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Showing 321 to 340 of 383 Records
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2012 (1) TMI 108
Duty demand - Assessee engaged in the manufacture of computers and was selling them in the name of M/s. Com Trade Agency and he was receiving the bills, receipts and quotations in the name of M/s. Com Trade Agency using the blank letter heads found in the office belonging to M/s. Com Trade Agency - Held that:- Commissioner (Appeals) has recorded a finding that the cheque book of M/s. Com Trade Agency was recovered from the premises of appellant when the same does not find mention in the panchnama at all. Therefore, there is no basis for this finding. Further, no investigation has been carried out with the bank to find out who had opened account in the name of M/s. Com Trade Agency and who operated this account, especially in view of the fact that both the statements of Shri Rajesh Manglani were retracted.
Signatures will obviously not tally with the actual signature of Shri Rajesh Manglani, which he has put in the statement etc. Findings of both the lower authorities are not clear as to which signature tallies with which and there is no clarity as to who issued the bills in the name of M/s. Com Trade Agency. In this case also, the efforts made by the officers in recording statement of the buyers would have been of great help if the buyers were to say that they had dealt with M/s. Siddhi Computers or Shri Rajesh Manglani. None of 6 buyers whose statements have been recorded have stated that they had dealt with Shri Rajesh Manglani or they had purchased the computers from M/s. Siddhi Computers. All of them have admitted that they purchased computers from M/s. Com Trade Agency. These statements, in reality, go totally against the case of the Department since the finding is that the M/s. Com Trade Agency was a dummy unit, whereas the buyers are saying that they have purchased the computers from M/s. Com Trade Agency. There is no evidence of any efforts having been made to trace Shri Harish Soni, either by the Department or by the party - Department has not been able to make out a case against the appellant as regards manufacture of computers and clearance of the same - Decided in favour of assessee.
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2012 (1) TMI 107
Waiver of pre deposit - Assesse manufacturer of wiring harness which are classifiable under heading 8544 30 30 - Held that:- Explanation to Section 2(d) is to the effect that excisable goods would include any article, material or substance which is capable of being bought and sold for a consideration and such goods shall be deemed to be marketable. As such, it is clear that said explanation relates to marketability aspect of the product - in any case waste and scrap arising in the appellants factory would not prima facie get covered under 8548 90 00 but may prima facie get covered under Heading 7404 00 12. Inasmuch as the show cause notice proposes classification of the waste and scrap under Heading 8548 90 00 with which we prima facie do not agree, we find that the appellants have earned their stay - Stay granted.
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2012 (1) TMI 106
Duty demand - Recovery of the credit in under Rule 14 of the CENVAT Credit Rules, 2004 read with the proviso to Section 11A(1) of the Central Excise Act - Bar of limitation - Held that:- Rule 3(5) provides that inputs or capital goods, on which CENVAT credit has been taken, can be removed as such from the factory of the manufacturer of the final products on payment of an amount equal to the credit availed thereon. Such removal is required to be made under an invoice referred to in Rule 9 of the Central Excise Rules, 2002. If these provisions are carefully perused, it would become clear that the removal of goods envisaged is a removal for good just like the removal of an excisable final product. A case of removal of input or capital goods to a job worker for further processing, testing, repair, re-conditioning or any other purpose is governed by Rule 4(5)(a) of the CENVAT Credit Rules, 2004.
If the job-worked goods are not received back in the factory of the manufacturer of final product within such period, the manufacturer of final product shall pay an amount equivalent to the CENVAT credit attributable to the input or capital goods, by debiting the amount in the CENVAT account or otherwise. Rule 4(5)(a) allows CENVAT credit on the input to be taken by the manufacturer of final product before removal of the input to the job worker. It was this right which was exercised by the present appellant and the same is not assailable - manufacturer of final product is entitled not only to avail credit on the input supplied to their job worker but also to take credit of the duty paid on the intermediate product by the job worker - Following decision of VENLON POLYESTER FILM LTD. Versus COMMR. OF C. EX., BANGALORE-III [2007 (9) TMI 354 - HIGH COURT OF KARNATAKA] - Decided in favour of assessee.
