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Showing 121 to 140 of 1957 Records
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2018 (11) TMI 1841 - ITAT AHMEDABAD
Additions u/s. 69C - commission expense incurred outside the books of accounts - Addition on the basis of the statement obtained from Shri Tejas V. Shah - Non providing opportunity of cross examination of the statement obtained under the provision of Act - denial of natural justice - HELD THAT:- There was no other iota of evidence suggesting that the assessee has incurred any expenditure on account of commission paid to Shri Tejas V. Shah. The AO has not referred to any incriminating material found during the course of survey evidencing the payment by the assessee for the commission. In our considered view, for the addition made u/s 69C of the Act, the onus lies on the Revenue to prove that the assessee has incurred expenditure on account of commission expenses.
The provision of Section 69C requires to make the disallowance of the expenses which has been incurred by the assessee and the assessee fails to explain the nature/ source of such expenditure. Thus, it is implied that first of all the AO has to prove whether the assessee has incurred expenditure and then the question comes for the explanation. In the instant case, the AO has not proved with the documentary evidences that the assessee has incurred expenditure on account of commission expenses. Thus, in such case the question of explanation does not arise.
AO before making the addition on the basis of statement should have provided the opportunity of cross examination to the assessee. In this regard, we find support and guidance from the judgment of Hon’ble Supreme court in the case of Andaman Timber Industries [2015 (10) TMI 442 - SUPREME COURT]
AO is directed to delete the Addition made by him. Hence, the ground of appeal of the assessee is allowed.
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2018 (11) TMI 1840 - ITAT MUMBAI
Estimation pf income - Addition u/s. 69C - Bogus purchases - CIT(A) sustaining the addition to 3% of the alleged bogus purchases - assessee has not produced any evidence to demonstrate that the purchases made from the declared sources are genuine and only submission made by the learned AR before us is, the estimated profit on account of alleged bogus purchases should be reduced to the gross profit rate declared by the assessee in subsequent assessment years - HELD THAT:-The aforesaid submission of the learned AR is not acceptable. It is a fact on record that the assessee has failed to prove the purchases from the declared sources, which in other words demonstrates that the assessee has purchased the goods/diamonds from unknown sources/grey market, thereby, avoiding payments of VAT and other taxes, as may be applicable to such transactions. Thus, to that extent the assessee has suppressed his actual profits.
The gross profit rate declared by the assessee under normal circumstances cannot be applied to unproved purchases. After considering the overall facts and circumstances of the case, we are of the considered opinion that learned CIT(A) is more than reasonable in estimating the profit on the bogus purchases @3%. Therefore, we are not inclined to interfere with the aforesaid decision of the learned CIT(A). Accordingly, the grounds raised are dismissed.
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2018 (11) TMI 1839 - GUJARAT HIGH COURT
Reopening of assessment u/s 147 - no notice u/s 148 of the Act has been served upon the petitioner - HELD THAT:- As submitted that in the absence of service of statutory notice under section 148 of the Act, continuance of the proceedings under section 147 of the Act is without any authority of law. In support of his submission, learned advocate has placed reliance upon the decision of the Delhi High Court in the case of Commissioner of Income Tax (Central)-I v. Chetan Gupta, [2015 (9) TMI 756 - DELHI HIGH COURT] wherein the Court has held that burden to establish that service of notice has been effected on the assessee or his duly authorized representative is on the revenue.
Having regard to the submissions advanced by the learned advocate for the petitioner, issue NOTICE returnable on 7.1.2019. By way of ad-interim relief, further proceedings pursuant to the impugned notice are hereby stayed. Direct service is permitted.
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2018 (11) TMI 1838 - MADRAS HIGH COURT
Levy of penalty without properly considering the provisions of Section 27(3)(c) of the Tamil Nadu Value Added Tax Act, 2006 - no tax due at all on the turnover estimated as sales suppressions at the time of passing the revised order - HELD THAT:- As per the section contemplates levy of penalty only on the tax due on the turnover that was willfully not disclosed.
