TMI Tax Updates - e-Newsletter
September 5, 2018

Case Laws in this Newsletter:

Income Tax Benami Property Customs Insolvency & Bankruptcy Service Tax Central Excise Indian Laws

Articles

1. IN A CRIMINAL PROCEEDING THE INFORMANT AND THE INVESTIGATING OFFICER SHALL NOT BE THE SAME PERSON

   By: DR.MARIAPPAN GOVINDARAJAN

News

1. GST on overseas air tickets violates intl norms: IATA chief

2. 24th RCEP Auckland Round from 17-24th October 2018

3. NITI Aayog’s MOVE Cyclathon draws massive participation, promotes clean mobility

4. Finance Commission to visit Tamil Nadu from 5th Sep, also to meet the economists from the region to understand some peculiar issues

Notifications

GST

1. 42/2018 – Central Tax - dated 4-9-2018 - CGST

Seeks to extend the time limit for making the declaration in FORM GST ITC-01 for specified classes of taxpayers

2. 41/2018 – Central Tax - dated 4-9-2018 - CGST

Seeks to waive the late fee paid for specified classes of taxpayers for FORM GSTR-3B, FORM GSTR-4 and FORM GSTR-6

3. 40/2018 - dated 4-9-2018 - CGST

Seeks to extend the time limit for making the declaration in FORM GST ITC-04

4. 39/2018 - dated 4-9-2018 - CGST

Seeks to make amendments (Eighth Amendment, 2018) to the CGST Rules, 2017

Circulars / Instructions / Orders

GST

1. 59/33/2018-GST - dated 4-9-2018

Clarification on refund related issues- regarding

2. 57/31/2018 - dated 4-9-2018

Scope of Principal-agent relationship in the context of Schedule I of the CGST Act -regarding.

3. 58/32/2018 - dated 4-9-2018

Recovery of arrears of wrongly availed CENVAT credit under the existing law and inadmissible transitional credit - regarding

4. 60/34/2018 - dated 4-9-2018

Processing of refund applications filed by Canteen Stores Department (CSD)- regarding

5. 61/35/2018 - dated 4-9-2018

E-way bill in case of storing of goods in godown of transporter - regarding

Highlights / Catch Notes

GST

• Eighth Amendment 2018 proposes updates to CGST Rules 2017 to enhance compliance and tax administration under GST.

  Notifications : Seeks to make amendments (Eighth Amendment, 2018) to the CGST Rules, 2017
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Income Tax

• Court Allows New Show Cause Notice After Adjudicating Authority's Benami Property Assessment Lapse u/s 2(8).

  Case-Laws - HC : Benami Property - Jurisdiction - The Adjudicating Authority had not examined the issue whether the properties (amounts) in question were benami properties in terms of Section 2(8) of the Act - this Court finds no reason which would preclude the IO from issuing a fresh show cause notice and curing the procedural defect as observed by the Adjudicating Authority.
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• Tax Case Settlement Rejected: Applicant Failed to Disclose Income from London Property & Foreign Bank Accounts. KYC Docs Upheld.

  Case-Laws - HC : Rejection of applications for Settlement of the Case - failure to make full and true disclosure of undisclosed income with reference to the London property and two foreign bank accounts - The veracity the entire documentation regarding KYC cannot be ignored and treated as imaginary creation of the officers of the said bank and without knowledge and involvement of the petitioner.
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• Deemed Rental Income: Allow Reasonable Time Post-Construction Before Assessing Notional Annual Value u/s 23(1)(a.

  Case-Laws - AT : Income from house property - deemed rental income - notional annual value (NAV) u/s 23(1)(a) - without allowing a reasonable period or time gap from the completion of construction of the property held as stock in trade to let out the same, the property cannot reasonably expect to let from year to year and fetch fair market rent just after completion of construction.
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• Businesses Not Required to Keep Daily Cash Memos; Consolidated Cash Book Entries Sufficient for Transaction Verification.

  Case-Laws - AT : Rejection of books of accounts - Even the judicial pronouncements are clear on the facts that in the nature of trade as like assessee, cash memos for day-to-day sales are not required and that a consolidated entry in the cash book along with relevant documents of purchase of liquor are sufficient to prove the genuineness.
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• Assessment Reopened: Additions Confirmed u/s 68 Due to Unproven Genuineness of Share Subscription Transactions.

  Case-Laws - AT : Reopening of assessment - Addition u/s 68 for alleged accommodation entries - There is thus no escape from proving genuineness of a transaction. The assessee has failed to do so - Additions towards share subscription received confirmed.
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• Section 80IA Allows Deductions for Income from Inland Container Depots and Container Freight Stations as Inland Ports.

  Case-Laws - AT : Disallowance u/s 80IA on ICDs/CFS, which are inland ports - considering the nature of work carried out at these ICDs they can be termed as Inland Ports - the ICDs are Inland Ports and subject to the provisions of the Section and deduction can be claimed for the income earned out of these Depots
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• Firm's Status Not as Association of Persons; Claim on Interest and Remuneration to Partners Allowed u/s 40(b.

  Case-Laws - AT : Disallowance on claim made u/s 40(b) - whether status of the firm has to be treated as Association of Persons and thus the claim of expenses on interest and remuneration to partners has to be disallowed - Held No - it is never stated that the parties were representing any Trust or HUF
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• Non-Resident Companies' Interest Income Tax Rate on Refunds Determined by Income Tax Act.

  Case-Laws - AT : Rate of tax on Interest Income - how the tax rate of non resident companies in their respective countries will be applied on this interest income earned by the assessee on the refund of Income tax when the rate of interest is determined by the Income tax Act.
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• Tax Authorities Deny Assessee's Transfer Pricing Adjustments for Startup Phase Due to Lack of Evidence of Ongoing Difficulties.

  Case-Laws - AT : Transfer pricing adjustment - adjustment for startup phase of operation - adjustment for abnormal expenses - The assessee could not provide any material to show that it is continue to face the difficulties peculiar to the start up phase. - tax authorities are justified in rejecting this claim of the assessee.
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Central Excise

• Nuclear Grade Ammonium Di-uranate Classified Under Chapter 2844, Not CETH 2845 9010 or CETH 2844.1000.

  Case-Laws - AT : Classification of goods - Nuclear Grade Ammonium Di-uranate - whether classified under CETH 2845 9010 or under CETH 2844.1000? - the product is classifiable under Chapter 2844
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• Appellant Granted Input Service Credit for Transporting Towers Essential for Telecom Services, Despite Towers Not Qualifying for CENVAT Credit.

