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Showing 241 to 260 of 2075 Records
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2019 (3) TMI 1840
Disallowance u/s 14A r.w. Rule 8D(iii) - indirect expenditure for earning exempt income - HELD THAT:- As decided in own case. [2017 (3) TMI 1832 - ITAT MUMBAI] Calculation of disallowance as per Rule 8D(2)(iii) is erroneous, as the AO without assigning any reason did not reduce the investment in mutual funds and group concern which does not quire incurrence of major expenditure.We restore this ground back to the file of A.O. for fresh consideration.
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2019 (3) TMI 1839
Relief of special additional duties - clearances of various medicinal products by the respondent, from their unit in a special economic zone to their own undertaking in the domestic tariff area as stock transfer - Section 3(5) of Customs Tariff Act, 1975 - HELD THAT:- From N/N. 45/2005-Cus., dated 16th May, 2005, it is apparent that exemption will not apply only if such goods, when sold in domestic tariff area, are exempted from value added tax attendant on a specific notification providing for ‘nil’ rate of duty - In the present instance, the goods themselves are not exempt from value added tax though the internal transfer defers the tax for the moment. In other words, the payment of value added tax is merely postponed till actual transaction of sale occurs. The exclusion from value added tax is, thus, fleetingly temporary and the exemption test cannot be applied except when that transaction takes place. That which cannot be subjected to the test cannot fail the test.
There is no doubt that the goods themselves are liable to value added tax. Postponement of that liability or even evasion of that liability does not derogate from taxability. As the said goods are taxable under the relevant revenue laws of the State, it is found that the appeal against the order of the first appellate authority is misdirected.
Appeal dismissed.
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2019 (3) TMI 1838
Disposal of petition - petitioner states that the petitioner was served with a show cause notice dated 21.05.2018, under Section 142(1) of the G.S.T. Act, 2017 to which the petitioner has filed a reply on 11.06.2018 but the respondent authorities are not disposing of the petitioner's reply at all - HELD THAT:- The respondents are directed to pass orders on the petitioner's reply dated 11.06.2018 in accordance with law within a period of three weeks from today.
Petition disposed off.
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2019 (3) TMI 1837
TP Adjustment - AMP expenditure - International transaction - bechmarking technique - HELD THAT:- International transaction of AMP functions exists in the case of the assessee, however, as far as benchmarking of the said transaction is concerned, we find that the Ld. Transfer Pricing Officer has claimed to have followed the directions in the case of Sony Ericsion [2015 (3) TMI 580 - DELHI HIGH COURT]. The assessee is aggrieved with not considering the AMP expenses in aggregated manner with imports of goods under TNMM. The assessee is also aggrieved with cost plus method in segregated manner without properly comparing the functions of the comparable companies.
In such circumstances, we feel it appropriate to restore the issue to the file of the Ld. TPO for following the direction of the Hon’ble Delhi High Court for benchmarking under TNMM in aggregated manner along with the purchase of goods from the AE or in the segregated manner, after taking into account appropriate comparables or applying of resale price method or cost-plus method - We are restoring this issue to Ld. Transfer Pricing Officer because factual information on the issues raised by the Hon’ble Court are not before fully. The Ld. TPO may also decide the issue of direct selling expenses and applying markup following the decision of the Hon’ble Delhi High Court in the case of Sony Ericsson (supra). It is needless to mention that assesses shall be afforded adequate opportunity of being heard.
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2019 (3) TMI 1836
Addition u/s. 14A - Sufficiency of own interest free funds - HELD THAT:- As decided in own case [2019 (2) TMI 1889 - ITAT AHMEDABAD] CIT(A) granted relief to the assessee from such disallowance on the ground that the interest free funds at the disposal of the assessee is in excess of the corresponding investments yielding tax free income. On such facts, we do not see any reason to interfere with the aforesaid findings in view of the decision of the Hon’ble Gujarat High Court in CIT vs Suzlon Energy Ltd. [2013 (7) TMI 697 - GUJARAT HIGH COURT] and CIT vs GIDC [2013 (1) TMI 809 - GUJARAT HIGH COURT] and other judicial precedents.
