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Showing 281 to 300 of 1764 Records
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2016 (11) TMI 1486
CENVAT credit - According to the Revenue, the appellant paid 85% of the bill amount to the TV Channels for booking the space and 15% was paid to M/s. Pressman Advertising & Marketing Ltd.. Hence, they are not entitled to avail the entire amount of credit - Held that: - There is no dispute that the amount of service tax was paid by M/s. Pressman Advertising & Marketing Ltd. under the category of advertising services. In my considered view, as the Revenue had not disputed the payment of service tax by the advertising agency as mentioned in the bill, the jurisdictional officers of the residual unit has no authority to bifurcate the taxable value - denial of credit cannot be sustained - appeal allowed - decided in favor of appellant.
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2016 (11) TMI 1485
CENVAT credit - inward transportation of sugarcane service - Held that: - the issue is no more res integra in terms of the decision of the Hon ble Allahabad High Court in the case of Balrampur Chini Mills Ltd. vs. UOI [2013 (1) TMI 525 - ALLAHABAD HIGH COURT] wherein the Board Circular No.904/24/2009-CX dated 28.10.2009 requiring reversal of credit or payment of amount in terms of Rule 6 stands quashed - appeal allowed - decided in favor of appellant.
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2016 (11) TMI 1484
TDS u/s 195 - withholding of tax - Disallowance u/s 40(a)(i) - expenditure incurred by the assessee as Management services fees on the ground that the assessee failed to deduct tax at source in terms of section 195 - Held that:- Hon’ble Delhi High Court in assessee own case [2016 (8) TMI 166 - DELHI HIGH COURT] has held on the last page that: (i) the payment made by the assessee to Steria France for the management services provided by the latter cannot be taxed as ‘Fees for technical services; and (ii) the said payments are not liable to withholding of tax u/s 195 of the Act. By rendering this judgment, a copy of which has been placed on record, the Hon’ble High court has vacated the Ruling of the AAR on this issue. In the given circumstances, we are of the considered opinion that the ends of justice would meet adequately if the impugned order on this issue is set aside and the matter is restored to the file of AO. We order accordingly and direct him to decide this issue afresh in consonance with the judgment of the Hon’ble Delhi High Court passed in the assessee’s own case.
Deduction u/s 10A computation - AO excluding the three items of expenses claimed by the assessee from 'Export turnover’ alone - Held that:- AO computed deduction u/s 10A by reducing the three expenses from the figure of 'Export turnover’ without correspondingly reducing such amounts from the figure of ‘total turnover’ in the formula given for computing the amount of deduction. This approach, in our considered opinion, is not right. When a particular amount is excluded from the numerator of 'Export turnover’, it has, naturally, to be excluded from the denominator of 'Total turnover’ as well in the computation of deduction u/s 10A. It is so for the reason that 'Total turnover’ always includes 'export turnover’ and if a particular item is not a part of export turnover, that cannot partake the character of total turnover as well.
Excluding proportionate amount of interest income from the total profits in the re-computation of deduction u/s 10A - Held that:- The assessee furnished a calculation at the instance of the AO to bring home its point that no further reduction was warranted from the book profits in the computation of deduction u/s 10A, whose copy has been placed in the paper book. It can be noticed that in computing the Income under the head ‘Profit and gains of business or profession’ (before/after apportionment of interest income to the Noida Unit-IV), the assessee started with Profit before tax as per P& L account at ₹ 31,59,98,024/Rs.39,62,06,943 including interest income of ₹ 91375/Rs.80300294. Thereafter, such Interest income of ₹ 91375/Rs.80300294 has been reduced to arrive at income under the head ‘Profits and gains of business or profession’ at ₹ 34,79,66,065/Rs.34,79,66,065. It is this figure of ₹ 34,79,66,065, which has been taken by the AO before reducing, inter alia, the amount of interest income of ₹ 8,03,00,294. Once the interest income of ₹ 8,03,00,294 does not form part of the business profits eligible for deduction u/s 10A, there can be no question of once again reducing such interest income from the amount of eligible business profits. We, therefore, overturn the impugned order to this extent and direct that the interest income apportioned to the eligible unit be not separately reduced since the same was already excluded by the assessee from the amount of Business profits eligible for deduction u/s 10A.
Not allowing credit for proper amount of advance tax - AR contended that the AO allowed credit of advance tax at ₹ 13.80 crore instead of ₹ 24,51,64,659/-, thereby allowing short credit of ₹ 10,71,64,659/- - Held that:- The AO is directed to verify the assessee’s contention and allow proper amount of credit of advance tax.
