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Showing 441 to 460 of 1429 Records

• 2014 (2) TMI 990 - ITAT BANGALORE
  

  Claim of Deduction u/s 80P(2)(a)(i) of the Act - Co-operative society – Whether the gross total income of a cooperative society includes income from carrying on the business of banking or providing credit facilities to its members and is allowed as deduction or not – Held that:- The decision in ACIT, Circle 3(1), Bangalore v. M/s. Bangalore Commercial Transport Credit Co-operative Society Ltd. [2011 (4) TMI 1222 - ITAT BANGALORE] followed - section 80P(4) is applicable only to cooperative banks and not to credit cooperative societies - The intention of the legislature of bringing in cooperative banks into the taxation structure was mainly to bring in par with commercial banks - the assessee is a cooperative society and not a cooperative bank, the provisions of section 80P(4) will not have application in the assessee’s case – thus, it is entitled to deduction u/s 80P(2)(a)(i) of the Act.

  The Revenue’s contention cannot be accepted that section 80P(4) would exclude not only the cooperative banks other than those fulfilling the description contained therein but also credit societies, which are not cooperative banks – thus, the assessee is not a credit co-operative bank but a credit cooperative society - Exclusion clause of sub-section(4) of section 80P would not apply – Decided against Revenue.

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• 2014 (2) TMI 989 - ITAT BANGALORE
  

  Service of Notice u/s 143(2) of the Act - Applicability of Section 292BB of the Act - Whether the notice was issued and served within the time contemplated u/s. 143(2) of the Act - Held that:- The notice issued by the AO u/s. 143(2) of the Act in the present case will not fall within any mistake, defect or omission which is in substance and effect in conformity with or according to the intent and purpose of this Act - The requirement of giving of notice because completion of the assessment proceedings cannot be dispensed with by taking recourse to the provisions of Sec.292B of the Act – Relying upon Manish Prakash Gupta v. CIT [2014 (2) TMI 657 - ALLAHABAD HIGH COURT] & CIT v. Parikalpana Estate Development (P.) Ltd. [2012 (10) TMI 617 - ALLAHABAD HIGH COURT] the provisions of section 292BB cannot be applied in a case where admittedly no notice u/s. 143(2) had been issued within the time limit prescribed in law.

  The provisions of Sec.292BB lay down presumption in a given case - It cannot be equated to a conclusive proof - The presumption if rebuttable - The provisions of section 292BB cannot extend to a case where the question of limitation is raised on admitted factual position in a given case – thus, the provisions of section 292BB of the Act will not be applicable to the present case - the assessment proceedings are invalid for the reason that the notice u/s. 143(2) of the Act had not been issued and served within the time limit prescribed by those provisions - The order of assessment is accordingly annulled – Decided in favour of Assessee.

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• 2014 (2) TMI 988 - ITAT HYDERABAD
  

  Claim of depreciation u/s 32(1) of the Act – Computation of income u/s 11(1)(a) of the Act - Whether the computation of income u/s 11(1)(a) of the Act, without classification under various heads as set out in section 14 of the Act amount to double deduction – Held that:- The decision in DIT vs. Vishwa Jagriti Mission [2012 (4) TMI 289 - DELHI HIGH COURT] followed - claim of depreciation on fixed assets utilized for the charitable purposes has to be allowed while arriving at the income available for application to charitable and religious purposes, since the income of the society should be computed on the basis of commercial principles - there is no business activity - As seen from the computation of income placed on record, assessee has not claimed any application of income towards purchase of assets in this year - A.O. has not brought out anything on record that assets purchased by assessee have been claimed as deduction in earlier years and without examining the issue A.O. cannot disallow the amount, simply because there was a case law establishing the principle that double deduction is not allowable – the order of the AO and CIT(A) set aside and the claim of the depreciation is allowed – Decided in favour of Assessee.

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• 2014 (2) TMI 987 - ITAT DELHI
  

  TDS u/s 194H - nature of expenditure on foreign travelling of its dealers/sub-dealers - Commission or Discount - Held that:- The assessee had paid incentives/commission to its dealers, which had been debited in the Profits & Loss Account under the head of foreign travel expenses - the expenses had been claimed under the garb of foreign travel expenses - there is nothing other than incentive/commission - this fact was evident since the higher sales achieved by the dealers would result in more bonus points to the dealers - commission includes any payment received directly or indirectly by a person acting on behalf of another, for services rendered in the course of buying or selling of goods - The Assessing Officer has miserably failed to appreciate the real controversy - He has totally misconstrued the explanation given by the assessee - The dealers and sub-dealers had purchased the goods directly from the assessee - They have not acted as a commission agent for third person where upon sec. 194H would be applicable – Decided in favour of Assessee.

