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2010 (6) TMI 685
Issues involved: Appeal against rejection of appeals by Revenue, remand by High Court on grounds of natural justice, eligibility for concessional duty, invocation of extended period u/s 11A of Central Excise Act, 1944.
Appeal rejection by Tribunal: The Tribunal rejected the appeals filed by the Revenue against the order setting aside the demand for duty against the respondents, along with penalties, on the ground of limitation without delving into merits.
Remand by High Court: The High Court remanded the matter to the Tribunal due to a breach of natural justice principles, as the Tribunal dismissed the appeals on the limitation ground without giving the Revenue an opportunity to address it, contrary to the decision of the Commissioner (Appeals) allowing the appeals on merits.
Eligibility for concessional duty: The Revenue argued that the respondents were not eligible for concessional duty as they had cleared dyed yarn at a concessional rate of duty, manufactured prior to the date when the unit was converted to a non-composite mill, invoking the extended period u/s 11A of the Central Excise Act, 1944.
Invocation of extended period u/s 11A: The Revenue contended that the respondents deliberately evaded duty by clearing goods at a concessional rate of duty, even though they had manufactured dyed yarn prior to the unit's conversion, and had availed modvat credit, leading to the confirmation of demand by the Joint Commissioner invoking the extended period.
Decision on limitation aspect: The Tribunal found that the Revenue failed to establish a case on the limitation aspect, as the department was aware of the unit's conversion based on the amended registration certificate and returns filed by the respondents, making the issuance of the show cause notice within the statutory period feasible. Additionally, the Tribunal noted that the Commissioner (Appeals) wrongly applied a Supreme Court decision, rendering the invocation of the extended period unsustainable, ultimately rejecting the appeal filed by the Revenue.
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2010 (6) TMI 684
Issues:
1. Absolute confiscation of counterfeit mobile phones
2. Penalty under Section 112 of the Customs Act, 1962
Analysis:
1. The appellant challenged the absolute confiscation of 850 counterfeit Nokia E 51 Mobile Phones and a penalty of Rs. 3,50,000 under Section 112 of the Customs Act, 1962. The goods were declared as 'Made in Finland' instead of China, packed in loose polythene, and falsely branded as Nokia. The appellant argued that the examination report was not issued by Nokia Ltd., and the country of origin declaration does not impact duty demand. The appellant also cited Notification No. 49/2007-Cus. (N.T.) prohibiting goods with false trademarks. However, the adjudicating authority based its decision on the report from Nokia's representative, confirming the phones as counterfeit. The appellant disputed the evidence and lack of investigation by the authority.
2. The Department's representative contended that the issue centered on misdeclaration of the product's origin, as the IMEI numbers on the phones were never issued by Nokia Ltd., indicating counterfeiting. It was alleged that the appellant had prior knowledge of the counterfeit nature of the goods, justifying the penalties. After hearing both sides, the judge upheld the decision, noting that the phones were not of Chinese origin as declared but made in Finland. The IMEI numbers were unauthorized by Nokia, supporting the counterfeit claim. Consequently, the confiscation was deemed valid. However, the judge found the penalty excessive given the confiscation for destruction and reduced it to Rs. 70,000.
In conclusion, the appeal against the absolute confiscation of counterfeit mobile phones and the penalty under Section 112 of the Customs Act, 1962 was partially successful. The confiscation was upheld due to the phones being counterfeit and falsely labeled, but the penalty was reduced from Rs. 3,50,000 to Rs. 70,000 considering the impending destruction of the confiscated goods.
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2010 (6) TMI 683
Issues involved: Interpretation of Rule 16 of the Central Excise Rules, 2002 regarding credit of duty on goods received for reconditioning and repairing; validity of demand of duty, interest, and penalty by the department.
Summary:
The case involved an applicant with multiple factories and depots, including one in NOIDA, receiving goods for reconditioning and repair under Rule 16 of the Central Excise Rules, 2002. The department alleged that the credit taken under Rule 16 was not supported by "admissible documents," leading to a demand of duty, interest, and penalty. The Commissioner (Appeals) upheld this decision.
The applicant argued that Rule 16 allows for credit of duty on goods cleared earlier for reconditioning, independent of the procedural rigour of the Cenvat Credit Rules. They contested the Commissioner's findings regarding the registration of depots and the applicability of Rule 11 of the Central Excise Rules to goods returned under Rule 16.
