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Showing 161 to 180 of 1255 Records
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2015 (5) TMI 1102
CENVAT credit - service tax paid on different category of insurance policies - Held that: - the Tribunal in the case of Hindustan Zinc Ltd. vs CCE Jaipur [2014 (7) TMI 485 - CESTAT NEW DELHI] has allowed the cenvat credit of service tax paid on burglary insurance, Fire insurance, transit insurance for inward transportation of raw material and outward transportation of finished goods, holding that the services are confirming to definition of input service contained in Rule 2(l) of the CCR, 2004.
Extended period of limitation - Held that: - the Department had not specifically proved the fact with tangible evidence that the appellant had suppressed the fact of taking irregular credit. Thus, issuance of show cause notice on 09.04.2013, which is almost after four and a half years from the date of visit of the audit officers, in my considered opinion, is barred by limitation of time.
Appeal allowed - decided in favor of appellant.
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2015 (5) TMI 1101
Levy of Penalty u/s.271(1)(c) - addition based on the loose papers found and seized during the course of search - notice u/s.153A - Held that:- Since admittedly in the instant case no money, bullion, jewellery or any valuable article were found which were owned by the assessee and the additional income was declared in the return filed in response to notice u/s.153A on the basis of entries in loose papers etc. found during the course of search, which has been accepted by the AO in assessment, therefore, we are of the considered opinion that no penalty u/s. 271(1)(c) of the I.T. Act is leviable on account of above 3 additions. We therefore direct the AO to cancel the penalty on account of the above 3 additions.
Assessee could not substantiate as to why penalty shall not be levied u/s. 271(1)(c) on account of
Unexplained investment in Furniture, Capital introduced in Kirti Developers, Cost of land paid to R.B., Moze and Interest paid to Shriram Soni
Levy of penalty on account of sales unrecorded since the assessee is a land developer and the addition of ₹ 55,000/- made by the AO was on account of sales unrecorded which was due to non receipt of the amount, therefore, we find force in the submission of the assessee that it is a debatable issue as to whether the amount received has to be offered as the sale proceeds or the amount agreed to be received has to be offered as sale proceeds. In view of this, we are of the considered opinion that penalty cannot be levied on this amount of ₹ 55,000/-, the issue being debatable.
Levy of penalty on account of addition on account of 50% of donations claimed as Advertisement Expenses and on account of estimated disallowance of Car, Petrol and Telephone expenses are concerned, we agree with the assessee that penalty cannot be levied on account of estimated addition. As in the case of CIT Vs. Ajaib Singh and Co [2001 (8) TMI 79 - PUNJAB AND HARYANA High Court] has held that penalty cannot be levied on account of addition to income based on estimate and disallowance of expenditure. The Hon’ble Chattisgarh High court in the case of CIT Vs. Vijay Kumar Jain [2010 (4) TMI 386 - CHHATTISGARH HIGH COURT] has also upheld the decision of the Tribunal where the Tribunal has upheld the order of the CIT(A) in cancelling the penalty levied on account of estimated GP addition.
Penalty levied on account of agricultural income treated as business income - Held that:- We find similar addition was made in A.Y. 1998-99 which was upheld by the CIT(A). However, no penalty was levied by the AO on such treatment of agricultural income as undisclosed income. As the AO had not levied penalty u/s.271(1)(c) of the I.T. Act in the preceding year, therefore, it is not open to the AO to impose penalty on the admittedly identical facts for the impugned assessment year.
We further find merit in the submission of the Ld. Counsel for the assessee that the computation of agricultural income from rubber plantation was purely on estimate basis which is on the basis of minimum quantity of 6kg/tree. However, it cannot be said that the production of rubber from a tree will always be at the minimum of 6kg/tree. It may vary from tree to tree. Sometimes it may be more and sometimes it may be less. Therefore, addition may be justified in quantum proceedings. However, the same in our opinion cannot be the basis for imposing penalty u/s.271(1)(c) of the I.T. Act.
Assessee appeal partly allowed.
