Transfer pricing adjustment - assessee entered into Advance Pricing Agreement (APA) with CBDT covering nine years from assessment years 2010-11 to 2013-14 under roll back provisions - Held that:- Where the international transactions entered into by the assessee with its associate enterprises are similar to the international transactions in the succeeding years, then where the APA proceedings have been carried out in the case of assessee and the Board and the assessee have come to a settlement vis-à-vis the manner of computation of arm's length price - we restore this issue also back to the file of Assessing Officer, who shall consider the plea of assessee and shall after obtaining report from the TPO in this regard, decide the issue in accordance with law. Reasonable opportunity of being heard shall be afforded to the assessee while deciding the issue. The grounds of appeal raised by the assessee are thus, allowed.
TDS u/s 194C on the value of the bye products - nature of services - assumption of Payment in kind - Held that:- Assessee is under no obligation to deduct the tax at source in terms of a contract where it does not require any payment of any sum even if the sum here means that the payment could be of some kind but it is difficult to say that the assessee has made these payments to the extent of shortfall in getting the wheat supplied back and construe it as the payment to the other for processing the wheat into Atta or Daliya. The department must have appreciated the contract as a whole which does not involve any payment or getting the payment for services rendered. It Is a case of barter or exchange or one good against the other. It Is a type of sale contract In a very crude form but it is certainly not a works contract as understood by the courts in cases under the sales tax
Although services were taken, it is difficult to say that the residuals and the losses left by the assessee in favour of AIL are purely consideration for the job that is done The market fluctuations in the price structure of the raw material and the end product cannot be just ignored in the whole transaction nor the process loss. The process loss could be either more or less than the percentage agreed to between the parties. But still the parties settle the transactions at an agreed proportion. In other words, the residual that is left by the assessee, apart from covering the labour cost of processing, also includes the protection from market fluctuations as also protection from adverse process loss. To conclude, the entire residual is only for the purpose of job work is not fair and correct having regard to the totality of the transaction entered into by the parties - Decided in favour of assessee.
Deduction u/s.80IB - assessee fails to file the return of income before the due date specified in section 139(1) - provisions of section 80AC applicability - Held that:- As carefully perused the orders of the authorities below. The undisputed fact is that the return of income for the year under consideration was not furnished on or before the due date as per the provisions of Section 139(1) of the Act. In our considered opinion, provisions of Section 80AC of the Act squarely apply on the facts of the case in hand. We set aside the findings of the ld. CIT(A) and restore that of the A.O.
Addition made on account of delay in the deposit of Employee’s contribution - Held that:- We find that the ld. CIT(A) has deleted the addition following the decisions of Hon’ble High Court of Delhi by holding that if Employee’s contribution is deposited before the due date of filing of the return of the same is allowable. On identical issue, the Hon’ble Jurisdictional High Court has decided the matter against the Assessee and in favour of the Revenue in the case of CIT vs. Gujarat State Road Corporation [2014 (1) TMI 502 - GUJARAT HIGH COURT]. With our utmost respect to the Hon’ble High Court of Delhi, we are governed by the Hon’ble High Court of Gujarat, therefore, respectfully following the decision of the Hon’ble Jurisdictional High Court (supra), we set aside the findings of the ld. CIT(A) and restore that of the A.O. Ground no. 3 is accordingly allowed.
Claim of depreciation @ 15% - Held that:- We find that the CIT(A) has allowed the claim by holding that electric fittings are eligible to depreciation as plant and machinery. For this proposition, we find that the ld. CIT(A) has followed the decision of the Hon’ble High Court of Rajasthan in the case of RG Ispat Ltd. [2003 (9) TMI 5 - RAJASTHAN HIGH COURT] and also the decision of the Tribunal in the case of Ahmedabad Benches in the case of Marwar Hotels Ltd.[2015 (11) TMI 1194 - ITAT AHMEDABAD].
