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Showing 301 to 320 of 938 Records
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2011 (8) TMI 1085
Computation of Capital Gain - Market value should be considered or not? - Assessee adopted lower price of Rs. 0.26 against the quotation of Bombay stock exchnage. Assessee contended that there is no provision in the Income tax to consider market value for the purpose of computing the capital gain - HELD THAT:- As per section 48, capital gain has to be worked out after reducing the cost of acquisition of capital asset along with cost of improvement thereto and the expenses incurred on transfer of a capital asset from full value of the consideration received or accruing as a result of the transfer of the capital asset. There is no reference to the market value of the capital asset transferred in section 48 or in any other section except section 50C, which is applicable only in case of sale of landed property.
Ratio in the decision of COMMISSIONER OF INCOME TAX-II VERSUS GIRISH DAMJIBHAI PATEL [2011 (3) TMI 1593 - GUJARAT HIGH COURT] is this that for the purpose of working out capital gain, the sale consideration received by the assessee or accrued sale consideration has to be adopted because there is no reference in section 48 to the market value of the asset for the purpose of computing the capital gain. In that judgment, reference has been made to section 45(2) also where it is specified that market value of the asset in question has to be considered where there is conversion by the owner of the capital asset into stock in trade but it was held that provision of section 45(2) are not applicable in the case of sale of capital asset and the same is applicable where there is conversion of capital asset into stock in trade.
Also, in the present case reasons for adoption of lower price of ₹ 0.26 per share against the quotation at Bombay Stock Exchange of ₹ 1.52 per share is also given by assessee. Respectfully following this judgment and considering the facts of present case, we are of the considered opinion that for the computation of capital gain in the present case, the A.O. shall work out the capital gain/capital loss on the basis of consideration received by the assessee and not on the basis of alleged market value of the shares sold by the assessee. We direct the A.O. accordingly -Decision in favour of Assessee.
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2011 (8) TMI 1084
Deduction under section 80-P(2)(a)(ii) - reason pointed out by AO to deny the benefit of cottage industry to the assessee is that the size of the assessee’s establishment is too big that it employed more than 2000 workers; its turnover are crores and crores of rupees and it is a very big co-operate society engaged in producing handloom goods etc. - Held that:- These objections raised by the Assessing Officer on the size and extent of the operation of the assessee-society are legally valid to disqualify the assessee from the category of cottage industry for the purpose of the Income-tax Act, 1961. The Industrial Development and Regulation Act has classified the para meters necessary to qualify something as a cottage industry. The assessee is having the recognized status as a cottage industry under that Act. In normal sense, one should take the said recognition as the conclusive proof that the assessee is a cottage industry. This conclusive statutory proof is further strengthened by the fact that the assessee is working under the umbrella of the Commissioner of Handloom and Textiles, Government of Tamilnadu and obtaining various concessions like subsidies, rebates etc. in promoting the sale of its products. These concessions and facilities are given both by the State and Central Governments to protect the employment and interest of traditional workers and artisans in different fields of cottage industries. Handloom is a traditional industry in India deploying a large number of workers.As a matter of fact, it is to be stated that the Central and State Governments are promoting such societies to develop and expand the area of operation of cottage industries. When the assessee has grown itself into a big institution, it shows that the assessee is in fact, following the policies declared by the State and Central Governments. Since the society is performing well, it is able to expand and provide more and more employment to traditional handloom workers.
We agree with the Commissioner of Income-tax (Appeals) that the assessee-society is entitled for the benefit of exemption under sec.80P(2)(a)(ii) of the Income-tax Act, 1961
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2011 (8) TMI 1083
Depreciation on leasehold land - Depreciable Asset u/s 32 or not? - Assessee said leasehold rights in the land are entitled to depreciation - A.O disagreed on the basis that the Act does not envisage depreciation on land or the leasehold rights over the land, thus disallowed the depreciation - HELD THAT:- The depreciation even under the amended Sec. 32 is allowable only on the restricted categories of tangible/intangible assets which are specifically enumerated in the Section - Under these circumstances, we fully concur with the submission of the assessee that the provisions of the Act cannot be interpreted to mean that leasehold rights granting such type of ownership over land etc., would also qualify as intangible assets for the purpose of depreciation under the Act - Decision against Assessee.