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2015 (5) TMI 1100
Penalty levied under Section 271(1)(b) - non appearing on the different dates of hearing before the Assessing Officer in response to notice issued under Section 143(2) - Held that:- The penalty under Section 271(1)(b) could not be imposed for each and every notice issued under Section 143(2), which remained not complied with on the part of the assessee. The provision of Section 271(1)(b) is of deterrent nature and not for earning revenue. Any other view taken shall lead to the imposition of penalty for any number of times (without limits) for the same default of not appearing in response to the notice under Section 143(2) of the Act. This does not seem to be the intention of the legislature in enacting the provisions of Section 271(1)(b) of the Act. In case of failure of the assessee to comply with the notice under Section 143(2) of the Act, the remedy with the Assessing Officer lies with framing of “best judgement assessment” under the provisions of Section 144 of the Act and not to impose penalty under Section 271(1)(b) of the Act again and again. In this view of the matter, we restrict the penalty levied under Section 271(1)(b) of the Act to the first default of the assessee in not complying with the notice under Section 143(2) of the Act.
Accordingly, the penalty imposed is restricted to ₹ 10,000/- . The grounds of appeal of the assessee are thus partly allowed.
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2015 (5) TMI 1099
Amendment in IGM - Section 30 of the CA - goods which are pipes, are erroneously declared as tubes, which is now sought to be corrected - Held that: - the minor amendments to the Import General Manifesto can be allowed with prior permission of the proper officer, but without any adjudication. The major amendments, which would include amending the commodity description, can be made with the prior permission of the proper officer and adjudication of the same - I direct the proper officer under Customs Act to consider the application for amendment of the Import General Manifesto in respect of the goods imported by the petitioner - petition allowed - decided in favor of petitioner.
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2015 (5) TMI 1098
Exemption u/s 54F against the Long Term Capital Gain denied - Held that:- The assessment was completed on 31.01.2014. From these facts, it is evident that the inquiries were conducted through Inspector of Income-tax till 29.01.2014. The outcome of these inquiries has been used by the Assessing Officer against the assessee to arrive at the conclusion that no construction was made by the assessee so as to be entitled to exemption u/s 54F. The assessment was completed on 31.01.2014 i.e., within two days from conducting the enquiries by the Inspector of Income-tax. When the inquiry was conducted almost in the last week of January 2014, naturally it cannot be possible to confront the outcome of the inquiry to the assessee and allow him sufficient time to furnish the reply in rebuttal. Therefore, in our opinion, it would meet the ends of justice if the orders of the authorities below are set aside and the matter is restored back to the file of the Assessing Officer. We order accordingly and direct the Assessing Officer to supply the copy of the Inspector Report, Panchnama and any other material if collected behind the back of the assessee which the Department proposes to utilize against the assessee. The Assessing Officer is also directed to allow adequate opportunity to the assessee for submission of his reply as well as any evidence in support of his claim that construction of residential house was done within stipulated time as per Section 54F. - Decided in favour of assessee by way of remand.
Charging of interest u/s 234B - Held that:- Both the parties agreed that the charging of interest u/s 234B is consequential. We, therefore, direct the Assessing Officer to re-compute the interest in accordance with law, after the re-determination of income.
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2015 (5) TMI 1097
Deduction u/s. 80P(2)(a)(i) - Held that:- A credit co-operative society giving credit to its members is not hit by the provisions of Sec.80P(4) of the Act as it does not possess a licence from RBI to carry on business and is not a co-operative bank. The object of introducing Sec.80P(4) of the Act was not to exclude the benefit extended u/s.80P(1) to co-operative society carrying on the business of providing credit facilities to its members. See CIT Vs. Sri Biluru Gurubasava Pattina Sahakari Sangha Niyamitha, Bagalkot [2015 (1) TMI 821 - KARNATAKA HIGH COURT].
We hold that the assessee society is entitled to deduction u/s. 80P(2)(a)(i) of the Act. - Decided in favour of assessee
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2015 (5) TMI 1096
Penalty u/s 271(1)(c) - Held that:- In this case, the Assessing Officer has not brought out any specific charge for which the penalty has been imposed on the assessee u/s 271(1)(c) of the Act. He has not brought out whether the assessee has concealed the particulars of income or whether the assessee has furnished inaccurate particulars of income.
