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Showing 381 to 400 of 1167 Records
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2012 (7) TMI 795
Non deduction of tax at source - remittances to a non-resident company incorporated in Hongkong - services rendered by M/s SEL, NRI company to the assessee company are technical, managerial or consultancy as per sec. 9(i)(vii) - Held that:- The agreement between the assessee and NRI company stipulates that it shall be responsible for the shipment of raw material to the assessee from its importers within the stipulated time and as per the specific quality and quantity - it is the assessee, in the consultation with its exporters, which identifies the manufacturer and the quality and the price of the material to be imported. Therefore, SEL nowhere is involved in the above identification of the exporter or in selecting the material and negotiating the price, thus it cannot be said that SEL is rendering any of the consultancy services.
As the quality of material is already determined by the assessee and the SEL is only to make a physical inspection of the material to see if it resembles the quality specified by the assessee it is thus not much of technical knowledge is required in it.SEL is not required to employ any skilled technical personnel to discharge its obligation under the agreement and, therefore, we hold that the assessee is not discharging any technical services - it is seen that SEL is acting on behalf of the assessee as its agent and there is no independent application of thought process in any of the activities to be carried out by SEL no managerial services being rendered by SEL to the assessee - above payments do not fall within the ambit of fee for technical services and, therefore, the provision of sec. 195(1) is also not attracted - in favour of assessee.
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2012 (7) TMI 794
Dis allowance of interest paid on capital borrowed for the acquisition of capital assets (WIP) - CIT stated that the assessment order u/s 143(3) should be treated as erroneous and prejudicial to the interest of the revenue"- Held that:- Undisputed fact that the Assessee had made written submissions both before CIT & AO that though the assessee had made acquisition of assets during the year under consideration but had not borrowed funds for its acquisition and hence the provisions of sec 36(1)(iii) are not applicable and accordingly no part of interest was required to be capitalised the Commissioner did not adequately deal with these contentions, and rejected the same by observing that the interest payment should not have been allowed as a deduction.
The A.O. has after considering all the facts and after satisfying himself accepted the contentions of assessee and made no disallowance u/s. 36(1)(iii). CIT has not been able to establish and pin point unequivocally the error or the mistake made by the A.O. which makes the order unsustainable in law as the finding of the CIT must be clear, unambiguous and not debatable - A.O. having exercised his mind over the issue, it cannot be termed as erroneous and prejudicial to the interest of the Revenue - in favour of assessee.
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2012 (7) TMI 793
Penalty u/s 271 (1)(c) - Held that:- A.O. after detecting the concealment of income on the basis of cash book and deposit in the Bank account & considering the all transactions for working of peak and finally he made addition of Rs. 4 lakhs as conceal income u/s 68 after detecting unaccounted deposit in the Bank account, which was confirmed by the ITAT B Bench - no reason to interfere in the order of CIT(A) for confirming the penalty on quantum addition of Rs. 4 lakhs, however the addition of Rs. 5 lakhs has accepted by the A.O. as explained, therefore, penalty on addition of Rs. 5 lakhs is deleted - partly in favour of assessee.
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2012 (7) TMI 792
Treatment of sales tax subsidy - CIT(A) treated it as revenue receipts - Held that:- As decided in M/s Indo Rama Synthetics (I) Ltd. Versus ACIT (2012 (7) TMI 406 - ITAT, DELHI) the intention of granting sales tax incentive is not to increase the viability of the eligible units but to promote development of further industry and infrastructure in processing/developing the backward area, it would be in the nature of capital receipt not liable to tax - no difference between the sales tax subsidy scheme of 1979 vis-a-vis the sales tax subsidy scheme of 1993 - in favour of assessee.
Charging of interest u/s. 234B - Held that:- Interest u/s. 234B is not leviable in the instant case as decided in the case of DCIT vs. Uttam Sugar Mills Ltd. [2010 (12) TMI 625 - ITAT, DELHI ] in view of retrospective amendment made by the Finance Act, 2008 inserting section 115JB(2), Explanation 1(h) which provided that the book profit be increased by the amount of the deferred tax w.e.f. 1.4.2001, interest u/s. 234B and 234C could be levied by the AO on the income computed u/s. 115JB - It is only on account of subsequent retrospective amendment in law that the advance tax paid by the appellant would faIl short as it was not possible for the appellant to foresee the retrospective amendment to take place and pay advance tax on the basis of the amended law - in favour of assessee.