Depreciation on Intangible assets u/s 32(1)(ii) - Assessee was allowed to use brandname for a period of 3 years. The A.O. disallowed the depreciation claim u/s 32(1)(ii) because though the agreement mentions about knowhow, in the Balance sheet of the transferor company it was not disclosed - HELD THAT:- Following the ratio laid down in the case of AMWAY INDIA ENTERPRISES. VERSUS DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE - 1(1), NEW DELHI. [2008 (2) TMI 454 - ITAT DELHI-C], we come to the conclusion that in the present case, since the assessee had purchased the user of brand name, trademark, logo for 3 years, we hold that the expenditure incurred in this regard as valued by the approved valuer is capital expenditure on which the claimed depreciation was allowable. We accordingly direct the A.O to allow the claimed depreciation on the above assets - Decision in favour of Assessee.
Method for determination of ALP in respect of Exports - Assessee adopted comparable Un-controlled price method (CUP) for determining (ALP) in respect of Exports transaction undertaken with the AE. TPO held such method is not applicable for determining ALP, thus adopted Cost Plus Method(CPM) - HELD THAT:- . In our view, the Ld TPO was not justified in comparing the gross margin in export segment vis-à-vis gorss margins in domestic segment. There are various differences in the functions performed and the risk assumed in these two segments and therefore, the same cannot be considered as comparable cases for determining the ALP. There is no marketing risk in the export segment, no risk of bad debts, no product liability risk in export segments whereas the assessee has to bear all these risks in the domestic segment. Thus, we are of the view that it is very difficult to make suitable adjustments for these differences, hence the CMA Method is not appropriate method.
On the basis that the assessee had a Joint Facility Arrangement or a Long Term Buy and Supply Arrangement with its AE, we find that there was no sufficient reasons with the Ld TPO to reject CUP method - Decision in favour of Assessee.
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2011 (8) TMI 1082
The Supreme Court of India in 2011 (8) TMI 1082 - SC Order, dismissed the special leave petition after condoning the delay. The respondent did not have representation during the hearing.
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2011 (8) TMI 1081
Issues Involved:
Assail to order declining to condone delay under Central Excise Act, 1944.
Maintainability of appeal before CESTAT.
Condonation of delay by revisional authority.
Analysis:
1. Assail to Order Declining to Condone Delay:
The judgment pertains to a writ petition challenging an order dated 17th February, 2011, where the revisional authority under the Central Excise Act, 1944 declined to condone the delay, citing it as non-condonable. The petitioner contended that they had approached the CESTAT, and the tribunal dismissed the appeal on 3rd October, 2008, directing the appellant to file a revision before the appropriate authority of the Central Government under Section 35-EE of the Act for condonation of delay if satisfied that the appeal was filed bonafide under proper legal advice. The High Court noted that the period consumed before the tribunal would stand excluded under Section 14 of the Limitation Act, 1963. The Court directed the revisional authority to reconsider the issue of condonation of delay, emphasizing that apart from this direction, no opinion was expressed on the merits of the condonation of delay or on the lis.
2. Maintainability of Appeal before CESTAT:
The tribunal had earlier dismissed the appeal as not maintainable based on a decision of the Larger Bench. The Court did not delve into the merits of the appeal's maintainability but focused on the procedural aspect of directing the appellant to seek revision before the appropriate authority for condonation of delay. The judgment did not address the substantive issues of the appeal but rather dealt with the procedural requirements and the authority's discretion to condone the delay.
3. Condonation of Delay by Revisional Authority:
The main issue before the High Court was the refusal of the revisional authority to condone the delay. The Court allowed the writ petition, setting aside the order of the revisional authority, and remitted the matter for reconsideration on the issue of condonation of delay. The judgment did not delve into the specifics of the delay or the reasons behind it but focused on the procedural aspect of giving the petitioner an opportunity for reconsideration by the revisional authority. The Court did not award any costs in this matter.
In conclusion, the judgment primarily dealt with the procedural aspects of condonation of delay under the Central Excise Act, 1944, and the directions given by the tribunal regarding seeking revision before the appropriate authority. The High Court's decision focused on ensuring that the petitioner had a fair opportunity for reconsideration on the issue of delay condonation, without expressing any opinion on the substantive merits of the case.
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2011 (8) TMI 1080
Enhancement Notice u/s 251(2) - Appellant's income was enhanced without issuing a notice to that effect - HELD THAT:- We find merit in the submissions of the assessee that the learned CIT(A) while enhancing the income of the assessee has not issued the enhancement notice which is statutorily required as per the provisions of sec. 251(2), for which his order has to be set aside.