Assessing Officer in this case levied the penalty for both the charges without mentioning any specific charge. In CIT v. Atul Mohan Bindal (2009 (8) TMI 44 - SUPREME COURT) wherein considering the same provision, it observed that the assessing officer has to be satisfied that a person has concealed the particulars of his income or furnished inaccurate particulars of such income. Thus the satisfaction of the Assessing Officer about the concealment of particulars of income or furnishing of inaccurate particulars of such income is essential before levying any penalty u/s 271(1)(c). The Assessing Officer as is apparent from the penalty order has not satisfied about the concealment of particulars of income or furnishing of inaccurate particulars of income on the part of the assessee. On this basis itself the penalty deleted. -Decided in favour of assessee
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2015 (5) TMI 1095
Addition made on account of determination of arm's length price of assessee’s international transaction - selection of comparable - Held that:- While benchmarking the international transactions of tested party and while applying TNMM method endeavor has been made to select such companies, which are functionally similar. Where the comparables are functionally dissimilar to the tested party, the margins of such companies cannot be utilized for determining the arm's length price of international transactions carried out by the tested party. In the above said facts and circumstances, we find no merit in the selection process carried out by the TPO and we direct the TPO to exclude the margins of Agrima Consultants International Limited while benchmarking the arm's length price of international transactions of the assessee and applying the margins of other comparables as selected by DRP, determine the arm's length price of international transactions of assessee.
Another objection raised by the assessee was against the selection of Rolta India Limited, while benchmarking the international transaction with respect to design engineering services provided by the assessee to its AEs. The learned Authorized Representative for the assessee pointed out that the margins of Rolta India Limited could not be applied as it had different year end as against the assessee’s year end 31.03.2008. The said company’s year end was 30.06.2007. It was pointed out by the learned Authorized Representative for the assessee that since the data of comparables concerned does not correspond to the financial year of the year, the same was un-comparable. We find merit in the plea of the assessee as even the provisions of Rule 10B(4) of the Income-tax Rules, 1962 provided that the data to be used in analyzing the comparability of an un-controlled transactions with an international transaction, shall be the data relating to the financial year, in which the international transaction had been entered into. In the present case, the data adopted by Rolta India Limited does not relate to the financial year, in which the international transaction has been carried on by the assessee and hence, the said concern is to be excluded from the list of comparables.
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2015 (5) TMI 1094
Classification of manufactured item - pre-pregs - classified as sheets or under CETH 3926.90? - benefit of N/N. 8/96-C.E., dated 23-7-1996 - Held that: - reliance placed in the case of NANYA IMPORTS & EXPORTS ENTERPRISES Versus COMMR. OF CUS., CHENNAI [2000 (4) TMI 101 - CEGAT, CHENNAI], where it was held that the material in roll form of 50 metres length has to be considered as sheetings - In this case also pre-pregs are in roll form of 50 metres length.
Note 10 to Chapter 39 of Schedule to Central Excise Tariff Act, 1985 clearly shows that sheets are covered under CETH 3920-3921. The note clearly refers only to sheets and not sheetings. A clear distinction has been made between sheetings and sheets by the Tribunal in the case of Nanya Exports & Imports and reliance of the Commissioner on this decision is appropriate. No contrary decision has been produced before us of any superior forum. Once the classification under 3926 90 is upheld, exemption from duty is available in terms of N/N. 8/96-C.E., dated 23-7-1996.
Appeal dismissed - decided against Revenue.
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2015 (5) TMI 1093
Cenvat credit - Short receipt of inputs - Penalty - Rule 15(1) of Cenvat Credit Rules, 2004 - Time limitation - Held that: - the conclusion is that Cenvat credit availed and utilized on short receipt of base oil in excess of 1% is not permissible - In our view the said limit is in accordance with the instruction issued by the Central Board of Excise and Customs on the subject. We also agree with the ld. AR that the limits will not be different in case of movement of goods which are duty paid or movement of goods which are non-duty paid. Such losses will not depend upon duty paid or non-duty paid nature of goods but will upon the inherent nature of the goods.
We find that basic Excise duty without benefit is ₹ 9,39,250/- + ES+ SHES. Amount confirmed is less than this amount. However, computation details are not given. Appellant may compute, after taking benefit of 0.1% permissible limit and pay the differential amount and interest.
We also note that equal amount of penalty has been imposed under Rule 15(1) of Cenvat Credit Rules, 2004. Keeping in view the nature of the dispute and the fact that earlier department has allowed such losses; we do not consider it a fit case for imposition of penalty under Rule 15(1) of Cenvat Credit Rules, 2004, penalty imposed is therefore, set aside - Appeal disposed of.
