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2017 (9) TMI 1644
The Supreme Court of India in 2017 (9) TMI 1644 - SC Order, condoned the delay and granted leave. The court disposed of the appeal in similar terms as a previous order, stating that practice under the Architects Act, 1972, is restricted to registered architects. The appeal was disposed of with no order as to costs.
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2017 (9) TMI 1643
Provisional release of goods - prohibited goods - Section 110A of the Customs Act - Held that: - since the bill of entry was filed as early as on 06.06.2017 and as of now, the examination has been done by the authorities, there will be a direction to the respondents to consider the petitioner's representation for provisional release of goods, which are not prohibited and where there are no other issues including IPR issues - petition disposed off.
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2017 (9) TMI 1642
Transfer Pricing Adjustment - comparables selection criteria - functional dissimilarity - Held that:- The assessee provides software development services and customer support service to its Associated Enterprises thus companies functionally dissimilar with that of assessee need to be deselected from final list.
Exclusion of telecommunication expenses incurred in foreign currency from export turnover as well as total turnover while computing the deduction under Section 10A - Held that:- We find that the issue of expenditure incurred towards telecommunication expenses in foreign currency is reduced from export turnover an equal amount should also be reduced from total turnover while computing the deduction under section 10A of the Act, is covered in favour of the assessee by the decision of the Hon'ble Karnataka High Court in the case of CIT v. Tata Elxsi Ltd. [2011 (8) TMI 782 - KARNATAKA HIGH COURT] .
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2017 (9) TMI 1641
Issues Involved: 1. Validity of Penalty Proceedings Initiated Under Section 271(1)(c) of the Income-tax Act, 1961. 2. Defective Notice Issued Under Section 274 Read with Section 271 of the Act. 3. Merits of the Penalty Levied for Unexplained Investment in Jewellery.
Issue-wise Detailed Analysis:
1. Validity of Penalty Proceedings Initiated Under Section 271(1)(c) of the Income-tax Act, 1961: The appeal by the assessee challenges the order of the Commissioner of Income-tax (Appeals) - 4, Bengaluru, which upheld the penalty of Rs. 2,08,365/- levied by the DCIT, Circle-2(2), Bangalore under Section 271(1)(c) of the Income-tax Act, 1961 for the assessment year 2011-12. The penalty was based on the addition of Rs. 6,74,320/- for unexplained jewellery found during a search action under Section 132 of the Act. The assessee contended that the penalty proceedings were initiated without proper satisfaction being recorded in the assessment order, rendering the initiation and the subsequent penalty order invalid.
2. Defective Notice Issued Under Section 274 Read with Section 271 of the Act: The assessee argued that the notice issued under Section 274 read with Section 271 of the Act was defective as it did not specify whether the penalty was for "furnishing inaccurate particulars of income" or "concealment of income." This contention was supported by the decision of the Hon’ble Karnataka High Court in the case of Manjunatha Cotton & Ginning Factory (359 ITR 565) (Kar) and the rejection of Revenue’s SLP by the Hon’ble Apex Court in the case of SSAS Emerald Meadows. The Tribunal observed that the notice issued to the assessee did not delete inappropriate words, making it unclear which specific default was being penalized. The Karnataka High Court had held that such a notice is invalid, and any consequential penalty proceedings/orders are also invalid.
3. Merits of the Penalty Levied for Unexplained Investment in Jewellery: On the merits, the assessee contended that the addition of Rs. 6,74,320/- was based on a valuation report, which is an estimation, and no penalty can be levied on such a basis. The Revenue, however, argued that the addition was sustained due to the lack of a reconciliation statement from the assessee. Despite this, the Tribunal did not delve into the merits of the penalty, as it found the initiation of penalty proceedings itself to be invalid due to the defective notice.