Revenue Recognition as per AS 7 regarding Percentage Completion Method - Applicable on Developers/ Builders or not? - Deduction u/s 80-IB - As per CIT(A), AS 7 is applicable only for contractors engaged in the civil construction business and the same does not apply to builders/developers - Therefore, CIT (A) didn't grant deduction u/s 80-IB(10) - CIT(A) also held, all risks and rewards in the property sold has been transferred to buyer as per the sale agreement
HELD THAT:- Since the assessee was regularly following the project completion method and has offered the income in the year of completion of project, therefore, we do not find any sound reason as to why the same should be rejected and percentage completion method be followed.
The Bangalore Bench of the Tribunal in the case of PRESTIGE ESTATE PROJECTS (P) LIMITED. VERSUS DEPUTY COMMISSIONER OF INCOME-TAX. [2009 (9) TMI 627 - ITAT BANGALORE-B] and relying on the decision of the Hon'ble Supreme Court in the case of COMMISSIONER OF INCOME TAX, CHENNAI VERSUS M/S BILAHARI INVESTMENT (P) LTD [2008 (2) TMI 23 - SUPREME COURT] has held that "the assessee developer having regularly employed project completion method, which is an accepted method of accounting and the Central Government having not notified AS-7 under sec. 145(2), the AO could not reject the accounts u/s 145(3) on the ground that the assessee has not followed percentage completion method of accounting."
We find merit in the submission of assessee that he has to construct the complete building as per the specifications over a period and receive the purchase consideration from time to time from the purchasers and hand over the possession of the building when the building is fully completed, it is only at that time the risks and rewards are transferred to the purchaser.
Therefore, Revenue authorities are not justified in rejecting the project completion method. In our opinion, merely on the basis of one sample agreement, the learned CIT(A) cannot come to the conclusion that all the risks and rewards in the property sold as per the sale agreement have been transferred to the buyer.
Since the project completion method of the assessee has been accepted by us, the without prejudice ground of the assessee challenging non-granting of deduction u/s 80-IB(10) becomes academic in nature and hence the same is not being adjudicated.
Deduction u/s 80-IB (10) - Maximum Permissible Commercial Area - Commercial area constructed by the assessee works out to 6.75% and is more than 2000 sq. ft. which is more than permissible area i.e 5% of total project area or 2000 sq.ft whichever is less - Therefore, deduction was denied by AO
HELD THAT:- We find that Co-ordinate Bench of the Tribunal in the case of ACIT – CIRCLE -2, KALYAN VERSUS SHRI GIRDHARILAL K. LULLA, SHREE GANESH BUILDERS & OSHO DHARA DEVELOPERS [2011 (5) TMI 867 - ITAT MUMBAI], found that - "the condition of 2,000 sq. ft. or 5 per cent of the project was brought to the statute by the Finance (No. 2) Act, 2004 w.e.f. 1st April, 2005. Prior to this insertion, there was no such condition. Further, in the case of HIRANANDANI AKRUTI JV VERSUS DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE 36, MUMBAI [2010 (3) TMI 876 - ITAT MUMBAI], it was held that "we find the issue stands decided in favour of the assessee by the decision of the Hon'ble jurisdictional High Court in the case of Brahma Associates where the decision of Special Bench of the Tribunal in the case of BRAHMA ASSOCIATES. VERSUS JOINT COMMISSIONER OF INCOME-TAX., DHARESHWAR PROMOTERS AND BUILDERS, TUSHAR DEVELOPERS VS ITO AND KUMAR BEHARY RATHI AND RAVIRAJ KOTHARI PUNJABI ASSOCIATES VS DCIT [2009 (4) TMI 215 - ITAT PUNE] has been upheld according to which the project having commercial area upto 10 per cent of the project is eligible for deduction u/s 80-IB(10). Since admittedly the commercial area in the instant case is less than 10 per cent of the built-up area, therefore, the assessee is entitled to the deduction u/s 80-IB(10) and the learned CIT(A) was not justified in restricting the deduction""
Since the approval in the instant case was obtained on 10th Oct., 2003 i.e. prior to 1st April, 2005, we hold that the amendment as introduced by the Finance Act, 2004 w.e.f. 1st April, 2005 i.e. asst. yr. 2005-06, is not applicable to assessee's case. The project undisputedly was approved before 1st April, 2005 therefore the provisions of the old law will apply. Therefore, the assessee cannot be denied the benefit of deduction under sec. 80-IB(10) for the commercial area exceeding 5 per cent of the built-up area or 2,000 sq. ft. whichever is less - Decision in favour of Assesee
Deduction u/s 80- IB - Purchasers combined more than one flat- Exceeds Permissible Build Up Area - Revenue objected that the assessee has sold two or more than two flats to one party, the combined area of which is more than 1,000 sq. ft
HELD THAT:- We find merit in the submission of assessee that the area of two flats should not be combined even though the two flats were sold to one person as the built-up area of each flat as approved by CIDCO is less than 1,000 sq. ft. as per the approved plan and occupancy certificate received. Also, there is no evidence with the Department that the assessee has sold after combining the two flats together and sold to one party.
