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Case Laws
Showing 461 to 480 of 1051 Records
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2013 (1) TMI 600
Disallowance of Interest income – Interest free advance to group companies – Commercial expediency - Held that:- Assessee also taken a plea before us that though the advances made by the assessee to its sister concerns at free of interest in earlier year, however, the interest on these advances has been accounted in subsequent years. The assessee is following mercantile system as such interest has to be accounted on accrual basis. If there is a mutual transaction between the assessee and the sister concerns to whom the assessee made interest free advances then it has to be considered as advances made by the assessee on account of commercial expediency. Issue back to the file of the A.O. to consider the issue afresh. Remand back
Disallowance of advances written off - creditor advances written off – Held that:- The assessee only furnished list of debts and the details called for by the authorities have not been furnished. The claim of the bad debts has been disallowed by considering the material on record by finding as a fact that the debt has not been proved as bad debt. Following the decision in case of Sirpur Paper Mills (1971 (12) TMI 37 - ANDHRA PRADESH HIGH COURT) that only the debt which constitutes trade debt could be claimed as bad debt if it is irrecoverable. In the present case it is observed by the lower authorities that the debts which were written off were not trade debts as seen. In favour of revenue
Disallowance of advances given to employees written off - tour advance – Held that:- If it is an expenditure incurred in respect of its business, it should have been claimed during the relevant assessment year and if it is a debt it should have been advanced in respect of trade or business of the assessee and it should have gone to computation of income of the assessee in the previous year in which the amount of such debt or part thereof is written off or of an earlier previous year or represents money lent in ordinary course of business
The assessee is not able to lead any evidence how it has gone into computation of income of the assessee in the assessment year under consideration or in any other assessment year. Being so, we are of the opinion that findings of the lower authorities in disallowing the claim of the assessee are justified
Addition u/s 68 - The A.O. called for information at the time of assessment - The assessee failed to produce the same – Held that:- The A.O has no occasion to examine the evidence produced before the CIT(A) by the assessee. The CIT(A) ought to have called for a remand report before deleting the addition. In the interest of justice, we remit the entire issue back to the A.O. for fresh consideration. Remand back
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2013 (1) TMI 599
Deduction u/s 80IB - Whether in the absence of any completion certification showing completion of project before 31/03/2009 by the local authority, the assessee is entitled for claim of deduction u/s 80IB(10) - Assessee obtained approval from Municipal Authorities for construction of the project on 26/06/2004 - Structural Engineer certified that the project is completed on 15.9.2008 i.e. six months prior to the due date - The GHMC authorities issued completion certificate on 31.11.2009 i.e. 14 months after submission of completion certificate by the Structural Engineer
Held that:- Following the decision in case of Satish Bora & Associates (2011 (1) TMI 1215 - ITAT PUNE) has set a legal principle under the provision of relevant Municipal Laws, where there is no concept of completion certificate but only the occupancy certificate. It also contains the provisions for deemed issue of completion certificate if Municipal Authorities did not raise objections if any after filing of the Completion Certificate by the concerned Architect
It is not clear as to why the GHMC took only 14 months to issue the certificate and if there are any deviations from the approved plans by the assessee. One must examine, if the relevant Municipal Laws / Rules / Guidelines specify any time limitation for processing the certificate filed by the Architect / Structural Engineer as the case may be and issue of the final completion certificate.