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2016 (11) TMI 1483
Denial of deduction under section 10B - Claim of deduction on the amount of refund of CST - Held that:- Special Bench of the Tribunal in the case of Maral Overseas Ltd. (2012 (4) TMI 345 - ITAT INDORE) held that once an income forms part of the business of the eligible undertaking, there is no further mandate in section 10B of the Act to exclude it from the profits eligible for deduction. Quite clearly, the schematic mechanism of section 10B of the Act, especially a joint reading of sub-section (1) and sub-section (4) would show that there is no requirement for the assessee to establish a direct nexus with the business of the undertaking so long as the relevant income forms part of the business of the undertaking.
In the present case, the assessment order itself reveals that the refund of ₹ 2,59,903/- on account of CST has been assessed as a part of the business income of the 100% EOU. Similar is the situation with regard to the interest income of ₹ 68,677/- earned on term deposit with the bank and interest of ₹ 47,441/- earned on deposit with Gujarat Electricity Board. Thus we find that the claim of the assessee for deduction u/s. 10B of the Act is quite justified. In fact, the judgment of the Hon'ble Karnataka High Court in the case of Motrola India Electronics (P) Ltd (2014 (1) TMI 1235 - KARNATAKA HIGH COURT) is directly on the point of allowability of deduction under section 10B of the Act in relation to interest income earned from inter-corporate loans. The Hon’ble High Court has considered the definition of ‘profits derived from export’ contained in sub-section (4) of section 10B of the Act and held that the said income was eligible for deduction contemplated under section 10B(1) of the Act
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2016 (11) TMI 1482
TDS u/s 195 - withholding of tax - Disallowance u/s 40(a)(i) - expenditure incurred by the assessee as Management services fees on the ground that the assessee failed to deduct tax at source in terms of section 195 - Held that:- Hon’ble Delhi High Court in assessee own case [2016 (8) TMI 166 - DELHI HIGH COURT] has held on the last page that: (i) the payment made by the assessee to Steria France for the management services provided by the latter cannot be taxed as ‘Fees for technical services; and (ii) the said payments are not liable to withholding of tax u/s 195 of the Act. By rendering this judgment, a copy of which has been placed on record, the Hon’ble High court has vacated the Ruling of the AAR on this issue. In the given circumstances, we are of the considered opinion that the ends of justice would meet adequately if the impugned order on this issue is set aside and the matter is restored to the file of AO. We order accordingly and direct him to decide this issue afresh in consonance with the judgment of the Hon’ble Delhi High Court passed in the assessee’s own case.
Deduction u/s 10A computation - AO excluding the three items of expenses claimed by the assessee from `Export turnover’ alone - Held that:- AO computed deduction u/s 10A by reducing the three expenses from the figure of `Export turnover’ without correspondingly reducing such amounts from the figure of ‘total turnover’ in the formula given for computing the amount of deduction. This approach, in our considered opinion, is not right. When a particular amount is excluded from the numerator of `Export turnover’, it has, naturally, to be excluded from the denominator of `Total turnover’ as well in the computation of deduction u/s 10A. It is so for the reason that `Total turnover’ always includes `export turnover’ and if a particular item is not a part of export turnover, that cannot partake the character of total turnover as well.
Excluding proportionate amount of interest income from the total profits in the re-computation of deduction u/s 10A - Held that:- In computing the Income under the head `Profit and gains of business or profession’ (before/ after apportionment of interest income to the Noida Unit-IV), the assessee started with Profit before tax as per P& L account at ₹ 15,66,85,756 / ₹ 19,39,06,979 including interest income of ₹ 62,481 / ₹ 3,72,83,704. Thereafter, such Interest income of ₹ 62,481 / ₹ 3,72,83,704 has been reduced to arrive at income under the head `Profits and gains of business or profession’ at ₹ 26,37,50,768 / ₹ 26,37,50,768. It is this figure of ₹ 26,37,50,768, which has been taken by the AO before reducing, inter alia, the amount of interest income of ₹ 3,72,83,704. Once the interest income of ₹ 3,72,83,704 does not form part of the business profits eligible for deduction u/s 10A, there can be no question of once again reducing such interest income from the amount of eligible business profits. We, therefore, overturn the impugned order to this extent and direct that the interest income apportioned to the eligible unit be not separately reduced since the Business profits eligible for deduction u/s 10A were already exclusive of the same. This ground is allowed.
Transfer pricing adjustment in the 'Software development services’ - selection of comparable - Held that:- The assessee provides both software and BPO services to its customers. It reported, inter alia, an international transaction of `Provision of software services’ with the transacted value of ₹ 3,31,67,83,807/-, thus companies functionally dissimilar with that of assessee need to be deselected from final list of comparable.