  Disallowance of interest paid – excessive and unreasonable expenditure - Held that:- Section 40A(2)(b) is not applicable on a public limited company - The premises in question, consisting of 21000 sq. ft. of office area, was taken on rent in Assessment Year 1999-2000 - During the year, total rent amounted to Rs. 48 lacs - In addition, Rs. 11.35 crores had been paid as interest free security deposit, which was as per clause (2) of rent agreement dated 31.12.2008 - it had been agreed to keep the rent @ Rs. 4 lacs per month and to increase the security deposit by Rs. 6 crores, which facts do not stand disputed – Decided in favour of Assessee.

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• 2014 (2) TMI 986 - ITAT HYDERABAD
  

  Denial of deduction u/s 80IB(8A) of the Act - Profits derived from Medicinal Chemistry and Clinical Pharmacology Division – Held that:- The decision in GVK Biosciences Pvt. Ltd., Versus Addl. CIT [2014 (2) TMI 597 - ITAT HYDERABAD] followed - The prescribed authority under the Act, having approved the assessee as a research and development company, assessee is eligible for deduction under S.80IB(8A) and also renewed such approval from year to year, the learned CIT(A) cannot override the approval/renewal granted by the prescribed authority and deny the benefit to the assessee - deduction u/s 80IB cannot be denied to the assessee, till such time, the assessee is approved as a Research and Development Organisation - the assessee is entitled to deduction under S.80IB of the Act – Decided in favour of Assessee.

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• 2014 (2) TMI 985 - ITAT HYDERABAD
  

  Liability to deduct TDS u/a 194A of the Act – Held that:- The decision in Income-Tax Officer Versus M/s. Neeladri Chit Fund (P) Ltd[2014 (2) TMI 456 - ITAT HYDERABAD] followed - the amount disbursed by a chit fund company to the members from the contribution cannot be treated as interest - the payment made/disbursed to the subscribers/members is not interest, the question of deducting any tax at source from it would not arise - In the case of a chit fund, there is no borrowing of money nor any debt is incurred and as such the provisions of section 194A and 2(28A) of the Act are not attracted – there was no infirmity in the order of the CIT(A) – Decided against Revenue.

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• 2014 (2) TMI 984 - ITAT HYDERABAD
  

  Disallowance of expenditure U/s 37 read with Section 40A(3) - Cash payment - disallowance to lower percentage – site development and construction – Held that:- The decision in M/s. Lahari Homes, Hyderabad [2014 (2) TMI 596 - ITAT HYDERABAD] followed - CIT(A) directed the the assessing officer to exclude the cheque payments out of the disallowance and with regard to balance payments, to restrict the disallowance to 15% of cash payments made on account of such items of expenditure which have been considered by the Assessing Officer.

  In the absence of any material to contradict the findings of the CIT(A) brought on record by the Revenue – there was no infirmity in the impugned order of the CIT(A) – Decided in favour of Revenue.

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• 2014 (2) TMI 983 - ITAT PUNE
  

  Denial of deduction u/s 80IB(10) of the Act – Effect of amendment - Non receipt of completion certificate - Held that:- The decision in Opel Shelters (P) Ltd. Vs. ACIT [2014 (2) TMI 593 - ITAT PUNE] followed - The law as it existed in the A.Y.04-05 when the Assessee submitted its proposal for slum rehabilitation and the permission for carrying out the development was accorded on 17.11.2003 and when the Assessee commenced development is to be applied - the legislature would not have intended to take away a vested right without clear words to that effect in the provisions of Sec. 80-IB(10) as amended by the Finance Act, 2005, w.e.f. 1-4-2005 - By applying the principle of harmonious construction to interpret the provisions under Sub-section (10) to Section 80IB as amended w.e.f. 1.4.2005, the Legislature always intended that the project must be approved by the local authority, thus in those approved projects where construction has been started much earlier than 1.4.2005, the assessees are required to complete the plan as it has been approved - The project was approved on 12-10-2001, i.e. prior to 01-04-2005 – thus, the amended provisions of section 80IB(10) w.e.f. 01-04-2005 restricting the commercial area in a housing project are not applicable and the assessee is eligible for deduction u/s.80IB(10) of the Act.

