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Showing 81 to 100 of 2843 Records
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2015 (10) TMI 2773 - ITAT PUNE
Deduction u/s. 80IA(4) - Whether erection of foot over bridges and installation of road signage can be construed as “infrastructure facility” within the meaning of Explanation to section 80IA(4) ? - HELD THAT:- In the instant case, the assessee has constructed three foot over bridges and has installed road signage for the Indore Municipal Corporation. The major part of income during the year was received on account of execution of work of road signage. Thus, the facts in the present case are identical to the one adjudicated by the Co-ordinate Bench in the group concern of the assessee. Respectfully following the same, we hold that the activities carried on by the assessee do not fall within the ambit of “infrastructure facility” defined in Explanation to section 80IA(4). Thus, the assessee is not eligible to claim deduction u/s. 80IA(4). - Decided against assessee.
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2015 (10) TMI 2772 - ITAT PUNE
Validity of proceedings u/s. 263 - HELD THAT:- We find the Hon’ble Madras High Court in the case of Sakti Charities [2000 (2) TMI 75 - MADRAS HIGH COURT] has held that revisional power is not meant to correct every error of fact. The power of revision should not be exercised for purpose of directing the AO to hold another investigation. When the order of the CIT does not indicate as to how the order of the ITO was erroneous and prejudicial to the interest of the revenue, the CIT lacks the jurisdiction to revise the order of the AO.
Since the assessee in the instant case has furnished full details as called for by the AO during the course of assessment proceedings and since the order of the CIT is silent as to how the order of the AO is erroneous and prejudicial to the interest of the revenue, therefore, in view of the above decisions cited we are of the considered opinion that the Ld.CIT was not justified in setting aside the order passed u/s.143(3) r.w.s. 144C(13) of the I.T. Act by invoking the provisions of section 263. We, therefore, set aside the same. The grounds raised by the assessee are allowed.
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2015 (10) TMI 2771 - ITAT KOLKATA
Disallowance of business loss treating the same as speculation loss arising out of foreign exchange contracts - HELD THAT:- We are of the view when the assessee is not a dealer in foreign exchange but an exporter of commodities and assessee had entered into forward contracts with banks in respect of foreign exchange but some of these contracts could not be honoured by the assessee for which it has to pay and which was debited to the P&L Account and claimed the same as business loss/hedging loss.
In order to hedge against losses, the assessee had booked foreign exchange in the forward market with the bank but the export contract entered into by the assessee for export of commodities in some cases failed, the assessee is entitled to claim for deduction of loss as a business loss. Accordingly, respectfully following Hon’ble jurisdictional High court in the case of Soorajmull Nagarmull [1980 (9) TMI 69 - CALCUTTA HIGH COURT] we allow the claim of the assessee. This issue of assessee’s appeal is allowed.
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2015 (10) TMI 2770 - ITAT MUMBAI
Disallowance on account of mark to market loss - CIT(A) allowed assessee’s claim - HELD THAT:- As found from the record that forward contracts were hedged against the debtors. Accordingly resultant loss was claimed as mark to market loss. The issue under consideration is squarely covered in the case of Bank of Bahrain and Kuwait, [2010 (8) TMI 578 - ITAT, MUMBAI] which have been elaborately dealt by the CIT(A) while reaching to the conclusion that mark to market loss on account of foreign contract done to hedge the risk of exchange fluctuations is allowable as business loss and which has been determined as per accounting method regularly followed by the assessee. Accordingly, we do not find any merit in the order of CIT(A). - Decided against revenue
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2015 (10) TMI 2769 - ITAT MUMBAI
Disallowance u/s.14A - HELD THAT:- We have been informed that the AO has not passed fresh order so far in pursuance to the order of the Tribunal. in AY 2006-07. In our considered opinion, before this issue can be decided in the impugned year i.e. A.Y. 2007-08, it is imperative that it is first decided by Assessing Officer in A.Y. 2006-07.
