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TMI Tax Updates - e-Newsletter
September 8, 2015
Case Laws in this Newsletter:
Income Tax
Customs
Service Tax
Central Excise
CST, VAT & Sales Tax
TMI SMS
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
Income Tax
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ITAT declined to permit the Assessee to maintain the cross objections on the ground that since the Assessee had not urged the plea of being entitled to the benefit under Section 10 A before the CIT (A), it could not be permitted to urge such plea for the first time before the ITAT - order of ITAT is not correct - HC
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Determination of capital gain - allocation of sale consideration between the land and building - The historical cost of building or WDV of building cannot be determinative of market value of building on the date of sale. Similarly end use of building by the buyer is also not relevant for determining market value of building on the date of sale - AT
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The disallowance made U/s.40(a)(ia) cannot be taken into consideration for the purpose of granting the benefit of deduction because Section-10B is a provision with fiction and Section.40(a)(ia) is also a provision with fiction and a provision with fiction cannot be super imposed on another provision with fiction. - AT
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Depreciation claim denied - earlier claim as application of income u/s 11 - depreciation is allowable on capital assets on the income of the charitable trust for determining the quantum of funds which have to be applied for the purpose of trusts in terms of section 11 of the Act. - AT
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Disallowance of depreciation - purchase of assets were allowed as application of income u/s 11 of assessee - d when the assessee again claimed the same amount in the form of depreciation, such notional claim became a cash surplus available with the assessee, which was outside the books of account of the trust unless it was written back which was not done by the assessee - AT
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The asset is put to repair and the material used for repair of plant & machinery cannot be said to be the scrap value on account of sale or discarding or demolishing or disturbing of the asset in question. - claim of depreciation allowed - AT
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Treatment to the over all income of the assessee as belonging to his wife, received in UK which was only remitted to India and clubbing these receipts in the hands of the assessee under section 64 - As per section 5(2), this income accrued or arise outside India. Thus there is no tax in the case of the assessee. - No clubbing - AT
Customs
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Valuation - Import of Oracle packaged software - condition of sale or condition of use - in respect of commercial imports of media packs, the licence fee remitted by OIPL to Oracle USA was includible in the assessable value - AT
Service Tax
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Export of services - claim of rebate - omitting to mention amount of service tax on the invoices when there is documentary evidence showing payment of service tax in the books of accounts maintained by the appellant, cannot debar them from the claim of rebate under Notification No. 11/2005. - AT
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Denial of SSI exemption upto ₹ 10 lakhs - the services are provided to the customers on behalf of the banks and appellants are only acting as an agent of service provider. Accordingly, admissibilities of small scale benefit has been rightly denied - AT
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Refund - relevant date - if the demand is dropped, the amount deposited has to be considered as pre-deposit or a deposit the limitation has to be accounted from the date of the adjudication order and not from the date of deposit of the amount - AT
Central Excise
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Valuation of free samples - samples are distributed free to the physicians - CESTAT has accepted that the method of valuation would be `cost of production or manufacture of the goods'. To this extent the grievance of the appellant herein stands redressed. - SC
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Manufacturing activity or repair activity - activity carried out by the Appellant on the defective compressor is clearly an activity of repair and by no stretch of imagination, it can be called as ‘manufacture' - AT
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Manufacture of semi finished battery management systems electrical panels, air-cooling systems and regulators on Job work basis - Matter remanded back for marketability text - AT
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Penalty u/s 11AC - Interest u/s 11AB - there is Revenue neutrality in this case despite the fact that the appellants have not determined the correct value - demand of interest and penalty set aside - AT
VAT
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Sale against ST-1 Form - DVAT - correctness of ST-1 - denial of deduction - Assessee could not be held responsible for any discrepancy in the ST-2 Account furnished by the purchasing dealer to the Sales Tax Authorities. - HC
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Benefit of Exemption as per notification – Use of Handmade paper in manufacturing -May be such paper is worst than handmade paper, but same cannot be equated with handmade paper - HC
Case Laws:
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Income Tax
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2015 (9) TMI 287
Examine the cross objections filed by the Assessee declined by ITAT - ITAT restored the order of the AO disallowing the claim made by the Assessee under Section 10B - ITAT declined to permit the Assessee to maintain the cross objections on the ground that since the Assessee had not urged the plea of being entitled to the benefit under Section 10 A before the CIT (A), it could not be permitted to urge such plea for the first time before the ITAT - Held that:- The Court is of the view that ITAT was in error in declining to examine the cross objections filed by the Appellant Assessee. The powers of the ITAT while hearing appeals and cross objections have been explained by this Court in CIT v. Edward Keventer (Successors) Pvt. Ltd. (1979 (11) TMI 73 - DELHI High Court) wherein held he Tribunal, in deciding an appeal, is not confined to the grounds set forth in the memorandum of appeal or those which the appellant may urge with its leave. It can decide the appeal on any ground provided only that the affected party has an opportunity of being heard on that ground. Also see NTPC v. CIT (1996 (12) TMI 7 - SUPREME Court) as held reason to restrict the power of the Tribunal under Section 254 only to decide the grounds which arise from the order of the Commissioner of Income-tax (Appeals). Both the assessee as well as the Department have a right to file an appeal/cross-objections before the Tribunal. Consequently, the question framed is answered in the negative, i.e. in favour of the Assessee and against the Revenue. The impugned order dated 10th December 2014 of the ITAT to the extent that it declined to examine the Appellant Assessee's cross objections on merits is hereby set aside and restored to the file of the ITAT for consideration on merits - Decided in favour of assessee
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2015 (9) TMI 286
Disallowance of depreciation on the intangible assets viz. , material supply contracts, distribution network and right to brand usage - Held that:- The assessee had acquired Textile Effect(TE) Business from CIBA-India and DDCL as a going concern on a lump sale basis, that manufacturing facilities of both the entities were not transferred as part of slump sale, that as a part of slump sale the entire distribution channel was handed over to the assessee including the customer, dealers, marketing people, marketing plans, laboratory, supply-chain and the warehouses, that the services of textile effects employees was transferred to the assessee, that it had entered into agreement with CIBA-India and DDCL for material supply and for supply of chemical products to the newly acquired TE business, that it regarded the fixed assets and intangible assets of acquired TE business at fair market value as determined by an independent valuer. By entering into MCS and getting distribution network, the assessee had acquired business/commercial rights that were of the similar nature as mentioned in sec. 32 (1) (ii) of the Act. Same is the case about use of brand name. The assessee had assigned value to various assets namely Fixed assets (Rs. 6. 68 crores), Intangible assets (Rs. 54. 94 crores), Goodwill (41. 87crores). We are of the opinion that by relying upon the valuation report of an expert the assessee had not contravened any of the provisions of the Act. We have already held that business right, distribution network and brand usage fall in the same category of commercial rights mentioned in Section 32 of the Act. Therefore, we hold that assessee was entitled to claim depreciation on the intangible assets. - Decided in favour of assessee. Disallowance of expenditure on payment basis u/s. 43 B - Held that:- If a business, along with its assets and liabilities, is transferred by one owner to another, a debt so transferred would be entitled to the same treatment in the hands of the successor. The recovery of the debt is a right transferred along with the numerous other rights comprising the subject of the transfer. If the law permits the transferor to treat the whole or part of the debt as irrecoverable and to claim a deduction on that account, the same right should be recognised in the transferee. It is merely an incident flowing from the transfer of the business, together with its assets and liabilities, from the previous owner to the transferee. It is a right which should, on a proper appreciation of all that is implied in the transfer of a business, be regarded as belonging to the new owner - See T. Veerbhadra Rao case [1985 (7) TMI 2 - SUPREME Court] - Decided in favour of assessee. Transfer pricing adjustments - Held that:- DRP has not mentioned anything about the documents submitted by the assessee, as stated earlier. In para 5. 2. 2 the DRP has issued directions but we are not aware as how far same were followed by the officers concerned. The assessee has specifically alleged that the directions of the DRP were not carried out. In next para i. e. para 5. 2. 3 the DRP mentions that the TPO had rightly rejected the TP Study but reasons have not been given for agreeing with the views of the TPO especially when the assessee had made extensive submissions stating that as how the stand taken by the TPO was flawed. Similar is the position of the next paragraph. The DRP has endorsed the views of the TPO in a very mechanical way without giving any reasoned finding on the arguments taken by the assessee. Therefore, in the interest of justice we are remitting back the matter to the file of the DRP who would adjudicate the issues raised by the assessee in grounds no. 2 to 5 of by passing a speaking and reasoned order and after affording a reasonable opportunity of hearing to the assessee. The additional evidences produced by the assessee before the DRP have to be taken in to consideration during fresh adjudication proceedings. - Decided in part in favour of assessee by way of remand. Disallowance of depreciation on intangibles and goodwill - Held that:- the assessee is entitled to claim depreciation u/s 32(1) (ii) of the Act with regard to MSC, DN and Brand usage. Similar is the position about Goodwill in light of the judgment of the Hon'ble Supreme Court delivered in the case of Smifs Securities [2012 (8) TMI 713 - SUPREME COURT] - Decided in favour of assessee.
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2015 (9) TMI 285
Penalty under section 271(1)(c) - addition u/s. 69A - Held that:- The hon’ble apex court in Reliance Petro-products case (2010 (3) TMI 80 - SUPREME COURT) holds that quantum and penalty proceedings stand on different footings. And each and every disallowance/addition does not lead to automatic imposition of section 271(1)(c) penalty. We notice that first of all, the authorities’ below do not produce any material much less a corroborating one to support the impugned addition of ₹ 20 lacs except that of survey statement. The co-ordinate bench in quantum case proceeds on an assumption of absence of a banking channel and non-production of the balance sum of ₹ 4 lacs in survey. The assessee’s duly audited books are already on record. No case of diversion or above-stated withdrawn sum is being made out in the course of arguments. Case file demonstrate the very shroff to be an unsecured loan creditor for ₹ 27,19,423/- forming part of balance sheet. We infer in these facts that although assessee’s plea was declined in quantum, the same is a reasonable explanation in the instant penalty proceedings for want of any further evidence to the contrary. We conclude in these facts that the assessee has successfully explained source of the robbed sum of ₹ 20 lacs to his bank withdrawal of ₹ 24 lacs. His arguments are accordingly accepted. The impugned penalty is deleted. - Decided in favour of assessee.