  The assessee has applied to the PMC for issue of completion certificate and that possessions were given to all the respective flat owners before 31-03-2008, Corporation has started levying taxes to all the individual flat owners, electricity connections have been given to all the flat owners and the final completion certificate is also obtained by the assessee on 09-05-2008 – the decision in Runwal Multihousing Pvt. Ltd. Vs. ACIT [2014 (2) TMI 595 - ITAT PUNE] - the assessee cannot be denied the benefit of deduction u/s 80IB(10) for not obtaining the completion certificate before 31-03-2008 – thus, the order of the CIT(A) set aside and the Assessing Officer is directed to allow the claim of deduction u/s 80IB(10) to the assessee – Decided in favour of Assessee.

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• 2014 (2) TMI 982 - ITAT PUNE
  

  Disallowance of claim of deduction u/s 80IB(10) of the Act – Entire project not eligible for deduction – Project not completed - Housing project "Leela Garden" - Held that:- The assessee has obtained the completion certificate before the statutory due date - the assessee has obtained the completion certificate before 31-03-2008 and out of the 83 flats the assessee has claimed deduction u/s.80IB(10) in respect of 61 flats where the built up area is less than 1500 sq.ft. - thus, the deduction u/s.80IB(10) has to be allowed on proportionate basis with reference to the qualified residential units and that the assessee would not be denied claim of deduction u/s.80IB(10) of the Act - the assessee is entitled to deduction u/s.80IB(10) in respect of the 61 flats of the housing project "Leela Garden”.

  Housing project "Hill View Residency" – Held that:- Out of the 5 Buildings, the assessee was able to obtain completion certificates for 4 Buildings and therefore it is the case of the assessee that the deduction u/s.80IB(10) should be allowed in respect of the 4 Buildings – The decision in Runwal Multihousing Pvt. Ltd. Vs. ACIT [2014 (2) TMI 595 - ITAT PUNE] Followed - It is the case of the Revenue that since the completion certificate for Building D has not been obtained before 31-03-2008, therefore, deduction u/s.80IB(10) should not be allowed.

  There was substance in the contention of the AR that approval of the housing project and approval of building plan are two different concepts - plan for development is only a work order and not final plan sanctioned by the local authority - the assessee has claimed deduction u/s.80IB(10) in respect of Buildings A, B, C on which profit has been earned on sale of units and the completion certificate has been obtained before the statutory date and none of the units in the above building is in excess 1500 sq.ft. - thus, the assessee is entitled to deduction u/s. 80IB(10) in respect of buildings A, B and C of the project "Hill View Residency" – thus, the order of the CIT(A) set aside and the AO is directed to allow the claim of deduction u/s 80IB(10) in respect of the housing projects "Leela Garden" and "Hill View Residency" – Decided in favour of Assessee.

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• 2014 (2) TMI 981 - ITAT HYDERABAD
  

  Transfer pricing adjustment – Interest received on loans given to Associated enterprises – Held that:- The decision in Siva Industries & Holdings Ltd. Versus Assistant Commissioner of Income-tax, Co. Circle VI(4), Chennai [2012 (10) TMI 890 - ITAT CHENNAI] followed – LIBOR rate which has to be considered while determining the arm's length interest rate in respect of the transaction between the assessee and the Associated Enterprises - no addition on this count is liable to be made in the hands of the assessee - The AO is directed to examine whether the rate of interest received was at LIBOR + percentage points - The adoption of Prime lending rates is not approved in various coordinate bench decisions – thus, assessee lending at LIBOR plus rates can be considered as arm’s length provided there is no other expenditure on the borrowed funds - Since some of the loans are reflecting rate at ordinary percentage points, conversion to LIBOR plus is required –It can also be taken as arm’s length rate for the loans advanced during the year. AO is directed to examine – Decided in favour of Assessee.