  Case-Laws - AT : CENVAT Credit - Even though the towers are not eligible for Cenvat credit as inputs or capital goods, they are essential for providing telecommunication service - input service credit on transportation of towers to the site is admissible to the appellant
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Case Laws:

• Income Tax

• 2018 (9) TMI 154
  Rejection of applications before the Income Tax Settlement Commission (ITSC) u/s 245C - failure to make full and true disclosure of undisclosed income with reference to the London property and two foreign bank accounts of M/s Barro Holdings Limited and M/s Bulova Holding Limited in the BSI Bank Limited, Singapore - Beneficial ownership of Bank Account - Held that:- Reasoning of the ITSC, to set at rest any argument of lack of application of mind on facts and documents. Indeed, there was a detailed and through examination of the factual aspects, including the contentions raised by the petitioner on the question of beneficial ownership. The petitioner had submitted that he was not a shareholder of the two companies and, therefore, he had no interest in the companies. The Singapore authorities had only made an observation that the petitioner was a beneficial owner, but this confirmation, the KYC documentations certifying that the petitioner was the beneficial owner, was imaginary or creation of the officers of the bank. The plea and contention that the petitioner's brother-in-law, Yusuf Mehboob Khan, citizen of Pakistan, was the beneficial owner of the property in London and also beneficial owner of M/s Bulova Holdings Limited and M/s Barro Holdings Limited was resoundingly rejected for cogent and good reasons. Reliance was placed on the power of attorney executed by Yusuf Mehboob Khan in favour of the petitioner, Moin Akhtar Qureshi, and discrepancies relied by the petitioner with regard to the accounts was duly considered. The contention of the petitioner that the acts attributable to him were on behalf of Yusuf Mehboob Khan, it was observed was unacceptable in view of the overwhelming evidence and material available and produced before the ITSC. The documents filed with the BSI Bank Limited, Singapore specifically and categorically mention that the petitioner was a beneficial owner. The veracity of these documents and the entire documentation regarding KYC cannot be ignored and treated as imaginary creation of the officers of the said bank and without knowledge and involvement of the petitioner. The ITSC has made reference to the banking procedures applicable, the strict KYC norms, the legal mandate and the requirement to identify and record details and particulars of the real or beneficial owner. It was noted that the petitioner had not disputed his signatures on the documents. The objection was with reference to date of signing. The identity of the petitioner was also established by verified copy of the passport. We have also examined the documents, copies of which have been placed on record, including the power of attorney executed by M/s Arcas Holding Limited, the director of M/s Barro Holdings Limited in favour of the petitioner. They had certified and identified the petitioner as the beneficial owner.Information with regard to M/s Bulova Holdings Limited was also received from the Government of Republic of Singapore under the Double Taxation Avoidance Agreement and the provisions relating to fiscal evasion in respect of taxes. M/s Bulova Holdings Limited had a bank account with BSI, AG in Switzerland. Letters received from the Singapore Authority had stated that payments were received by M/s Bulova Holdings Limited from M/s Barro Holdings Limited's Singapore and Hong Kong bank account with BSI Bank Limited. Lastly, and importantly, the petitioner i.e. Moin Akhtar Qureshi has declared himself as beneficial owner of the bank account of M/s Bulova Holdings Limited maintained with the BSI Bank, AG. Moin Akhtar Qureshi, had executed and signed indemnity bond, indemnifying the board of directors of M/s Bulova Holdings Limited. He had authorized the board of directors of M/s Bulova Holdings Limited to purchase the London property, i.e. 4, Chesterfield House, South Audley, Mayfair, London, and appoint a solicitor. M/s Bulova Holdings Limited was / is the registered owner of the London property which was acquired in May, 2012. Details of the income, payments from M/s Barro Holdings Limited to M/s Bulova Holdings Limited were available. The aforesaid evidence is compelling and conclusive. It cannot be ignored. It is in this context and in view of these documents specific factual findings have been recorded by the ITSC. It was also recorded that the petitioner had failed to adduce specific and clear evidence to show that he was not the beneficial owner of M/s Barro Holdings Limited etc. and the accounts and the London property were owned by his brother-in-law. On the question of full and true disclosure and the statutory mandate, reference can be made to decision of this Court in Ajmera Housing Corporation and Another versus CIT [2010 (8) TMI 35 - SUPREME COURT OF INDIA], Commission of Income Tax versus Income Tax Settlement Commission and Others [2013 (7) TMI 95 - DELHI HIGH COURT] and and Vishwa Nath Gupta versus Principal Commissioner of Income Tax Central and Others, [2017 (5) TMI 848 - DELHI HIGH COURT] Violation of principles of natural justice - Held that:- We fail to fathom relevance of the said contention in the context in question. There is no violation of the principle of audi alteram partem in the said case as hearing was given as the impugned order refers to the various contentions and issues raised by the petitioner and answers the same.

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• 2018 (9) TMI 152
  Revision u/s 263 - addition u/s 14A - If an assessing officer doubts the quantum of expenditure incurred towards exempted income, is it mandatory for the assessing officer to apply the formula prescribed in Rule 8D of the Income Tax Rules, 1962 or can he take a view otherwise ? - Held that:- The Tribunal in substance has followed the principle enunciated by the Hon’ble Supreme Court GODREJ & BOYCE MANUFACTURING COMPANY LIMITED VERSUS DY. COMMISSIONER OF INCOME-TAX & ANR. [2017 (5) TMI 403 - SUPREME COURT OF INDIA] with regard to the applicability of Rule 8D. We have set out the relevant passage from the decision of the Tribunal on that point and do not find any error in the decision of the Tribunal which is under appeal. We do not think that any point of law is involved in this appeal as the same stands covered by the decision of the Hon’ble Supreme Court. The appeal and the stay petition are accordingly dismissed. AO has adopted one of the possible course open to him in law. The CIT cannot invoke jurisdiction u/s. 263 of the Act just because he does not agree with the view of the AO We are apprised by Mr. Murarka, learned counsel for the assessee-respondent that although his advocate-on-record has not filed vakalatnama yet, he has instructions to appear in this matter. On the undertaking that such vakalatnama shall be filed by 23rd July, 2018, counsel has been permitted to represent the assessee before us.

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• 2018 (9) TMI 151
  Penalty proceedings initiated u/s.271(1)(c) - Held that:- As quantum appeal has been set aside to the file of the ld. CIT (A), therefore, impugned penalty appeal is also remitted to the file of the ld. CIT(A) to be decided a fresh after the disposal of the quantum and in accordance with law. - Decided in favour of assessee

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• 2018 (9) TMI 150
  Addition u/s 68 on account of unsecured loans taken from five persons - Held that:- Here in this case, the nature of credit appearing in the books of accounts of the assessee is in the form of loan on which assessee has paid interest to the creditors and also deducted TDS. These loans have come through banking channels i.e., which has been received through account payee cheque in the bank account of the assessee through clearing and the same has been recorded in the books of accounts. To prove the prima-facie source of such credits the assessee had filed; i) PAN and income tax returns alongwith complete address; ii) bank statement of the creditors and that of the assessee; iii) ledger account and other details. Addition aggregating to Rs. 19 lacs made on account of unsecured loans u/s 68 is directed to be deleted. - Decided in favour of assessee

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• 2018 (9) TMI 149
  Profits earned by the assessee from sale of land - busniss profit or capital gain - nature of land sold - Held that:- Given factual matrix it is crystal clear that it was a well thought business project carried out by the assessee jointly with 17 other persons by way of taking the services of Developer M/s. ADPL and the intention of entering into an adventure of business was very clear from the very first day of purchase of impugned land and completed on selling the residential plots - Both the lower authorities have rightly appreciated the facts and concluded that the profits from sale of land situated at Village Jhalaria, Tehsil Indore is a business profit and cannot be taxed as Short Term Capital Gain or Long Term Capital Gain. In the result these common issue raised for both the assessment years is decided against the assessee.