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2012 (1) TMI 105
Whether it would not be unreasonable to entertain the belief that the arbitrator appointed by the respondent would not be independent?
Whether the appointment of Mr. Satyanarayana cannot pass the test under Section 11(8) of the Arbitration and Conciliation Act, 1996?
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2012 (1) TMI 104
Non-compete fee agreement - Held that:- We are not in agreement with the arguments of the assessee that non-compete fee is an intangible asset to which provisions of section 32(1)(ii) of the Act are applicable. Therefore, in our considered opinion, the depreciation cannot be allowed on amount of non-compete fee. We accordingly dismiss this contention of the assessee.
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2012 (1) TMI 103
Capital expenditure vis-a-vis revenue expenditure - nature of expenditure - replacement cost - assessee has replaced the mechanical yarn clearers with the electronic yarn clearer - Held that:- The replacement has not increased the volume of production of the assessee-company. Strictly speaking, the yarn clearers do not directly take part in deciding the quantum of production. The yarn clearers make the yarn compatible for further treatment. Therefore, yarn clearer is a servicing system within the manufacturing operation carried out by the assessee-company. Therefore, it comes under the category of current repairs, as if a fused bulb is replaced by a new electric bulb. The existing situation is protected and no new benefit is created.
Entitlement to be deducted under section 80-IA - captive consumption of power generated - Held that:- Captive consumption of the power generated by the assessee from its own power plant would enable the respondent/ assessee to drive profit and gains by working out the cost of such consumption of power inasmuch as the assessee is able to save to that extent which would certainly be covered by section 80-IA(1). When such will be the outcome out of own consumption of the power generated and gained by the assessee by setting up its own power plant, we do not find any lack of merit in the claim of the respondent/assessee when it claimed by relying upon section 80-IA(1) of the Income-tax Act by way of deduction of the value of such units of power consumed by its own plant by way of profit and gains for the relevant assessment years.
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2012 (1) TMI 102
Issues: The only issue raised in the present appeal is against the levy of penalty u/s 271(1)(c) of the Income-tax Act, 1961.
Summary:
Issue: Penalty u/s 271(1)(c) of the Act
The assessee declared income from the sale of land and claimed exemption u/s 54F for investing in a new residential house. The Assessing Officer found discrepancies in the claimed exemption amount. The penalty proceedings u/s 271(1)(c) were initiated, and the penalty was levied. The Commissioner of Income-tax (Appeals) upheld the penalty. The assessee appealed against the penalty, arguing that the mistake was due to following counsel's advice in good faith. The Tribunal held that the mistake was bona fide, as the assessee relied on counsel's guidance. Ignorance of law is not an excuse, but in this case, the mistake was not mala fide. Therefore, the Tribunal directed the Assessing Officer to delete the penalty u/s 271(1)(c) as the assessee was not liable for it. The appeal was allowed.
Conclusion:
The Tribunal allowed the appeal filed by the assessee, directing the deletion of the penalty imposed u/s 271(1)(c) of the Income-tax Act, 1961.
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2012 (1) TMI 101
Issues Involved:
- Allowability of deduction for storage charges paid by the assessee company.
The judgment of the Appellate Tribunal ITAT CHENNAI in 2012 (1) TMI 101 addressed the issue of deduction for storage charges paid by the assessee company u/s 37 of the Income-tax Act, 1961. The assessee, engaged in importing petroleum products, entered into a contract with M/s. Konkan Storage Systems P. Ltd. for storing kerosene oil. However, due to a government prohibition on kerosene oil import, the assessee could not utilize the storage facility and claimed the amount paid as a deduction in its taxable income for the assessment year 2004-05.