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2015 (9) TMI 284
Treatment to profits derived from share transaction - business income OR short term capital gains - Held that:- The CIT(A)’s findings extracted demonstrate frequency and magnitude of share transactions, assessee’s accounting treatment, holding period, absence of any borrowed funds being utilized in shares etc. to name a few decisive factors. It has come on record that assessee’s identical profits in preceding assessment year stand treated as capital gain only. It entered into 10 transactions in relevant previous year. The former head of long term capital gains comprise of shares held from minimum 15 months to holding period as long as 32 months. The same can in no way be taken an instance of a trading activity. More particularly, when such a long term investment covers almost three assessment years. Decided against revenue. Short term capital gains vis-à-vis business income - Held that:- Suffice to say, the transactions relate to five scripts. This gross amount involves a sum of ₹ 22,09,327/- i.e. more than 90% arising from sale of M/s Guj. Heavy Chemicals scrips carried over from preceding assessment year only. This leaves behind other four scrips. Two of them have holding period less than a month i.e. 18 days and two days; respectively involving profits of ₹ 7,873/- and ₹ 2,600/-. We take into account non usage of borrowed funds, separate portfolio being maintained along with judicial consistency as in preceding assessment year and hold that these transactions do not involve any trading element therein. We accept assessee’s grounds and reverse the CIT(A)’s corresponding findings. Decided in favour of assessee.
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2015 (9) TMI 283
Determination of capital gain in respect of sale of factory premises including land - allocation of sale consideration between the land and building - Held that:- It is irrelevant at whose behest certificate was issued. GIDC is a Gujarat Government undertaking and a certificate issued by it cannot be rejected merely on the basis of suspicion or presumption. Therefore, we are of the opinion that the certificate of the GIDC with regard to the rate of plot in the GIDC area at the relevant time is one of the proper basis for determination of the market value of the plot in that area. The Assessing Officer as well as the CIT (A) has not given any basis for allocation of the sale consideration between the land and building. The WDV of the building cannot be determinative of market value of the building after 20 years. In the allocation of sale consideration between the land and building by the assessee at least the value of the land is determined on the basis of GIDC certificate and residual value is allocated to the building. But the allocation of sale consideration by Assessing Officer and CIT (A), between the land and building is absolutely without any basis. The historical cost of building or WDV of building cannot be determinative of market value of building on the date of sale. Similarly end use of building by the buyer is also not relevant for determining market value of building on the date of sale. Considering the facts of the case in our opinion the allocation of sale consideration between the land and building by the assessee deserves to be accepted and we order accordingly.- Decided in favour of assessee. Enhancement by CIT(A) by denying the option of fair market value as on 1-4-1981 which was accepted by the Assessing Officer - Held that:- From the reading of the order of the ITAT which is reproduced above in para-6, it is evident that it was a limited set aside for the purpose of giving opportunity to the Assessing Officer with reference to the additional evidence i.e. letter of GIDC. In the above circumstances, in our opinion, enhancement was made by the CIT(A), in respect of altogether new point which was not taken by the Assessing Officer in the assessment order, was not an issue before the CIT (A) or ITAT in first round. The matter was set aside by the ITAT to the CIT (A) for the limited purpose of allowing opportunity to the A. O. with reference to the additional evidence. Therefore, the CIT (A) was not justified in taking up altogether a new issue while readjudicating the issue as per direction of ITAT. We are therefore of the opinion that the CIT (A) was not justified in denying the benefit of option of Fair Market Value of land as on 1-4-1981 to the assessee which was allowed by the Assessing Officer. The allotment of the land by GIDC to the assessee was on the payment of lump sum consideration. It was not a tenancy right on the basis of monthly payment of rent. Therefore provision of Section 55(2)(a) is not applicable. However, as we have set aside the enhancement made by the CIT (A) on the limited ground that it was beyond the scope of order of set-aside by the ITAT, we do not express any opinion whether the allotment of land by GIDC to the assessee would fall within the ambit of tenancy right or not. In view of above, we direct the Assessing Officer to accept the workings of the capital gain of the assessee and the addition made by him as well as enhancement made by the CIT (A) are deleted. - Decided in favour of assessee.
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2015 (9) TMI 282
Assessment order u/s 143(3) passed in the name of non-existent company - validity of assessment - Held that:- Undisputedly and admittedly, the return was filed by STIPL amalgamating company on 30.11.2006. The AO issued notices u/s 143(2) and 142(1) of the Act in the name of amalgamating company. Subsequently, letter dated 3.10.2008 was filed before the AO during the course of assessment proceedings informing the scheme of amalgamating sanctioned by the Hon’ble High Court vide order dated 22.8.2008 and the amalgamating company i.e. STIPL ceased to exist in pursuance to filing of such order before the Registrar of Companies w.e.f. 1.4.2008. Letters dated 17.11.2009 and 24.11.09 were also filed before the AO duly disclosing the factum of amalgamation and subsequent dissolution of the amalgamating company STIPL with the amalgamated company SIEPL. However, the AO passed impugned assessment order on 30.11.09 u/s 143(3) of the Act in the name of non-existent amalgamating company viz. STIPL. The facts of the present case are quite similar to the facts and circumstances in the Spice Infotainment (2011 (8) TMI 544 - DELHI HIGH COURT) wherein their lordships held that the framing of assessment against non-existent entity/person goes to the root of the matter which is not a procedural irregularity curable u/s 292B of the Act and or any other provision but it is a jurisdictional defect because there cannot be framing of any assessment against a dead person or entity which is non-existent on the date of passing or framing assessment order. Thus the assessment order dated 30.11.09 passed u/s 143(3) in the present case in the name of non-existent amalgamating company STIPL having jurisdictional defect is not sustainable and we quash the same. - Decided in favour of assessee.
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2015 (9) TMI 281
Disallowance u/s 14A - AO has rejected the suo motu disallowance - Held that:- Rule 8D is applied then disallowance would work out at ₹ 37,08,098/- which is almost four times the actual expenditure claimed by the assessee. So, according to ld. AR, the disallowance has to be made, it should be confined to the actual expenditure incurred and claimed for earning exempt income. First submission of assessee that total expenditure claimed as per P&L account is ₹ 18,35,064. It has been stated that out of this amount, ₹ 2,59,835/- is the administrative expenses and ₹ 5,40,397/- pertains to the two companies which have amalgamated with the assessee, namely, M/s. Kiran Securities Pvt. Ltd. and M/s. Soarma Vinimay Pvt. Ltd. and from whom no dividend income has been earned and declared by the assessee. Thus to the said extent, according to assessee, no disallowance of expenditure of ₹ 5,40,397/- is warranted. As regards the expenditure of ₹ 15,74,196/- it is apparent that it includes a sum of ₹ 2,22,729/- (Kiran Securities Pvt. Ltd. ) and a sum of ₹ 3,17,679/- (Soarma Vinimay Pvt. Ltd.) as claimed by the ld. AR which are pertaining to amalgamating companies and further amalgamation expenses of ₹ 8,58,617 (of Mayuka Investment Ltd.), capital increase expenses of ₹ 70,000/- (of Mayuka Investment Ltd.) are claimed by the ld. AR; and loss on sale of investment ₹ 11,695/- which have no nexus with the exempt income. Thus, according to ld. AR, the said amounts cannot be disallowed. The remaining expenditure according to AR is ₹ 93,477/- (Rs.15,74,156/- - ₹ 2,22,729/- + ₹ 3,17,679/- + ₹ 8,58,617/- + ₹ 70,000/- + ₹ 11,695 (Page 57 of PB) = ₹ 93,477/-). This sum of ₹ 93,477/-, according to ld. AR, includes audit fees of ₹ 16,545/- and filing fees ₹ 2,088/-, which are in the nature of routine business/statutory expenditure. In view of the aforesaid submission of the AR, we feel that if these expenditures are considered in the light of the suo motu expenditure of ₹ 50,000/- as claimed by the assessee for earning exempt income need to be reconsidered by the AO. Therefore, we set aside the impugned order and restore the matter back to the file of the AO for deciding the issue in view of the aforesaid submissions of ld. AR and thereafter, determining the question of disallowance u/s 14A of the Act. - Decided in favour of assessee for statistical purposes.