  Claim of bad debts – Held that:- It is not necessary to prove that the debt has become irrecoverable and is enough if bad debt is written off in the accounts of the assessee - There is no dispute that the amount claimed is towards supplies made and the debtor company is not in the position to repay – the decision in TRF. LTD. Versus COMMISSIONER OF INCOME-TAX [2010 (2) TMI 211 - SUPREME COURT] followed - the AO is directed to allow the amount as claimed – Decided in favour of Assessee.

  Disallowance made u/s 40(a)(ii) of the Act – Held that:- As decided in assessee’s own case for the previous assessment year, since no services are rendered in India, sales commission cannot be disallowed under the provisions of section 40(a)(ia) – the amounts covered by sales commission are not accruing or arising to the non-residents in India – thus, provisions of section 195 does not apply and, section 40(a)(ia) cannot be invoked.

  Product registration and filing fee – Held that:- Without examining the nature of the amount and whether the other non-resident has any permanent establishment in India or made available anything in India or rendered any services In India, the amount cannot be considered under the provisions of section 40(a)(ia) - Since complete details of the amounts and to whom they are paid are not forthcoming on record – thus, the matter is remitted back to the AO for fresh adjudication - If the non-resident has not rendered any services in India, or the amount paid is not taxable in India, provisions of section 195 does not apply and disallowance under section 40(a)(ia) does not arise – Decided in favour of Assessee.

  Disallowance of claim u/s 35D of the Act – Held that:- The assessee's contentions are to be accepted - Even though assessee made claim under section 35D, the claim is allowable under section 37(1) as in Mahindra & Mahindra Limited vs. CIT [2009 (10) TMI 639 - ITAT MUMBAI] – The assessee is eligible for deduction under section 37(1) - Since the issue of allowance under section 37(1) was not examined by the AO – thus, the matter remitted back to the AO – Decided in favour of Assessee.

  Disallowance of payment u/s 40(a)(ia) of the Act – Held that:- The order of the AO cannot be upheld which mainly focus on non-obtaining of TDS certificate and also there is no clarity in the order of the A.O. about nature of payments and its taxability under the IT Act - even the DRP also expressed difficulty to conclude whether the payments are in the nature of income or not - since the nature of payment and whether any services are rendered in India or not have not been examined in detail, item-wise along with the applicable DTAA provisions – The matter remitted back to the AO for fresh adjudication – Decided in favour of Assessee.

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• 2014 (2) TMI 980 - ITAT DELHI
  

  Additions made u/s 143(3)/153A of the Act – Block assessment - Admission of additional evidence under Rule 46A(3) – Held that:- The revenue wants to adopt an unfair course for ascertaining the tax liability, firstly by making an arbitrary and untenable sort of ex parte assessment and secondly not ensuring the process for proper evidence to come on record - Thus there is no justification for revenue to challenge the CIT(A)s action in admitting the additional evidence after following the due procedure laid down by the act - CIT(A) has been vested with powers coterminous to that of AO, over and above it to undertake further inquiries and even to enhance the assessment - Observations of CIT(A) clearly indicate the fact that the AO not only had an opportunity of submitting its comments on the merits of the case but also he actually submitted requisite comments - the assessments were completed in unjustifiable manner violating even the basic principles of natural justice.

  Neither sufficient opportunity of hearing nor time was given to the assessee to represent his case - The questionnaire issued by AO had no question about the agricultural income already assessed -This income was not being shown for the first time and has been regularly accepted year to year by department in preceding years – thus, the assessee had no remedy except to file additional evidence in first appeal – thus, assessee was prevented by sufficient cause in filing these papers during the course of 153A assessment proceedings – Relying upon COMMISSIONER OF INCOME TAX Versus TEXT HUNDRED INDIA PVT. LTD. [2013 (6) TMI 72 - DELHI HIGH COURT] - In 153A/C assessments additions cannot be made unless they are based on any incriminating material or inquiries based on such material.

  There is neither reference nor reliance on any incriminating material - Besides there is no reference to any inquiries conducted by AO based on any incriminating material – the additions have been rightly deleted by the CIT(A) on this count – the assessee owns a fairly large agricultural holding known as Prag Farms - Agricultural income has been returned and accepted by department year after year - Confirmation from agricultural tenant is on record - AO cannot reject documentary evidence on surmises and conjectures - Assessee has supported his claim based on relevant agricultural record - The tenant has confirmed that the agricultural expenses were borne by him and not by the assessee – thus, there was no infirmity in the order of the CIT(A) – Decided against Revenue.