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• 2018 (9) TMI 148
  Unexplained deposits - amount received on sales transactions of agricultural land - amount deposited in the bank account of the assessee by mistake - Held that:- In the instant case, nothing is brought on record to substantiate that the amount was deposited by Shri Sunil Kumar, (the assessee) and it was withdrawn by him from his account because no deposit slip filled by the assessee. Sh. Sunil Kumar or withdrawal form was produced before the AO rather it was stated that no record was available with him which clearly proves that the amount was deposited by Sh. Kulwant Singh and not by the assessee and when the bank realised its mistake the entry was reversed and the amount was the deposited in the account of the six persons. In the present case, nothing is brought on record that the sale proceeds from the family land claimed to be received on 15. 02. 2011 or 16. 02. 2011 was utilized elsewhere and not deposited in the bank accounts of aforesaid six persons. The impugned amount was wrongly added in the hands of the assessee, particularly when the same amount was credited in the names of 6 persons. The said amount received from the sale proceeds of the land can not be stated to be related to the assessee as well as the other six persons at a same time. If it was to be presumed that said amount belonged to the assessee then there should have been another amount which was deposited in the bank account of the six persons. Nothing is brought on record to substantiate that the amount deposited in the bank account of the assessee by mistake, was different from the amount deposited in the bank account of the six persons out of the sale proceeds of the agricultural land. Impugned addition made by the AO and sustained by the Ld. CIT(A) was not justified. Addition made by the AO and sustained by the Ld. CIT(A) is deleted. - Decided in favour of assessee

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• 2018 (9) TMI 147
  Income from house property - Assessing the property held as stock in trade by applying notional annual value as per the provisions of Section 23(1)(a) - Held that:- There is no dispute that the commercial space in the project in question was held by the assessee as stock in trade. Further the project was completed in the month of February itself, which is not in dispute as the Assessing Officer has also accepted this fact and assessed the income from house property only for the month of March, 2013. As far as the issue of assessing the property held as stock in trade by applying notional annual value as per the provisions of Section 23(1)(a) of the Act is concerned, there are divergent views of different Hon'ble High Courts. This is not a case of keeping the property vacant from year after year but the project itself was completed in the month of February, 2013 and therefore, as per provisions of Section 23(1)(a) of the Act, the annual letting value (ALV) of any property shall be deemed to be a sum for which the property might reasonably be expected to let from year to year. Thus, the annual letting value of the property is a sum for which the property might reasonably be expected to let out from year to year. We find that without allowing a reasonable period or time gap from the completion of construction of the property held as stock in trade to let out the same, the property cannot reasonably expect to let from year to year and fetch fair market rent just after completion of construction. Hence, in the facts and circumstances, we find that for the year under consideration, the provisions of Section 23(1)(a) of the Act cannot be applied in the property in question due to the peculiar reason that the completion certificate was obtained only in the month of February, 2013 and it is not expected to let out the property just after the completion of the project and therefore, the reasonable expected rent to be fetched by the property in question is not possible immediately after the completion without allowing a reasonable period, which is also recognized by the Legislature. Accordingly, we delete the addition - Decided in favour of assessee.

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• 2018 (9) TMI 146
  Addition u/s 40(a)(ia) with regard to interest paid on loan taken from three parties - applicability of second proviso to section 40(a)(ia) read with first proviso to section 201 - whether assessee comes within the purview of beneficiary provisions? - Held that:- Decision of the Hon'ble Delhi High Court in the case of CIT vs. Ansal Land Mark township (P) Ltd. [2015 (9) TMI 79 - DELHI HIGH COURT] and Pr. CIT vs. Manoj Kumar Singh [2018 (4) TMI 136 - ALLAHABAD HIGH COURT] are absolutely clear that in the realm of welfare legislation, which is main objective of the Income Tax Act beneficial provisions, which are beneficial to the assessee, shall have retrospective effect and these provisions shall have applicability from 2005 onwards. Therefore, in assessment year 2012-13 case of the assessee is covered within these provisions and it is deemed that assessee has deducted and paid tax on the amount paid as interest, since all the payees have paid taxes on such income. If there is tax effect and if the assessee has not complied with, at least the person to whom payment has been made should have paid the tax so that Revenue is protected from incurring any loss. Reading the second proviso to section 40(a)(ia) of the Act and first proviso to section 201 of the Act, it put forth certain conditions where the payee in his return of income has shown amount received from assessee and has paid tax thereon which is also certified by qualified Chartered Accountant, that signifies that there is no loss to the Revenue and in such circumstances second proviso to section 40(a)(ia) automatically comes into play and the assessee will be deemed to be an assessee who has deducted and paid tax. With these observations, we are of the considered view that additions made in the hands of the assessee is arbitrary, harsh, illegal and perverse - Decided in favour of assessee

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• 2018 (9) TMI 145
  Rejection of books of accounts - Held that:- We are in agreement with the arguments of Learned A.R. that once the addition has been made after rejection of books of account no further additions can be made relying on the same books of account. However, the Learned A.R. agreed that in respect of agreed addition of Rs. 3,00,000/- and Rs. 3,50,000/- he does not have anything to say GP estimation at higher rate - Held that:- Neither the Assessing Officer nor the ld. CIT(A) has conducted any independent enquiry regarding the same and just on the basis of guess work has observed that assessee is not bringing out full particulars. Even the judicial pronouncements are clear on the facts that in the nature of trade as like assessee, cash memos for day-to-day sales are not required and that a consolidated entry in the cash book along with relevant documents of purchase of liquor are sufficient to prove the genuineness. In this view of the matter, we hold that the ld. CIT(A) was not justified in confirming the rejection of the books of account and adopting the G.P. rate on the higher side and, therefore, we set aside the order of the ld. CIT(A) on this issue and allow grounds No.1 & 2 of the appeal of the assessee.

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• 2018 (9) TMI 144
  Reopening of assessment - addition u/s 68 - period of limitation - Held that:- In the present case, undoubtedly, the case was reopened in view of CIT(A)’s order dated 22.12.2015 and on that date the assessment order for 2003-04 were already barred by limitation by the provisions of Section 149 of the Act. Therefore, we accept the contentions of the Learned A.R. and following the above judicial precedent allow the appeal of the assessee. Order u/s 143(3) without rejection of books of account - Held that:- CIT(A) could have examined the assessment record, wherein the assessee has filed complete details of vouchers to verify the genuineness of expenses and simply by holding that the assessee did not produce the books of account and vouchers, he sustained the addition. The findings of the Assessing Officer clearly states that the assessee had produced books of account and had also produced bills and vouchers, therefore, in view of these contradictions and for the sake of justice, we set aside the order to Learned CIT(A), who should pass a speaking order regarding the arbitrary disallowance made by the Assessing Officer.

