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Case Laws
Showing 321 to 340 of 2121 Records
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2019 (2) TMI 1809
Deduction u/s 80-IA - interest income earned on the margin money deposit with the banks and the interest earned on short-term loans and advances in the form of interest received from customers on the belated payments of invoices raised by the assessee - HELD THAT:- Interest income earned by the assessee in the ordinary course of business, cannot be said to be excluded from the head "Income from business or profession" in Part D, comprising of sections 28 to 44DB in Chapter IV, which deals with computation of the total income in the heads of income as per section 14 of the Act. If by no stretch of imagination, such interest income could be included under the head "Profits and gains of business or profession" only then it could fall in the residuary clause of "income from other sources" under section 56 of the Act and not otherwise.
No occasion to artificially bifurcate and dissect the interest income earned by the assessee in the present case in its ordinary course of business, so as to take it out of the ambit of deduction available to it under section 80-IA - The efforts on the part of the Revenue authorities to create such artificial compartments in the "business income" of the assessee, merely to reduce the quantum of deduction available to the assessee under section 80-IA of the Act of which the eligibility of the assessee is not even in doubt, is nothing but a whimsical and the arbitrary view of the Revenue authorities and the same is opposed to common sense and business prudence of a common businessman.
Our view is fully supported by the judgments relied upon by the learned counsel for the assessee as quoted above, whereas we find distinction of the facts in the case law relied upon by the Revenue and therefore, we have no hesitation to hold that the interest income earned by the assessee on margin money deposits with the bank and interest on short-term loans and advances in the form of belated payments made by customers was very much profits and gains of the business of the assessee and therefore, the assessee was entitled to deduction under section 80-IA of the Act in respect of such interest income also.
Having in favour of the assessee, we do not consider it even necessary to answer the question whether the reopening of the assessment to bring to tax such income under the head "Income from other sources" and denying deduction under section 80-IA. - Decided in favour of the assessee
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2019 (2) TMI 1808
TP Adjustment - Comparable selection - HELD THAT:- Assessee company provides chip designing software development services to its associated enterprises (AEs). The assessee also provides marketing support services to its associated enterprises. The company operates through its centres at Noida and Bangalore, registered with Software Technology Park of India as 100% export oriented units and Hyderabad, registered with Special Economic Zone. For the services rendered, the assessee is being remunerated on the cost-plus basis by its associated enterprises, thus companies functionally dissimilar with that of assessee need to be deselected from final list.
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2019 (2) TMI 1807
Public Interest Litigation - closing down all running illegally teer-counters in the State and to provide age limit restrictions for entering into the betting of teer and to ensure that the distance in terms of Section 6 of the Meghalaya Regulation of the Game of Arrow Shooting and the Sale of Teer Tickets Act, 2018 - compliance of various provisions of the Act of 2018 and also to ensure that the State exchequer is not put to any loss of revenue - contention of the petitioner is that many such teer-counters in different parts of the State, especially in Garo Hills and Tura district, are being run without obtaining any license.
HELD THAT:- It appears that the licenses were earlier issued to various owners of different teer-counters under the Act of 1982. Now with the repeal of that Act and enactment of the Act of 2018, licensees of that time are required to obtain fresh license under the Act of 2018. It goes without saying that no such teer-counter can be allowed to run without a valid license. Compliance of Section 6 of the Act of 2018 has to be scrupulously ensured which mandates the teer-counters and bookmakers are required to be located not less than 1000 feet or 300 meters away from the nearest place of worship or educational institution.
The respondent-State is directed to ensure that the sites of all teer-counters in the State are inspected, especially those teer-counters, which were run by earlier licenses and if such teer-counters are found to run without new license, they should be immediately closed down and should be allowed to operate only if they obtain the license and fulfill various requirements under the Act of 2018 especially Sections 6 and 16 - If any operator of teer-counter has an obligation to get himself registered under the Meghalaya Goods and Service Tax Act, 2017, he should be required to obtain necessary registration and make payment of due amount of GST.