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• 2014 (2) TMI 979 - ITAT KOLKATA
  

  Deletion made u/s 40A(3) of the Act – Cash payment - Whether the assessee’s case falls under exception contained in Rule 6DD(b) of the I.T Rules – Held that:- CIT(A) held that the Rule 6DD(b), would not hold water in so far as exemption provided is in Rule 6DD - The various clauses of the said Rule would have to be considered - Even otherwise, the said Rule is not exhaustive - The State Government has closed its doors in so far as the local treasury is concerned and the payment for the purchase of country spirit or country liquor has to be made to the warehouse, run by the government - This shows that any payment made to the warehouse, which is under the direct control of the state government, is a payment made directly to the government.

  Once, this is accepted then the provisions of Rule 6DD(b) of the I.T Rules 1962 which clearly spells out that the payment made to the government in legal tender under the rules framed by the Government, is exempted from the rigours of section 40A(3) of the Act - the payments made by the assessee for purchase of country spirit and country liquor is to the government as per the notification issued by the government and is in legal tender specified by the notification - the payment made by the assessee for the purchase of country liquor and country spirit from the territorial licensee bottling plant is protected by the exemption in terms of Rule 6DD(b) of the I.T Rules 1962 - the addition as made by the AO and as confirmed by the CIT(A) by invoking the provisions of section 40A(3) of the I.T Act 1961 stands deleted – Decided in favour of Assessee.

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• 2014 (2) TMI 978 - ITAT MUMBAI
  

  Modvat Excise Duty credit - Closing stock of raw material and packing goods – Held that:- The decision in ADDL COMMISSIONER OF INCOME TAX Versus M/s JOHNSON & JOHNSON LTD [2013 (6) TMI 286 - ITAT MUMBAI] followed - merely because Modvat credit is an irreversible credit available to the manufacturers upon purchase of duty paid raw material, it would amount to income which is liable to be taxed under the Act, is not acceptable – thus, the matter remitted back to the AO for fresh adjudication – Decided in favour of Assessee.

  Disallowance of provision for Executive Retirement Scheme (ERS) – Held that:- The decision in ADDL COMMISSIONER OF INCOME TAX Versus M/s JOHNSON & JOHNSON LTD [2013 (6) TMI 286 - ITAT MUMBAI] followed - the AO is directed to allow the expenses on account of ERS on the basis of actual payment made during the relevant assessment year as business expenses – thus, the matter remitted back to the AO to allow the deduction on account of ERS on payment basis as against provision basis claimed by the assessee – Decided in favour of Assessee.

  Disallowance on account of provision for cash discount – Disallowance of expenditure on repairs, maintenance - Held that:- The decision in ADDL COMMISSIONER OF INCOME TAX Versus M/s JOHNSON & JOHNSON LTD [2013 (6) TMI 286 - ITAT MUMBAI] followed – the matter remitted back to the AO for fresh adjudication to allow cash discount which has been actually paid by the assessee – The Tribunal has allowed the claim of the assessee because the assessee has successfully explained the nature of expenses by filing necessary details – the details have not been properly examined by the lower authorities – thus, the matter remitted back to the AO for fresh adjudication – Decided in favour of Assessee.

  Disallowance u/s 80HHC of the Act - Liabilities/provisions written back - Gross rental income - Sundry receipts - Held that:- The decision in M/s. Johnson & Johnson Limited Versus The Addl. Commissioner of Income-tax [2013 (4) TMI 228 - ITAT MUMBAI] followed – the Tribunal has remitted the matter back to the AO for fresh adjudication in the light of the decision taken in earlier years following the direction of the Tribunal in assessee's own case – For rental income, the Tribunal directed that netting off of rent paid against rent received should be allowed and only 90% of the net rent income should be considered for disallowance u/s. 80HHC of the Act - Decided in favour of Assessee.

  Transfer pricing adjustment – Determination of arm's length price – Held that:- The application made by the assessee to RBI for brand usage agreement specifically mentions that the royalty to be remitted is net of taxes - the approval was received from the RBI to remit the royalty on brand usage by the assessee @ 1% net of taxes - taxes were liability of J&J India under the terms of agreement - The assessee has entered into a commercial arrangement with J&J US and it has been so arranged that the payment of taxes have to be borne by the assessee being a commercial arrangement, the same should not be questioned while calculating arm's length price – Relying upon Dresser Rand India (P.) Ltd. v. Dy. CIT [2012 (10) TMI 127 - ITAT MUMBAI] – the order of the CIT(A) set aside – Decided in favour of Assessee.

