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Showing 141 to 160 of 1003 Records

• 2013 (4) TMI 870
  
  The Supreme Court granted exemption from filing certified copy of the impugned order and issued notice. The prayer for interim relief was rejected.

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• 2013 (4) TMI 869
  
  Issues involved: Refund of amount deposited by defendants as per Clause 6 of Agreement dated 15th May, 2009 and pending adjudication of injunction application in Supreme Court.
  
  Refund of amount deposited:
  The defendants sought a refund of the amount deposited based on Clause 6 of the Agreement dated 15th May, 2009. The Court noted that the said Clause clearly stated that the amounts received would be returned if certain interim applications were decided in favor of the defendants. The plaintiff's counsel acknowledged that the refund was due as per the Agreement. However, the plaintiff mentioned that a similar matter was pending adjudication in the Supreme Court, with a hearing scheduled for 13th August, 2013.
  
  Court's decision on refund:
  The Court found Clause 6 of the Agreement to be explicit and binding. It directed the plaintiff to refund the entire amount received to the defendants by 21st August, 2013, considering the pending hearing in the Supreme Court. The refund was to be made via an account payee cheque to the defendants' counsel against a receipt. The case was listed for further hearing on 24th October, 2013.

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• 2013 (4) TMI 868
  
  The Supreme Court allowed the petitioner to withdraw special leave petitions with liberty to file a review petition in the High Court. However, the granted liberty cannot be considered as an observation of the Court. The special leave petitions were dismissed as withdrawn. [Case: 2013 (4) TMI 868 - SC]

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• 2013 (4) TMI 867
  
  Issues Involved:
  1. Exclusion of telecommunication expenditure from export turnover while computing deduction u/s 10A without corresponding exclusion from total turnover.
  2. Disallowance u/s 14A of the Act.
  3. Grounds of appeal not adjudicated by the learned CIT(A).
  
  Summary:
  
  Issue 1: Exclusion of telecommunication expenditure from export turnover while computing deduction u/s 10A without corresponding exclusion from total turnover

  The Assessing Officer excluded 30% of telecommunication expenses incurred outside the country from the export turnover. The ld. CIT(A) upheld this exclusion. The assessee argued that if telecommunication expenditure is excluded from export turnover, it should also be excluded from total turnover. The Tribunal referred to the decision in ITO vs Sak Soft Ltd., [2009] 30 SOT 55 (Chennai)(SB), which held that items excluded from export turnover should also be excluded from total turnover. The Tribunal confirmed the exclusion of Rs. 40,62,697/- from export turnover but allowed the assessee's alternate contention to exclude the same from total turnover, following the principle of parity as upheld by the Hon'ble Supreme Court in CIT vs Lakshmi Machine Works, 290 ITR 667(S.C).

  Issue 2: Disallowance u/s 14A of the Act

  The Assessing Officer disallowed Rs. 70,55,114/- as expenditure attributable to earning exempt dividend income by invoking Rule 8D. The ld. CIT(A) held that Rule 8D was applicable from assessment year 2008-09 onwards and estimated the disallowance at 5% of the dividend income, reducing it to Rs. 13,53,635/-. The Tribunal, following the decision of the Hon'ble Madras High Court in M/s Simpson and Co. Ltd vs DCIT, restricted the disallowance to 2% of the gross dividend income, modifying the ld. CIT(A)'s order.

  Issue 3: Grounds of appeal not adjudicated by the learned CIT(A)

  The assessee raised additional grounds before the ld. CIT(A) which were not adjudicated. These grounds included issues related to the computation of deduction u/s 10A, disallowance u/s 14A, depreciation on computer software and electrical installations, computation of education cess, and levy of interest u/s 234B. The Tribunal restored these grounds to the file of the ld. CIT(A) for fresh adjudication as per law, after allowing reasonable opportunity of hearing to both parties.