AO must also examine, if there is any provision in local laws for deemed acceptance of the Completion Certificate filed by the Structural Engineer of the project in local laws. All these issue requires the explanation of the assessee with the supportive evidence of law rules. The minor deviation if any ought not to disentitle the assessee for availing deduction. For fresh adjudication remand back to AO
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2013 (1) TMI 598
Validity of notice u/s 148 – Reopening of assessment - Escaped assessment – Speculation loss - Assessee had claimed loss from speculative transaction - Transactions for trading in gold and silver futures on commodities exchange MCX – Held that:- It is trite law that the notice for reopening must stand or fail on the basis of reasons recorded by the A.O. for issuing such a notice. The case of the assessee was that by virtue of clause (a) of sub-section (5) of section 43, the same would not be treated as speculative transaction. It is not the case of the A.O. in the reasons recorded for reopening the assessment that for any particular reason such claim under clause (a) was not acceptable. A transaction of hedging to fall under clause (a), there are certain conditions to be fulfilled. However, we are afraid such a contention cannot be accepted for two reasons. Firstly, any attempt on the part of the Assessing Officer now to fall back on the conditions required to be satisfied for application of clause (a) would amount to change of reasons recorded for reopening. Secondly, any such inquiry would be wholly a fishing inquiry - In favour of assessee
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2013 (1) TMI 597
TDS u/s 194A – Rate of TDS - Whether tax has to be deducted as the rate in force in quarterly basis where the interest is payable on 31st March every year and compounded with quarterly rest – After amendment the deduction for interest payable u/s 194A at the rate of 10% w.e.f. 1/10/2009 as against 20% before the said date - Assessee company had moved application u/s 154 seeking rectification as the A.O. had computed the tax deductible in terms of the rates that were in force before 1/10/2010 and had not considered the rates in force as per the amendment made by Finance Act, 2009
Held that:- Merely because the interest is compounded quarterly does not mean that the interest is payable on quarterly basis.
The interest was accruing quarterly and therefore, the tax has to be deducted as the rate in force in quarterly basis, is not correct. The interest on ICD was payable on 31st March, although the interest was compounded with quarterly rests
It can be seen from the ledger account that the assessee company had credited the interest payable on the ICD only on 31st March, 2010; thus the claim of the assessee company that it was liable to deduct tax at source at the rate of 10%, which was the rate in force on the date of credit to the account of the payee. The liability of the assessee to deduct tax at source with reference to the interest payment is only at the rate of 10%. In favour of assessee
Delay in payment of TDS – Interest u/s 201(1) – Held that:- Following the decision in case of Hindustan Coca Cola Beverage Pvt. Ltd (2007 (8) TMI 12 - SUPREME COURT OF INDIA) that assessee cannot be made liable u/s 201(1), since the payee had disclosed the interest income in its return of income - In favour of assessee
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2013 (1) TMI 595
Revision of order by CIT u/s 263 – Computation of Period of limitation – from the date of the order of original assessment or from the order of assessment passed after remanded back by Tribunal, and CIT exercising his revisional jurisdiction u/s 263 reopened the order of assessment only in relation to the issue which was not subject matter of the appeal or issues remand back
Held that:- Yes, the order is barred by limitation. Following the decision in case of Alagendran Finance Ltd. (2007 (7) TMI 304 - SUPREME COURT) that the CIT exercising his revisional jurisdiction reopened the order of assessment only in relation to issue which was not subject matter of the reassessment proceedings, it was held that the period of limitation provided for under sub-section (2) of section 263 would begin to run from the date of the order of assessment and not from the order of reassessment.