Petition disposed off.
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2019 (2) TMI 1805
TP Adjustment - selection of comparable - companies as found to be fully owned by the Government they cannot be treated as comparable - HELD THAT:- As decided in own case [2018 (1) TMI 1566 - ITAT MUMBAI] excluding companies from the list of comparables on the reasoning that they are Government Companies. Since, the Tribunal has already decided the issue in respect of the very same comparables in assessee’s own case in the preceding assessment years, respectfully following the aforesaid decisions of the Tribunal, we exclude Engineers India Ltd., Rites Ltd. and WAPCOS Ltd. from the list of comparables and direct the Assessing Officer to compute the arm’s length price accordingly. Considering the submissions of the learned Authorised Representative that upon exclusion of these three comparables, the margin shown by the assessee would fall within ±5% of the average margin of the remaining comparables, hence, no adjustment is required to be made to the arm’s length price.
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2019 (2) TMI 1804
Revision u/s 263 - Assessment u/s 153A - claim of interest expenses against interest income - HELD THAT:- In this case, assessee has shown has to have received ₹ 42,11,011/- as interest income in the year under consideration, and has also claimed interest expenditure of ₹ 57,37,042/- resulting into declaration of loss of ₹ 15,26,031/- under the head “Income from Other Sources”.
We can see in this case, during search no incriminating material was found and ld. A.O. made adequate enquiry in this case.
In this case, assessee cannot be branded as erroneous as there has been inquiry with regard to claims made and mere inadequacy cannot ground for taking action u/s. 263 of the Income Tax Act.
A.R. also cited a case of Pr. CIT Vs. Saumya Construction Pvt.Ltd. [2016 (7) TMI 911 - GUJARAT HIGH COURT] wherein has been held that assessment “u/s. 153A, relation to material disclosed during search or requisition; if no incriminating material is found during search, no addition can be made on basis of material collected after search. We allow both the appeal of the Assessee.
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2019 (2) TMI 1803
Royalty receipt - payment received by the Assessee from the BCCI - whether payment received by the Assessee from the BCCI for such work, was in the nature of “Fee for technical services” - India UK Double Taxation Avoidance Agreement (DTAA) - HELD THAT:- Tribunal interpreted this definition to hold that to include in the expression royalty, the payment in question should have to be made for the use of or right to use any copyright etc. The Tribunal referred to the decision of the Delhi High Court in the case of CIT v/s. Delhi Race Club Ltd., [2014 (12) TMI 265 - DELHI HIGH COURT] in support of its conclusions.
We are in agreement with the view of the Tribunal. Considering the nature of payments received by the Assessee from BCCI and considering the definition of term royalty contained in DTAA between two countries, it cannot be stated that Assessee received payment from the BCCI by way of royalty. There was no copyright vested in the Assessee for which the payment in question was being made. The Assessee merely prepared a coverage of live cricket matches under the contact, for such purpose, awarded by the BCCI. This question is, therefore, not entertained.
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2019 (2) TMI 1802
Exemption under N/N. 67/2006-Cus., dated 30-6-2006 - crushed bones under 7 bills of entry from Pakistan - It appeared that as Pakistan is Appendix-2 of the notification and hence goods imported from that country were not eligible for the exemption - Revenue submits that Section 28 very clearly provides for issue of a show-cause notice to demand duty in respect of duties not levied or short levied.
HELD THAT:- There are no infirmity in the impugned order. Discernably, Section 28 of the Customs Act, 1962, provides for issue of a show-cause notice, inter alia, where duty has not been levied or short levied. Evidently, any non levy or short levy would only be by the assessing officer and not by the importer.
