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Showing 221 to 240 of 1887 Records
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2017 (12) TMI 1671
Rebate claim - rejection on the ground of time bar - export of goods vide ARE-1’s - the entire Revision Application is based on the premise that the Department did not return the Rebate Claim or issued any deficiency memo to the respondent and, therefore, the resubmission of Rebate Claim on 11-10-2013 must be considered as a fresh filing of Rebate Claim by which the period of rebate claim was already over - Held that:- The Government does not agree with the applicant’s view as it is quite evident from the above facts that withdrawal of the claim took place with the discussion, direction, approval, knowledge or consent with the Asstt./Deputy Commissioner of a Central Excise Division and after having accepted this fact a technical stand of no communication from the Department cannot be resorted to. A verbal communication from a public authority like Asstt./Deputy Commissioner of a division with regards to withdrawal of rebate claim is as good as written communication and if a person from the public has acted as per such communication it is bound to be regarded at the behest of the Department. Such fair dealing should also be maintained for the sake of administrative decency and morality.
Government is of the clear view that the applicant does not have any basis to discard the fact of original filing of Rebate Claim on 30-9-2013 and it fully agrees with the Commissioner (Appeals) that resubmission of the claim on 11-10-2013 is in continuation of the original Rebate Claim only and hence the rebate claims filed by the respondent are not time barred - revision application rejected.
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2017 (12) TMI 1670
Condonation of delay in filing revision application - whether delay of 89 days in filing the instant revision application is condonable in this case? - Held that:- As per sub-section (2) of Section 35EE of Central Excise Act, 1944, a revision application can be filed only within 3 months from the date of communication of the Commissioner (Appeal)’s order. Further, the delay of 90 days in filing the revision application can be condoned by the Government on the ground that the applicant was prevented by any sufficient cause from filing the revision application in time. The applicant has stated in their condonation of delay application that the applicant could not file the application with the Government on time because the file pertaining to present case was unfortunately misplaced in their office. The reason adduced by the applicant is manifestly very vague, casual and cannot be considered as sufficient cause which prevented them from filing the instant revision application on time as keeping the documents was entirely within their control. The applicant has not explained which document was missing because of which revision application could not be filed in time - the applicant’s case is not covered by the term ‘sufficient cause’ as is envisaged in Section 35EE and, therefore, the Government does not consider it serving case for condonation of delay. Hence the application filed by the applicant is time barred.
Classification of goods - export of ladies knitted blouse - the contention of the applicant that their exported product are classifiable under CTH 6106 03A and the adjudicating authority has wrongly classified the same under CTH 6114 02 03A - Held that:- The contention of the applicant is not found supported by any concrete material. They have merely cited description of the goods as was given in the Shipping Bill and relied upon Public Notice No. 22/2012, dated 6-7-2012 issued by Commissioner of Customs, Air Cargo (Exports), NCH, New Delhi, wherein garments of different description have been discussed for the guidance of trade and departmental officers. However, reliance on Public Notice is not sufficient here and the classification of applicant product is to be determined by the actual make, dimensions, size and other features of the products only - The sample of the exported goods was not produced before the first appellate authority and it is not produced even before the Government along with revision application or even during the personal hearing. Hence, it is not feasible for the Government at this juncture to accept the above claim of the applicant merely on the basis of the description of the exported garments given in the revision application.
Revision application not maintainable on merits as well as on limitation.