Admittedly, in the instant case, the dealer had paid the tax at the time of inspection, which was done in the business premises of the dealer on 09.3.2011. The revision of assessment took place much after that and was concluded by the revised order dated 14.8.2012. Since the dealer paid tax even much prior to initiation of revision proceedings, the question would be as to whether the dealer can be directed to pay penalty under Section 27(3) of the Act - In the instant case, the dealer paid the entire tax much prior to the issuance of the revision notice i.e even at the time of inspection.
The dealer, having paid the tax much prior to initiation of revision proceedings, cannot be mulcted with penalty - revision allowed.
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2018 (11) TMI 1837 - GUJARAT HIGH COURT
Reopening of assessment u/s 147 - assessee has received total share capital from two Kolkata based shell companies - HELD THAT:- As pointed out that the amounts received from both the companies was ₹ 10,00,000/- each and not ₹ 20,00,000/-. It was also pointed out that in assessment year 2010-11 there was scrutiny assessment under section 143 (3) and the share application money received from the said companies has been accepted as genuine after due verification in scrutiny assessment of the year in which these amounts were received.
As submitted that therefore the assessing officer has proceeded on a factually incorrect premise and that on the basis of the reasons recorded, the assessing officer could not have formed the requisite belief that income chargeable to the tax has escaped assessment for the year under consideration. It was submitted that therefore, in the absence of the assessing officer having formed a requisite belief, the assumption of jurisdiction under section 147 of the Act is without authority of law.
Having regard to the submissions advanced by the learned advocate for the petitioner, issue NOTICE returnable on 7.1.2019. By way of ad-interim relief, the respondent is permitted to proceed further pursuant to the impugned notice; he, however, shall not pass the final order without the permission of this Court.
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2018 (11) TMI 1836 - ITAT PUNE
Capital Gain in respect of sale of agricultural land - Addition invoking provision of section 50C - difference between the sale value declared by the assessee and the sale value determined by the Assessing Officer by 13% - approval of tolerance limit of 15% variation in estimating sale value - DR submitted that in proceedings before the First Appellate Authority the assessee had offered addition over and above 10% of the difference between the sale value disclosed by the assessee and Government valuation - contentions of the assessee is that where the difference in the sale value declared by the assessee and value determined by the Assessing Officer is less than 15% no addition is warranted - HELD THAT:- We find in the present case there is difference of 13% in the value declared by the assessee and as determined by the Assessing Officer. The Co-ordinate Bench of the Tribunal in the case of Rahul Constructions Vs. Deputy Commissioner of Income Tax [2012 (1) TMI 229 - ITAT PUNE] has taken a tolerance limit of difference in two valuations as 10%.
Similar view has been taken in the case of Honest Group of Hotels (P) Ltd. Vs. Commissioner of Income Tax [2001 (11) TMI 1016 - HIGH COURT OF JAMMU & KASHMIR]. The assessee before the Commissioner of Income Tax (Appeals) had voluntarily offered for the addition of sale consideration over and above the difference of 10%. Taking into consideration entirety of facts and the decisions cited by the assessee, to meet the ends of justice the benefit of 10% difference of sale value is allowed. The sale consideration over and above 10% is added for the purpose of determining Capital Gains. The appeal of assessee is partly allowed, in the terms aforesaid.
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2018 (11) TMI 1835 - ITAT KOLKATA
Addition u/s 68 - unexplained source of funds for the investment - HELD THAT:- AO has simply disbelieved the evidence filed by the assessee. He has not conducted any verification, let alone investigation, before coming to the conclusion that the confirmations and evidence filed by the Directors cannot be admitted as evidence. As the share applicants are the Directors of the assessee Company and have confirmed the transactions and have also filed their source of funds for the investment.
