Man Power Recruitment and Supply Agency Service - the appellant had supplied/deployed the manpower in the factory premises of its client - Held that: - Since the essence of contract is execution of the assigned work and control over the workman and supervision was always with the appellant, it cannot be said that the activities undertaken by the appellant falls under the category of “Manpower Recruitment and Supply Agency Service”, for levy of service tax - the documents available on records show that the service receiver M/s. Super Iron and Steel Ltd. has paid for the lump sum amount for the contract executed by the appellant. Thus, the appellant cannot be considered as Manpower Recruitment or Supply Agency inasmuch as the deployment of the labour/workforce was for the execution of the job by itself and not by its client - appeal allowed - decided in favor of appellant.
CENVAT credit - input services - outward freight (GTA service) - period April 2005 to March 2008 - Held that: - on interpreting the definition and scope of “input services”, the Hon'ble Gujarat High Court in Parth Poly Wooven Pvt. Ltd`s case [2011 (4) TMI 975 - GUJARAT HIGH COURT] observed that the Service Tax paid on outward freight services tax upto 01.04.2008 would fall within the scope of input services as defined under Rule 2(l) of CCR 2004 - credit allowed - appeal allowed - decided in favor of appellant.
Absolute Confiscation - gold/gold jewellery - penalty - Held that: - There is no findings in the Order that the gold was brought for consideration as carrier - gold is not an item the import of which in any circumstances would danger or be detriment to health, welfare or morals of people as whole, and therefore is liable to be released on payment of redemption fine since it does not cause danger or detriment to health.
An option given to redeem the goods on payment of fine and on payment of applicable rate of duty. As far as the quantum of fine is concerned, I find that there are various judicial pronouncements that purpose of Redemption Fine is to wipe out the margin of profit - redemption fine fixed at ₹ 1,00,000/- - penalty upheld.
Valuation - import from related party in Singapore - validity of SCN - principles of natural justice - Held that: - when there is no evidence to demolish the findings of the authorities below, even though sixteen grounds in appeal have been raised, appellant’s mere statement that the order of the Commissioner (Appeals) is not in accordance with the law is of no significance and unreasoned - There were no material evidence before learned Commissioner (Appeals) suggesting that the appellant has replied to the questionnaire properly furnishing relevant documents.
The appeal is dismissed with a clear observation that there was no denial of natural justice.
Manufacturer or trader - appellant's plea was that it was the trader of the computer parts, Revenue discarded such plea on the basis of oral evidence of the partner as well as the engineer of the appellant firm who stated that the appellant was engaged in the manufacture of computer - Held that: - Evidence gathered by the Revenue from the partners of the appellant as well as the engineer of the appellant and the buyers of the computer supplied by appellant unerringly proved that the appellant was engaged in manufacture of computer without being the trader of the said goods - appeal dismissed - decided against appellant.
Addition invoking the provisions of section 40A(3) - Payment exceeding limit in cash - Held that:- In the instant case, throughout the financial year, the payments have been made in cash exceeding ₹ 20,000 and the same will therefore be covered by the provisions of section 40A(3) of the Act. From perusal of material available on record, the assessee has neither brought on record any such exceptional or unavoidable circumstances to the notice of the Assessing Officer nor the Assessing Officer has recorded any satisfaction in this regard in terms of rule 6DD of the Act. In light of above we are unable to agree to the contention of the Ld. AR. The ground taken by the assessee is thus dismissed.
Addition u/s 40(a)(ia) - Held that:- Respectfully following the Delhi High Court decision in case Ansal Lankmark Township Pvt. Ltd. (2018 (1) TMI 610 - ALLAHABAD HIGH COURT), the second proviso to section 40(a)(ia) of the Act is read as retrospective in nature and will thus be applicable in the instant case. In light of the above discussion, we set aside the matter to the file of the Assessing Officer to examine the claim of the assessee. The AO shall verify whether payees have filed their return of income and whether such return of income includes the amount paid/credited by the assessee without deduction of tax at source and whether due taxes have been paid thereon. In the result, ground of appeal is allowed for statistical purposes.
Addition of excess payment of salary - salary payment for the month of January and March 2011 claimed by the assessee company - Held that:- There is not enough material available on record to decide the subject matter. In the interest of justice, it would be appropriate to set aside the matter to the file of the AO to examine the same afresh. Needless to say, the assessee will provide all relevant information and documents as called for by the AO. In the result, ground taken by the assessee is allowed for statistical purposes.
Benefit of Concessional rate of duty - M-1 Haier Wireless Data Modem-Wi-Fi and battery colo - Held that: - The benefit is available only to wireless data modem cards which specifically have the additional facility of PCMCIA or USB or PCI express ports - the imported goods are not having such facilities.