Maintainability of appeal - low tax effect - Held that:- Learned senior counsel fairly submits that in view of the circular dated 07.3.2016, the special leave petitions are to be dismissed. In view of the above, the special leave petitions are accordingly dismissed.
Levy of penalty u/s 271(1)(c) - disallowance of commission - Non response to summons - assessee's authorized representative accepted the disallowance of 25% of the commission so as to buy peace and to avoid long drawn litigation - Held that:- The assessee has furnished confirmation of all the parties to whom the commission was paid. TDS was duly deducted from all the persons. That summon issued u/s 133(6) was duly complied with and six persons confirmed having received the commission. Merely because four persons did not furnish reply to the AO in response to summons, it cannot be said that the claim of the commission by the assessee was not genuine. That merely because the assessee agreed for the addition, it, in no way, saddle the assessee with the penalty u/s 271(1)(c) of the Act.
It is not a fit case for levy of penalty u/s 271(1)(c). While doing so, we draw support from the decision of Hon'ble Apex Court in the case of CIT Vs. Reliance Petroproducts Pvt.Ltd. - (2010 (3) TMI 80 - SUPREME COURT) as held merely because the assessee's claim for any deduction is not accepted by the Revenue, penalty u/s 271(1)(c) of the Act is not attracted. - Decided in favour of assessee.
Penalty u/s 271(1)(c) - addition of bogus purchases - Held that:- Taking into consideration the order the Tribunal, the evidence which has surfaced on record as well as the decision of this Court in the case of Vijay Proteins Ltd. v. Commissioner of Income-tax [2015 (1) TMI 828 - GUJARAT HIGH COURT] wherein the question of law was answered in favour of the assessee and against the Revenue and consequently, the penalty imposed was quashed and set aside, we are of the view that the issues raised in this Appeal are to be answered in favour of the assessee and against the Department.
Scheme of arrangement and de-merger - Held that:- This is a Second Motion Petition moved under Sections 391 to 394; and 100 to 104 of the Companies Act, 1956 in connection with a scheme of arrangement and de-merger.
Issue notice. Ms. Aparna Mudiam, Assistant Registrar of Companies, enters appearance and accepts notice on behalf of the Regional Director.
Let another copy of the petition be served on the office of the Regional Director within one week. Reply be filed within eight weeks thereafter. Rejoinder thereto, if any, may be filed within another four weeks.
Application for withdrawal of appeal - Revenue says that as per the policy of the Board, they propose to withdraw these appeals filed by Revenue through these miscellaneous applications - Held that:- Prayer of Revenue is allowed and the appeals are dismissed as withdrawn.
The Appellate Tribunal CESTAT CHENNAI dismissed the appeal filed by Revenue as per the policy of the Board. The appeal was withdrawn through a miscellaneous application, and no one appeared for the respondent. The cross-objection was disposed of accordingly.
MAT - addition made to the book profit u/s. 115JB - Rectification of mistake u/s 154 - Assessee company has debited ₹ 1,94,00000 crores as provision for current tax whereas while working income under MAT provision had added only ₹ 4,18,968/- as income tax provision, therefore, he has made addition of ₹ 1,89,81,032/- as provision for income tax to the book profit - Held that:- After perusal of the detail on record and the facts of the case, we observe that if provision of income tax of ₹ 1,94,00000/ is added for the purpose of calculation of book profit, then the amount credited to profit and loss account being MAT credit entitlement ₹ 1,93,69,003/ is to be reduced while calculating book profit as is mentioned in item no.(i) of explanation 1 to sec.115JB(2) of the act.
It was also noticed that alternatively if the amount of profit before the tax is taken for calculating book profit u/s. 115JB of the act and no adjustment are made with respect to income tax then also the calculation of book profit.
It is clearly demonstrated from the above facts that the assessee has debited income tax provision of ₹ 1.94,00000 crores against which it has claimed MAT credit of ₹ 1,93,69,003/- therefore, the difference of ₹ 30,997/- was added to the book profit. In the light of the above and after considering the detailed findings of CIT(A), we do not find any merit in the appeal of the assessee, therefore, the same is dismissed.