  Conclusion:

  The appeal of the assessee is partly allowed, and that of the Revenue is dismissed. Order pronounced on Friday, the 05th of April, 2013, at Chennai.

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• 2013 (4) TMI 866
  
  Issues Involved:
  1. Whether the power of attorney in question is a power coupled with interest by virtue of Section 202 of the Indian Contract Act.
  2. Whether the Courts below are right in ignoring Ex.B4 which has been proved without any ambiguity through expert opinion and attesting witness.
  3. Whether the plaintiff is entitled to a declaration without paying the requisite court fees for cancellation of the sale deed.
  
  Summary:
  
  Issue 1: Power of Attorney Coupled with Interest
  The Court analyzed whether the power of attorney executed on 16.09.2002 was coupled with interest u/s 202 of the Indian Contract Act. The appellant contended that the power of attorney was irrevocable as it was executed after the sale consideration was paid and possession handed over on 14.09.2002. The Court found that the power of attorney was indeed coupled with interest, as the first plaintiff had handed over possession and original title deeds to the defendant, indicating that the power of attorney could not be canceled without notice. The Court concluded that the cancellation of the power of attorney was not properly intimated to the defendant, making the cancellation invalid.
  
  Issue 2: Ignoring Ex.B4
  The appellant argued that Ex.B4, an unregistered sale deed dated 14.09.2002, was wrongly ignored by the lower courts despite being proved through expert opinion. The Court noted that although Ex.B4 was unregistered and thus not admissible as a sale deed, it served as evidence of the transaction and payment of consideration. The expert opinion confirmed the signature of the first plaintiff on Ex.B4, proving the sale consideration was passed. The Court held that the lower courts failed to consider this crucial evidence, which indicated that the power of attorney was coupled with interest.
  
  Issue 3: Court Fees for Cancellation of Sale Deed
  The Court addressed whether the plaintiff was entitled to a declaration without paying the requisite court fees for the cancellation of the sale deed. It was found that the plaintiff had only paid a court fee of Rs. 1,000/- for the relief of declaration but failed to pay the court fees for the cancellation of the sale deed, which should be based on the value of the sale deed. The Court concluded that the plaintiff's prayer for cancellation was not sustainable as it was inadequately worded and lacked the necessary court fees.
  
  Conclusion:
  The Court allowed the Second Appeal, setting aside the judgments of the lower courts. It held that the power of attorney was coupled with interest and could not be canceled without proper notice. The suit filed by the plaintiffs was dismissed in toto, and no costs were awarded.

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• 2013 (4) TMI 865
  
  Issues involved: Appeal by Revenue against CIT(A) order for assessment year 2008-2009.
  
  Summary:
  The appeal by the Revenue was against the order of the CIT(A)-I, Surat dated 24.7.2012 for the assessment year 2008-2009. During the hearing, no one appeared on behalf of the assessee-respondent, leading to the appeal being disposed of ex parte. The main ground of the Revenue was the restriction of addition of unexplained deposits in the bank account. The learned DR argued that the AO was not given a reasonable opportunity to provide comments, citing a lack of natural justice. However, the Tribunal found that the CIT(A) had indeed given the AO an opportunity to submit a remand report, which was duly considered along with the assessee's comments. The CIT(A) reasoned that the entire deposit amount added by the AO was unjustified, and only the peak of cash deposits along with additional undisclosed income was sustained. The Tribunal upheld the CIT(A)'s order, emphasizing that the entire deposit amount could not be taxed as income and confirming the addition based on the peak cash credit. The Revenue's grounds were dismissed as lacking merit, and the appeal was ultimately dismissed.
  
  In conclusion, the Tribunal upheld the CIT(A)'s order, dismissing the appeal of the Revenue for the assessment year 2008-2009.