There are also merit in the assertions of the Learned Authorised Representative that even in the Apex Court judgment in the case of M/s. Priya Blue Industries Ltd. [2004 (9) TMI 105 - SUPREME COURT] has validated the disturbance of an order of assessment by review under section 28 of the Customs Act, 1962. Therefore, the ratio laid down by M/s. Priya Blue Industries Ltd., will not help the case of the appellant herein - There cannot also be any dispute that the exemption provided in the Notification No. 67/2006-Cus., would never have been eligible’ or applicable to goods imported from Pakistan.
The appellant is only seeking to wrongly benefit indirectly what they are not entitled to directly - Appeal dismissed - decided against appellant.
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2019 (2) TMI 1801
Refund of excess duty paid - duty paid under protest - the quantity which was received in the shore tank was lesser than the quantity which was reported in the ullage report of the ship - the appellant filed a bill of entry for the lesser quantity and was directed to pay duty on the entire quantity taking into account quantity in the ullage report as the total quantity received.
The only ground on which the refund was sought to be rejected by the lower authority is that the imports were made prior to the acceptance of the judgment of Hon’ble Supreme Court in the case of Mangalore Refinery & Petrochemicals Limited [2015 (9) TMI 245 - SUPREME COURT] and hence the refund is applicable from the date of pronouncement of the judgment i.e. 2-9-2015.
HELD THAT:- There are no force in the arguments by the lower authorities inasmuch as that once the judgment is pronounced by Hon’ble Supreme Court, all adjudicating authorities are bound by the same. The Hon’ble Supreme Court settled the legal position that in case of liquid cargo transferred to the shore tank, the shore tank quantity should be considered for determining the Customs duty and not the quantity mentioned in the ullage report.
Thus, the appellants who were compelled to pay excess duty, are entitled to refund of the same under Section 27, along with applicable interest - appeal allowed - decided in favor of appellant.
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2019 (2) TMI 1800
Classification of imported goods - Speed Boat - classified under CTH 8906 00 90 or under CTH 8905 90 90 of Customs Tariff Act, 1975? - N/N. 21/2002-Cus., dated 1-3-2002 - HELD THAT:- Surveying activity in the sea requires movement of vessel from one place to another which can be done only if there is a navigation and which is primary in nature. The Boat Licence issued to appellant indicates that this speed boat is capable of carrying cargo and passengers in fair weather, which would mean that speed boat has navigation as a primary function. If a vessel needs to be classified under Chapter Heading 8905 90 90, the vessel should be of such a nature wherein navigability is subsidiary to the main function.
Nothing is on record to show that the vessel imported in the case in hand had equipments in order to indicate that the primary function of the vessel was for surveying and taking soundings. It is on record that the vessel is capable of navigating on his own which is a primary function for surveying - the classification of chapter heading adopted by Revenue under 8905 90 90 is erroneous and cannot be sustained.
Appeal allowed - decided in favor of appellant.
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2019 (2) TMI 1798
Assessment u/s 153A - unexplained jewellery u/s 69B - HELD THAT:- In the present case the bills of purchase of jewelry were found instead of jewellery itself and assessee has explained that the jewellery is purchased for the friends and relatives of the assessee. In the above decision of RATANLAL VYAPARILAL JAIN [2010 (7) TMI 769 - GUJARAT HIGH COURT] court the purpose of the issue of the circular was accepted. When the jewellery itself is found but the bills are not found the addition is made u/s 69 of the act.
When the bills are found but the jewellery is not available with the assessee during the course of search the addition is also required to be made u/s 69 of the act. Therefore we do not find any difference in the above those situations so far as the overall jewellery found during the course of search as well as the bills of such jewellery do not exceed the limits specified in the above instructions. We set aside this issue back to the file of the learned AO, with a direction to the assessee to identify the total grams of the jewellery contained in the purchase bills as well as the actual jewellery found along with the details of the family members staying with the assessee, thereafter the AO may examine the same and grant benefit of instruction number 1994 dated 11/05/1994 to the assessee. In view of this the issue on account of addition of jewellery is set aside to the file of the assessing officer with above direction.