It is also to be noticed that the concessional rate of duty is available only for modem cards, i.e. parts which can be used for making modems. The imported goods are clearly in the form of complete duty modems which will not be eligible for the benefit of the notification.
Benefit rightly denied - appeal dismissed - decided against appellant.
Smuggling - Betel Nuts - notified goods - Held that: - The nature of the goods, i.e., hey are of foreign make, is based upon the opinion of two local dealers who have not even been named & identified and the report of private laboratory without getting it tested by the Government laboratory - seized goods shall be released in favor of petitioner.
The judgment is from the National Company Law Tribunal, Delhi. The case is part heard in the Principal Bench and will be listed for further hearing on May 30, 2017.
Non prosecution - Held that:- Called out for final hearing. None appears for the Appellant. When the Appeal was called out for final hearing on 25th April 2017, none appeared for the Appellant.
Invoking provision of section 145(3) - veracity and correctness of the books of accounts is substantially accepted by revenue - Held that:- So far as unverified purchases are concerned, by not producing the suppliers the appellant failed to prove purchases of precious and semi precious stones to the extent of ₹ 14,72,455/-. By filing confirmations and copy of accounts, TIN and PAN and RST/CST No. etc at the most the existence of the suppliers could be proved on paper but all other evidences indicate that the suppliers were not having required infrastructures and business of the precious and semi precious stones at the relevant time. The existence of business of the suppliers could not be established beyond doubt. Further as the wages payments were not fully verifiable and therefore application of provisions of section 145(3) is hereby upheld.
The issue is required to be answered in favour of the assessee
Relied upon documents furnished to the petitioner - need for issuing Show cause Notice - Held that:- To say that the person being prosecuted or proceeded against can only be 'shown' such documents, but not provided copies thereof is untenable even on a plain reading of Article 26 (2) of the OECD Model Convention.
As regards the contention that a SCN is not required to be issued, it is obvious that the Department itself recognises the importance of complying with the rules of natural justice and has therefore rightly issued the SCN to the Petitioners, which has to be responded to by them. Indeed, for an effective response, the Petitioners would be required not merely to be 'shown' the material relied upon in the SCN but with copies thereof. This would include their own statements, documents seized during the search and documents gathered from other sources including statements of bank accounts, relied upon against them to be provided copies thereof. Such a requirement inheres in the principles of natural justice and would be applicable even if the statute governing the proceedings does not specifically mandate it.
Thus directed that not later than 1st June, 2017, the Respondents will provide to each of the Petitioners copies of the documents referred to and relied upon in the SCN issued to the Petitioners, including the statements made by the Petitioners, copies of the statements of bank accounts and any other documents relied upon and referred to in the SCN.
Release of Seized goods - Betel Nuts - the aforesaid consignment is not being released and handed over to the petitioner on the ground that Customs Department have directed to keep the same under detention - Held that: - the consignment of goods which has been detained/seized at the behest of the Customs Department shall be released in favour of the petitioner forthwith subject to the petitioner furnishing security other than cash and bank guarantee in respect of the value of ₹ 2,022,435/-, of the goods as disclosed in the tax invoice - petition disposed off.
N.P. determination - rejection of books of accounts - enhancement by CIT-A - Held that:- Enhancement made by the ld. CIT(A), which, in terms of NP rate comes to 11.58% is also unjustified. It is also noted that the AO has not provided any basis of applying 11.50%. He neither referred past history nor any comparable case. Considering the totality of facts & circumstances therefore, we are satisfied that the results declared by the assessee of this year at NP rate of 11% (subject to interest & depreciation) is justified and the addition made by the AO of ₹ 12,15,176/- and also the enhancement of ₹ 1,84,824/- made by the ld. CIT(A), totaling to ₹ 14 Lacs, was not fully justified. Since we have sustained the rejection of books of account and to plug the leakage of Revenue , we sustain addition of ₹ 2.00 lacs only. Thus ground of appeal no. 2 of the assessee is partly allowed.
