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Showing 201 to 220 of 1558 Records
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2017 (2) TMI 1363
Treatment to entertainment tax subsidy - Tribunal as relying on the decision of Chaphalkar Brothers v/s. [2013 (6) TMI 73 - BOMBAY HIGH COURT] in holding that the entertainment tax subsidy is a capital receipt?” - Held that:- Revenue does not dispute the fact that the issue is covered by the decision of this Court in Chaphalkar Brothers (supra). However, this appeal has been filed by the Revenue as the decision of this court in Chaphalkar Brothers (supra) is subject matter of appeal before the Supreme Court. However, in the absence of any stay of the decision of this Court in Chaphalkar Brothers (supra), no fault can be found with the impugned order of the Tribunal in following the decision of the jurisdictional High Court. No substantial question of law.
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2017 (2) TMI 1362
TDS u/s 194H - TDS liability on dealer's incentive - examination of the relationship between the Respondent-Assessee and its dealers as principal-to-principal basis - Held that:- The impugned order of the Tribunal has held that the dealers incentive is not subject to tax deduction at source under Section 194H of the Act as the sale between the Respondent-Assessee and its dealer was on principal to principal basis. The impugned order of the Tribunal place reliance upon its earlier order for the Assessment Year 2007-08 wherein on detailed examination of the relationship between the Respondent-Assessee and its dealers was found to be on principal to principal basis and, therefore, not hit by Section 194H of the Act. The impugned order, therefore allowed the Respondent-Assessee's appeal. The issue now stands concluded against the Revenue by the decision of this Court in CIT v/s. Intervet India P. Ltd. [2014 (4) TMI 353 - BOMBAY HIGH COURT] - Decided in favour of assessee.
Appeal admitted on Questions at (a), (b), (c), (d), (f) and (g) as substantial questions of law.
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2017 (2) TMI 1361
Treatment of interest on Non Performing Assets (NPAs) - Revenue contends that given the obligation of the assessee to maintain books in accordance with Section 209 of the Companies Act, 1956 on accrual basis, it had to reflect the interest accrued upon unpaid loans (NPAs) - Held that:- Assessee successfully contended before the ITAT that the treatment it accorded to such transactions was in accord with the decision of this Court in CIT v. Vasisth Chay Vyapar Ltd. (2010 (11) TMI 88 - DELHI HIGH COURT) as held Assessee bound by Reserve Bank of India directions to treat deposit as non-performing asset – Interest does not accrue - question of law decided against the Revenue
This Court also notices that the assessee’s method of treatment of such accrued interest was also subject matter of a previous order of this Court in CIT v. GE Countrywide Consumer Financial Service Limited [2016 (1) TMI 1371 - DELHI HIGH COURT] . The Court had affirmed the views of the ITAT which ruled in favour of the assessee.
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2017 (2) TMI 1360
N.P. estimation - rejection of books of accounts - Held that:- Assessing Officer has himself agreed in his latter remand report that assessee’s books are indeed fabricated. This made the CIT(A) to reject the same and adopt net profit @ 3% hereinabove. We come to Section 251 at this stage to notice that the same contains an explanation as well to all clauses thereof that a CIT(A) may also consider and decide any matter in which the order appealed against was passed notwithstanding that such matter was not raised by the concerned appellant - Assessee’s case in the facts narrated hereinabove is much stronger since he has indeed raised the issue of rejection of books during the course of the lower appellate proceedings. Revenue further fails to prove any genuineness element in assessee’s books of account by leading cogent supportive material. We thus find no reason to interfere with CIT(A)’s order rejecting assessee’s books of account thereby estimating his net profit @ 3%.
Section 40A(3) disallowance - Held that:- We deem it appropriate at this stage to quote hon’ble jurisdictional high court’s judgment in CIT vs. Dhiraj R. Rungta [2014 (4) TMI 711 - GUJARAT HIGH COURT] holding that in a case where an assessee’s books of accounts are rejected being defective, the very books could not be relied upon to make disallowances/additions.
Estimating much higher net profits @ 3% as against 1.5% already declared - Held that:- We find that the same involve ‘raddiwala suppliers’ instead of waste paper suppliers to paper mills as is the instance involved in assessee’s case. It has further come on record that the assessee has even fabricated his books of account whereas he had duly maintained the same in earlier assessment years. We accordingly observe that the CIT(A) has rightly estimating assessee’s net profit @ 3% in the given facts of this batch of six appeals. The assessee’s identical sole substantive ground in all the impugned assessment years is rejected.