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2015 (9) TMI 280
Eligibility for deduction U/s.10B - whether expenditure incurred in foreign exchange towards telecommunication expenditure and travel expenditure deducted from export turnover should also be deducted from total turnover for arriving at the eligible deduction U/s.10B - Held that:- As held in ITO Vs. Sak soft Ltd. [2009 (3) TMI 243 - ITAT MADRAS-D] expenditure incurred towards freight charges and insurance premium in foreign exchange ought to be excluded from both export turnover as well as from the total turnover. Also see M/s. Allsec Technologies Ltd. case [2015 (9) TMI 219 - ITAT CHENNAI] - Decided in favour of assessee. Loss on account of conversion of the amount outstanding in EEFC account in foreign currency to Indian currency - Held that:- Any loss incurred by the assessee has to be allowed to be set off against the same business income or against the other business income or any other income as per the provisions of the Act. The Tribunal on the earlier occasion in the assessee’s own case has only decided the issue of granting deduction U/s.10B of the Act with respect to the gain derived from EEFC account which does not have direct nexus with the profits earned out of export by holding that such gains should be excluded for the purpose of deduction U/s.10B of the Act. This is only for the limited purpose of granting deduction U/s.10B of the Act. However as per the provisions of the Act, any gain or loss incurred by the 10-B unit of the assessee, though not eligible for deduction while computing the income of the assessee, such gains or losses have to be considered in accordance with the normal provisions of the Act. We do not find any bar on the claim of the assessee by any of the provisions under the Act. Therefore, we do not find it necessary to interfere with the order of the Ld. CIT (A). - Decided in favour of assessee. Excluding Telecommunication expenditure and Travelling expenditure incurred in foreign currency from export turnover, though the same were not included in the export turnover - Held that:- Assessing Officer had excluded the Telecommunication expenditure and Travelling expenditure from the export turnover, though it was not included in the export turnover. On this issue, we have only to say that if these expenditures have already been excluded by the assessee, the same need not be excluded once again - Decided in favour of assessee. Re-compute the deduction U/s.10B of the Act for the earlier years - Held that:- Assessing Officer for the earlier years have incorrectly granted deduction U/s.10B of the Act i.e., even for the increase in profits due to disallowance U/s.40(a)(ia) of the Act. While granting deduction U/s.10B of the Act, the disallowance made U/s.40(a)(ia) of the Act cannot be taken into consideration for the purpose of granting the benefit of deduction because Section-10B of the Act is a provision with fiction and Section.40(a)(ia) of the Act is also a provision with fiction and a provision with fiction cannot be super imposed on another provision with fiction. Therefore, the Ld. CIT (A) has rightly directed the Ld. Assessing Officer to re-compute the deduction U/s.10B of the Act for the earlier years, however, subject to the period of limitation provided under the Act. If the Assessing Officer has the option to assess one, or other of the entities in the alternative, the Ld. CIT (A) can direct him to do what the Ld. Assessing Officer should have done in the circumstance of the case as held by the Hon’ble Apex Court in the case CIT Vs. Kanpur Court Syndicate ( 1964 (4) TMI 18 - SUPREME Court). Therefore we hereby confirm the order of the Ld. CIT(A) subject to the adherence of the period of limitations provided under the Act. - Decided against revenue. Invoking the provisions of Section-14A for the earlier assessment years - whether IT (A) had exceeded his jurisdiction by directing the Ld. Assessing Officer to re-comptue the deduction U/s.10B of the Act for the earlier assessment years other than the year under appeal? - Held that:- Since we have already held in the earlier ground at para 7.3 that the Ld. CIT (A) has powers under the provisions of the Act to direct the Ld. Assessing Officer to modify the assessment of the earlier years based on the findings in the subsequent assessment year under appeal before the Ld. CIT (A), this ground is also accordingly disposed off. - Decided against assessee.
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2015 (9) TMI 279
Addition invoking Ss. 36(1)(iii) and 40A(2)(b) - Held that:- As decided in assessee's own case [2015 (7) TMI 361 - ITAT PUNE] there is no question of disallowance of interest on account of interest free advances given to related parties. It is a reverse case wherein the assessee has obtained the loan from related parties by paying exorbitant rate of interest for which the Assessing Officer disallowed the excess interest paid to the related parties by invoking the provisions of section 40A(2)(b) of the I.T. Act. Since the assessee itself has agreed for the addition of ₹ 33,37,059/- to tax being excess interest paid to the related parties covered u/s.40A(2)(b), therefore, the CIT(A) in our opinion was fully justified in upholding the addition made by the Assessing Officer. - Decided against assessee. Disallowance u/s 14A r.w.r. 8D - Held that:- As decided in assessee's own case [2015 (7) TMI 361 - ITAT PUNE] Since the assessee itself had admitted that it has incurred certain expenses although the same is negligible which cannot be correctly ascertained and since certain additions were made during A.Y. 200607 and 200809 by the Assessing Officer u/s.14A and nothing has been brought on record as to the outcome of the same including the quantum, therefore, we do not find any infirmity in the order of the CIT(A) upholding the disallowance made u/s.14A r.w. Rule 8D for the impugned assessment year. - Decided against assessee. Disallowance of foundation day expenses being excessive - Authorised Representative of the assessee agreed for disallowance of 20% of the aforesaid expenses - Held that:- The assessee itself has agreed before the AO for disallowance of 20% of such expenses which according to the AO was on the higher side. Nothing was brought before us to show that there was no acceptance by the assessee for such offer or the assessee was in possession of relevant bills and vouchers justifying such expenditure. We therefore uphold the order of the CIT(A) on this issue and the ground raised by the assessee is dismissed. - Decided against assessee. Adhoc disallowance of various expenses - Held that:- We direct the AO to restrict such disallowance to 5% of the expenses claimed as against 10% disallowed by him and upheld by the CIT(A) - Decided partly in favour of assessee.
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2015 (9) TMI 278
Penalty levied u/s. 271(1)(c) - reopening of assessment - addition of the entire on-money amount in the hands of the assessee - CIT(A) deleted penalty - Held that:- In the present case, reassessment proceedings were initiated on the basis of incriminating document found against the assessee during search proceedings in the case of Luthra Group. Thus, the right course of action for the Revenue is to initiate proceedings u/s. 153C and not u/s. 148 of the Act. Our view is supported by the decision of Amritsar Bench of Tribunal in the case of ITO Vs. Arun Kumar Kapoor (2012 (6) TMI 403 - ITAT AMRITSAR ), wherein, under similar circumstances the Tribunal has held that the proceedings u/s. 148 are illegal and void ab initio. Since, the substratum for making addition is itself bad in law, no penalty can be levied on such addition. Commissioner of Income Tax (Appeals) has deleted the penalty on the ground that the amount of on-money received as advance by the assessees from the prospective customers of the plots is to be taxed in the year of sale of plots. We do not find any error in the findings of the Commissioner of Income Tax (Appeals). - Decided in favour of assessee.
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2015 (9) TMI 277
Disallowance of depreciation - purchase of assets were allowed as application of income under Section 11 of assessee - allowing depreciation would amount to double depreciation as held by AO - Held that:- As decided in The Anjuman-E-Himayath- E-Islam v. ADIT [2015 (7) TMI 594 - ITAT CHENNAI ] this issue is elaborately discussed in the case of Lissie Medical Institution Vs. CIT reported in [2012 (4) TMI 115 - KERALA HIGH COURT] and held the issue against the assessee wherein held that after writing off the full value of the capital expenditure on acquisition of assets as application of income for charitable purposes and when the assessee again claimed the same amount in the form of depreciation, such notional claim became a cash surplus available with the assessee, which was outside the books of account of the trust unless it was written back which was not done by the assessee. It was not permissible for a charitable institution to generate income outside the books in this fashion and there would be violation of section 11(1)(a). It was for the assessee to write back the depreciation and if that was done, the Assessing Officer would modify the assessment determining higher income and allow recomputed income with the depreciation written back by the assessee to be carried forward for subsequent years for application for charitable purposes - Decided against assessee. Excess application - Tthe assessee cannot claim excess application/expenditure as application of income. Carry forward of excess application of fund in the commercial principles cannot be allowed as per the provisions of the Act because it would result in notional application of income in the subsequent year.Needless to mention that the income of the Trust refers to ‘income derived from the property held under the Trust’ and any ‘voluntary contributions received by the Trust other than contributions made with specific directions that they shall form part of the corpus of the trust’ - Decided against assessee.
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2015 (9) TMI 276
Disallowance of depreciation relatable to scrap discarded machinery - Assessing Officer has made disallowance out of depreciation on the basis that out of repairs to plant & machinery, 10% of material cost of spares is to be considered as scrap value and the same should be reduced from the WDV of the plant & machinery and consequently, the depreciation is to be reduced to that extent - CIT(A) deleted disallowance - Held that:- Unless this is brought on record by the Revenue that there is any scrap value realized or is relalizable on account of sale of scrap, no such adjustment can be made in WDV because as per explanation 2 below clause (ii) of section 32(1), written down value of the block of assets shall have the same meaning as in clause (c) of sub section (6) of section 43 of the Act. As per clause (c) of sub section (6) of section 43, deduction has to be made from opening WDV on account of sums payable in respect of any asset falling within that block which is sold or discarded or demolished or disturbed, during that previous year together with the amount of scrap value, if any, subject to this that such deduction is not exceeding the WDV. In the present case, the scrap value sought to be reduced by the Assessing Officer is not on account of assets being sold or discarded or demolished or disturbed. In the present case, the asset is put to repair and the material used for repair of plant & machinery cannot be said to be the scrap value on account of sale or discarding or demolishing or disturbing of the asset in question. Hence, in our considered opinion, there is no infirmity in the order of CIT(A) on this issue and therefore, we decline to interfere in the order of CIT(A) on this issue - Decided against revenue. Addition on account of liabilities of more than 3 years - CIT(A) deleted addition - Held that:- CIT(A) has deleted this addition by following the judgment of Hon’ble Apex Court rendered in the case of CIT vs. Sugauli Sugar Works (P) Ltd. [1999 (2) TMI 5 - SUPREME Court] . This is not the case of the Revenue that the liability is not appearing in the balance sheet. The only objection of the Assessing Officer is that the liability is more than three years old. Hence, under these facts, the disputed issue is covered in favour of the assessee - Decided against revenue. Disallowance of sales promotion incentive - CIT(A) deleted addition - Held that:- The decision of CIT(A) is on the basis that the liability to pay sales promotion incentive accrues when it is acknowledged upon attainment of the sales target set for each distributor or sub-distributor or selling agent. He has given a finding that the liability in respect of incentive was acknowledged by the assessee in the year in question and as such the expenditure is allowable in the present year. This finding of CIT(A) could not be controverted by Learned D.R. of the Revenue and therefore, we do not find any infirmity in the order of CIT(A) on this issue - Decided against revenue. Addition of of telephone expenses - CIT(A) deleted addition - Held that:- This issue is covered in favour of the assessee by the judgment of Hon’ble Gujarat High Court rendered in the case of Sayaji Iron and Engg. Co. vs. CIT [2001 (7) TMI 70 - GUJARAT High Court] where it is held that even if there is personal use of telephone and vehicles etc. by the Directors / employees of the company, the same can be included in the perquisites value of the concerned Director/ employee but the disallowance cannot be made in the hands of the assessee company. We decline to interfere in the order of CIT(A). - Decided against revenue. Disallowance of under valuation of stock in trade - CIT(A) deleted addition - Held that:- CIT(A) in his order that the assessee company was compelled to change its method of valuation of stock with a view to comply with the requirement of the AS-2 issued by the Institute of Chartered Accountants of India. He has also observed that as per various judgments, the issue is covered in favour of the assessee because in these judgments, it was held that if there is change in the method of valuation of closing stock due to mandatory requirement and that change has been consistently followed by the assessee, no addition is called for. This is not the case of the Revenue that the change in method of valuation of closing stock has not been consistently followed by the assessee after this year and therefore, in our considered opinion, no interference is called for in the order of CIT(A). - Decided against revenue. Disallowance of of expenses on Architect award - CIT(A) deleted addition - Held that:- This is the only objection of the Assessing Officer that the assessee company is not in actual construction business except for the manufacture of one item i.e. cement and therefore, it is not perceptible as to how this item will benefit the business of the assessee. The issue in dispute is regarding expenses incurred by the assessee company in respect of architect award of the year. In our considered opinion, even if the assessee is in the business of manufacturing of only one time of construction material i.e. cement, such an expense on account of architect award, can be very much for business purposes because it will help the assessee company to promote its cement business. This is also noted by learned CIT(A) that the similar claim was allowed in earlier assessment year i.e. 94-95 and also in later year i.e. assessment year 2004-05. Hence, we decline to interfere in the order of CIT(A) on this issue. - Decided against revenue.