The department contended that the documents for the received goods were for transfer purposes, and no sale documents indicating the duty involved were provided by the applicant.
Upon considering the submissions, the Tribunal found that Rule 16 provides a distinct facility for treating goods received for reconditioning as if inputs, allowing credit of duty paid by the original manufacturer. The Tribunal disagreed with the Commissioner's grounds for rejecting the appeal, stating that Rule 11 does not apply to goods returned under Rule 16. The documents showed invoices issued for depot transfers with duty paid by the manufacturing units. Consequently, the Tribunal ordered a waiver of pre-deposit and stay on recovery of dues until the appeal's disposal.
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2010 (6) TMI 682
Issues involved: Duty demand confirmation, relevance of reconciliation statement, validity of show cause notice u/s Rule 57-I.
The judgment by the Appellate Tribunal CESTAT MUMBAI addressed the issue of duty demand confirmation against the appellant in the second round of litigation. The key question was whether the appellants were obligated to reverse the duty on lost quantity not issued by the manufacturer of finished goods, and if the reconciliation statement submitted had any bearing on the confirmed demand.
Regarding the validity of the show cause notice u/s Rule 57-I, the learned Advocate for the appellant argued that the notice was flawed as it was issued under the old Modvat Rules while the Cenvat Credit Rules, 2000 were in force. Citing a relevant case law, it was emphasized that the law applicable at the time of the notice must be invoked. Since Rule 57-I was not in existence when the notice was issued, it was deemed unsustainable. The Tribunal concurred, noting that the show cause notice invoked provisions that had been substituted by Cenvat provisions prior to the issuance of the notice. As such, the notice was deemed invalid, leading to the setting aside of the impugned order and allowing the appeal solely on this ground.
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2010 (6) TMI 681
Issues involved: Authorization for filing appeal u/s 35B(2) of the Central Excise Act, Requirement of filing two appeals against different parties, Defect in authorization by the Committee of Commissioners.
Authorization for filing appeal u/s 35B(2) of the Central Excise Act:
The appeal was filed without proper authorization by the Committee of Commissioners as required u/s 35B(2) of the Central Excise Act. The initial authorization was signed only by one Commissioner, not the entire Committee, which raised doubts about its legality. The respondent argued that mere signatures of two Commissioners recommending the appeal may not fulfill the requirement of forming an opinion as mandated by Section 35B(2). However, the Department contended that once the Committee approves the appeal, it implies confirmation that the order is not legal and proper. The Tribunal acknowledged the need for improvement in the filing process but agreed with the Department's stance that the Committee's approval indicated their opinion on the impugned order's legality.
Requirement of filing two appeals against different parties:
The respondent pointed out that since the Commissioner (Appeals) had decided two appeals, one against the respondent Company and the other against an individual, the Department should have filed two separate appeals. However, the CESTAT Procedure Rules did not explicitly address this issue. The Department argued that in cases where multiple parties are aggrieved, only one appeal needs to be filed, listing all parties as respondents. The Tribunal found the Department's approach of filing one appeal against both parties to be in compliance with the procedure.
Defect in authorization by the Committee of Commissioners:
Although the Committee had approved the appeal, it did not specifically authorize any particular officer to file the appeal, which was considered a defect. The Tribunal deemed this defect as curable based on precedents where similar issues were allowed to be rectified. The learned Advocate for the respondents did not provide any authority mandating the filing of two appeals, and the CESTAT Procedure Rules did not address this requirement. The Tribunal directed the Registry to issue notice to the other respondent, acknowledging the need for rectifying the defect in authorization.
(The matter is adjourned to 27-7-2010)
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2010 (6) TMI 680
Impugned actions of getting transferred diverse sums of money from the Escrow Accounts of the writ petitioners towards recovery of alleged dues of excise duty and additional duty of excise
Held that:- For the purpose of making the withdrawal applications, the periods, during which the Escrow Accounts had remained frozen as well as the periods, during which diverse sums of money had stood appropriated by forfeiture of the amounts, shall be kept excluded
Coming to the question of the hotel project, it needs to be noted that by way of an interim order, dated 30-9-2008, the Court had allowed the petitioners-applicants to proceed with the construction of the hotel subject to the outcome of the writ petition and since this Court has already held that the petitioners-applicants’ hotel project stood approved, on principle, by the IAC, and when the petitioners’ hotel project satisfies the conditions of investment on infrastructure, it becomes clear that the respondents are, now, required to pass appropriate order(s), in this regard, so as to enable the petitioners-applicants receive the benefit of the findings of this Court and the directions given in this regard.