Therefore, merely because some of the purchasers have purchased more than one flat and combined the same, the same in our opinion, will not disentitle the assessee to claim the deduction under sec. 80-IB(10)
Further the condition that not more than one residential unit in the housing project is allotted to any person not being an individual has been inserted by the Finance (No. 2) Act, 2009 w.e.f. 1st April, 2010 - Decision in favour of Assessee.
Balcony and Terrace included in "Build- Up Area"u/s 80-IB or not? - As per Revenue, if the terrace area is included, the total built-up area in some of the cases exceeds 1,000 sq. ft - Denied benefits of deduction
HELD THAT:- In the instant case, undisputedly the project was approved on 10th Oct., 2003 i.e. prior to 1st April, 2005, therefore, we are of the opinion, that the Revenue authorities are not justified in including the balcony/terrace in the built-up area so as to deny the benefit of deduction u/s 80-IB(10).
Further, if some of the flats in a housing project exceed the permissible limit, then the benefit of deduction under s. 80-IB(10) has to be granted on pro rata basis and the assessee cannot be denied the exemption. However, since the area of none of the flats exceeds 1,000 sq. ft. after excluding the balcony/terrace, the assessee, in our opinion, has not violated this condition.
We therefore, direct the AO to grant the benefit of deduction.
Taxability of income from wings where Occupancy Certificate were already Received - Assessee submitted though Occupancy Certificate was received by assessee in 2006 but possession was handed over in next year after meeting specifications of purchasers
HELD THAT:- The assessee is right in recognizing the revenue in assessment year when flats were handed over. Further, we also find merit in the submission of the learned counsel for the assessee that since the assessee fulfils all the conditions prescribed under s. 80-IB(10), the entire profit has to be allowed as deduction under sec. 80-IB(10) and it does not affect the computation.
Deemed Dividends u/s 2(22)(e) - Assessee company took unsecured loan from Haware Engineers & Builders (P) Ltd.(HEBPL) - Mrs. Ujjwala Haware holds more than 20% equity capital in assessee company and (HEBPL) - AO treated unsecured loan as receipt of deemed dividend and made addition in income of Assessee
HELD THAT:- It is clear that the assessee is not a registered shareholder in HEBPL nor HEBPL is a registered shareholder in the assessee company. It has been held by the Special Bench of the Tribunal in the case of ASSISTANT COMMISSIONER OF INCOME-TAX. VERSUS BHAUMIK COLOUR (P) LIMITED. [2008 (11) TMI 273 - ITAT BOMBAY-E] that "deemed dividend can be assessed only in the hands of the person who is a shareholder of the lender company and not in the hands of a person other than a shareholder and not in the hands of the borrowing concern in which such shareholder is member or partner having substantial interest."
Since the assessee company is not a shareholder in HEBPL, therefore, merely because Smt. Ujjwal Haware is a shareholder in both the concerns having 20 per cent equity share no amount can be taxed in the hands of the assessee company under sec. 2(22)(e) - Addition made deleted - Decision in favour of Assessee
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2011 (8) TMI 1079
Issues: Challenge to legality and validity of order imposing penalty under Customs Act, 1962 by CESTAT.
Analysis:
The appellant challenged the order dated 9th of July 2009, passed by the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), confirming the penalty of &8377; 2,50,000 imposed by the Commissioner of Customs under Order-in-Original No. 16/2005. The case involved unclaimed and undervalued precious stones imported from M/s. Kalyan Gems Trading Co. The Commissioner of Customs issued show cause notices to the appellant and others, leading to the penalty imposition. The CESTAT, after considering the appeals, set aside penalties on two appellants but confirmed the penalty on the present appellant, Ashok Kumar Khandelwal. The appellant argued insufficient opportunity of hearing and unjustified penalty imposition based on statements of others. However, the CESTAT found the appellant liable under the Customs Act, considering the evidence and nexus between the appellant and the impugned import consignment. The CESTAT's reasoned order, despite the absence of the appellant's counsel during final proceedings, was deemed legal and proper. The appellant failed to raise any substantial question of law, leading to the dismissal of the appeal for lack of merit.