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2015 (9) TMI 275
Disallowance of incentive - change in the method of accounting - Held that:- The assessee changed the method of account for these expenses from cash to mercantile during the year under appeal, but still the assessee has claimed some of the expenses on cash basis and some of them on mercantile basis during the year itself. According to section 145 Hybrid System of accounting is not at all allowable now. Therefore, the finding of the ld. CIT(A) is hereby upheld - Decided against assessee. Disallowance in respect of payment of additional remuneration to Managing Director - expenditure has not accrued during the year under appeal - assessee submitted that the amount was subsequently rectified by the Ministry of Company Affairs - Held that:- The requisite approval by the Central Government (Ministry of Company Affairs) was received on 17/05/2007. The assessee has not placed any material on record suggesting that the approval so made by the Ministry of Company affairs was with retrospective effect. Therefore, we do not see any reason to interfere with the order of the ld. CIT(A), same is hereby upheld - Decided against assessee. Disallowance made in respect of advance written off u/s.37 - Held that:- The assessee has placed details with regard to the parties to whom the advances have been given, the authorities below have not made any inquiry from such parties, therefore, we are of the considered view that the disallowance made cannot be sustained in view of the judgement of the Hon’ble Apex Court rendered in the case of TRF Ltd. [2010 (2) TMI 211 - SUPREME COURT] - Decided in favour of assessee. Addition made on the provision for warranty - CIT(A) deleted the addition - Held that:- In view of the judgement of the Hon’ble High Court of Gujarat rendered in the case of CIT vs. Inductotherm (India) Pvt. Ltd. [2015 (9) TMI 218 - GUJARAT HIGH COURT] as held it is important here to mention that even if AO's contention is accepted that it is not possible to exactly determine the amount of liability and if no claims are lodged with the assessee, nothing would be required to be paid, then also I believe in that case the assessee would write back the whole amount of provision to its profit and loss account and there is section 41 in the statute to take care of such amounts if the same is granted as deductible here we do not see any reason to interfere with the order of the ld. CIT(A), same is hereby upheld. - Decided against revenue. Addition made on account of disallowance of penalty expenditure for breach of contract - CIT(A) deleted the addition - Held that:- There is no dispute with regard to the fact that the payments are at Arm’s Length Price (ALP) as held by the TPO. It is an undisputed fact that the contract included the “Affiliates”. It is also an undisputed fact that the expenditure is related to the business of the assessee. Therefore, we do not see any reason to interfere with the findings of the ld. CIT(A) on this issue, same are hereby upheld. -Decided against revenue.
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2015 (9) TMI 274
Addition u/s.68 - CIT(A) restricted part addition - Held that:- The finding of the ld. CIT(A) that there were transactions of cash deposit and withdrawal. This fact is not controverted by the Revenue by placing any contrary material on record. We are of the considered view where there are deposit and withdrawal entries into the bank account, it would be presumed that the amount withdrawn was available with the assessee for depositing the same. Therefore, it cannot be concluded that the entire deposits were from unexplained source. We do not see any reason to interfere with the finding of the ld. CIT(A), the same is hereby upheld. - Decided against revenue. Disallowance of interest expenditure paid towards interest paid to HDFC secured loan - CIT(A) deleted the addition admitting additional evidence - Held that:- There is no specific submission as what were the evidences which were considered by the ld. CIT(A) without giving opportunity to the AO and/or the evidences which were not available before the AO. Therefore, this contention of the Revenue is also devoid of any merit. Thus, we do not see any reason to interfere with the order of the ld. CIT(A), same is hereby upheld - Decided against revenue.
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2015 (9) TMI 273
Notice issued under section 143(2) by the ACIT Circle-2 Udaipur challenged - Held that:- The assessee as per section 124(3) had not challenged the jurisdiction before the AO within one month from the date on which he was served notice under section 143(2) of the IT Act as he challenged the jurisdiction of the ADIT (Intl. Taxation), Jaipur on 12.10.2010 whereas first notice under section 143(2) was issued on 22nd September, 2009. Further, even the objection regarding jurisdiction was raised before the AO which can be entertained by the Commissioner or Chief Commissioner from the date of Notification i.e. 1st September, 2008 as per section 124(2) of the IT Act. The case law cited by the assessee are not squarely applicable. The assessee’s status was non-resident but he filed the return before the ACIT Circle-2 Udaipur, PAN was lying with him as is evident from the processing made by the ACIT, Circle-2, Udaipur on 25.06.2009. The jurisdiction of nonresident was decided by the Addl. Director of Income-tax (International Taxation), Jaipur as per direction of the CBDT issued for non-resident assessee. Therefore, there is no need to pass order under section 127 of the IT Act as Additional DIT (International Taxation) Jaipur had passed the order in pursuance of direction of CBDT. The case laws referred by the assessee are not squarely applicable to the facts of this case. The ld. A/R had not controverted the findings given by ld. CIT (A). Therefore, we confirm the order of the ld. CIT (A). - Decided against assessee. Treatment to the over all income of the assessee as belonging to his wife, received in UK which was only remitted to India and clubbing these receipts in the hands of the assessee under section 64 - Held that:- As per Explanation-1, income accruing or arising outside India shall not be deemed to be received in India within the meaning of this section by reason only of the fact that it is taken into account in a balance sheet prepared in India. Therefore, it is clear from section that in case of assessee non-resident and income accrues or arises outside India shall not be included in the income of the assessee. The shares were held by the assessee. The employer company issued these shares on the basis of Scheme and performance of the assessee. There was a restriction on this Award which proved that these shares were allotted to the assessee but on request same were issued in the name of his wife Smt. Sunita Pathak. It is further held that section 64 is also not applicable on this transaction because assessee is a non-resident and even if it is presumed that these shares were transferred without any consideration to the wife of the assessee who is non-resident being a capital asset not taxable in India on account of status of the assessee. Therefore, same cannot be clubbed in the hands of the assessee as capital asset/capital gain arises/accrued outside India. Further, the case laws relied upon by the assessee are squarely applicable as real owner of the shares was assessee, not his wife. Therefore, same should be taxed in the hands of non-resident assessee but as per section 5(2), this income accrued or arise outside India. Thus there is no tax in the case of the assessee. We are of the considered view that the ld. CIT (A) was not right in upholding the share transaction as taxable in the hands of the assessee. Accordingly we reverse the order of ld. CIT (A). - Decided in favour of assessee.
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2015 (9) TMI 272
Depreciation claim denied - as at the time of acquiring the relevant capital asset, cost of acquisition was considered as application of income in the year of its acquisition thus allowing depreciation would amount to allowing double deduction - assessee is a charitable trust with objects to provide education - CIT(A) allowed claim - Held that:- The issue raised by the revenue in the ground of appeal is thus no longer res integra and has been decided in the case of CIT v. Market Committee, Pipli (2010 (7) TMI 374 - Punjab and Haryana High Court) wherein after considering several decisions on that issue and also the decision of the Hon’ble Supreme Court in the case of Escorts Ltd. (1992 (10) TMI 1 - SUPREME Court ), came to the conclusion that depreciation is allowable on capital assets on the income of the charitable trust for determining the quantum of funds which have to be applied for the purpose of trusts in terms of section 11 of the Act. The Hon’ble Supreme Court in the case of Escorts Ltd. (supra) observed that as dealing with a case of two deductions under different provisions of the Act, one u/s. 32 for depreciation and the other on account of expenditure of a capital nature incurred on scientific research u/s. 35(1)(iv) of the Act. The Hon’ble Court thereafter held that a trust claiming depreciation cannot be equated with a claim for double deduction. Also see CIT v. Society of Sisters of Anne (1983 (8) TMI 44 - KARNATAKA High Court)- Decided against revenue. Entitlement to trust to carry forward expenditure incurred in excess of its income for setting off against income of the succeeding years - CIT(A) allowed claim - Held that:- So long as the expenditure incurred is on religious or charitable purposes, it is the expenditure properly incurred by the trust, and the income from out of which that expenditure is incurred, would not be liable to tax. The expenditure, if incurred in an earlier year is adjusted against the income of a later year, it has to be held that the trust had incurred expenditure on religious and charitable purposes from the income of the subsequent year, even though the actual expenditure was in the earlier years, if in the books of account of the trust such earlier expenditure had been set off against the income of the subsequent year. The expenditure that can be so adjusted can only be expenditure on religious and charitable purposes and no other. See CIT Vs. Society of Sisters of St. Anne ((1983 (8) TMI 44 - KARNATAKA High Court). - Decided against revenue.