The scope of remand pursuant to the order of the Tribunal remitting the matter to the A.O., was limited to the addition of Rs. 59,56,000/-, evidently, therefore, such deduction u/s 80I was not in issue in the remand proceedings. Under the circumstances, the limitation qua the issue of grant of deduction u/s 80I would have to be computed from the date of the original assessment order wherein the Assessing Officer had granted 30% deduction on the total income inclusive of the income u/s 68, that is, from 28th March, 1995. When so computed, the order dated 30th March, 2007 passed u/s 263, is hopelessly time barred, the prescribed period of limitation for making such order being two years from the end of the financial year in which the order sought to be revised was passed - In favour of assessee
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2013 (1) TMI 594
Penalty u/s 271(1)(c) – Concealment of income - Bonafide claim - Furnishing of inaccurate particulars - Deduction u/s 80HHC had been claimed without reducing deduction u/s 80IB – Held that:- The claim of the assessee for deduction u/s 80HHC was a bona fide claim. The claim of the assessee though later on was found to be untenable on the basis of subsequent decision of the Court, thus, it could not be held that the assessee had intentionally claimed deduction under Section 80HHC of the Act which was legally not permissible. This did not amount to furnishing of inaccurate particulars of income. Under the circumstances, no penalty, thus, could be levied u/s 271(1)(c) - In favour of assessee
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2013 (1) TMI 593
Rectification of order by Tribunal u/s 254(2) - Computation of deduction u/s 80HHC - Whether it is the net interest which has to be taken into account while computing deduction u/s 80HHC as per Explanation (baa) to Sec. 80HHC(4C) – Revision application filed by assessee contended to work out deduction u/s 80HHC, 90% of receipt by way of interest had to be excluded from profits of business taking net interest income and not the gross interest receipts – Held that:- The effect of the same would be that it is the net interest which has to be taken into consideration while computing deduction u/s 80HHC as per Clause (baa) of the explanation to Section 80HHC. The order passed by the Tribunal in the miscellaneous application being in conformity with the order in case of ACG Associated Capsules Private Limited (2012 (2) TMI 101 - SUPREME COURT OF INDIA). In favour of assessee
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2013 (1) TMI 592
Disallowance u/s.40(a)(ia) – TDS u/s 194C - Scope of sub-section (2) of section 194C – Assessee is individual and engaged in the business of construction - To transport construction material at the site, assessee had availed the services of transporters - Made payments to such transporters under the head transport charges - Payment made to contractor and sub-contractor - Assessee had only availed of the services of such transporters for carrying out the material to the site
Held that:- Section 194C(2) what was necessary was a relationship between the contractor and sub-contractor and not merely be hiring of an agency by the contractor during the course of execution of the work. Such vital requirement of relationship of a contractor and sub-contractor between the assessee and the transporters was missing
Till introduce of Clause (k) of sub-section (1) of section 194C, the category of individual, HUF or AOP was not included. Such amendment was made with effect from 1st June 2007 and obviously, therefore, would not apply to the case on hand. The Tribunal, therefore, correctly came to the conclusion that the case of the assessee was not covered u/s 194C(1)
In favour of assessee
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2013 (1) TMI 591
Addition on account of foreign travel expenses – Revenue or personal expenditure - Foreign travel expense incurred by assessee and his wife which has been allowed to the extent of 50% by the CIT(A) and upheld by the Tribunal - Assessee was a heart patient and was looking after the business of the firm - His wife had to accompany for looking after him on visit to the foreign country – Held that:- Foreign visit resulted in increase in the business and after analyzing the factual matrix had allowed 50% expenses as revenue expenditure which was wholly and exclusively expended for business purposes. An effort was made by the revenue to submit that 50% had been allowed without any basis. He, however, could not substantiate the said plea - In favour of assessee
Addition on account of late deposit of PF & ESI – Held that:- Following the decision in case of Alom Extrusions Limited (2009 (11) TMI 27 - SUPREME COURT) wherein it has been held that Second Proviso to Section 43B of the Act omitted by Finance Act, 2003 with effect from 1.4.2004 was clarificatory in nature and was to operate retrospectively. CIT(A) was right in deleting the addition made by the A.O. u/s 36(1)(va) and u/s 43B on account of late payment of employee's as well as employer's contribution to PF & ESI as the same had been deposited prior to the filing of the return u/s 139 (1) - In favour of assessee
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2013 (1) TMI 590
Apex Court issues Directions as the Law declared under Article 141 of the Constitution of India. regarding proceedings under the NDPS Act. - Directions and detailed process about - (i) Adjournment - (ii) Examination of Witnesses - (iii) Workload - (iv) Narcotics Labs - (v) Personnel - (vi) Re-testing Provisions - (vii) Monitoring - (viii) Public Prosecutors - (ix) Other Recommendations.
For the simplification of the above detailed process, we direct that the filing of the charge- sheet and supply of other documents must also be provided in electronic form. However, this direction must not be treated as a substitute for hard copies of the same which are indispensable for court proceedings.
We expect and hope that the aforesaid directions shall be complied with by the Central Government, State Governments and the Union Territories, as the case may be, expeditiously and in the spirit that these have been made.