Addition with respect to cash received over and above the amount of sale consideration mentioned in the sale deed treated as undisclosed income of the assessee - HELD THAT:- We do not have any hesitation is holding that when the addition is made solely on the basis of statement the third party and revenue does not have any other evidences, then without granting opportunity of cross examination , such addition cannot be made. In the result the assessee succeeds on the second issue. Gr. No 2 is allowed.
Addition of cash found during the course of search - HELD THAT:- Before us assessee has filed a copy of that letter but relevant annexure were not filed. Therfore it is not possible for us to verify that assessee has filed any statement of affairs or not along with the return of income. Before us assessee has not submitted the statement of affairs as stated before the lower authorities. However assessee has referred them in reply to the assessment proceedings vide letter dated 14/7/2014.
Whole issue is set aside back to the file of the AO with a direction to the assessee to show the statement of affairs of all these family concerns and individuals in whose account the assessee is saying that there is enough cash available on hand. AO may verify the same and if it is found that that such persons are having the cash balances in the statement of affairs , then after examination and proper verification, the learned assessing officer is directed to delete the addition of INR 1809000/– on account of cash found during the course of search. Accordingly ground number 1 of the appeal of the assessee is allowed for statistical purposes with above direction.
Addition on account of the voluntary disclosure made by the assessee in his statement recorded u/s 132 (4) - HELD THAT:- As perused the statement of assessee u/s 132 (4) of the act dated 26/4/2012 wherein he made the above disclosure. The letter dated 9/7/2012 stating that there is no undisclosed income earned by the assessee. He also stated that there is no evidence found during search. Along with the statement in search he also handed over 4 post dated cheques of tax payments of ₹ 58.30 lakhs which were also not presented for payments by the revenue. No evidence were also referred by the AO while making the above addition or by the CIT (A) at the time of Confirming the same. Even before us CIT DR also could not show the evidence on which the disclosure was made. The CBDT has issued a letter dated 18/12/2014 where in it has instructed its officers to not to obtain disclosure without gathering evidences supporting the disclosure. Further no coercive measures or pressure to be exerted for disclosure
Hon Gujarat High court in case of Kailashben Mangarlal Chokshi Vs CIT [2008 (9) TMI 525 - GUJARAT HIGH COURT] has held that merely on the basis admission, the assessee could not have been subjected to additions, unless and until some corroborative evidence was found in support of such admission In that decision also the statement was retracted by the assessee. Therefore based on the circular of CBDT as well as the decision of Honourable Gujarat High court, in absence of any material based on which disclosure is made, the addition cannot be sustained.
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2019 (2) TMI 1797
Penalty u/s 271(1)(c) - Defective notice - no specific charge against the assessee spelt out in the said notice - HELD THAT:- Show cause notice issued in the present case u/s 274 of the Act does not specify the charge against the assessee as to, whether it is for concealing particulars of income or furnishing inaccurate particulars of income. The show cause notice u/s 274 of the Act does not strike out the inappropriate words. In these circumstances, we are of the view that imposition of penalty cannot be sustained. The plea of the ld. Counsel for the assessee that in such circumstances penalty u/s.271(1)(c) of the Act cannot be imposed, has to be accepted, as such a plea is based on the decisions referred to by the learned counsel for the Assessee. We, therefore, hold that imposition of penalty in the present case cannot be sustained and the same was rightly cancelled by the CIT(A). - Decided in favour of assessee.
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2019 (2) TMI 1795
Levy of service tax - Club or Association Services - extended period of limitation - HELD THAT:- The assessee relied upon the Hon’ble Jharkhand High Court’s decision in the case of Ranchi Club Ltd. Versus Commissioner of Customs, Central Excise & Service Tax, Ranchi Zone & Others [2012 (6) TMI 636 - JHARKHAND HIGH COURT] and contended that the Club & Association Service has been held to be ultra-vires by the Hon’ble High Court - The Appellate Authority distinguished the said decision of the Hon’ble High Court of Jharkhand by observing that the Club before the High Court was Member’s Club whereas the appellant in the present case is running a propriety club and as such the declaration of law by the Jharkhand High Court would not be applicable to them.
