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Showing 121 to 140 of 701 Records
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2005 (3) TMI 709 - CESTAT, KOLKATA
Confiscation - Foreign origin goods - Sewing machine parts ... ... ... ... ..... I find that the goods are confiscated absolutely. The Hon rsquo ble Kolkata High Court had held that the Commissioner of Customs (Preventive) v. Uma Shankar Verma reported in 2000 (120) E.L.T. 322 (Cal.) that when the goods are not prohibited the Customs Authorities no other option but to allow grant of an option to the assessee to pay a fine in lieu of confiscation. In this case the impugned goods are neither prohibited nor restricted. In view of judgment cited above, the lower authority should have given an option to redeem the goods. In view of above, I remand the matter to the Original Adjudicating Authority to give an option for redeem the goods. I find the absolute confiscation is not correct. The lower authority should be given an option to redeem the goods after observing the principles of natural justice. I remand the case to the original adjudicating authority for determining the redemption fine and the amount of penalty, if any. Appeal is allowed by way of remand.
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2005 (3) TMI 708 - ITAT MUMBAI
Taxability of the training fees - Double taxation relief - sale of know-how in fact constitutes sale of property within meanings of that expression under article 12(5)(a) of the India US tax treaty - Whether or not the training fees paid to a US based company, which is said to be integral to the purchase of know-how from that company, is taxable in India - Principles of interpretation of tax treaties - HELD THAT:- There is no dispute that Article 12(5) is an exclusion clause which restricts the scope of applicability of Article 12(4) regarding taxability of certain receipts in the nature of ‘fees for included services’ in the source country. As we have noted earlier as well, it is not even assessee’s case that the receipts in the nature of trading fees are not covered by the normal scope of Article 12(4). In any event, ‘Memorandum of Understanding concerning fees for included services in Article 12’ dated 12th September, 1989, attached to and forming part of the India US tax treaty, specifically mentions that scope of Article 12(4b) may extend to, inter alia, ‘technical training’. Example (6) given in the MoU States that the fees for training the employees of the Indian company constitutes ‘fees for included services’ and is, therefore, taxable in the source country as well. The reasoning for this conclusion, as given in the said MoU, is that ‘the services are technical, and the technical knowledge is made available to the Indian company’.
The assessee’s defence against taxability of these receipts in the source country primarily consists of reliance on the scope of exclusion clause set out in Article 12(5)(a) of the Indo US tax treaty. The exclusion clause, relied upon by the assessee, provides that the services which are ancillary and subsidiary, as well as inextricably and essentially linked, to the sale of a property, are not to be treated as ‘fees for included services’ exigible to tax in the source country. The only rider is that the exclusion clause will not extend to the sale of property referred to in Article 12(3)(a) of the treaty.
It is thus clear that when the principal sale itself is subjected to tax in the source country, the services which are ancillary and subsidiary, as well as inextricably and essentially linked, to the sale of a property, are also subjected to tax in the source country. The said principle is also implicit in Article 12(4)(a) which provides that consideration for rendering any technical or consultancy services, where such services are ancillary and subsidiary to the application or enjoyment of the right, property or information which is covered by the definition of ‘royalty’ in Article 12(3), is also includible in the ‘fees for technical services’ and accordingly liable to be taxed in the source country.
During the course of hearing before us, we put it to the assessee that the principle elaborated above could, in our understanding, perhaps be the only explanation for the exclusion clauses in article 12(5)(a) and 12(5)(b). We also requested the assessee to let us know in case there could be any other intent and scheme of things underlying these clauses. However, learned counsel for the assessee could not enlighten us on this issue. The issue regarding connotations of expression ‘property’ was heard at considerable length for over two sessions but yet the learned counsel could not come up with any arguments in assessee’s defence on the question of intent and scheme of treaty as put to him by the bench.
In due deference to the order passed by the co-ordinate bench, we restore the matter to the file of the CIT(A) for examination de novo. While doing so, the CIT(A) shall examine (i) whether or not the training is ancillary and subsidiary, as well as inextricably and essentially linked to the sale of know-how, and (ii) whether or not the sale of know-how constitutes sale of property. The CIT(A) shall give due and fair opportunity of hearing to the assessee, bear in mind our findings above and shall objectively deal with, by way of a speaking and reasoned order, whatever submissions the assessee prefers to make.
The only issue raised in regarding non taxability of training fees in India. Thus, these appeals are allowed for statistical purposes in the terms indicated above.
