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Showing 381 to 400 of 1407 Records
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2015 (2) TMI 1032
Unaccounted share application money - CIT(A) confirmed addition u/s. 68. - Held that:- By considering the relevant record produced by the assessee, we find that the assessee has discharged its onus to prove that the payment in question on account of refund of share application money to these three parties have been made by Nath Industrial Chemical Ltd. and Nath Paper & Pulp. Though the CIT(A) has raised a question about the takeover agreement to verify whether liability of repayment was part of the takeover agreement or not however, it is pertinent to note that when the assessee has produced the relevant record to establish that the payment was made by Nath Group of Companies then the takeover agreement will not change the fact of payment made by these companies. Accordingly, in the facts and circumstances of the case, we hold that the assessee has proved the fact that the repayment of application money of ₹ 51,20,000/- was made to these three companies through Nath Group of companies and therefore, addition made by the AO of this account is not sustainable and accordingly deleted. - Decided in favour of assessee.
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2015 (2) TMI 1031
Deduction u/s 80IB - AO has disallowed claim on the premise that the assessee was qualified to get deduction u/s.80IB only in AY 2003-04 and not in AY 2002-03 i.e. the FY 2001-02 - CIT(A) allowed the deduction accepting that the old unit engaged in production since F.Y. 2000-01 - Held that:- Assessing officer was not correct in denying claim of deduction u/s. 80IB(3) to the appellant merely because the trade license for the new premise and provisional registration by Directorate of Cottage & Small Scale Industries of state Government was after 01.04.2002, when there was clear evidence before him that the appellant was engaged in manufacturing activity from FY 2000-01 onwards. Here is no dispute that the appellant satisfies all other eligibility conditions prescribed u/s. 80IB.
The assessee has been allowed deduction u/s 80IB of the Act for and from AY 2004-05 to 2008-09 and now in AY 2009-10 the claim is declined. For the sake of consistency the claim of deduction u/s. 80IB of the Act cannot be disallowed. Therefore, the assessing officer was correctly directed to allow deduction u/s. 80IB(3) of I.T. Act, 1961, as computed in accordance with the provisions of law after going through the audit report and other relevant material. - Decided in favour of assessee.
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2015 (2) TMI 1030
Eligibility for exemption u/s.10(23C)(iiiad) - assessee is conducting only coaching classes for students for appearing in civil services examination - CIT(A) allowed the claim - Held that:- there is no justification on the part of the A.O. to observe that the assessee cannot be treated as a charitable institution. Therefore, keeping in view the fact that assessee is registered as a charitable institution under section 12A of the Act, it can alternatively also claim exemption under section 11 of the Act. The A.O. while completing the assessment has totally ignored this aspect and has failed to examine whether the assessee is eligible for exemption under section 11 of the Act. For the aforestated reasons, we cannot therefore, accept the conclusion drawn by the A.O. while disallowing the claim of exemption. In the aforesaid view of the matter, we hold that Ld. CIT(A) was correct in allowing assessee's claim of of exemption under section 10(23C)(iiiad). - Decided in favour of assessee.
Disallowance of depreciation - CIT(A) deleted the addition - Held that:- As can be seen Ld. CIT(A) has deleted the addition having found that assessee has neither written off the cost of acquisition nor has treated it as application of income. As the learned D.R. has not brought any material to controvert the aforesaid finding of the Ld. CIT(A), we do not find any infirmity in the order of the Ld. CIT(A). - Decided against revenue.
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2015 (2) TMI 1029
Validity of proceedings under section 153C non recording of satisfaction by the Assessing Officer in the case of "person subjected to search" - Held that:- Satisfaction by the Assessing Officer of the searched person was not recorded before initiating proceedings under section 153C of the Act against the assessee and the impugned issue is squarely covered by judgment of the jurisdictional High Court in CIT Vs. Classic Enterprises [2013 (4) TMI 520 - ALLAHABAD HIGH COURT]. We, therefore, have no hesitation in holding that since the assessment was framed consequent to the proceedings initiated under section 153C of the Act, without recording satisfaction by the Assessing Officer of the searched person, the assessment is bad in law and deserves to be quashed. We accordingly set aside the order of the ld. CIT(A) and quash the assessment framed under section 153C read with 143(3) of the Act. - Decided in favour of assessee.