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2015 (9) TMI 271
Restricting the exemption claimed u/s 54 to the amount invested @ ₹ 3000/- per sq.ft. in Flat No.301 (1325sq.ft.) denied by CIT(A) - Held that:- In CIT & Anr. vs. D. Ananda Basappa (2008 (10) TMI 99 - KARNATAKA HIGH COURT) observed that expression "a residential house" should not be understood to indicate a singular number; assessee having purchased two residential flats, exemption under s. 54 was available, more so as these flats are situated side by side and the builder has effected modification of the flats to make it as one unit. Following CIT vs. D. Ananda Basappa (Supra) it was held in CIT & Anr. vs. Smt. K.G. Rukminiamma (2010 (8) TMI 482 - Karnataka High Court) that expression "a residential house" used in s. 54 should be understood in a sense that the building should be of residential nature and "a" should not be understood to indicate a singular number. Assessee was entitled to claim exemption under s. 54 in respect of four residential flats acquired by her. The CIT(A) has followed the decision of the Hon’ble jurisdictional High Court and therefore the said order does not require any interference. The Assessee was therefore entitled to exemption u/s.54 of the Act in respect of the two flats which were both located in the third floor. - Decided against revenue.
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2015 (9) TMI 270
Disallowance of interest expense u/s 40(a)(ia) - failure to deduct income tax at source and non procurement of Form 15G from the parties within the stipulated time - Held that:- Assessee has submitted Form 15G well in the stipulated time-limit along with all the relevant details and disallowance u/s 40(a)(ia) of the Act cannot be made only for topographical error in filling the verification date in duplicate Form 15G filled up by payees. All the original Form 15G were received by the assessee before the end of FY 2007-08 and those have been submitted to the Department before 07-04-2008 and assessee was correct in not making deduction of TDS as per the provision of Sec. 197A (1A) of the Act and as such, reverse the orders of authorities below and delete the disallowance of interest claimed by the assessee. - Decided in favour of assessee.
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2015 (9) TMI 269
Penalty u/s 271(1)(c) - Loss incurred on purchase and sale of shares treated as short-term capital loss or business loss - FDR interest and dividend received assessed under the head “income from other sources” or “income from business” - Held that:- The findings recorded in the assessment proceedings insofar as “concealment of income” and “furnishing of incorrect particulars” would not operate as res judicata in the penalty proceedings. It is open to the assessee to contest the said proceedings on merits. However, the validity of the assessment or reassessment in pursuance of which penalty is levied, cannot be the subject matter of penalty proceedings. The assessment or reassessment cannot be declared as invalid in the penalty proceedings - Penalty deleted - Decided in favour of assessee.
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2015 (9) TMI 268
Penalty u/s.271(1)(C) - addition made invoking the provisions of section 69A - Held that:- There is no dispute with regard to the fact that neither the transactions were not disclosed nor the Bank Account in which the cash deposits have been made were disclosed to the Revenue Authorities. The only explanation for not disclosing the transactions are that there was loss in share transactions, therefore the assessee has not reflected the same in the return of income. But the question remains that what about the source of such cash deposits which was made into the bank account. The ld.counsel for the assessee could not explain satisfactorily about the cash deposits neither in the quantum proceedings nor in the penalty proceedings. It was incumbent upon the assessee to furnish the true and correct particulars of income. In the case in hand, it is transpired from the records that the assessee has failed to disclose the Bank Account on various dates cash deposits were made. Under these facts, we do not see any reason to interfere with the findings of the authorities below. However, ld.counsel for the assessee submitted that in the quantum proceedings, the Tribunal has reduced the addition from ₹ 37,75,000/- to ₹ 14,19,919.88 in assessee’s own case for AY 2008-09. We, therefore, direct the AO to delete the penalty on the addition in sum of ₹ 23,55,080/-. - Decided partly in favour of assessee.
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2015 (9) TMI 267
Reopening of assessment - Held that:- In the present case, on the basis of the clause no. 2 of the Supplementary Agreement dated 29.04.2002, cogent material was available before the A.O. to form prima facie belief about escapement of income in the present year. It is not relevant that in spite of this material, it was held by Hon’ble Allahabad High Court in assessee’s own case for assessment year 2006-07 [2014 (12) TMI 686 - ALLAHABAD HIGH COURT ] on the basis of circumstantial evidence that possession was in fact handed over by the assessee in F.Y. 2001 – 02 relevant to A.Y. 2002 – 03. Be that as it may but in view of this cogent material available on record and also in view of this fact that even the judgment of Hon’ble High Court about handing over of the possession in F.Y. 2001 – 02 is on the basis of presumption after considering various circumstantial evidences, it cannot be said that there was no valid basis for reopening. In view of above discussion, we do not find any infirmity in the order of CIT (A) on this issue. Accordingly, these grounds of the assessee are rejected. Capital gain accrue or arise or not in the present AY or not - Transfer u/s 2(47) - Held that:- In the present case, the assessee has not offered the capital gain in any year i.e. A.Y. 2000 – 01 being the year of initial agreement or in A.Y. 2002 – 03 being the year in which possession was given as per the assessee and transfer has taken place as per the judgment of Hon’ble High Court [2014 (12) TMI 686 - ALLAHABAD HIGH COURT ] or in A.Y. 2003 – 04 i.e. the present year when supplementary agreement was executed or in A.Y. 2006 – 07 when completion agreement was executed. This is also very important that even as per the judgment of Hon’ble High Court, this does not come out that there is any clear cut evidence about handing over of possession in F.Y. 2001 – 02 relevant to A.Y. 2002 – 03 but the claim of the assessee was accepted by Hon’ble High Court on the basis of surrounding circumstances. In view of these facts, we feel it proper to give consequential direction to the A.O. to tax this capital Gain in A.Y. 2002 – 03 being the year in which the transfer has taken place as per the judgment of High Court. Accordingly Assessing Officer is directed to compute the capital gain in assessment year 2002-03 in accordance with law and tax the same. - Decided in favour of assessee.
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2015 (9) TMI 265
Compensation recived on compulsory acquisition of land - treated as Long term capital gains - whether compensation received is fully exempt u/s 10(37)? - Held that:- Decided in favour of the assessee by the order of the Hon’ble Gujarat High Court in case of one of the co-owners of the property, Shri Amrutbhai S. Patel [2013 (5) TMI 449 - GUJARAT HIGH COURT] wherein held merely because the assessee was not residing close to the land or was also pursuing some other business would not by itself be sufficient to hold that the land was not used for agricultural purposes by the assessee. The Tribunal recorded that in the earlier years, the assessee had declared agricultural income, which was also accepted by the Revenue. - Decided in favour of assessee.
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2015 (9) TMI 264
Condonation of the delay in filing the appeal before the Tribunal - delay for over five years - Held that:- No cogent reason has been given by the department for inordinate delay in this case. As per the contents of the application for condonation of delay of the Revenue, the due date of filing of the appeal before the Tribunal was 20th June, 2007. The present appeal was filed before the Tribunal on 18th December, 2012, and thus there is a delay of over five years i.e. 2005 days wit the only reason of the department in the condonation application is that while handing over the charge by the AO, the above case might not been mentioned in the handing over note exchanged by the officers relieved and taking over the charge of Circle 4, Ahmedabad, and accordingly the aspect of filing of the appeal to ITAT might not been taken into account by the officer taking over the charge of circle 4, Ahmedabad. No other reason has been stated on behalf of the Revenue. The reason advanced for the inordinate delay for over five years could not be said to be a sufficient reason for delay in filing the appeal before the Tribunal, and in our view, it shall be a wrong precedent to encourage such casual attitude of the appellant, by admitting the appeal by condoning inordinate delay for no valid reason. Thus dismiss the appeal by the Revenue in limine and refuse to condone the delay in filing the present appeal before the Tribunal. - Decided against revenue.
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2015 (9) TMI 263
Reopening of assessment - difference of ₹ 5,79,332 in the gross receipts reflected in the TDS certificates, vis-avis the gross receipts as per in the Profit & Loss Account - Held that:- In the present case before us, since no additions were made in relation to the grounds for which the assessment was reopened, the scope of additions cannot be enlarged to include incomes which are not within the realm of the re-opening of the assessment. The reopening of the assessment, as per the reasons recorded for that purpose, was only in relation to reconciliation of receipts shown in the TDS certificates and the receipts credited in Profit & Loss Account, and hence, following the decision of the Bombay High Court in the case of Jet Airways (2010 (4) TMI 431 - HIGH COURT OF BOMBAY ), we find that the impugned re-assessment made by the Assessing Officer cannot be upheld. As decided in case of Meheria Reid & Co. Vs. ITO, [2013 (2) TMI 348 - ITAT KOLKATA] a variation in the two figures does not necessarily lead to escapement of income – Mere need to verify the discrepancy does not bring the matter within the scope of cases in which reassessment proceedings can be validly initiated – There is subtle, though significant, distinction between reason to believe and reason to suspect – While the former is good enough to hold that income has escaped assessment and initiate suitable remedial measures in respect thereof, the latter can, at best, be the ground to verify and examine the matter further – Mere fact that matter needs to be verified and examined further can never be a reason good enough to believe that income has escaped assessment and to invoke the reassessment proceedings. Thus we cancel the re-assessment made under S.14(3) read with S.147 - Decided in favour of assessee.