In the result, Appeals are hereby allowed for statistical purposes.
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2005 (3) TMI 707 - ITAT MUMBAI
Income from house property ... ... ... ... ..... gh Court cannot be applied here. What is to be applied is the decision of the Calcutta High Court. It is not that we have not considered the submission of the learned D.R. that the matter must be further examined to find out whether there was any collusion in this case or not. Even though the anxiety of the learned D.R. is very well appreciated by us, we do not think that such a move from the side of the Tribunal at this point of time would not be fair. The Tribunal cannot remand a case for finding out fresh defects. 10. Therefore, in the facts and circumstances of the case and also recording our appreciation on the concern expressed by the learned D.R., we hold that the ground raised in these three appeals are covered by a series of decisions taken by different Benches of Mumbai Tribunal and further to the latest decision of the Calcutta High Court in the case of Indra Co. Ltd. (supra ) 11. In result, these three appeals filed by the Revenue are dismissed. Order accordingly.
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2005 (3) TMI 706 - ITAT DELHI
Appellate Tribunal ... ... ... ... ..... sessee, we are of the view that the amount so recovered should be refunded to the assessee. Only then, the Tribunal will be able to grant stay to the assessee which it deserves in this case. Accordingly, we direct the department to refund the amount of Rs. 7,05,04,101 to the assessee within two weeks from the date of receipt of this order. Further, a stay on the recovery of the demand is granted to the assessee for a period of 180 days or till the disposal of the appeal, whichever is earlier. The Registry is directed to fix the appeal on 2-5-2005. The parties are required to take note of the date of hearing as no separate notices shall be issued in this regard. The parties will not seek any adjournment and will co-operate fully for the early disposal of the appeal. If the assessee seeks adjournment, the stay shall stand vacated automatically, unless otherwise directed by the Bench. 6. In the result, the stay application of the assessee is allowed in the terms expressed above.
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2005 (3) TMI 705 - ITAT CHENNAI
Depreciation, Business expenditure, ... ... ... ... ..... n be allowed only when plant and machinery has been really used. But the moot question is when plant and machinery is used for trial production, whether the same can also be said to be used or not. In our considered opinion that would amount to lsquo used rsquo because wear and tear in the plant and machinery would start from the day when plant and machinery is used in trial production. We also find that the lower authorities have not reached any clear conclusion as to when the plant and machinery was put to use for trial production. Therefore, we set aside the order of the learned CIT(A) and restore the matter back to the file of the Assessing Officer with a direction to find out when the trial production commenced. We make it clear that depreciation should be allowed if the plant and machinery has been put to use for trial production. Needless to say that the assessee should be given adequate opportunity to represent its case. 7. In the result, the appeal is partly allowed.
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2005 (3) TMI 704 - ITAT MUMBAI
Business expenditure ... ... ... ... ..... nnot be said to be an authority to support the case of the assessee, as in the said case, there was no discontinuation of business whereas in the present case, it is undisputed that the assessee did not carry on any business activity. 13. To sum up, ground No. 1 regarding disallowance of interest and other administrations expenses is dismissed. In respect of ground No. 2, it is held that as against dividend income, section 14A was rightly invoked. I may mention here that no argument was submitted by learned counsel for the assessee in respect of chargeability of dividend under section 115-O. Therefore, no cognisance of such ground is taken. In respect ground Nos. 3 and 4, directions are given to Assessing Officer as mentioned in the earlier paras and the Assessing Officer will decide accordingly. In respect of ground No. 5, it was pleaded that the same is pre-mature and, therefore, the same is dismissed. 14. In the result, the appeal is partly allowed for statistical purpose.
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2005 (3) TMI 703 - ITAT CHENNAI
Income-tax Authorities - Power to transfer cases, Block assessment in search cases ... ... ... ... ..... ssessee should have produced the details of the source of deposit from which loan was repaid. The assessee has failed to do so. Even before us the assessee has not explained the source from which the said loan was repaid. When the appeal was filed before the CIT(Appeals), the CIT(Appeals) has issued notice for hearing on 4-3-2002. The assessee filed an adjournment petition on 4-2-2002 and failed to appear on that date and the CIT(Appeals) passed the appellate order on 6-3-2002 on the basis of facts available on record and decided the issue on merit, in accordance with law. However, we heard the matter at length and consider all the aspects of the case in the interest of justice. We are of the opinion that the assessee is not interested in explaining the real source of repayment of loan and it wants to hide the same. Hence, we have no hesitation in confirming the order of lower authorities and same is confirmed. 13. In the result, the appeal filed by the assessee is dismissed.