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2015 (2) TMI 1028
Deduction under section 80-IA on power generation receipts - CIT(A) allowed the deduction - Held that:- The assessee during the year under consideration had claimed deduction under section 80-IA(5) of the Act. The Assessing Officer had tabulated the notional losses from year. However, the said losses were being adjusted against the other income arising to the assessee from time to time. Where the losses have already been adjusted against assessable income in the preceding year, the said losses cannot be said to be available to be adjusted against the income of the assessee arising in the year under consideration.
As held by the Tribunal in the case of Shri Sangram Patil v. ITO [2015 (2) TMI 936 - ITAT PUNE] that, where the assessee exercised the option of the ten consecutive years as contained in section 80-IA of the Act, only the losses beginning from such initial assessment year are to be brought forward and setoff while applying the provisions of section 80-IA(5) of the Act and not the losses of the earlier years, which have already been set-off against the other income of the assessee. Accordingly, we hold that the assessee is entitled to claim of deduction under section 80-IA(5) of the Act. - Decided against revenue.
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2015 (2) TMI 1027
Unaccounted parking charges - AO made the addition of ₹ 1.25 lakhs on the basis that the assessee has been realising parking charges which has not been declared in the books of account - CIT(A) deleted addition following his own order for the assessment year 2005-06 - Held that:- Since the basis of addition is survey carried out under section 133A of the Act on September 19, 2007 no such addition is justified in earlier years, i.e., assessment years 2006-07 and 200708. We also find that the Assessing Officer has referred to a letter dated January 13, 2006 written to ICICI Bank which was found in the course of survey but when the Assessing Officer made enquiry from ICICI Bank, it was replied by ICICI Bank that they had not received any such letter and they have not made any such payment to the assessee. Thereafter, the Assessing Officer has made assumptions that the assessee has started realising parking charges directly from the customers but this assumption of the Assessing Officer is without any basis and considering all these facts, we feel that no interference is called for in the order of the Commissioner of Income-tax (Appeals) on this issue because no case has been made out by the Assessing Officer for making addition in the present year. - Decided against revenue.
Deduction under section 80-IA of the Act in respect of captive power consumption - CIT(A) allowed the deduction - as per AO assessee-firm was not set up for the generation or distribution of powers but the firm was formed specifically for constructing and running a commercial complex - Held that:- As per partnership deed the assessee-firm is authorised to carry on business of real estate and business of similar nature and/or other business as the partners may mutually decide and agree from time to time. In our considered opinion, the objects clause of the assessee-firm are so wide that it includes any sort of activity being carried on by the assessee as authorised by the said partnership firm and therefore, we do not find any merit in the first objection of the Assessing Officer that the assessee-firm was not set up for the generation of electricity.
Higher profit shown for the purpose of claiming extra deduction under section 80-IA - Commissioner of Income- tax (Appeals) has reproduced the detailed working regarding rate per unit of electricity along with the meter reading, etc., and a clear finding is given that rate per unit charged is same as that being charged from other tenants of the building. This finding of the Commissioner of Income-tax (Appeals) could not be controverted by the learned Departmental representative of the Revenue and therefore, in the facts of the present case and as per various judgments cited by the learned authorised representative of the assessee, it cannot be said that there is any merit in this allegation that extra profit has been shown by the assessee in the electricity generation and distribution unit by transferring extra profit from air conditioning unit to generation unit.
Non obtaining of permission or approval from the Central Government or the State Government - Enough material has been brought on record by the learned authorised representative of the assessee showing that in respect of generation of power by using diesel generating set and its captive consumption and supply to tenants, no approval or permission from any Government authority is required. Regarding the argument of Revenue that a power generation unit cannot have profit of more than 16 per cent. on the capital invested as per the Electricity Regulatory Act, no such copy of any Act by highlighting such provision has been brought on record and moreover, even if such restriction is there regarding profit of electricity generating company, then such restriction is on account of restricting the rate of electricity to be charged by electricity generating company to common public by holding that such electricity company should not earn higher profit. In the present case, as against supply of power to the tenants and captive power consumption of ₹ 130.83 lakhs, the assessee is showing profit of ₹ 17.54 lakhs whereas in respect of air conditioning undertaking against total receipt of ₹ 135 lakhs, the assessee is showing net profit of ₹ 27.68 lakhs and considering these facts, we are of the considered opinion that in the facts of the present case, the profit reported by the assessee in respect of power generation cannot be said to be excessive or unreasonable particularly when the same rate of power per unit is being charged by the assessee from tenants. Deduction under section 80-IA allowed - Decided in favour of assessee.