Conclusion: The Tribunal, after considering the rival contentions and the material on record, held that the notice issued under Section 274 read with Section 271 of the Act was indeed defective. Following the judgments of the Hon’ble Karnataka High Court in the cases of Manjunatha Cotton & Ginning Factory and SSAS Emerald Meadows, the Tribunal declared the penalty proceedings and the consequent penalty order invalid. Therefore, the penalty of Rs. 2,08,365/- levied under Section 271(1)(c) of the Act for the assessment year 2011-12 was deleted. The grounds raised by the assessee regarding the defective notice were allowed, and the other grounds on the merits of the penalty were not adjudicated due to the invalidation of the penalty proceedings.
Order: The appeal by the assessee for the assessment year 2011-12 was allowed, and the penalty levied was deleted. The order was pronounced in the open court on 22nd September 2017.
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2017 (9) TMI 1640
G.P. addition - admitted facts in the statement of Director u/s 132(4) - Held that:- Taking into account the average GP rate which will be applied in the present case will be 12 per cent. It is made clear that where ever the profit is more than 12 per cent, the same will not be refunded to the assessee but where it is less than 12 per cent, the income will be assessed on the basis of 12 per cent GP.
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2017 (9) TMI 1639
CENVAT credit - a part of the amount showing in the invoice has been retained by the appellant in terms of contract towards performance guarantee - Rule 4 (7) of Cenvat Credit Rules,2004 - Held that: - identical issue decided in the case of M/s. Hindustan Zinc Ltd. Versus C.C.E. Jaipur-II [2017 (1) TMI 373 - CESTAT NEW DELHI], where it was held that in case of any amount retained or discounted after the invoices were issued, the credit need not be changed and full credit of service tax paid to the service provider will be eligible for credit - credit allowed - appeal allowed - decided in favor of appellant.
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2017 (9) TMI 1638
Proceeding pending before the Debt Recovery Tribunal, Allahabad simultaneously with corporate insolvency resolution process - Held that:- Entire proceeding before the DRT is completely without jurisdiction precisely in the backdrop that once the proceeding has already been commenced under IBC, 2016 and Moratorium under Section 14 of IBC, 2016 has already been issued and even in the said proceeding the parties have put their appearance before the insolvency professionals, then the impugned proceeding against the guarantors of principal debtor is per se bad.
Once the liability is still in fluid situation and the same has not been crystallized, then in such situation two parallel/split proceedings in different jurisdiction should be avoided, if possible.
This Court is of the considered opinion that in the aforementioned facts and circumstances once the sufficient safeguards are provided in the IBC, 2016 & the regulations framed thereunder to the bank, and even the liability has not been crystallized either against the principal debtor or guarantors/mortgagors at present, then the proceeding, which is pending before the Debt Recovery Tribunal, Allahabad cannot go on and the same is stayed till the finalisation of corporate insolvency resolution process or till the NCLT approves the resolution plan under sub-section (1) of Section 31 or passes an order for liquidation of corporate debtor under Section 33, as the case may be.
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2017 (9) TMI 1637
Disallowance of deduction claimed u/s. 35(1)(ii) - Disallowance based on statement recorded on oath during survey - no opportunity to cross examine the witness - Held that:- AO got swayed away with the statement recorded on oath of Mr. Swapan Ranjan Dasgupta during survey conducted at the premises of M/s. Herbicure. Answers given by Shri Swapan Ranjan Dasgupta, wherein he admits to provide accommodation entries in lieu of cash. This information we should say can be the tool to start an investigation when the assessee made the claim for weighted deduction.
The general statement of Shri Swapan Ranjan Dasgupta against donation made the claim of assessee for deduction suspicious. However, when the AO investigated, Shri Swapan Ranjan Dasgupta has confirmed that M/s. Herbicure was in receipt of the donation and it has not given any refund in cash, then the sole basis of disallowance of claim as a matter of fact disappeared. It should be remembered suspicion howsoever strong cannot take the place of evidence.