In case, we decide this issue first, it may pre-empt the order of Assessing Officer for A.Y. 2006-07, and it may also close the gates for the AO to make proper examination of facts and circumstances in A.Y. 2006-07. Therefore, to avoid this situation, we deem it proper to send this issue of disallowance u/s 14A, in totality, to the file of Assessing Officer. He shall re-decide this issue, after giving adequate opportunity of hearing to the assessee and after considering the facts and circumstances of the case and the law available at the time of deciding this issue.
Expenditure for the ‘in-house’ research facility - Disallowance of deduction u/s 35(2AB) and u/s 37(1), by treating the same as capital expenditure - HELD THAT:- Since we have received order of Department of Scientific & Industrial Research (DSIR) dt. 24.08.2010, in which the DSIR while approving our R & D facilities for the purpose of section 35(2AB) has not considered clinical trial expenditure incurred by us as a part of "in-house R & D expenditure" on the ground that by definition these expenditure were incurred outside of approved R & D facility. This is the stand taken by DSIR for all pharma R & D companies.
Accordingly, we withdraw our claim for weighted deduction of the aforesaid expenditure u/s.35(2AB). However, we submit that the aforesaid expenditure should be allowed as an expenditure u/s 37(1) (without weightage of 150%).
With respect to alternate claim made by the assessee u/s 37(1) of the Act, it is noted that the invoice of M/s. Reliance Clinical Research Services Pvt. Ltd. dated 31.03.2007 is enclosed at page no. 3 of the paper book, showing that payment has been made to the said company under the head “Clinical Trial Fees” – for the month of March, 2007 for time spent on 1st March to 31st March, 2007 for conducting clinical trials, in support of to all ‘K projects’, for a sum of ₹ 57,65,564/-. It is further noted that on the back side of the invoice, complete details have been given with respect to time spent by 22 employees of RCRS, also giving particulars of the studies done by these employees. Names of these employees have been given along with their rates per hour. It is further noted that ld. Assessing Officer has shown no doubts about the genuineness of these expenses. It was held by Ld. CIT(A) that since claim of assessee with respect to deduction u/s.35(2AB) has been denied, therefore, these expenses are capital in nature. It was further observed by ld. CIT(A) that Assessing Officer, as well as assessee, have treated these expenses as capital in nature. In our view, the observations of Ld. CIT(A) are misplaced and without any basis. We have gone through details of these expenses. In our considered view, these expenses are apparently revenue in nature. Ld DR also could not point out as to which expenses are capital in nature. Thus, in our view, these expenses are of revenue nature.
TDS u/s 194J - Disallowance of software expenses incurred by treating the same as capital expenditure - Counsel has submitted that injustice has been done by the Ld. CIT(A) by not examining the facts and evidences placed by assessee - HELD THAT:- It is noted that full co-operation has been extended by the assessee at all times i.e. during course of assessment proceeding, and also during appellate proceeding before the ld. CIT(A). If the CIT(A) wanted to have one separate petition under Rule 46A, the same could have been very well pointed out to the assessee. Without affording opportunity to the assessee, the valid claim of the assessee should not have been denied to it, merely for some technical reasons. Under these circumstances, we find it appropriate to send this issue back to the file of ld. CIT(A) who shall give opportunity to the assessee to file all the evidences as may be considered appropriate, along with petition under Rule 46A etc.
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2015 (10) TMI 2768 - SUPREME COURT
Partition of immovable property - admissibility of evidence - Whether the Courts below were right in holding that Exhibits B21 and B22 are not admissible in evidence as they are compulsorily registerable documents? - Whether Exhibits B-21 and 22 are admissible in evidence for collateral purpose?
HELD THAT:- Section 17 (1) (b) of the Registration Act mandates that any document which has the effect of creating and taking away the rights in respect of an immovable property must be registered and Section 49 of the Act imposes bar on the admissibility of an unregistered document and deals with the documents that are required to be registered u/s 17 of the Act.