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2017 (12) TMI 1669
TDS u/s 195 - Non-deduction of TDS on the payments made to foreign partiesfor the services rendered in various foreign destinations - addition u/s. 40(a)(i)/40(a)(ia) - DTAA provisions - Make available Clauses' - PE in India - HELD THAT:- These entities who have rendered the impugned services admittedly have no presence in India by way of permanent establishment and no business connection in as much as that the services were rendered outside India. It would suffice to hold that the basic ingredients to trigger the operation of Sec.9(1)(i) are conspicuous in their absence in the above services as explained by the assessee, supra. The payment(s) made to them would not be exigible to tax unless and until a case has been made out that they are in the nature of the services within the meaning of Sec. 9(1 )(vi) or 9(1)(vii) being “royalty “ or "technical services". The Revenue could not assail the assessee’s above contentions . Since the above payments are not chargeable to tax in India u/s 9(1)(vii) r.w.s. 195, the provisions of s.40(a)(i) will not be applicable. - Decided against revenue
Addition on account of Bogus Purchase - HELD THAT:- As before the CIT(A}, the assessee has filed details like Receipt Notes, Payment Vouchers, Retail Invoice and bank statement in which the payment of ₹ 3,17,126 was cleared. Still the Revenue has raised a ground that 'the assessee did not furnish any material evidence to prove that the transaction took place in the earlier A.Y.2011-12.- Decided against revenue
Disallowance of PF & ESI - employees contribution & ESI as remitted to Government before the due date and filed return u/s. 139(1) - HELD THAT:- As placing reliance on the Delhi High Court's decision in the case of Aimil Ltd [2009 (12) TMI 38 - DELHI HIGH COURT] that if the assessee had deposited employees contribution towards PF and ESI after the due date as prescribed under the relevant Act, but before the due date of filing of the return under the Income Tax Act, no disallowance could be made in view of the provisions u/s.43B as amended by Finance Act 2003. Respectfully following the ratio laid down by the Hon'ble High Court, the plea of the appellant is allowed. This ground of appeal is allowed
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2017 (12) TMI 1668
Interest expenditure - AO disallowed the same because the interest income on term deposits as claimed by the assessee, in the opinion of the AO, was not allowable due - HELD THAT:- We set aside the order of the CIT(A) and direct the AO to allow deduction in respect of said interest accrued and calculated at 12% per annum amounting to ₹ 2,64,72,208/- after disallowing proportionate interest in respect of the investment in shares amounting to ₹ 3,51,176/- after verifying the calculation of the interest quantification.
Now coming to the additional ground raised with respect to capitalization of interest we are of the view that to the extent the interest relate to the investment, i.e. being disallowable under Section 57 will become part of cost of acquisition of shares and therefore the AO is directed to take it as part of the cost of shares for determining profit on sale of the shares. Thus, the additional ground stands allowed to that extent.
Addition on account of personal household expenses - HELD THAT:- We find that the addition made by the AO as well as sustained by the CIT(A) are though on ad-hoc basis, but same was done because no details of expenditures was filed by the appellant. Before us, the Ld. Counsel has submitted that, most of the expenses have been incurred by Dr. Hitesh S. Mehta and other family members living in a Joint family set-up. Further other members have contributed for household expenses and that some of the additions have been confirmed on account of personal household expenses by the Department. On these facts and circumstances, we are inclined to scale down the additions to ₹ 3 lakhs. Accordingly, addition sustained on account of personal household expenses would be ₹ 3 lakhs.
Levy of interest under Section 234A, 234B and 234C as well as calculation of the said interest - HELD THAT:- Respectfully following the said order of the Tribunal in the case of Eminent Holding P. Ltd.[2014 (7) TMI 466 - ITAT MUMBAI] we direct the AO to recomputed the interest liability after reducing the amount of tax deductible at source on the income earned.
Allow the deduction of interest expenditure as claimed by the assessee out of the interest on term deposit after verification of the calculation of interest quantification. We further direct the AO to allow capitalisation of interest which has been proportionately disallowed in view of the additional ground.
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2017 (12) TMI 1667
Profit estimation @ 12.5% of the bogus purchase - HELD THAT:- In the present case sale has not been disputed and the books of account have not been rejected - when the assessee has adduced the sufficient evidence on record which has been discussed about therefore, in the said circumstances, we are of the view that the no addition is required to be made on account of bogus purchase. Non service of noticed is not a ground to raise the addition of bogus purchase to the income of the assessee in view of the law settled in CIT Vs. M/s. Nikunj Eximp Enterprises P. Ltd. [2013 (1) TMI 88 - BOMBAY HIGH COURT]. On seeing the above facts and circumstances of the present case and in view of the law settled relied by the Ld. Representative of the assessee we are of the view that the no addition is required to be raised in the instant case. We ordered accordingly, we decide this issue in favour of the assessee.