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• 2018 (9) TMI 143
  Reopening of assessment - Sanction for issue of notice - Section 68 addition for alleged accommodation entries - share capital / subscription - Held that:- It is not the case of the assessee that the investigation wing report was available to the assessee at the point of time when the original assessment was framed. Learned counsel does not, therefore, get any support from this judicial precedent either. Satisfaction has to be recorded of the given case which can be reflected in the briefest possible manner”. Given the simplicity of the factual matrix of this case, and clearly correct inference drawn from the same, learned CIT clearly showed application of mind when he observed that “based on the reasons recorded above, I am satisfied that this is a fit case for issue of notice under section 148 of the Income Tax Act”. It has not been shown to us as to how this observation reflects non application of mind so far as concealment of income is concerned. We donot see as to how this decision supports the case of the assessee In the light of these discussions, as also bearing in mind, learned CIT(A) was indeed justified in upholding the validity of reassessment. We uphold his action and decline to interfere in the matter. For the merits of addition in the case of CIT v. Precision Finance (P.) Ltd [1993 (6) TMI 17 - CALCUTTA HIGH COURT] it was observed that “it is for the assessee to prove the identity of creditors, their creditworthiness and genuineness of transactions”. There is thus no escape from proving genuineness of a transaction. The assessee has failed to do so. We, therefore, confirm the addition in respect of alleged share subscriptions received from these two companies- namely Mahanivesh and Geefcee. As regards the addition in respect of commission, we have seen that there is a categorical finding that these entities were arranging the accommodation entries on the basis of 2.5% commission. We, therefore, confirm this addition as well.

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• 2018 (9) TMI 142
  Disallowance u/s 80IA on ICDs/CFS, which are inland ports - Held that:- COMMISSIONER OF INCOME TAX, DELHI-1 VERSUS M/S CONTAINER CORPORATION OF INDIA LTD. [2018 (5) TMI 359 - SUPREME COURT OF INDIA] The term ‘Inland Port’ has been defined nowhere. But the Notification that has been issued by the Central Board of Excise & Customs (CBEC) dated 24.04.2007 in terms holds that considering the nature of work carried out at these ICDs they can be termed as Inland Ports- The communication dated 25.05.2009 issued on behalf of the Ministry of Commerce and Industry confirming that the ICDs are Inland Ports, fortifies the claim of the respondent herein. Though both the Notification and communication are not binding on CBDT to decide whether ICDs can be termed as Inland Ports within the meaning of Section 80-IA the appellant herein is unable to put forward any reasonable explanation as to why these notifications and communication should not be relied to hold ICDs as Inland Ports. Unless shown otherwise, it cannot be held that the term ‘Inland Ports’ is used differently under Section 80-IA of the IT Act. All these facts taken together clear the position beyond any doubt that the ICDs are Inland Ports and subject to the provisions of the Section and deduction can be claimed for the income earned out of these Depots. The actual computation is to be made in accordance with the different Notifications issued by the Customs department with regard to different ICDs located at different places. Disallowance of depreciation on intangible assets being license acquired from Indian Railway for running container trains on Indian Railways - Held that:- This Tribunal for A.Y. 2008-09 in assessee’s own case held that, commercial right acquired by assessee by way of this license for earning enduring benefit for a period of 20 years would amount to capital asset. It is also observed that this view of Tribunal derives support from decision of Hon’ble Delhi High Court in the case of Areva T&D India Ltd. vs. DCIT [2012 (4) TMI 79 - DELHI HIGH COURT]. We hold intangible asset acquired by assessee is eligible for depreciation @ 25% u/s 32(1)(ii) of the Act. Disallowance of deduction on account of lease rent paid in advance against the land taken on long - term lease for business purposes on pro rata basis - Held that:- As there is no change in the factual circumstances, respectfully following the aforestated view taken by this Tribunal in assessee’s own case for Assessment Year 2008-09 and 2009-10, we set aside this issue to the file of Ld. AO with the direction to assessee to furnish all requisite details in respect of the claim of depreciation. Ld. AO shall then verify the details to determine whether the claim of assessee is allowable or not as per law. Disallowance computed under section 14A read with Rule 8D - Held that:- We are inclined to set aside this issue to Ld. AO for recomputing the disallowance having regard to the ratio laid down by Hon’ble Supreme Court in case of Maxopp investments Ltd vs. CIT [2018 (3) TMI 805 - SUPREME COURT OF INDIA]. Accordingly this ground raised by assessee stands allowed for statistical purposes. Depreciation granted on assets retired from active use - Held that:- Recompute depreciation after reducing the scrap value of the assets which have been discarded and written off in the books of account for the year under consideration from the written down value of the block of assets. Actual user of the machinery is not required with respect to discarded machinery and the condition for eligibility for depreciation that the machinery being used for the purpose of the business would mean that the discarded machinery is used for the purpose of the business in the earlier years for which depreciation has been allowed.

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• 2018 (9) TMI 141
  Disallowance on claim made u/s 40(b) - whether status of the firm has to be treated as Association of Persons and thus the claim of expenses on interest and remuneration to partners has to be disallowed, under the provisions of section 40(b)? - Held that:- Considering the clause of partnership deed it would not ipso facto convert partnership firm as one entered between two Trusts and an HUF. This is because of the reason that in the first part of partnership where the description of parties are given, it is never stated that the parties were representing any Trust or HUF. Even if we take that Shri R. Kumaraveluwas representing an HUF, by virtue of judgment of Apex Court in the case of Rashik Lal & Co. (1997 (12) TMI 2 - SUPREME COURT), he could also be considered as a partner in his individual capacity. - Decided against revenue.

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• 2018 (9) TMI 140
  TPA - jurisdiction of the TPO to determine ALP of an international transaction and not to re-characterize transaction as an international transaction - Held that:- Any transfer pricing issue can be taken up by the TPO as the same is referred to the TPO by the Assessing Officer as per sub-section 1 of Section 92CA of the Act. In fact, sub-section 2 of Section 92CA itself is clear in that respect that where a reference is made under sub-section (1), the Transfer Pricing Officer shall serve a notice on the assessee requiring him to produce or cause to be produced on a date to be specified therein, any evidence on which the assessee may rely in support of the computation made by him of the arm's length price in relation to the international transaction [or specified domestic transaction] referred to in sub-section (1) of the Act. Thus, Ground No. 3 is dismissed. Non-existence of international transaction - no creation of marketing intangible in favour of AE - non rendition of any brand building services. - AR submitted that existence of an international transaction is sine qua non to invoke the provisions of transfer pricing - Held that:- This issue is not verified properly by the TPO and therefore, it requires verification as there is no mention of the specific agreements to the effect of the AMP whether is a international transaction or not. Therefore, we direct the TPO/AO to verify this issue in light of the agreements signed by the assessee Ita with its AEs as well as the main company. Needless to say the assessee be given the opportunity of hearing by following principles of natural justice. Ground No. 4, 5 and 6 of the assessee’s appeal are partly allowed for statistical purpose. AMP expenditure not amenable to Chapter – X - selection of MAM - wrong application of Bright Line Test by the AO/DRP/TPO - Held that:- since the main issue of AMP is remanded back to the file of the TPO/AO it will be appropriate to send this issue to the file of TPO/AO as well Exclusion of direct selling and distribution expenses along with subsidy from ambit of AMP expenditure - Held that:- As read with the subsequent directions of the Hon’ble Delhi High Court in Assessee’s own case i.e. judgment in batch of cases of Sony Ericsson [2016 (1) TMI 1234 - DELHI HIGH COURT] case, the TPO should be directed to exclude Trade discount, commission and special purpose subsidy from the ambit of the AMP expenditure. Thus, following the order of the Tribunal for A.Y. 2006- 07 to 2008-09 read with the subsequent directions of the Hon’ble Delhi High Court in Assessee’s own case, it will be appropriate to direct the TPO to exclude Trade discount, commission, selling and administrative expenses and special purpose subsidy from the ambit of the AMP expenditure, as given in the tabulated form hereinabove after verifying the same in accordance with the records available with the TPO/AO. Unutilized subsidy required to be recognized as income of the Assessee in the year of its receipt - Held that:- As decided in assessee's own case [2013 (7) TMI 380 - ITAT DELHI] we are unable to accept the Revenue's contention that the unutilized subsidy is required to be recognized as income of the Assessee in the year of its receipt. This would be contrary to the matching concept, which is the substratal principle for computing income during a relevant period - where an Assessee follows the Accrual/Mercantile system of Accounting - as in this case - income can be recognized only when the matching expenditure is also accounted for irrespective of the cash outflows/inflows during the year. It would thus, not be correct to recognize the subsidies received for incurring specific expenditure as income without accounting for the corresponding expenditure. Claim of prepaid taxes and foreign tax credit claimed - Held that:- From the records it can been seen that the Assessing Officer has not allowed credit of pre-paid taxes to the assessee which should have been taken into consideration. Therefore, it will be appropriate to remand back this issue to the file of the Assessing Officer. Thus, this issue is remanded back to the file of the Assessing Officer.