The Tribunal observed that the payment made by the assessee towards storage charges was a revenue expenditure incurred in the course of its business activities. Despite the inability to import kerosene oil and utilize the storage facility, the nature of the expenditure remained unchanged. The Tribunal held that the loss incurred by the assessee due to government intervention and non-utilization of the storage facility was a normal business risk and deductible u/s 37 of the Income-tax Act, 1961. Therefore, the Tribunal allowed the appeal filed by the assessee, directing the assessing authority to revise the computation of taxable income by deducting the sum of Rs. 20,36,160.
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2012 (1) TMI 100
Validity of reassessment proceedings failure to issue notice u/s 143(2) within the period stipulated in the proviso to clause (ii) - effect of Section 292BB - petitioner had filed returns of income vide letter dated 19th November, 2009 in response of notice issued u/s 147/148, adopting their earlier returns u/s 139(1) objections to the reopening were filed by petitioner on 13th July, 2010 and 19th July, 2010 and supplementary objections on 8th August, 2010 - A.O. issued notice u/s 143(2) on 23rd November, 2010 which is beyond the period of six months prescribed in the proviso to Section 143(2)(ii) - petitioner being foreign company, filed an application with the RBI for closure of their liaison office NOC required from the Income Tax Department Held that:- In the present case, the final assessment order has not been passed and only a draft assessment order u/s 144C has been passed. The proviso to section 292BB is applicable. The principle of estoppel u/s 292BB will, therefore, not apply. In respect of returns filed pursuant to notice u/s 148 after 1st October, 2005, it is mandatory to serve notice u/s 143(2), within the stipulated time limit. Thus, in present case, notice u/s 143(2) is deemed not to be served within the stipulated time. See ACIT vs. Hotel Blue Moon (2010 - TMI - 35251 - Supreme Court Of India. In view of the aforesaid position, reassessment proceedings should not continue as no notice u/s 143(2) was served on the assessee within the stipulated time. Accordingly, the writ petition is allowed and a Writ of Certiorari is issued quashing the assessment proceedings pursuant to the notices u/s 148. A Writ of Mandamus is issued to the Department to issue NOC to the petitioner as per the needs and requirements of the RBI within the stipulated time Decided in favor of petitioner.
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2012 (1) TMI 98
Levy of service tax on Builders - amendment to clauses (zzq), (zzzh) and (zzzzu) - constitutional validity - held that:- The fact that the activity in question is an activity which is rendered on land does not make the tax a tax on land. The charge is on rendering a taxable service and the fact that the service is rendered in relation to land does not alter the nature or character of the levy. The legislature has expanded the notion of taxable service by incorporating within the ambit of clause (zzq) and clause (zzzh) services rendered by a builder to the buyer in the course of an intended sale whether before, during or after construction. There is a legislative assessment underlying the imposition of the tax which is that during the course of a construction related activity, a service is rendered by the builder to the buyer. Whether that assessment can be challenged in assailing constitutional validity is a separate issue which would be considered a little later. At this stage, what merits emphasis is that the charge which has been imposed by the legislature is on the activity involving the provision of a service by a builder to the buyer in the course of the execution of a contract involving the intended sale of immovable property. - The submission that the explanation brings in two fictions and is ultra vires the provisions of Sections 67 and 68 of the Finance Act is completely lacking in substance. The levy under Section 66 is on the value of taxable services. Section 65(105) defines taxable services. The explanation cannot possibly be held to be ultra vires Sections 67 and 68. - Constitutional validity of levy of service tax upheld. Service tax on Preferential location charges or development of complex clause (zzzzu) - held that:- These according to the Revenue involve value additions and services when the prospective purchaser purchases a flat or a unit before the completion certificate is obtained. We find merit in the contention which has been urged on behalf of the Revenue that if no charge is levied for a preferential location or development, no service tax would be attracted in the first place. Builders, however, follow the practice of levying charges under diverse heads including preferred development of the property intended to be sold or in terms of a preferred location which is made available to the buyer. Clause (zzzzu) only intends to obviate a leakage of revenue and plugs a loophole which would have otherwise resulted. To reiterate, if no separate charge is levied, the liability to pay service tax does not arise and it is only where a particular service is separately charged for that the liability to pay service tax arises. The fact that the service is rendered in the context of a location, does not make it a tax on land within the meaning of Entry 49 of List II. The tax continues to be a tax on the rendering of a service by the builder to the buyer. There is no vagueness and uncertainty. The legislative prescription is clear. Hence, there is no excessive delegation. - Levy of service tax upheld on preferential location charges or development of complex.