Disallowance @ 10% of the television expenses, vehicle expenses, conveyance expenses, office & staff welfare expenses and sundry expenses - HELD THAT:- It is incumbent upon the assessee to prove the claim by adducing the sufficient evidence on record. The assessee produced the self made vouchers and also produced the bill and vouchers in support of his claim. The AO restricted the addition to the extent of 10% on the basis of personal element. At the time of the argument the Ld. Representative of the assessee nowhere produced any other cogent evidence in support of his claim. On account of non producing the sufficient evidence in support of the claim, we are of the view that the CIT(A) has rightly restricted the claim to the extent of 10% of the expenses - Decided against assessee.
Reopening of assessment - HELD THAT:- AO was not having any information at that time because the Assessing Officer received the information from DGIT(Inv.), Mumbai vide letter dated 26.02.2013. When the Assessing Officer was not having any information as on 15.02.2013, therefore, it is strange in which circumstances, the Assessing Officer issued the present notice on the information received through letter dated 26.02.2013 as on date 15.02.2013. The personal knowledge of the Assessing Officer could not be the ground to invoke the proceeding u/s 147/148 of the I.T. Act. Therefore, in the said circumstances the noticed doesn’t seems to be legal. It is held by Hon’ble Supreme Court in the case of CIT Vs. Kurban Hussain Ibrahimji Mithiborwala [1971 (9) TMI 9 - SUPREME COURT] that the notice issued for any invalid reason makes the proceeding void an without jurisdiction. - Decided in favour of assessee.
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2017 (12) TMI 1666
Rebate claim - time limitation - rejection on the ground of failure to submit pre-intimation to the Jurisdictional Assistant Commissioner regarding input-output ratio and its prior approval under Notification No. 21/2004-C.E. (N.T.), dated 6-9-2006 - rejection also due to re-submission of the rebate claims beyond the period of one year as specified under Section 11B of Central Excise Act - Held that:- The applicant had withdrawn their earlier filed rebate claims from the Division office on their own volition and same were filed later on by which the one year limitation period as specified in Section 11B of the Central Excise Act was already over - The Commissioner (Appeals) has observed in her order that the refund claims were withdrawn suo motu and department did not issue any deficiency note. Hence it amounts to non-filing of the rebate claims on the earlier dates and the claims submitted later on cannot be treated as the same claims which were filed earlier. The Government does not find any error in the above observation of the Commissioner (Appeals) in the face of the facts of the present proceeding and, therefore, the rebate claims are manifestly hit by limitation of one year as already held by the Assistant Commissioner and Commissioner (Appeals) in their order.
The refunds and rebate of duty Section 11B of the Central Excise Act is directly dealing statutory provision and it is clearly mandated therein that the application for refund of duty is to be filed with the Assistant/Deputy Commissioner of Central Excise before expiry of one year from the relevant date. Further in explanation in this Section, it is clarified that refund includes rebate of duty of excise on excisable goods exported out of India or on excisable materials used in the manufacture of goods which are exported out of India. In addition to time limitation, other substantive and permanent provisions like the authority who has to deal with the refund or rebate claim, the application of principle of undue enrichment and the method of payment of the rebate of duty, etc. are prescribed in Section 11B only - Since the time limitation of 1 year is expressly specified in Section 11B and as per this section refund includes rebate of duty, the condition of filing rebate claim within 1 year is squarely applicable to the rebate of duty when dealt by Assistant/Deputy Commissioner of a Division under Rule 18. Thus Section 11B and Rule 18 are interlinked and Rule 18 is not independent from Section 11B.
Non-observance of the conditions of Notification No. 21/2004-C.E. (N.T.) - Held that:- Considering the facts and especially the non-compliance of the condition of the letter dated 18-4-2011 despite of five letters to the applicant by the Range Superintendent, it is evident that non-submission of input-output ratio in respect of each export consignment in time is not a procedural and bona fide lapse only. The Assistant Commissioner in his order has clearly concluded that it was not an inadvertent mistake and rather the claimant knowingly and willingly had not followed the condition of the permission even after repeated reminders to them to follow the condition.
The Government does not find any error in the order of the Commissioner (Appeals) - revision application dismissed.
