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Showing 181 to 200 of 1389 Records
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2014 (7) TMI 1212
Loss on account of foreign exchange fluctuation - neither notional nor speculative - allowable business expenditure - Held that:- It is not in dispute that the assessee is exposed to fluctuations in foreign exchange given its scale of operations and hedging of such transactions is the need of the business. It is also not in dispute that except being profit booked by MTM valuation, the entire loss claimed by the assessee was actual loss incurred on cancellation of the forward contracts. It is not the case of the Revenue that at a given point of time all the receivables and all the payables can be adjusted each other. There may be a position that the payments for imports may not be due as on a particular date and vice versa. Having regard to the overall circumstances the learned CIT(A) applied the ratio of the Hon'ble jurisdictional High Court decision in the case of CIT vs. Badridas Gauridu Pvt. Ltd. [2003 (1) TMI 61 - BOMBAY High Court] to hold that the loss incurred by the assessee cannot be treated as a notional loss but an actual loss which is allowable as deduction.
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2014 (7) TMI 1211
Adjustment of excess service tax paid – demand of tax, interest and penalty – Held that: - the same issue was the subject matter in another case of the appellant which has been decided by CESTAT in their favour vide Order No. 52863 dated 10.07.2014 – appeal allowed – decided in favor of appellant.
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2014 (7) TMI 1210
Bank account declared as non-performing asset - request of the petitioning company for legal representation has been refused on the ground that the guidelines of the RBI do not provide for the same - committee on identification of wilful defaulters had identified it as a wilful defaulter - Held that:- The officers of the bank comprising the Committee are legally trained persons for which there could be a reasonable likelihood of a failure of justice, if the petitioning company were refused the permission to be represented by an advocate. Even if any or all the officers of the bank comprising the Committee are legally trained persons, the petitioning company does not stand at a disadvantage. It is inconceivable that the petitioning company does not have in its fleet an efficient and well versed company secretary and/or competent law officers. In the hearing to be conducted by the Committee, reasonably simple questions of fact as to by whom and how the finances of the petitioning company were handled and utilized, and where the funds have gone resulting in accumulation of dues, would fall for consideration, which a company secretary and/or law officers of fair intelligence and having knowledge of the conditions prevailing in the petitioning company would be able to disclose, for unearthing the truth. It is he/they who would be best suited to answer the queries of the Committee members or to raise effective defence and plead that the default has not been wilful and, therefore, question of declaring the petitioning company as a wilful defaulter does not and cannot arise.
On the facts pleaded in the responses to the impugned notices forming part of the writ petition, the petitioning company can claim no right to be represented by an advocate at the hearing before the Committee. The writ petition is without merit and the same stands dismissed, without order for costs.
Since the Committee adjourned the hearing scheduled on July 9, 2014 awaiting decision on this writ petition and it has now been dismissed, it shall be at liberty to fix a further date of hearing upon service of 72 hours advance notice on the petitioning company and its directors.Needless to observe, the Committee shall proceed to decide the issue before it in accordance with law and all other points are left open for being urged before it by the petitioning company.
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2014 (7) TMI 1209
Assessment against late assessee - legal heirs of the assessee were not brought on record before passing the order by Ld. CIT (A) - Held that:- We find merit in the submission of the Ld.AR. The Ld. A.R. has produced the death certificate of the assessee before us in order to establish that the assessee had expired on 03/01/2013 ie., before the date of the order of Ld.CIT(A) on 28/03/2013. Therefore in the interest of justice, we hereby remit the matter back to the file of the Ld. CIT (A) to pass appropriate order as per law and merits after bringing the legal heirs on record and affording sufficient opportunity to them of being heard.
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2014 (7) TMI 1208
Import of Cosmetics - commissioner observed that appellant were not able to produce the requisite registration for import of cosmetics under Drugs and Cosmetics Act, 2010 leading to reasonable belief that the same were liable to confiscation under section 111(d) of the Customs Act, 1962. - Held that:- appellants later on submitted that they have now obtained the requisite registration certificate from the Drug Control Authority of India and produced the registration certificate before the authorities.
Redemption fine and penalty reduced - Decided partly in favor of assessee.