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Customs
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2015 (9) TMI 317
Valuation - Import of Oracle packaged software - condition of sale or condition of use - Whether the licence fee paid by OIPL to its parent company Oracle USA is includible in the assessable value of imported media packs – the licence fee has actually been collected from the customers and a part of it (56%) remitted by OIPL to Oracle USA. Ld. counsel has strenuously argued that the licence fee remitted by OIPL to Oracle USA was not a condition of sale and only a condition of use. - Held that:- licence fee is includible in the assessable value only if it is paid or required to be paid as a condition of sale. As stated earlier, it is a settled legal position with which both sides also agree and therefore we do not need to refer to each of those judgements/opinions. As it is, whether the licensee fee paid or was required to be paid as a condition of sale is essentially more a question of fact than of law. In every case of commercial imports, Oracle USA and Oracle Ireland were fully aware that the order has been uploaded/scanned into Oracle Order Management System only after the customer agreed to pay the licence fee for the software and this information was available to Oracle USA as well as Oracle Ireland before the shipment was made. OIPL was incorrect when it claimed initially that it was a case of stock and sale and that the software imported from Ireland could be given to any customer, commercial or non-commercial. It comes out clearly that each software which was shipped was in the knowledge of Oracle USA and each shipment came for a particular Indian customer identified by the unique order number generated. - In the wake of the factual matrix of the case, we hold that in respect of commercial imports of media packs, the licence fee remitted by OIPL to Oracle USA was includible in the assessable value. - Decided against the assessee. However, any subsequent (post importation) increase in the number of users of the software imported in the form of physical media packs was neither known at the time of import nor was it a condition of sale and therefore licence fee remitted on that account cannot be said to be a condition of sale and hence would not be includible in the assessable value and customs levy thereon would also be hit by the absence of collection mechanism - Decided in favor of assessee. Non commerical use of Media pack - inclusion of notional licence fee - Held that:- Clearly stated in Software Duplication and Distribution Licence Agreement between Oracle and company that Royalty/sub-licence fee shall not accrue on licences put to internal use as trial/ demonstration licences – Thus, no licence fee was payable – Therefore demand cannot be sustained. - Decided in favor of assessee. Levy of custom duty on softwares downloaded electronically – whether software downloaded electronically will be liable to customs duty on same lines as duty leviable on such software imported as media packs – Held that:- Supreme Court in case of Tata Consultancy Services [2004 (11) TMI 11 - Supreme Court] held that software even in its intangible form are goods and therefore electronic download of software from server located abroad would get captured in scope of import of goods – From provisions of Customs Act, 1962, it is evident that entire Customs Act provides mechanism/procedure for levy and collection of duty only in respect of tangible goods – Software is intangible, can be downloaded anywhere, from anywhere, at any time and none of provisions of Customs Act, 1962 are capable of being applicable/ enforceable in respect of such downloads – Thus, electronically downloaded software is not liable to customs duty – Decided in favour of assessee. Extended period of limitation - Mis-Statement of facts – Whether there was wilful mis-statement of fact on appellants’ part with intention to evade payment of duty – Held that:- Company had made complete disclosure regarding its commitment to remit 56% of licence fee to Oracle in its FIPB application is certainly indicative of fact that it did not have any intention to hide this fact – Seizure took place when customs could hardly claim that company had not disclosed facts about remittance of licence fee to Oracle – Further fact that appellant had followed same system, procedure and practice of declaring assessable value even during prior periods when there was no duty to be evaded at all – There is evidence on record that company submitted details about their relationship with Oracle to Customs and so allegation that company suppressed fact stands negated – No evidence to sustain charge of wilful mis-statement / suppression of facts, therefore allegation of wilful mis-statement/suppression of facts is not sustainable – Impugned demands, redemption fines and penalties on appellants set aside – Demand set aside on the ground of period of limitation - Decided in favour of assessee.
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2015 (9) TMI 292
Provisional release of goods – Fulfilment of condition for release – Applicant stated that entire duty of consignment have already been deposited based on value approved by Government approved valuer's report and, thus, no Bank Guarantee/Security was required for release of goods –Assistant Commissioner(Customs) directed release of seized goods provisionally on conditions –However later Assistant Commissioner(Customs), requested to retain 25% of value of goods as security in lieu of Bank Guarantee and release remaining goods – Held that:- without expressing any opinion on merits of case, at this stage, court to stay condition of retaining 25% goods and direct respondents to release whole goods on other conditions imposed on letter of provisional release – In view of aforesaid application allowed – Decided in favour of Applicant.
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2015 (9) TMI 291
Non-compliance of conditional advance licence – Imposition of Duty – Delay in adjudication – Petitioner-1 was issued conditional advance licence and compliance was to be made with condition that petitioners would export polythene/viscose blended fabric – As there was collusion between 2nd petitioner and third party, incorrect/manipulated/false information regarding quantities/weight/composition of exported goods was provided to show compliance of terms and conditions of licence and demand of duty was confirmed – Held that:- Admittedly petitioners addressed several letters requesting authorities to proceed with matter or to drop proceedings and retain money already deposited in lieu of demanded duty – 18 years have lapsed since notice was issued and revenue cannot merely issue show cause notices and thereafter not take steps to adjudicate matter in accordance with law – Revenue directed to furnish the details of pending cases.
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2015 (9) TMI 290
Suspension of License - Vide impugned order of tribunal reported in [2007 (2) TMI 544 - CESTAT, CHENNAI] application filed for condoning delay of 64 days was dismissed for being time barred - It was submitted by learned counsel for appellant that period of suspension ordered against respondent was for period of 18 months from 23-8-2005, which has come to end on 23-1-2007 - It was observed by high court that since period was already over, it was therefore submitted that nothing further survives for adjudication - It was further submitted that respondent as on date was in possession of valid licence - Since period of suspension was already over and further respondent was having licence, issue does not require further consideration - In view of above, appeal closed.
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2015 (9) TMI 289
Finalisation of Assessment – Petitioner sought to finalise assessment, within time frame that may be fixed by Court – Respondents submitted that prayer sought for asking authority to take into account decision of Commissioner and then to pass appropriate orders, may not be granted, as each fact will have to be considered based upon facts and circumstances of case – Taking into account facts and circumstances of case, court direct authority to finalise assessments and to re-assess Bill of Entry and to pass appropriate orders in accordance with law, after giving opportunity of personal hearing to petitioner.
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2015 (9) TMI 288
Classification of Goods - Beech wood - Tribunal vide impugned order reported in 2007 (6) TMI 27 - CESTAT, CHENNAI classified goods under SH 44.03 (wood in rough) - Whereas Appellant contended it should fall within the category of Heading 44.07 - Therefore appeal was filed against said order of classification - As neither appellant nor respondent was not present, showing that parties were not interested in pursuing matter - Thus, appeal dismissed for non-prosecution.
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Service Tax
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2015 (9) TMI 316
Management Consultancy Service - appellants were advising the clients about various aspects relating to Management. The services are not executionery in nature and are clearly advisory in nature. - Held that:- Regarding the appellants’ contention that the said services would be appropriately covered in the category of support services of business or commerce, or Business Consultancy Service, the same is not tenable because as per the definition of support service for business or commerce, the activities covered thereunder are essentially executionery in nature. - the impugned services rendered to Transocean/Tidewater categorically and unambiguously fall within the ambit of Management Consultancy Service. - Decided against the assessee. Export of services - amount received from ONGC to be treated as receipt in foreign exchange or not - Held that:- Such payments do not reflect in the Govt. records as foreign exchange received in the country nor such payments reflect in the trade statistics of import and export. These are not mere procedural aspects and have legal and policy consequences. - It is pertinent to mention that once the RBI is taken in the loop, such transactions will not go unnoticed for the purpose of the relevant data bases of India’s international trade and foreign exchange transactions and will also not remain under the radar of the laws relating thereto. Thus, the impugned payments made by ONGC to the appellants do not merit to be treated as payments received in foreign exchange. - Decided against the assessee. Extended period of limitation - Held that:- For a service provider of this stature, something positive has to be shown to demonstrate that they had made reasonable efforts or had taken reasonable steps to ascertain legal position with regard to taxability of their impugned activities for the purpose of forming their purported reasonable belief. Mere presumption of non-taxability can never be equated to “reasonable belief” in that regard. Thus, the conclusion is inescapable that they deliberately did not take registration and pay the impugned service tax with a view to escaping the liability and when caught, pretended to be having reasonable belief about the non-taxability. Thus invocability of extended period and mandatory penalty is unexceptionable. Demand of service tax confirmed - penalty u/s 78 reduced - Decided against the assessee.
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2015 (9) TMI 315
Export of services - claim of rebate - Notification No. 11/2005, dated 19-4-2005 issued under Rule 5 of the Export of Services Rules, 2005 - A contention of Revenue is that the element of service tax which is mandatorily required to be mentioned under Rule 4 of the Service Tax Rules is not shown in the export invoices. - Held that:- omitting to mention amount of service tax on the invoices when there is documentary evidence showing payment of service tax in the books of accounts maintained by the appellant, cannot debar them from the claim of rebate under Notification No. 11/2005. Revenue authorities should have co-related the huge volume of documents submitted by the appellant, no matter how voluminous, before arriving at a judicious decision. In view of the documents placed on record and. their co-relation, we hold that the rebate is admissible to the appellants on merits. Details of services exported are not mentioned in the Softex Forms. - Held that:- since the service mentioned in the Softex Forms is the same as that mentioned in the invoices which have been shown to co-relate with the specific services falling under Section 65(105) in the documents submitted by the appellant to us as well as to the Revenue authority the contention is not correct. Admissibility of Cenvat credit on the input services - Held that:- There are two parts to this objection; the first is whether Cenvat credit would be available to these units in respect of input services received by them. We find no provision in law which debars this. The second part of the argument is the taxability of service exported from the SEZ units. Here also there is nothing in the statute which says that the tax should not be paid on taxable service exported from the SEZ units. We reject this contention also. The rebate claim relates to the years 2008-2009 and 2009-2010. Already six years have passed. We have held that rebate is admissible merits. At the same time, this Tribunal cannot go into the verification of the quantum of refund. Refund allowed - matter remanded back for limited purpose of verification of the quantum of rebate to be sanctioned to the appellant - Decided in favor of assessee.