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2017 (12) TMI 1665
Reopening of assessment - addition of unutilized CENVAT credit - as held by by the AO that it cannot be treated as advance given to the Government on account of excise payable - addition of excise duty in closing stock value since the assessee runs its cars on hire - HELD THAT:- There is no dispute that the assessee had paid the impugned excise duty on motor cars purchased for its hiring business. It reduced the relevant excise duty on the said purchases from the total cost of the motor cars. This followed its depreciation claim on the consequential reduced cost thereof. The assessee thereafter treated the above excise duty amount as an advance in its balance sheet’s asset side.
Revenue is fair enough in not disputing the fact that it is already entitled to claim 50% of the above excise duty as CENVAT credit. The assessee has admittedly set off its service tax payable to the extent of 50% of the above excise duty. It thereafter has carried forward the remaining amount in the next year - there is no income element embedded therein since the assessee is not entitled to get the same refunded from the government since the same has to be utilized only against the service tax payable. We therefore express our agreement with learned CIT(A)’s conclusion that the above excise duty cannot be added in closing stock value since the assessee runs its cars on hire. - Decided against revenue
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2017 (12) TMI 1664
Excisability - intermediate product - clinkers used in the manufacture of cement which was cleared to SEZ units without payment of duty - Held that:- This issue stands covered by the decision of Tribunal in the case of Ultratech Cements Ltd. Vs CCE & ST Tiruchirapalli [2015 (10) TMI 1058 - CESTAT CHENNAI], where it was held that appellants are eligible for exemption under Notification 67/95-CE on clinker captively consumed for manufacture of cement cleared to SEZ units/developers without payment of duty for both the periods prior to and after the amendment of SEZ Act - appeal dismissed - decided against Revenue.
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2017 (12) TMI 1663
Valuation - construction activities - inclusion of value of free supply materials received from the recipient of service which is used in provision of services in assessable value - N/N. 1/2006, dated 1-3-2006 - Held that:- The Tribunal in the case of Bhayana Builders (P) Ltd. v. Commissioner of Service Tax, Delhi [2013 (9) TMI 294 - CESTAT NEW DELHI (LB)] examined an identical situation under N/N. 4/2005-S.T., where it was held that the value of free supplies by the service recipient do not comprise as gross amount charged by the service provider and the Explanation under Notification 15/2004 as introduced by N/N. 4/2005 has no implication for such supplies - Appeal allowed - decided in favor of appellant.
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2017 (12) TMI 1662
Oppression and mismanagement - Legality of allotment of shares - Board Meetings held without quorum - Whether the allotment of shares i.e. 5,05,000 in favour of Respondent Nos.2 and 3 in the Board Meetings purportedly held on 25.04.2008 and 11.08.2010 is legal and valid? - Whether the continuance of Respondent 3, viz., Mrs. Bindu Paul as a Director of 1st Respondent company is legal and valid? - Whether the appointment of 4th Respondent as a Director of the 1st Respondent company purportedly made on 27.1.2011 is legal and valid? - HELD THAT:- It is settled legal position that if further issue of shares results in conversion of majority into a minority, or creation of new majority, then, such issue of shares is not only in breach of fiduciary responsibilities but also a grave act of oppression against the existing majority. Therefore, the allotment of shares impugned in the Company Petition which have been made without proper service of notice with a view to gain advantage against the Petitioners being the majority shareholders of the closely held company is in breach of fiduciary obligation of the Directors which is neither in compliance with the legal requirements nor ensures the fair play and probity in corporate management. Thus, it amounts to an act of gross oppression. In view of this, the allotments made on 25.04.2008 and 11.08.2010 of 505000 shares to Respondent Nos. 2 and 3 is illegal.
Board Meetings held without quorum as required by the Articles of Association of the 1st Respondent Company are bad in law and the appointments of additional Directors at such Board Meeting was also bad in law, as that failed to satisfy the test required by law as has been laid down in Murari Mohan's case [2015 (7) TMI 298 - COMPANY LAW BOARD]
The allotments of shares i.e. 5,05,000 in favour of the Respondent Nos. 2 and 3 made on 25.04.2008 and 11.08.2010 are declared illegal, and the same stand set aside.
The Board Meetings purportedly held on 25.04.2008 and 11.08.2010 are not tenable in the eye of law, the same are declared as illegal, and all decisions taken there at are set aside.
The EoGMs dated 22.01.2011 and rights offer dated 01.02.2011 are declared illegal, null and void and hence, are set aside.
