Liability to pay differential interest under Section 11AB of the Central Excise Act - Price escalation clause - interest for the period when the Central Excise duty was due as per the original invoice, upto the date of payment of balance duty, under the supplementary invoice raised - HELD THAT:- The similar issue was considered by the Hon’ble Supreme court in Steel Authority of India Ltd. Vs. Commissioner of Central Excise, Raipur [2019 (5) TMI 657 - SUPREME COURT] where it was held that the interest was levied to be paid holding that the value of the goods which was only admittedly provisional at the time of clearing the goods is finally determined and it is on the said differential value that admittedly that differential duty is paid. We would think that while the principle that the value of the goods at the time of removal is to reign supreme, in a case where the price is provisional and subject to variation and when it is varied retrospectively it will be the price even at the time of removal. The fact that it is known, later cannot detract from the fact, that the later discovered price would not be value at the time of removal.
Thus, the appellant is liable to pay interest - Learned Counsel states that the amount of pre-deposit made by them, exceeds the amount of interest payable under Section 11AB of the Act. Accordingly, the adjudicating authority are directed to verify the calculation of interest as submitted by the appellant and to refund the excess amount paid by the appellant (if any), with interest as provided under Section 35FF of the Act - appeal dismissed.
CENVAT credit - common inputs - by-product - concentrates used in relation to the said manufacture - non-maintenance of separate inventory and accounts and are using the said input in relation to the manufacture of silver - HELD THAT:- The perusal of this procedure makes it abundantly clear that this pyro silver is being extracted as an unavoidable remnant which apparently and admittedly cleared by the appellants without demand of duty due to specific exemption available to the assessee. The process further clarifies that since no other separate activity or process is being employed by the appellant to extract the product, which has been cleared by them, the extraction of the impugned silver cannot at all be called as the activity of manufacture and therefore, has rightly been impressed upon to be out of the ambit of Section 57 CC of Central Excise Rules, 1944 - The argument of the Department that the unavoidable remnant is a Pyro-silver but the product cleared by the appellant is silver, is not acceptable as it is not coming out of the show cause notice.
It is apparent that whatever emerges from the oxides of zinc and lead during the process of smelting that is the Pyro silver, the same is cleared as it is by the appellant. There is no evidence to the contrary.
Doctrine of merger - Refund of CENVAT Credit - case of appellant is that in the second round under the scope of remand, the order-in-original passed, is hit by the doctrine of merger, as the issue is already decided by the Commissioner, could not have been opened by the adjudicating authority in the second round - HELD THAT:- In the order-in-appeal in the first round, passed by the Commissioner (Appeals), it is crystal clear that the scope of remand was limited to reconciliation of FIRC with the bills of export of service. Accordingly, the order of the court below in the second round is hit by the ‘doctrine of merger’ and accordingly the same is set aside to the extent it have disallowed the appeal for the period from September, 2007 onwards for the financial year 2007-08 - 2008-09.
Further, in view of the finding recorded in the first and second round it is evident that there is no further dispute with regard to reconciliation of FIRC, in view of the categorical finding recorded in para 11 of the impugned order - the appellant is held entitled to refund for the period 2007-08 to 2008-09 - Appeal allowed - decided in favor of appellant.
CENVAT Credit - exempt goods or not - storage tank of (300 KL) installed in the factory premises of the Appellant - denial of credit on the ground that the same was used for storage of medical grade Oxygen which is exempt - HELD THAT:- The documentary evidence has been adduced by the Appellant regarding use of storage tank both for storage of industrial grade oxygen and medical grade oxygen. Therefore, the charge of the Department regarding exclusive use of this tank for storage of goods which exempt from payment of duty is not sustainable - credit allowed.
CENVAT Credit - capital goods - capital goods were not put to use on 01.01.2009 before the Appellant applied for area based exemption on 10.06.2003 - HELD THAT:- Once cenvat credit is admissible at the time of receipt of the capital goods the same cannot be denied for the subsequent use for manufacture of exempted goods. This issue is settled by the decision of Larger Bench of this Tribunal in case of SPENTA INTERNATIONAL LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, THANE [2007 (8) TMI 25 - CESTAT, MUMBAI]. As the issue is settled in the favour of the Appellant by the decision of Larger Bench of this Tribunal followed by other decisions, the appellant is entitled for the credit and the finding of Commissioner in the impugned order is not sustainable - Credit allowed.