The directions, contained above, it may be noted, having not been consciously denied, though the petitioners-applicants were entitled to, ought to have been given and it is this error, which was apparent on the face of the record and which has, now, been corrected. Such directions, one must reiterate, shall be made available to the petitioners-applicants so that they can enjoy the fruits of the directions already passed, in their favour, in their writ petitions
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2010 (6) TMI 679
Whether the order withholding gratuity is illegal and no dues other than Government dues are recoverable from gratuity or commuted value of pension in terms of the provisions of the CCS (Pension) Rules, 1972 read with the Government of India orders issued thereunder and that no gratuity or commuted value of pension is liable for attachment in terms of the provisions of the Code of Civil procedure?
Held that:- The Tribunal did not have the jurisdiction to sit in judgment on the correctness or otherwise of the orders of attachments/prohibitory orders issued under the CPC or the RR Act. Therefore, the Tribunal acted wholly without jurisdiction in essentially interfering with those attachment orders/prohibitory orders by directing the establishment to release the amounts to the respondent.
We are also surprised at the procedure adopted by the Tribunal in having sat in judgment on the entitlement of the different creditors in different civil suits and RR proceedings, including KSFE and a District Co-operative Bank in a proceeding in which they were not even parties. Even if they were made parties, the Tribunal did not have jurisdiction to adjudicate on any issue arising between those parties and the officer under the terms of the contracts between them. Thus no ground to sustain the impugned order of the Tribunal. WP allowed.
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2010 (6) TMI 678
Issues involved: Review petition filed by Appellate Tribunal for Foreign Exchange (ATFE) for reconsideration of Central Information Commission's order u/s RTI-application.
Details of the Judgment:
Issue 1: Review petition filed by ATFE for reconsideration of CIC's order.
The review petition was filed by ATFE seeking reconsideration of CIC's order dated 26-3-2010 in response to the RTI-application of the appellant, Shri R.K. Jain, dated 11-8-2009. The petition was filed following the permission granted by the Delhi High Court on 23-4-2010 to bring the matter before the Commission for reconsideration.
Issue 2: Grounds raised by review-petitioners for non-disclosure of information.
The review-petitioners cited poor staffing as a reason for their failure to disclose the information requested by the appellant. They claimed that the information sought included a wide range of orders and documents, making it a difficult and onerous task to collect and collate. They also highlighted the sensitivity of documents from organizations like the Enforcement Directorate, which could attract exemptions under the RTI Act.
Issue 3: Appellant's response and arguments against the review petition.
The appellant argued that the review petition was not maintainable as there was no provision in the RTI Act for wholesale review of an order already passed by the Commission. He accused ATFE of using tactics to avoid disclosure of information to hide internal irregularities. He emphasized that the ATFE's plea of insufficiency of staff was not a valid reason to avoid discharging statutory duties under the RTI Act.
Issue 4: Decision of the Central Information Commission.
The Commission found the grounds raised by ATFE for non-disclosure to be insubstantial and after-thoughts. It noted that the RTI Act does not provide for a review by the Commission unless there is a substantial miscarriage of justice. The Commission directed the information not yet disclosed to the appellant to be provided as previously ordered, rejecting the review petition.
In conclusion, the Commission upheld its decision dated 26-3-2010 and directed ATFE to disclose the information to the appellant. The Commission emphasized the importance of transparency and accountability in fulfilling obligations under the RTI Act.
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2010 (6) TMI 677
Whether a "composite notice" is enough to complete the escaped assessment of turnover under section 25(1) of the Kerala Value Added Tax Act, 2003 inviting objections, if any, and also mentioning about the "right to be heard" so as to satisfy the requirement under the "first proviso" to the said provision, is the point of dispute.