The appellant also assailed the demand on the point of limitation by submitting that there was no suppression on their part and the issue involved was a bona-fide legal issue of interpretation. The Commissioner (Appeals) did not agree with the said plea of the assessee and upheld the order - the appeal cannot be disposed on the point of limitation itself, inasmuch as, the demand stands raised by invoking the extended limitation period. The disputed issue was an interpretational issue and in the light of the Hon’ble Jharkhand High Court’s order the assessee could have entertained a bona-fide belief that the activity is not taxable, the entire figures were collected by the Revenue from the records maintained by the assessee.
The demand is hopelessly barred by limitation - Appeal allowed - decided in favor of appellant.
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2019 (2) TMI 1794
Unexplained cash deposit and unproved expenditure on account of stamp duty, registration fee etc. - HELD THAT:- It is not in dispute that during the course of search, two cash vouchers dated 05.04.2010 in the name of Mr. Sachin Gandhi & Mrs. Meera Gandhi for payment of ₹ 10 lakhs each were found at the residential premises of the assessee, which were towards the purchase of land at Nashik. During the course of search, statement of assessee was recorded wherein the source of payment of ₹ 20 lakhs was stated to be withdrawal of the amount from his ICICI Bank account. We find that the contention of the assessee of having taken a demand draft from the Bank, getting it cancelled and withdrawing of cash from the bank is reflected in his bank account with ICICI Bank.
In the statement of Shri Sachin C. Gandhi, had also accepted the payment of cash to be a stop gap arrangement and refundable on receipt of the agreed amount by way of cheque. Submissions of the assessee has not been found to be false on the basis of any corroborative evidences.
Thus when the assessee in the statement recorded at the time of search had explained the source of withdrawal of cash from his bank account and subsequently, the depositing in his bank account coupled with the confirmations of Mr. and Mrs. Gandhi, we are of the view that assessee has fully explained the source of cash deposits. No additions on account of “unexplained cash deposit” and “unproved expenditure on account of stamp duty” can be made in the present case. We therefore direct its deletion. Grounds of the assessee are allowed.
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2019 (2) TMI 1793
Penalty u/s 271(1)(c) - Defective notice - non specification of charge - HELD THAT:- AO has initiated the penalty for furnishing of inaccurate particulars of income with a view to concealment of income. The notice u/s 271(1)(c) was issued on 28.12.2016 in a standard format without mentioning the one of the two limbs or one of the two charges on which the penalty was proposed to be levied. Finally the penalty was imposed by AO invoking explanation 4 to section 271(1)(c) of the Act which is applicable in the case of concealment of income.
It is clear from the above that AO has not passed the order after due application of mind and thus , assessee was deprived of the opportunity to respond to the show cause notice in a proper manner as the assessee was not aware of the specific charge on which the penalty was proposed to be levied. We have carefully perused the decisions relied upon by the counsel in the case of Shivkumar Devidutt Saraf, HUF vs. ITO [2018 (4) TMI 1786 - ITAT MUMBAI] and M/s. Quikr India Pvt. Ltd. vs. DCIT [2019 (1) TMI 1573 - ITAT MUMBAI] wherein under similar set of facts the co-ordinate bench of the Tribunal has held that no penalty can be imposed in such cases where the AO has passed the order in a mechanical manner. - Decided in favour of assessee.
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2019 (2) TMI 1792
Grant of Interim Stay - Differential duty alongwith interest voluntarily paid - applicability of Section 28(B) of CA - HELD THAT:- In the light of Section 28(2) of the Customs Act, where the Proper Officer is informed of the payment of the duty and interest, no show cause notice shall be issued by the Officer in respect of the duty or interest so paid or any penalty liable under the provisions of the Act or the Rules. In the aforesaid circumstances, there shall be an order of interim stay.
List the matter for filing counter on 20.03.2019.