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2015 (9) TMI 311
Denial of refund claim - Bar of limitation - Duty paid under protest - Held that:- In the G.A.R. -7 Challans dated 5.3.2009, 31.3.2009, 3.7.2009 and 5.10.2012, the appellant has not endorsed the words under protest. Where as in GAR-7 Challans dated 28.4.2010, 5.7.2010, 3.7.2010, 4.10.2010, 4.1.2011, 4,4,2011, 5,7,2011, 4.10.2011 3.1.2012, 31.3.2012 and 4.01.2013 the appellant has marked the words under protest. The refund claim is filed beyond a period one year after deposit. The amount as per these challans have been sanctioned. It is evident that the appellant has not deposited the rejected amount under protest. Thus the claim is barred by limitation as provided under Section 11B of Central Excise Act, 1944. Therefore I do not find any infirmity with the impugned order. - Decided against assessee.
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2015 (9) TMI 310
Business Auxiliary service - Denial of SSI exemption - whether the commission received by the appellants from the banks is chargeable to service tax under Section 65 (19) of the Finance Act, 1994 under Business Auxiliary Services - whether small scale exemption will be admissible to the appellants or not - Held that:- services provided by these appellants as a Commission Agents are classifiable as Business Auxiliary Services. Appellants are arranging loans for the banks and thus promoting marketing the services provided by the Banks and are paid commission on such services from the bank. These activities have been correctly held to be classifiable under Business Auxiliary Services. So far as admissibility of small scale exemption notification is concerned, the services are provided to the customers on behalf of the banks and appellants are only acting as an agent of service provider. Accordingly, admissibilities of small scale benefit has been rightly denied by the First Appellate Authority as appellants are providing branded services on behalf of the banks. - Decided against assessee.
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2015 (9) TMI 309
Leviability of service tax - services provided by a person situated out of India - Held that:- The issue has been finally settled by Hon’ble Supreme Court in the case of Union of India vs. Indian National Ship Owners Association [2009 (12) TMI 850 - SUPREME COURT OF INDIA] when Revenue appeals against Bombay High Courts order in the case of UOI vs. M/s Indian National Ship Owners Association (2008 (12) TMI 41 - BOMBAY HIGH COURT), was dismissed - Decided against Revenue.
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2015 (9) TMI 308
Management, Maintenance or Repair Service - activity of reconditioning - Invocation of extended period of limitation - Held that:- Admittedly, reconditioning and restoration was not available in the definition of Management, Maintenance or Repair Services prior to 16.05.2005 and same was specifically introduced with effect from 16.05.2005, Thereafter, this Tribunal has arrived at a decision that for the period prior to 16.05.2005 the definition of Management, Maintenance or Repair Services did not cover the reconditioning and restoration service. In this case the show cause notice has been issued by invoking extended period of limitation as the issue was before this tribunal where for the period prior to 16.05.2005 the activity of reconditioning is includable in the definition of Management, Maintenance or Repair Services in this dispute, therefore, extended period for limitation is not invokable. - activity of reconditioning by the appellant was not covered in the definition of Management, Maintenance or Repair Services for the period prior to 16.05.2005. In these terms demand of service tax is not sustainable against the appellant. Consequently, demand of interest and imposition of penalty are also not sustainable. In view of this, the impugned order is set aside - Decided in favour of assessee.
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2015 (9) TMI 307
Denial of refund claim - Amount paid under protest - relevant date - period of limitation - GTA service and business auxiliary service - Held that:- appellant had paid the amount during the course of investigation on the advice given by the investigating officer (it might be force) and after adjudication process, if the demand is dropped, the amount deposited has to be considered as pre-deposit or a deposit. Therefore in this case also, the limitation has to be accounted from the date of the adjudication order and not from the date of deposit of the amount. Therefore I do not find anything wrong in the impugned order - Decided against Revenue.
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2015 (9) TMI 306
Denial of CENVAT Credit - goods transport agency service - Held that:- prior to 01.04.2008 when the inclusive part of the definition allowed CENVAT credit in respect of outward transportation from the place of removal, would be valid and credit will be allowable in respect of outward transportation from the place of removal till 01.04.2008, the date on which the words "from the place of removal" were replaced by words "up to the place of removal". It is not the case of the Revenue that the appellants have taken CENVAT credit in respect of transportation from a point "beyond the place of removal". Moreover, it is the claim of the appellant that they had sold the goods on "FOR" destination basis and therefore, the credit was admissible even if definition was to be read as providing for credit "up to the place of removal" - Decision in the case of CCE & ST (LTU) Bangalore Vs ABB Ltd. [2011 (3) TMI 248 - KARNATAKA HIGH COURT] followed - Decided in favour of assessee.
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Central Excise
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2015 (9) TMI 313
Valuation - Related person - Apex Court uphold the decision of tribunal [2003 (3) TMI 597 - CEGAT, BANGALORE] wherein tribunal has sustained the order of Commissioner (Appeals) who has stated that, "ECIL has been accused of forming the joint venture with a view to depress the assessable value of the impugned goods and thereby evaded payment of the appropriate Central Excise duty. It should be noted that the ECIL is Government of India Enterprise under the Department of Atomic Energy and formation of the joint venture, viz., ECIL Rapiscan has the tacit approval of the Government. It is, therefore, too much to make such a wild allegation against them."
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2015 (9) TMI 312
Valuation of free samples - samples are distributed free to the physicians - Held that:- CESTAT has accepted that the method of valuation would be `cost of production or manufacture of the goods'. To this extent the grievance of the appellant herein stands redressed. Insofar as the present case is concerned, since substantial relief is already granted to the appellant in the rectification orders passed by the CESTAT, it is not necessary to deal with the remaining period which shall be covered the order passed by the Tribunal in the instant case. - Decided against the assessee.
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2015 (9) TMI 301
Validity of Tribunal's order - Tribunal dismissed appeal as not being the civil court - Matter before Tribunal is as to who is the proper party to the case - Held that:- Besides demand of duty, penalty has also been imposed upon Sri Pramod Kumar Goyal being the active Director and that the appeal before the Commissioner (Appeal) was contested on behalf of the company by Sri Pramod Kumar Goyal, however, in no circumstance the Tribunal can refuse to enter into the issue as to whether the appeal as filed by Sri Pramod Kumar Goyal was competent or not i.e. it had the backing of a valid resolution of the company or not. Such issues must necessarly be gone into by the Tribunal only for the purposes of ascertaining as to whether the appeal on behalf of the company has been filed by a competent person or not and nothing beyond it. Any other inter se dispute between the two Directors of the Company had not be examined by the Tribunal. Tribunal has misdirected itself in dismissing the appeal only on the ground that a dispute has been raised with regard to the correctness or otherwise of the resolution said to have been made in favour of Pramod Kumar Goyal in the matter of filing of the appeal. The Tribunal must adjudicate upon the said issue on the basis of the material brought on record before it and must decide as to whether the appeal as presented was competent or not. All issues on merits of the maintainability of the appeal are left open to be examined by the Tribunal as per the evidence led by the parties and after affording opportunity to them. - order impugned passed by the Tribunal cannot be legally sustained and is hereby quashed - Decided in favour of assessee.
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2015 (9) TMI 300
Rectification of mistake - Rectification Application came to be dismissed under the order of the Tribunal dated 05.01.2001 on the ground that the two orders referred to by the department were independent orders and no mistake has crept in the order of the Tribunal. - Held that:- An application for rectification is made for the purposes of making corrections of the mistakes in the order of the Tribunal which are apparent. If such application is rejected by the Tribunal, it will not mean that the department has given up its right to seek reference of the question of law, which in the opinion of the department, arise from the order of the Tribunal. - Tribunal was under an obligation to examine as to whether the question of law as sought to be referred to the High Court arise from the order of the Tribunal or not. The Reference Application could not have been dismissed as infructuous only because the rectification application has been dismissed as withdrawn - Tribunal dated 01.06.2001 cannot be legally sustained. It is hereby quashed - Decided in favour of Revenue.
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2015 (9) TMI 299
Duty demand - Confiscation of goods - Imposition of penalty - Held that:- A Division Bench of this Court in the case of Commissioner of Central Excise & Customs v. Stovec Industries Ltd. reported in [2013 (1) TMI 72 - GUJARAT HIGH COURT] held that in view of Circular dated 17-8-2011, tax appeal involving the duty amount below ₹ 10 lakh is not maintainable and this Circular also applies to the pending appeal. Following the aforesaid decision of the Division Bench, we dismiss this tax appeal as not maintainable - Decided against Revenue.
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2015 (9) TMI 298
Waiver of pre deposit - Financial crisis - Held that:- the materials on record, the statements of the parties, the affidavit placed on record together with copies of the ITR, balance sheets and the statement of affairs clearly indicate that the appellant is in acute financial crisis and would not be able to pay any amount. In these peculiar circumstances, the requirement of depositing any pre-deposit amount is hereby set aside - stay granted.