  Enhancement made in respect of brand usage royalty – Held that:- The CIT(A) erred in ignoring the copy of draft brand usage royalty agreement which was submitted by the assessee alongwith application to RBI on 10.8.2001 - If the assessee which carries on a business find that it is commercially expedient to incur certain expenditure directly or indirectly, it would be open to such an assessee to do so notwithstanding the fact that a formal deed does not precede the incurring of such expenditure – Relying upon CIT v. Associated Electrical Agencies [2003 (12) TMI 36 - MADRAS High Court ] there is no merit in the enhancement made by the CIT(A) – thus, the AO is directed to delete the addition made by the CIT(A) – Decided in favour of Assessee.

  Disallowance of tax and R&D cess paid on technical know-how royalty – Held that:- Royalty payments has been approved by RBI and therefore deserves to be allowed - as the payments have been made in the light of the agreement with J&J US and as per the approval/guidelines of the RBI, there is no reason to disallow the tax and R&D Cess paid on technical royalty - the AO is directed to delete the addition made – Decided in favour of Assessee.

  Deletion of the disallowance on account of royalty payment on sale of traded finished goods - Restriction on technical know-how royalty to 1% instead of 2% - Held that:- As it has been held in assessee's appeal, it has already been held that the agreements between J&J India and J&J USA for payment of royalty has to be considered in the light of the approval of the RBI – there is no substance in the findings of the TPO that there is no need for paying royalty for technical/marketing know-how - The CIT(A) has rightly considered the relevant clauses of the agreement between J&J India and J&J USA – Decided against Revenue.

  Deletion on account of unaccounted production and sales –Deletion of publicity expenses being expenses on advertisement films – Held that:- The CIT(A) observed that the AO has not pointed out any mistakes or manipulations in the records maintained by the assessee nor he has invoked provisions of Sec. 145 for making the addition - As decided in assessee’s own case for the previous years - the production loss depends on number of factors and in absence of any comparable to show that the loss shown by the assessee is excess and decided the appeal in favour of the assessee - no evidence of purchase/sales outside the books of account have been brought on record – thus, there is no reason to interfere in the findings of the CIT(A) –Decided against Revenue.

  Disallowance of 10% of payment made to M/s. Crawford Bailey & Co. – payment made to Crompton Corporation - Held that:- The decision in M/s. Johnson & Johnson Limited Versus The Addl. Commissioner of Income-tax [2013 (4) TMI 228 - ITAT MUMBAI] followed - the Tribunal has deleted the addition mentioning that in order to make any disallowance u/s. 40A(2)(b), it is for the AO to bring on record some material to indicate that the payment was in fact excessive having regard to the fair market value of goods or services for the legitimate needs of the business - CIT(A) has deleted the addition holding that for the payments for legal counseling, it is futile to think of comparables because counsels may not charge standard fee but may charge according to the issue involved - there is no reason to interfere with the findings of the CIT(A) – Decided against Revenue.

  Adhoc disallowance of Travelling expenses – Held that:- The assessee is a company and therefore in such a case disallowance on account of personal expenses cannot be sustained - The AO has made an adhoc disallowance presuming that such expense have personal element – there is no logic/basis for making disallowance which are based on presumptions and surmises – thus, there is no reason to interfere with the findings of the CIT(A) – Decided against Revenue.

  Deletion made on Club Membership fees – 10% adhoc disallowance of expenses incurred on professional sponsorship – Held that:- As decided in assessee’s own case for the previous years, the Tribunal decided in favour of Assessee, Relying upon Otis Elevator Co. (India) Ltd. v. CIT [1991 (4) TMI 53 - BOMBAY High Court] - once the expenditure is held to be for business purposes, there is no question of adhoc disallowance of such expenses by treating same as non-business expenditure - Decided against Revenue.

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• 2014 (2) TMI 977 - ITAT DELHI
  

  Power of the CIT(A) for setting aside the assessment passed by AO – Held that:- Assessee contended that the CIT (A) has enabled the Assessing Officer to make such inquiry as he deems fit to verify the cash statement to be produced by the assessee - The CIT (A) has deleted the addition made by the Assessing Officer and it is not a case of setting aside the assessment and remitting the matter to the Assessing Officer - the directions given by the CIT (A) were not required to be given and the same are liable to be expunged – thus, the order of the CIT(A) upheld – Decided against Revenue.

