality of material supplied, some letters were exchanged between the parties and the representatives of both the parties had also met for the purpose of resolving their disputes but unfortunately, the disputes with regard to quality of the material supplied could not be resolved and ultimately the respondent company had to invoke the bank guarantee. In the aforestated circumstances, it cannot be said that there is no dispute between the parties and therefore, in my opinion, an Arbitrator is required to be appointed as per the provisions of Section 11(6) of the Act. - Decided in favor of petitioner.
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