CENVAT Credit - capital goods - angles, channels etc., for making structural support for the capital goods - HELD THAT:- The definition of capital goods under Rule 2(a) of Credit Rules includes components, spares and accessories of capital goods by applying the ‘user test’ as held by the Apex Court in COMMISSIONER OF CENTRAL EXCISE, JAIPUR VERSUS M/S RAJASTHAN SPINNING & WEAVING MILLS LTD. [2010 (7) TMI 12 - SUPREME COURT] the credit cannot be denied - Credit allowed.
CENVAT Credit - denial on the ground that the Bills of Entries is not in the name of the Appellant (i.e. unit at Roorkee) but was in the name of Alwar Unit, and thus no valid document under Rule 9(1)(c) of the Credit Rules - HELD THAT:- here is no dispute regarding receipt of the capital goods in the factory of the Appellant and the same has been put to use in the manufacture of dutiable goods the credit cannot be denied on merely technical breach of procedure. The Central Board of Excise and Customs vide above circular as permitted the endorsement of bill of entry when receive from their head office - The goods have been received by the Appellant unit in Roorkee which is not disputed and that too on valid documents endorsed B/Es. In view of above, the impugned order is not legally sustainable and, therefore, set aside.
CENVAT Credit - non production of the documents at the strength of which such credit were availed under the Credit Rules - HELD THAT:- Appellant does not dispute the fact that the documents were not made available to the audit team on account of the fact that the same were old and not traceable. Ld. Counsel as submitted the compilation of such document for our perusal - on perusal of the documents, it is found that the input/capital goods imported or ingeniously procured have been received by the Appellant and the credit has been taken accordingly.
Matter remanded to adjudicating authority to get the document verified, that has been produced and consider the availability of cenvat credit to the Appellant in terms of credit rules and pass an appropriate order - appeal allowed by way of remand.
Additions towards cash payment u/s 69A for purchase of flats - assessee has failed to bring on record the source of cash of ₹ 1 crore paid to the M/s Nish Developers P. Ltd. - CIT(A) granting relief with regards to the additions made in the hands of third party - CIT(A) after considering relevant submissions of the assessee and also taken into account additional evidence filed by the assessee came to the conclusion that when the person who gave statement u/s 132(4), retracted from his admission by filing a sworn affidavit, the AO was erred in reaching to the conclusion that the assessee has paid cash for booking flat - HELD THAT:- AO has relied upon information received from DDIT (Inv.) as per which the CEO and trusted employee of M/s Nish Developers P.Ltd., in the statement recorded during search proceedings have admitted the fact of receiving cash for booking of flats. Except this, the AO has not carried out any independent enquiry to find out the truth in light of statement recorded from CEO of M/s. Nish Developers P.Ltd. towards cash payment made for bookings flats.
The assessee has also filed copy of purchase deed which was executed on 24/12/2013 and market value of the said flat has been determined by the Registrar at ₹ 2,72,20,000/- for the purpose of stamp duty. When the market value of the flat which was agreed to be purchased in 2010 for a purchase of price ₹ 2, 75,00,000/- is determined after more than three years by the Sub Registrar at ₹ 2,72,20,000/-, there is no reason for the AO to make additions towards alleged cash payment only on the basis statement of some persons, more particularly when the persons who gave such statements have been subsequently retracted statement by filing a sworn affidavit. The Ld. CIT(A) after considering relevant facts and also by following the decision of Hon’ble Supreme Court in the case of Shri. Kishanchand Chellaram [1980 (9) TMI 3 - SUPREME COURT] held that the AO has made additions without conducting any independent enquiry and solely on the basis of information received from DDIT (Inv.) without there being any further evidences to support his findings that a sum of ₹ 100 Lacs alleged to have been paid in cash by the assessee. We do not find any error in the findings of CIT(A) - Decided against revenue.