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• 2013 (4) TMI 864
  
  Issues Involved:
  1. Disallowance of amount transferred to Statutory Reserve.
  2. Application of Rule 8D of Income-tax Rules in computing disallowance u/s 14A.
  3. Deduction of amount transferred to Reserve Fund.
  4. Disallowance of bad debts.
  5. Disallowance of royalty.
  6. Loss arising from derivatives/hedging transactions in foreign exchange.
  7. Disallowance of Employees Stock Option Scheme (ESOP) expenses.
  
  Summary:
  
  1. Disallowance of amount transferred to Statutory Reserve:
  The Tribunal upheld the disallowance of the amount transferred to Statutory Reserve by the assessees. It was noted that the issue had been previously decided against the assessees in their own cases, following the decisions in I.T.A. No. 701/Mds/2012 and I.T.A. No. 702/Mds/2012. The Tribunal held that the transfer to Reserve Fund could not be considered a diversion of income by overriding charge and was merely an appropriation of profits.
  
  2. Application of Rule 8D of Income-tax Rules in computing disallowance u/s 14A:
  The Tribunal found that the Assessing Officer (AO) did not provide sufficient reasoning for rejecting the assessees' suo motu disallowance under Section 14A. The AO's dissatisfaction must be based on relevant and reasonable grounds. The Tribunal followed the decision in the case of MAXOPP Investment Ltd. vs. CIT, emphasizing that the AO must record dissatisfaction with the correctness of the assessee's claim before invoking Rule 8D. Consequently, the Tribunal deleted the disallowance made under Section 14A.
  
  3. Deduction of amount transferred to Reserve Fund:
  The Tribunal dismissed the assessees' grounds regarding the deduction of the amount transferred to Reserve Fund, following its earlier decisions in I.T.A. No. 235/Mds/2009. The Tribunal reiterated that the transfer to Reserve Fund was an appropriation of profits and not a diversion of income by overriding charge.
  
  4. Disallowance of bad debts:
  The Tribunal upheld the CIT(A)'s decision to allow the assessees' claim for bad debts. It was noted that the assessees had written off bad debts in the books maintained for income-tax purposes, and the issue had been previously decided in favor of the assessees in I.T.A. No. 726/Mds/2010. The Tribunal emphasized that the write-off of bad debts was in compliance with Section 36(1)(vii) of the Income-tax Act.
  
  5. Disallowance of royalty:
  The Tribunal upheld the CIT(A)'s decision to allow the royalty expenses as revenue expenditure. It was noted that the royalty was paid for the non-exclusive use of a logo, and similar issues had been decided in favor of the assessees in earlier cases, including I.T.A. No. 726/Mds/2010. The Tribunal found no reason to treat the royalty payment as a capital expenditure.
  
  6. Loss arising from derivatives/hedging transactions in foreign exchange:
  The Tribunal upheld the CIT(A)'s decision to allow the loss arising from derivatives/hedging transactions. It was noted that similar issues had been decided in favor of the assessees in I.T.A. No. 319/Mds/2011 and I.T.A. No. 320/Mds/2011. The Tribunal found that the derivative contracts were hedge transactions, and the loss computed on a market-to-market basis was allowable as a business loss.
  
  7. Disallowance of Employees Stock Option Scheme (ESOP) expenses:
  The Tribunal upheld the CIT(A)'s decision to allow the ESOP expenses as staff welfare expenditure. It was noted that the issue had been decided in favor of the assessees by the Hon'ble jurisdictional High Court in the case of CIT v. PVP Ventures Ltd. The Tribunal found that the ESOP expenses were an ascertained liability and not a contingent one.
  
  Conclusion:
  The appeals of the assessees were partly allowed, whereas the appeals of the Revenue were dismissed. The Tribunal's decisions were based on precedents and the specific facts of the cases, emphasizing the need for reasoned and relevant findings by the AO before making disallowances.