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2013 (1) TMI 589
Stay petition - Import goods like Smart Cards and Cards from parent company – Valuation of imported goods – Purchase from related party – Held that:- The transaction between the appellant-company and the parent company were at arms length and the supplies made to the Indian buyers were of personalised Sim Cards / Smart Cards. Differential duty would come out to Rs. 6.42 crores of which a sum of Rs. 5.2 crores stands deposited during the earlier proceedings including a sum of Rs. 2 crores paid during the course of investigation. We do not find any justification to waive pre-deposit of the balance of Customs duty demanded from the assessee. In favour of revenue
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2013 (1) TMI 588
Classification - Fire detection and quenching system - Respondents have claimed the same as 'security system' - Notification No.140/91 Cus dt. 22/10/1991 - Granted exemption when imported by a 100% EOU - Held that:- Any security system is designed to protect persons/property from against threat, theft or damage. The imported equipments are very much used for protection of property and humanbeings, inasmuch as they are undisputedly used in detection of fire and extinguishing the fire as and when it breaks out. In favour of assessee
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2013 (1) TMI 587
Depositories Act, 1996 - role and power of NSDL - Respondent No. 1 filed the company petition before the CLB against L&T, Ultratech Cement, Sharepro Service, the appellant-NSDL and seven others seeking an order for decision on title of Respondent No. 1 and rectification in respect of 431 shares of L&T which were held/dematerialized by various persons - Respondent No. 1 claimed to have made a bona fide purchase of 650 shares of L & T from his broker on 4-10-1999 got delivered and claimed to have misplaced in the year 1999 and inturn received new transfer deeds for 229 shares. However, being unable to obtain fresh transfer deeds in respect of 431 shares - Respondent No. 1 sought rectification order from the Company Law Board in respect of the balance 431 shares - CLB directed NSDL to issue notices to respondent Nos. 5 and 6 and take appropriate decision in the matter -
Held that:- The role and power of the NSDL is quite restricted and limited as they are not empowered to decide or adjudicate the claim of title in respect of demated shares. Any dispute with regard to the ownership or title of any share including demated, the proper forum is somewhere else. Unless the title and/or any objection regarding transfer of shares is decided finally in case of dispute and in case there is no dispute, it cannot be forwarded by the company for further transfer. As the parties concerned unless clears the position about the ownership and/or title of the shares, NSDL is no way in a position to accept and/or permit the transfer of demated shares. Their role, in view of the above position, just cannot be enlarged in such a fashion, as done by the impugned order.
Thus considering the role and scope, if NSDL is not in a position to adjudicate and/or decide the title of any shares, there is no question of issuing notice to the concerned and hear them for deciding the title/ownership. Therefore, there is also no question of taking any decision with regard to the same. Everything will be, without jurisdiction and authority. Therefore, order passed by the Board against NSDL is quashed and set aside - liberty granted to the concerned Respondents/Original Petitioners to take out appropriate proceedings to get their dispute settled with regard to the title of the demated shares and/or such other shares - company appeal partly allowed.
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2013 (1) TMI 586
Goods used as paint on the shop floor - whether be treated as inputs under Modvat Credit Rules, 2001/2002? - Held that:- As decided in Flex Engg. Ltd. Versus CCE [2012 (1) TMI 17 - SUPREME COURT OF INDIA] the word 'input' has to be examined with the word 'manufacture'. From the definition of 'manufacture' it is clear that not only the materials used in the final product but incidental and ancillary requirements for the completion of the final product are also falls within the definition of the manufacture. As such the materials used in making the dust free hall are incidental and ancillary for the completion of the manufactures of the final product.
As decided in assessee's own case [2013 (1) TMI 554 - ALLAHABAD HIGH COURT] the paints used on the floor of the production hall to make it dust free and fire retardant, was used for manufacture of final products. As such, the Cenvat Credit was admissible on it - in favour of assessee.