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• 2018 (9) TMI 139
  Disallowance u/s 14A - Held that:- Considering the past history of the assessee vis a vis the issue, in our considered opinion, since no fresh investment was made during the year under consideration and no nexus has been proved between the borrowed funds and the investment in tax free PDU Bonds, we do not find any justification in the disallowance made u/s 14A of the Act. Ground No. 1 is allowed. Disallowance of payments made by the Appellant to various clubs - expenditure for busniss purposes - Held that:- We further find that in A.Y 2002-03 to 2005-06, the first appellate authority himself has deleted the disallowances made on account of club expenses and the COD denied permission to the department to agitate this issue in further appeal before the Tribunal. We further find that no such disallowances have been made in A.Ys 2006-07 to 2009-10. Respectfully following the findings of the coordinate bench and considering the history of the assessee as mentioned above, we set aside the findings of the CIT(A) and direct the AO to delete the addition. Interest received by the Appellant on refunds of income tax paid - chargeable to tax at rates applicable to the nonresident companies - Held that:- We find that under the agreement, the assessee was supposed to pay tax liability of non resident companies and has accordingly paid the same. Subsequently, refund was granted by the department and tax paid by the assessee for non resident companies was refunded. On such refund, interest was granted to the assessee to the tune of Rs. 7,13,702/-. We fail to understand how the tax rate of non resident companies in their respective countries will be applied on this interest income earned by the assessee on the refund of Income tax when the rate of interest is determined by the Income tax Act. We direct the AO to delete the impugned addition Before closing, we find that from A.Y 2002-03 to A.Y 2007-08, the CIT(A) himself had deleted the additions on account of interest on I.T. refunds on similar facts and the COD denied permission to the department to agitate this issue in further appeal before the Tribunal. Foreign currency loss on capital account on accrual basis as well as revenue account - Held that:- We find that the amendment in section 43A of the Act is applicable only from A.Y 2003-04 and prior to that the assessee is entitled to deduction on Foreign Exchange Fluctuation loss arising for both Revenue and on capital account. For this proposition, we draw support from the judgment of the Hon'ble Supreme Court in the case of Woodward Governor India Pvt Ltd [2009 (4) TMI 4 - SUPREME COURT]. Further, the Hon'ble Supreme Court in assessee's own case has settled this issue in favour of the assessee and against the Revenue in A.Ys 1991-92 to 1994-95 and 1997-98. Respectfully following the same, we decline to interfere Disallowance being 60% of the royalty and cess paid in respect of PY-3 production sharing contract - Held that:- The underlying facts to this issue show that the aforesaid royalty and cess payments were governed by the terms of the PSC entered into between Government of India and contracting parties i.e. joint venture parties. As per the terms of PSC, the assessee was obliged to pay 100% of cess & royalty to the relevant Government. The relevant extracts of PSC are exhibited wherein it has been specifically mentioned that royalty and cess shall be paid by the assessee - once the bonafides of the expenditure have been accepted by the Assessing Officer and the genuineness has not been doubted, the Assessing Officer cannot question the commercial expediency of the expenditure. It is trite law that the Revenue cannot justifiably put itself in the arm chair of the business man and decide how much expenditure is reasonable having regard to the circumstances of the case. Expenditure incurred on furnishing of hired accommodation - Held that:- There is no dispute that the boundary wall was constructed to protect helipad and processing facility at Uran near Mumbai which asset belongs to the assessee. We find force in the contention of the ld. DR. The expenditure has been incurred to protect its own assts thereby adding value to its existing asset. In our understanding of the facts, such expenditure is of capital in nature and has been rightly treated as such. However, having said that the assessee is entitled for deprecation as per applicable rate of depreciation on such asset, we accordingly direct the Assessing Officer to allow deprecation as per the provisions of law. Before closing, all the decisions relied upon by the ld. counsel for the assessee are misplaced in as much as in all the cited cases, expenditure was incurred where the general public was also benefitted whereas in the case in hand, only the assessee was benefited and only the asset of the assessee was protected. Ground No. 4 is partly allowed. Claim of deduction u/s 80IA allowed - the assessee is very much entitled for claim of deduction u/s 80IA of the Act. Our view is fortified by the judgment of the Hon'ble Delhi High Court in the case of DCM Sriram Consolidated Ltd [2008 (11) TMI 44 - DELHI HIGH COURT]

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• 2018 (9) TMI 138
  Transfer pricing adjustment - adjustment for startup phase of operation - adjustment for abnormal expenses - Held that:- Subject to verification of the claim of the assessee, in our view, adjustment sought by the assessee should be considered on its merits. The assessee has also claimed deduction towards start up phase adjustment. However we notice that the assessee could not substantiate the said claim with any credible material. TPO has observed that the assessee company has stated its operation in the year 2006 and accordingly, it has got about four years of experience in this field. The assessee could not provide any material to show that it is continue to face the difficulties peculiar to the start up phase. There should not be any doubt that the responsibility to substantiate the claim put forth lies upon of the assessee. Accordingly we are of the view that the tax authorities are justified in rejecting this claim of the assessee. With regard to adjustment claimed towards abnormal items, we have already held that the same is required to be considered on merits. Accordingly this claim of the assessee requires examination at the end of the Assessing Officer/TPO. Accordingly, we set aside the order passed by the learned CIT(A) on this issue and restore the same to the file of the Assessing Officer/TPO to examine the said claim of the assessee. In the set aside proceedings, the Assessing Officer/TPO should also consider the mistakes pointed out by the assessee with regard to computation made by the TPO.