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• 2013 (4) TMI 863
  

  Reassessment Proceedings by the AO u/s 147 - Original assessment was made u/s 143(3) and reopening of the assessment has admittedly taken place beyond a period of four years from the end of the relevant assessment year. AO stated that he has reason to believe that the income has escaped assessment by reason of the failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment. Thus he wants to initiate reassessment proceedings u/s 147 - HELD THAT: - Expression u/s 147 is “reason to belief”, such a belief may not be based merely on reasons but it must be founded on information. AO has failed to establish that the assessee did not disclose all material facts at the time of making the original assessment u/s 143(3). Also, initiation of reassessment proceedings by the AO is barred by limitation, thus invalid.

  Decision in the cases of BAWA ABHAI SINGH VERSUS DEPUTY COMMISSIONER OF INCOME-TAX [2001 (3) TMI 14 - DELHI HIGH COURT] and INCOME-TAX OFFICER, I WARD, DISTT. VI, CALCUTTA, AND OTHERS VERSUS LAKHMANI MEWAL DAS [1976 (3) TMI 1 - SUPREME COURT], relied upon.

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• 2013 (4) TMI 862
  
  Issues involved: Appeal against the order directing deduction of contribution made towards Provident Fund not recognized u/s 2 (38) of IT Act.
  
  Issue 1: Recognition of Provident Fund Trust
  
  The department appealed against the order allowing deduction of contribution made by the assessee towards Provident Fund, which was not recognized u/s 2 (38) of the IT Act. The assessee, a Co-operative Society engaged in banking, debited an amount towards Provident Fund of its employees. The Assessing Officer disallowed the contribution u/s 40A(9) as the Provident Fund Trust was not recognized. The CIT (A) allowed the appeal, stating that the Provident Fund was established under a scheme framed under the EPF Act, 1952, making it eligible for deduction irrespective of approval by the authorities. The Tribunal upheld the CIT (A)'s decision, emphasizing that a Provident Fund established under the EPF Act, 1952 is considered a recognized Provident Fund u/s 2 (38) of the Act.
  
  Issue 2: Interpretation of Section 2 (38) of the IT Act
  
  The Tribunal analyzed Section 2 (38) of the IT Act, which defines a "recognized provident fund" to include a fund established under a scheme framed under the EPF Act, 1952. It noted that the Assessing Officer failed to acknowledge that the assessee's Provident Fund Trust was established under the EPF Act, 1952. As per the Act, a Provident Fund established under the EPF Act, 1952 is considered recognized, regardless of approval by the authorities. The Tribunal concluded that the CIT (A) correctly rectified the Assessing Officer's error in disallowing the deduction, as the Provident Fund met the criteria of a recognized fund as per Section 2 (38) of the Act.
  
  Final Decision
  
  The Tribunal dismissed the department's appeal, finding no merit in the grievance raised. It upheld the CIT (A)'s decision to allow the deduction of contribution made towards the Provident Fund, emphasizing that the fund being established under the EPF Act, 1952 qualified as a recognized Provident Fund u/s 2 (38) of the IT Act.

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• 2013 (4) TMI 861
  
  The petitioner filed a petition under Section 482 of the Code of Criminal Procedure, 1973 to quash FIR No. 61 dated 25.7.2012 under Sections 420, 468, 471, 120-B IPC. The High Court allowed the petition, quashing the FIR and subsequent proceedings. The State counsel agreed with the decision, but reserved the right to initiate proceedings under the Punjab Vat Act 2005 if necessary.

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• 2013 (4) TMI 860
  
  Issues involved:
  The judgment involves the deletion of addition by treating it as a capital receipt instead of income from house property, and the treatment of receipts from a bank tenant as mesne profit/damages not liable to tax.
  
  Deletion of Addition - Capital Receipt vs. Income from House Property:
  The appeal filed by the revenue pertained to the deletion of an addition of Rs. 18,48,790 by the CIT (Appeals), treating it as a capital receipt instead of income from house property. The amount was received by co-owners from a bank tenant in pursuant to a court order. The CIT (A) granted relief to the assessee based on a decision of the ITAT, Delhi Bench-I, which held that mesne profits constitute capital receipt not chargeable to tax. The ITAT upheld the CIT (A)'s decision, stating that the nature of the receipt does not change in the hands of the appellant, and thus, the addition made by the Assessing Officer was unjustified. The ITAT dismissed the revenue's appeal, following the decision of the coordinate Bench in a similar case.
  