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2014 (7) TMI 1207
Estimation of net profit rate after rejection of books of account under section 145(3) - Held that:- The Assessing Officer in the assessment order had tabulated the defects in the books of account maintained by the assessee and in view of the exhaustive list, we are in conformity with the order of the CIT (Appeals) in rejecting the books of account under section 145(3) of the Act. Once the books of account have been rejected then the next step to determine the income of the assessee is to apply justifiable net profit rate to the receipts declared by the assessee. The assessee during the year under consideration had claimed net profit rate of 5.29% which was increased to 12% by the Assessing Officer and was reduced to 6.5% by the CIT (Appeals). The assessee was engaged in the business of civil contractor and in the totality of the facts and circumstances, we hold that the net profit rate of 7% be applied to determine the income in the hands of the assessee. The Assessing Officer is directed to recompute the income of the assessee accordingly. - Decided partly in favour of revenue
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2014 (7) TMI 1206
Assets mortgaged to bank - inclusion in net wealth of the assessee - Held that:- The properties mortgaged to the bank cannot be held as assets belonging to the assessee u/s.2(m) of the W.T. Act. We, therefore, set-aside the order of the CWT(A) and direct the Assessing Officer to delete the assets mortgaged to the bank from the net wealth of the assessee. See CIT Vs. Thressiamma Abraham [1996 (12) TMI 25 - KERALA High Court] - Decided in favour of assessee
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2014 (7) TMI 1205
Maintainability of writ petition - Reopening of assessment - ex-parte order - The case of the Revenue was that as per the books of the petitioner after tallying the opening stock of raw materials the additional purchase of raw material, other incidental charges, etc., the stock transfer to the manufacturing arm, i.e., M/s. Basant Cables & Conductors Pvt. Ltd. was less than the total amount of production in all the years.
Held that:- Before us it is urged that the assessing officer erred in not granting any adjournment and granting a date to the assessee to approach the High Court. The order of the Commissioner of Taxes was passed on September 4, 2013. Thereafter notice was issued to the assessee on September 30, 2013. The assessee asked for a date and thereafter another date was given directing it to appear before the assessing officer on November 8, 2013. Again a date was prayed for and the matter was adjourned to December 16, 2013. Again a request for adjournment was made but it appeared that this was not allowed and the assessment order was passed.
We are clearly of the view that the manner in which the assessee has acted does not entitle it to get any relief from this court. - In this case the assessing officer gave notices thrice to the assessee but it did not care to appear before the assessing officer and just kept asking for adjournments. We cannot condone this sort of behaviour of the assessee.- Petition dismissed - Decided against the assessee.
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2014 (7) TMI 1204
Penalty u/s.271(1)(c)- disallowance of loss on RBI Bonds - Held that:- We are not in agreement with the findings of learned CIT(A) because the nature of the receipt, the amount receipt on maturity on tax free RBI bonds as well as other related information was placed before the Revenue Department at the time of filing of the return. Therefore, it can be opined that there was no concealment about the particulars of the facts regarding the maturity of RBI bonds. On those facts being disclosed before the Revenue Department a legal question has cropped up whether the assessee was eligible for the short term capital loss or not. Although, it is true that the loss was not permissible in the eyes of law but the correct position of law could only be ascertained by the Revenue Department after examining the facts of each case. Because of this reason, we hereby hold that the case of Reliance Petro Product Pvt. Ltd., (2010 (3) TMI 80 - SUPREME COURT ) is applicable and the penalty deserves to be deleted - Decided in favour of assessee
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2014 (7) TMI 1203
Validity of assessement u/s 158BD - Held that:- For the purposes of Section 158BD of the Act a satisfaction note is sine qua non and must be prepared by the assessing officer before he transmits the records to the other assessing officer who has jurisdiction over such other person.
The Tribunal being a final fact finding authority had not recorded any finding with regard to the recording of satisfaction note validity of assessement u/s 158BD rejected. - Decided in favour of assessee
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2014 (7) TMI 1202
Pre deposit - Held that:- Appellants were directed to make pre-deposit of ₹ 3,00,000/- lakhs within a period of six weeks.
As the appellants submits that they have neither complied the stay order nor seeking extension of stay. Since the appellants failed to comply with the stay order all the appeals are dismissed for non-compliance of the stay order.