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2005 (3) TMI 702 - ITAT AHMEDABAD
Deduction of tax at source ... ... ... ... ..... rds, winning of prize by draw of lots or by chance has been included in the ambit of word lottery w.e.f. 1-4-2002 by the expression intended by the Legislature. Therefore, I find merit in the arguments of the learned counsel for the assessee that the winning of prize by lots stood included in the lottery w.e.f. this date. The assessee rsquo s case fall to the period prior to the amendment, therefore, the provisions of section 2(24)(ix) and consequently section 194B proviso were not applicable to the assessee rsquo s case. Consequently, it is held that the assessee was not liable to TDS on such distribution of prize by drawing of lots. Since there is no TDS liability, there can be no question of levy of interest, which is deleted. Since I have held this on the basis of first contention of the assessee, there is no need to go into other supplementary contentions. In view thereof, the appeals of the assessees are allowed. 8. In the result the appeals of the assessee are allowed.
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2005 (3) TMI 701 - ITAT BANGALORE
Business disallowance ... ... ... ... ..... 677 (SC) (para 12) CIT v. Podar Cement (P.) Ltd. 1997 226 ITR 625 (SC) (para 12) Imperial Chit Funds (P.) Ltd. v. ITO 1996 219 ITR 498 (SC) (para 13) CIT v. J.H. Gotla 1985 156 ITR 323 (SC) (para 17) Goodyear India Ltd. v. State of Haryana 1991 188 ITR 402 (SC) (para 17) CIT v. Expo Machinery Ltd. 1991 190 ITR 576 (Delhi) (para 21). In this regard we may point out how the amendment is curative and that one of the rules of interpretation is to give due regard to the legislative history and background that led to the enactment of the section. This principle was laid down by the Hon rsquo ble Apex Court in the case of Imperial Chit Funds (P.) Ltd. v. ITO 1996 219 ITR 4988. In view of these facts and judicial pronouncements, we are of the view that the assessee is eligible to deduction for all such payments, which stand paid before the due date of filing of the return and the proof of such payment was attached with the return. In the result, the appeal of the assessee is allowed.
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2005 (3) TMI 700 - ITAT BANGALORE
Disallowance of written off - Bad debt - HELD THAT:- From the facts it is seen that M/s. Vinayaka Enterprises firstly defaulted in honouring the first agreement. A fresh contract was entered into and the debtor also agreed to pay compensation. The compensation was to be paid in the year 1998. After 31-8-1999 nothing was paid till October, 2002. In between several cheques issued by the debtor bounced. There were more than 24 such instances of bouncing of cheques. During this period there was a general recession in property market. This can lead the assessee to believe that the debt has become bad. The position has to be looked into as on the date of write off, and not on the possibility of recovery at a subsequent uncertain date. Even till date of filing return of income, nothing was received, nor any hope revived. The initiation of legal proceedings is not a condition precedent for claim of bad debt. At the same time there is no prohibition for initiation of legal proceedings subsequent to write off. The decision has to be arrived at on the common sense and as to what a prudent business man will arrive at. The civil proceedings were only to restrain the debtor from alienating its property. However, it was not subject to charge by the assessee.
Series of events like 24 in number can lead any reasonable man of ordinary prudence to believe that the debt has become bad. We accordingly hold that when the assessee wrote off the sum, he was under a bona fide belief and hence the debt written off as bad debt is allowable. The principal sum is allowable as loss u/s 28/37 of the Act. The compensation and interest component is allowable u/s 36(1)(vii) read with section 36(2) of the Act.
In the result the appeal is allowed.
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2005 (3) TMI 699 - ITAT MUMBAI
Deduction u/s 80HHC - Diamond Exporters - Interest on fixed deposits - HELD THAT:- In the case, the value of foreign currency was not to go up, there would not have been gains on cancellation of contracts but then the actual costs, in terms of domestic currency, that the assessee pays when he has to pay for imports in foreign currency does not also go up. Since it is an undisputed position that the imports, in connection with which the assessee had entered into forward contracts, actually took place, this profit on cancellation of forward foreign exchange contracts effectively only reduces the costs of purchases in respect of those imports, and cannot be, by any logic, construed as transactions independent of assessee’s business of importing rough diamonds and exporting cut and polished diamonds.