  Receipts from Bank Tenant - Mesne Profit/Damages not Liable to Tax:
  The issue revolved around the treatment of the assessee's share of receipts from a bank tenant as mesne profit/damages not liable to tax, which the CIT (A) had upheld. The ITAT referred to a decision of a larger special bench in the case of Narang Overseas Pvt. Ltd. vs. ACIT, where it was held that mesne profit received for deprivation of use and occupation of property is a capital receipt not chargeable to tax. The ITAT, in line with this decision, concluded that the appellant's share of mesne profit was a capital receipt and therefore not taxable. The ITAT dismissed the revenue's appeal, following the decision of the coordinate Bench in a similar case.
  
  Conclusion:
  In both issues, the ITAT ruled in favor of the assessee, upholding the treatment of the receipts as capital receipts not liable to tax. The judgment was based on legal precedents and interpretations regarding the nature of mesne profits and their taxability under the Income-tax Act, 1961.

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• 2013 (4) TMI 859
  
  Issues involved: Interpretation of deduction u/s 10A for the assessment year 2007-2008.
  
  Issue 1: Interpretation of deduction u/s 10A
  
  The appeal by the Revenue challenged the order of the Commissioner of Income-tax (Appeals) regarding the deduction u/s 10A for the assessment year 2007-2008. The main ground raised was the contention that the profit derived by the assessee from the business of manufacturing Industrial Sewing Machine Needles was abnormally high due to an extraordinary arrangement with a German Co., and thus, the deduction of Rs. 34,32,68,706/- should not have been allowed. The AO had initially restricted the profit at 60% based on the preceding year's assessment, but the CIT(A) overturned this decision.
  
  Issue 2: Precedent and Judicial Interpretation
  
  Upon reviewing the facts and relevant material, the Tribunal noted a previous case from the assessment year 2004-2005 which had a similar issue regarding deduction u/s 10A. In that case, the Tribunal had accepted the assessee's claim for the full deduction u/s 10A. Furthermore, a judgment from the Hon'ble jurisdictional High Court had upheld the Tribunal's decision, dismissing the Revenue's appeal. Given these precedents, the Tribunal found that the question of deduction u/s 10A in the present appeal was settled law, and the CIT(A)'s decision was in line with the previous rulings. Therefore, the Tribunal upheld the impugned order and dismissed the appeal.
  
  In conclusion, the Appellate Tribunal ITAT MUMBAI upheld the Commissioner of Income-tax (Appeals) decision regarding the deduction u/s 10A for the assessment year 2007-2008, based on established precedents and judicial interpretations.

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• 2013 (4) TMI 858
  
  Issues involved:
  The judgment involves issues related to non-deduction of TDS on interest paid by the assessee to its customers, as well as the time limitation for passing assessment orders u/s 201(1), 201(1A), and 206C(7) of the Income Tax Act.
  
  Non-deduction of TDS on interest paid by the assessee:
  The Revenue appealed against the order of the ld. CIT(A) regarding the non-deduction of TDS on interest paid by the assessee to its customers. The ld. CIT(A) allowed relief to the assessee based on Board's Circular No.3/2010 and the Ahmedabad Bench of the Tribunal's decision in the case of Bank of Maharashtra vs. ITO. It was held that the interest credited was for macro monitoring and not actual payment to depositors, hence section 194A was deemed not applicable.
  