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2014 (7) TMI 1201
Validity of reassessment orders - Violation of principles of natural justice - order passed without giving an opportunity to the petitioner - Held that:- as the petitioner has appeared before the reassessing authority and has produced the relevant books of accounts and other evidence, it cannot be said that there was violation of the principle of natural justice. Therefore, this court cannot interfere with the impugned orders of reassessment under article 226 of the Constitution. - Decided against the petitioner
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2014 (7) TMI 1200
Waiver of pre-deposit - Demand of service tax on repair and maintenance services rendered to Military Engineering Service (MES) - Demand confirmed on services rendered to MES and cum-service tax benefit has not been extended - Held that:- as has been clearly brought out by the adjudicating authority and admitted by the appellants, the services rendered by them to MES are classifiable under Erection, Commissioning or Installation Service and there is no requirement that these services to be taxable should be rendered to a commercial organisation.
The adjudicating authority has indeed considered this point to come to a finding that the cum-tax benefit is not available to the appellants. Although in the concluding para, while remanding the case for de novo adjudication, CESTAT had not given specific directions to extend the said benefit, it can be argued that CESTAT intended to extend such benefit. At the stage of deciding stay petition, prima facie, this point can be allowed to play in favour of the appellants.
As regards the contention of the appellants that they had given separate values of the goods supplied and therefore the benefit of deduction of the value of the goods should have been allowed and also the work done in J&K should also have been excluded, we find that the point regarding service rendered in J&K had not been taken up by the Appellants before the adjudicating authority but their contention regarding excluding the value of goods for the purpose of service tax has force as service tax cannot be charged on the sale/transfer of goods. - stay granted partly.
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2014 (7) TMI 1199
Deduction under Section 80-IA - revision u/s 263 - Whether the Tribunal was correct in holding that the order of assessment computing deduction under Section 80-IA of the Act was neither erroneous nor prejudicial to the interest of the Revenue as percentage of expenditure adopted by the assessee from Bhuvaneshwar unit and Bangalore unit was permissible? - Held that:- Assessing Authority has taken into consideration all the details mentioned in the computation statement which is taken from the books of account maintained by the assessee and has recorded the finding. The Commissioner proceeds on the basis that the figures found in the calculation statement has no basis ignoring that these figures are taken from the books of account. In that view of the matter, the Tribunal was justified in setting aside the order passed by the Commissioner and restoring the order of the Assessing Authority. - Decided in favour of the assessee
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2014 (7) TMI 1198
Applicability of Employees Provident Fund and Miscellaneous Provisions Act, 1952 to the Tungidhighi unit - Extension of provisions of the Act - allotment of a new separate Code to the Tungidhighi unit - Establishment of the petitioners has failed to remit the provident fund, employees pension funds and insurance funds dues under the newly allotted P.F. Code - Held that:- the factory situated in different places and having separate licences but same registered office, activities, Managing Director vis-à-vis Manager and Secretary empowered to operate Bank Account of both and Balance Sheet, Income and Expenditure Account common to both would be as treated as part of the same establishment. To decide whether different units are part of the same establishment, the Court has to assess the extent of functional integrity between them and also whether one unit can exist conveniently and reasonably without the other. An establishment would include all departments and branches and if the two units are put together as a single establishment, the Act would be applicable and otherwise not.
The authorities concerned did say that the said unit is a separate and independent of the principal establishment. It is also not being contended that there is no financial management and functional integrality between the factory and the main establishment. If there is financial, management and functional integrality between the different units and one cannot exist without the other they should be treated as one single unit. Therefore, the allotment of a new Code in respect of the said unit Tungidighi is unsustainable. However, it is made clear this order shall not prevent the Provident Fund Authorities from realizing the dues of the said unit in accordance with law, if it is found that the said unit has not complied with the statutory requirements. It is made clear that this Court has not gone into the merits of the order passed under Section 7A of the said Act in relation to the Tungidighi unit of the petitioner No.1. All consequential steps taken pursuant to allotment of such code number is accordingly set aside. - Writ application disposed of
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2014 (7) TMI 1197
Deemed dividend u/s 2(22)(e) - Held that:- The allegation of the department that the payments by the company to the assessee is a gratuitous one also cannot be accepted not only because of the fact that it is towards advance for purchase of land but also considering the fact that the assessee has put all her personal properties as collateral security for the loan availed by the company. Therefore, the company has certainly derived advantage on account of the assessee. That being the case, it cannot be said that the amount paid, even assuming that it is not towards sale consideration of the property, is a loan or advance and not for the business purpose of the company.