Waiver of penalty u/s 78 and 77(1)(d) of the Finance Act, 1994 - non-payment of service tax - ‘security deposit’/’renting of immovable property’ - HELD THAT:- Originally the show cause notice was issued for an amount of ₹ 2,92,493/-. Subsequently the adjudicating authority has confirmed the demand of ₹ 1,16,381/- and ₹ 36,479/- which is quite less than the original demand. On perusal of the records it is observed that the appellant has paid the entire demand much before the issuance of the show cause notice. Interest has also been deposited.
The issue involved in this appeal is no more res integra in view of the decision of the Tribunal in the case of M/S R.K. REFRESHMENT AND ENTERPRISES (P) LTD, M/S R.K. ASSOCIATES AND HOTELIERS (P) LTD VERSUS CCE RAIPUR [2018 (2) TMI 1412 - CESTAT NEW DELHI] where it was held that though the said sub-section was basically with reference to renting of immovable property service, the main Section 80 is still available to the appellant considering that the tax liability under renting of immovable service was subject matter of various disputes, amendments, including retrospective amendment. As such, the penalty imposed on this service is waived invoking provisions of Section 80.
The penalties imposed under section 78 and 77(1)(d) are set aside - Appeal allowed - decided in favor of appellant.
CENVAT Credit - air ticket, and travel agency services as availed by the Appellant - penalty under renting of immovable property - HELD THAT:- The issue of penalty under renting of immovable property service, it is found that the present issue involved in this appeal is no more res-integra in view of the decision of the Tribunal in the case of M/S R.K. REFRESHMENT AND ENTERPRISES (P) LTD, M/S R.K. ASSOCIATES AND HOTELIERS (P) LTD VERSUS CCE RAIPUR [2018 (2) TMI 1412 - CESTAT NEW DELHI] where it was held that though the said sub-section was basically with reference to renting of immovable property service, the main Section 80 is still available to the appellant considering that the tax liability under renting of immovable service was subject matter of various disputes, amendments, including retrospective amendment. As such, the penalty imposed on this service is waived invoking provisions of Section 80 - thus, the penalty is set aside.
CENVAT Credit - travel expenses - HELD THAT:- The actual amount of CENVAT Credit was ₹ 21,552/- and the credits were taken basically against ‘Travelling Agency Service’ and such services were basically used/consumed by an individual in personal capacity and were not related with the main business activity of the assessee either on the count of manufacturing activity or provision of output service. Such services cannot be included to be ‘input services’ within the meaning of Rule 2(1) of CENVAT Credit Rules, 2004.
The assessee had reversed / paid CENVAT Credit to the extent of ₹ 566/- alongwith interest of ₹ 111/- vide entry serial No. 412 dated 01.07.2013, i.e. before issuance of the Show Cause Notice, against such wrong availment and utilization of total credit of ₹ 21,552/- - The assessee were rather agreeing to the contentions of audit as well as demands raised in the Show Cause Notice. On this count, the differential CENVAT Credit to the tune of ₹ 21,522/- was inadmissible, recoverable from the assessee.
Disallowance of expenditure u/s 14A - AO held that earning exempt income involves so many administrative expenses under several heads and it is not possible to believe that the assessee did not incur any expenditure whatsoever - HELD THAT:- As submitted by the ld. AR that for the earlier Assessment Year 2002-03, under similar set of circumstances, ld. AO disallowed 25% of the dividend income u/s 14A of the Act and it was directed to be reassessed by ld. CIT(A) by applying Rule 8D of the Rules but the Tribunal remanded the matter to the file of ld. AO for reconsideration taking into account the decision of the Hon’ble Delhi High Court in the case of Maxopp Investment Ltd. [2011 (11) TMI 267 - DELHI HIGH COURT].
We find such an order Tribunal reached a conclusion that the matter needs to be set aside to the file of the AO for reconsideration keeping in mind the decision of the Hon’ble Delhi High Court in the case of Maxopp. Investment Ltd. (supra). While respectfully following the same, we remand the issue to the file of the ld. AO to comply with the said directions.