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2017 (2) TMI 1359
Demand of Interest u/r 7(4) of CER 2002 - whether the interest under Rule 7(4) of Central Excise Rules, 2002 is chargeable on the differential duty paid before finalization of the provisional assessment? - Held that:- The interest on the differential duty paid before finalization of the assessment is not chargeable - reliance placed in the case of Tata Motors Ltd Vs. CCE [2008 (2) TMI 121 - CESTAT, MUMBAI] wherein it was held that any differential duty deposited during the provisional assessement before finalization thereof no interest is chargeable in terms of Rule 7(4) - appeal allowed - decided in favor of appellant.
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2017 (2) TMI 1358
Disallowance of deduction u/s 54 - AO was of the view that Section 54 does not mention that the exemption should be given on loan for the purchase of new property - Held that:- Provisions of Section 54 permits the investment prior to the date of sale of the existing house and thereby the condition of the investment of the sale proceeds cannot be understood in the manner that the investment has to be made only from the proceeds of the sale but it is only the amount of investment which is relevant.
If the view taken by the authorities below is accepted then the purchase of the house one year prior to the sale of existing asset cannot be allowed under Section 54(1) - the authorities below have committed a serious error in not allowing the deduction u/s 54 on the ground that the assessee has availed the loan for purchase of new house. Even otherwise when the total investment is much more than the loan as well as the capital gain then the capital gain is treated to be invested in purchase of new house. Hence the claim of the assessee under Section 54 is allowed. - Decided in favour of assessee.
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2017 (2) TMI 1357
Addition on documents fund in search - Presumption as to documents u/s 292C - Presumption as to assets, books of account, etc. - addition to income - Held that:- Tribunal has given effect to the provision by drawing presumption against Assessee - however, mere drawing of presumption does not mean that every document will result in some addition. For that purpose one has to mention as to the nature of document, nature and year of transaction, quantum as to how it should be treated, whether it is an investment, expenditure, income or earning, and unless all these things are clear, no addition can be made - thus we are clear that every document will not result in some addition, as has been recorded by Tribunal - Decided in favor of assessee.
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2017 (2) TMI 1356
Profit derived from the operation of ships in international traffic - DTAA between India and Denmark - whether treated as Royalty as per Article 13 and section 9(1)(vi) and (vii) - income deemed to accrue and arise in India - incurring expense towards operation, maintenance and upgradation of SAP based ERP solution (FACT)- Held that:- As decided in assessee's own case amendment is carried out under domestic law, same cannot be read into the treaty. Accordingly, we are of the view that The FACT cost represent merely allocation of cost incurred and hence in the nature of reimbursement of expenses not having any element of profit embedded in it. Such recovery only includes proportionate cost incurred by the assessee for the development and maintenance of the system. Therefore, such recoupment of cost does not constitute income chargeable to tax in the hands of the assessee. It is undisputed that he assessee is in business of conducting operation of ships in international traffic and not engaged in the business of providing communication services, and therefore, per se no separate royalty/FTS were rendered by the assessee. Hence, we allow this issue of assessee’s appeal.
Income from Inland Haulage Charges [IHC] of cargo - whether covered under Article 9 of the tax treaty between India and Denmark and therefore not liable for tax in India and that section 44B - Held that:- As decided in assessee's own case the activities of the IHC are connected directly or an ancillary activity that provides minor contribution and should not be regarded as a separate business to the operations of ships. These activities are linked or connected to each other and as such one cannot say that one is to be conducted efficiently without the other and which have a nexus to the main business of the assessee of operations of ships should be considered as integral part of income from shipping operations. Accordingly, we allow the claim of assessee - repayment of money may be construed as “reimbursement” only if it is bereft of profits for the services rendered. There is no profit element in the pro rata costs paid by the agents of the assessee to the assessee and accordingly, we have no hesitation in holding that the amounts paid by the agents to utilize the amount arose out of the shipping business cannot be brought to tax as sought to be done - revenue appeal dismissed.