The continuance of Respondent No. 3 and appointment of Respondent No.4 are declared as illegal, null and void, and hence, set aside.
The 1st Petitioner is appointed as Managing Director of 1st Respondent Company and Mr. K. J. Paul is removed from the position of Managing Director, but he shall perform the duties as Director of the 1st Respondent Company. Consequently, the said Board of Directors is directed to rectify the Register of Members by restoring the shareholding pattern as on 30.09.2005 as shown under para 6(a) of the Petition.
As proposed to appoint an independent Auditor within three weeks of passing this Order, with the consensus of the Board of Directors comprising of 1st Petitioner and the 2nd Respondent, failing which, this Bench on mention by any of the Directors, shall appoint the independent Auditor out of the names, if suggested, by the parties, who (Independent Auditor) shall determine the true and fair value of the shares of 1st Respondent Company by taking into consideration three Financial Years w.e.f. 2011 onwards.
Based on the said value, and keeping in view the shareholding pattern as on 30.09.2005, the first opportunity for purchase of shares of Respondents is given to Petitioner, failing which the Respondents shall purchase the shares of the Petitioner. This process shall commence after the submission of the report of the independent Auditor, who shall submit the same within four weeks from the date of his appointment, and shall get completed within the twelve weeks thereafter. Till this process is completed, there shall not be any change in the composition of the Board constituted by this Bench, and shareholding pattern shall remain the same as on 30.09.2005. The fee of the independent Auditor shall be paid by the 1st Respondent Company which shall be fixed as per mutually agree of terms
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2017 (12) TMI 1661
Recovery of CENVAT credit wrongly taken or erroneously refunded - Rule 14 of the CENVAT Credit Rules, 2004/section 73 of the Finance Act, 1994 - Held that:- One of the stipulations in the said Rules is that a recovery of CENVAT credit may be made from the manufacturer if it had wrongly been taken and utilized or had been erroneously refunded to him. The Rules, therefore, contemplate that if such a situation arises, a notice to that effect must be given to the assessee for recovery. In the absence of such a notice for recovery, as is contemplated under Rules 14 of the Rules, any action taken or order passed to reject refund claimed would become bad.
The Tribunal has come to the conclusion that in the present case compliance of the Rule 14 had not been made. There is no challenge to the correctness of that finding of the Tribunal. Also, it is seen that the total amount of refund claimed is only about ₹ 2.5 lacs.
The order of the Tribunal is affirmed - The questions of law is answered in favour of the assessee and against the revenue.
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2017 (12) TMI 1660
Initiation of the corporate insolvency resolution - financial creditor - Section 7 of the Insolvency and Bankruptcy Code 2016 - Held that:- The fact the petitioners did file a counter claim before the learned arbitrator, admittedly, is disallowed. An extreme scenario would be allowing of such counter claim but in that eventuality Section 14 (1) (a) of the Code would immediately come into play and the decree would not be executable against the corporate debtor. However in apprehension of such an eventuality the proceedings under Section 34 of the Act cannot be kept in abeyance, especially when such counter claim has been rejected by the Learned Arbitrator and the claim of the corporate debtor being upheld.
The continuation of these proceedings shall cause no harm to either party‟s rights to seek determination of issues under section 34 of the Act and object of the code shall be preserved rather than defeated. The question posed is thus answered.
Second limb of objection raised is once the moratorium is declared the decision to continue with the objections need to be taken only be the Resolution Professional, since per Section 17 of the Code from the date of the appointment of the interim resolution professional, the management of the affairs of the corporate debtor shall vests with the interim resolution professional and hence in the peculiar circumstances of this case where a counter claims was preferred by the objector, though rejected, it would be appropriate if the interim resolution profession be made aware of these proceedings and he consents to its continuation.
Thus consent/permission of interim resolution professional be obtained and be filed in this Court within four weeks from today.
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2017 (12) TMI 1659
Penalty u/s 10-A of the Central Sales Tax Act 1956 - Form-C - no suppression of facts - Held that:- In order to justify the imposition of penalty under the provisions of Section 10A, the authority must come to hold conclusively that the dealer had falsely represented when purchasing goods in the course of inter-state commence that they were covered by its certificate of registration - As the Court reads the order of the assessing authority and the Tribunal it finds that no findings have been recorded in support of the case that a false representation had been made by the assessee.