Interest income - Income from other sources - on ICD, FD etc, interest on bill discounting to the tune and interest on employees’ loans and advances - HELD THAT:- As deposits for the purpose of obtaining the bank guarantee etc have nexus with the conduct of business by the assessee and are allowable, subject to the verification of such business nexus, as expenditure. However, we do not find any such probability or convincing reasons given by the assessee in respect of the ICD’s. We are, therefore, of the considered opinion that the treatment of interest derived from ICDs cannot be taken as business income and the learned Assessing Officer rightly treated it as income from other sources.
In respect of the interest on FD stands on a different footing and if the assessee is able to establish the nexus between the FD and the business, the interest derived from the transaction has to be treated as business income for the purpose of deduction under section 80 HHC of the Act. We, therefore, set aside the 7 findings of the Ld. CIT(A) on this issue and remand the same to the file of learned Assessing Officer for verification of the nexus between the FD and the business and if such nexus is established, to consider the same as business income for the purpose of Section 80 HHC of the Act.
Since the assessee had given the surplus funds to employees as a measure of incentive/perquisite, such an activity comprises of the business activity; that the source of such income is not activity of giving loan, but the benefit extended to 9 employees engaged in the business. The Tribunal observed that the first degree nexus of such income is the eligible business carried on by the assessee.
Since facts are similar, and in the absence of any explanation as to why and how the decision under similar circumstances in assessee’s own case has no application to the facts of this year, we find it difficult to take a different view and while respectfully following the reasoning given by the Tribunal [2017 (1) TMI 266 - ITAT DELHI], we conclude that the interest derived by the assessee on the loans provided to employees is inextricably linked to the business of the assessee and constitute business income for consideration under section 80 HHC of the Act.
Deduction claimed u/s 80IA in respect of captive power generating unit of the assessee situated at Gurgaon - We hold this issue in favour of the assessee and answer that the disallowance made by the ld. AO u/s 80IA of the Act in relation to the generation of power cannot be sustained. We accordingly allow this ground.
Transfer Price adjustment on account of international transaction of import of components - HELD THAT:- We find that out of the total purchases of ₹ 20,46,58,682/- from the domestic market, the assessee imported from associated enterprises the components worth ₹ 22,83,666/- which does not constitute any significant portion thereof. We, therefore, having regard to the directions given by the Tribunal for earlier years and the approach adopted by the ld. AO while deleting the addition on this score, hold that the transfer pricing adjustment to the tune of ₹ 7,05,334/- made by the TPO cannot be sustained and accordingly while allowing the ground delete the same.
Expenditure incurred on account of Royalty, model fee and provision for warranty in respect of the sales - HELD THAT:- As the issue has been consistently decided in favour of the assessee for more than 13 years and also upheld by the Hon’ble jurisdictional High Court, the same approach has to be adopted in this case also and, therefore, while respectfully following the consistent view taken by the Tribunal and approved by the Hon’ble High Court, we uphold the finding of the learned CIT(A).
Disallowance of model fee at 25% paid during the year on the ground of it being capital in nature - as following the appellate orders for the earlier years, ld. CIT(A) deleted the same - HELD THAT:- In assessee’s own case for the AY 1996-97, the Tribunal took the view that the model fee paid by the assessee to Honda is allowable u/s 37(1) of the Act as revenue expenditure on the ground that the 16 payment was only for right to use the technology know-how and there was no ownership of the intellectual property which remains to be with the Honda. This view of the Tribunal was challenged by the revenue but the Hon’ble Delhi High Court decline to entertain the appeal and SLP against the same was also dismissed.
As brought to our notice that subsequently the same view is upheld by the Tribunal and the Hon’ble High Court affirmed the same. Hon’ble Supreme Court also declined to interfere with the same. By latest order [2019 (4) TMI 1509 - ITAT DELHI] for the Asstt. Year 2009-10, the Tribunal reaffirmed the said view. For quite a long time there is consistency in the view taken by the Tribunal as upheld by the Hon’ble jurisdictional High Court and Hon’ble Apex court. Therefore, the issue is no longer res integra and is in favour of the assessee.