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2011 (8) TMI 1078
Issues Involved:
1. Disallowance u/s 40A(3) for cash payments.
2. Addition u/s 68 for unexplained cash loans.
3. Disallowance u/s 40(a)(ia) for non-deduction of tax at source.
4. Penalty u/s 271E for repayment of loans in cash.
5. Penalty u/s 271D for taking loans in cash.
Summary:
1. Disallowance u/s 40A(3) for cash payments:
The assessee argued that the cash payment of Rs. 74,647 was necessary due to a bank holiday and emergency circumstances. The Tribunal found the reasons sufficient and bona fide, thus deleting the addition of Rs. 14,647 made u/s 40A(3).
2. Addition u/s 68 for unexplained cash loans:
The assessee claimed that the cash loans totaling Rs. 14,10,000 were taken from six creditors due to business exigencies. The Tribunal noted that the assessee provided confirmation letters and affidavits from the creditors, which the Assessing Officer did not verify due to time constraints. The Tribunal held that the affidavits were valid evidence and the assessee had discharged the prima facie burden of proof. Consequently, the addition of Rs. 14,10,000 u/s 68 was deleted.
3. Disallowance u/s 40(a)(ia) for non-deduction of tax at source:
The assessee contended that the disallowance of accounting charges paid to site accountants was incorrect as they were not covered u/s 194J. The Tribunal accepted the assessee's explanation that the provision was misunderstood to be applicable from the next assessment year and deleted the addition.
4. Penalty u/s 271E for repayment of loans in cash:
The assessee explained that the cash repayments were due to urgent business requirements and lack of bank facilities. The Tribunal, considering the extenuating circumstances and the deletion of the quantum addition, held that the penalty was not exigible and deleted the penalty of Rs. 18,95,000 u/s 271E.
5. Penalty u/s 271D for taking loans in cash:
The assessee argued that the cash loans were taken due to urgent business needs and lack of bank facilities. The Tribunal, having accepted the genuineness of the loans in the quantum appeal, found the explanation reasonable and deleted the penalty of Rs. 19,15,000 u/s 271D.
Conclusion:
All the appeals of the assessee were allowed, and the additions and penalties were deleted.
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2011 (8) TMI 1077
Diversion of imported goods - raw silk which was duty free imported goods under Advance Licence Scheme - whether penalty can be imposed based on the statements of co-accused or co-noticee in the absence of any corroborative evidences? - Held that: - penalty cannot be imposed based on the statement of co-accused or co-noticee in the absence of corroborative evidence - appeal dismissed - decided against Revenue.
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2011 (8) TMI 1076
Issues involved: Determination of whether rectified spirit manufactured from duty paid molasses is a final product, emergence of both dutiable and exempted goods during processing of molasses, and applicability of Rule 6(3)(a) of Cenvat Credit Rules, 2004.
Rectified spirit classification: The appeal by the Revenue challenged the order of the Customs, Excise and Service Tax Appellate Tribunal, which allowed the appeal filed by the respondent/assessee regarding the classification of rectified spirit manufactured from duty paid molasses.
Jurisdiction of High Court: The High Court, referring to a previous decision, held that disputes related to duty payable on goods, assessment value, goods classification, exemptions, excisability, manufacturing processes, and tariff item fall under the jurisdiction of the Supreme Court, not the High Court under Section 35G of the Central Excise Act, 1944.
Disposal of appeal: Based on the precedent, the High Court concluded that the appeal was not maintainable under Section 35G and directed the Revenue to file an appeal before the Supreme Court under Section 35L of the Central Excise Act. Consequently, the appeal was disposed of with this direction.
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2011 (8) TMI 1075
What was the effect of possession of land subsequent to notification issued under Section 4(1) of the Land Acquisition Act?
Whether the provisions of Section 11A of the Act would apply to the acquisition under Section 17(1) read with Section 17(4) of the Act?
How the market value should be determined?
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2011 (8) TMI 1074
MODVAT credit - Whether the CESTAT is right in allowing modvat credit of duty paid on inputs Furnace Oil/LSHS used in the manufacture of exempted final products? - Held that: - the issue stands decided in the case of The Commissioner of Central Excise, Tirunelveli v. M/s. Rajapalayam Mills Ltd., Rajapalayam & Another in CMA No. 3442 of 2005, dated 28-4-2009 - following the same credit is allowed - appeal dismissed - decided against Revenue.
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2011 (8) TMI 1073
Whether a party before the District Consumer Forum/State Commission cannot be compelled to engage services of an advocate?
Whether a person under the purported cover of being an “agent” can represent large number of persons before the forums created under the Consumer Protection Act, 1986 (In short the ‘Act’) and the Rules made thereunder?