When statement of final accounts were filed giving sources of funds for making the investment, the Assessing Officer has not given any reason as to why he is not able to accept the same. If at all the creditworthiness of the directors is not proved, then an addition can be made only in their hands and not in the hands of the company as held by the Hon’ble A.P. High Court in the case of Lanco Industries Ltd [1999 (12) TMI 45 - ANDHRA PRADESH HIGH COURT]
No contrary evidence to controvert the evidence produced by the assessee, is brought on record. Simply because the directors/shareholders did not present themselves before the Assessing Officer, an addition u/s 68 of the Act, cannot be made. In view of the above circumstances, we cannot uphold this addition made u/s 68 of the Act. Under these circumstances, we delete the addition and allow this appeal of the assessee.
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2018 (11) TMI 1833 - CHHATTISGARH HIGH COURT
Extension of benefit of subsidy which new cinema halls or multiplexes were required to derive under a set of rules notified by the State of Chhattisgarh on 23.10.1982 - Chhattisgarh Naye Cinemagharo (Ya Multiplex Cinemagharo) ke Nirman ko Protsahan Yojna ke Sahayata Anudaan Niyam, 1982 - HELD THAT:- The reason for the petitioner to file the present writ application has arisen because of the nature of business in which they are. The modern trend is that large number of malls and shopping complexes are coming up not only in the state of Chhattisgarh but across the country and the petitioner- Company is one of the pioneers and leading company engaged in the business of exhibition of cinemas by becoming lessees as well as licensees of most of the cinema halls and especially multiplexes. It is their assertion supported by material evidence which has been annexed to the writ application that in most of the cases the builders of such cinema halls or multiplexes may be in a mall have been providing just a shell or space and thereafter this company makes significant investment by giving it a shape of a movie theatre/multiplex which includes providing, furnishing, sound proofing, acoustics, lighting etc.
For the purpose of the Rules of 1982, a wider meaning to the word "swami" will have to be read and it cannot be confined to the actual owner who has no concern with the running or exhibition of a cinema hall or a multiplex. Neither is he meeting any obligations both under the license as well as other obligations including payment of entertainment tax etc. The word "swami" therefore, will be required to mean person who is actually at the helms of affairs in running of the cinema hall or multiplex. Meaning thereby that he is the entity who has made significant investment to make the space into a multiplex, is the licensee and is also making payments of entertainment tax etc. He meets all the requirements, obligations and duties imposed thereto in terms of the license and the agreement between him and the State under the Rules, 1982.
The stand of the State that the Golden Rule of interpretation must be used to understand the word "swami" or 'malik' has to be rejected on the face of it since the same will make the Rule of 1982 to be unworkable and defeat the very object behind it. The wider definition given to the words proprietor or licensee in other enactments relating to cinema business keeping in mind the way such business is run or is allowed to run cannot be lost sight of - the word "swami" which has been used in Rules, 1982 especially in 'spastikaran' would not only include the actual owner but also the 'occupier'/licensee of the cinema hall or the multiplex for which the test laid down or noticed shall be the guiding principle.
The decision of the respondent stand quashed - respondents are directed to take a fresh decision within a period of three months from the date of production of a certified copy of this order.
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2018 (11) TMI 1832 - SUPREME COURT
Smuggling - certain drugs were stored without a valid drug licence - contravention of Section 18(c) of the Drugs and Cosmetics Act, 1940 - non-examination of one Kamalakannan-the person in whose name the pharmacy licence stood and one Jayanthi in whose name the shop stood - Sentence of imprisonment - HELD THAT:- At the time of inspection of the medical shop of the Respondent located at 191, Main Road, Bargur on 17.12.2008, it was found that the retail medical shop was functioning without a valid licence in violation of Section 18(c) of the Drugs and Cosmetics Act. It was also noticed that eighty-seven items of drugs were stocked without possessing a valid drug licence. The Respondent was prosecuted for contravention of (i) Section 18(c) of the Drugs and Cosmetics Act for having stocked and sold drugs without a valid drug licence which is punishable Under Section 27(b) (ii) of the Drugs and Cosmetics Act; and (ii) Section 18(a) of the Drugs and Cosmetics Act for not furnishing the name of the supplier of the drug which is punishable Under Section 28 of the Drugs and Cosmetics Act.