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2013 (1) TMI 585
Refund claim on wrong reversal of CENVAT Credit - rejection of refund invoking period of limitation - whether the claim for refund of wrongly reversed Cenvat Credit/Modvat Credit is subject to the limitation period prescribed under section 11B - Held that:- As decided in Indo-Nippon Chemicals Co. Ltd. Vs. Union of India reported [2002 (2) TMI 136 - HIGH COURT OF GUJARAT AT AHMEDABAD]that refund/re-credit of Cenvat Credit wrongly reversed, would be subject to the provisions of Section 11B, as Modvat/Cenvat Credit is nothing but a constituent of duty. In view of this, the refund/re-credit of the wrongly reversed Cenvat Credit would be subject to the provisions of Section 11B and the limitation period prescribed in Section 11B would be applicable for filing the refund claim for Modvat Credit.
Relevant date from which the limitation period has to be counted - Held that:- Hon'ble High Court in the case of Indo-Nippon Chemicals Co. Ltd.(Supra) has held that when reversal of Modvat Credit was on insistence of Department and subsequently the reversal was found to be wrong, the provisions of Section 17 of Limitation Act would be applicable and limitation period would run from the date on which the mistake was discovered by the appellant.
Ascertainment as to whether the reversal was on the insistence or instructions of the Departmental Officers - Held that:- On this point there is dispute, as while the Department claims that the reversal in both the cases had been made by the appellant on their own without any instructions in this regard to them, Contrary to this, the appellant in their reply dtd. 02.09.01 to the Show Cause Notice have made the submissions that reversal of credit was done without any protest but on the context of wrong interpretation of rule by departmental officers advising reversal of such credit. The learned DR had been asked file his written submissions on this point but the same have not been filed in view of this, the matter has to be remanded once again to the Commissioner (Appeals) and ascertain as to whether the reversal was on advice or instructions of the Departmental Officers or made by the appellant on their own, as per their own interpretation of rules without any advice or any instructions.
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2013 (1) TMI 584
Rebate claim adjusted against the demand of interest - whether the appropriation of sanctioned rebate claim as held to be bad by the Commissioner (Appeals) would be entitled to payment of interest from the date of refund claims made by them - Held that:- As decided in Nijrang Print Pack Pvt. Ltd. Vs. Union of India [2002 (10) TMI 113 - HIGH COURT OF GUJARAT AT AHMEDABAD] such adjustments are not appropriate, and the refund is actually not given to the assessee, assessee is entitled to the interest on the same.
In the present case also, refund has actually been sanctioned to the appellant but stand adjusted. And as such, the appellants are entitled to the refund claim as also interest on the delayed refund - remand the issue to the original authority for deciding the issue of interest and the quantum of interest as the interest issue was never agitated before the original adjudicating authority inasmuch as the refund was never sanctioned by him.
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2013 (1) TMI 583
Waiver of pre-deposit - Applicants are engaged in the manufacturing of ‘sponge iron’ - During process of manufacturing of ‘sponge iron’, flue gas is generated - For cooling down the said gas, the ‘Water Heat Recovery Boiler’ is installed – Assessee claimed it as a pollution control device - Rule 2(a)(A)(ii) of CENVAT Credit Rules, 2004 – Held that:- Primafacie, agree with the assessee that they are entitled to CENVAT credit on the ‘Water Heat Recovery Boiler”.