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2010 (6) TMI 676
Issues:
- Appeal against the order of the Commissioner of Income-tax (Appeals) for the assessment year 2004-05.
- Tax effect in the Revenue's appeal less than Rs. 2 lakhs.
- Ruling on the maintainability of the Revenue's appeal based on the tax effect.
- Dismissal of both the appeal and cross-objection.
Analysis:
The Appellate Tribunal ITAT DELHI considered an appeal by the Revenue against the order of the Commissioner of Income-tax (Appeals) for the assessment year 2004-05. The assessee filed a cross-objection in response to the Revenue's appeal. The key contention raised was regarding the tax effect in the Revenue's appeal, which was stated to be Rs.1,65,681. Citing an instruction by the Central Board of Direct Taxes, it was argued that the Revenue could not challenge the Commissioner's order before the Tribunal if the tax reduction amount was less than Rs. 2 lakhs, unless falling within specified exceptions. The Tribunal noted the computation of tax effect provided by the assessee, confirming it to be below the threshold for challenging the Commissioner's order. Consequently, the Tribunal ruled that the Revenue's appeal was not maintainable due to the tax effect being below the prescribed limit.
The Tribunal referenced a case where the High Court had dismissed a Revenue appeal due to the tax effect being below the monetary limit specified for carrying appeals before the High Court. The Departmental representative failed to counter the assessee's argument regarding the tax effect. Given the tax effect in the present case was determined to be Rs. 1,65,681, falling below the permissible limit for challenging the Commissioner's order, the Tribunal concluded that the Revenue's appeal was not maintainable. Consequently, the appeal of the Revenue was dismissed in limine, leading to the cross-objection not being pursued by the assessee's counsel.
In the final judgment, the Tribunal dismissed both the appeal and the cross-objection. The order was pronounced in open court on June 1, 2010. The decision highlighted the significance of adhering to the prescribed monetary limits for challenging tax-related orders, emphasizing the procedural requirements for maintaining appeals before the Tribunal based on tax effect thresholds.
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2010 (6) TMI 675
Addition made on account of surrender on account of renovation of showroom and cash - AO solely relied on the statement recorded on the date of survey in the night, which was retracted by the assessee - CIT(A) deleted addition - HELD THAT:- As assessee has retracted and for which letter was duly filed with the competent authority, the amount of surrender was also not offered in the return of income. It was upon the AO to find out the actual cost of the building and renovation to substantiate the statement given by the assessee wherein surrender was made. The statement so recorded by the survey team was also alleged to be under influence, coercion and under a confused state of mind.
In the letter of retraction the factual position was stated assessee to the effect that her husband, an acute diabetic patient, was made to sit in the shop by the visiting officials for long hours and was feeling very much disturbed/depressed, when she was called in the night and asked to sign the statement of surrender, she had no other choice except to sign the statement recorded by the visiting officials.
In the facts and circumstances, there may not be any evidence of coercion or undue influence being exercised by the Departmental officers, but the existence of duress/disturbed state of mind at such a crucial moment cannot be ruled out.
It is an undisputed fact that no documents or papers were found during the course of survey indicating any expenditure having been incurred by the assessee for renovation of the showroom or any cash of the assessee being left at the showroom of M/s. Vishal Jewellers, from where M/s. Vishal Gold and Precious Stones Pvt. Ltd. was carrying on its business.
The High Court in the case of Krishan Lal Shiv Chand Rai v. CIT [1972 (12) TMI 6 - PUNJAB AND HARYANA HIGH COURT] observed that "it is an established principle of law that a party is entitled to show and prove that an admission made by him previously is in fact not correct and true. Such admission raises a presumption against the person making the admission but such presumption is rebuttable."
We found that categorical finding was recorded by the CIT (A) to the effect that no material was brought on record by the AO to substantiate that any expenditure on renovation was incurred by the assessee during the AY 2005-06, nor the AO has made any reference to the Departmental Valuation Officer to find out the correct state of affairs, and it was merely on the basis of statement given by Smt. Usha Rani Talla in a disturbed state of mind, which cannot be made the basis for making the addition.
Therefore, we do not find any infirmity in the order of the CIT(A) for deleting the additions made merely on the basis of statement, without bringing on record any material much less a cogent material. In the result, the appeal of the Revenue is dismissed.