It is well settled that the nomenclature given to the document is not decisive factor but the nature and substance of the transaction has to be determined with reference to the terms of the documents and that the admissibility of a document is entirely dependent upon the recitals contained in that document but not on the basis of the pleadings set up by the party who seeks to introduce the document in question. A thorough reading of both Exhibits B-21 and B-22 makes it very clear that there is relinquishment of right in respect of immovable property through a document which is compulsorily registerable document and if the same is not registered, becomes an inadmissible document as envisaged under Section 49 of the Registration Act - Hence, Exhibits B-21 and B-22 are the documents which squarely fall within the ambit of section 17 (i) (b) of the Registration Act and hence are compulsorily registerable documents and the same are inadmissible in evidence for the purpose of proving the factum of partition between the parties.
Whether these can be used for any collateral purpose? - HELD THAT:- In a suit for partition, an unregistered document can be relied upon for collateral purpose i.e. severancy of title, nature of possession of various shares but not for the primary purpose i.e. division of joint properties by metes and bounds. An unstamped instrument is not admissible in evidence even for collateral purpose, until the same is impounded. Hence, if the appellants/defendants want to mark these documents for collateral purpose it is open for them to pay the stamp duty together with penalty and get the document impounded and the Trial Court is at liberty to mark Exhibits B-21 and B- 22 for collateral purpose subject to proof and relevance.
Exhibits B-21 and B-22 are admissible in evidence for collateral purpose subject to payment of stamp duty, penalty, proof and relevancy.
Appeal allowed in part.
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2015 (10) TMI 2767 - ITAT MUMBAI
Addition u/s 40A(2)(b) towards interest paid on loans - whether the interest paid @ 15% to related parties can be considered as excessive and unreasonable to invoke the provisions of section 40A(2)? - HELD THAT:- As per the provisions of section 40A(2) of the Act the Assessing Officer has to establish on record that the payment made by the assessee is unreasonable and excessive compared to the market rate. Nowhere in the assessment order, has the Assessing Officer brought any material to establish the market rate of interest on such types of loan.
Commissioner (Appeals) has also ignored this aspect. Therefore, there is no reason why interest payment to related party should be confined to 12.6%. More so, when the loans are not secured against any asset unlike bank loans and the lender always runs a risk of recovery of loan, therefore, charges interest at a bit higher rate. The decision cited by the learned Authorised Representative also supports this view. Moreover, it is a fact on record that the assessee has paid interest @ 15% even to unrelated parties. That being the case, interest paid @ 15% to related parties should be allowed. Ground raised by the assessee is allowed and grounds raised by the Revenue are dismissed.
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2015 (10) TMI 2766 - ITAT CHANDIGARH
Grant of approval u/s 80G(5)(vi) - assessee is a society registered under the Society Registration Act and was granted the registration under section 12AA - HELD THAT:- We find that the finding given by the learned Commissioner of Income Tax (Exemption) that neither the assessee had spent 85% of gross receipts, nor has it made a declaration in Form No.10 is factually incorrect. In these circumstances, the order of the learned Commissioner of Income Tax (Exemption) rejecting the application under section 80G of the Act is not as per law.
There is one more sound reason for quashing the said order of the Commissioner of Income Tax (Exemption) rejecting the application for approval under section 80G of the Act. The provisions of section 11(2) are not relevant for granting approval under section 80G of the Act. This aspect of granting approval under section 80G of the Act has been very aptly discussed in the order of the Chandigarh Bench of the I.T.A.T. in the case of Shri Krishna Kirpa Gaushala Samiti Vs. CIT(E) [2015 (9) TMI 1563 - ITAT CHANDIGARH] where on the issue of anonymous donation as appearing in Section 115BBC of the Act, the approval sought by the assessee under section 80G of the Act was rejected.
In the present case also, the only reason given by the Commissioner of Income Tax(Exemption) is the provision of section 11(2) of the Act, which is not at all relevant for the said purpose, which otherwise is also factually incorrect. In view of the above, we direct the learned Commissioner of Income Tax (Exemption) to grant the assessee approval under section 80G of the Act.