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• 2014 (2) TMI 976 - DELHI HIGH COURT
  

  Foreign exchange remittance - liaison office (‘LO’) in India - salaries and emoluments of the empaloyees are payable by the Head Office (‘HO’) - contravention of Section 8(1) of the Foreign Exchange Regulation Act (‘FERA’), 1973 - Held that:- The Court finds that both the AO and the AT erred in proceeding on the basis that the employees of the parent corporation, seconded to the Appellant, were ‘borrowed employees.’ There is no question of the Appellant being an ‘agent’ of Mitsubishi, Japan. The Appellant, as a LO, is not permitted to undertake any commercial activity. The letter dated 30th January 1976, issued by the RBI under Section 29(2) of the FERA granting permission to the LO to operate clearly states that the LO would only undertake the liaison activities relating to import/export trade, collection of commercial, industrial and other business information in Tokyo etc. and that “Excepting the said promotional work, the Indian offices will not undertake any activity of a trading commercial or industrial nature without the prior permission of the Reserve Bank of India.”

  Significantly, with the AO itself finding the Appellant not liable under Section 9(1)(c) of the FERA on the ground that there was no debt owed by the Appellant to the parent company, it could not have held that there was a liability owed by the LO to the parent company for the purposes of Section 8 (1) (b).

  AO dated 10th February 2004 and the impugned order dated 30th October 2007 of the AT set aside - Decided in favor of appellant.

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• 2014 (2) TMI 975 - CESTAT MUMBAI
  

  Rejection of refund claim - pilferage - Reassessment of bills of entry not done - Held that:- in the Bill of Entry it is mentioned that out of charge was given on 28.04.2006. The same cannot be disputed. - The claim that the pilferage was found after out of charge was given without presenting or bringing any evidence on record is not sustainable - Board's Circular No. 58/96-Cus has clarified that when pilferage was found during the course of examination before the charge was given, the assessee is entitled for refund claim of duty paid on shortage of the goods. Therefore, the appellants are entitled for refund claim. - the appellants have paid excess duty on the goods received by them, therefore, they are entitled for refund claim. - adjudication authority directed to implement this direction within 30 days of receipt of this order - Decided in favour of assessee.

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• 2014 (2) TMI 974 - CESTAT NEW DELHI (LB)
  

  Penalty for mis-declaration of goods - import of CRT picture tubes 14" CRT picture tubes - whether the Mis declaration is deliberate - Valuation of goods - Confiscation - Penalty u/s 112(a) - While the colour picture tubes for use in colour television are classifiable under sub-heading 85401190 where the basic customs duty is 12.5%, the data/graphic display tubes ( colour ) with phosphor dot Screen pitch smaller than 0.4 mm are classifiable under sub-heading 85404000 where the tariff rate itself is nil.

  Held that:- Since the assessment is online and in normal course, the assessment would have been done online on the basis of declared description without seeing the invoice and without examination as bill of entry had been assessed online under Risk Management System under "no assessment, no examination order" and without any compulsory compliance requirement, the act of the appellant has to be treated as deliberate, as when the invoice mentioned the goods as stock lot of colour picture tubes and the goods were actually colour picture tubes meant for colour television, there was absolutely no reason for the appellant for mentioning the words "data graphic display tubes colour with phosphor dot Screen pitch smaller than 0.4 mm" in the bill of entry and at the same time, classifying the same under sub-heading 85404000 pertaining to data/graphic display tubes and claiming nil rate of duty on this basis. In the background in which the wrong description had been given, it has to be treated as deliberate. - the description of the goods had been deliberately mis -declared with intent to evade the duty so as to attract the provisions of Section 111(m). - Decided against the assessee.

  Declaration of valuation - Held that:- The price of the goods in these bills of entry could be adopted for the goods, in question, if and only if, those bills of entry were in respect of import of "identical goods" or "similar goods" within the meaning of these terms as defined in the Customs Valuation Rules, in comparable quantity. Since, the details of the goods covered under these bills of entry have not been disclosed, it is not known as to whether goods imported under these bills of entry were also unbranded and of the same country of origin or the same were branded goods of different country of origin and also whether the quantities were comparable. Without such comparison, the unit import price of these bills of entry cannot be adopted in respect of the goods, in question.