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2010 (6) TMI 674
Issues:
- Assessment of gross profit rate for unaccounted sales turnover
- Modification of profit computation from gross profit to net profit
- Disallowance of sales tax payments
- Determination of net profit rate for wholesale trade
Analysis:
The appeals were filed by the assessee for the assessment years 2004-05 and 2005-06 against the common order passed by the Commissioner of Income-tax (Appeals). The assessee, a dealer in kirana goods, was involved in unaccounted sales for both years under appeal. The Assessing Officer had adopted gross profit rates for the respective years, which were later modified by the Commissioner of Income-tax (Appeals) to net profit rates, considering the suppressed turnover. The Commissioner confirmed the disallowance of sales tax payments based on the estimated net profit rate. The Tribunal noted that even in cases of suppressed turnover, there are proved expenditures, justifying the modification of profit ratio. The Tribunal acknowledged the applicability of section 44AF for summary assessment at 5% net profit in retail trade but considered the rate high for wholesale trade, to which the assessee belonged. Consequently, the net profit rate was reduced to 3% for fairness. As the income was determined based on net profit ratio, no further deduction for expenses, including sales tax payments, was allowed. Therefore, the appeals were partly allowed by the Tribunal.
The Tribunal's decision focused on the appropriate determination of profit rates for the assessee's wholesale trade business. It recognized the need to consider proved expenditures even in cases of suppressed turnover, leading to the modification of profit ratio from gross profit to net profit. The Tribunal found the initially adopted 5% net profit rate to be high for wholesale trade, reducing it to 3% for fairness and reasonableness. This adjustment was made to align with the principle that net profit rates are typically lower in wholesale trade compared to retail trade, as per section 44AF. Consequently, the Tribunal upheld the disallowance of sales tax payments, given the income determination based on net profit ratio, where no further deductions for expenses were allowed. The Tribunal's decision aimed to strike a balance between the legal provisions and the specific nature of the assessee's wholesale trade operations, ensuring a fair and reasonable outcome in the assessment of income and expenditures.
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2010 (6) TMI 673
Agriculture Income - Computation of total income - production and sale of hybrid seeds - HELD THAT:- Operations carried out by the assessee in the previous year relevant to the assessment year in appeal, we find that the production of basic seeds as well as hybrid seeds are the results of basic agricultural operations carried on by the assessee-company in its own land as well as in leasehold land. The method of contract farming does not take away the character of the basic operations carried out by the assessee-company which are agricultural in nature. The assessee-company procures germplasm and sows it in its own fields, and carries on all agricultural operations and produces the basic seeds. The basic seeds so harvested are again put through agricultural operations intimately connected with leasehold land for finally bringing out the hybrid seeds. Only for the reason that the basic seeds are sown in leasehold land and the manpower required is arranged through contract farming, it does not mean that the operations carried out by the assessee-company are not agricultural operations. As a matter of fact, it is to be seen that the assessee-company has carried out basic as well as secondary agricultural operations. Therefore, without any fear of contradiction, it is possible for us to hold that such entire income of the assessee is agricultural in nature which is to be excluded from the nature of total income. The assessee is successful in its appeal.
Exemption of income - HELD THAT:- The reasons pointed out by the assessing authority to deny the claim of exemption made by the assessee-company are that the assessee is following international technology, marketing expertise, integrated scientific and commercial activity, etc. These are all matters strange to the strict code of income-tax. Those premises do not have any role in deciding the nature of income within the framework of the Income-tax Act, 1961. The reasons pointed out by the AO are by and large issues to be decided by the policy makers in the Government.
In result, appeal filed by the assessee is allowed.
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2010 (6) TMI 672
Issues involved:
The issues involved in this case are the applicability of section 50C of the Income-tax Act to a purchaser, the valuation of property for assessment purposes, and the justification of additions made by the Assessing Officer.
Summary:
Applicability of Section 50C to Purchaser:
The case involved a dispute regarding the applicability of section 50C of the Income-tax Act to a purchaser. The Assessing Officer had reopened the assessment under section 148 based on information regarding undervaluation of property by the assessee. The Assessing Officer contended that the assessee had undervalued the property, leading to an addition to the income. However, the learned Commissioner of Income-tax (Appeals) deleted the addition, stating that section 50C pertains to the seller of assets for charging capital gain and is not applicable to the purchaser. The Tribunal upheld this decision, citing previous judgments that supported the non-applicability of section 50C to purchasers.