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2019 (2) TMI 1791
Directions u/s. 144A - non affording any opportunity to the assessee - HELD THAT:- The law in the matter is well-settled. In Guduthur Bros. [1960 (7) TMI 5 - SUPREME COURT] a decision by it’s larger bench, the Apex Court explained that the proceedings shall go back to the stage where the irregularity had set in - The matter therefore, where the assessee’s claim is admitted, shall accordingly have go back to the stage of providing it opportunity before the competent authority. Reference in this context may be made to the decision in Bhagwat Prasad v. CIT [1997 (9) TMI 75 - ALLAHABAD HIGH COURT]
Loss on trading in Narma (raw cotton) - genuineness of loss - HELD THAT:- The genuineness of the transactions, on the conspectus of the case, is completely unproved - The business purpose or economic rationale that informs the agreement is conspicuous by its absence. Is the assessee acting on the basis of the some past experience or demonstrated price behavior? What is the information or the data, acting on the basis of which the assessee, as a business man, with a business purpose and, rather, in the interest of his business, enters into these contracts covering the entire sale of Narma for the season 2008-09. It is this basis, based on objective material, that shall provide the economic justification for entering into the agreement/s. It is this, and this alone, that would justify the genuineness thereof. We say so as the absence of any such basis implies self-infliction of loss, which cannot be regarded as incurred in the normal course of business
No credit period is specified, so that the supplies, made latest by 15.12.2008, continue, as it appears, to outstand for payment even up to 31.03.2009, with in fact the assessee even financing one of the buyers, so that the payment received, which is from one of them, again, does not form part of the assessee’s working capital (system) and, rather, gets deployed for the benefit of the said buyer! Now, could it be that while the assessee is under the contract obliged to, even if at a loss, supply the goods, the same does not carry any corresponding obligation as to payment, making the buyer liable for penal consequences for non-payment within the stipulated credit period? The non-payment, then, is itself a ground enough for the assessee to rescind the agreement, which is clearly a make-believe, being without any sense of (business) purpose or proportionality. In fact, even the delivery is not proved, which though important in-as-much as it only will prove (narma) sale, is in the final analysis not determinative of the matter. We, for the reasons afore-stated, find no infirmity in the disallowance of the assessee’s claim of business loss on the sale of narma
Disallowance of interest on borrowed capital u/s. 36(1)(iii) - disallowance was effected in the absence of the assessee furnishing any business purpose of an advance during the relevant period on interest-free basis - HELD THAT:- Impugned advance thus stands advanced to the extent of 80.12% by borrowed capital. The interest disallowed is on proportionate basis, i.e., in proportion to the period each amount comprising ₹ 16.50 lacs outstands during the year. The assessee shall get further relief, i.e., to the extent of 19.88% thereof on account of being financed by trade liabilities and own capital, both being non-interest bearing. This in fact takes a liberal view of the matter inasmuch as credit for the entire profit for the year – arising during the year; in fact, during the season which falls in the latter part of the year, stands allowed. We decide accordingly.