Repayment proposal submitted by HBN - Previous default by company for non repayment - repayment proposal that HBN has now proposed is a structured repayment mechanism which involves setting up an independently managed ring fenced Special Purpose Entity (“SPE”) in the nature of a trustee company as a corporate registered under the Indian Trust Act, 1882 - Held that:- SEBI has been assigned the statutory duty to protect the interests of investors in securities and regulating the market by such measures as it deems fit. It is the duty of SEBI to ensure that the securities market functions in a fair manner.
HBN failed to take any concrete steps for all these years to repay the investors’ money despite its own earlier repayment proposal in 2013. The past malafide conduct of the company was clearly noted.
Almost 20 lacs investors of HBN are desperately waiting to get their money back. The company’s intentions have been malafide right from the very beginning till now. This is illustrated by HBN’s raising of funds in a blatantly illegal manner, flouting the directions of SEBI in respect of repayments to be made only through the escrow account, ‘repaying by cash’ to a huge extent of ₹ 192.96 crores, the source of which remains unexplained even after 2 years etc.. This new proposal is nothing but a ploy to drag on the matter without any reasonable end in sight.
Order:- In view of the foregoing, in exercise of the powers conferred upon me in terms of Section 19 read with Sections 11 and 11B of the SEBI Act, 1992 hereby reject the repayment proposal submitted by HBN.
Revocation of the CHA license - forfeiture of part or whole of the security deposit - Smuggling of various goods by way of concealment or gross undervaluation - revocation on the ground that CHA has not produced any evidence or facts to refute the conclusions of the inquiry officer that Bills of Entry of M/s Pujan Overseas filed by CHA - Held that:- The activities of the appellant firm were controlled day to day, not by Shrimankar but by employees of Amol Shipping Agency. We do not see how this does not amount to transfer of the licence in all but name. Hence, we must hold that the first and second articles of charge have been rightly held as proved. Moreover, more than 100 blank shipping bill forms were sent to a third-party. Following these aggravating factors, the penalty of revocation was justified by the CESTAT.
The revocation of CHA license and forfeiture of security deposit in the impugned order has been arrived at without appreciation of the evidence, or for that matter, the lack of it - the impugned order requires to be set aside in toto - appeal allowed - decided in favor of appellant.
Classification of Ilmenite upgraded - Classification claimed initially under Chapter Heading 26140010; reclassification claimed under 26140020 – Department contented for classifying under Chapter 26140010 - Held that:- Issue notice on the appeal as well as on the applications for condonation of delay.
Matter not referred to DVO u/s 50C(2) - computation of capital gains - Held that:- As held by Hon’ble Calcutta High Court in the case of Sunil Kumar Agarwal vs. CIT [2014 (6) TMI 13 - CALCUTTA HIGH COURT], even in the absence of specific request from the assessee, the Assessing Officer has to give an option to the assessee to follow the course provided by law under section 50C(2). Therefore, uphold the grievance of the assessee, and remit the matter to the file of the Assessing Officer for adjudication de novo after referring the matter to the DVO under section 50C(2) - Appeal allowed for statistical purposes.
Computation of deduction u/s 80HHC - interest from fixed deposits formed out of compulsory retention and transfer of export realisation is income from business liable for inclusion as business profit - Held that:- Referring to Section 80HHC learned standing counsel for the Income Tax Department submitted that if the Company is engaged in the business of export, income earned out of exports of any goods or merchandise, deduction to the extent of profits, referred to in sub-Section (1B) alone would be allowed, if only the income is derived by the assessee, from the export of such goods or merchandise, and not from any other source. Further on the facts and circumstances of the case, interest income has been derived, not from the export of goods or merchandise, but derived from the deposits made by the appellant and therefore, interest income, earned by the assessee, cannot be treated as "business income", liable for deduction. Interest income earned from the deposits, should be treated only as "other source" and therefore, both the appellate authority, as well as the Tribunal, have rightly decided the issue, in favour of the Revenue.