The fact of premature cancellation, therefore, cannot alter the nature of transaction. Thus, we are of the considered view that the credit shown in the profit & loss account as ‘profit on cancellation of forward contracts’ is as integral part of the export business, as purchases or imports. As it effectively controls and reduces the cost of imports, and is integral part of the export business profits, and as, in our considered view, the exclusion clause under clause (baa) of Explanation to section 80HHC cannot apply to these profits, the authorities below were indeed not justified in holding that 90% of these profits is required to be excluded from profits of export business. This amount is not covered by any of the categories which are covered by the aforesaid clause in Explanation to section 80HHC. We, therefore, uphold the contention of the assessee, and direct the Assessing Officer to recompute the deduction u/s 80HHC by, inter alia, not excluding 90% of the profit realized on cancellation of forward foreign exchange contracts, from the profits of export business. The assessee succeeds on this issue.
Ground is thus allowed. In the result, the appeal is allowed in the terms indicated above.
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2005 (3) TMI 698 - CESTAT, MUMBAI
Appeal to Appellate Tribunal - Amounts involved being very small ... ... ... ... ..... rsquo s appeals are under Section 35B(2) which are not required to be listed under Section 35B(1) of the Central Excise Act, 1944 for admission. 3. emsp However, since both the appeals involve very small amounts, the same are rejected.
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2005 (3) TMI 697 - CESTAT, CHENNAI
Exim - Demand - Confiscation and penalty ... ... ... ... ..... iscation on the grounds that Export obligations period was not over, we do not find any reason to upholding of redemption fine or/and imposition of penalty under Section 112(a) of the Customs Act, 1962 to be called for, as regards these imports. In this view of the matter, order of penalty under Section 112(a) is required to be set aside on these imports. 4. emsp In view of the finding arrived at hereinabove, the appeal is allowed after setting aside the order of confiscation and redemption fine and duty of Rs. 86,81,059/-, and interests thereon. Since issue of demand and payment of duty of Rs. 4,81,403/- is not being pressed by the appellants, and since they have already paid the duty, no further orders on the same are being passed. Similarly, orders of confiscation and penalty as arrived at in the impugned order as regards all imports on the licences impugned herein are required to be set aside and the appeal is to be allowed in the above terms. 5. emsp Ordered accordingly.
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2005 (3) TMI 696 - CESTAT, NEW DELHI
Demand - Clandestine removal ... ... ... ... ..... ss bottles. 7. emsp The learned Advocate rsquo s contention that shortage of empty glass bottles by itself cannot lead to the conclusion that such bottles were used to clear clandestinely quiwam is well founded. No material has been brought on record by Revenue either by way of statement of any labour/worker in the factory or by way of statement of any customer who has purchased the excess quantity alleged to have been cleared by them without payment of duty or by any other material. It has been held by the Tribunal in T.G. Poshak Corporation, supra, after referring to a large number of cases decided by the Tribunal, that ldquo unless there is clinching evidence on the nature of purchase of raw materials, use of electricity, sale, clandestine removals, the mode and flow back of funds, demands cannot be confirmed solely on the basis of note books maintained by some workers. rdquo Accordingly, we set aside the impugned order and allow both the appeals. (Pronounced on 31-3-2005)
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2005 (3) TMI 695 - SETTLEMENT COMMISSION, CUSTOMS AND CENTRAL EXCISE,
Settlement of case - Interest - Levy of ... ... ... ... ..... resent case before us, it is observed that out of an amount of Rs. 36,79,950/-, only Rs. 1,10,079/- is time-barred which works out to a meager 3 of the total duty admitted by the applicant. (c) Keeping in view the co-operation extended by the applicant during the proceedings and making full and true disclosure of its duty liability, the Bench levies simple interest 10 per annum from the date the duty was due till it was paid. The Bench grants immunity to the applicant from interest in excess of 10 per annum. The applicant shall calculate the interest liability, get it verified from the Revenue and pay the same within 30 days of receipt of this order and submit proof thereof. 10. emsp The above immunities are granted to the applicant in terms of Section 127H of the Act. 11. emsp This order of settlement shall be void if the Settlement Commission subsequently finds that it has been obtained by fraud or misrepresentation of facts. 12. emsp All concerned are informed accordingly.