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2015 (2) TMI 1026
Applicability of amended provision of Section 36(1)(III) - CIT(A) held that amended provision of Section 36(1)(III) was not applicable in the case of the assessee as no new assets were acquired and the disallowance of interest was not proper - CIT(A) directing the Assessing Officer to verify the facts regarding the fixed assets related to the term loans from MTIL and IOB as on 31.03.2003 & to verify the contentions of the A.R of the appellant from records to ensure that the same business activity had been continued after renovation - CIT(A) restricting the addition of ₹ 95,100/- to ₹ 19,020/- which was made by AO by invoking provisions of section 14A - Held that:- A perusal of the impugned order shows that the CIT(A) after the submissions of the assessee has further summed up these submissions alongwith arguments and after re-addressing the facts has given the directions to the AO to verify the factual assertions. On a consideration of the directions contained which have been reproduced in the earlier part of this order, we find no infirmity in the direction given. However considering the fact that the CIT(A) as per section 251(1)(a) of the Act has the powers only to confirm, reduce, enhance or anull the assessment and specifically does not have the power to set aside as per the Finance Act, 2001 w.e.f 01.06.2001. Accordingly finding ourselves in agreement with the directions given, we substitute the same by our similar direction to the AO as the Statute bars the CIT(A) to set aside the issue to the AO. The impugned order is modified to this extent. Decided in favour of revenue for statistical purposes.
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2015 (2) TMI 1025
Applicability of provisions of section 161(1A) or section 164 - the income is chargeable to tax in the hands of the appellant amounting to ₹ 7,95,15,873/- as the maximum marginal rate as held by CIT(A) - assessee trust was created by indenture of trust dated 01/02/2008 by its Settlor M/s. Infrastructure Licence & Financial Services Ltd. - Held that:- It is pertinent to note that when the CIT(A) has held that the provisions of section 164 are applicable then the issue of treating the assessee as AOP under section 161(1A) is no more exist and accordingly, the decision of the Bangalore Bench of this Tribunal in India Advantage Fund-VII [2014 (10) TMI 614 - ITAT BANGALORE] to the extent, of finding on the point of treating the trust as AOP, becomes irrelevant.
As far as the question of applicability of section 164(1) is concerned, the CIT(A) has proceeded on the basis of fact that the name of IL & FS Financial Services is not appearing either in the deed of trust or in the supplementary deed of the trust. Further, there was also confusion about the fact that the Settlor and beneficiary are one and the same. This is a crucial factual aspect of the case and requires a proper verification by considering the relevant evidences as well as contentions of the assessee. Another crucial confusion as emerging from the records is regarding income arising from sale of shares by the assessee trust and distributed to the beneficiaries was offered to tax by IL & FS Financial Services Ltd. and assessed accordingly. Since these two factual aspects requires a clear and proper verification and examination as well as a clear finding, therefore in the facts and circumstances of the case we set aside this issue to the record of CIT(A) for deciding the same denovo after verification of the facts, consideration of the contentions as well as decisions relied upon by the assessee. Needless to say the assessee may be given appropriate opportunity of hearing before passing the fresh order. - Decided in favour of assessee for for statistical purposes.
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2015 (2) TMI 1024
Setting off of brought forward business loss and unabsorbed depreciation - CIT(A) allowed setoff in the assessee of the amalgamated company for assessment year 2006-07, even the amalgamation was effective with effect from 01.04.2004 as per the order of the Hon’ble Calcutta High Court and the date of amalgamation thus falls within a period less than three years from the date of incorporation of the amalgamating company - Held that:- There is no evidence on record to prove that amalgamating company was engaged in business in which the accumulated loss occurred or depreciation remains unabsorbed for three or more years as on the date of amalgamation. Hence the order of ld. CIT(A) on this account is not sustainable since the assessee has not complied with the provision of section 72A(2)(a)(i) of the Act. - Decided in favour of revenue.
Disallowance regarding employees’ contribution to PF and ESI - CIT(A) deleted addition - Held that:- The proposition law in this regard is settled in the case of CIT vs Vinay Cement Limited ( 2007 (3) TMI 346 - Supreme Court of India). If the contributions are made before the due date of filing the return no disallowance is to be made. In this case we note that the actual dates of payment are not available on record. Hence we remit this issue to the file of AO. AO shall examine the actual date of payments and allow the payments if the same are done before the due date of filing the return. - Decided in favour of revenue for statistical purposes.