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2016 (11) TMI 1481
Refund claim - various input services - denial on the ground that the services do not fall within the scope of Port Services - Held that: - irrespective of the taxable service, if the same are provided within the port for exportation of goods, the refund claim can be processed in terms of the N/N. 41/2007 dated 06.10.2007 - refund claim denied by the authorities below on the disputed services namely, inland Haulage charges, Freight outward charges, BL charges and CHA charges is not in conformity with the provisions of the Notification dated 06.10.2007 and to that extent the impugned order is set aside - appeal allowed.
Refund claim - fumigation charges - denial on the ground that the appellant had not produced the written agreement entered with the overseas buyer for providing such service - Held that: - Since the ld. Advocate concedes that the agreement has been entered into and the same is available with the appellant, I am of the view that the matter should go back to the original authority for verification of the agreement entered into by the appellant with its overseas buyer - matter on remand.
Appeal allowed in part and part matter on remand.
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2016 (11) TMI 1480
Security Agency Service - the Respondent, in respect of some of their clients, failed to collect Service Tax and deposit the same to the Govt. Exchequer - intent to evade duty - Held that: - the concurrent finding of fact arrived at by the lower appellate authority that in absence of any plea of deliberate attempt to evade tax, a ground is made out for non-imposition of penalty under section 78 of the Act, is justified and does not suffer from any perversity or arbitrariness so as to call for interference - appeal dismissed - decided against Revenue.
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2016 (11) TMI 1479
CENVAT credit - various input services - common except expenditure incurred on PF/EPF collection and telephone installed at residential complex - Held that: - the denial of cenvat credit along with interest, except telephone services installed at the residences of senior executives and PF/ESI data collection/compilation service, is set aside.
Penalty - Held that: - As the issue involved in this case is of interpretation of eligibility of cenvat credit, imposition of penalty is unwarranted.
Appeal allowed in part.
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2016 (11) TMI 1478
Repairing and maintenance service - Scope of service - Franchisee Service - Held that: - the appellants’ services became taxable under the category of ‘repairing and maintenance service’ w.e.f. 16.06.2005. The definition of ‘repairing and maintenance service’ has been changed w.e.f. 16.06.2005 - Mere delay in payment of service tax, in my opinion, cannot be construed as suppression or mis-declaration of facts with intent to evade payment of tax. Further, the bonafideness of the appellant is evident from the fact of their getting registered with the Service Tax Department soon after change in the scope of definition on repairing and maintenance service and also from the fact that the entire receipt relating to the repair and retreading of tyres during the relevant period, had duly been reflected in their audited balance sheet.
Penalty u/s 77 upheld - penalty u/s 78 set aside - appeal allowed in part.
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2016 (11) TMI 1477
CENVAT credit - Neptha, (Petro grade) - it was alleged that inputs was found short in stock for the period from April, 2003 to March, 2004 and therefore, the said input was not used in the manufacture of finished goods - Held that: - Revenue has not disputed the shortage to the extent of 0.046% and the %age of shortage which is well within the permissible / tolerance limit as per Board circular dt 23.09.2002 - the shortage of inputs is insignificant percentage of storage and handling losses intended for use in the manufacture of final products and Cenvat credit cannot be denied - appeal dismissed - decided against Revenue.
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2016 (11) TMI 1476
Penalty u/s 112 of CA - Fuel Oil, Diesel Oil and Lube Oil from the Engine storeroom of the vessel, in excess of the declaration of vessel stores given on arrival of the vessel at Haldia dock - Held that: - It is surprising to note that in the grounds of appeal it was requested to impose penalty on Mr. Zhang Jian Ming, the Chief Engineer of the vessel who was not made a party in the appeal. Hence, the prayer of the Revenue cannot be acceded to - the adjudicating authority already imposed penalties on the respondents herein under section 112 of the Customs Act, 1962. Hence, there is no merit in these appeals. It may be noted that the appeals of Mr. Chen Gao Sheng and M/s. Devi Shipping Agency filed for setting aside of penalty, have already been dismissed by the Tribunal - appeal dismissed - decided against Revenue.
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2016 (11) TMI 1475
CENVAT credit - whether the appellant is eligible to pay service tax towards inward and outward transportation service under GTA through cenvat credit input service register, under Rule 3 (4) of CCR, 2004 in terms of explanation note to Rule 2 (p) of CCR 2004?