Whether somebody who is not a legal practitioner, can represent large number of parties before their forums thereby frustrating objects embodied in the Advocates Act?
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2011 (8) TMI 1072
Imposition of penalty u/s 76 & 78 of the FA, 1994 - Service Tax has been paid immediately before the fact of liability was brought to the notice of the assessee - Section 73 of FA - Held that: - Sub-section (3) of Section 73 of the FA, 1994 categorically states, after the payment of service tax and interest is made and the said information is furnished to the authorities, then the authorities shall not serve any notice under sub-section (1) in respect of the amount so paid. Therefore, authorities have no authority to initiate proceedings for recovery of penalty - appeal dismissed - decided against Revenue.
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2011 (8) TMI 1071
Issues involved:
1. Appeal filed by Revenue against order of Customs, Excise and Service Tax Appellate Tribunal.
2. Question of law regarding liability of transport operators to pay tax under Section 73 of the Act.
3. Appeal process from original authority to appellate authority to Tribunal.
4. Interpretation of Sections 70, 71A, and 73 of the Finance Act, 2004.
5. Admissibility of appeal and decision based on previous judgments.
Analysis:
1. The appeal was filed by the Revenue against the order of the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Bangalore, which had dismissed the appeal filed by the Revenue in Final Order No. 210/2008 dated 6-3-2008. The Tribunal confirmed the order passed by the Commissioner (Appeals), leading to the Revenue filing this appeal challenging the decision.
2. The main question in the appeal was whether the transport operators who received notices under Section 73 of the Act were liable to pay tax. The original authority had confirmed a proposal demanding Service Tax and imposed penalties. However, the appellate authority, citing a Supreme Court decision, set aside the order, stating that the show cause notice issued under Section 73 was not maintainable for entities not liable under Section 70 but under Section 71A. The Tribunal upheld this decision, leading to the current appeal.
3. The appeal process involved moving from the original authority to the appellate authority and finally to the Tribunal. The Tribunal's decision to dismiss the Revenue's appeal was based on the interpretation of relevant sections of the Finance Act, 2004, and previous judgments. The appeal raised identical questions of law as another case, which had been disposed of earlier, with a decision against the Revenue.
4. The interpretation of Sections 70, 71A, and 73 of the Finance Act, 2004 was crucial in determining the liability of transport operators to pay tax. The judgments relied on the distinction between the sections to establish the inapplicability of Section 73 to entities falling under Section 71A. This interpretation formed the basis for the decisions made at different stages of the appeal process.
5. The admissibility of the appeal and the decision were influenced by previous judgments and the reasoning applied in those cases. The decision to dismiss the appeal was made after considering the substantial question of law against the Revenue and in favor of the assessee, following the precedent set by earlier judgments. The final order of the High Court was to dismiss the appeal, upholding the decision of the Tribunal.
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2011 (8) TMI 1068
TDS u/s 194C - default of assessee was non furnishing of form 15J alongwith form 15I - Held that:- Assessee did not submit form 15J by 30.06.2006 because he had not received form 15-I. He was of the view that 15-I was received subsequently when the assessee was confronted with the issue of disallowance under section 40(a)(ia). The availability of form15-I, however, at the time of assessment proceedings is not doubted. Therefore, in view of decision in the case of Shri Vipin P. Mehta (2011 (5) TMI 503 - ITAT MUMBAI), Assessing Officer is directed to delete the disallowance
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2011 (8) TMI 1067
Undisclosed Cash Credits u/s 68 - Assessee has received fresh loans during the year from three of its Directors. The AO treated the majority of the loans as genuine but made the addition of the amounts which were deposited in cash in the bank account of the creditors -The assessee submitted an explanation to explain the credits in the accounts of the creditors, but AO dis-believed it - CIT(A) confirmed the addition - HELD THAT:- AO dis-believed part of the deposits which has been received by the assessee through the banking channel but there was cash deposit of similar amount in the accounts of the creditor on or around the date on which the assessee received the amount. Since the assessee has proved the identity and also creditworthiness of these lenders, the assessee cannot be asked to prove the source of the source of the creditors.
There is no evidence on the record which could show that the deposits made in the books of account of the creditors were from the money belonging to the assessee itself. Similarly, the explanation about the source of deposit in the creditors account, if not found to be acceptable, then also the addition cannot be made in the hands of the assessee. It may be subjective to the proceedings for inclusion of the amount as income of the depositors from the undisclosed sources or if they are found benami then the real owner can be brought to the tax - Decision in favour of Assessee.