Under Section 18(c) of the Drugs and Cosmetics Act, licence is required for sale of any drug. Under Section 18(c) of the Act, stocking or storing of drugs for sale cannot be done without a licence. Respondent is charged for having stored drugs for sale without licence. Before a person is convicted Under Section 18(c) read with Section 27(b)(ii) of the Act, the prosecution must establish that the drugs are stocked or stored for sale without licence - On the date of inspection i.e. on 17.12.2008, when N. Banumathi, Drugs Inspector (PW-1) inspected the Respondent's shop, he did not have any licence. He only stated that he was not aware that he has to obtain the licence. When the Respondent has stocked the drugs and was selling the same without licence, there was violation of Section 18(c) of the Act which is punishable Under Section 27(b)(ii) of the Act. The Drugs and Cosmetics Act, 1940 is a social statute which provides for checks and balances so that drugs are sold strictly only by the licence-holder or that the adulterated drugs are not sold. From the evidence of PW-1 and from the admission of the Respondent in Exs. P-4 and P-7, the prosecution has established that the Respondent did not have licence for sale of the drugs.
Both the trial court as well as the first appellate court convicted the Respondent Under Sections 27(b)(ii) and 28 of the Drugs and Cosmetics Act. When there is concurrent findings by the courts below, the High Court ought not to have interfered with the same in exercise of its revisional jurisdiction. The revisional jurisdiction of the High Court is different from the appellate jurisdiction. The High court will not normally interfere with the concurrent findings of fact, unless the findings of fact arrived at by the courts below is perverse or that the court has ignored the material evidence while arriving at that finding.
Sentence of imprisonment - HELD THAT:- Respondent had stated that he was not aware that he has to obtain a licence for sale of drugs. Considering the facts and circumstances of the case, in the interest of justice proviso to Section 27(b)(ii) of the Act can be invoked and the sentence of imprisonment of one year imposed upon the Respondent is reduced to three months.
The conviction of the Respondent Under Sections 27(b)(ii) and 28 of the Drugs and Cosmetics Act, 1940 is affirmed and the sentence of imprisonment imposed upon him is reduced to three months, while maintaining the fine of ₹ 5,000/- - Appeal allowed - decided in favor of appellant.
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2018 (11) TMI 1831 - ITAT SURAT
Computation of long-term capital gain on transfer of the property - Adoption of fair market value of the property as on 1.4.1981 - AO adopted fair market value of the property at ₹ 80/- per sq.yard in the cases of other three family members, who have sold land in same survey number, and thereafter computed capital gain - HELD THAT:- Way back in 1955 Board has issued a circular bearing No.14/XN dated 11.4.1955 prohibiting its authorities not to take advantage of ignorance of assessees in order to collect more tax. This circular has not been questioned till date. The quasi-judicial authorities are being respected not on account of their power to legalise injustice on technical ground but because, they are capable of removing injustice and is expected to do so.
Once a piece of land has been valued in the case of other co-owners and accepted by the AO then for other co-owners that rate should not be differed with unless some other substantial circumstances are there, showing more potentiality of the land viz. the land is abutted to National high-ways or some other factors which fetch more value to the area. No such factor has been noticed by the AO or available in the present case. Therefore, we allow first fold of grievance raised by the assessee. We direct the AO to compute long term capital gain after adopting fair market value of the property as on 1.4.1981 at ₹ 80/- per sq.yard.
AO shall thereafter give benefit of indexation at this rate and calculate along with cost, which is to be reduced from the ultimate sale consideration deemed in the hands of the assessee under section 50C - AO has further granted total deduction of ₹ 15,24,464/- being deduction under section 54D for new agricultural land of ₹ 4,67,720/- and ₹ 10,56,744/- under section 54F for purchase of residential house. These deductions are not being disturbed by us. They will be granted to the assessee after computation of long term capital gain as indicated above.