Valuation of Property:
The Assessing Officer had charged an additional stamp duty on the property, valuing it higher than the declared amount by the assessee. The dispute arose from the differential valuation of the property by the stamp duty authorities. The Tribunal noted that the Assessing Officer did not provide evidence that the assessee had paid more consideration than recorded in the sale deeds. The Tribunal held that there was no factual foundation for the additions against the assessee and, therefore, set aside the orders of the authorities below and deleted the additions.
Justification of Additions:
The Departmental appeal and cross-objection by the assessee were directed against the order of the Commissioner of Income-tax (Appeals). The Departmental representative argued that the Assessing Officer was justified in making the addition due to a significant difference in the sale consideration. However, the Tribunal upheld the decision of the Commissioner of Income-tax (Appeals) to delete the addition, citing previous judgments and finding in favor of the assessee.
In conclusion, the Tribunal confirmed the decision of the Commissioner of Income-tax (Appeals) to delete the addition and dismissed both the Departmental appeal and the cross-objection of the assessee. The judgment was pronounced on June 11, 2010.
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2010 (6) TMI 671
Issues Involved:
1. Taxability of proceeds from maturity of keyman insurance policies.
2. Application of exemption u/s 10(10D) of the Income-tax Act, 1961.
3. Correct quantification of taxable amount from the maturity proceeds.
Summary:
1. Taxability of Proceeds from Maturity of Keyman Insurance Policies:
The primary issue was whether the maturity proceeds of keyman insurance policies, which were later assigned to the appellant, should be taxed. The Assessing Officer added Rs. 23,51,25,000 to the assessee's income, but the Commissioner of Income-tax (Appeals) sustained only Rs. 13,25,92,264 of this amount. The Tribunal had previously ruled that the sum equivalent to the surrender value of the policy at the time of its assignment by the company to the assessee is taxable.
2. Application of Exemption u/s 10(10D) of the Income-tax Act, 1961:
The assessee argued that the entire addition should be deleted under section 10(10D), which exempts sums received under a life insurance policy. However, the Tribunal clarified that sums received under a keyman insurance policy are not exempt. The Commissioner of Income-tax (Appeals) held that the maturity value received by the appellant is exempt u/s 10(10D) except for the amount representing the keyman insurance policy period.
3. Correct Quantification of Taxable Amount:
The Commissioner of Income-tax (Appeals) computed the taxable amount by considering the ratio of premiums paid by the employer and the appellant to the total maturity proceeds. The Tribunal found this computation inconsistent with its earlier rulings. The Tribunal directed the Assessing Officer to get clarification from LIC regarding the status of the keyman policy upon assignment and to decide the issue afresh based on the terms and conditions of the policy. The Tribunal emphasized that if the policy is converted into an ordinary policy, the observation of the co-ordinate Bench should be followed.
Conclusion:
The appeal was allowed for statistical purposes, and the matter was remitted to the Assessing Officer for further clarification and fresh decision-making in line with the Tribunal's earlier directions. The order was pronounced on June 4, 2010.
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2010 (6) TMI 670
Issues:
- Dispute over filing fee for appeal before the Appellate Tribunal
- Treatment of investment subsidy by the assessee as capital receipt
Analysis:
- Issue 1: Dispute over filing fee for appeal before the Appellate Tribunal
The appeal and cross-objection were filed against the order of the Commissioner of Income-tax (Appeals) under section 154 of the Income-tax Act, 1961. The assessee remitted a filing fee of Rs. 500, but the registry raised an objection, requiring Rs. 10,000 as the filing fee. The dispute arose due to the interpretation of section 253(6) of the Act, which specifies the fee based on the total income of the assessee. The Tribunal held that as the assessed income exceeded Rs. 2 lakhs, the filing fee should be one percent of the assessed income or Rs. 10,000, whichever is less. Therefore, the assessee was directed to pay the balance fee of Rs. 9,500 for the appeal to be admitted.