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2012 (7) TMI 791
Levy of penalty u/s 271(1)(c) - addition u/s 92CA(3) in relation to international transactions - Held that:- Addition made by AO had been disputed by the assessee before CIT(A)by filling detailed submission giving full details of cost for providing professional services and I.T. implementation services as well as the related working of the international transactions. The very fact that CIT(A) remanded the issue to the AO - a perusal of the remand report shows that the CIT(A) himself was not clear as to whether the amount was representative of ALP of the services was examined by TPO on merit. Remand report was not received even till the date of order of CIT(A).
Withdrawal the ground relating to management fee and I.T. implementation fees for expeditious disposal consequent to Hon'ble High Court direction to the CIT(A) to dispose off the appeals for assessment years 2004-05 and 2005-06 within a period of 4 months can not be considered as acceptance of addition by the assessee - Though the appeal has been decided without remand report the contentions raised in the submissions leading to remand of the issue is required to be examined objectively to make proper assessment of case of penalty - no reasons have been given as to how the assessee had not proved to satisfaction that international transactions had been computed in accordance with the provisions of section 92C - it is a settled legal position that penalty proceedings are different from assessment proceedings - allowed in favour of assessee for statistical purposes.
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2012 (7) TMI 790
Disallowance of claim of bad debts - Loan given to party - As per assessees claim that party turned out insolvent, therefore, the assessee had written off the loan Held that:- Assessee is in the line of money lending business and this amount had been advanced as loan - assessee has written off this amount as per Section 36(1)(vii) in the books of account - disallowance rightly deleted - In favor of assessee
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2012 (7) TMI 789
Addition on account of estimation the cold storage rent alleged that assessee was suppressing the rental receipt by showing under utilization of the capacity of cold storage Held that:- There is nothing on record to suggest that the receipts shown by the assessee on account of rent of cold storage are less than what the appellant actually received. The addition made by the AO is based on suppositions and conjectures and not on any credible evidence to support the case of the AO Addition deleted
Whether AO was justified in invoking the provisions of section 145(3) of the I.T. Act Rejection of books of accounts on the basis of non-maintenance of records of loading/unloading expense, excessive consumption of power AO alleged that actual rent received by the assessee was Rs.40 per bag and rebate of Rs.5 per bag shown in the bill was not genuine Held that:- It has not been established by the AO that it is not Rs.35 per bag but actually Rs.40 per bag has been received by the appellant - same cannot be a reason for rejection of books of account.
Under utilization of capacity Held that:- Unless and until it is proved that there was full capacity utilization, but the same has been suppressed before the department then only there would be a case with the AO for rejection of books of account.
Excess consumption of power Held that:- Fuel and power expenses are directly related to the running of cold storage, some cold storage might run for longer time than the others particularly in view of the fact that rent is relatable to whole year and is not charged on day to day basis - AO was not justified in invoking the provisions of sec. 145(3) of the Act
Addition on account of interest income earned on the loans given to farmers alleged that other cold storage of Agra and nearby locality are also showing income on this account Held that:- Assessee has given advance to farmers to keep their potato in cold storage of the assessee. The assessee did not charge interest on such advance given to farmers - such interest free advances to the farmers is in accordance with commercial expediency Addition deleted In favor of assessee
Addition on account of payment made to National bank Handling Corporation alleged that payment for acquiring the membership was given once for all and is of capital nature Held that:- It is mentioned in the certificate itself that the membership is valid for one year - such type of payment is revenue in nature and the CIT(A) has rightly deleted the addition In favor of revenue
Addition on account of interest on the loans taken from concerns of Ganga Ram Group alleged that this group is famous for giving accommodation entries on commission basis and the assessee could not prove the genuineness of these loans Held that:- When addition itself is deleted accepting the loan taken as genuine, therefore, the related interest disallowed is not justifiable Decided in favor of assessee
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2012 (7) TMI 788
Disallowance u/s section 36(1)(ii) - bonus and commission payment to the Managing Director as payment in lieu of dividend - payment is for services rendered as per terms of appointment as Executive/Managing Director of the appellant company assessee contended that the bonus and commission paid to Managing Director was a regular business expenditure of the company and the assessee has been paying it regularly for the last 20 years Held that:- In the case of AMD Metplast Pvt. Ltd. (2011 (12) TMI 320 (HC) ) it was held that the amount of commission and bonus paid to the Managing Director was an allowable business expenditure - facts for are same - Therefore, appeals filed by the assessee are allowed - decided in favour of the assessee.