  Assessment orders u/s 201(1), 201(1A), and 206C(7) of the Income Tax Act:
  The assessee appealed against the orders of the ld. CIT(A) upholding the Assessing Officer's orders u/s 201(1), 201(1A), and 206C(7) of the Income Tax Act. The assessee contended that the orders passed for assessment years 1997-98, 1998-99, and 1999-2000 were time-barred, citing the Mahindra and Mahindra Ltd. case and judgments of the Hon'ble High Court of Delhi. The Tribunal held that the orders were passed beyond the reasonable time limit of six years from the end of the assessment year, thus annulling the orders as they were beyond the limitation period.
  
  Conclusion:
  The Tribunal dismissed the appeals of the Revenue while allowing the appeals of the assessee. The orders under section 201(1), 201(1A), and 206C(7) of the Act were deemed to be passed beyond the reasonable time limit and were annulled. The judgment followed the decisions of the Hon'ble Delhi High Court and the Special Bench of the Tribunal, which favored the assessee.

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• 2013 (4) TMI 857
  
  Issues Involved:
  1. Deletion of disallowance of 15% in cash payments made to partners.
  2. Deletion of addition on account of disallowance made u/s 40(a)(ia) of the Act.
  
  Summary:
  
  Issue 1: Deletion of disallowance of 15% in cash payments made to partners
  
  The department challenged the deletion by the CIT (A) of the disallowance of 15% in cash payments made to partners. The assessee, engaged in conducting horse races, filed its return of income for the assessment year 2009-10. During scrutiny, the Assessing Officer noted that the assessee incurred cash expenditures, some above Rs. 2500/- with proper records and some below Rs. 2500/- without proper records. The Assessing Officer made an ad hoc disallowance of 15% amounting to Rs. 45,89,17,327, despite the Tribunal's previous deletion of similar disallowances. The CIT (A) deleted the addition following the Tribunal's earlier orders. The Tribunal upheld the CIT (A)'s decision, noting that the issue had been consistently decided in favor of the assessee in previous years, emphasizing the difficulty in maintaining complete details due to the nature of the assessee's activities.
  
  Issue 2: Deletion of addition on account of disallowance made u/s 40(a)(ia) of the Act
  
  The Assessing Officer disallowed Rs. 3,15,33,468/- u/s 40(a)(ia) for non-deduction of tax at source u/s 194H on payments to other clubs, treating them as commission. The CIT (A) deleted the addition, holding no principal-agent relationship existed, thus sec. 194H was not applicable. The Tribunal remitted the issue to the Assessing Officer for fresh consideration, noting that the payees had accounted for the payments and paid taxes. The Tribunal also considered the retrospective application of the amended provision of sec. 40(a)(ia) introduced by the Finance Act, 2012, but did not accept it at this stage due to procedural reasons. The Tribunal directed the Assessing Officer to re-examine the issue, consistent with its earlier decisions.
  
  Conclusion:
  
  The appeal filed by the Revenue was treated as partly allowed for statistical purposes, with the Tribunal remitting the issue of disallowance u/s 40(a)(ia) back to the Assessing Officer for fresh consideration. The deletion of the 15% disallowance in cash payments was upheld.

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• 2013 (4) TMI 856
  
  Issues involved:
  The issues involved in the judgment are the demand of Service Tax and imposition of penalty u/s 78 of the Finance Act, 1994.
  
  Service Tax Demand Issue:
  The appellant, an Advertising Agency, filed an appeal against the demand of Service Tax of Rs. 80,275 confirmed by the Commissioner for certain months in 2003. The appellant's activities included various services falling under taxable services related to advertisements. The appellant contended that they were carrying out separate activities - one subject to Service Tax and the other subject to VAT. They believed that the value of printing charges where only VAT was paid should not attract Service Tax. The Commissioner confirmed the demand for the period before a specific notification and dropped it for the subsequent period. The Tribunal found that the appellant's belief was genuine, and since no penalty was imposed by the Commissioner, the demand for the extended period was set aside. The appeal on this issue was allowed.
  