Legislature has engrafted the provisions, as to how, the Company engaged in the business of export, out of India, of any goods or merchandise, can be allowed, to compute the total income of the assessee, deduction to the extent of profits, referred to, in sub-Section (1B), derived by the assessee, from such export of goods or merchandise, meaning thereby, that such income from the said proceeds of the goods or merchandise, should be earned in convertible foreign exchange or in otherwords, and not income generated within the country, from other sources. - Decided in favour of revenue.
Detention of goods with vehicle - power to detain the vehicle - Section 59 of the Act - Held that:- The subject matter of this Writ Petition is covered by the order passed by this Court in Lakshrni Tanker Service Versus The Assistant Commercial Tax Officer [2016 (7) TMI 1466 - TELANGANA AND HYDERABAD HIGH COURT], where the writ petition is disposed of directing the respondents to release the vehicle and the goods forthwith - following the same, the present writ petition also disposed off.
Jurisdiction - Powers of the police and other authorities in Kerala, under the special laws dealing with minerals and minor minerals, to deal with sand or other minerals brought to Kerala from another State where there is prohibition of export of such materials to neighbouring States.
Whether prohibition and control of export of sand in the State of Karnataka, prohibiting such export to the neighbouring States including Kerala, is binding on the State of Kerala, and whether the police authorities in Kerala are bound to honour such prohibition and restriction?
Whether the police authorities or other authorities appointed by the Government in Kerala, will have powers under the Sand Act, or the MMDR Act and the Rules framed thereunder, to seize the sand imported from the State of Karnataka in such circumstance of prohibition or restriction, and to proceed for prosecution and other actions including confiscation?
Held that:- The extent of legislative powers of the Union and the States is dealt with under Part XI of the Constitution of India. Clause 1 of Article 245 of the Constitution empowers the parliament to make laws for the whole or any part of the territory of India, subject to the other provisions of the Constitution. This clause also provides that the legislature of a State may make laws for the whole or any part of the State. Article 246 deals with legislative powers of the Centre and the States on the different matters enumerated in the three lists in the VIIth schedule of the Constitution. Clause 3 of Article 246 provides that subject to Clauses (1) and (2) dealing with legislative powers regarding matters in the union list and the concurrent list, the legislature of any State has exclusive power to make laws for such State or any part thereof with respect to any of the matters enumerated in List II (State list) in the VIIth schedule. Thus it is very clear that the legislative powers of a State cannot extend beyond the territorial limits of the State and beyond the scope of the subject matter in the State list or in the concurrent list as the case may be, or beyond the scope of the object of legislation.
In the present circumstances involving sand exported from the State of Karnataka, the Sand Act in Kerala can have no application, and the police and other authorities in Kerala cannot invoke the powers of seizure or prosecution or confiscation with respect to such Sand, under the provisions of the Sand Act in Kerala.
Whether the MMDR Rules in Kerala are self contained, to deal with all sorts of transactions and situations in respect of minor minerals including sand? - Held that:- Sub Rule 3 of Rule 3 of these Rules made under Section 23C of the MMDR Act provides that no person shall transport or cause to be transported any mineral or mineral products by any carrier without having a valid mineral transit pass under these Rules. In this case the petitioners did not have any permit or pass justifying import of sand from Karnataka or justifying transportation of such sand within the State of Kerala. The police seized the sand and the vehicles when the petitioners failed to produce any pass or permit as prescribed under the law. Of course, it is true that the above Rules were made in 2015 as authorised under Section 23C of the MMDR Act, but the vehicles and the sand in this case were seized long back in February 2012. Still the position is covered by the MMDR Act itself.