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2012 (7) TMI 787
Rejection of accounts of the Assessee u/s.145 of the I.T. Act - flat rate of net profit to the gross receipt of the assessee Held that:- Merely because there was a fall in net profit rate, there is no reason to reject the books of account of the assessee - difference in TDS figures as per certificates and as per books of account have been reconciled by the assessee and the reconciliation has been accepted as correct by the Assessing Officer - appeal of the assessee are allowed
CIT(A) was not justified in directing to take the Net Profit @ 4% on the declared receipts
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2012 (7) TMI 786
Condonation of delay - the signatory was not in charge of day-to-day activities - He was living in Coimbatore which is 450 kms. from the factory. - held that:- No one has preemptory right to get the delay condoned on one plea or the other. We are conscious that there cannot be presumption of deliberate delay on account of culpable negligence or malafide. But when the appellant as a Managing Director did not visualize that he may run in risk when SCN resulted in adjudication of demand and penal consequences, he became a silent spectator. Present application is abuse of process of law for no reasonable cause advanced. Condonation of delay of unexplained nature shall be premium to the lapse. There is no sufficient cause to condone the delay of 603 days made in the present case to seek appeal remedy.
Just because the Tribunal is vested with the discretion to condone the delay, exercise of such discretion is not meant to grant premium to the default of delay when neither cogent nor believable reason exist.
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2012 (7) TMI 785
Application for Dissolution of the company - Held that:- When the affairs of the company had been completely wound up or the court finds that the Official Liquidator cannot proceed with the winding up of the company for want of funds or for any other reason, the Court can make an order dissolving the Company from the date of that order. This puts an end to the winding up process - the facts and circumstances of this case, the liquidation proceedings deserve to be brought to an end.
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2012 (7) TMI 784
Interest on delayed refund Held that:- Interest on delayed refund is payable under Section 11BB of Central Excise Act, 1944 on the expiring of period of three months from the date of receipt of application under Section 11B(1) ibid and not from the date of order of refund or Appellate Order allowing such refund - order is set aside and appeal allowed
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2012 (7) TMI 783
Refund claim - bar of unjust enrichment assessee submitted that if the increase amount of excise duty is not charged as increased sale price, this itself proved that the incidence of excise duty has been borne by the seller Held that:- Their claim is hit by the bar of unjust enrichment under Section 11B of the Act as the uniformity of the price before and after assessment does not lead to the conclusion that incidence of duty has not been passed on to the buyers Against assessee
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2012 (7) TMI 782
Cenvat credit - appellants were having a D.T.A. manufacturing unit - availed modvat credit on the capital goods installed in the unit - no such capital goods were found therein - capital goods were indeed found in the newly set up 100% E.O.U Held that:- From this letter of approval, it is noticed that it permits the conversion of D.T.A. unit into an 100% EOU - It is not clear from the case records, whether there was any correspondence between the appellants and the Ministry of Commerce & Industry - whether the Ministry of Commerce & Industry has permitted the appellants to convert the existing D.T.A. unit into an 100% E.O.U.unit - case is remanded back to the Commissioner for de novo adjudication after verifying the facts with the Ministry of Commerce & Industry about the conversion of D.T.A. unit into an 100% E.O.U - appeals are allowed by way of remand.