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2015 (5) TMI 1092
Unjust enrichment - refund of ADD - whether the rejection of refund claim on the ground of unjust enrichment of the amount becoming due as refund on finalization of provisional assessment is correct? - Held that: - the unjust enrichment doctrine can be invoked to deny the benefit to which a person is not otherwise entitled and further it was also held that this does not mean that in the absence of statutory provisions, a person can claim or retain undue benefit - In this case, there is a clear statutory provision which provides that he is entitled to refund.
Further the concept of unjust enrichment was incorporated only on 13-7-2006. In the absence of any clear legislative intention emerging from the amendment that such an amendment would have retrospective effect.
The rejection of refund claim on the ground of unjust enrichment is not correct - appeal allowed - decided in favor of appellant.
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2015 (5) TMI 1091
CENVAT credit - MS sheet, MS coils, etc - denial on the ground that these items do not qualify as input/capital goods as per Rule 2 of the CCR, 2004 - Held that: - appellant has correctly taken the Cenvat credit on these items as these items have been used by them for fabrication on MS Trays (capital goods) which are ultimately used for manufacturing of final product - credit allowed - appeal allowed - decided in favor of appellant.
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2015 (5) TMI 1090
Transfer pricing adjustment under the segment of 'Provision of software development and maintenance support services’ on one hand and 'Provision of back office support services’ including `Provision of finance and accounts support services’- grant of working capital adjustment - Held that:- Such an adjustment is restricted to inventory, trade receivables and trade payables. If a company carries high trade receivables, it would mean that it is allowing its customers relatively longer period to pay their amounts, which will result into higher interest cost and the resultant low net profit. Similarly, by carrying high trade payables, a company benefits from a relatively longer period available to it for paying back to its suppliers, which reduces the interest cost and increases profits. In order to neutralize the difference on account of inventory, trade payables and trade receivables, it is of utmost importance to allow working capital adjustment for bringing the case of the assessee at par with the other otherwise functionally comparable entities. We, therefore, agree in principle with the grant of working capital adjustment. The entitlement of the assessee to the working capital adjustment, cannot be denied.
When the TPO rejected the assessee’s claim for the grant of any working capital adjustment at the threshold itself, there was no reason for him to examine the veracity of the computation of working capital adjustment as put forth on behalf of the assessee. Under such circumstances, we direct the AO/TPO to compute working capital adjustment, if any, available under both the segments, namely, Provision of software development and maintenance services and Merged provision of back office support services and F&A support services distinctly in the light of our above discussion. Needless to say, the assessee will be allowed an opportunity of hearing in such fresh determination of the working capital adjustment, if any.
Reducing lease line charges from `total turnover’, after excluding it from `export turnover’ - assessee claimed the benefit of section 10A - Held that:- We find force in the contention raised by the ld. AR, requiring the exclusion of this amount from `total turnover’ as well. The obvious reason is that when a particular item does not form part of export turnover, which, in turn, is a necessary ingredient of the total turnover, the same has to be necessarily excluded from the computation of latter.
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2015 (5) TMI 1089
Penalty u/s. 271(1)(c) - change of head of income - speculative loss assessed under the head business loss - Held that:- We are of opinion that mere change of head of income should not result in automatic levy of concealment penalty. The detail about the speculative loss was available on the record. Therefore, it cannot be held that assessee had filed inaccurate particulars of income or had concealed the particulars of income.Even if a unsubstantiated claim is made in the return of income, it cannot be held that the assessee is liable for levy of penalty u/s.271(1)(c). Difference of opinion between the AO and the assessee about head of income under which particular item is to be assessed was and would remain a bone of contention between the AO and the assessee. But such differences should not and cannot result invoking the penal provision of chapter XXI of the Act. See COMMISSIONER OF INCOME-TAX Versus AURIC INVESTMENT AND SECURITIES LTD. [2007 (7) TMI 276 - DELHI HIGH COURT ] - Decided in favour of assessee.