  Imposition of Penalty Issue:
  Regarding the imposition of penalty u/s 78 of the Finance Act, 1994, the Tribunal noted that the Commissioner did not impose any penalty despite confirming the demand for Service Tax for the extended period. The Tribunal observed that the same factors that would warrant a penalty were present for invoking the extended period. Since no penalty was imposed, the Tribunal held that the demand confirmed by invoking the extended period of limitation was not sustainable and set it aside. Consequently, the appeal was allowed on this issue as well.

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• 2013 (4) TMI 855
  
  Issues:
  The issues involved in the judgment are whether the respondents are liable to pay service tax for providing clearing and forwarding agent services and whether the demand for service tax is sustainable based on the activities undertaken by the respondents.
  
  Issue 1: Liability to Pay Service Tax for Clearing and Forwarding Agent Services
  The Revenue filed an appeal against an order holding that the respondents are not recipients of clearing and forwarding services but merely provided their tanks for storage of final products, which falls under 'storage and warehousing service'. The Revenue contended that the respondents' activities, as per agreements with various parties, such as evacuating tankers and blending, constitute clearing and forwarding agent services, making them liable to pay service tax.
  
  Issue 1 Details:
  The Trade Notice No. 59/99 issued by the Mumbai Commissionerate outlines activities of a clearing and forwarding agent, including receiving goods, warehousing, arranging dispatch, and maintaining records. The respondents argued that they only stored products and did not undertake the specific activities mentioned in the Trade Notice. The definition of 'clearing and forwarding agent' under the Finance Act includes any person providing services connected with clearing and forwarding operations. However, the activities listed in the Trade Notice were not proven to be carried out by the respondents, and no evidence was presented by the Revenue to support their claim. Consequently, the impugned order was upheld, and the appeal was dismissed.
  

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• 2013 (4) TMI 854
  
  Issues: Appeal against order confirming demand of Service Tax and interest u/s 68, 69, 70 & 73 of the Finance Act, 1994.
  
  Summary:
  The appellants challenged the order of the Commissioner (Appeals) upholding the demand of &8377; 1,55,885/- along with interest for the period 12-6-2000 onwards, related to availing services of GTO from 16-11-1997 to 1-6-1998 and liability for Service Tax u/s 41/97-ST, 42/97-ST & 43/97-ST. The adjudicating authority confirmed the demand, penalizing for non-filing of Service Tax return u/s 75, 76, 77 & 78 of the Act.
  
  The appellants contended that the levy of Service Tax on GTO was not validated at the time of the show-cause notice, and upon validation on 14-5-2003, they paid the Service Tax on 28-8-2003 within the stipulated six months from the validation date. They argued that interest should not be levied in their case due to timely payment post-validation.
  
  After considering the submissions and records, it was noted that the appellants indeed paid the Service Tax within six months from the validation date as required, i.e., on 28-8-2003, for the period from 16-11-1997 to 1-6-1998. As per the validation terms, no interest or penal provisions are attracted if the Service Tax is paid within the specified period. Consequently, the order of the ld. Commissioner (Appeals) imposing interest was deemed unsustainable, and thus set aside. The appeal was allowed accordingly.

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• 2013 (4) TMI 853
  
  Issues involved:
  The issue involves the demand for service tax on the grounds of providing advertisement consultancy services by the appellants.
  
  Summary:
  The appellants, registered as an Advertising Agency, filed an appeal against the order passed by the Commissioner of Central Excise (Appeals), Mumbai, demanding service tax for providing advertisement consultancy services. The appellants contended that they were registered with the Revenue as providers of advertising consultancy services and were paying service tax accordingly. They also undertook activities not related to advertising consultancy at the request of their clients, such as media plan budgeting, sales strategy development, and analysis of data. The Revenue argued that all activities were related to advertisement consultancy based on the Director's statement. However, the Tribunal found that certain activities like media plan budgeting, sales strategy development, and data analysis were not related to advertisement consultancy and set aside the demand for service tax on these activities.
  