Addition made u/s. 36(1)(iii) - interest of advance given for purchase of immovable property - HELD THAT:- The perusal of the order of the CIT(A) shows that the assessee had demonstrated before the first appellate authority that the advances given for purchases of immovable property is far in excess of the interest free funds. In view of the facts narrated by the CIT(A) towards availability of interest free funds in excess of interest bearing loans for towards advances immovable property, we do not see any reason to interfere with the order of the CIT(A) which is sync with the judicial precedence prevailing in this regard. - Appeal of the revenue is dismissed.
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2019 (3) TMI 1835
Unexplained cash credit taxed u/s 68 - assessee has not satisfactorily discharged the primary onus of proving the identity of the creditors, their creditworthiness and the genuineness of the transaction - CIT-A deleted addition - HELD THAT:- No such addition can be made under section 68 where the assessee has filed all the necessary evidences before the AO when AO has not made any further enquiry to to prove otherwise. The allegation of the AO that assessee has not proved identity and creditworthiness of the lenders and genuineness of the transactions is without any basis as stated above.
The allegation of the AO that assessee has not proved identity and creditworthiness of the lenders and genuineness of the transactions is without any basis as stated above. The assessee filed the necessary evidences in the form of loan confirmations, balance sheets and profit and loss accounts, ITRs, bank statements and PAN cards of the lenders.
Entire transactions were routed through the banking channels and thus the assessee has discharged the primary onus of proving the identity, creditworthiness and genuineness of the transactions. Another allegation of the AO is that assessee has failed to produce the parties and hence question of providing cross examination does not arise which is without merit as the assessee has discharged its onus by providing all the basic documentary evidences before the AO who just relying on the statement of Shri Pravin Kumar Jain treated the loan transactions as unexplained credit in the books of the assessee. On the issue that these lenders are showing low income or losses in the return of income filed, we observe that in the balance sheets the said loan advanced by the lender were duly reflected and thus there is no income in the particular year has no relevance and there were sufficient sources.
Order passed by the Ld. CIT(A) is well reasoned and there is no reasons to deviate from the his findings - Decided against revenue.
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2019 (3) TMI 1834
TDS u/s 194J - disallowance of data processing cost u/s.40(a)(ia) - Non deduction of TDS - whether data processing cost paid to head office is in the nature of royalty as per Clause-3, Explanation 1 to Section 9(1)(vi) of the Income Tax Act, 1961 which is liable for withholding tax u/s.194J? - HELD THAT:- Similar issue has been the subject matter of discussions by the Co-ordinate Benches of ITAT in assessee’s own case for the A.Y.2012-13 wherein after considering relevant provisions of the Act, and also scope of Article 12(3)(a) of DTAA between India and Netherlands held that data processing cost did not constitute royalty and is merely reimbursement of expenses not liable for withholding tax and therefore, no disallowance could be made u/s.40(a)(i).
Disallowance of interest paid to head office and taxability of the same in the hands of the head office - HELD THAT:- In assessee’s own case for earlier years Tribunal after considering relevant facts in the light of the provisions of Article 11 of DTAA between India and Netherlands hold that interest paid by the branch office to head office is not chargeable to tax in view of the specific provisions of Article 11 of DTAA between India and Netherlands - CIT(A) was right in deleting the addition made by the AO towards disallowance of interest paid to head office. Hence, we are inclined to uphold the findings of the ld. CIT(A) and reject the ground taken by the revenue.
Disallowance u/s 14A r.w.r. 8D - HELD THAT:- As with view taken by the Co-ordinate Bench in assessee’s own case for earlier years, we are of the considered view that there is no error in the findings of the ld. CIT(A) in deleting additions made towards disallowance of expenditure incurred in relation to exempt income u/s. 14A of the Act. Hence, we are inclined to upheld the findings of ld. CIT(A) and reject the ground taken by the revenue.
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2019 (3) TMI 1833
Undisclosed profit from broker - CIT(Appeals) deleted the addition - HELD THAT:- There was thus a difference of ₹ 29,53,995/- in the profit reported by the Investigation Wing and the profit declared by the assessee and when the assessee was required to explain this difference, complete details of the relevant transactions were furnished by the assessee to show that the profit actually earned by him was only ₹ 8,55,82,593/-.