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2017 (2) TMI 1355
Business Auxiliary Services - The process of threshing involves the separation of the lamina and the midrib from the tobacco leaves as they are to be processed and, used separately in the manufacture of cigarettes and allied products - Department considered this activity as BAS and brought the assessees to the service tax net - Held that:- As per N/N. 14/2004-S.T., BAS in respect of inter alia, “production of goods on behalf of client”, inter alia “in relation to agriculture” is exempted from service tax liability. This exemption got further broadbanded vide N/N. 19/2005, dated 7-6-2005 as a result of which such BAS in respect of “production of processing of goods for; or on behalf of the client” was exempted - the activity of the assessees is in relation to the agriculture and not subject to service tax as a Business Auxiliary Service even before or after the negative list was issued on 1-7-2012 - there are no merits in the impugned orders where the said activity of threshing and redrying was brought under BAS - demand set aside.
GTA Service - assessee-appellants have brought the tobacco bundles from the auction platform to their factories - main plea of the assessees on this issue is that no consignment notes have been raised - Held that:- Consignment notes can be issued in any form, as seen from definition of GTA in Section 65(50)(b) of the Finance Act, 1994 - In the instant cases, the assessees are the service recipients for which they are paying the freight charges. When it is so, then we are of the view that the Department has rightly applied GTA and demanded the service tax for the reason that without an accompanying paper/document, goods cannot be received without which is the basis of amount for payment - demand under GTA Service upheld.
Renting of immovable property for commercial purpose - Department has demanded the service tax under sub-section (105)(zzzz) of Section 65 of Finance Act, 1994 w.e.f. 1-6-2007 under the head of “renting of immovable property services” - Held that:- It is an undisputed fact that the immovable property in question was given for the purpose of commercial activities. When it is so, then the service tax is leviable - demands on Renting of Immovable Property confirmed.
Demand of service tax on commission paid to foreign agents - Held that:- It appears that foreign agent acted as an agent outside India in relation to sale of the processed tobacco - Hence, the amount of commission paid shall be liable to service tax, the liability thereof being on the appellant-assessee under reverse charge mechanism in terms of Rule 2(1)(d)(iv) of the Service Tax Rules - demand upheld.
Penalty - Held that:- If the service tax is paid within the period of 6 months, then penalty was not leviable under Section 80(2) of the Finance Act, 1994 which was introduced by the Budget of 2012 - cases remanded for de novo consideration only on the issue of penalties on tax demands.
Appeal allowed in part and part matter on remand.
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2017 (2) TMI 1354
Business Auxiliary Services - Consignment Agent service - period prior to 10.09.2004 - levy of service tax - Held that:- An identical issue has come up in the case of CCE&C vs. Trade Tek Corporation [2013 (4) TMI 45 - GUJARAT HIGH COURT] where it was observed that the consignment agent cannot be treated as C&F Agent, hence, no service tax can be demanded - demand set aside - appeal allowed - decided in favor of appellant.
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2017 (2) TMI 1353
Monetary limit of filing appeal - Held that:- As per Instructions issued by C.B.E.C. dated 17.12.2015 from file F.No. 390/Misc./163/2010-JC, the appeal is not maintainable due to the monetary limit - appeal dismissed - decided against Revenue.
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2017 (2) TMI 1352
Under Valuation of closing stock - entitlement to value the article at market value OR cost price - valuation of closing stock being based on "realizable value" as had been quantified by actual realisation after the close of the accounting year - Held that:- Tribunal has not looked into this aspect of the matter that valuation can be made on the basis of actual cost price, marketing rate whichever is lower and instead it has taken only the market rate and that too as on 02.04.2010 that is just one day later to determining for valuation of stock in trade which is not consistent with the law laid down.
In the matter of Sugar as we have noted above in Commissioner of Income Tax versus Ponni Sugars and Chemicals Ltd. (2008 (9) TMI 14 - SUPREME COURT ) Court allowed valuation of closing stock at levy price though it was less than cost of manufacturer of sugar. A.O. in fact has completely lost sight that the intention of valuation of stock in trade is not to penalize Assessee by computing a hypothetical income which has yet to be earned by Assessee but the object is that a proper valuation of entire stock must be available so that profit and loss in the particular Assessment Year must be asserted in the best possible manner.
We, therefore, are of the view that Tribunal has erred in law in upholding valuation of closing stock on the basis of price received by Assessee on 02.04.2010 and not in the light of principles as discussed above that is the actual cost price or market rate whichever is lower - remand the matter to Tribunal to reconsider the valuation of closing stock
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2017 (2) TMI 1351
Transfer pricing addition - comparable selection criteria - functional similarity - Held that:- The assessee is engaged in the business of rendering I.T. enabled services to its AEs thus companies functionally dissimilar with that of assessee need to be deselected from final list.