This Court finds itself unable to sustain the view taken by the Tribunal that the conduct of the revisionist would fall within the category of a false representation - revision allowed.
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2017 (12) TMI 1658
Addition towards unsecured loan u/s 68 alongwith interest - unsecured loans are bogus accommodation entries provided by Shri Pravinkumar Jain through his hawala companies - Held that:- On perusal of the financial statements filed by the assessee, we find that both the companies are active in the website of Ministry of Corporate Affairs. Also AO has accepted that both companies, viz. Josh Trading Company Pvt Ltd and Viraj Mercantile Pvt Ltd are active in MCA website. Both the companies have filed financial statements for the year ending 31-03-2006. Therefore, we are of the considered view that the assessee has discharged its initial burden cast u/s 68 by filing identity, genuineness of transaction and creditworthiness of the parties. Once, the assessee has discharged its initial burden, the burden shifts to the AO to prove otherwise. In this case, the AO made addition only on the basis of information received from Investigation Wing, but not based on any evidence to disprove the loan transaction from above companies are ingenuine. Therefore, we are of the view that there is no reason for the AO to treat loans from above 2 companies as unexplained credits u/s 68 - assessee has discharged identity, genuineness of transactions and creditworthiness of the parties. Therefore, there is no reason for the AO to make addition towards loan u/s 68 - Decided in favour of assessee.
Estimation of net profit from Zoom Plaza and Aurm Park - AO has estimated net profit from Zoom Plaza and Aurm Park on the ground that the assessee is following different methods of accounting for different projects - Held that:- AO has estimated 10% net profit on both the projects without assigning any reasons for incorrectness in books of account maintained by the assessee for both the projects. We further notice that the AO is only on the point that the assessee can follow only one method of accounting for both the projects. No merit in the findings of the AO that when assessee is following different method of accounting for different projects, that too, consistently for many years, there is no reason for the AO to reject those books of account and estimate net profit. Therefore, we are of the view that the AO was erred in estimating net profit of 10% on both the projects. Hence, we direct the AO to adopt net profit as declared by the assessee for both the projects. - Decided against revenue.
Disallowance of purchases u/s 40A(3) - assessee has made cash purchases in contravention of provisions of section 40A(3) - Held that:- No merit in the arguments of the assessee for the reason that the assessee has not assigned any reasons for cash payments for purchases in contravention of section 40A(3) of the Act. Though the assessee claims to have made purchases at construction site on urgent basis, the reasons given by the assessee are not coming within the exclusion provided under Rule 6DD of I.T. Rules, 1962. Therefore, we are of the considered view that the AO was right in disallowing cash purchases u/s 40A(3).- Decided against assessee.
TDS u/s 194A - disallowance of interest paid to financial institutions u/s 40(a)(ia) for failure to deduct tax - Held that:- assessee has failed to deduct tax at source u/s 194A in respect of interest payment to financial institution though it requires to deduct tax at source as per the provisions of section 194A of the Act. The reasons given by the assessee that it has paid interest through post dated cheques in advance based on the instalments granted by the banks cannot absolve the assessee of his responsibility of deducting tax at source as per the provisions of the Act. Since the assessee has failed to deduct tax at source on interest payment, the AO has rightly disallowed interest u/s 40(a)(ia) of the Act - Decided against assessee.
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2017 (12) TMI 1657
Penalty levied u/s.271(1)(c) - addition u/s.68 - failure to file the confirmation letters in a proper format with all particulars mentioned in it - Held that:- There is no dispute on the fact that assessee furnished the names and addresses of 19 depositors. Each of the deposit vary from ₹ 15,000/- to ₹ 30,000/- per the depositor. The names and addresses of the 19 depositors are already on record. It shows the existence of the basic details of the depositors. The details furnished by the assessee indicate the capacity of the assessee in furnishing all the details of the deposits as well as the depositors.
It is possible that the assessee would have furnished if the time is given and not after lapse of time of years. AO has not taken any positive step to demonstrate the incorrectness of the details so furnished by the assessee. Therefore, in the absence of positive incriminating information against the assessee, in our view, levy of penalty u/s.271(1)(c)is not justified. It may be good enough for confirming the additions on merit in quantum appeals but certainly falls short of the requirement of confirming the penalty u/s.271(1)(c) - Decided in favour of assessee.