Illicit import of sand from other states, or illicit transport of such sand within the State of Kerala was not in fact covered by the Kerala Rules of 1967 at the relevant time. But at the same time the alleged act is a clear violation of Sub section 1A of Section 4 of the MMDR Act. When such an act of offence is committed, and if it is punishable under the Principal Act, or if such a situation is not covered by the Rules made by the Government of Kerala, such act of offence will have to be dealt with under the Principal Act. The scope of the Rules framed by the Government under Section 15(1) of the MMDR Act will not go beyond the object of those Rules specified under Section 15(1A). Illicit import of sand from other states and illicit transportation or possession of such sand within the State of Kerala is not in fact the subject matter dealt with under the MMDR Kerala Rules of 1967 or 2015 - Once it is found that minerals include minor minerals, and that the subject matter of dispute in these cases is not in fact covered by the Sand Act in Kerala, or the MMDR Rules in Kerala, the prosecution procedure including seizure and arrest as provided under the MMDR Act, will have to be followed.
The general powers of the police for arrest and seizure under the Code of Criminal Procedure are not specifically ousted or excluded by any of the provisions of the MMDR Act. On the other hand the offence punishable under Section 21 is made specifically cognizable also. That the offence is made cognizable means that any police officer, competent and empowered to act under the Code of Criminal Procedure, is competent to make arrest and to make seizure of properties, but prosecution can be launched only by the persons authorised by the Government under Section 22 of the MMDR Act. Contraband articles including minerals are liable to confiscation by court orders under Sub Section 4A of Section 21 of the MMDR Act - Competence of the police officer who made seizure in this case, to initiate prosecution under Section 22 of the MMDR Act cannot be questioned or doubted, because there is already a Government order authorising police officers of and above the rank of Sub Inspectors to initiate prosecution under Section 22. If an officer is authorised under the law to initiate prosecution, and if his powers as police officer under the Code of Criminal Procedure including Section 102 of the Code of Criminal Procedure are not specifically ousted or excluded under the special law, and when the offence is specifically made cognizable, the powers and authority of such police officer to make seizure under Sub Section (4) of Section 21 cannot be questioned or challenged. Such appointment specifically under Sub Section (4) of Section 21 is required only in the case of other categories of officers than police officers.
In view of the specific provisions in Section 22 of the MMDR Act, prosecution on the basis of a final report under Section 173(2) Cr.P.C. is not possible. As regards the other police powers including arrest and seizure, there is no specific exclusion by the special law, and so, such general powers can be exercised by the police, including the powers to make arrest, and to seize properties.
CENVAT Credit - inputs - fabrication, erection and installation of various capital goods and supporting structures, namely pollution control equipment, conveyor support and gallery, stock house bunker and bunker support etc. - Held that:- It may be mentioned that in Rule 2(k) of the Cenvat Credit Rules, 2004 the term of “input” has been defined and Explanation 2 to Rule 2(k) of Cenvat Credit Rules, 2004 also states that “input” includes goods used in the manufacture of the capital goods, which are further used in the factory of the manufacturer. Thus, it is not necessary that the “input” exclusively be used in or in relation to the final product - credit allowed - appeal dismissed - decided against Revenue.
Settlement of case - levy of interest u/s 234A and 234B - Held that:- the observation of the Settlement Commission by extending terminal date upto 25.02.2000 calls for interference. Accordingly, the Writ Petitions are allowed to that extent and the terminal date as fixed by the Commission in its original order dated 25.02.2004 is confirmed
Reassessment of tax - Section 21 of U.P. Trade Tax Act, 1948 - Change of Opinion - assessment challenged on the ground that assessment was already finalized by Assessing Officer on 24.03.1999 - Held that:- Learned Standing Counsel did not dispute that re-assessment proceedings have been initiated only on the basis of subsequent judgment and not otherwise. That be so, it is nothing but a case of change of opinion which does not allow jurisdiction to initiate reassessment proceedings under Section 21 of Act, 1948.
9911796707