The confirmation from Shri Swapan Ranjan Dasgupta fortifies the claim of the assessee for weighted deduction u/s. 35(1)(ii) of the Act. The sole basis of the addition/disallowance based on statement recorded on oath during survey cannot be allowed as held by Hon’ble Supreme Court in Kader Khan & sons (2013 (6) TMI 305 - SUPREME COURT). Moreover, we note that if the AO was hell bent determined to disallow the claim of the assessee, then he should have granted an opportunity to cross examine Shri Swapan Ranjan Das Gupta and Shri Kishan Bhawasingka as held by Hon’ble Supreme Court in Andaman Timber (2015 (10) TMI 442 - SUPREME COURT). - Decided in favour of assessee
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2017 (9) TMI 1636
Jurisdiction - case of petitioner is that the impugned order is without jurisdiction as the petitioners are administering the liquor policy of the State of Uttarakhand and, therefore, are not enterprises within the meaning of Section 2(h) of the Act - whether the petitioners are excluded from the scope of the term 'enterprise' as defined under Section 2(h) of the Act. Section 2(h) of the Act? - Held that: - A plain reading of Section 2(h) of the Act indicates that an enterprise would also include a department of the Government, which is engaged in any activity relating to production, storage, supply, distribution, acquisition or control of articles or goods. Indisputably, the petitioners were charged with the function of supply and distribution of IMFL (the manner in which they conducted such business is the subject matter of information provided by respondent no. 2). The activity carried on by the petitioners is clearly not relatable to any sovereign function of the State of Uttarakhand and, therefore, the petitioners are not excluded from the ambit of Section 2(h) of the Act - distribution of liquor cannot by stretch be considered as one of the activities falling within the above exclusionary provision - the contention that the petitioners are not enterprises within the meaning of Section 2(h) of the Act is unmerited and is rejected as such.
Merely because multiple remedies arise from a set of facts or multiple consequences arise from the same set of facts does not prevent recourse to more than one proceedings. Unless the proceedings are mutually destructive - which in this case they are not - recourse to multiple proceedings on the same set of facts is not barred.
Petition dismissed - decided against petitioner.
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2017 (9) TMI 1635
Penalty u/s 78 - Appellant had not discharged the Service Tax on the amount received as charges towards manpower recruitment or supply agency services - Held that: - in the absence of any correspondence with the department and in the absence of any plausible reason for not discharging the service tax liability in time despite being a Unit registered with the service tax Commissionerate, all reasoning put forthwith by the Appellant would not carry the case any further, as Appellant being an Assessee in the organized sector should have known the law better than anyone else - penalty upheld - appeal dismissed - decided against appellant.
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2017 (9) TMI 1634
Application to extend the stay order rejected - Held that:- It would be appropriate to dispose of this petition directing the ITAT Regular Bench where the appeal of the petitioner-Company is stated to be pending to decide the petitioner-Company’s appeal, within a period of 10 working days from the date of presentation of a certified copy of this order. For this purpose an appropriate date be fixed on the petitioner-Company’s application for early listing of the pending before the ITAT. Further in view of the petitioner’s case that the issue before the ITAT is fully covered by the judgment of this Court in the case of Commissioner of Income Tax (TDS), Jaipur vs. M/s. Bharti Hexacom Limited. (2017 (7) TMI 1076 - RAJASTHAN HIGH COURT) it would also be free to move afresh an application for extension of stay order before the ITAT
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2017 (9) TMI 1633
Addition made u/s. 40A(3) - purchase of land holding these cash payment falls under exceptional circumstances r.w.r. 6DD of Income Tax Rules - Held that:- CIT(A) has rightly held that the assessee’s case is found to be covered under the exceptional circumstances under rule 6DD of IT Rules. Accordingly, the addition made by the AO amounting to ₹ 60 lacs was rightly deleted by the Ld. CIT(A). - Decided in favour of assessee.