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2012 (1) TMI 97
Validity of reopening of assessment previously framed after scrutiny beyond 4 years from the end of relevant A.Y. - assessment reopened on ground that income derived from the works contract would not qualify for deduction u/s 80IA - Explanation to Section 80IA added in year 2009 with retrospective effect from 1.4.2000 A.Y. 05-06 Held that:- By virtue of such retrospective amendment assessment previously framed after scrutiny could not have been reopened beyond the period of 4 years without any thing on record to suggest that the income chargeable to tax had escaped assessment for the failure on the part of the assessee to fully and truly disclose all material facts. The suggestion that the assessee failed to disclose the nature of works executed and that the same was executed only as works contractor and not as a developer, cannot be accepted for two reasons. Firstly, the reasons recorded do not refer to such a ground. Secondly, when the assessee filed the return of income, the Explanation in question was not in picture. It would not be possible to expect the assessee to comply with the requirements of such Explanation by making disclosures in this regard which Explanation did not form part of the statute book when he filed his return Decided in favor of assessee.
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2012 (1) TMI 96
Fringe Benefit Tax car dealer - levy of FBT on car accessories provided free of cost to the customers Revenue contending it to be sales promotion expenses - Held that:- Expenditure incurred on accessories which were supplied to customers who have purchased cars cannot be treated as sale promotion including publicity expenses under clause (D) of Section 115WB(2). Until and unless a customer purchases a car, no accessories are provided or furnished. The customer was not given a largesse but was offered and has managed to get a better deal for the consideration paid. Revenue did not invoke clause (O) to sub-section (2) to Section 115WB. It was not the contention of the Revenue that the accessories given free of cost as gifts. This is rightly so as gifts are given or presented without consideration. Consideration, in the present case is inbuilt as per person/customer is paying consideration for purchase of the car. For gift under clause (O), the same should be paid without consideration. There is no finding to this effect by the Assessing Officer or by the tribunal. - Decided in favor of assessee.
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2012 (1) TMI 95
Indian Contract Act 1872 - Breach of contract agreement to sale failure of appellant in not having obtained the permission from the Income Tax Authorities u/s 230A nad 269UC - forfeiture of earnest money Held that:- In view of decision of Supreme Court in case of Fateh Chand vs Balkishan Dass, there is no merit in the appeal inasmuch as not only because the appellant was guilty of breach of contract but also because the appellant did not plead and prove the forfeiture of earnest money or any loss having been caused to him. The appellant was, therefore, liable to refund the amount which he received under the Agreement to Sell Decided against the appellant.
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2012 (1) TMI 92
Unexplained Investment Search conducted assessee declared undisclosed investment of Rs.42,65,924/- - A.O. made addition of Rs 61,64,407/ on ground of undisclosed stock - CIT(A) deleted addition of Rs 23,08,033/- as assessee established that belonged to third parties balance addition was deleted by Tribunal Held that:- Assessee in their explanation had pointed out that the valuation reports had taken the value of 24 carat gold at Rs.790 per gram but did not correspondingly reduce the value of 18 carat and 22 carat gold. Further, even the stock, recorded in the books of account, was valued as per the market rates, which is not correct, and under the mercantile system of accounting an assessee is entitled to value the stock in hand (declared stock) at cost price or market price, whichever is lower. The assessee had valued the stock at cost price. The cost price as recorded in the books was not rejected or adversely commented upon in the assessment order. Thus an obvious mistake has been corrected by the Tribunal Decided in favor of assessee.