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2015 (2) TMI 1023
Revision u/s 263 by DIT(E) - Benefit of mutuality given to the assessee - assessee charged only interest income instead of taxing the whole excess of income over expenditure and this mistake resulted in under assessment of income of ₹ 1,06,10,312/- as held by CIT(A)- Assessee Society is registered under section 12A - Held that:- AO has made the detailed enquiries on the issue of ‘principle of mutuality’ and passed the order dated 13.12.2011 u/s. 143(3) of the I.T. Act. Therefore, the assessment order dated 13.12.2011 passed u/s. 143(3) is not erroneous at all and the Ld. DIT(E) has passed the impugned order dated 28.3.2014 contrary to the law and facts on record, which is not sustainable in the eyes of law.
The Audit Officer raised the objection on 2.5.2012 on the benefit of mutuality to the assessee and charging only interest income instead of taxing the whole income and in response to the audit objection, the AO vide his reply dated 18.12.2012 to the Sr. Audit Officer regarding the ‘principle of mutuality’ and supported the assessment order dated 13.12.2011 by stating that all received of money from members should go for the maintenance of super-structure, the surplus arising after meeting the administrative expenses has naturally be transferred to the account of the Institution Members, because it belongs to the Members. He further replied that it is the Institution Members who had contributed towards the cost of the assessee or any service or some time deficit will also be to the account of the members. This is a settled principle behind the mutuality concept and lastly Dy. DIT(E) Circle-1, New Delhi vide his reply dated 10.1.2014 to the Director of Income Tax (E), Delhi. The reply to the DIT(E) establish that the revenue authority itself supported the order of the AO dated 13.1.22011 passed u/s. 143(3) of the I.T. Act. In our considered opinion, when two views are possible and the AO has taken one of the possible view, then the provisions of section 263 of the I.T. Act will not apply. Therefore, in the present case the same facts and circumstances are applicable. We are of the view that ld. DIT(E) has passed the impugned order by taking his own view which is contrary to the various decision rendered by the Hon’ble Supreme Court of India in the case of Malabar Industrial Co. Ltd. vs. CIT (2000 (2) TMI 10 - SUPREME Court) and CIT vs. Max India Ltd.(2007 (11) TMI 12 - Supreme Court of India). - Decided in favour of assessee.
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2015 (2) TMI 1022
Entitlement to deduction u/s 80P(2)(a)(i) - Held that:- As it is apparent that if the co-operative society complied with all the three conditions; firstly that the primary object or principle business transacted by it is a banking business, secondly, the paid up share capital and reserve of which are 1 lakh or more and thirdly, by laws of the co-operative society do not permit admission of any other co-operative society as a member, it will be regarded to be primary co-operative bank. If co-operative society does not fulfil any of the conditions, it cannot be regarded to be a primary co-operative bank. Therefore, in the case of the Assessee we have to examine on the basis of the facts and materials on record whether the Assessee co-operative society complies with all the three conditions. In case, it does not comply with all the three conditions, it cannot be regarded to be a co-operative bank and the provisions of Sec. 80P(4), in our opinion, will not be applicable in the case of the Assessee.
Since the Assessee cannot be regarded to be a primary co-operative bank, therefore, it cannot be a co-operative bank and therefore the provisions of Sec. 80P(4) are not applicable in the case of the Assessee and Assessee shall be entitled for deduction u/s 80P(2)(a)(i). We, therefore, set aside the order of CIT(A) and allow deduction to the Assessee u/s 80P(2)(a)(i). - Decided in favour of assessee.
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2015 (2) TMI 1021
Reinstatement in job in case of honourably acquitted by court - No provision in Tamil Nadu Service rules - Directions to curb Eve-teasing - Held that:- As we have already indicated, in the absence of any provision in the service rule for reinstatement, if an employee is honourably acquitted by a Criminal Court, no right is conferred on the employee to claim any benefit including reinstatement. Reason is that the standard of proof required for holding a person guilty by a criminal court and the enquiry conducted by way of disciplinary proceeding is entirely different. In a criminal case, the onus of establishing the guilt of the accused is on the prosecution and if it fails to establish the guilt beyond reasonable doubt, the accused is assumed to be innocent. It is settled law that the strict burden of proof required to establish guilt in a criminal court is not required in a disciplinary proceedings and preponderance of probabilities is sufficient.