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• Benami Property

• 2018 (9) TMI 153
  Benami Property - Jurisdiction - power of IO to pass orders of Provisional attachment - Section 24(3) of the Prohibition of Benami Property Transactions Act, 1988 - petitioners contend that the Adjudicating Authority had already passed an order under Section 26 (3) of the Act holding that the properties (amounts) in question are not benami properties and, therefore, it is not open for the IO to once again pass orders attaching the same - whether the IO was barred from issuing a fresh show cause notice under Section 24(1) of the Act? Held that:- A plain reading of sub-section (3) of Section 24 of the Act indicates that the IO may issue an Order of Provisional Attachment if he is of the opinion that the person in possession of the property held benami would alienate such property during the period specified in the notice; that is, the time provided by the IO for the noticee to show cause as to why such property should not be treated as a benami property - It is, at once, clear that an order under Section 24(3) of the Act is only for the purposes of provisionally attaching the property till the IO completes his inquiry pursuant to the show cause notice issued under Section 24(1) of the Act. It is also relevant to note that an Order of Provisional Attachment under Section 24(3) of the Act cannot exceed period of ninety days from the date of issuance of the show cause notice under Section 24(1) of the Act. It is apparent that the Adjudicating Authority had set aside the Provisional Attachment Orders passed under Section 24(3) and 24(4)(a)(i) of the Act only on the ground that the IO had not followed the procedure in terms of the scheme of Section 24 of the Act. The Adjudicating Authority had not examined the issue whether the properties (amounts) in question were benami properties in terms of Section 2(8) of the Act - this Court finds no reason which would preclude the IO from issuing a fresh show cause notice and curing the procedural defect as observed by the Adjudicating Authority. The principles analogous to res judicata do not apply, as the Adjudicating Authority has not taken any decision on the merits of the matter; that is, he has not decided whether the sums deposited in the bank accounts of the petitioners were benami properties of Sh Nitin Jain. It is well settled that if an order is set aside on account of violation of the principles of natural justice or on account of any procedural defect in the decision making process, the concerned authority is not precluded from re-initiating the proceedings after curing the procedural defects. This is, of course, subject to the condition that the fresh proceedings are (a) within the jurisdiction of the authority; and (b) are not barred by limitation - In the present case, there is no dispute that the IO has the jurisdiction to issue a show notice under Section 24(1) of the Act. There is also no dispute that such notice is not barred by limitation - this Court is unable to accept that the IO (respondent no.3) was in any manner precluded from issuing the show cause notice. Petition dismissed.

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• Customs

• 2018 (9) TMI 136
  Direction issued by the Intelligence Officer, Directorate of Revenue Intelligence dated August 16, 2018 - non-application of mind - the petitioner seeks to import soyabean oil into the country. The customs authorities have issued a notice under Section 110 of the Act of 1962 which is impugned in the present writ petition. The petitioner is yet to apply under Section 110A of the Act of 1962. Held that:- In the event, the petitioner applies under Section 110A of the Act of 1962, the adjudicating authority is requested to hear and consider such application as expeditiously as possible. Needless to say, the adjudicating authority will afford a reasonable opportunity of hearing to the petitioner - It is expected that, the adjudicating authority completes the entire exercise within three weeks from the date of making of the application under Section 110 A of the Act of 1962.

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• 2018 (9) TMI 135
  EPCG License - Concessional Rate of Duty - N/N. 49/2000-Cus. dated 27.4.2000 - Department alleged that the appellant failed to submit the requisite documents regarding export obligation as well as the requisite certificate as required under said notification within the prescribed time limit - Held that:- As per the appellant’s own appeal before Commissioner (Appeals), the date of communication of order is mentioned. No doubt the date is the same as the date of O-I-A and apparently there is no document proving the service of the communication of said order but appellant did not raise this ground before the Commissioner (Appeals) nor pleaded the same as inadvertent mistake. There is no evidence on record as to when the said RTI, as impressed upon was filed. Thus, the reason cited doesn’t appear to be the sufficient justifiable cause. Commissioner (Appeals) has committed no error while dismissing the appeal on the ground of limitation for want of any sufficient cause or explanation thereto. Appeal dismissed - decided against appellant.

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• 2018 (9) TMI 134
  Valuation of imported goods - hot rolled stainless steel - hot rolled stainless steel plates - enhancement of value set aside based on the inadequacy of the evidence - Held that:- It is evident that the dispute in bill of entry no. 786750/1.12.2009 is below the threshold prescribed for filing the appeal by Revenue. Considering the enhancement apparent in this bill of entry and its combined disposal by the first appellate authority, as well as authority competent to review the order of the first appellate authority, it would appear that the disputed amount in the second bill of entry is also not of a greater magnitude. Also, both the disputed amounts forming part of the single appeal were separately and severally less than the threshold. The appeal of Revenue dismissed for being not in accordance with the new litigation policy.

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• Insolvency & Bankruptcy

• 2018 (9) TMI 137
  Corporate insolvency proceedings - legitimate claims of workmen - proceedings initiated in this case at the instances of the corporate debtor - Held that:- In the absence of any supporting materials brought to the notice of this Bench that any legitimate claims of workmen were rejected unreasonably, this Bench could not find any fault with the Resolution Professional, who was unable to consider the claim which has been directed to file by the workmen in the prescribed format giving all the necessary data. Failure from the side of the workmen in submitting the required data in the prescribed format for the consideration of the claims cannot be a ground for rejection of the resolution plan in hand. Nothing produced to prove that it has been implemented or that the workmen are entitled to have any benefit under the alleged pay revision of 2007. The reasons for rejection of claims, non inclusion of arrears of 1997 pay revisions and non-implementation of 2007 pay scale submitted by the resolution professional being supported with proof it appears to me that none of the objections raised on behalf of the workmen at the time of consideration of the approval of the resolution plan in hand are found devoid of any merit. Upon commencement of the CIRP any legal proceedings if any initiated against the corporate debtor is to be stayed and there is no bar on any suit or proceedings instituted by the corporate debtor as against an operational creditor. That being so pendency of a civil suit filed by the corporate debtor as against the intervener in this case is not at all a bar to proceedings initiated in this case at the instances of the corporate debtor. No other objections raised on any other sides regarding approval of the resolution plan. The Resolution Plan in hand fulfilled to meet the requirements as referred to in sub-section (2) of section 30 of the Code. However, it is pertinent to note that this is a unique Resolution Plan rather a plan for repayment of outstanding debts found due from the corporate debtor to various stake holders and to its workmen and staff. The corporate debtor/ corporate applicant was an industry originally engaged in wagon manufacturing which is at present running at loss due to intense competition following the entry of new players. High level of debt and increased loses prompt the corporate applicant to file the application in hand. The Resolution Plan has been prepared on the strength of a letter no.2018/M(W)/300/2 dated 12.02.2018 addressed to the Corporate Debtor/ Corporate Applicant from the Ministry of Railways (Railway Board), Government of India, who recommended closure of Corporate Applicant company. Therefore, what is to be understood from the Resolution Plan is that on the basis of allocation of fund in the budget 2018-19, the Corporate Applicant would like to settle its liabilities and provides a repayment plan. So, the Resolution Plan in hand is a repayment plan for settlement of liabilities of the Corporate Applicant so that the closure of the Corporate Applicant can be effected, instead of liquidating the company. On going through the letter above and the Resolution Plan, it is understood that the Resolution Applicant in the instant case has prepared the Resolution Plan and submitted to the CoC for its approval through the Resolution Professional and it is that Resolution Plan came up for consideration and on further examination, satisfied that the said plan meets the requirements as stipulated under section (2) of section 30 of Insolvency & Bankruptcy Code, 2016. Therefore, the Resolution Plan deserves approval. Accordingly, the Resolution Plan is approved upon the following directions. ORDER:- The Resolution Plan, which is approved by the CoC with a voting share of hundred percentage is hereby approved under provisions of section 31(1) of the Insolvency & Bankruptcy Code, 2016, which will be binding on the Corporate Debtor/Corporate Applicant, its employees, members, creditors, coordinators and other stakeholders involved in the Resolution Plan. 2. The resolution plan of the company shall come into force with immediate effect. 3. The moratorium order passed under Section 14 shall cease to have effect. 4 The Resolution Professional shall forward all records relating to the conduct of the Corporate Insolvency Resolution Process and the Resolution Plan to the Insolvency and Bankruptcy Board of India to be recorded on its database.