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2017 (2) TMI 1350
Penalty - CENVAT credit - manufacture of exempted as well as dutiable final product - Held that: - the Apex Court in the case of CHANDRAPUR MAGNET WIRES (P) LTD. VERSUS COLLECTOR OF C. EXCISE, NAGPUR [1995 (12) TMI 72 - SUPREME COURT OF INDIA] has held that no penalty could have been imposed after reversal of the Cenvat benefit availed on an exempted final product. The only difference in the instant matter is that the reversal in the case in hand was made after issuance of notice to show cause. The prime issue is reversal and not the issuance of notice to show cause - appeal dismissed - decided against Revenue.
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2017 (2) TMI 1349
Demand of duty with interest and penalty - appellant had transferred Copper Ingots into their 'scraps account' due to storage for a long time and thus become non-usable - demand on the ground that they had not applied for remission of duty on the said Copper ingots - Held that: - there is no dispute of the fact that the manufactured Copper Ingots have been later used in the factory, by melting it in the furnace, repeating the process of manufacture of Copper Wire Rods - In absence of any evidence that these goods were removed form the factory or destroyed and not reused in the manufacture of Copper Wire Rods, application for remission of duty involved on Copper Ingots is not required - appeal allowed - decided in favor of appellant.
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2017 (2) TMI 1348
Disallowance of loss of goods by theft - Held that:- CBDT Circular No.25 of 1939 and Circular No. 13 of 1994 as clarified that losses arising due to embezzlement of employees or due to negligence of employees should be allowed if the loss took place in the normal course of business and the amount involved was necessarily kept for the purpose of the business in the place from which it was lost.
Cases of Shitla Prasad Shyam Lal vs. CIT (1990 (11) TMI 118 - ALLAHABAD HIGH COURT) and Bombay Forgings (P) Ltd. vs.CIT (1993 (9) TMI 99 - BOMBAY HIGH COURT) to be followed. - Decided in favour of assessee.
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2017 (2) TMI 1347
Demand of service tax - appellant are getting the commission from the RBI for the tax collection, RBI bonds, payment of pension, PPF etc. - Held that: - the bank has been appointed by the RBI as its agent under Section 45 of the RBI Act. RBI itself has been entrusted by the Central Government to transact Government business. Hence the bank has been appointed as agent of RBI, it is transacting Government business which is in the nature of a sovereign function performed on behalf of the Government and hence not liable to service tax - appeal allowed - decided in favor of appellant.
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2017 (2) TMI 1346
Seeking restoration of the name of the petitioner company as struck off by the Registrar of Companies - proof of conducting busniss - Held that:- As seen from the documents available on record that the company was carrying on its business and was operative at the time of its name struck off from the register. The assumption of Registrar of Companies that the company was not in operation was clearly erroneous. Besides it is seen that the appeal has been filed within the stipulated period prescribed under Section 252 of the Act. Needless to say that Income Tax Department and ROC have raised no specific objection against the restoration of the Company subject to filing of statutory returns with fees as prescribed. Besides nobody would be prejudiced by the restoration of the name of the Company.
Accordingly, this appeal is allowed. The notification published in the Official Gazette of India dated 08.07.2017 and the order dated 30.06.2017 in so far as the name of the appellant company shown as at entry No. 1967 bearing CIN No. U28998DL2002PTC114525 is hereby declared illegal and is set aside
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2017 (2) TMI 1345
Amendment of Bill of Entry - whether amendment in the Bill of Entry, was permissible under Section 149 of the Customs Act, 1962 on the basis of documents/certificate of origin issued with retrospective effect, vide N/N. 187/2009-Cus. (N.T.), dated 31-12-2009? - Held that: - the issue involved herein is no longer res integra, under the similar facts and circumstances in the case of Samsung India Electronics Pvt. Ltd. [2016 (10) TMI 726 - CESTAT ALLAHABAD], where it was held that the ld. Commissioner (Appeals) have erred in rejecting the appeal and it is clear case of failure on his part to exercise jurisdiction.
Amendment in bill of entry upheld - appeal dismissed - decided against Revenue.
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2017 (2) TMI 1344
Practice under the Architects Act, 1972 - Held that: - the High Court was in error in rejecting the contention of the appellant that practice under the Architects Act, 1972 is not restricted only to the architects - It is not correct to say that any one can practice as an architect even if he is not registered under the Architects Act, 1972 - appeal disposed off.
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