  Penalty of ₹ 1.5 Lakh u/s 112 (a) maintained - Decided against assessee.

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• 2014 (2) TMI 973 - CESTAT AHMEDABAD
  

  Denial of refund claim - finalization of provisions assessments - djudicating authority sanctioned the refund claim filed by the appellant but credited the same to the consumer welfare fund - Unjust enrichment - Held that:- On the issue of applicability of the principles of unjust enrichment an amendment has been made under Section 18 of the Customs Act, 1962 with effect from 13.07.2006, linking the refunds arising out of finalization of provisions assessments to the provisions contained in Section 27 of the Customs Act, 1962. As the period involved in the present refund claim is 07.09.2007 when amendment carried out in Section 18 w.e.f. 13.07.2006, linking provisions of Section 18 and 27 of Customs Act, 1962, was existing, therefore, doctrine of unjust enrichment will be applicable to the appellants refund claim pertain to the period after 13.07.2006.

  Both the original adjudicating authority and the first appellate authority has giving a finding that appellant has not submitted documents like Charter - Party Agreement, Balance Sheet or Audited Financial documents to support the CA certificate to the effect that unjust enrichment is not attracted. In order to meet the ends of justice it is required that an opportunity should be given to the appellant to substantiate their claim that duty refund sought for has not been recovered by furnishing necessary documentary evidences. The matter is remanded to the adjudicating authority a fresh devono proceedings, with directions to the appellant to furnish all the documentary evidences to establish that excess duty paid has not been recovered - Decided in favour of assessee.

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• 2014 (2) TMI 972 - CESTAT AHMEDABAD
  

  Denial of refund claim of Interest - Unjust enrichment - Denial on basis of Previous order of Commissioner (Appeals) - Held that:- appellant's refunds of interest, paid as per the provision of Sec. 61(2) of the Customs Act, 1962, will not be hit by the doctrine of unjust enrichment. - decision in the case of Ashok Leyland Vs. Commissioner [2001 (3) TMI 786 - CEGAT, CHENNAI] and J.K. Synthetics Ltd. v. CC, Jaipur [1997 (7) TMI 414 - CEGAT, NEW DELHI] followed. - Decided in favor of assessee.

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• 2014 (2) TMI 971 - BOMBAY HIGH COURT
  

  Winding up petition - Escrow account - Non payment for certain invoices - Creditor debtor relationship - Whether or not Yahoo was or could in law be bound by any such escrow agreement between Inflow and Apara - Held that:- abundantly clear that Inflow’s case is entirely speculative. It proceeds on a fanciful supposition, unsubstantiated by facts, unsupported by documents and belied by its own conduct, that Inflow is Yahoo’s creditor. It is not. The reasons are many. Yahoo has paid the invoices on which Inflow founds its claim. It may not have paid these into the escrow account but that does not mean they were unpaid. If Apara, to whom direct payment was made of the invoices in question, did not in turn transmit them to the escrow account, then that is a matter between Inflow and Apara, one of no concern whatever to Yahoo. There is no cogent material that there ever existed any such tripartite escrow contract binding Yahoo such that its direct payments to Apara were to count for nothing.

  Inflow’s suggestion is that if Yahoo paid Apara directly, it is Yahoo that should file recovery proceedings against Apara. That suggestion, wholly untenable, posits the existence of a binding and inflexible tripartite agreement with clearly spelled out terms applicable to all invoices and payments. There is none. Inflow’s cause is also betrayed by its own conduct. For, in its email of 2nd July 2010, it spoke of future payments being made into the escrow account and sought payment advice details for past direct payments. That puts the matter beyond the pale. Mr. Tulzapurkar is, therefore, entirely correct in his submission that there is no debtor-creditor relationship between Yahoo and Inflow. The escrow account was but a mode of payment. It brought no privity between Yahoo and Inflow. None of Inflow’s invoices are drawn on Yahoo, but always only on Apara. That they show Yahoo as the endcustomer does not establish any direct privity; it only specifies a destination, not a contractual liability - The petition is as thoroughly misconceived as it is misdirected and quite possibly mischievous as well - Decided against Petitioner.

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