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2005 (3) TMI 694 - SETTLEMENT COMMISSION, CUSTOMS AND CENTRAL EXCISE,
Settlement of case - Immunity from penalty and prosecution ... ... ... ... ..... that in this case also interest on the duty due but not paid at the time of importation is chargeable under Section 28AB of the Act. However, taking note of the good conduct of the applicant and the co-operation extended during the proceedings of this case, we are inclined to levy simple interest 10 per annum on the duty element from the time it was due till it was paid. The Bench grants immunity to the applicant from interest in excess of 10 p.a. The amount of interest due shall be calculated by the applicant and deposited within 30 days of receipt of this order after getting it confirmed from the Revenue and compliance thereof reported to the Commission and the Revenue. 9. emsp The above immunities are granted to the applicants in terms of Section 127H(1) of the Act. 10. emsp This Order of settlement shall be void if the Settlement Commission subsequently finds that it has been obtained by fraud or misrepresentation of facts. 11. emsp All concerned are informed accordingly.
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2005 (3) TMI 693 - CESTAT, CHENNAI
Re-export - Confiscation, penalty and redemption fine - EXIM ... ... ... ... ..... .V. Marketing (Supra), allowed re-export of the goods without payment of duty but on payment of a fine of Rs. 1.5 lakhs. The penalty imposed on the party by the Commissioner was set aside in the facts and circumstances of the case. 4. emsp In the instant case, it has been pleaded before us that the appellant was not in a position to clear the goods and has no option other than seeking permission for re-export to the foreign supplier who is willing to take back the goods. Following the above precedent, we are inclined to allow this request for re-export in the facts and circumstances of this case. Accordingly, it is ordered that the appellant be allowed to re-export the goods without payment of duty, but on payment of redemption fine of Rupees Twenty-five thousands and penalty of Rs. Five thousands. The impugned order will stand modified accordingly. 5. emsp The appeal is disposed of in the above terms. (Operative portion of the order was pronounced in open court on 31-3-2005)
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2005 (3) TMI 692 - CESTAT, NEW DELHI
Waste and scrap of plastic - Exemption ... ... ... ... ..... ods cleared on payment of duty and not where the goods had been cleared at nil rate of duty. 6. emsp From the record, it is evident that the waste and scrap generated within the factory of the appellants, had been utilised in the manufacture of re-processed granules which were cleared by them at nil rate of duty, being exempted under Notification No. 131/95-C.E., dated 6-9-95. The plea of the appellants that nil rate of duty also amounted appropriate rate of duty under the law, in our view, has rightly been not accepted by the authorities below. When there is no nil rate of duty provided by virtue of the exemption, it cannot be said that the goods had been cleared on payment of any appropriate duty. Therefore, the benefit of exemption Notification No. 67/95-C.E. has been rightly denied to the appellants. We do not find any illegality in the impugned order and uphold the same. The appeal of the appellants is dismissed. (Order dictated and pronounced in open Court on 10-3-2005)
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2005 (3) TMI 691 - CESTAT, MUMBAI
Rectification of mistake ... ... ... ... ..... egard to marketability, excisability and dutiability of carbide sludge has not been considered by the Tribunal. The use and consequent marketability of carbide sludge, as spelt out expressly in the order-in-original passed by the Adjudicating authority, and is apparent from the fact of the record, is a mistake on the part of the Hon rsquo ble CESTAT, which should have been considered while passing the order. Therefore it is prayed to rectify the mistake in the impugned order. emsp 3.After going through the record we find no case for rectification of mistake. Non-consideration of the decision in Rishi Gases Limited does not amount to an error apparent at the face of the record. emsp 4.Hence application is dismissed. (Pronounced in Court)
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2005 (3) TMI 690 - CESTAT, BANGALORE
Refund - Cenvat/Modvat credit ... ... ... ... ..... rsed the credit on their own. When they realised that they are entitled to the credit so reversed, they applied for a refund. Thus there is no order requiring them to reverse the credit for the period in question. 8.There are conflicting decisions on the applicability of principle of unjust enrichment to the refund/re-credit of Modvat credit. While in Pearl Polymers Ltd. 2004 (174) E.L.T. 41 (Tri.-Del.) it was held that the principle of unjust enrichment does apply in Orient Paper Mills 1994 (73) E.L.T. 648 Kanpur Plastipack Ltd. 2001 (127) E.L.T. 826 and in STI Sanoh India Ltd. 2001 (127) E. L.T. 572 , it was held that the principle does not apply to refund of Modvat credit. emsp 9.Since there are conflicting decisions on the issue, we request the President/HOD to refer the issue to a Larger Bench of the Tribunal to resolve the issue. E/248/2003 10.Covering period March, 1997 to September, 1997 is dismissed as in-fructuous. (Pronounced in the Court on 31-3-2005 at Bangalore)
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