Disallowance of ginning charges and depreciation - HELD THAT:- As it appears to us, it is the lack of proper articulation of his case, substantiating his claims by the assessee, that has led to the impugned disallowance. Why did, for instance, the assessee prepare a trading account of cotton, suggesting it of being sold as it is, when, as claimed before us, ginning was done to convert cotton and cotton waste into standard quality, also incurring expenditure on power and labour. The assessee should have, accordingly, prepared a manufacturing account, debiting the ginning and pressing charges, besides the said two expenses to this account. Even as the same is a matter of presentation, by itself not decisive, it does raise a question which, given his own accounts, duly audited, requires explanation. Further, why, one wonders, the explanation/facts being now stated were not furnished before the Revenue authorities? The electricity charges, debited in accounts, as we observe, are for ₹ 3.74 lacs and not for, as stated, ₹ 4.20 lacs and, besides, there are pressing charges (₹ 67,808/-) as well. Though the matter, strictly speaking, should be set aside for verification of these claims, we do not think, given the time that has lapsed since, that any proper purpose would be served by doing so. We also cannot be oblivious to the burden, both on the assessee and the administrative machinery, that accompanies such a restoration, particularly as the same includes third party confirmation/evidences. The assessee’s case seems prima facie acceptable, in view of which, as well as to give a quietus to the matter, we direct the allowance of the impugned claims
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2019 (2) TMI 1790
TP Adjustment - determination of the royalty payment at Rs. Nil by using the benefit test - HELD THAT:- We find that the assessee has used the technology supplied by its AE for in its manufacturing process and for such use of technology, it has paid the royalty. A.O has applied the benefit test and observing that the assessee failed to prove the benefit derived by it by use of such technology, he has disallowed the entire expenditure by treating the arm’s length price at Nil. We find that such an issue had arisen, before the Coordinate Bench of the Tribunal at Bangalore in the case of M/s. Toyota Kirloskar Auto Parts Pvt Ltd Vs. ACIT [2015 (1) TMI 921 - ITAT BANGALORE] held that so long as expenditure payment has been demonstrated to have been incurred or laid out for the purpose of business, it is no concern of the TPO to disallow the same on any extraneous reasoning and as provided in the OECD guidelines, he is expected to examine the international transaction as he actually finds the same and then make suitable adjustment but wholesale disallowance of the expenditure is not contemplated or authorized, thus set aside the finding of the TPO that the ALP of the transaction of royalty is ‘nil - for determining the ALP under the TNMM, the assessee as well as the Revenue have to search for comparable companies. Therefore, we remit this issue to the file of the AO/TPO to determine ALP of royalty by adopting TNMM
As decided in M/S. RAK CERAMICS INDIA PRIVATE LIMITED [2017 (12) TMI 191 - ITAT HYDERABAD] once it is admitted by the Revenue that the assessee entered into a royalty agreement with the AE and the assessee claimed benefit from such agreement, in the form of quantum increase in sales with no apparent increase in production, minimal product recalls and low after sales maintenance cost, and consequently paid royalty in terms thereof, it was not for the TPO to determine as to what could be the other reasons for increase in the assessee's sales and profit. . Above all, there is no explanation forthcoming as to why the TPO decided upon 2% instead of the contractual rate of 3% for payment of royalty. No reason is offered by the TPO for picking on 2%. This whimsical fixation by the TPO amounts to an arbitrary and unbridled exercise of power.
A.O cannot determine the royalty at Nil. Therefore, we remit the issue to the file of the AO/TPO with a direction to determine the arm’s length price of royalty by adopting TNMM as the most appropriate method and adopting the suitable comparables. Needless to mention that the assessee shall be given a fair opportunity of hearing. Accordingly, the appeal of the assessee is treated as allowed for statistical purposes.
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2019 (2) TMI 1787
Money Credit - Rule 57-O(2) of the Central Excise Rules, 1944 - applicability of the provisions only on inputs received after filing of the declaration under sub-rule (1), or it is also applicable or covers the inputs received before filing the declaration and if it covers the inputs received before filing the declaration - benefit of money credit under Rule 57-O of the said Rules - HELD THAT:- An assessee is put under a statutory obligation to file a declaration indicating to the Department the input intended to be used in the manufacture of the finished product and sub-rule (2) of Rule 57-O further makes it clear that a manufacturer who has filed a declaration in terms of sub-rule (1) may after obtaining the acknowledgment take credit of money on the inputs - Close reading of Rule 57-O of the Rules, 1944 makes it clear that filing a declaration is a condition precedent and it is only after filing a declaration and intimating the Department the input which the manufacturer intends to use, which would be only prospectively and only after satisfying the Assistant Collector of Central Excise with reference to any information which he may require and obtaining the acknowledgment may take the credit of money on the inputs.