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2015 (9) TMI 297
Duty demand - Manufacturing activity or repair activity - Assessee received defected compressors - Held that:- there is clear distinction between the newly manufactured compressor and repaired one. It is also observed that if it is assumed that the repair claimed by the Appellant is not repair and it is a manufacture in terms of Section 2(f), then as per the nature of the product, there will be no concept of repair in respect of compressor and the like goods, for the reason that there can not be any process other than the process carried out by the Appellant in the present case for repair of the compressor. Obviously, if any defective compressor needs to be repaired, these very activities are required to repair the compressor - activity carried out by the Appellant on the defective compressor is clearly an activity of repair and by no stretch of imagination, it can be called as ‘manufacture' - Decided in favour of assessee.
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2015 (9) TMI 296
Clandestine removal of goods - Imposition of penalty - Held that:- Appellant No.5 M/s. Vandevi Texturisers (P) Limited and its CEO Appellant No.6 indulged the whole conspiracy with Appellant No. 1, 2 and 3 in hand in gloves in clandestinely disposal of the goods. All were directly involved in disposal of the goods in open market in different roles as stated in the Adjudication order Quantum of penalty are excessive. As regards the imposition of penalty on Shri Rashid Sadatali Saiyed, the Commissioner (Appeals) has already observed that the said person was exploited by Appellant No. 2 and 3 and was under compulsion. It is also noticed that the penalty was imposed on the partnership firm, so, the penalty on Shri Rashid Sadatali Saiyed (Appellant No.4) is not warranted. The Hon'ble Gujarat High Court in the case of Pravin N. Shah vs. CESTAT - [2012 (7) TMI 850 - GUJARAT HIGH COURT], held that separate penalty not imposable upon partner of firm because partner is not a separate legal entity and cannot be equated with employee of firm. In that case, the important question of law before the Hon'ble Court was, “Whether in the facts and circumstances of the case, the Tribunal was right in upholding the penalty of ₹ 10,00,000/- imposed on the appellants under Rule 209A of the erstwhile Central Excise Rules, 1944 now Rule 26 of the Central Excise Rules, 2001”. The Hon'ble Court answered to the question in favour of the appellant and set-aside the penalty on the partner. - Penalty imposed on appellant 1 & 2 is reduced - Decided partly in favour of assessee.
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2015 (9) TMI 295
Demand towards 10%/5% of value of exempted electricity generated and supplied in term of Rules 6(3) Cenvat Credit Rules, 2004 - Held that:- Demand of 10%/5% of the value of electricity generated and supplied to M/s. MSEB was made in terms of Rule 6(3) of Cenvat Credit Rules, 2004. The undisputed fact is that the appellant is sugar/molasses manufacturing unit, electricity so generated and supplied to M/s. MSEB is manufactured out of bagasse. - issue that 10%/5% value of electricity generated from use of bagasse and sold to M/s. MSEB is applicable in terms of Rule 6(3) of Cenvat Credit Rule is settled in favour of assessee and accordingly the impugned order is not sustainable. - Decided in favour of assessee.
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2015 (9) TMI 294
Manufacture of semi finished battery management systems electrical panels, air-cooling systems and regulators on Job work basis - Marketability - Exemption under Notification No.50/2003-CE - Simultaneous availment of exemption under Notification No.214/1986-CE - Held that:- If the goods being cleared by M/s.MI Telecom are incomplete battery management system, electrical panel, air-cooling system and line regulators and complete goods emerged only in the premises of M/s. Acme, the incomplete goods being cleared by M/s.MI Telecom cannot be presumed to be marketable and hence excisable unless the Department leads the evidence in this regard, which we do not find in this case. In such a situation the judgment of Tribunal in the case of M/s. AIumeco India Extrusion Ltd. [2009 (5) TMI 402 - CESTAT, BANGALORE] would be applicable. The impugned order is, therefore, set aside and the matter is remanded to the Commissioner for de-novo adjudication for giving a specific finding after considering the appellant's plea based on the documents produced by them that the goods which are being cleared by them, to M/s.Acme are incomplete battery management systems, incomplete electrical panel, incomplete air-cooling system and incomplete line regulators and as such are not marketable and, therefore, are non excisable. - Matter remanded back - Decided in favour of assessee.
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2015 (9) TMI 293
Denial of CENVAT Credit - Rule 9A - Transitional provisions for textile and textile articles - physical content of the inputs in process - claim rejected towards process loss - Held that:- Right from the stage of issue of show cause notice upto the stage of the order of the Tribunal, the claim of the appellant that they incur a manufacturing loss to the extent of 5% of the total quantity of the finished product, has not been disputed by the Department. In cases where there is a dispute about the existence of a loss and in cases where there is a dispute with regard to the quantum of loss, the questions may have to be left open. But, in cases where the quantum of manufacturing loss claimed at 5% by the appellant is never disputed by the Department from the stage of issue of the show cause notice upto the stage of the order of the Tribunal, the interpretation given to Rule 9A cannot be accepted. - appellant was right in making a claim for CENVAT credit, with reference to the total quantity and the value of the inputs that went into the making of the fabric. - Decided in favour of assessee.
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2015 (9) TMI 266
Penalty u/s 11AC - Interest u/s 11AB - Demand of differential duty - Held that:- There is no dispute that the appellant transferred the goods to their own unit at Kosamba and the duty paid by them would be eligible to cenvat credit to the other units. - Therefore there is Revenue neutrality in this case despite the fact that the appellants have not determined the correct value of the each grade of the Barium Carbonate. In the present case, it is evident that the demand of duty by show cause notice dtd 20th Sept. 2007 for the period 13.7.2004 to 30.9.2004 invoking extended period of limitation would not survive. Hence, the demand of interest and imposition of penalty would also not maintainable. - demand of interest and imposition of penalty are not warranted. Accordingly, the same are set aside. - Decided in favour of Assessee.
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CST, VAT & Sales Tax
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2015 (9) TMI 314
Sale against ST-1 Form - DVAT - correctness of ST-1 - denial of deduction - The Assessing Authority (hereafter ‘AA’) had found that the relevant account (ST-2 account) filed by certain dealers ( hereafter referred to as ‘purchasing dealers’) who were stated to have purchased goods from the Appellant against the ST-1 Forms - Held that:- it is well established that a selling dealer would have no duty to examine the correctness of the Form ST-1 submitted; the selling dealer would also not be responsible for any misapplication of goods by the purchasing dealer or failure on the part of the purchasing dealer to maintain the correct records. Clearly, the Assessee could not be held responsible for any discrepancy in the ST-2 Account furnished by the purchasing dealer to the Sales Tax Authorities. Assessee had produced documents for the sale of goods and the duly receipted invoices along with original ST-1 Forms coupled with receipt of consideration through bank drafts and cheques that would clearly establish the transactions claimed by the Assessee. The AA was unduly influenced by the ST-2 Account filed by the purchasing dealer and the fact that the purchasing dealers were not found in existence at the time of making the remand assessment order. We find it difficult to sustain the denial of deduction claimed by the Assessee for the sales made against ST-1 Forms. - Decided in favor of assessee.
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2015 (9) TMI 305
Maintainability of Suit – Statutory Bar to entertain Suit – Plaintiff’s company was unable to repay its debt and Haryana financial corporation took possession of company including its pledged buildings, machinery, land etc and were put to auction – Simultaneously company failed to provide C-form and assessing authority under Haryana General Sales Tax Act, 1973 consequently served summons to make payment of amount due – Plaintiff seeking proper remedies and to be allowed to still furnish C-forms – Held that:- There was clear bar in Sub Sections 1 and 2 of Section 62 of Act, 1973 that civil courts were statutorily divested of jurisdiction to entertain suits under section 9 of CPC – There was not only bar on civil court but ordinarily even writ petition was not maintainable – Suit filed by plaintiff was wholly misconceived and not maintainable before civil court and was clearly in abuse of process of law – Therefore, appeal dismissed – Decided against Plaintiff.
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2015 (9) TMI 304
Detention of goods for carrying incorrect documents – One time payment for release of goods – Petitioners goods were intercepted in transit and on verification of goods and records, even though goods were accompanied with required documents, respondent detained goods and vehicle – Respondent thereafter issued impugned Goods Detention Notice for reason that in Gujarat Transit Pass, Consignor Name / Consignee Name and name mentioned in invoice were different – Held that:- Admittedly main issue was related to not mentioning correct name of consignee – Petitioner agreed to pay one time disputed tax and on such payment, goods may be directed to be released – Payment of one time tax immediately for release of goods was acceptable to respondent – Thus, respondent to quantify one-time tax payable – On receipt of proof of such payment being made by petitioner, 1st respondent directed to release goods forthwith – Petition disposed of –Decided in favour of Assesse.
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2015 (9) TMI 303
Benefit of compounding scheme – Benefit of compounding scheme was not made available to assesse during assessment year in question only on ground that application made for obtaining benefit under said scheme during said assessment year was belated – Held that:- Tribunal vide impugned order held that it is undisputed that assessee had been given credit of said scheme in previous year – There is no fixed time-limit in scheme disclosing period of its enforceability and, accordingly, there remains sufficient basis for bona fide on part of assessee to believe continuance of previously opted compounding scheme during relevant year – Whereas, scheme has not been brought on record along with papers submitted with revision application – Therefore there is no reason to interfere – Decided against revenue.
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2015 (9) TMI 302
Benefit of Exemption as per notification – Use of Handmade paper in manufacturing - Tribunal vide impugned order reversed decision of Appellate Authority in which authority stated that onus of establishing that assessee does not come within exemption notification is with Department and as Department proceeded to hold that assessee does not come within exemption notification assessment orders exempting revisionist are bad – Held that:- who seeks to contend that he is entitled to benefit of exemption, onus is upon him to establish that he is covered by exemption notification – Exemption to unit was available only if it had used as raw material handmade paper for manufacturing – Revisionist not only made no attempt to establish same, did not even make any assertion, at any point of time, that it has used, in fact, handmade paper for manufacturing – May be such paper is worst than handmade paper, but same cannot be equated with handmade paper – In said circumstances, Tribunal cannot be faulted – Revision applications dismissed – Decided against Assesse.
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