The payment cannot be treated as deemed dividend u/s 2(22)(e) of the Act. Accordingly, we direct the assessing officer to delete the addition made of the said amount. So far as the other additions are concerned, it is the contention of the Ld. A.R. that if at all they are to be treated as deemed dividend, then opening balance as appearing at the beginning of the year has to be excluded and proportionate addition has to be made on the balance amount. However, considering the fact that this argument was not made before the departmental authorities, we consider it appropriate to remit the matter back to the file of the assessing officer for considering the same afresh after verifying the facts and materials on record. - Decided partly in favour of assessee
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2014 (7) TMI 1196
Eligibility of refund claim of Cenvat credit - Rule 5 of the Cenvat Credit Rules, 2004 read with Notification No.5/2006-C.E. (N.T.) dated 14.03.2006 - Huge accumulated Cenvat credit of service tax paid on the input services - Early drug discovery services taxable under category of Scientific and Technical Consultancy Service exported to its overseas clients - Received various input services and avails Cenvat credit of Service tax paid on such input services - Services has no nexus with the output services.
Held that:- the business activities in the case of a service provider are not only confined to mere proving the service directly, but also include other activities, which he may be required for accomplishing the purpose of business. For smooth functioning of the business of providing the service and other like activities, the service provider may use other services, which are ancillary and incidental for accomplishing the main purpose. In such an eventuality, it cannot be said that the function of those ancillary services are not connected to the business purpose of the assessee. Therefore, in view of the definition of input service and the ratio laid down by the Hon'ble Bombay High Court, any service received and which is commercially required for the purpose of carrying on the business of the service provider, will be covered by the expression 'activity relating to business' contained in Rule 2(l) of the Cenvat Credit Rules, 2004.
The nature, purpose and use of the disputed services by JBL establish the fact that the expenditure incurred for those purported disputed services are commercially required to be incurred with a view to facilitate the carrying on the business of providing the taxable service, and thus, confirming to the expression 'activities relating to business' as contained in the definition clause of 'input service'; as the word 'business' is one of wide import and in fiscal statutes, it must be construed in a broad rather than a restricted sense. Therefore, denial of refund benefit to JBL under Rule 5 ibid by the authorities below is not justified. I am also of the considered view that there are no merits in the appeals filed by the Revenue, because of the fact that the nexus between the input services and the output service exported by the appellant is duly established by JBL for claiming of refund of accumulated Cenvat credit.
whether refund application was filed within the prescribed time limit - Held that:- at this juncture, it is not appropriate for the Tribunal to ascertain the dates, when the refund applications were filed by JBL for the purpose of computation of the limitation. Therefore, the matter should be remanded back to original authority for ascertainment of fact regarding the date of filing of the refund applications and if the applications were filed within the stipulated time limit, then to decide the matter in line with the observations recorded above. - Appeals disposed of
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2014 (7) TMI 1195
Disallowance representing commission paid to directors and disallowance u/s 36(1)(ii) - excessive and unreasonable interest - Held that:- The issue involved is no longer res integra. As in the case of the assessee, the co-ordinate bench followed the order of the jurisdictional High Court in the case of AMD Met Plast Pvt Ltd (2011 (12) TMI 320 - Delhi High Court ) and has deleted the identical disallowance. n view of the above findings, we conclude that the disallowance made in the instant Assessment Year too is not tenable. The ld CIT(A), had sustained the disallowance on the basis of the order for Assessment Year 2007-08 and 2008-09, which as stated above has been set-aside. And since, the ld DR has not brought any material or fresh facts so as to persuade us to arrive at a different conclusion, we are not inclined to take another view of the issue in hand. Therefore we set-aside the impugned order and direct deletion of the disallowance towards commission paid to the Directors. - Decided in favour of assessee
Disallowance on account of interest paid held to be excessive and unreasonable u/s 40A(ii)(b) - Held that:- it is an undisputed position that interest has been paid to the specified persons in the earlier years at 16% which has been allowed in the respective previous years. The assessee however, has claimed deductions on the money borrowed from said ten persons at 18% in the instant year. The AO has held the same to be excessive and unreasonable in term of section 40A(2)(b) of the Act. He has referred to the interest paid to six parties at 12% and thus the difference between 18% and 12% was disallowed u/s 40A(2)(b) of the Act. We however find that it would be unfair to restrict the disallowance by adopting the interest at 12% because in earlier year interest has been allowed to such persons at 16%. Reference has been made by the authorities below to interest paid at 12% in respect of six parties. In our opinion in view of the preceding history of the ten said persons, it would be appropriate to refer to the interest paid to the said person in the earlier year for the purpose of section 4A(2)(b) of the Act. Having regard to the above, we conclude that it would be fair and appropriate to restrict the disallowance by adopting the interest rate at 16%. In view of the above the AO is directed to disallow the interest between 18% to 16% and the balance be allowed as deduction. - Decided in favour of assessee in part