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• Service Tax

• 2018 (9) TMI 132
  Refund of unutilized CENVAT Credit - N/N. 27/2012-NT dated 18th June, 2012 - Export of Services - whether export turn-over of inputs would be equal to the “Total Turnover” in terms of clause (E) of Rule 5 (1) of Cenvat Credit Rules, 2004 and that when there is no dispute of Service Tax payment on input services, whether the assessee is eligible for refund of Cenvat Credit which remains unutilized? Held that:- The total turn-over has to be calculated on such value of export turnover as is to be calculated in the manner provided under sub-rule(d) of Rule 5 of CCR - the meaning of ‘all other services’ as mentioned in the definition of ‘total turnover’ under Rule 5 (1) E of CCR, 2004 has not been provided in CCR, 2004. As per the ‘Law of purposive interpretation’ the Commissioner (Appeals) observed that the text proceeding the phrase ‘all other services’ is ‘export turnover’. Hence, ‘all other services’ would mean ‘value of all services other than the exported service’. Appeal allowed - decided in favor of appellant.

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• 2018 (9) TMI 131
  Reverse charge mechanism - GTA Services - transportation of goods by road and making payment of inward / outward freight which was incurred by them for consignment - Held that:- The department has based the case on the fact that appellant is a factory registered and is governed under the Factories Act, 1948, as is apparent from para 2 of the show cause notice. The appellant is a proprietary concern and is otherwise registered under the District Industries Centre. Thus, it becomes clear that appellant is not covered under the Factories Act. The appellant is a proprietorship concern employing less than 10 workers and has not been registered under Factories Act but registered under MP Shop and Establishment Act. Therefore, Rule 2(1)(d)(v) of the Service Tax Rules is not applicable to them and they are not liable to pay Service Tax under GTA Service as recipient of services. Appeal allowed - decided in favor of appellant.

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• 2018 (9) TMI 130
  Condonation of delay in filing appeal - appellant is the successor of deceased - case of appellant is that acquired knowledge of order of appeal dated 8th May, 2014 from the by letter of the Department dated 23rd February, 2018 only. The appeal was filed on 23rd March, 2018 i.e. within one month of acquiring knowledge by the applicant of the impugned order - Held that:- The order under challenge was announced on 18th May, 2014. The assessee, the Proprietor thereof passed away on 3rd November, 2016 i.e. after 2 years of the date of order under challenge. The application mentions no reason for the delay for said 2 years except that the deceased Mr. Santosh Rai was under medical treatment. The documents attached shows that the illness was for the year 2010-11. Hence this reason is opined as not relevant for explaining the delay for the said 2 years. Further, the ground taken that the applicant who is the son of the deceased Proprietor had not received the copy of the impugned order prior to 23rd February, 2018 is also opined not to be a reasonable cause, as the appellant’s own annexure with the application i.e. the copy of the letter of the Department dated 23rd February, 2018 makes it clear that the letter was issued earlier also on several occasions with the repeated reminders. There is no cogent explanation for the initial delay of two years - appeal dismissed - decided against appellant.

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• 2018 (9) TMI 129
  Club or association Service - It is submitted on behalf of appellant that the appellant has discharged its liability towards the sale of food and beverages by paying VAT for the same - Held that:- The Commissioner (Appeals) in para 12 of his findings has reproduced a chart. Perusal thereof makes it clear that there is acknowledgement on the part of the Department about payment of VAT on the impugned sale by the appellant. Further, perusal of show cause notice makes it clear that the said acknowledgement is well confirming the tax liability mentioned in the show cause notice. Thus facts stand clear that the requisite liability has been discharged, as far as the sale of goods for rendering the services by the club to its members is concerned - Since for claiming said benefit, documents evidencing sale/transfer are mandatory the appellant was required to produce the same at first available opportunity i.e. the Original Adjudicating Authority. Apparently it has not been done - matter remanded back to the Original Adjudicating Authority for being decided afresh after taking into consideration the documents as that of the invoices, if any, produced by the appellant - appeal allowed by way of remand.

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• Central Excise

• 2018 (9) TMI 128
  Classification of goods - Nuclear Grade Ammonium Di-uranate - whether classified under CETH 2845 9010 or under CETH 2844.1000? Held that:- From the records it is seen that Uranium contains 0.7% of Uranium 235 and balance is Uranium 238 isotopes. Therefore, it was evident that the composition of the items is in conformity with the description of Natural Uranium as given in HSN. Further, the Commissioner found that among the items listed under Note VIB to Heading 2844 in the HSN, the item is Di-Ammonium Uranate (NH4)2U207 along with Di-Sodium Uranate (Na2U207) finds a specific entry against the Sl. No.1(d) therein as a Compound of fissile and fertile chemical element or isotopes . It is also noted that isotopes in HSN under Section VI-2844 that Uranium 235 and Uranium 238 are isotopes of the element Uranium - the Commissioner had held that the product NGADU is eligible for exemption in terms of Notification No.3/2005 dated 24.2.2005. The learned Commissioner was right in holding that Chapter Heading No.2845 covers isotopes other than those of Heading 2844 compounds, inorganic or organic, all such isotopes whether or not chemically defined. Further sub-classification of those heading relates to Heavy Water and others. Therefore, in terms of the HSN as cited by the learned Commissioner, we find that the product is classifiable under Chapter 2844 as held by the Commissioner in terms of the Chapter Note and HSN - also exemption Notification No.3/2005 dated 24.2.2005 at Sl. No.24 mentions Nuclear Fuel falling under Chapter 28 irrespective of the subheading, it is eligible for nil rate of duty. Appeal dismissed - decided against Revenue.