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2017 (12) TMI 1656
Exemption u/s 54 - non adherence to mandate of Sec.54F(4) - entire amount of capital gain was not utilized for the purchase of residential flat till the time of filing of return u/s 139(1) - Held that:- It is an undisputed fact that assessee has earned long term capital gains on sale of flat which was sold on 30.03.2009 and the entire amount of capital gain is at ₹ 1,26,41,650/- was not utilized for the purchase of residential flat till the time of filing of return u/s 139(1) i.e., upto 29.07.2009. The new flat was purchased by the assessee on 26.04.2010 i.e., after one year from the date of transfer of original flat.
It is also an undisputed fact that the capital gain earned on sale of flat was not deposited in the specified bank account till the time of purchase of new flat. On the issue of deposit of unutilized capital gains in specified bank account, we find that in the case of Humayun Suleman Merchant (2016 (9) TMI 70 - BOMBAY HIGH COURT) has held that the mandate of Sec.54F(4) of the Act is clear that the amount which has not been utilized either in purchase / construction of house before filing return of income has to be deposited in the account duly notified by Central Government for claiming exemption.
We are therefore of the view that in the present case, AO was justified in denying the claim of deduction u/s 54 of the Act. It is a settled law that the decisions of High Courts are binding on the Sub-ordinate Courts, Authorities and the Tribunals situated within its jurisdictional territory. - Decided against assessee.
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2017 (12) TMI 1655
Deemed dividend u/s 2(22)(e) - whether the loan/advance received by the assessee company from these group companies could be taxed in its hand as "deemed dividend"? - Held that:- It is fact on record that the loans and advances are not received by the assessee company on behalf or for the individual benefit of any shareholder. All the judgements cited at Bar suggests that loans/advances can be taxed as deemed dividend U/S 2(22)(e) in the hands of the registered or beneficial shareholder only. No contrary decision was brought to our knowledge. As far case laws, cited by the Ld DR, are concerned it would be suffice to say that they do not address the specific issue of treating receipt of an advance/loan as deemed dividend in the hands of the non-shareholder recipient which is the core dispute in the present case.
As relying on the case of Bhaumik Colours Pvt Ltd (2008 (11) TMI 273 - ITAT BOMBAY-E) we have upheld the order of the CIT(A) deleting the addition made by the AO u/s 2(22)(e) of the Act. The issue in dispute as to applicability of section 2(22)(e) to a non-shareholder recipient of loan / advance, is now stands settled, in case of CIT, Delhi-II vs. Madhur Housing and Development Company [2017 (10) TMI 1279 - SUPREME COURT OF INDIA]. - Decided in favour of assessee.
Disallowance on account of keyman issuance policy - assessee failed to produce any admissible evidence during the course of assessment proceedings - Held that:- The policy document was fully explanatory as “key man policy (APB -26). The policy holder was the assessee company while the life assured is that of Shri Hari Kant Samodhiya, its MD. The premium is allowed as business expenditure as per CBDT Circular No. 38/2016 dated 22nd November 2016. In view of the above, we observe that the findings of the ld. CIT(A) are in conformity with the facts of the case which are not controverted by ld. DR. The order of the CIT(A) is confirmed on this issue accordingly. - Decided against revenue
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2017 (12) TMI 1654
Levy of CST - rejection of H-Forms - principles of natural justice - Held that:- The impugned revision order passed by respondent No. 1 is in the teeth of the law declared by this Court as well as the High Court of Madhya Pradesh. On this short ground, the impugned revision order is set aside. Respondent No. 1 is directed to return the defective H-Forms to the petitioner within three weeks from the date of receipt of a copy of this order - petition allowed.
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2017 (12) TMI 1653
Branch of Foreign Company - Management consultancy services - charges recovered in respect of the borrowed services from other Mckinsey entities - According to the case of the revenue, the appellant could not provide satisfactory explanation and supportive documents for OPE of an amount of ₹ 35,68,38,421/out of total sum of ₹ 40,82,55,661/for the period between October 1998 to March 2003 - inclusion of core documents charges, borrowed service charges as well as market research charges in assessable value - disallowance of abatement of traveling, lodging and boarding expenses - tax on miscellaneous expenses incurred on items other than traveling, lodging, boarding and described an infrastructural and establishment expenses - tax for payments received in foreign exchange - service tax on expenses incurred in procuring core document and borrowing other services from Head Office and other McKinsey entities for which no recovery was made from clients - expenses incurred on core documents and borrowed service charges of which recovery was made from the client - section 66 of the Finance Act,1994 - time limitation.