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2018 (11) TMI 1830 - AUTHORITY FOR ADVANCE RULING, UTTAR PRADESH
Scope of Advance Ruling - Whether the applicant can dispatch the commodity of Eucalyptus/Poplar wood at the time of supply through Delivery Challan, which is supplied by him and the tax invoice be issued later after the goods is delivered and measured by the purchaser? - HELD THAT:- On examination of Section 97(2) vis-à-vis the application of party we observe that the question raised by applicant on which Advance Ruling is being sought does not come under the ambit of the specification as provided by the Section 97(2) of the GST Act.
The question on which Advance Ruling is sought is beyond the jurisdiction of this authority, as it is beyond the domain of sub-section (2) of Section 97 of CGST Act, 2017 and SGST Act, 2017 - the application is “not admitted’’ under sub-section (2) of Section 98 of CGST Act, 2017 and SGST Act, 2017.
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2018 (11) TMI 1829 - AUTHORITY FOR ADVANCE RULING, HARYANA
Valuation of supply of services - inclusion of amount of statutory charges i.e. External Development Charges and Infrastructural Development Charges, recovered by the Applicant from buyers and paid further to respective government authorities - HELD THAT:- The provisions for determination of value of supply under the CGST/HGST Act, 2017 are provided under section 15 of the said Acts. The clause (a) of sub-section (2) of section 15 of the said Acts provides that the value of supply shall include any taxes, duties, cesses, fees and charges levied under any law for the time being in force other than this Act, the SGST Act, the UTGST Act and the Goods and Services Tax (Compensation to States) Act, if charged separately by the supplier.
Hon'ble Supreme Court in COMMISSIONER OF SERVICE TAX ETC. VERSUS M/S. BHAYANA BUILDERS (P) LTD. ETC. [2018 (2) TMI 1325 - SUPREME COURT] held that it is not any amount charged which can become the basis of value on which service tax becomes payable but the amount charged has to be necessarily a consideration for the service provided which is taxable under the Act. In this regard, it is observed by the committee that the provisions regarding value of supply under CGST / HGST Act, 2017, as contained in section 15 of the said Acts, are patently different from the provisions of Section 67 of the erstwhile Finance Act, 1994 that were applicable for determination of value of supply of services in the pre-GST regime. Thus, the clause (a) of sub section (2) of section 15 specifically provides that the value of supply shall include any taxes, duties, cesses, fees and charges levied under any law for the time being in force. So, the facts of the case are patently distinguishable.
It is further submitted in the application that the applicant is only acting as a pure agent in respect of these charges, as envisaged under Rule 33 of the Central Goods & Service Tax Rules, 2017. It is also submitted in the application that the concept of pure agent was also provided under Rule 5 (2) of the erstwhile Service Tax (Determination of Value) Rules, 2006. It was for this reason that vide Circular No. 334/1/2010-TRU, dated 26.02.2010, it was clarified that development charges, to the extent they are paid to State Government or local bodies, would be excluded from the taxable value levy for Service Tax purposes. In this regard, authority has observed from the perusal of the cited circular that it nowhere states that the role of developer is of pure agent. The conditions of pure agent as contained in rule 33 are not satisfied in the circumstances mentioned by the applicant as the first condition requires that the pure agent should make payment to the third party on authorisation of recipient of service is not met.
The amount of statutory charges i.e. External Development Charges and Infrastructural Development Charges, recovered by the Applicant from buyers and paid further to respective government authorities will form part of value of taxable supplies being made by the Applicant.
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2018 (11) TMI 1828 - ITAT SURAT
Maintainability of appeal of revenue on low tax effect - reopening of assessment u/s 147 - CIT(A) quashing the assessment on the basis that the issue of undervaluation of stock is change of opinion even and not adjudicated the case on merits - AO has explicitly stated in the assessment order passed u/s.147 of the I.T Act, 1961 that the assessee has not provided any documentary evidence of expenditure - HELD THAT:- In the present case, “tax effect” on the total income assessed minus the tax that would have been chargeable had such total income been reduced by the amount of income in respect of the issue against which appeal is filed, is less than ₹ 20 lakhs. Further, the case of the Revenue does not fall within the ambit of exceptions provided in the Circular. Thus, keeping in view the above CBDT circular and provisions of section 268A of the Income Tax Act, we are of the view that the present appeal of the Revenue deserves to be dismissed. It is accordingly dismissed.