Held that: - the Tribunal in the case of Shree Rajasthan Syntex Ltd. Vs. CCE, Jaipur [2011 (8) TMI 265 - CESTAT, NEW DELHI] held that cenvat credit of service tax on GTA from cenvat a/c is permissible prior to the issue of N/N. 10/2008-CE (NT) - credit allowed - appeal allowed - decided in favor of appellant.
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2016 (11) TMI 1474
CENVAT credit on Additional duty of Customs - removal of imported goods to other unit - Held that: - The appellant had taken a plea of bonafide belief. But they have not produced any material evidence in support of their contention, therefore, the lower authorities rightly invoked Section 11AC of the Act. However, the Adjudicating Authority had not given any option to pay penalty of 25% of duty, as provided under Section 11AC of the Act. The appellant is entitled for an option to pay penalty of 25% of duty within the specified period - appeal allowed in part.
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2016 (11) TMI 1473
Release of goods - provisional assessment for clearance of the goods - there was excess gross weight of 2672.5 Kgs. The Department has neither issued any show cause notice nor allowed the goods to be released provisionally - extension of time limit for seizure of goods - Held that: - in exercise of the powers vested in me under the proviso to Section 110 (2) of the Customs Act, 1962 I hereby extend the period of six months referred to in the main sub-section (2) of the Section 110 ibid by a further period not exceeding six months from the expiry of the initial period of six months from the date of seizure (i.e. upto 13.08.2008) in respect of the goods covered under the Bill of Entry number 332001 dated 20.03.2007 - appeal dismissed.
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2016 (11) TMI 1472
CENVAT credit - duty paying invoices - credit disallowed on the ground that the appellant availed credit on the basis of photo copies of the two invoices as the original and duplicate copy of the invoices were lost - Held that: - on 08.08.2013, the appellants have debited an amount of ₹ 17,768/- and filed a copy of RG-23C for the month of August, 2013, which is not contested by the appellant - there are no element of suppression of facts, fraud, collusion, mis-statement or contravention of any of the provisions of Act or the Rules made therein with intent to evade payment of duty by the appellants - penalty set aside - demand of duty upheld - appeal allowed in part.
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2016 (11) TMI 1471
Validity of assessment order - TNVAT Act - why the petitioner did not give objections to the pre-assessment notice dated 03.11.2015? - Why petitioners have not pursued the appellate remedies as against the impugned orders which have been passed on 08.12.2015? - Held that: - From the averments set out in the affidavit filed in support of these writ petitions nor the submissions made by the learned counsel for the petitioner, there is no proper explanation. This is sufficient to reject the writ petitions - petition dismissed as not maintainable.
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2016 (11) TMI 1470
Claim of deduction under section 80-IB(5) and 80-IE - whether manufacturing of poultry feeds amounts to “manufacture” or not? - Held that:- Every year the scrutiny assessment order was passed u/s 143(3) of the Act from AYs 2005-06 to 2010-11. In this search assessment order passed u/s. 143(3) r.w.s. 153A, AO has disallowed the deduction claimed u/s. 80IB(5)/80IE of the Act without bringing on record any evidence or documents found during the search. The search party did not find any incriminating document or any new document during the search action. In the absence of any new document/incriminating document how the assessee can be denied for deduction U/s 80-IB/80IE. The assessee has submitted a synopsis of manufacturing process of poultry feeds which amounts to ‘manufacture’ considering the above cited judicial precedents cited in para 6.3 above. It is also clear from the details filed with the end product that poultry feeds cannot be reversed back to its original content/material. It is clear that the poultry feed is a distinct product and amounts to ‘manufacture’. It is clear that the process of producing poultry feeds involves the process of manufacturing.
The assessee's eligible undertaking itself was independently carrying out the complete activity i.e. from mixing, grinding till the pelletisation. The raw materials once consumed cannot be reconverted into the same position. Its utility gets changed.
Apart from this, keeping the principle of consistency and the process of manufacturing, the action of the Assessing Officer of making disallowance u/s. 80-IB(5)/80IE of the Act, in respect of manufacturing of poultry feeds is not justified. - Decided in favour of assessee.
Disallowance u/s 14A - Held that:- The assessee had in its books of accounts available capital as per schedule ‘A’ of ₹ 40,00,200/- and reserve and surplus as per schedule ‘B’ of ₹ 26,65,12,677/- (totalling ₹ 27,05,12,877/-). Thus, it is clear that the assessee has enough funds of its own and no borrowed fund seems to have been utilised in order to earn exempted income. Regarding Rule 8D(2) (iii), the assessee has given a calculation for average investments as (41,361,527+38,416,565)/2 =Rs.39,889,046/-. As per assessee the disallowance under Rule 8D(2)(iii) comes at (0.5% of ₹ 39,889,046/-) ₹ 1,99,445. Therefore, total disallowance under [Rule 8D(2) (i)+(ii)+(iii) is ₹ 1,99,445/- less amount paid by the assessee ₹ 1,00,000/-,] ₹ 99,445/-.