Disallowance on account of provision for warranty made in respect of sales during the year - HELD THAT:- For the Asstt. Year 2002-03, while following the decision of the Hon’ble Apex Court in the case of Rotork Controls India Ltd. vs CIT,[2009 (5) TMI 16 - SUPREME COURT], the Tribunal deleted the addition and subsequently, similar addition was disallowed in respect of Asstt. Years 1999-2000, 1996-97, 1997-98, 2006-07, 2007-08 to 2009-10 by several orders of the Tribunal, which are to be found place in the paper book. On a reading of these orders, we are of the considered opinion that the issue is fairly settled and there is no need to reopen the same for taking fresh view. Learned CIT(A) deleted the addition by following the appellate orders and, therefore, we do not find any perversity in such finding. We uphold the order of ld. CIT(A).
Disallowance of bad debt on account of “Bad Debt- NSEL" - whether claims were premature as final deficiencies in amount could not be arrived at as contemplated u/s 36(2)(ii) of the Act? - CIT (A) deleted the disallowance made by the AO - HELD THAT:- CIT (A) has based his findings on the judgment of the Hon’ble Supreme Court in the case of TRF Ltd.[2010 (2) TMI 211 - SUPREME COURT] has held that it is enough if the bad debt is written off as irrecoverable in the accounts of the assessee. The Ld. CIT (A) has further referred the Circular No. 12/2016 dated 30.05.2016 in which it has been mentioned that in view of the judgment of TRF Ltd. vs. CIT, claim for debt or part thereof in any previous year shall be admissible u/s 36(1)(vii) of the Act, if it is written off as irrecoverable in the books of account of the assessee for that previous year and it fulfills the conditions of stipulated in sub-section 2 of section 36(2)
CIT (A) has specifically mentioned that it is not the case of revenue that any of the conditions either u/s 36(1)(vii) or section 36(2) of the Act are not fulfilled by the assessee. Admittedly, the assessee has written off the bad debts in its books of account. In the light of the aforesaid facts, we do not find any legal or factual infirmity in the order passed by the Ld. CIT (A) to interfere with the same. Hence, we dismiss the sole ground of appeal of the revenue and uphold the findings of the Ld. CIT (A). Accordingly, we direct the AO to delete the addition. - Decided in favour of assessee.
The Supreme Court of India ordered to issue notice as the High Court was not justified in quashing the criminal proceedings, suggesting they could have been kept in abeyance until the matter is disposed of by the Appellate Authority/Tribunal (CESTAT).
Assessment of trust - Brought forward of excess application and carry forward of excess application of income of current year to subsequent years - HELD THAT:- Excess application of a charitable fund in a particular year is allowed to be carried forwarded to subsequent year for set off against any shortfall in spending in that year under the provisions of fact - expenses incurred by the trust in earlier years against the income earned by the trust in subsequent year will have to be regarded as application of income of trust.
Identical issue has been considered by Hon’ble Karnataka High Court in case of CIT (E) vs Ohio University Christ College [2018 (11) TMI 1055 - KARNATAKA HIGH COURT] wherein allowed claim of assessee - Decided against revenue.
Ex–parte order by CIT-A - non–appearance on the date of hearing of appeal, the learned Authorised Representative submitted, when the appeal was called for hearing on 11th October 2018, he was appearing before another Bench of the Tribunal - HELD THAT:- On a perusal of the material on record, it is seen that for the first time the appeal was fixed for hearing on 10th October 2018, and on the said date, at the request of the assessee, hearing of the appeal was adjourned to 11th October 2018. However, on 11th October 2018, since no one appeared for the assessee when the appeal wascalled for hearing, the Bench proceeded to decide the appeal ex–parte. After considering the submissions of the learned Authorised Representative that when the appeal was called for hearing, he was busy in another Bench and also taking note of the fact that the assessee has not taken many adjournments and the appeal was disposed of on the second date of hearing itself, I am inclined to recall the order dated 18th October 2018, and restore the appeal to its original position. The Registry is directed to fix the appeal for hearing before the assigned Bench in due course. Notice of hearing intimating fresh date should be issued to both the parties.