However, it is observed that in case on re-verification at the end of the AO it comes to the notice that the tax effect is more or Revenue’s case falls within the ambit of exceptions provided in the Circular, then the Department will be at liberty to approach the Tribunal for recall of this order. Appeal of revenue dismissed.
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2018 (11) TMI 1827 - AUTHORITY FOR ADVANCE RULING, HARYANA
Classification of goods - clear Insoluble Sulphur” for export - whether classified under tariff heading under ITC HS 3812 39 30, ITC HS 3824 90 90, ITC HS 2503 00 10, ITC HS 2503 00 90 and ITC HS 4005 91 90 (Pre-dispersed Insoluble Sulphur) as desired by the customers from Thailand, Mexico, Espania (Spain) and Europe respectively?
HELD THAT:- The objective of HS Codes is to provide a classification system that associates each individual product with a single heading (and, as the case may be, single sub-heading), to which that product can be simply and unequivocally assigned. It also contains certain interpretation rules designed to ensure that a given product is always classified in one and the same heading (and sub-heading), to the exclusion of any others which might appear to merit consideration. As per guidelines by WCO, all classification decisions must be based upon the application of these rules - There are six of these rules, known as the General Rules for the Interpretation, which are applied in hierarchical fashion, i.e., Rule 1 takes precedence over Rule 2, Rule 2 over Rule 3, etc. The General Interpretative Rules are explained at the beginning of Volume 1 of the Explanatory Notes to the Harmonized System. These rules are also adopted for interpretation of Customs Tariff by India.
Upon considering of General Interpretative Rules, there seems no possibility that any goods may be classified under more than one heading / sub-heading and therefore, there seem no rationable to allow use of different codes for a commodity while exporting.
Prescribing different GST rates (5% and 12%] for any good is definitely not the intention of government and it is imperative that the item should be classified properly in view of applicable classification rules - Although, the applicant has submitted that it is supplying the goods in question in domestic market (i.e. within the Country) under the heading 2802 and charging GST @ 18% and intends to continue doing same yet it doesn't seem, logical that the same good for the purpose of export out of country may be classified under different headings. Moreover, the applicant has failed to provide any logical reason on which basis his goods may be said to fall in more than one heading even under the application of interpretation rules. Thus, there seems no reason for the authority to answer the question in affirmative.
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2018 (11) TMI 1826 - AUTHORITY FOR ADVANCE RULING, HARYANA
Classification of goods - rate of GST - solar powered robotic cleaning systems (RCS)/ E4 supplied by the Applicant - Whether classified as solar power based device’ in terms of sub-clause (b) of Entry no. 234 of Notification no. 1/2017-Integrated Tax (Rate) dated 28 June 2017? - supply of RCS along with provision of ancillary services, erection and commissioning services) by the Applicant - Composite supply as per Section 2(30} of the CGST Act or not - HELD THAT:- The functioning of the said robotic cleaning systems, as is apparent from the submissions made by the applicant it is observed that the applicant is engaged designing, ‘supplying and installation of solar powered Robotics Cleaning System for cleaning photovoltaic solar panel arrays in solar parks. Elaborate working and functioning of the said systems have been discussed in the preceding paras, on the basis of submissions made by the applicant. From the submissions of the applicant, it is observed that the said product, is working on solar power and thus, the same merits classification chapter heading 8479 and also qualifies as a ‘solar power based device’ in terms of sub-clause (b) of Entry no, 234 of Notification no. 1/ 2017 integrated Tax (Rate) dated 28 June 2017 (as amended from time to time) liable to GST @ 5% - Apart from supply of ‘‘robotic cleaning system” the applicant Is also engaged in installation of same. Hence, the applicant has also raised the question as to whether the supply of RCS along with provision of ancillary services, erection and commissioning services) by the Applicant construes as a Composite supply as per Section 2(30) of the CGST Act.