- Issue 2: Treatment of investment subsidy by the assessee as capital receipt
The assessee had received an investment subsidy from the State Government, treating it as capital in nature. However, the Assessing Officer adjusted the subsidy amount against the cost of factory building and plant and machinery, reducing the cost of those assets and granting depreciation on the reduced value. This led to the assessee incurring a loss due to the differential depreciation amount. The rectification petition filed by the assessee under section 154 was dismissed by the assessing authority and the Commissioner of Income-tax (Appeals). The Tribunal noted that the appeal, though arising from proceedings under section 154, was essentially against the assessment order, making it a quantum appeal. The Tribunal emphasized that the filing fee for the appeal should be determined based on the assessed income, which in this case exceeded Rs. 2 lakhs, warranting a fee of Rs. 10,000.
- The Tribunal referenced the judgment of the Bombay High Court in a similar case, emphasizing that the assessed income determines the fee payable, regardless of the issue raised in the appeal. Despite the different context, the court's analysis of section 253(6) highlighted the significance of the assessed income in fee determination. Consequently, the Tribunal held that the assessee must pay the required filing fee to proceed with the appeal and cross-objection. Failure to do so would render the appeal non-maintainable. The case was scheduled for hearing, with notice waived, and the order was pronounced on a specified date.
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2010 (6) TMI 669
Issues involved:
Confirmation of demand of service tax liability under Section 11D of the Central Excise Act, 1944 and Section 73(2) of the Finance Act, 1994.
Analysis:
The issue involved in this case pertains to the confirmation of demand of service tax liability on the appellants on two counts: (i) demand under Section 11D of the Central Excise Act, 1944 for the amount collected as service tax, and (ii) demand under Section 73(2) of the Finance Act, 1994 for the value of the taxable service provided by the appellant. The appellant's counsel argues that the demand under Section 73(2) has already been paid along with interest and penalty, while the demand under Section 11D is beyond the five-year limit prescribed under Section 11A. The counsel cites various decisions in support of this claim. On the other hand, the Departmental Representative (DR) contends that Section 11D of the Central Excise Act does not have a time limit and relies on previous Tribunal decisions to support this argument. In response, the appellant's counsel refers to a decision by the Bench that emphasizes the need to read Section 11D in conjunction with Section 11A of the Central Excise Act.
The Tribunal carefully evaluates the submissions from both sides and examines the records. Regarding the demand for duty collected beyond five years under Section 11D, the Tribunal opines that such demand can only be raised under Section 73 of the Finance Act within a five-year period, provided there are allegations of suppression of facts or misstatement. Since there are such allegations in this case, the Tribunal decides that the demand within five years requires detailed scrutiny during the final appeal disposal. The Tribunal concludes that the appellant has not justified a complete waiver of the amounts upheld by the Commissioner (Appeals). Consequently, the Tribunal directs the appellant to deposit a specific amount within a stipulated timeframe and report compliance accordingly. Upon compliance with this directive, the Tribunal allows the application for waiver of pre-deposit of the remaining amount involved and stays the recovery until the appeal is disposed of.
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2010 (6) TMI 668
Whether Tribunal was justified in granting relief u/s. 80HHC on the issue of gain on forward currency contract without appreciating the fact that the gain on exchange difference is nothing but speculation profit and not related to the business of the assessee ? - Whether Tribunal was justified in directing AO not to exclude this income from the profits eligible for deduction U/s. 80HHC without appreciating that when the assessee enters into a forward contract assessee stands to benefit by the fluctuations in foreign exchange irrespective of the fact whether the trade agreement exists or not ? - Held that:- Tribunal after appreciating the evidence on record and the submissions advanced on behalf of the respective parties, has given sufficient, cogent and convincing reasons for holding that the the transaction in question was not a speculative transaction and that the foreign exchange contract was entered into by the assessee only with a view to realize the amount due on sale of goods. In the circumstances, no infirmity is found in the reasoning adopted by the Tribunal in holding that the gain on forward currency contract is related to the business of the assessee. In the circumstances, no question of law can be stated to arise qua the said ground.