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• 2018 (9) TMI 127
  CENVAT Credit - input service - Outward Courier Service - place of removal - Time Limitation - Held that:- Tribunal in the case of Hero Motocorp Ltd. [2014 (8) TMI 364 - CESTAT NEW DELHI] has held that in case of MRP clearance of the product as per Section 4A of the Central Excise Act, place of removal would be the factory gate and the credit of service tax paid on courier service beyond the factory gate is not available under Rule 3 of the Cenvat Credit Rules - there is no infirmity in the impugned order - CENVAT credit not allowed. Time limitation - Held that:- The appellant has taken the cenvat credit in respect of input services in question on the bonafide belief that they are entitled for credit and the said bonafide belief was founded on the basis of various judicial decisions of the High Court and the Tribunal - Further, the entire issue relates to interpretation of statutory provisions particularly the ‘input service’ definition in Rule 2(l) of the Cenvat Credit Rules 2004 - In the present case, the period of dispute is from 2009-10 up to 2011-12 and the show-cause notice was issued on 04.03.2014 which is beyond the normal time period of one year from the relevant date i.e. 10.04.2012 - entire demand is barred by limitation. The appellant is not entitled to the cenvat credit on courier service whereas on limitation he succeeds - the entire demand is barred by limitation - appeal allowed - decided in favor of appellant.

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• 2018 (9) TMI 126
  CENVAT Credit - transportation of towers to the site - Revenue is of the view that as these towers and shelters are immovable property, therefore, the appellant is not entitled to avail Cenvat credit on transportation of towers to the site as well as towers and shelters - Extended Period of Limitation - the period for input service is 2006-07 to 2007-08 i.e. the entire period is prior to 1.4.2011 - Difference of Opinion. Held that:- The settled position in law is that the input service or the activity used should be integrally connected with the business of the appellant and should not be in the nature of welfare activity. On this basis, the services like renting a cab, outdoor catering and other services, which are used for carrying on the business of manufacturing or providing output services have been held to be admissible services in numerous judicial pronouncements - On the same basis, transportation of towers is an activity related to the business. Even though the towers are not eligible for Cenvat credit as inputs or capital goods, they are essential for providing telecommunication service - input service credit on transportation of towers to the site is admissible to the appellant Appeal disposed off.

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• 2018 (9) TMI 125
  Refund claim - N/N. 19/2004 dated 6.9.2004 - Export of consignment of Mango juice to Nepal without following the prescribed procedure - Held that:- It is not in dispute that the goods have been exported to the Nepal without following the procedure prescribed under the two aforesaid notifications. The contention of the appellant that this may be treated as a procedural lapse as the export has already been affected to Nepalese importer. This is undisputed the fact that the condition of notification has not been complied - appeal dismissed.

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• 2018 (9) TMI 124
  Classification of goods - manufacture of “Tipper” brands Cigarettes - whether “Tipper” cigarettes manufactured by the respondents are filter cigarettes or not? - tests conducted by Chemical Examiner - presence of the subsequent report of the Chemical Examiner. Held that:- As is seen from the report, the same is based upon the definition of the filter and filtration as is available from the technical books wherein natural fibers have also been held to be the material used in the filtration. As per the said report the filling in filter rod of the products are covered by the term 'Natural Fibers'. If that do so the cigarette have to be held as filter cigarette - It is a fact that the classification of tipper brand cigarette already stands held in favour of the assessee by the decision of the Tribunal in M/s International Tobacco Co. Ltd. Vs Commissioner of Central Excise, Ghaziabad [2007 (3) TMI 24 - CESTAT, NEW DELHI] - The question remains as to whether the ratio of the said decision would be applicable in the present case where the revenue have procured more evidence and another report, which substantiate their stand. The Hon'ble Supreme Court in the case of CCE, Calcutta Vs Alnoori Tobacco Products [2004 (7) TMI 91 - SUPREME COURT OF INDIA] has observed that the precedent decisions, before applying, have to be shown to fit factual situation of the given case. Circumstantial flexibility, one additional or different fact may make world of difference between conclusions of two cases and disposal of cases by blindly placing reliance on a decision, is not proper. As such the presence of the subsequent report of the Chemical Examiner in the present case may make the entire difference having bearing on the finality of the matter. Inasmuch as, the Adjudicating Authority has neither referred to the said report, nor examined the same and has simplicitor followed the Hon'ble Supreme Court's decision, the impugned order is required to be set aside and matter remanded with directions to consider the applicability of the subsequent report of the Chemical Examiner and to re-decide the issue accordingly. Appeal allowed by way of remand.

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• 2018 (9) TMI 123
  Valuation - includibility of VAT in assessable value - Revenue was of the view that the VAT liability discharged by utilizing the investment subsidy granted in form 37B cannot be considered as VAT actually paid, for the purpose of Section 4 of the Central Excise Act, 1944 - Held that:- Identical issue decided by the Tribunal in the case of Shree Cements Ltd. V/s CCE, Alwar [2018 (1) TMI 915 - CESTAT NEW DELHI], where it was held that There is no justification for inclusion in the assessable value, the VAT amounts paid by the assessee using VAT 37B Challans - appeal allowed - decided in favor of appellant.

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• 2018 (9) TMI 122
  CENVAT Credit - Manufacture or not - waterproofing chemicals and other chemicals - Alleging that the said activity does not amount to manufacture, a show-cause notice was issued proposing denial of CENVAT Credit - Held that:- Undisputedly the appellant had discharged appropriate Central Excise duty after undertaking the process of repacking, relabeling of the inputs on which credit has been availed by them. Thus, it is incorrect to allege that the appellants are not eligible to avail CENVAT Credit on inputs that has been utilized in the manufacture (repacking, relabeling etc.) of waterproofing resultant product, on which appropriate excise duty was paid and accepted by the Revenue. Reliance placed in the case of THE COMMISSIONER OF CENTRAL EXCISE, PUNE VERSUS AJINKYA ENTERPRISES [2012 (7) TMI 141 - BOMBAY HIGH COURT], where it was held that Once the duty on final products has been accepted by the department, CENVAT credit availed need not be reversed even if the activity does not amount to manufacture. Appeal allowed - decided in favor of appellant.

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• Indian Laws

• 2018 (9) TMI 133
  Acquittal of respondents for an offence punishable under Section 138 of the Negotiable Instruments Act, 1881 - Whether the said Rajiv Shivji Sharma was entitled to claim that he was a Proprietor of the appellant M/s Century Steel Traders? - whether cheque in question was indeed signed by the respondents or that the same had been issued in discharge of legal debt or liability? Held that:- The trial Court took into consideration the entire evidence and material on record and found that not only was the appellant unable to prove that the said Rajiv Shivji Sharma was its Proprietor, but it had also failed to prove that the disputed cheque pertained to discharge of legal debt or liability. The entire case of the appellant was rendered suspicious and not believable. The analysis of the evidence and material on record by the trial Court cannot be said to be erroneous and the findings are not perverse. It is certainly a possible view taken by the trial Court on the basis of the oral and documentary evidence on record. Not only was the complaint filed by a person who had no authority to file the same, but the signatures on the disputed cheque and other documents appeared to be forged and in any case, there was lack of credible evidence to show that there had been transactions between the parties for which the respondents had issued the cheque in discharge of legal debt or liability. It is trite that in criminal jurisprudence when two views are possible, the view that is in favour of the accused is to be adopted. The trial Court in the present case has taken a possible view of the matter and there is no reason why the same is required to be reversed. The appellant has failed to demonstrate any justifiable reason for interfering with the impugned order passed by the trial Court. The present appeal is found to be without any merit and it is dismissed

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