There may be cases where a person is acquitted for technical reasons or the prosecution giving up other witnesses since few of the other witnesses turned hostile etc. In the case on hand the prosecution did not take steps to examine many of the crucial witnesses on the ground that the complainant and his wife turned hostile. The court, therefore, acquitted the accused giving the benefit of doubt. We are not prepared to say in the instant case, the respondent was honourably acquitted by the criminal court and even if it is so, he is not entitled to claim reinstatement since the Tamil Nadu Service Rules do not provide so.
In view of the above mentioned circumstances, we are of the view that the High Court was not justified in setting aside the punishment imposed in the departmental proceedings as against the respondent, in its limited jurisdiction under Article 226 of the Constitution of India.
Directions for All the State Governments and Union Territories in public interest to curb eve-teasing - 1) To depute plain clothed female police officers at public places to monitor and supervise incidents of eve-teasing
2) To install CCTVs in strategic positions
3) Person in charge of the respective public institutions have to take steps as they deem fit and on a complaint, they must pass on the information to the nearest police station or the Women's help centre
4) In case of eve-teasing is committed in a public service vehicle, it is duty of crew to take such vehicle to the nearest police station. Failure to do so should lead to cancellation of the permit to ply.
5) To establish Women’ Helpline in various cities and towns
6) Suitable boards cautioning such act of eve-teasing be exhibited in all public place
7) Responsibility is also on the passers-by and on noticing such incident, they should also report the same to the nearest police station or to Women Helpline
8) To issue suitable instructions to the concerned authorities including the District Collectors and the District Superintendent of Police so as to take effective and proper measures to curb eve-teasing
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2015 (2) TMI 1020
Waiver of pre deposit - Denial of the benefit of Rule 96D - Held that:- Sub-rule (5) of Rule 96D provides that if cotton fabrics after being processed are removed without payment of duty to one or more factories for further processing or to the originating factory, such removal shall be subject to and in accordance with the provisions of sub-rule (3). It is seen that sub-rule (3) of Rule 96D provides that when cotton fabris are removed from the factory from where they are manufactured to another factory including a processing factory, the consignor shall follow the procedure as required under Rule 156A and Rule 156B as modified by Rule 173N of the said Rules. In the instant case, the learned Counsel submitted that there is no dispute that the applicant followed the procedure as provided under sub-rule (3) of Rule 96D. On a perusal of the impugned Adjudication order, we find that the Adjudicating authority proceeded on the basis that the fully processed cotton fabrics removed for further processing of LDPE/HDPE coating, it ceases to retain its identity as cotton fabrics and a new distinct commodity emerges of such coating/lamination. Prima facie, we find that there is no change of identity of the processed fabrics at the hand of the processor. In any event, the process of LDPE/HDPE was undertaken at the hands of the principal CVIL. Hence, we find that the applicant made out a strong prima facie case for waiver of pre-deposit of the entire amount of duty along with interest and penalty - Stay granted.
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2015 (2) TMI 1019
Refund of CENVAT Credit - Held that:- Interest has been granted vide Order-in-Original dated 30.12.2014, wherein the interest of ₹ 4,37,95,262/- has been granted against the claim of the appellant for rebate of Service Tax of ₹ 5,45,77,651/-. It appears from the Order-in-Original dated 30.12.2014 that the interest has been allowed from the date when C.A certificate (certifying utilization of CENVAT Credit) was filed. - appellant made prayer for compliance of order by the Revenue. We note the compliance reported by the Revenue in terms of order of this Tribunal. Thus, the miscellaneous application is disposed of. The assessee/appellant may seek/resort to remedy, against the Order-in-Original dated 30.12.2014, in accordance with law. - Revenue is in appeal before the Hon'ble Supreme Court in Civil Appeal no. 38259 of 2014 against final order dated 21.08.2014 and if the Revenue succeeds, the appellant shall be bound to refund the amount to the Revenue along with interest - application disposed of.
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2015 (2) TMI 1018
Waiver of pre deposit - Business auxiliary service or banking and other financial services - Held that:- Prima-facie, the conclusions recorded by the adjudicating authority on both the services alleged, appears unsustainable. Insofar as BAS is concerned, the service provided by the assessee prima-facie falls within the ambit of export of service in view of the Larger Bench decision in CCE, Chandigarh vs. Paul Merchant Ltd. reported in [2012 (12) TMI 424 - CESTAT, DELHI (LB)]. Insofar as BAFS is concerned, prima-facie and in view of the analysis in Association of Leasing and Financial Services Companies vs. Union of India reported in [2010 (10) TMI 4 - SUPREME COURT OF INDIA], particularly in pargraph 20 and 37 (of the report) and the decision of this Tribunal in Commissioner of Service Tax, Delhi vs. M/s.Lufthansa Technik Services India Pvt. Ltd. reported in [2013 (12) TMI 968 - CESTAT NEW DELHI], the transactions do not amount to BAFS and equipment leasing of transactions between the assessee and its customers falls outside the ambit of financial leasing as defined in section 65 (12) read with Section 65 (105) (zm) of the Act. - strong prima-facie case in favour of the petitioner/ appellant. We therefore order waiver of pre-deposit in full and stay all further proceedings for realization of the adjudicated liabilities, pending disposal of the appeal - Stay granted.