  In regards to media consultancy, the appellants admitted that it was related to advertising consultancy. The Tribunal acknowledged that the appellants were paying service tax regularly for advertising consultancy services and believed in good faith that media consultancy was not covered under Advertising Agency or Advertising Consultant. Thus, the demand for service tax beyond the normal period for media consultancy was set aside. Since there was no intent to evade payment of duty, the penalties imposed were also set aside. Consequently, the appellants were not liable to pay any penalty. The appeal was disposed of accordingly.

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• 2013 (4) TMI 852
  
  Issues involved: Appeal filed by Revenue against CIT(A) order for assessment year 2005-06 regarding deletion of MODVAT credit as income.
  
  Facts: Assessee company in chemical business declared income of Rs. 1,24,44,110/-, with total loss determined at Rs. 83,02,886/- under section 143(3). Dispute arose over unutilized MODVAT credit of Rs. 94,82,796/- treated as income by Revenue.
  
  Assessment Proceedings: A.O. disallowed Rs. 39,98,872/- MODVAT credit set off against revenue receipts, citing capital nature of modvat received on plant and machinery. CIT(A) deleted the addition based on Jay Laminate Pvt. Ltd. case.
  
  CIT(A) Decision: CIT(A) relied on Jay Laminate Pvt. Ltd. case where unutilized MODVAT was held as prepaid expenditure, not constituting income. Revenue appealed against this decision.
  
  Appellate Tribunal's Analysis: Tribunal upheld CIT(A) decision, citing Jay Laminate Pvt. Ltd. case precedent. Coordinate bench held unutilized MODVAT as prepaid expenditure, not taxable income. Apex Court precedent also supported this view.
  
  Conclusion: Revenue's appeal was dismissed as unutilized MODVAT credit was deemed as prepaid expenditure, not constituting taxable income based on legal precedents. Tribunal found no reason to interfere with CIT(A) decision.

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• 2013 (4) TMI 851
  
  Issues Involved:
  1. Non-placement of retraction letters before the detaining authority.
  2. Reliance on confessional statements in the detention order.
  3. Legal consequences of non-placement of vital documents.
  
  Summary:
  
  Issue 1: Non-placement of Retraction Letters Before the Detaining Authority

  Payal Garg, wife of the detenu Lokesh Garg, filed a writ petition u/s Article 226 of the Constitution for a writ of Habeas Corpus to quash the detention order dated 27th August 2010 u/s 3(1) of COFEPOSA. The petitioner challenged the non-placement of the retraction letter and bail application of co-detenu Manish Jalhotra before the detaining authority. The detaining authority relied on the confessional statements of Manish Jalhotra and Lokesh Garg, but the retraction letters were not presented. The respondents claimed they did not have copies of these letters as they were filed in the court of ACMM.

  Issue 2: Reliance on Confessional Statements in the Detention Order

  The grounds of detention heavily relied on the confessional statements of Lokesh Garg dated 9th March 2010 and Manish Jalhotra dated 14th June 2010. The court noted that these statements formed the cornerstone of the detention order. The retractions were not considered, which could have influenced the detaining authority's decision. The court emphasized that the retractions were of vital importance and should have been placed before the detaining authority.

  Issue 3: Legal Consequences of Non-placement of Vital Documents

  The court referred to several precedents, including Asha Devi Vs. K Shiv Raj and Deepak Bajaj Vs. State of Maharashtra, highlighting that the failure to place retractions before the detaining authority vitiates the detention order. The court held that indirect references to retractions in bail applications are not substitutes for direct retractions. The non-placement of retractions before the detaining authority led to non-application of mind, rendering the detention order invalid and illegal.

  Conclusion:

  In view of the legal position and the non-placement of retraction letters, the court allowed the writ petition, quashing the detention order dated 27th August 2010 and the confirmation order dated 18th February 2013. Lokesh Garg was ordered to be released forthwith unless required to be detained in accordance with law in any other case/order.

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