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2019 (2) TMI 1786
Rejection of plaint - Partition, rendition of accounts and permanent injunction against their grandparents - HELD THAT:- This Court is of the view that a meaningful reading of the present plaint, in the present case, does not disclose a cause of action. There is no averment that any specific property was owned by Mr. R.P. Gulati or that defendant No.1 succeeded to any specific estate/business of his father. It is also settled law that land granted to a displaced person is in the nature of grant and a grant is always self acquired. Consequently, the essential averment with regard to nucleus, i.e., sine qua non for Hindu Joint Family, is lacking in the plaint.
Mr. R.P. Gulati, the great-grandfather of the plaintiffs having died after coming into force of the Hindu Succession Act, 1956, the property/business inherited by the defendant no. 1, i.e., grandfather of the plaintiffs, would be held by him as his personal/individual property and the father of the plaintiffs would have no right or share therein - Also, as Order 6 Rule 4 CPC is attracted to suits where plaintiff claims that a coparcenary or Hindu Joint Family exists, (inasmuch as after coming into force of the Act, 1956, there is no presumption as to the existence of an HUF), detailed facts have to be averred. However, no averments have been made by factual references qua each property claimed to be a Hindu Joint Family property.
In any event, after enactment of section 14 of the Act, 1956, the Legislature has done away with the concept of limited ownership in respect of property owned by Hindu female all together. Consequently, the exception contained in Section 4(3) of the Act, 1988, as it then stood, is not attracted to the present case - It is further settled law that the Hindu law does not recognise some of the members of a joint family belonging to different branches as a coparcenary unit. In the present case, the uncles (without their children) and two nephews (defendant nos. 4 and 3) did not belong to the same branch. The acquisitions made by them even if taken as jointly, cannot be treated to be Hindu joint family property.
Even if it is presumed that on the birth of defendant No.4 in 1969, a coparcenary was created, then also the same came to an end by virtue of partition. The essence of coparcenary under Mitakshara Law is unity of ownership and once there is a partition, unity of coparcenary is destroyed / dissolved. Since admittedly there have been four partitions in the present case, the share of the coparceners is deemed to have been determined and the properties ceased to be coparcenary properties. Consequently, even if it is presumed that the plaint discloses a cause of action, the same is barred by law.
The present plaint is rejected and the present application is allowed.
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2019 (2) TMI 1785
Maintainability of appeal - whether Tribunal is correct in law to dispose the Appeal as file closed, when there is no provision under Section 35-C (1) of Central Excise Act, 1944 to close the appeal for statistical purposes without going into merits? - the appeal is disposed as file closed based on the issue pending before the larger bench of the Tribunal which is not the only issue involved in the present case.
HELD THAT:- We are surprised with the reasons assigned by the Tribunal to close the proceedings. In fact, in terms of Section 35-C (1) of the Act, the Appellate Tribunal may, after giving parties to the appeal an opportunity of being heard, pass such orders confirming, modifying or annulling the decision or order appealed against. The Tribunal may also refer the case back to the authority which passed such decision or order with such directions, as the Appellate Tribunal may think fit, for fresh adjudication or decision, after taking additional evidence, if necessary.
The Tribunal noted that the matter was referred to the Larger Bench of the Tribunal. Therefore, one of the two options that could have been exercised by the Tribunal is to keep the matter pending before the Tribunal till a decision is arrived at by the Larger Bench. The second option is to remand the matter for de nova consideration to the adjudicating authority and direct the adjudicating authority to await the decision of the Larger Bench. Unfortunately, the Tribunal did not exercise any of these two options. Therefore, we would be well justified in interfering with the order passed by the Tribunal.
The order passed by the Tribunal has to be set aside and is, accordingly, set aside and the matter is remanded to the Tribunal with a direction to the Tribunal to await the decision, which is now pending before the High Court at Ahmedabad in the case of Housing and Urban Development Corporation Ltd. [2012 (7) TMI 1072 - GUJARAT HIGH COURT] and the substantial questions of law are answered in favour of the Revenue.
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