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2015 (10) TMI 2765 - SUPREME COURT
Cancellation of anticipatory bail - allegations of corruption and misappropriation of public funds released for rural development - offences punishable Under Sections 409, 420, 467, 468, 477A read with Section 34 of Indian Penal Code (Indian Penal Code) and Under Section 13(1)(d) read with Section 13(2) of Prevention of Corruption Act, 1988 - requirement of the custodial interrogation of the Appellants - HELD THAT:- After considering the gravity of the offence, circumstances of the case, particularly, the allegations of corruption and misappropriation of public funds released for rural development, and further considering the conduct of the Appellants and the fact that the investigation is held up as the custodial interrogation of the Appellants could not be done due to the anticipatory bail, we are of the opinion that the High Court has rightly cancelled the anticipatory bail granted to the Appellants by the Additional Sessions Judge, Jalgaon.
We decline to interfere with the order of cancellation of anticipatory bail, passed by the High Court - appeal dismissed.
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2015 (10) TMI 2764 - ITAT CHANDIGARH
Accrual of income - sales tax subsidy - AO treating the same as revenue receipt taxed it under the head ‘income from other sources’ - HELD THAT:- The assesses have received sales tax subsidy from Punjab Government under the scheme named, ‘Industrial Policy & Incentive Code, 1996’. We have gone through the said policy and found that the scheme though not verbatim as that of West Bengal or Gujarat schemes, but the sum and substance of all these schemes are the same, therefore, relying on our finding given in the case of Bhushan Limited [2015 (6) TMI 1195 - ITAT CHANDIGARH] we hold that the sales tax subsidy received by the assessee is capital in nature.
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2015 (10) TMI 2763 - ITAT MUMBAI
Addition on account of alleged artificial capital gain - Addition on account of alleged payment of commission - HELD THAT:- DR fairly accepted that though the assessee had submitted requisite documentary evidences in support of its claim and AO could not bring on record contrary evidences to contradict the evidences filed by the assessee, but there statements of few persons against the assessee.
When bench put across factual queries to the parties, both the parties i.e., Ld. Counsel as well as Ld. DR fairly agreed that there were some gaps and contradictions. It has been stated by the AO in the assessment order, that there is no Demat account - counsel has contended that shares were converted in the Demat account on the sale of shares. Ld. AO has field to verify the demat account. Further the company namely Fast Track Entertainment Ltd., is existing on the records of ROC as well as on the records of income tax department.
AO failed to make inquiries of the said company with these agencies, and further, AO should make inquiries with the authorized persons of the brokers only. Therefore we find it appropriate to send this matter back to the file of the AO with the direction to make proper inquiries and to examine all the documentary evidences as have been submitted by the assessee in support of its claim and for this purpose the AO shall afford opportunity of hearing to the assessee.
AO shall exercise its powers, as has been conferred upon him under the law, to make inquiries from the persons/agencies concerned. The assessee shall extend all requisite cooperation as may be directed by the AO by filing complete address and any particulars of the persons concerned. AO shall grant opportunity of cross examination to the assessee, in case he would be relying upon statement of any of the persons against the assessee. We, therefore, send this matter back to the file of the AO with our directions as stated above. Appeal of the assessee is allowed for statistical purposes.
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2015 (10) TMI 2762 - MADRAS HIGH COURT
Smuggling - concealment of gold within the Pallet boxes of the TVs imported - seizure and confiscation - HELD THAT:- Statement recorded with respect to concealed pallet boxes.
To give quietus to the issue, the petitioner is hereby directed to furnish 100% Bank Guarantee for the value of the goods assessed within a week from the date of receipt of a copy of this order. On such furnishing of Bank Guarantee, the respondents shall release 7 pallet boxes except boxes 8 and 9 (B1 and B2). The other adjudication proceedings in accordance with the Customs Act may go on and the same shall be completed within a period of eight weeks.
Petition disposed off.