Unexplained Cash Deposit - There was a cash deposits in the two bank accounts held by the assessee. The assessee submitted an explanation that the amount deposited in the bank accounts are received from the debtors/client and also cash withdrawals from the bank account of the company which have been accounted for in the books of account - CIT(A) considered them as unexplained cash deposits on the basis of small time gap between the withdrawals and corresponding to cash deposits - HELD THAT:- We hold that the assessee was maintaining books of account and the assessee has submitted an explanation that the deposits in the bank account were out of the cash withdrawals from the bank and cash in hand available with the assessee and also from the advances received from the clients entered into the books of account. The ITAT Delhi ‘A’ Bench in the case of ASSISTANT COMMISSIONER OF INCOME-TAX. VERSUS BALDEV RAJ CHARLA AND OTHERS. [2008 (12) TMI 241 - ITAT DELHI-C],held as under simply because there was a time gap, the explanation of the assessee cannot be rejected.
Assessee has to maintain margins with N.S.E. at short notice and for that ready cash in hand has to be maintained. Since the deposits are from the cash balance available to the assessee in its books of account, therefore, in our considered view, no addition is called for. The addition cannot be made or sustained on the basis that there was time gap between withdrawal and deposits. When cash balance is available in cash book maintained no addition can be made. In view of this factual position, we set aside the orders of the authorities - Decision in favour of Assessee.
Interest charged u/s 234D - The question involved was regarding the chargeability of interest u/s 234D in respect of assessment year 2003-04 - HELD THAT:- In the instant case of the assessee, the assessment year involved is 2003-04 under consideration before us, therefore, tax authorities were not justified in charging interest u/s 234D from the assessee and the same is liable to be deleted in view of the decision of Special Bench of the ITAT in the case of INCOME-TAX OFFICER, WARD 11 (1), NEW DELHI. VERSUS EKTA PROMOTERS (P.) LIMITED. [2008 (7) TMI 452 - ITAT DELHI-E]. We order accordingly. - Decision in favour of Assessee.
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2011 (8) TMI 1066
Issues:
1. Date for determination of rate of duty and tariff value of export goods.
2. Applicability of Notification No. 55 (RE-2008) dated 5-11-2008.
3. Proper officer's role in passing the 'let export order.'
Analysis:
Issue 1: The judgment revolves around determining the date for the rate of duty and tariff value of export goods. The Customs Act, 1962, specifically Section 16, mandates that the rate of duty applicable to export goods is the one on the date when the proper officer passes the 'let export order' under Section 51 of the Act. This order is granted after ensuring no prohibition on goods, payment of assessed duty, and other charges. The date of the 'let export order' is crucial for determining the applicable duty rate.
Issue 2: The case involves the applicability of Notification No. 55 (RE-2008) dated 5-11-2008, which classified 'Pusa-Rice 1121' as basmati rice attracting an export duty of &8377; 8,000/- per tonne. Despite the appellant presenting shipping bills on 3-11-2008 when the rice was considered non-basmati, the subsequent notification altered the duty liability. The Tribunal upheld that the duty rate applicable is the one in force on the date of the 'let export order,' which was 5-11-2008 in this case.
Issue 3: The proper officer's role in passing the 'let export order' is pivotal in determining the applicable duty rate. In this case, the Assistant Commissioner examined the goods on 5-11-2008 and issued the 'let export order' on the same day after confirming the rice quality as basmati. The Tribunal emphasized that the duty rate applicable is as per the status of goods on the date of the 'let export order,' thereby dismissing the appellant's argument based on the date of presenting shipping bills.
In conclusion, the Tribunal dismissed the appeal, emphasizing that the duty rate for export goods is determined as per the date of the 'let export order' when the proper officer confirms the goods' details and duty payment. The judgment clarifies the significance of the 'let export order' date in fixing the duty rate, overriding the date of presenting shipping bills.
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2011 (8) TMI 1065
Issues Involved:
1. Confiscation of imported used multi-functional copiers.
2. Imposition of redemption fines and penalties.
3. Jurisdiction of the original authority.
4. Applicability of the Exim Policy to the imported goods.
5. Reduction of redemption fines and penalties by the Commissioner (Appeals).
6. Enhancement of redemption fines and penalties by the department.
Detailed Analysis:
1. Confiscation of Imported Used Multi-Functional Copiers:
The assessees imported used multi-functional copiers classified under 8443 31 00. These consignments were examined by approved chartered engineers, and the values were enhanced based on their certificates. The appellants accepted the classification, enhanced value, and paid duty without dispute. However, the department held that these items were restricted and violated the Exim Policy due to the lack of requisite licenses. Consequently, the original authority confiscated the consignments, allowing redemption on payment of fines and imposing penalties. The Commissioner (Appeals) upheld the confiscation and duty liability but reduced fines and penalties in some cases.