In the instant case, indeed there are two supplies. Firstly, there being a supply of goods, i.e. “robotic cleaning systems” which qualifies as ‘solar power based device’ in terms of sub-clause (b) of Entry no, 234 of Notification no. 1/2017 integrated Tax (Rate) dated 28 June 2017 (as amended from time to time) liable to GST @ 5%. Secondly it is supply of service also, related to installation, erection commissioning services of the said robotic cleaning systems supplied by the applicant. Therefore, the same comprises of two supplies and one of which, that is supply of robotic cleaning systems is a principal supply. We agree with the contentions of the applicant that supply of RCS and its erection, installation and commissioning services are naturally bundled - that in order to make the RCS operational, it is essential that the same be erected and installed atop the solar panels, by way of nuts and bolts - in the instant case, the rate of tax applicable to this composite supply shall be the rate applicable on the principal supply, i.e., 5%.
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2018 (11) TMI 1825 - AUTHORITY FOR ADVANCE RULING, HARYANA
Exemption from GST or not - freight charges covered by the Applicant under the contract from Power Grid Corp India without issuance of consignment note - applicability of S. No. 18 of notification No. 12/2017 Central Tax Rates dated 28-06-2017 and the corresponding S. No. 18 of Notification No. 43/ST2 dated 30-06-2017 issued by Haryana Govt - HELD THAT:- As per the advance ruling application, the fifth contract covers in its ambit, activities such as port handing of plant and machinery, loading, inland transportation and insurance for delivery at site, insurance, unloading, storage and handling at site, installation including civil works, testing and commissioning in respect of all plant and equipment supplied under first and third contracts. Hence, it is not only transportation activities which are being provided under fifth contract, but other services also, such as port handing of plant and machinery, storage and handling at site, installation including civil works, testing and commissioning as well. All such activities are being carried out by the applicant, in connection with goods covered under first and third contract. Therefore, supply of these goods and services is required to be assessed as composite supply.
From definition of “composite supply” and illustration given therein, activities being performed by the applicant under fifth contract also are naturally bundled and are being supplied in conjunction with each other, as all these set of activities, such as port handing of plant and machinery, loading, inland transportation and insurance for delivery at site, insurance, unloading, storage and handling at site, installation including civil works, testing and commissioning, are all to performed in respect of all plant and equipmetns supplied under first and third contract.
Thus, GST on the activities covered vide fifth contract is required to be levied by considering them as composite supply and is required to be charged at the GST rate which the principal supply, amongst such supplies, is chargeable and exemption from GST, as being claimed by the applicant in respect of freight charges, as provided in Sr.No,18 of notification No. 12/2017 Central Tax Rates dated 28-06-2017 and the corresponding S. No. 18 of Notification No. 43/ST2 dated 30-06-2017 issued by Haryana Govt., is not applicable, because transportation is not a stand-alone activity under the said contract. Rather, even the fifth contract is also riot a stand-alone contract from the other five contracts.
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2018 (11) TMI 1824 - CESTAT ALLAHABAD
Time Limitation - Maintainability of appeal - appeal is rejected on the issue of time-bar by observing that the impugned order, was passed by the Adjudicating Authority on 31-3-2015, whereas the appeal stand filed before him on 25-1-2016 - HELD THAT:- The Appellate Authority has gone by the report of the office of the Assistant Commissioner indicating the dispatch of the order by speed post. There is no evidence of receiving of the order by the appellant. In terms of the provisions of Section 37C of Central Excise Act, 1944, any decision or order passed by an Authority shall be served by registered post with acknowledgement Due or by speed post with proof of delivery. As such it is seen that the said Section requires serving of any order either by registered post or by speed post with proof of delivery. However, there is no proof of delivery produced by the Revenue in the present case. In such a scenario, Commissioner (Appeals) was not right by taking the date of dispatch as the proof of delivery and to calculate the period from the said date by considering the same as relevant date. On the other hand the appellant have produced an affidavit of their employee to substantiate their plea that the impugned order was received by them on 7-12-2015 only.