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2015 (10) TMI 2761 - SUPREME COURT
Partition of property - stand of the defendants-appellants was that the plaintiff could not claim any share in self acquired property of the members of the joint family and that the claim of the plaintiff had to be dealt with only under Section 6 of the Hindu Succession Act, 1956 as it stood prior to the amendment by Act 39 of 2005 - Whether Hindu Succession (Amendment) Act, 2005 (‘the Amendment Act’) will have retrospective effect?
HELD THAT:- The proviso to Section 6(1) and sub-section (5) of Section 6 clearly intend to exclude the transactions referred to therein which may have taken place prior to 20th December, 2004 on which date the Bill was introduced. Explanation cannot permit reopening of partitions which were valid when effected. Object of giving finality to transactions prior to 20th December, 2004 is not to make the main provision retrospective in any manner. The object is that by fake transactions available property at the introduction of the Bill is not taken away and remains available as and when right conferred by the statute becomes available and is to be enforced. Main provision of the Amendment in Section 6(1) and (3) is not in any manner intended to be affected but strengthened in this way.
The rights under the amendment are applicable to living daughters of living coparceners as on 9th September, 2005 irrespective of when such daughters are born. Disposition or alienation including partitions which may have taken place before 20th December, 2004 as per law applicable prior to the said date will remain unaffected. Any transaction of partition effected thereafter will be governed by the Explanation.
The matter is remanded to the High Court for a fresh decision in accordance with law.
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2015 (10) TMI 2760 - MADRAS HIGH COURT
Imposition of higher rate of tax - failure to file Form WW - TNVAT Act - HELD THAT:- Section 63-A of the Tamil Nadu Value Added Tax Act, 2006 empowers the authority to levy penalty for the belated submission of Form-WW. Accordingly, the petitioner has also paid the penalty amount. Now, the petitioner is inclined to file Form-WW for the purpose of completing the assessment in question relating to the turn over available in Form WW.
The learned counsel appearing for the petitioner submitted that Form WW is very much available and the petitioner is ready to place before the authority within a time frame to be fixed by this court. The said submission is recorded.
Since the petitioner has already paid penalty amount as contemplated under the provision of the Tamil Nadu Value Added Tax Act, 2006, this court is inclined to set aside impugned order and remit back the matter for fresh consideration with certain conditions - petition allowed by way of remand.
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2015 (10) TMI 2759 - ITAT AHMEDABAD
MAT - Adjustment of book profit u/s.115JB - estimated gratuity provision made on the basis of actuarial valuation, which is an unascertained liability - CIT-A deleted addition - Whether the provision for gratuity is ascertained liability or not for the purpose of computing the book profit u/s.115JB? - HELD THAT:- This issue was duly examined by the Coordinate Bench in the earlier years in the case of the assessee [2013 (1) TMI 135 - ITAT AHMEDABAD] wherein issue decided in favour of assessee. Therefore, taking a consistent view, we hereby dismiss this ground of Revenue’s appeal.
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2015 (10) TMI 2758 - ITAT INDORE
Addition towards unpaid sundry creditors treated as bogus - HELD THAT:- Revenue has failed to controvert the findings of the learned CIT(A) in respect of 16 creditors which have been accepted by learned CIT(A) as genuine, therefore we find no merit in the appeal of the revenue.
In respect of five creditors which were held to be non-genuine, we hold that certain more facts need to be brought on record to decide the issue, therefore, after hearing both the sides, we restore this issue to the file of the AO to decide de novo. The assessee shall provide correct addresses of these five creditors and the AO will verify whether these concerns are showing outstanding in their books of accounts against the assessee. Whether the creditors are genuine or not. After considering all these, AO shall decide the issue as per law. Revenue’s appeal is dismissed and the assessee’s appeal is allowed for statistical purposes.