2. Imposition of Redemption Fines and Penalties:
The department sought to enhance the redemption fines and penalties to the levels imposed by the original authority. The learned advocate for the importers argued that the fines and penalties were arbitrary and not based on market enquiry. He cited several decisions where lower fines and penalties were upheld, emphasizing that the imposed fines exceeded the benchmark rate of 10% for redemption fines and 5% for penalties.
3. Jurisdiction of the Original Authority:
The issue of jurisdiction was raised for the first time before the Tribunal. The importers argued that the imported goods did not require a license, referencing the Tribunal's decision in M/s. Shivam International. However, the Tribunal found that the imported items in the present case were different from those in Shivam International, and the claim that the consignments did not require a license was weak. The Tribunal concluded that the authorities did not exceed their jurisdiction and that the importers had submitted to the jurisdiction of the original authority and Commissioner (Appeals).
4. Applicability of the Exim Policy to the Imported Goods:
The Tribunal held that the imported photocopiers with additional facilities were rightly confiscated as they were imported without the requisite licenses under the Exim Policy. The original authority's confiscation orders were upheld by the Commissioner (Appeals), and the Tribunal found no reason to interfere with these orders.
5. Reduction of Redemption Fines and Penalties by the Commissioner (Appeals):
The learned advocate sought further reductions in fines and penalties, citing several decisions where lower fines were sustained. The Tribunal noted that the quantum of redemption fines depends on the facts and circumstances of each case, subject to statutory limits under Section 125 of the Customs Act. The Tribunal found that the redemption fines were not imposed arbitrarily and were based on valuations by approved chartered engineers. However, considering the facts and circumstances, the Tribunal decided to reduce the fines and penalties for certain appellants.
6. Enhancement of Redemption Fines and Penalties by the Department:
The department's appeals for enhancing fines and penalties were rejected. The Commissioner (Appeals) had exercised discretion in reducing fines based on the facts and circumstances, and there was no evidence of arbitrary or mechanical exercise of power. The Tribunal upheld the reductions made by the Commissioner (Appeals) and rejected the department's appeals.
Conclusion:
The Tribunal disposed of the appeals by reducing the redemption fines and penalties for certain appellants while upholding the confiscation orders. The department's appeals for enhancement of fines and penalties were rejected. The Tribunal emphasized the importance of discretion in imposing fines and penalties, considering the facts and circumstances of each case.
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2011 (8) TMI 1064
Enhancement of Redemption fine and penalty - import of restricted goods without valid import licence repeatedly - Digital Multifunctional print and copier machines - Held that: - On careful reading of the explanatory notes under the HSN, we find that the photocopiers are specifically arranged under the head of copying machines and the said head does not include the machines which are capable to perform two or more functions of printing copying or facsimile, etc. There is a clear cut identification and separate head for combination of printers, copying machines or facsimile machines in the HSN explanatory notes. In view of this, it is very clear that photocopier machines are understood as copying machines, while the imported goods fall separately under the category of combinations of printers, copying machines of facsimile machines. It is not in dispute in this case that the imported goods are combination of printers, copying machines and/or facsimile machines. Hence, the “digital multifunction print & copier machines” cannot be termed as photocopiers to attract the bar of Para 2.17 of the FTP.
As the adjudicating authority has found that the machines in question are capable of additional functions, such as printing, etc., when connected to a computer, although confiscation and penalty is to be sustained in the absence of any appeal by the importers against confiscation and penalty, no justification exists for enhancement in the quantum of fine in lieu of confiscation and penalty - Further, there is no finding that the importers had made any payment over and above the invoice value and the value arrived at by the Chartered Engineer is only an estimated value and in his report in the case of imports made by M/s. Digitech Systems, M/s. S.S. Enterprises, M/s. Indicon Copier Services, it is stated that the subject goods are required to be modified/reconditioned for further use. He also stated that the estimated margin of profit varies between 20-25%, that the price of the second-hand goods varies depending upon the market conditions, demand, availability of spares, etc. All these are conditional factors to be kept in view while fixing quantum of fine and penalty and would justify reduction as done by the lower appellate authority.
Also, respondents are first time importers and not repeated offenders so as to justify the enhancement in fine and penalty.
Eenhancement in the quantum of fine and penalty not justified - appeal dismissed - decided against Revenue.
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