A copy of relevant ledger account was also filed by the assessee to show that the actual profit only ₹ 8,55,82,593/- was earned on the relevant transactions booked through broker Dhairya Commodities Pvt. Limited. This relevant information furnished by the assessee-company in support of its claim, however, was brushed aside by the Assessing Officer and the difference of ₹ 29,53,995/- was added by him by treating the same as undisclosed profit of the assessee without giving any basis as to how the profit of ₹ 8,85,36,587/- was arrived at as reported by the Investigation Wing. He also did not make any enquiry from the National Multi Commodity Exchange, Ahmedabad or even from the concerned broker Dhairya Commodities Pvt. Limited to find out the factual position - addition made by the Assessing Officer on this issue was not sustainable .
Characterization of income - sales tax incentives as capital receipt or as declared by the assessee as revenue receipt in the return of income - HELD THAT:- We are of the view that the subsidy in question received by the assessee in the form of refund of sales tax under the West Bengal Incentive Scheme, 2004 was capital in nature as the purpose of the same was for the expansion of the existing industry of the assessee. We also hold that merely because the said subsidy was to be received by the assessee only after the commencement of production would not change its character, which otherwise was capital in nature. We accordingly uphold the impugned order of the ld. CIT(Appeals) giving relief to the assessee on this issue.
MAT computation u/s 115JB - treatment to be given to the sales tax subsidy while computing the book profit under section 115JB - HELD THAT:- This issue is squarely covered in favour of the assessee and against the revenue by the various decisions of the Tribunal. In one of such decisions rendered in the case of Benani Industries Limited [2016 (3) TMI 873 - ITAT KOLKATA] the Coordinate Bench of this Tribunal has held that the capital receipt in the form of sales tax incentive is required to be excluded while computing the book profit under section 115JB.
The entire submissions made on behalf of the assessee in support of its new claim made for the first time before him were forwarded by the ld. CIT(Appeals) to the Assessing Officer for his examination. After examining the details and documents furnished by the assessee, a remand report dated 12.06.2017 was submitted by the Assessing Officer to the ld. CIT(Appeals). In the said remand report, reasons were given by the Assessing Officer elaborately in support of his stand that the claim of the assessee that the incentive received in the form of subsidy was a capital receipt was not acceptable.
As pointed out by the ld. Counsel for the assessee from the relevant portion of the orders of the Tribunal, the amounts in dispute were credited by the assessees in the Profit & Loss Account and the factual position in the said cases thus was similar to that of the assessee. As further pointed out by the ld. Counsel for the assessee, a Note No. 20 was given by the assessee-company as Notes to Accounts forming part of its annual accounts pointing out specifically that it was entitled for sales tax incentive of ₹ 2494.67 lakhs under the West Bengal Incentive Scheme, 2004. We, therefore, find no infirmity in the impugned order of the ld. CIT(Appeals) allowing the claim of the assessee for exclusion of the amount of subsidy in question while computing the book profit under section 115JB. Decided against revenue.
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2019 (3) TMI 1832
Approval of Scheme of Merger by Absorption - Sections 230 to 232 of the Companies Act, 2013 - HELD THAT:- From the material on record, the Scheme appears to be fair and reasonable and is not violative of any provisions of law and is not contrary to public policy.
The scheme is sanctioned with certain directions issued.
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2019 (3) TMI 1831
Approval of Composite Scheme of Arrangement - sections 230 to 232 of the Companies Act, 2013 - HELD THAT:- Directions regarding convening and holding of various meetings were issued - Directions regarding issuance of various notices also issued - application disposed off.
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2019 (3) TMI 1830
Penalty u/s 271(1)(c) - exemption under Section 54F - HELD THAT:- Appeal need not be entertained. This is so because independently also, we can safely come to the conclusion that the entire issue was a debatable one. The dispute between the Assessee and the Revenue was with reference to actual payment for purchase of the flat and whether when the Assessee had purchased one more flat, though contagious, could the Assessee claim exemption under Section 54F - Assessee submitted that this latter issue is covered by the decisions of High Court. It can thus be seen that the Assessee had made a bona fide claim.