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2015 (10) TMI 2757 - ITAT MUMBAI
Disallowance u/s 14A r.w.r. 8D - Computing disallowance applying the proportionate method - HELD THAT:- Out of the total expenses claimed of ₹ 31,13,082/-, the amount disallowed in relation to dividend is of ₹ 25,36,669/-. Now, this is evidently absurd on the face of it and the assessee is correct in contending that since there is huge other income, the quantum of disallowance is entirely unreasonable. Rather, a reasonable disallowance can be made, if the accounts of the assessee are considered, without taking recourse to Rule 8D of the Rules.
As assessee has contended that the total expenses claimed (as above) being ₹ 31,13,082/-, the total income ( as above) being of ₹ 80,189,889/- and out of this income, dividend being of ₹ 904,668/-, the disallowance of expenses needs to be worked out by applying the proportionate method, as per which, the disallowance works out to ₹ 35120/- it is found to be acceptable. The total income, the dividend and the total expenses claimed being as above, as discussed, the disallowable expenses would work out to ₹ 35,120/-, applying the proportionate method. Therefore, the disallowance is restricted to ₹ 35,120/-. Accordingly, Ground No.1 is partly accepted.
Disallowance u/s 94(7) - According to CIT(A) as per section 94(7) only the short term capital loss ought to have been added - HELD THAT:- Since no worthwhile challenge had been laid to the above finding of the ld. CIT(A) by the assessee before us, finding no error therein, the action of the ld. CIT(A) in restricting the addition
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2015 (10) TMI 2756 - SIKKIM HIGH COURT
Validity of Rule 3 (11) of the Central Rules - a state, where lotteries are conducted by another state - entitlement of charge an amount of ₹ 2000/- (Rupees two thousand) per draw from the organising state - HELD THAT:- Rule 3(11) of the Lotteries (Regulation) Rules, 2010 is undisputedly a subordinate legislation. These rules have been framed by the Central Government in exercise of the powers conferred by Sub-Section 1 of Section 11 of the of the Lotteries (Regulation) Act, 1998. Contrary to what have been submitted by the Learned Additional Solicitor General, it is not a law framed in terms of Entry 96 of List 1 of the Seventh Schedule to the Constitution of India. Lotteries (Regulation) Act, 1998 admittedly was enacted under entry 40 of List-1 of the Seventh Schedule. Entry 40 of List-1 is one of the entries which empowers the Parliament to legislate and is regulatory in nature. Entries 82-92 in List-1 are taxing provisions by which Parliament may legislate on the subject - Naturally, the Lotteries (Regulation) Act, 1998 having been enacted under the regulatory provision of Entry 40 of List 1, it would not be permissible to levy tax or fees or in other charges or other forms of imposts thereunder. It, therefore, would follow by natural corollary that rules framed under the Lottery (Regulations) Act, 1998 cannot make a provision levying any tax or fees or imposts.
In the present case, there are no specific provision in the central Act by which power to impose tax or fees has been provided. Rule 3(11) clearly appears to be in excess of the provisions in the parent Act, and therefore, would be rendered ultra vires the provisions of the Central Act.
Rule 3(11) of the Lotteries (Regulation) Rules, 2010 is ultra vires the provision of the Lotteries (Regulation) Act, 1998 and is accordingly struck down - Notification No.380/FIN/ DSSL/431 dated 6.8.2010 issued by the Respondent No. 2 stands hereby quashed as being ultra vires the provisions of the Lotteries (Regulation) Act, 1998.
Petition allowed - decided in favor of appellant.
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2015 (10) TMI 2755 - ITAT PUNE
Claim of deduction u/s 80IB(10) in respect of two projects undertaken by the assessee i.e. Kumar Kruti and Kumar Shantiniketan - prorata claim of deduction in respect of project Kumar Shantiniketan - Two of the flat bearing Nos.3 and 4 in building ‘D’ had covered area exceeding 1500 sq.ft. and on that basis, the deduction claimed under section 80IB(10) was denied to the assessee - HELD THAT:- Tribunal had in the earlier years relating to assessment years 2008-09 and 2009-10, allowed the claim of assessee with directions to the AO to allow prorata deduction u/s 80IB(10) and denied the said deduction in respect of two flats i.e. flat Nos.3 and 4 in building ‘D’, which had covered area of more than prescribed limit. The relevant findings of the Tribunal which are being referred to, but not being reproduced for the sake of brevity. In the entirety of the above said facts and circumstances, where the issue is identical to the issue before the Tribunal in the earlier years, following the same parity of reasoning, we direct the AO to re-work prorata deduction under section 80IB(10).