In the absence of any proof of delivery produced by the Revenue, we have to accept the date of receipt as shown by the appellant, in which case the appeal filed on 25-1-2016 would be within time - matter remanded to Commissioner (Appeals) for decision on merits.
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2018 (11) TMI 1823 - ITAT KOLKATA
Bogus LTCG - addition of the entire sale proceeds of the shares as income and rejection of claim of exemption made u/s 10(38) - CIT(A) upheld the addition as relied upon “circumstantial evidence” and “human probabilities” to uphold the findings of the AO. He also relied on the so called “rules of suspicious transaction” - HELD THAT:- The overwhelming evidence filed by the assessee remains unchallenged and uncontroverted. The entire conclusions drawn by the revenue authorities, are based on a common report of the Director of Investigation, Kolkata, which was general in nature and not specific to any assessee. The assessee was not confronted with any statement or material alleged to be the basis of the report of the Investigation Wing of the department and which were the basis on which conclusion were drawn against the assessee. Copy of the report was also not given.
Under the circumstances, in a number of cases this bench of the Tribunal has consistently held that decision in all such cases should be based on evidence and not on generalisation, human probabilities, suspicion, conjectures and surmises. We have in all cases deleted such additions. - Decided in favour of assessee.
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2018 (11) TMI 1822 - ITAT PUNE
Addition on account of excess profit adjustment under section 10AA(9) read with section 80IA(10) - As argued transactions with the Associated Enterprise have not been arranged to produce more than ordinary profits with the intent to abuse tax incentive - HELD THAT:- In assessee’s own case for A.Y. 2011- 12 [2017 (11) TMI 1933 - ITAT PUNE] held that the excess profits should be considered on the basis of difference of 16.34% and 20% as against 16.34% and 28% held by AO.
In the present case, the Assessing Officer has not proved that any arrangement had been arrived between the parties which resulted in higher profits. Consequently, the re-working of the profits by Assessing Officer by invoking section 10A r.w.s. 80- IA(10) of the Act is not justified - AO was not justified in working out the excess profit on the basis of presumptions and reducing the claim of deduction of assessee u/s 10AA of the Act. We therefore set aside the action of the AO. Thus, the ground of the assessee is allowed and the Revenue is dismissed.
Disallowance of expenditure in respect of RSA token expenses - revenue or capital expenditure - HELD THAT:- Expenditure incurred on RSA tokens is for the purpose of business operations and for conducting the business in an efficient manner. In such a situation, we are of the view that the expense is a revenue expenditure and therefore, the AO was not justified in disallowing RSA token expenses. We accordingly hold that the RSA token expense to be of revenue in nature and direct the AO to allow the expenditure. We further direct the AO to take into consideration the depreciation already granted while allowing the claim of RSA token expenses. Thus, the ground No.2 of the assessee is allowed.
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2018 (11) TMI 1821 - ITAT KOLKATA
Addition u/s 68 - unexplained cash credit - assessee failed to explain the sources of funds for the share capital received by it at a premium -allotment of shares in this case was a non-cash transactions and that they were subscribed through book entries - HELD THAT:- The undisputed fact is that shares were issued at a premium, as consideration for the purchase of shares from the share applicant companies. This issue is squarely covered by the decision of the Kolkata ‘C’ Bench of the Tribunal in the case of ITO vs. M/s. Anand Enterprises Ltd [2018 (9) TMI 1779 - ITAT KOLKATA] wherein held this is a simple case of acquiring shares of certain companies from certain shareholders without paying any cash consideration and instead the consideration was settled through issuance of shares to the respective parties.
In the balance sheet of the assessee company in the schedule to share capital, it is very clearly mentioned by way of note that the fresh share capital was raised during the year for consideration other than cash. Hence we hold that provision of section 68 are not applicable. Also see JATIA INVESTMENT CO. [1992 (8) TMI 16 - CALCUTTA HIGH COURT] - Decided in favour of assessee.
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