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2015 (2) TMI 1017
Waiver of pre deposit - Commercial or Industrial Construction Service - Held that:- On perusal of Notification No.32/2007 (ST) dated 22.5.2007, which stipulates that no CENVAT credit be availed on the inputs and if the credit is availed, then it should be restricted at 40% subject to service tax at the rate of 4.12% being paid on the total invoice value of the service after availment of said CENVAT credit on the inputs. The learned counsel contested the adjudication order that this option came by Notification No.1/2011-ST (supra). However, we find some force in the submission of the learned counsel on the ground of limitation. Prima facie, we find there is a dispute regarding the eligibility of the benefit of Notification No.32/2007-ST. At this stage, the learned counsel submits that they have already paid a sum of ₹ 38,23,115/- out of which ₹ 33,39,585/- has been appropriated by the adjudicating authority. We find that the amount paid by the applicant is sufficient for the purpose of waiver of predeposit of balance dues. Accordingly, waiver of predeposit of balance dues is granted and recovery thereof is stayed during the pendency of the appeal - Stay granted.
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2015 (2) TMI 1016
Erection, Commissioning or Installation Service - Notification No.45/2010-ST, dated 20.07.2010 - Held that:- inquiries conducted on the activities of the appellant revealed that they have provided services, which includes earth excavation, stub setting, concreting tower erection, stringing power conductors and earth wire and also construction of revetment, construction of control room retaining walls etc. The activities would be classifiable under Erection, Commissioning or Installation Service. - impugned order is set aside and the matter is remanded back to the Adjudicating authority to decide afresh in the right of the Exemption Notification in accordance with law - Application disposed of.
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2015 (2) TMI 1015
Whether on the facts and circumstances of the case and on a true and correct interpretation of the provisions contained in Sections 57 and 55 of the Bombay Sales Tax Act, 1959, the Tribunal was legally justified in holding Bombay High Court that the Administrative Asstt. Commissioner was legally justified in assuming the revisional jurisdiction under section 57, despite the appeals against the very assessment orders being pending under section 55 before the Appellate Asstt. Commissioner who was his co-ordinate authority
Held that:- As Assessing Officer had accepted the contention of the assesses for exemption of brass sheets from levy of sales tax without there being its specific reference in the eligibility certificate, the revisional authority appears to have called for and examined the matter and has come to a conclusion that brass sheets manufactured and sold by the assessee would not be eligible to exemption from levy of sales tax under the 1979 Package Scheme of incentives and notification entry No.136 under Section 41 of Bombay Sales Tax Act, 1959.
The Assistant Commissioner in exercise of the powers pursuant to Section 57(1) had proceeded with the revisional proceeding and has passed order in the same. The revision is an independent power of an authority calling for and examining record and orders passed by an officer subordinate and to pass such order as he may think just and proper. Appeal by the assessee had been filed since him being not satisfied by certain other disallowances. As such, orders in respect of certain other disallowances in the appeal pending before the Assistant Commissioner of Sales Tax, Kolhapur would be hardly a matter which concerns the matter in revision. There is no decision by the appellate authority in said appeal which has been filed by the assessee aggrieved by other disallowances and much less there is any matter - such, exercise of revisional powers by the co ordinate authority would not be trammeled by pendency of appeal. Decision in Santoshi Tel Utpadak Kendra (1978 (7) TMI 233 - BOMBAY HIGH COURT) would hardly have any application in the present set of facts and circumstances. Tribunal is justified in holding that there is no error in exercise of powers u/s. 57 by the revisional authority.