Disallowance on account of depreciation - either bills for purchase of assets were not provided or the bills did not mention the Appellant’s name - Held that:- On appreciation of the facts on records, we find that the assessee had constructed labour quarter, factory building at its factories at Chennai and Ghaziabad. The AO on examination of the said construction expenditure, found that addition of ₹ 52,50,462/- was either not supported by bills or was supported by bills in respect of which name of the assessee was not mentioned. However, in the course of hearing before us, the ld AR, has placed on record complete copies of the bills supported by vouchers in respect of expenditure of ₹ 52,50,462/-. We have perused the bills placed at Pg.63 to 145 of the Paper Book , we find apart from the petty bills, name is mentioned of the assessee on the bills. Further, even in respect of petty bills there is a certification from the vendor, in support of the claim that such expenditure was incurred by the assessee company. Furthermore payments have been made substantially through cheques and have been found recorded in the books. Therefore, we find no reason to disallow the amount of ₹ 1,99,324/- representing the depreciation claimed by the assessee. - Decided in favour of assessee
Disallowance on account of Addl Depreciation claimed - denial of claim as additional depreciation is not allowable on purchases made in earlier years or on the opening balance which were carried forward from preceding years - Held that:- Where any new machinery or plant has been acquired and installed after 31st March 2005, by an eligible assessee then he is entitled to additional depreciation equal to 20% of the actual cost of the machinery. The ld AR in the course of hearing substantiate the copies of the bills referred by the AO. He however submitted that the denial of depreciation is based on a fundamental misconception. It was submitted that the aforesaid bills pertains to substantial expansion of the existing plant at Ghaziabad, which involved setting up a new concast plant and furnace. It was submitted that such expansion was carried out for number of years and was completed and capitalized in the instant year. And it was thus submitted that it was not a case of claim of depreciation in respect of opening balance or expenditure incurred in earlier year. We find force in the claim of the assessee. There is no dispute that the plant was capitalized in the instant year. There is no dispute that additional depreciation on such plant has been allowed by the AO in respect of items which were purchased in the instant year. However, he denied the claim of depreciation on the items purchased in the earlier year. In doing so, the AO has over-looked the factual position that such expenditure was part of the installation of plant which has been capitalized in the instant year. And therefore the mere fact that the bills pertain to earlier year is an irrelevant consideration to deny the claim of additional depreciation when other condition are not in dispute. We also agree with the claim of the assessee that incentive granting provision should be liberally construed as held by the Hon’ble Supreme court which is reported in Bajaj Tempo Limited Versus Commissioner of Income-Tax(1992 (4) TMI 4 - SUPREME Court ).- Decided in favour of assessee
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2014 (7) TMI 1194
Rectification of mistake - Held that:- The power to rectify the order was not available in the given facts and circumstances. The Tribunal in the garb of rectifying a mistake in its order could not have reviewed it. Precisely that has been done in the instant case and which we found not supportable in law.
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2014 (7) TMI 1193
Whether the detenue has to actually suffer the enforcement of the detention order to be given its copy and whether there is due and fair application of mind by the detaining authority on the proposal of the sponsoring authority is also an issue that would fall within this class of arguments - Held that:- without a copy of the detention order and the grounds of detention being served on the proposed detenue, it would be inconceivable that we should proceed to hear the matter on grounds as to the contents of the detention order or its grounds.
For the present, it would suffice that we treat these two cases as special situations and order that the detention orders and the grounds of detention of the petitioners be served on them on or before 31.07.2014. To enable the petitioners to seek remedy if any available to them, in accordance with law, as against the detention orders and grounds of detention, we make the interlocutory orders granted in these writ petitions absolute on the same terms until the 31st of August, 2014. This will be notwithstanding any of the terms and conditions imposed by the Court of Session in the bail orders issued to the petitioners herein. - Petition disposed of
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