Neither any income nor any particulars of the income were concealed. As per the settled legal position, merely because a claim is rejected, it would not automatically give rise to penalty proceedings. Reference in this respect can be made to the decision of Supreme Court in the case of Commissioner of Income Tax, Ahmedabad Vs. Reliance Petroproducts Pvt. Ltd. [2010 (3) TMI 80 - SUPREME COURT]- Decided in favour of assessee.
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2019 (3) TMI 1829
Sanction of Scheme of Arrangement (Demerger) - Sections 230 to 232 of the Companies Act, 2013 r/w the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 - HELD THAT:- The funds generated by the Company from its operations is also more than sufficient to meet the above Contingent Liability - The Scheme will not cast any additional burden on the stakeholders and also will not prejudicially affect the interests of any class of the creditors in any manner. There is no requirement to modify the proposed Scheme. The Scheme of Arrangement (Demerger) appears to be fair and reasonable and is not contrary to public policy and not violative of any provisions of law. All the statutory compliances have been made under section 230 to 232 of the Companies Act, 2013.
Therefore, the Scheme annexed with Petition(s) stands sanctioned. The Scheme sanctioned shall be binding on all the Equity Shareholders, the Creditors of the Demerged Company, the Resulting Company and on all their respective employees. The Scheme shall become effective from the Appointed Date viz., 01.04.2016.
The Order of sanction to this Scheme shall be prepared by the Registry as per the relevant format provided under the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 notified on 14th December, 2016 - the scheme is sanctioned.
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2019 (3) TMI 1828
Exemption u/s 11 - Assessee filed a revised return claiming exemption u/s 10(23C)(vi) - AO rejected claim as approval granted by the Chief Commissioner under Section 10(23C)(vi) of the Act was withdrawn - fact remains that the approval was also granted under Section 12A of the Act as a charitable institution - HELD THAT:- Assessee has collected capitation fee for admission of students. These facts were not examined by the AO as well as the CIT(Appeals). In respect of capital expenditure, the CIT(Appeals) has simply rejected the claim of the assessee on the ground that the same was not claimed in the return of income filed consequent to the notice issued under Section 148 of the Act.
The Apex Court itself in Goetze (India) Ltd [2006 (3) TMI 75 - SUPREME COURT] found that the power of the appellate authority to consider the additional ground is not impinged. CIT(Appeals) as well as ITAT being the appellate authorities can very well entertain the claim.
Apex Court itself in the case of CIT v. Shelly Products and Another (2003 (5) TMI 4 - SUPREME COURT found that the assessee can always bring to the notice of the Assessing Officer the material necessary for completing the assessment. In case any claim was not made or any income was wrongly included in the return of income, the same can always be brought to the notice of the assessing authority.
Tribunal is of the considered opinion that the matter needs to be re-examined by the Assessing Officer. Appeals of the assessee are allowed for statistical purposes.
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2019 (3) TMI 1827
Excess Duty Drawback claimed - misdeclaration of the Drawback Tariff Classification of the export goods - Ductile Iron Casting - period Oct, 2011-Jan, 2013 - demand alongwith interest and penalty - prosecution - HELD THAT:- Investigations revealed that the applicant firm had resorted to misdeclaration of Drawback Tariff Classification of the impugned goods under wrong Heading No. 7325 01 and 7325 10 with a drawback rate of 3%/2.4% instead of a specific Heading No. 7325 15 which has a rate of duty drawback of 2% of the FOB value in order to avail higher and ineligible duty drawback. Investigations culminated in the issuance of the instant SCN demanding ineligible Duty Drawback of ₹ 4,19,652/- pertaining to 72 Shipping Bills that were processed at Chennai Sea Port for the period 2011-12 along with interest of ₹ 38,025/-. Further, the SCN demanded ineligible Duty Drawback for 28 Shipping Bills processed at Chennai Sea Port from 4-2-2013 to 3-9-2013 amounting to ₹ 1,05,875/- along with interest of ₹ 1,04,819/-. Thus, the total ineligible Duty Drawback worked out to ₹ 5,25,527/- (₹ 4,19,652/- + ₹ 1,05,875/-) and interest to the tune of ₹ 1,42,844/-.