Whether on the facts and in the circumstances of the case and on a true and correct interpretation of the provisions contained in the 1979 Scheme of Incentives and the Notification Entry 136 under section 41 of the Bombay Sales Tax Act, 1959, the Tribunal was legally justified in holding that the appellant was not entitled to the exemption benefits in the context of manufacture of brass sheets for the reason of the brass sheets being not specifically mentioned in the class of manufactured goods as specified in the eligibility certificate - Held that:- List of products under the eligibility /entitlement certificate does not make reference to sheets or other products by strips, rods circles etc. of brass like the one the case of aluminum appearing in the list under the eligibility certificate. Moreover, in the absence of copper sheets being listed, the contention that brass sheets being its alloy qualify for exemption from levy of sales tax under the eligibility/entitlement certificate cannot be sustained. As such there does not appear to be any substance in the contention with regard to claim for exemption from levy of sales tax for brass sheets. As such, the second question also stands answered in the affirmative. - Decided against assessee.
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2015 (2) TMI 1014
Whether supply of medicines, drugs, stents, and other implants etc., during the course of treatment or a medical procedure is a "sale" in the States of Punjab and Haryana - Held that:- Admittedly, hospitals administer drugs, implants, stents to a patients on medical advice. The dominant purpose of medical treatment is medical services and integral to such a service is a medical procedure that involves administering medicines and drugs and may involve, implants, stents etc. as integral to a successfully medical treatment/procedure. - A perusal of the statutory definition of "sale" in both the Punjab and Haryana enactments, reveals that after setting out that a sale is a transfer of ownership in goods for consideration it proceeds to replicate Article 366 (29-A) of the Constitution of India. A medical procedure is a pure service with no part having the attributes or the elements set out in Article 366 (29-A) of the Constitution of India or the definition of sale under the Punjab and Haryana statutes and, therefore, cannot be held to involve a "sale".
The power to impose sales tax/VAT flows from Entry 54 of List II of Schedile VII and Article 366(29-A) of the Constitution, the latter assigning the status of a deemed sale to transactions where one or the other element of sale is missing, but where the element of sale is altogether missing and the transaction does not fall within any of the clauses of Article 366(29-A) of the Constitution of India, a State shall not be empowered to levy of value added tax on such a transaction. For the purpose of attracting VAT, a transaction or a part thereof, which is essentially a service would have to qualify as a sale within the meaning of Sales of Goods Act, 1930 or the definition of sale. The fiction of a deemed sale applies only to such situations as would fall within the sub-clauses of Article 366(29-A) of the Constitution of India which permit severance of the service element from the sale element and empowers the State to tax the element of sale. A perusal of Article 366(29-A) of the Constitution of India does not enable us to record an opinion that it covers services provided by hospitals. Before such a transaction is put to tax, whether under the Haryana or Punjab VAT Act, it would have to satisfy the dominant nature test by reference to the substance of the contract. A contract for medical treatment necessarily involves medicines, supply of surgical items, stents, implants, valves, without which a medical procedure or medical treatment cannot be completed.
A deeming fiction, must be rational and not farcical. The dominant purpose of a hospital is to provide medical treatment and if during a medical procedure it is required to provide medicines, stents, implants etc., it cannot by a deeming fiction be held to be a "sale". A patient may have a choice as to the quality of implant/stent but even that choice is confined to the suitability of a stent etc. The fact that a hospital may charge money for individual stents etc., whether as part of a package or separately is entirely irrelevant. A contract of medical service cannot be said to be a contract for sale of a stent, or valve or of medicines to be used in a medical/surgical procedure. The essential element of such a contract is the procedure of knee replacement, hip replacement, angioplasty, which as an intrinsic and integral part involves placing an implant whether in the knee, hip or a heart etc. The only choice available to the patient is the nature of the implant, namely, its quality but such a procedure is admittedly, a medical procedure and a service that cannot be completed without an implant/drugs and medicines as an integral part of the procedure. A private hospital does not provide medical services for free. The fact that it charges money, for drugs, medicines etc. cannot raise an inference of intent to sell goods in the shape of medicines, stents, implants etc. We are, therefore, in complete agreement with the opinion recorded by the Jharkhand High Court in Tata Main Hospital (2007 (9) TMI 599 - JHARKHAND HIGH COURT) and the Allahabad High Court in M/s International Hospital Pvt. Ltd. v. State of U.P. and two others [2014 (2) TMI 765 - ALLAHABAD HIGH COURT].
No hesitation in holding that medical procedures/services offered by the petitioners are a service. The supply of drugs, medicines, implant, stents, valves and other implants are integral to a medical services/procedures and cannot be severed to infer a sale as defined under the Punjab or the Haryana Act and therefore, are not exigible to value added tax. - Decided in favour of assessee.