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2015 (5) TMI 1088
Entitled to deduction U/s 80(P)(2)(d)- Interest received from the banks and cooperative societies - Held that:- The assessee society is maintaining operational funds and to meet any eventuality towards repayment of deposit the cooperative society is maintaining some liquidated funds as short term deposits with banks. Hence adhering to the doctrin stair desises, we hold that the assessee should be granted benefit of deduction under section 80P(2)(a)(i). Accordingly, the interest on deposits would qualify for deduction under the said section. Accordingly, we set aside the orders of authorities below and decide the issue in favour of the assessee.
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2015 (5) TMI 1087
Validity of reopening of assessment - notice sent by other ACIT - Held that:- When the original assessment was completed by CIT(A), Surat and within a period of three months from the original assessment order, notice under Section 148 was issued by another AO ACIT, Circle 6, Surat without having reassignment of the case or assuming legal jurisdiction over the case of AY 2004-05 and considering the fact that copy of reasons for reopening of the case has only been given to the assessee on 27.12.2007 and immediately thereafter on the very next day i.e. 28.12.2007 assessment came to be completed, learned CIT(A) had rightly held the assessment illegal and unlawful. We are in complete agreement with the view taken by the learned CIT(A) confirmed by the learned Tribunal holding the assessment/ reassessment proceedings illegal and unlawful. In view of the above, when the assessment / reassessment itself are found to be illegal and unlawful, the validity addition made by the AO is not further required to be gone into. - Decided in favour of assessee
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2015 (5) TMI 1086
Deemed divided u/s 2(22) - Held that:- The company in question not a Private Limited Company which is alone is attracted to the provisions of section 2(22)(e) of the Act. The said company is a Public company in which public are substantially interested. Considering the above distinction, the CIT (A) correctly granted relief to the assessee - Decided in favour of assessee
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2015 (5) TMI 1085
Validity of reopening of assessment - failure on the part of the assessee to disclose truly and fully all material facts necessary for assessment with respect to the deemed divident under Section 2(22)(e) - proceedings initiated beyond the period of four years - Held that:- Applying the decision of the Division Bench of this Court in the case of Niko Resources Ltd. (2014 (9) TMI 892 - GUJARAT HIGH COURT ) as well as Gujarat Lease Financing Limited (2013 (10) TMI 101 - GUJARAT HIGH COURT), to the facts of the case on hand and as observed hereinabove, there does not appear to be failure on the part of the assessee to disclose truly and fully all material facts necessary for assessment with respect to the deemed divident under Section 2(22)(e) of the Act, the initiation of the impugned reassessment proceedings which are initiated beyond the period of four years, are not permissible and the same cannot sustain and on that ground alone, the impugned reassessment proceedings deserve to be quashed and set aside. 6.0. In view of the above and for the reasons stated, on the aforesaid ground alone and not on merits with respect to deemed dividend under Section 2(22)(e) of the Act and as it is found that condition precedent for assumption of jurisdiction under Section 147 of the Act are not satisfied, the impugned notice under Section 148 of the Act and consequently reassessment proceedings for AY 2007-08 are hereby quashed and set aside. - Decided in favour of assessee
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2015 (5) TMI 1084
Constitutional vires of Section 35(1) of the Central Excise Act, 1944 - Held that: - The petitioner had in fact challenged the order of the CESTAT by filing CWP-14559-2013 which was dismissed by an order and judgement of a Division Bench of this Court dated 29.10.2014. The petitioner challenged this judgement by filing a petition for Special Leave to Appeal being SLP (C)-10349-2015. By an order dated 01.04.2015, the Supreme Court allowed the appeal to be withdrawn with liberty to approach the appropriate forum for appropriate relief. It is pertinent to note that the constitutional vires had not been challenged in that writ petition. The liberty, therefore, to approach the appropriate forum was obviously to file an appeal against the order of the CESTAT and not another writ petition to challenge the same order - petitioner not permitted to file another petition albeit in different grounds - petition dismissed.
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2015 (5) TMI 1083
CENVAT credit - warranty service - denial on the ground that the warranty service has been availed by the appellant after sale of equipments - Held that: - The issue has been settled by this Tribunal in the case of CCE, Vadodara-II vs. Danke Products [2009 (7) TMI 137 - CESTAT, AHMEDABAD], wherein it has been held that repair and maintenance of transformers during warranty period is an activity of relating to sale of goods - the appellant is entitled for input service credit on repair charges paid to the dealers by the appellant as the same is an activity relating to sale of goods by the appellant - appeal allowed - decided in favor of appellant.
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