The applicant in their application admitted the entire ineligible Duty Drawback availed and paid the same along with applicable interest as demanded in the SCN. An amount of ₹ 4,19,653/- demanded in the SCN was proposed to be appropriated towards ineligible drawback from the amount of ₹ 6,74,159/- paid on 31-3-2013 in the SCN itself. The Revenue vide letter S. Misc. 18/2017-Drawback dated 2-1-2019 reported that the applicant paid an ineligible drawback of ₹ 1,05,875/- and interest of ₹ 1,04,819/- and ₹ 38,025/- on 18-9-2018.
Interest - HELD THAT:- Interest @ 18% was calculated on ₹ 1,05,875/- in the impugned SCN from 4-2-2018 to 3-9-2018 only whereas the payment was made on 18-9-2018. The actual interest payable has to be worked out and paid by the applicant - the Bench is of the view that the applicant has made full and complete disclosure of the duty liability before the Bench, co-operated with the investigation and discharged their duty liability as confirmed by the Revenue. Accordingly, the Bench considers it as a fit case to settle Duty Drawback at ₹ 5,25,527/- along with applicable interest.
Penalty - HELD THAT:- The applicant had knowingly contravened the Provisions laid down in Section 75 of the Customs Act, 1962 read with relevant Drawback Rules issued by the Government of India in this behalf. It is worth mentioning here that the applicant did not approach the Department, suo motu, for re-crediting the ineligible duty drawback amount claimed by them - But for the intervention and painstaking investigation by Officers of Customs Intelligence Unit, Coimbatore the ineligible duty drawback erroneously sanctioned by the Department would have gone unnoticed. The act of the applicant attracts penalty under the Sections of the Customs Act, l962 - keeping in view, the full and true disclosure of additional duty liability, co-operation extended during the investigation and the proceedings before the Settlement Commission, the Bench considers this as a fit case for extending partial immunity from penalty to the applicant.
Prosecution - HELD THAT:- The Bench is inclined to consider grant of immunity from prosecution to the Applicant and Co-Applicant in as far as this case is concerned.
Application disposed off.
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2019 (3) TMI 1826
Disallowance of provision for leave encashment u/s 43B - HELD THAT:- This issue was dealt with by us in the case of Karur Vysya Bank Ltd. [2019 (3) TMI 1002 - ITAT CHENNAI] The clause (f) to s. 43B of the Act enacts that no expenditure shall be allowed on account of any leave salary unless, the expenditure is actually paid. Thus, provision is intended to overcome the decision in the case of Bharat Earth Movers v. CIT [2000 (8) TMI 4 - SUPREME COURT]. The case laws relied upon by the ld. Counsel cannot come to the rescue of the assessee-bank. Thus as long as Section 43B(f) is on Statute, the said disallowance is justified.
The arguments of the ld. Counsel that the payment made towards the LIC group leave encashment scheme should be allowed as a deduction on the payment basis cannot be accepted for two reasons 1) No evidence was filed before us showing that during the year under consideration the assessee company made any payment towards LIC group leave encashment scheme 2) The decision of Hon’ble High Court of Kerala in the case of Hindustan Latex Ltd. [2012 (6) TMI 713 - KERALA HIGH COURT] cannot come to the rescue of the assessee company, as in the said decision, the Hon'ble Kerala High Court had not laid down any law that the payment made towards the group leave encashment policy is allowable as a deduction. It merely held that the issue is a debatable and therefore, it cannot be subject matter of the revision u/s. 263 - Decided against assessee.
Disallowance of amount paid to M/s. Indocoserve invoking the provisions of s. 40(a)(ia) - HELD THAT:- This issue was elaborately dealt by us in the assessee’s own appeal for the AY 2007-08 wherein for the reasons mentioned therein, the issue was remitted to the file of Assessing Officer for the purpose of carrying out the verification whether the benefit of second proviso to s. 40(a)(ia) of the Act can be granted to the assessee. Similarly, in the present AY also, we remit the issue to the file of Assessing Officer on similar directions.