MAT - disallowance u/s 14A on the book profit of the assessee determined U/s 115JB - Held that:- The disallowance made U/s 14A is by the Assessing Officer in the impugned assessment order only. Thus, the conditional stipulation applies. The adjustment cannot be made.The important thing to note here is that for the purpose of applicability of section 14A read with Rule 8D, the computation of total income has to be under some heads in chapter - IV of the I.T. Act, 1961. Section 14A clearly says “for the purpose of computing the total income under this chapter, no deduction shall be allowed in respect of expenditure incurred by the assessee in relation to income which does not form part of the total income under this Act”. Whereas the computation of total income u/s 115JB falls under chapter -XIIB of the I.T. Act,1961. Therefore, it is very clear that the disallowance/computation for section 14A read with rule 8D will not be applicable for the purpose of calculation of income u/s 115JB.
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2016 (11) TMI 1469
Addition on account of long term capital loss on sale of Shares - Held that:- As per section 108 of the Companies Act, 1956 off market transactions are permissible by Security Exchange Board of India. All the transactions entered into by the assessee are within the frame work of law and cannot be termed as a colourable device to evade tax rather it is assessee’s right of tax planning which he has used to reduce his tax liability by entering into all the transactions permissible by law. We, therefore, find no reason to interfere with the order of ld. CIT(A). Accordingly this ground of Revenue is dismissed.
Disallowance u/s 14A of the Act r.w.r 8D - Held that:- Certainly provisions of section 14A of the Act can be applied to the assessee only if there is some expenditure incurred by assessee in relation to the income which does not form part of the total income and such expenditure have been claimed by the assessee against the taxable income. In other words if the assessee has been carrying on any business activity and has claimed certain expenditure against the revenue or has claimed expenditure under income from other sources u/s 57 of the Act then Revenue would have a case for calculating the disallowance. However, no such facts are existing in the case of assessee as assessee has not claimed any expenditure against salary income, or income from other sources as verifiable from the computation of income placed at page 10 to 14 of the paper book. We are, therefore, of the view that no disallowance is called for u/s 14A of the Act and no interference is called for in the order of ld. CIT(A).
Assessee should be allowed set off of long term capital loss from sale of shares off market against the long term capital gain on sale of land as they have been entered within the permissible four corners of law and the modus operandi of the assessee is not that of tax evasion but of tax planning.
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2016 (11) TMI 1468
Forfeiture of security deposit without revoking CHA license - Held that: - reliance placed in the decision in the case of V.B. Bhatia & Co [2005 (9) TMI 200 - CESTAT, MUMBAI] which is a majority decision, where it was held that forfeiture of security goes hand in hand with the order-of revokation and if the order of revokatioin of licence cannot be upheld, question of upholding only forfeiture of security does not arise - forfeiture of security deposit set aside - appeal allowed - decided in favor of appellant.
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2016 (11) TMI 1467
Rectification of mistake - Tribunal did not follow the co-ordinate bench decision rendered in the case of Solid Works Corporation (2012 (2) TMI 406 - ITAT MUMBAI) and the same has resulted in a mistake apparent from record - whether misreading of a decision would amount to mistake apparent from record? - whether the payment received by the assessee on sale of computer software is royalty or not as per DTAA between India and USA? -
Held that:- In the case of Solid Works Corporation as relying on the case of DIT Vs. Ericsson AB (2011 (12) TMI 91 - Delhi High Court ) and held that the consideration received by the assessee for sale of software was not royalty.
Misreading of decision of Hon’ble High Court would result in a mistake apparent from record warranting recall of the order. We have noticed that the assessees have submitted that the software purchased by them is specific to run the hardware and hence it was not a case of shrink wrapped software. Further the Hon’ble Delhi High Court has held in the case of Ericsson (supra) that the software would not be royalty, even it was supplied separately. All these points support the case of the assessee that the Tribunal has misread the decision rendered by Hon’ble Delhi High Court in the case of Ericsson (supra). We also notice that the Tribunal has committed an error in not appreciating the facts prevailing in the instant cases. Hence we find merit in the contentions of the assessee that the impugned order of the Tribunal suffers from mistake apparent from record.
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