Deduction u/s 80IB(10) in respect of project Kumar Kruti - deduction was denied to the assessee on account of two accounts i.e. where the project Kumar Kruti was part of larger project named Kumar City, and where the assessee had not completed the project by 31.03.2008, prorata deduction was allowed to the assessee - HELD THAT:- Tribunal after considering the issue, held that the project Kumar Kruti was an independent project since the building plan of the said project was sanctioned independently on 16.07.2006 and in view thereof, there was no justification in holding that the project Kumar Kruti was part of Kumar City. The relevant findings of the Tribunal are reproduced which are being referred to, but not being reproduced for the sake of brevity. Tribunal further held that the assessee was entitled to prorata deduction under section 80IB(10) in respect of eligible units, which were within covered area limit of 1500 sq.ft. However, few flats, which exceeded the prescribed covered area were denied the deduction under section 80IB(10) - We uphold the order of CIT(A) in directing the Assessing Officer to work out the prorata deduction in respect of units sold in Kumar Kruti project. In the entirety of the above said facts and circumstances, we uphold the order of CIT(A) and dismiss the grounds of appeal raised by the Revenue.
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2015 (10) TMI 2754 - CESTAT MUMBAI
Demand of duty - distribution of cenvat credit by the ISD - the appellant's submission is that the demand notice has been issued to Roha factory and is without jurisdiction. According to the learned counsel, the show cause notice should have been issued to ISD located at Thane and not to them - HELD THAT:- Credit is finally availed and utilised by the manufacturing unit. What learned counsel is trying to say is that show cause notice should be issued to head as hand has acted as per the direction of head. In our view, as rightly pointed out by learned AR, cause of action stands with availment and utilization of credit at the manufacturing unit. Of course, ISD and manufacturing unit are integrally connected, and both of them unitedly has to resolve the issue with the department. We, therefore, reject the plea regarding jurisdiction.
CENVAT Credit - input service distribution - common input services used in trading as well as manufacturing activity - assessment of distribution of credit made at the ISD - HELD THAT:- It would be seen from the definition that input service distributor is neither a service provider nor a manufacturer, but it is only an office of service provider or manufacturer. Since input service distributor neither manufactures the goods nor provides the service, there is no question of input service distributor liable to pay any excise duty or service tax. (The company will, of course, either be manufacturing the goods or providing the service from either the same location or some other location). There is therefore no question of assessment or self assessment by ISD.
Rule 7 of the Cenvat Credit Rules states that input service distributor is expected to distribute the credit and ensure that the credit distributed does not exceed the amount of service tax paid as per the documents. The other condition is that the credit of service tax attributable to service used in a unit exclusively engaged in the manufacture of exempted goods or providing exempted service shall not be distributed. It will be seen from the above Rule that these are only two guidance for the ISD for distribution of the credit. There is no rule in Service Tax Law which provides assessment or self-assessment by ISD.
Next submission of the learned counsel is that credit cannot be denied unless the assessment of distribution of credit made at ISD is set aside - HELD THAT:- All that input service distributor is to certify in clause (b) that they have distributed cenvat credit correctly. Based upon the heading given in the return which is a common heading for service provider as well as input service distributor, it cannot be claimed that input service distributor is making self-assessment and that self-assessment is required to be challenged. No rule provides for assessment/self-assessment by ISD.
Time Limitation - HELD THAT:- It is an admitted position that the appellant was registered as input service distributor and the fact that the appellant was also undertaking trading activity was suppressed from department and this has been admitted by the Director of the company. Thus, there is a suppression of fact and in our view the extended period of limitation is correctly invoked.
Appeal dismissed - decided against appellant.
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