Disallowance u/s 14A under clause (iii) of Rule 8 D - HELD THAT:- On perusal of the ld. CIT(A), it is clear that what is disallowed u/s. 14A of the Act is under clause (iii) of Rule 8D of the Rules. The decision of the ld. CIT(A) is in line with the settled preposition of the law that the provision of rule 8D of the Rules are mandatory is in nature. The assessee does not challenges the correctness of the calculation under clause (iii) of Rule 8D of the Rules. Therefore, ground of appeal No.4 filed by the assessee is dismissed.
Disallowance on the payments made to CMWSSB for non deduction of tax at source - As submitted that CMWSSB was formed by the MRL as registered co-operative society under Tamil Nadu Co-operative Society Act, 1951 and is formed by MRL for the benefit of contract workmen with the object of providing sustainable livelihood and at the same time avoid the exploitation by the contractor. The workmen were enrolled by these members - CIT(A) also confirmed the addition on the ground that the certificate of Nil TDS issued by the Income tax Department was not produced before him - HELD THAT:- We remit the issue to the file of AO for the purpose of verification whether the recipient had offered this sum as income in the hands of payee and made necessary arrangements for payment of tax in order to extend the benefit of second proviso to s. 40(a)(ia) of the Act.
Deduction u/s 80IB - profits derived from Refinery-III - AO had disallowed the claim on the ground that it is only an expansion of the existing business and it does not amount to setting up of a new undertaking relying on on the approval granted by Ministry of Petroleum and Natural Gas, Government of India - HELD THAT:- AO himself allowed the deduction in the subsequent year. But, from the perusal of the assessment order, there is nothing to show that the Assessing Officer examined the aspect of whether the assessee set up a new undertaking or not. The fact that the Assessing Officer allowed the deduction in the subsequent year cannot be bar to examine the eligibility/conditions in the every year of claim as held in the case of DCIT v. Ace Multi Axes Systems Ltd. [2017 (12) TMI 372 - SUPREME COURT] - The decision of the ld. CIT(A) is based on the reasoning that expansion of the existing unit also amounts to new undertaking as observed by us supra this meaning cannot be adopted in the context of provisions of s. 80IB(9) - In the interest of justice, we are of the considered opinion that the matter should be remitted to the file of AO for fresh adjudication .
Provision for service awards and gift cheques - accrual of the liability on account of grant of service awards and gift cheques to the employees - AO has allowed only to the extent of actual expenses incurred during the year under consideration - HELD THAT:- The difficulty in estimation of value cannot convert the accrued liability into a contingent one. In this regard reference can be on the decision of Hon’ble Supreme court in the case of Calcutta Co. Ltd. [1959 (5) TMI 3 - SUPREME COURT]. Further, in the mercantile system of accounting a liability already accrued though to be discharged at a future date would be allowed as a deduction while computing the profits and gains of business. In this regard reference can be on the decision of Hon’ble Supreme court in the case of Metal Box Co. of India Ltd. [1968 (8) TMI 53 - SUPREME COURT]. In the present case, it is not the case of the Assessing Officer that the liability had not accrued therefore, having regard to the principles enunciated in the judicial precedents cited above, we do not see any difficulty to allow the same as a deduction.
Advance salary paid to his employees on account of proposed pay revision - CIT-A allowed claim - HELD THAT:-the liability for the increased salaries of its employees had not crystallized during the year under consideration as the necessary approvals from the Government are still awaited. The fact that the payment is treated as salary within the meaning of s. 17 of the Act in the hands of the employees does not amount to accrual of liability in the hands of the employee. It shall not be treated as accrued liability in the hands of the employer. The liability to the enhanced salaries and wages would arise when it was finally approved by the Government. The fact that a payment constitutes income in the hands of recipient is not material in determining wither the payment is allowable as a deduction. Reliance in this regard can be placed on the decision of Empire Jute co. Ltd.[1980 (5) TMI 1 - SUPREME COURT]. Thus, the reasoning of the ld. CIT(A) does not stand the test of the law and hence, we reverse the findings of the ld. CIT(A) on this issue. Hence, this ground of appeal filed by the Revenue is allowed.