TP Adjustment - selection of MAM - most appropriate method for benchmarking import of Crystal goods and Crystal components - In respect of the Assessment Years 2007-08 to 2009-10, Ld. CIT(A) held that RPM is the most appropriate method for benchmarking the activities of the assessee in the import of Crystal and Crystal components - Bright Line Test (BLT) is sought to be applied - HELD THAT:- This Tribunal in assessee’s own case for the Assessment Year 2004-05 [2017 (2) TMI 691 - ITAT DELHI] direct the AO/TPO to determine the ALP of the transaction of Import of Crystal goods and Crystal components, firstly, by applying the RPM. It is hereby clarified that the manner of application of RPM is open at large before the TPO who will decide it in the way he thinks expedient. Contention of the ld. AR that the comparables should be restricted to the ten companies which it cited before the ld. CIT(A) or twenty companies which the ld. CIT(A) suomotu chose for making TP adjustment on account of AMP expenses, cannot be accepted. We do not intend to eclipse the power of the TPO by restricting the exercise, which he has yet to undertake for the first time. It is further clarified that if due to one reason or the other as discussed above, such a method cannot be applied, then, resort should be made to the TNMM in the way enshrined in rule 10B(1)(e) of IT Rules, 1962, taking care of the infirmities discussed above in the earlier calculation made by the TPO
Addition made on account of Software and Electronic Data Processing (“EDP”) charges - assessee incurred expenses towards IT support services which were categorised under Software and Electronic Data Processing (“EDP”) charges - HELD THAT:- We find that the expenditure being incurred in nature year after year, and cannot be placed in the category of capital expenditure - services are basic business operations of the company through the organised and maintained IT support systems. Further the sample copies of the invoices show that these services are charged on the basis of uses at a predefined hourly usage rates and these expenses are incurred for the services in the nature of operational IT services such as browsing charges, usage of Swarovski distribution system software for facilitating the activities such as customer invoicing, inventory management etc services of laptops and PCs etc which are helpful to the assessee to perform the basic business operations.
It is not the case of the Revenue that these expenses were made for purchase of any software for the purpose of making enhancement to any profit-making operations of the company constituting the capital asset. It could further be found from the record that no fixed amount expenses are incurred. As relying on M/S ASAHI INDIA SAFETY GLASS LTD. [2011 (11) TMI 2 - DELHI HIGH COURT] Software and Electronic Data Processing (“EDP”) charges incurred by the assessee are Revenue in nature and the assessee is entitled to claim the same as allowable deduction. We, therefore, delete the addition made on this account.
Nature of expenditure - Expenditure on media advertisements, PR agency fees, communication material and others - HELD THAT:- This Tribunal in assessee’s own case for the Assessment Year 2004-05 [2017 (2) TMI 691 - ITAT DELHI]held that the entire expenditure on publicity and advertisement is allowable fully in the year in which it is incurred and a similar view is adopted for the Assessment Year 2002-03, 2004-05 [2017 (2) TMI 1388 - ITAT DELHI] - Thus assessee had rightly claimed deduction of advertisement and publicity expenditure as Revenue expenditure.
Bogus LTCG - penny stock purchases - Eligibility of deduction under Section 10(38) - HELD THAT:- It is not brought on record how the assessee is involved in promoting the penny stock company and how the assessee involved in inflating the shares of the company. Moreover, the copy of the investigation report said to be received from the Investigation Wing of the Department at Kolkata was not furnished to the assessee. On identical circumstances, this Tribunal in the case of Kanhaiyalal & Sons (HUF) [2019 (2) TMI 1640 - ITAT CHENNAI] has remitted back the matter to the file of the Assessing Officer for reconsideration.