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2015 (2) TMI 1013
Compounding the offences - Section 81 of DVAT 2004 - Whether the Appellate Tribunal, Value Added Tax can give direction to the Sales Tax Department to compound a FIR which was registered and charge sheet has been filed by the police department - Whether the order of Commissioner on application under Section 54 Sales Tax Act is final not subject to scrutiny by the Appellate Tribunal - Held that:- It is clear that Section 93 of Delhi VAT Act differs materially from Section 54 of Delhi Sales Tax Act. Under the repealed law, the composition is permissible either before or even “after the commencement of the proceedings” in respect of the offence. In contrast, under Section 93 of Delhi VAT Act, the authority to compound is restricted to the period “before the institution of proceedings” for an offence under the law. - In the scheme for composition of offences under Delhi Sales Tax Act, the matter cannot end merely by rejection of the request of the offender on the ground that the composition money offered is “inadequate”. Rule 44(2), quoted earlier, clearly envisages that it is the obligation of the Commissioner to “determine” the amount of money subject to deposit of which he is agreeable to the composition. He cannot close the request for composition merely by conveying the composition money offered is inadequate. He must determine the appropriate amount of money and intimate to the offender giving him requisite time for its deposit.
Though for purposes of the present discussion it may be a digression, considering the directions that we intend to issue, it must also be observed here that unlike the scheme of Section 320 of the Code of Criminal Procedure (referable to the general penal law), in case of composition of offences under Section 54 of Delhi Sales Tax Act, the matter does not depend upon the approval of the criminal court which is seized of such prosecution. The composition is brought about and given effect to by the offender and the Commissioner on their own. The terms are settled, formalized and acted upon outside the criminal court. Once the Commissioner accepts the composition on conditions as to which he has reached an appropriate satisfaction, within the sphere of guidance given to him by the law, further “proceedings” before the criminal court (even if already commenced) for such offence under the special law can “not be further proceeded with” [Section 54(2)].
Law expects the Commissioner to take a conscious and informed decision. The prosecution for criminal offence under Section 50 is to be launched not as a general rule but in exceptional cases. If the Commissioner finds that enough deterrence can be provided by penalty to be imposed under Section 56 (inasmuch as it permits him to impose penalty two and half times the tax that has accrued in favour of the Revenue), he would choose that course instead of sending the matter to criminal court under Section 50. Noticeably further if, given the gravity of the facts involved, the matter has been taken to the criminal court for prosecution, the consequences for the wrongdoer are stiffer, even if he is able to persuade the Commissioner to compound, for the reason the composition money might represent even a higher revenue in the form of three times the tax that would have been evaded.
Expression “may consider” used by the Appellate Tribunal in its order dated 16.01.2006 could not have been construed by the Commissioner as anything but a direction. By using such phraseology, the Tribunal was being courteous. The only task remitted was to determine if the amount offered was the maximum permissible composition money that could be levied. In this fact situation, it was the turn of the Commissioner to show due deference to the views of the higher forum (Appellate Tribunal) and restrict his inquiry only to the subject of determination of the composition money.
Decision of the Commissioner on application under Section 54 for composition cannot be treated as final or immune from further scrutiny by the appellate authority. It necessarily follows that the Appellate Tribunal scrutinizing such order is competent to pass all such orders as the lower authority (subject to its appellate jurisdiction) is competent to pass. Since the Appellate Tribunal allowed the request for composition on modified terms and remitted the matter to the Commissioner, the latter was bound by the said mandate. - Decided against the revenue.
Whether Commissioner has indulged in “disobedience” or that his order bordered on “contempt” by not following the direction of the tribunal - Held that:- It was not correct for the Commissioner, to whom the matter had been remitted by the Appellate Tribunal by its order dated 16.01.2006, to assume that it was not bound by the views of the Appellate Tribunal, particularly by relegating the case back to the stage of scrutiny of the request for composition on considerations other than that of adequacy of the composition money. - While we affirm the conclusion reached by the Appellate Tribunal in the impugned order dated 07.01.2014 as to the impropriety of the second rejection of the request for composition, we do not uphold the findings that the Commissioner had indulged in “disobedience” or that his order bordered on “contempt”. There is no foundation for such adverse views to be recorded. We must also point out to the Appellate Tribunal that errors do occur and the hierarchy of superior forums (appellate etc.) is provided to bring in corrections. Wrong orders passed by the forum lower in order, unless actuated by malice, do not necessarily undermine “majesty of law” or lower the dignity of superior authorities.
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