TDS u/s 195 - disallowance of payment made to HEPI for the purchase of crude oil for non-deduction of tax at source - payee is a non-resident and payments are made towards purchase of crude oil - HELD THAT:- The contention of the assessee-company that the sum paid is not chargeable to tax in India, therefore, there was no need to deduct tax in the light of the decision of GE Technology Center [2010 (9) TMI 7 - SUPREME COURT] cannot be accepted as there is embedded element of income even in the case of transaction of purchase. The Hon’ble Supermen Court in the case of Transmission Corporation of Assessing Officer Ltd. [1999 (8) TMI 2 - SUPREME COURT] clearly laid down that any sum paid to a non-resident may be income or income hidden or otherwise embedded therein. Therefore, the tax is required to be deducted on the said sum. What would be the income is to be computed on the basis various provisions of the Act including the provisions for computation of income if the payment is a trade receipt. However, we find merit in the submission of the assessee that in the light of second proviso to s. 40(a)(ia) of the Act, the matter requires remission to the AO to examine applicability of second proviso to s. 40(a)(ia) of the Act, which is inserted by the Finance Act, 2012 w.e.f. 01.04.2013 held to be retrospective by the Hon’ble High Court of Delhi. Accordingly, we remit this issue to the file of Assessing Officer to examine the allowability of the claim under the second proviso to s. 40(a)(ia) of the Act. Hence, this ground of appeal filed by the assessee is partly allowed for statistical purposes.
Entitlement to interest on the interest u/s. 244A - HELD THAT:- Hon’ble Supreme Court in the case of Gujarat Fluoro Chemicals [2015 (9) TMI 862 - SUPREME COURT] categorically held that the provisions of s. 244A of the Act provides for interest on refunds under various contingencies and it is only that interest provided for under the statute which may be claimed by the assessee from the Revenue.
No other interest on such statutory interest. Following this decision the Hon’ble Delhi High Court in the case of CIT v. Indian Farmer Fertilizer Co-operative Ltd. [2015 (3) TMI 280 - DELHI HIGH COURT] held that the assessee is not entitled to interest on interest payable u/s. 244A of the Act. However, we must state here that a different law prevails in case of inordinate delay in grant of refunds. It is not the case of the assessee that there is inordinate delay in the grant of refunds. Hence, we do not find any merit in the appeal filed by the assessee is dismissed.
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2019 (3) TMI 1825
Jurisdiction - the case made out by the appellant assessee is that the adjudicating authority acted in error of jurisdiction in passing the order impugned - HELD THAT:- Since the appellant in the present case adopted the scheme under Rule 6(3)(c) of the Rules of 2004 to which the first Explanation to the sub-rule was also attracted, there was an option available to the appellant to either make over the amount that was realised by the appellant by way of excise duty from the appellant’s purchasers or to debit the CENVAT credit obtained by the appellant by the equivalent amount. There is no dispute that the appellant did, in fact, debit the CENVAT credit by the equivalent amount. If the CENVAT credit can be seen as money in the hands of the assessee in some other form, the debiting of the CENVAT credit by an equivalent amount, tantamounts to such amount having made over to the excise authorities or refunded to the excise authorities or the like.
It is evident that the adjudicating authority did not refer to the first Explanation to Rule 6(3) of the said Rules of 2004 while passing the relevant order. In such circumstances, the adjudicating authority committed an error of jurisdiction in failing to appreciate the extent to which the dictum in Unison Metals Limited bound the adjudicating authority - Since such jurisdictional error was amenable to correction within the scope of judicial review exercised in the extraordinary jurisdiction under Article 226 of the Constitution, there was no impediment to receiving the petition or adjudicating on such aspect notwithstanding the appeal from the order of the adjudicating authority not being entertained on the ground of limitation or the resultant appeal being withdrawn since the Commissioner (Appeals) had only acted within the bounds of his authority.