Depreciation on vehicles and depreciation on mobiles - Held that:- We hold that once the books of account are rejected and income is estimated then there is no further scope for any addition out of various expenses debit in profit and loss account. Therefore, we find no merit in the order of the ld. CIT(A) which is not justified in confirming the disallowance
Disallowance per se u/s. 40(a)(ia) - non deduction of tds - TDS u/s 194C or 194-I - Held that:- There is no evidence on record that assessee has deducted any tax either u/s. 194C or u/s. 194-I. In view of that even though assessee raised the issue in Ground No. 4, whether amounts are covered u/s. 194C or 194-I that dispute is not material for disallowing the amount u/s. 40(a)(ia), as assessee has not made any TDS on the amounts paid. In view of that, the disallowance per se u/s. 40(a)(ia) is warranted. Accordingly, the order of AO is restored - Decided against assessee
Payments made accessing its database and downloading readily available information - whether is in the nature of Royalty under section 9(l)(vi)? - entitled to benefits under India Singapore DTAA - distinction between “copyright” and “copyright article” - Held that:- We agree with the agreement advanced by Ld. Counsel that in order to qualify payment made to Thomson as royalty payment it is necessary to establish that there is a transfer of all or any rights in respect of copyright of literary work. It is observed that assessee is not allowed to exploit the database commercially under the agreement.
Treaty provisions between India and Singapore unambiguously require the use of copyright to be taxed in the source country. In the present case, the payment has been made by assessee for use of “copyrighted material” rather than for the use of copyright.
The distinction between “copyright” and “copyright article” has been well dealt in the case of DIT vs. Infrasoft (2013 (11) TMI 1382 - DELHI HIGH COURT ), wherein it has been held that in a case where assessee gets right to access “copyrighted material”, there is no dispute regarding the same to fall out of definition of term “Royalty”, under India Singapore DTAA. In this case, as assessee has only received access of copyrighted material, there is no dispute about payment falling out of definition of royalty. During course of hearing before us Ld. DR could not demonstrate as to how there was use of copyright and therefore, attempt to bring payments made under explanation 2 clause (iv) to section 9 (1) (vi) of the Act cannot be accepted. - Decided in favour of assessee.
TDS u/s 194C - payments made by Assessee to the distributors for non deduction of tds - nature of work - Held that:- We find even the definition of work as amended by the Finance Act, 2009 w.e.f. 01/10/2009 in explanation to section 194C of the act not applicable to the case of the assessee because the clause (e) of clause (iv) of explanation to section 194C of the act define the work as it includes manufacturing and supplying a products according to the requirement or specification of a customer by using material purchased from such customer. We have noticed that the distributor has no say about the nature and quality of any film for which it has distribution rights. - Decided against revenue
Scheme of Arrangement - Held that:- As the Company Petitions herein have also been transferred from Hon'ble High Court of Delhi due to notification of the provisions of Section 230 to 232 of the Companies Act, 2013 on and from 15.12.2016, we grant two weeks time from the date of this order for the Petitioners to comply in terms of proviso to sub-section (7) of Section 230/proviso to sub-section (3) of Section 232 failing which the Petition shall stand rejected.
Scheme of amalgamation - Certificate from the Company's Auditor in relation to compliance of the accounting standards prescribed under Section 133 - Held that:- In conclusion taking into consideration the provisions of the Companies Act, 2013 this Tribunal, in the absence of the required certificate from the Company's auditor as contemplated under proviso to sub-section (7) of Section 230 as well as proviso to sub-section (3) of Section 232 is not in a position to accord its sanction to the Scheme as proposed amongst the Petitioner Companies and the same is liable to be rejected.
However keeping in mind that the Petition and Scheme was filed before the Hon'ble High Court of Delhi under the erstwhile provisions of the Companies Act, 1956 and the above joint petition being a transferred matter there from, in the interest of justice, an opportunity is being provided to each of the petitioner companies to obtain the Certificate from the respective company's auditor in terms of proviso to sub-section (7) of Section 230 as well as proviso to sub-section (3) of Section 232 within a period of two weeks from the date of this order failing which the petition shall stand rejected. List the matter on 22.5.2017 if compliance is reported.
Condonation of delay - reopening of assessment - Held that:- The condonation petition does not inspire any confidence. It does not specify the name of the employee receiving the impugned order, who would presumably only be a responsible person in the company. In fact, receipt of an important document, as in the instant case, which is served either personally (by hand) or through registered post, is normally done by affixing a stamp bearing the name and address of the receiving organization.
Then, it is not explained as to why the same was not conveyed to the person handling the Income Tax matters in the company, who remains again unspecified, without also stating the date when he left the company’s employment, or to the person who was looking into or assigned the work in relation to the Income Tax matters in his absence. The company is represented by a counsel both before the Assessing Officer (AO) as well as the ld. CIT(A), who could in any case be approached, so that he could certainly fill in the breach, and who is to be in any case approached, as in fact claimed to have been subsequently.
The condonation petition is in vague terms, sans any affidavits by the concerned employees, even whose names are not spelt out, much less by any supporting materials or evidences in relation to the delay. The same thus is clearly a case of laches and, as it would appear, a result of an after-thought. The appeal is accordingly not admitted.
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