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2012 (7) TMI 781
Penalty - Cenvat credit on raw materials and services used for non-excisable goods Held that:- Goods containing alcohol are not final product since the same are not excisable goods under the Central Excise Act - They submitted that since they were reversing 10% of the price of price of non-excisable goods - amount reversed under Rule 6(3)(b) of the Cenvat Credit Rules was Rs. 90,86,941/- which is much more than the amount paid by them on being pointed out by the Revenue - no finding has been given by the Commissioner on this aspect of their submission - matter remanded back to Commissioner
Cenvat credit - services used for traded goods was admissible - trading activity undertaken by the appellants from their Head Office - Commissioner has stated that the method prescribed under Rule 6(3)(d)(iii) of the Cenvat Credit Rules, 2004 for apportioning common services between dutiable service and exempted services can be taken as a guideline on a rational basis - appellants had paid back the ineligible credit as per work-sheet prepared by them and they contended that the work-sheet was not rejected by the Commissioner Held that:- Work-sheet submitted by the appellants has not been rejected by the Commissioner and it is open to the Commissioner to call upon the appellants to substantiate their computation of the work-sheet in respect of the credit availed and the appellants should be given an opportunity of being heard to explain their case in respect of the calculation as mentioned in the work-sheet - matter remanded back to the original authority - appeal is allowed by way of remand
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2012 (7) TMI 780
Eligibility for Notification No.12/2003-ST - According to Notification No.12/2003 what is required is that the goods and materials must have been sold by the service provider to the recipients of services and evidence should be available Held that:- Invoices have been raised for the value of spare parts - Having accepted the invoice submitted at the time of import and having determined the transaction value at that time, if the department makes a claim that spare parts have not been sold, it will not be acceptable unless it is shown that the transaction value was rejected and arrived at on some other basis or before the Customs it was declared that there were no sale. No such evidence has been placed before us nor does it form a part of memo of appeal - value of spare parts form a part of contract for maintenance and repair and exemption under the Notification No.12/2003-ST is available In favor of assessee
Repair or Maintenance service in respect of movable or immovable goods - held that:- While the respondents have produced photographs of gas turbines to submit that they are nothing but immovable property, other than relying on the contract and submission that the Commissioner has misconstrued the contract to be for maintenance and repair of power plant, the Revenue has not come up with any evidence or document to support the view that turbines is a movable property. - Decided in favor of assessee.
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2012 (7) TMI 779
Availing double benefit - benefit of Notification 01/2006 ST and also availing CENVAT credit - Original authority confirmed the demand and appropriated the amount already paid and Commissioner proposed revision and imposed penalty u/s 78 - Held that:- The assessee on the mistake coming to their notice promptly paid the amount involved along with interest due thereon - as there was nothing irregular in taking the credit of the CENVAT on the "input services", the original authority rightly did not impose the penalty - Order-in-Revision cannot be sustained inasmuch as there was no allegation in the original show-cause notice about wrong availment of the benefit of the notification - in favour of assessee.
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2012 (7) TMI 778
Advisory fees for merchant banking service - appellant submitted that service tax has been demanded on these services on the ground that these services are to be categorized under Management Consultancy Service' - application for waiver of pre deposit - Held that:- Circular no. 1/1/2001-ST dated 27.06.2001 issued in exercise of the powers vested in the Board Section 37B to ensure that there is uniformity in the classification of excisable goods in this case service tax - the appellant have made out a case to show that the appellants had a bona fide belief that the services rendered by them were not taxable prior to 16.07.2001 thus,pre-deposit is required to be waived and stay against recovery of the dues during the pendency has to be granted.
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2012 (7) TMI 777
'Security Agency Services' - Cooperative society - Assessee contested that they are not the commercial concerned engaged in providing security services - Held that:- As decided in BHOOTPURVA SAINIK SOCIETY Versus COMMISSIONER OF C. EX. & S.T., ALLAHABAD [2011 (9) TMI 736 (Tri)]that prior to 18.04.06, the definition of security agency was in relation to a commercial concerned engaged in the business of rendering services - the confirmation of service tax against the appellant for the period prior to 18.04.06 is not sustainable as appellant is a cooperative society - as definition was amended w.e.f. 18.04.06 and included 'any person' engaged in the business of rendering services related to the security of property or any person etc the appellant is liable to pay service tax w.e.f. 18.04.06 - case remanded for re-quantification of the demand.
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2012 (7) TMI 776
Demand of service tax - Society of ex-servicemen - service of Security Agency - definition of Security Agency was changed w.e.f. 18.4.2006 referring "any person" engaged in the business of rendering services instead of 'commercial concern'. With effect from 18.4.06, they have started paying service tax Held that:- Society of ex-servicemen engaged in providing security services so as to provide reemployment of ex-servicemen, cannot be held to be a commercial concern. Security agency services rendered by commercial concern was liable to pay service tax and the appellant not being a commercial concern, cannot be held to be liable to pay tax
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