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2017 (9) TMI 1632
Applicability of the provisions of section 44 BBB - Held that:- In the case of NPCIL (2016 (3) TMI 117 - ITAT MUMBAI) the Tribunal has held that provisions of section 44BBB would be applicable for the project executed by the assessee. We hold that the assessee cannot be taxed as per the provisions of section 9 of the Act, that it is covered by the section 44BBB of the Act. Confirming the order of the FAA we decide the effective Ground of appeal against the AO.
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2017 (9) TMI 1631
Reopening of assessment - According to the reasons, the assessee had shown a contrived loss by misutilization of NMCE platform through the broker R.P.Jambuwala but as contended that in fact, the said figure was not a loss shown by the assessee but was shown as receipts in the commodity speculation account - Held that:- NOTICE, returnable on 11.10.2017. The respondent Assessing Officer may continue with the assessment in connection with the impugned notice, final order thereon shall not be passed without the leave of the Court. Direct service is permitted.
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2017 (9) TMI 1630
Maintainability of appeal - no readjudication order has been passed - Held that: - Normally, Tribunal does not pass order of any kind when an appeal is not maintainable. But this is an extreme case of hardship caused to the appellant, which calls for above order in exercise of power conferred on Tribunal under Rule 41 of CESTAT (Procedure) Rules, 1987. It may be appreciated that courts are not powerless to render justice since a litigant cannot be remediless.
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2017 (9) TMI 1629
CENVAT credit - input services - Convention Service - Membership of Club or Association Service - Renting of Immovable Property Service - Rent-a-cab Service - Repair of Motor Vehicle Service - Held that: - in various judgements, the respective services have been held to be ‘Input service’ as defined under Rule 2(l) of CCR, 2004, accordingly, the service tax paid on these services is admissible to credit - appeal allowed - decided in favor of appellant.
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2017 (9) TMI 1628
CENVAT credit - the machine installed in the premises of dealer, undergoing repairs - Held that: - There is no evidence on record to show that the appellant was not service provider to dealers. The service brings the appellant as a service provider to the fold of law and the dealer as a recipient of service of the appellant is recognized by the Authority below - the service tax payable for the repair of the machine wherever that is installed makes no difference to law - credit allowed - appeal allowed - decided in favor of appellant.
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2017 (9) TMI 1627
Refund of unutilized CENVAT credit - Rule 5 of CCR 2004 read with N/N. 27/2004-CE(NT) dated 18.06.2012 - Held that: - at the time of availment of Cenvat credit, the same has not been disputed, therefore, the refund claim also cannot be denied now - refund allowed - appeal dismissed - decided against Revenue.
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2017 (9) TMI 1626
Computation of income from business of life insurance - determining the profit/loss of the assessee u/s. 44 - Held that:- Respectfully following the decision of the coordinate Bench of this Tribunal in assessee’s own case for AY 2011-12 [2016 (9) TMI 1418 - ITAT BANGALORE] we are of the view that surplus/deficit as per shareholders account may be aggregated with surplus/deficit of the policy holders account for determining the income of the assessee u/s. 44 of the Act. The CIT(Appeals) after considering the relevant provisions of the Act has rightly deleted the addition made by the AO. - Decided against revenue
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2017 (9) TMI 1625
Remission of duty - Rule 21 of Central Excise Rules 2002 - goods lost in fire accident - rejection of claim on the ground that the appellant did not take reasonable steps to avoid the accident of fire in their factory - Held that: - fire took place in their factory premises due to short circuit as is the reason given by the Chief Fire Officer in his report who himself has stated that the fire took place due to electricity and reason of the fire is due to ignorance of the appellant. Fire due to short circuit is unavoidable due to improper voltage supplied by the Electricity Department or due to electricity failure - The same is unavoidable by taking all reasonable measures to avoid fire.
The fire took place in the factory premises of the appellant was beyond their control - claim of remission of duty cannot be rejected - appeal allowed - decided in favor of appellant.
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