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2012 (1) TMI 91
Deduction u/s 43B in respect of interest paid on additional sales-tax - Tribunal rejected the claim on the ground that interest did not fall within the expression any sum payable used in Section 43B Held that:- It is clear in Section 17-A (2) of the Himachal Pradesh General Sales Tax Act, 1968 that once there is a notice of demand for the tax and the same is not paid then interest becomes automatically payable. In this regard, Tribunal, not having considered the said provisions of Himachal Pradesh General Sales Tax Act has committed an error in law Decided in favor of assessee.
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2012 (1) TMI 89
Plea for waiver of pre-deposit of Rs 70 lakhs - clandestine removal and production has been established against the assessee and clubbing of turnover of assessee firm with turnover of sister concern was made Held that:- Appellant has made out the prima facie case by insisiting that due to its financial position, constraints & adverse market conditions, it is not in a position to pay the pre-deposit and thus would be deprived of his right to be heard and press their appeal. Further appellant have accepted to furnish surety or create a charge on its immovable property so that recovery can be made in case the demand is accepted. Thus, directions of the tribunal are modified. Appellant is required to pay Rs 40 lacs as per schedule specified and is required to deposit papers/title documents of its property. The appellant will also file an undertaking that they shall not dispose of, sell, or encumber or rent out property Decided in favor of assessee to the extent indicated above.
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2012 (1) TMI 88
Whether period of limitation would be applicable on demand for payment of interest duty imposed vide order dated 12.09.2001 paid by assessee - no direction for payment of interest in order-in-original or in the appellate order - letter dated 10.11.2004 demanding differential duty issued - another letter dated 19.10.2005 demanding interest on differntial duty issued - Held that:- Period of limitation, unless otherwise stipulated by the statute, which applies to a claim for the principal amount should also apply to the claim for interest thereon. Period of limitation prescribed for demand of duty u/s 11A is normally one year and, in exceptional circumstance of a case falling under the proviso to Section 11A(1), the period of limitation is five years. But that would be applicable only in case of misstatement, fraud, concealment etc., which is not the case here. As such, in the present case, the period of limitation for the demand for duty would be one year. Thus, the period of limitation for demand of interest thereon would be one year - Decided in favor of assessee.
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2012 (1) TMI 86
Contract Construction activity - Commissioner exercised revisionary powers u/s 263 on the ground that A.O. had not examined whether the assessee was following completion method or percentage completion method and whether the said expenditure could be claimed as an expense in the A.Y. in question - non-inquiry by the Assessing Officer with regard to squared up loans Tribunal quashed the order of Commissioner on ground that expenditure would be allowed as assessee has commenced business activities Held that:- There was error on the part of the A.O. in not making verification and inquiries, regarding both the aspects discussed aforesaid, which were required and the assessment order was prejudicial to the interest of the Revenue. The tribunal has completely ignored the said aspect and has proceeded on an entirely different basis which was not edifice and foundation of the order passed by the CIT u/s 263 of the Act. Order of Tribunal quashing CIT order is set aside Decided in favor of Revenue.
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2012 (1) TMI 82
Business expenditure - dis-allowance of travelling expenses, lease hold expenses, investment allowance, part of foreign travelling expenses Held that:- Since assessee has not pressed before Tribunal the matter of dis-allowance of travelling expenses, lease hold expenses and investment allowance hence, this question does not arise for adjudication in the present appeal. Further, Tribunal has not found any good ground to interfere in such part dis-allowance of foreign travelling expenses and appellant could not persuade us to take a contrary view. Therefore, appeal is dismissed.
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2012 (1) TMI 81
Best judgement assessment Lower G.P. Rate in comparison to last A.Y. - assessee contesting estimation of G.P. Rate based on previous records and G.P. of last year Held that:- In the instant case, the addition is made on the estimate basis, which is a question of fact as laid down in the case of Utkal Road Lines vs. Registrar, Income Tax Appellate Tribunal (2009 - TMI - 206552 - Orissa High Court). The Tribunal is a final fact finding authority and has already given the partial relief. No substantial question of law is emerging from the impugned order Decided against the assessee.
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