Whether the Appellate Tribunal was justified in granting relief to assessee without appreciating the fact that the provisions/liability written off and shown as income of the year was not earned during the year and was duly considered while working out the deduction U/s.80HHC in the relevant A.Y. in which such expenditure/creditors existed ? - Held that:- Commissioner (Appeals) found that writing back of provisions/liability for expenses payable was merely a reversal of liabilities created in the previous year as a result of which manufacturing profit of the previous year got reduced. Accordingly, it should also be treated as part of manufacturing profits eligible for deduction under section 80HHC. The Tribunal upon appreciating the evidence on record has concurred with the findings recorded by Commissioner (Appeals). Thus, in light of the concurrent findings of fact recorded by Commissioner (Appeals) and the Tribunal, no question of law can be stated to arise, as proposed or otherwise, in relation to the said ground.
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2010 (6) TMI 667
Levy of service tax - stand fees - The Stand fees are a statutory levy of the local State Government - Collection of stand fee is not for any specific service rendered by them, but is a flat rate of charge to one category of buses namely, private bus operators, it cannot be said that the amount so collected is by way of service charge - whether the stand fees is classified under Business Support services or otherwise and is taxable or otherwise? - Held that: - The stand fees are for enhancing the revenue of the KTC to cope up with the stand maintenance expenditures. Service tax can be demanded only when KTC collects service charge for “any of the services rendered” by them - Collection of stand fee is not for any specific service rendered by them, but is a flat rate of charge to one category of business namely, private bus operators, it cannot be said that the amount so collected is by way of service charge. Therefore, no service tax is payable for the stand fees collected by the appellant.
Revision allowed - decided in favor of assessee.
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2010 (6) TMI 666
Issues Involved:
1. Impracticability of calling an extraordinary general meeting.
2. Alleged fraudulent appointment of additional directors.
3. Dispute over the transfer of shares.
4. Allegations of siphoning off funds and changing the office location.
5. Validity of calling an extraordinary general meeting during pendency of the petition.
Detailed Analysis:
1. Impracticability of Calling an Extraordinary General Meeting:
The petitioner, holding 50% shares and being a director, alleged that it was impracticable to call an extraordinary general meeting due to the absence of the other shareholder, Mr. Mukhiya. Despite attempts to hold annual general meetings in 2007 and 2008, the meetings were adjourned due to the absence of Mr. Mukhiya, creating a deadlock. The petitioner sought a direction under section 186 of the Companies Act, 1956, to call an extraordinary general meeting to proceed with the company's affairs, including the removal of fraudulently appointed additional directors.
2. Alleged Fraudulent Appointment of Additional Directors:
The petitioner claimed that the second respondent fraudulently appointed two of her relatives as additional directors by forging his signature on the resolution minutes. This appointment was made without the petitioner's knowledge, and he only discovered it after reviewing records from the Registrar of Companies. The second respondent countered that the petitioner consented to these appointments to have a police complaint against him withdrawn, but this claim was not substantiated with original documentation. The court found the petitioner's claim of forgery plausible due to the lack of original evidence from the second respondent.
3. Dispute Over the Transfer of Shares:
The second respondent asserted that she held 50% of the company's shares, having acquired them from Mr. Mukhiya, who resigned as director in 2005. However, the petitioner disputed this transfer, stating that no board meeting was held to approve it, nor was it reflected in the company's annual return. The court noted the absence of any proof of share transfer in favor of the second respondent and concluded that Mr. Mukhiya remained a 50% shareholder until at least January 18, 2010, as per the Registrar of Companies' records.
4. Allegations of Siphoning Off Funds and Changing the Office Location:
The second respondent accused the petitioner of siphoning off company funds and changing the registered office location without notice. The petitioner denied these allegations, explaining that the office location change was due to the landlord's actions. He also highlighted his efforts in successfully completing a significant project for the company. The court did not find sufficient evidence to support the second respondent's allegations.
5. Validity of Calling an Extraordinary General Meeting During Pendency of the Petition:
The second respondent argued that the petition should be dismissed because the petitioner called an extraordinary general meeting on January 22, 2010, while the petition was pending. The court rejected this argument, clarifying that the notice for the meeting was issued following a court order on December 16, 2009, and was not contrary to the law.
Conclusion:
The court concluded that the petitioner was entitled to call an extraordinary general meeting despite the absence of quorum, due to the deadlock created by Mr. Mukhiya's absence and the second respondent's fraudulent actions. The petition was allowed, directing the petitioner to call, hold, and conduct the extraordinary general meeting within four weeks of receiving the order.
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