The order of the adjudicating authority of May 7, 2008 is set aside and it is recorded that the excise claim stands satisfied upon the CENVAT credit of equivalent amount having been debited from the CENVAT credit account of the appellant - Appeal allowed.
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2019 (3) TMI 1824
Maintainability of petition - availability of alternative efficacious remedy of appeal - Section 35B of the Central Excise Act, 1944 - Circular No. 1000/7/2015-CX., dated 3-3-2015 - HELD THAT:- We are prima facie inclined to sustain the argument of Learned Counsel for the petitioner that subsequent show cause notice dated 2-5-2017 has been issued on the basis of material discovered in the course of investigation conducted and referred to in earlier show cause notice dated 1-3-2016 issued to M/s. Chandra Protech Ltd., Silvassa. We therefore find that both the show cause notices are based on common evidence relied before different adjudicating authorities by the department, thus, giving rise to possibility of divergent views by two different adjudicating authorities. It is in order to avoid such a situation that the Central Board of Central Excise and Customs, New Delhi, in its wisdom, has rightly provided that in the case of different show cause notices issued on the same issue answerable to different adjudicating authorities, show cause notice involving the same issue shall be adjudicated by the adjudicating authority competent to decide the case involving the highest amount of duty.
Argument of the respondents that request of Petitioner No. 1 for transferring the case to the Additional Director General, Directorate General of Central Excise Intelligence, Delhi Zonal Unit, New Delhi did not fall within the power of the adjudicating authority of the present case i.e. the Commissioner, Central Excise and Service Tax Commissionerate, Alwar, is wholly without any substance as it was always open for him to make a request to the competent authority seeking appropriate order of transfer of the case to the Adjudicating Authority at New Delhi.
Petition allowed - decided in favor of appellant.
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2019 (3) TMI 1823
TP Adjustment - Characterization of distribution fee - Royalty or not? - HELD THAT:- As the order of the ITAT which was followed by the ITAT in the present order has been directed by the Hon’ble Judicial High Court to be heard afresh by the ITAT for the adjudication on the issue, respectfully following the above we also recall this order of the ITAT [2018 (5) TMI 2026 - ITAT MUMBAI]
The registry is directed to fix the case for hearing on the same date on which the earlier appeal for AY 2011-12 is fixed pursuant to the aforesaid direction of the Honourable jurisdictional High Court.
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2019 (3) TMI 1822
Validity of clause (ii) to proviso to Section 54(3) of the CGST Act, 2017 - HELD THAT:- Writ petitioner has sought for interim directions to the 3rd respondent to be taken on record the petitioner’s claim for refund of unutilized credit, as and when filed, arising under Section 54(3) of the TNGST Act by including input service within the meaning of the term Net ITC, pending disposal of the writ petition.
Interim direction as prayed for if granted would amount to granting the main relief itself. hence, prayer sought for in WMP Nos. 9121 & 9123 of 2019 in WP Nos. 8605 & 8608 of 2019, cannot be granted.
Post the instant writ petitions on 15-4-2019.
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2019 (3) TMI 1821
Carry forward the balance additional depreciation to the following years - Whether additional depreciation can be allowed in the next year in case the same cannot be allowed in the earlier year? - HELD THAT:- As decided in own case [2016 (8) TMI 1167 - ITAT CHENNAI] the intention of the legislation is absolutely clear, that the assessee shall be allowed certain additional benefit, which was restricted by the proviso to only half of the same being granted in one assessment year, if certain condition was not fulfilled. But, that, in our considered view, would not restrain the assessee from claiming the balance of the benefit in the subsequent assessment year.
As rightly held, that additional depreciation allowed under Section 32(1)(iia) of the Act is a one time benefit to encourage industrialization, and provisions related to it have to be construed reasonably, liberally and purposively, to make the provision meaningful while granting additional allowance. We are in full agreement with such observations made by the Tribunal.” Respectfully following the above decision of the Tribunal, we direct the Assessing Officer to allow the balance 50% of depreciation i.e., 10% additional depreciation as claimed by the assessee in the following assessment year - Ground raised by the assessee is allowed.
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