In view of the above, this Tribunal is of the considered opinion that the matter needs to be re-examined by the Assessing Officer. Accordingly, orders of both the authorities below are set aside and the issue raised by the assessee with regard to deduction under Section 10(38) of the Act is remitted back to the file of the Assessing Officer - Appeal filed by the assessee is allowed for statistical purposes.
Income from house property - ALV of the vacant flat - municipal ratable value Adoption - HELD THAT:- In the case of Harsh Jain [2015 (7) TMI 1253 - ITAT MUMBAI] The coordinate bench has taken the similar view in which the municipal ratable value has taken into consideration for the deemed income from the house property. The said decision has also been upheld by Hon’ble Bombay High Court in the case of PCIT Vs. Harsh Jain [2019 (2) TMI 537 - BOMBAY HIGH COURT]
Therefore, in view of the said circumstances, we are of the view that the ALV of the vacant flat has to be determined on the basis of municipal ratable value for the purpose of assessing income under the house property. Accordingly, we decide this issue in favour of the assessee against the revenue.
Characterization of income - treatment of subsidy received by assessee - capital or revenue receipt - HELD THAT:- The scheme of State of Jharkhand, wherein State Policy for Mega Projects was announced vide Notification No.2371 i.e. Jharkhand Mega Project Incentive Rules, 2005. The said scheme was promulgated to boost industrial development in the State of Jharkhand for setting up new industrial units or industrial units undertaking expansion, diversification and modernization on or after 15.11.2000.
The purpose of above scheme was to establish new units in Jharkhand and hence purpose of scheme was in capital field i.e. to establish manufacturing unit in Jharkhand. Merely because the incentives were received in the form of sales tax waiver, would not change the purpose of grant of subsidy.
The assessee has also received subsidy under the Maharashtra PSI 2007 Scheme for Jejuri plant. In view thereof, where the purpose of subsidy was to establish units, was in capital field, hence the subsidy received is capital receipt. We accordingly, reject the grounds of appeal raised by Revenue.
Permission for withdrawal of Advance Ruling Application - Levy of CGST and SGST or IGST - Clinical Research services provided by them to entities located outside India - export of service under section 2(6) of the IGST Act, 2017 - HELD THAT:- In view of the withdrawal letter of M/s. Cliantha Research Limited, the application of the party is dismissed as withdrawn.
TP Adjustment - determination of ALP was referred to by the AO, accepted TNMM as the MAM and also used the same PLI for comparison i.e., OP/TC - HELD THAT:- Companies functionally dissimilar with that of assessee need to be deselected from final list.
Negative working capital adjustment - HELD THAT:- There is no need for making any negative working capital adjustment when assessee does not carry any working capital risk. In fact, TPO should have done necessary working capital adjustment to the profits of the selected comparables so as to make them comparable to the assessee. In view of this, we direct the TPO not to make negative working capital adjustment.
It is undisputed that the Assessee is also a captive service provider such as the Assessee in the case decided by the ITAT Hyderabad Bench and therefore making a negative working capital adjustment without appreciating the fact that the company does not bear any working capital risks, was not correct.
Evasion of service tax on account of non-payment of service tax on royalty - HELD THAT:- The special leave petitions are dismissed both on the ground of delay and merits.
Pending interlocutory applications, if any, stand disposed of.
Assessment u/s 153A - denial of natural justice - Revenue Authorities have not provided the statement based on which addition is made and not providing opportunity of cross examination - HELD THAT:- Keeping in view of the assessment order passed by the AO, we have not seen from the proceedings of the AO regarding providing any statement of Sh. Pradeep Kumar Jindal to the assessee and providing opportunity of cross examination of Sh. Pradeep Kumar Jindal to the assessee meaning thereby the Revenue Authorities have not provided the statement of Sh. Pradeep Kumar Jindal to the assessee and also did not provide the opportunity of cross examination of Sh. Pradeep Kumar Jindal, on which basis the addition has been made and the provisions of Section 153A of the Act have been wrongly applied in the case of the assessee. Therefore, we do not find any cogency in the arguments advanced by the Ld. CIT(DR) and the case laws cited by him in support of his contention are not applicable here. - Decided in favour of assessee.
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