Held that:- As per subsection 4 of section 66, service tax can be levied at the rate of 5% of the value of the taxable services. Sub clause (r) of clause 48 of section 65 provides that the taxable service means any service provided to a client by management consultant in connection with the management of any organization in any manner. Section 67 deals with the valuation of taxable service for charging service taxes. Clause (q) of section 67 provides that in relation to service provided by management consultant to a client, the valuation of taxable service shall be on the basis of the gross amount charged by the such consultant from the client for services rendered in connection with the management of any organization in any manner. Thus, the service tax is required to be charged on the gross amount charged by the management consultant to his client.
The case of the appellant is that to enable the appellant to render service to its client, it was necessary for the client to submit necessary data. As the client did not provide the data, the appellant was required to borrow the said data from other Mckinsey entities and other entities. As a matter of fact, the Appellate Tribunal found that no material has been placed on record to show that the data which is procured from other Mckinsey entities was required to be supplied by the client and that due to inability of the client to supply the said data, the appellant obtained it acting as an agent of the client.
As per clause (q) of section 67 of the Finance Act,1994, service tax is payable on gross amount charged by the consultant. Thus, a finding of fact recorded is that the appellant procured data which its clients were not under an obligation to provide. The said data was acquired by the appellant for the purpose of rendering management consultancy services in India. It was used in India for rendering taxable service. Therefore, the amount charged to the client for core documents and other borrowed services is in fact on account of services rendered by the appellant in India. The said amount cannot be said to be payable on account of services rendered abroad. Therefore, we are unable to accept the submission that the taxable event did not occur in India and that the act of denying abatement amounts to invoking extraordinary territorial jurisdiction which is not in existence.
The other contention which was canvassed was that the appellant has merely arranged services of their foreign entities for and on behalf of their clients and the consideration for making such arrangement is already included in the consultancy fees. This contention based on factual assertions has not been canvassed before the Appellate Tribunal - The contention sought to be raised is that the amount recovered from the customers is in the nature of reimbursement of expenditure and not for providing of service. This factual contention is not agitated before the Tribunal as there is no reference to the such contention raised in the impugned Judgment. Therefore, the same cannot be raised in this appeal.
Appeal is dismissed as no substantial question of law is involved.
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2017 (12) TMI 1652
Maintainability of petition under Section 7 of the ‘I&B Code’ - mismatch of figures and dates of default - Held that:- In the present case, the Respondents have explained the difference between the claim amount as made on 19th October, 2015 and as on the date of filing in the year 2017, which has been calculated, taking into consideration the interest payable in the meantime and the amount, if any, recovered under other proceedings. Apart from the aforesaid fact, the mere mismatch of the figures will ipso facto not invalidate the order initiating ‘Corporate Insolvency Resolution Process’ under Section 7 of the ‘I&B Code’.
It was held in the case of M/s. Innoventive Industries Ltd. Vs. ICICI Bank & Anr [2017 (9) TMI 58 - SUPREME COURT OF INDIA], that in case a ‘Corporate Debtor’ commits a default of a financial debt, the Adjudicating Authority has merely to see the records of the information utility or other evidence produced by the ‘Financial Creditor’ to satisfy itself that a default has occurred. The Hon’ble Supreme Court further held that “it is of no matter that the debt is disputed so long as the debt is “due” i.e payable unless interdicted by some law or has not yet become due in the sense that it is payable at some future date.” - In the present case, the Appellant raised dispute and pleaded mismatch of debt amount, but it has not been disputed that some debt is “due” and is payable to the ‘Financial Creditor’ and the ‘Corporate Debtor’ has defaulted in making such payment.
No interference is called for against the impugned order dated 4th September, 2017 passed in Company Petition No. 551/(IB)/2017 - Appeal dismissed - decided against appellant.
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