Steam has been generated during the course of cooling down of flue gases - The steam, so generated is sold by the applicants without payment of duty - Notification No. 6/2002-C.E – Revenue demanding payment of an amount equal to 10%/5% of the value of the exempted goods - Rule 6(3)(i) of die CENVAT Credit Rules, 2004 – Held that:- Following the decision in case of HI-TECH CARBON (2003 (3) TMI 238 - CEGAT, NEW DELHI) that that the above gases are burnt out, which generate heat and in turn the same is used in the boiler to generate steam. No doubt, the steam has been generated by the applicants as a conscious act but it cannot be claimed by the Revenue that any part of the inputs has gone into the manufacture of steam
Applicants have made out a case for 100% waiver of pre-deposit. In favour of assessee
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2013 (1) TMI 582
Demand - Clandestine removal - Intention to evade excise duty liability – Bona fide belief - Assessee is manufacturer of Patent and Proprietary medicines – Valuation of physician samples - Manufacturing both exempted products and dutiable products - Issuing two sets of invoices - One set called ‘central excise invoices’ for paying excise duty - Another set of invoices called challan-cum-invoices for other commercial purposes - Clear the goods under his challan-cum-invoice rather than under excise invoice – CENVAT Credit short reversed under rule 57CC of the Central Excise Rules, 1944 - Free replacements of defective goods without payment of duty - Assessee was not paying duty on goods which was cleared free
Held that:- Following the decision in case of Kalvert Foods India Pvt. Ltd. (2011 (8) TMI 24 - SUPREME COURT OF INDIA) and we are not in agreement that the assessee entertained a bona fide impression that he need not pay excise duty on manufactured goods if it was cleared free. This is because the legal position that liability to excise duty arises when any goods are cleared from a factory whether for consideration or for free is a long settled issue. Further the excise liability on physician samples cleared free, was always known to the drug industry for decades. There were disputes only about method of valuation to be followed and not about the duty liability. The respondent is not a tiny manufacturer with no awareness of what happens in the industry. The fact that the respondent took care to clear the goods under his challan-cum-invoice rather than under excise invoice showing nil payment of duty shows his clear intent to evade excise liability.
Valuation of physicians sample – Held that:- Following the decision in case of BLUE CROSS LABORATORIES LTD. (2006 (8) TMI 220 - CESTAT, MUMBAI) that goods have to be valued on the basis of value of identical goods.
Free replacement of damaged/defective goods - Time expired medicines – Held that:- we hold that extended period of time could not have been invoked for demanding duty short paid.
Demand on account of improper reversal of credit under Rule 57CC – Lapsed credit - Held that:- The liability is for the period before the lapsing of credit though determined after the date of lapsing. In such situation it is only proper that a set off on account of such lapsed credit is given because of such liability was determined correctly during the relevant time the credit would have been available for discharging such liability. In favour of assessee
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2013 (1) TMI 581
Reversal of CENVAT Credit - Whether the respondent was required to reverse the Cenvat credit involved in the inputs lying in stock as well as contained in finished goods/semi-finished goods lying in stock as on 9-9-2004, the date when the assessee opted for exemption under Notification No. 50/2003-C.E., dated 10-6-2003 – Held that:- Following the decision in case of SABOO ALLOYS PVT. LTD. (2009 (12) TMI 125 - HIGH COURT OF HIMACHAL PRADESH) that input credit legally taken and utilised on dutiable final product, need not be reversed on the final product becoming exempt under Notification No. 50/2003-C.E., dated 10-6-2003. In favour of assessee
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2013 (1) TMI 580
Entitlement to claim input tax credit having regard to Section 9 of the DVAT 2004 - assessee/dealers are engaged in the business of leasing cars/motor vehicles - Held that:- Once it is held that the leasing of a car results in transfer of its right to use, the provisions of Section 9(1) would apply, because the cars were purchased by him, for the purpose of making sales (within the extended definition, i.e as leasing – or selling the right to use) - The concept of right to use would cover a wide spectrum of transactions; most certainly, a lease of the article, for a limited period, would be comprehended within the meaning of “right to use”. Therefore, the Court rejects the first submission of the revenue, and holds that Question No. 1 has to be answered in favour of the assessee, and against the revenue.
Whether the Act makes a distinction between “deemed sale”- stipulated under Section 2(1)(zc) (i)-(vii) and sale as explained by the main body of the definition for the purposes of section 9(2), and Sl. No. 2 of List of Non-Creditable Goods as provided in Schedule VII - Held that:- There can be no doubt that “resale” should be construed according to the definition of “sale” under the Act which includes the transfer of right to use goods. The fiction created in defining "sale" as including transactions which otherwise, in the ordinary sense, would not have been but for the deeming provision, must apply as respect the entire Act, its Schedules, and the Rules made under the Act. The fiction has been created with respect to the term "sale", and would definitely extend correspondingly to the word "resale" as well. Thus this is a logical extension of the principle that “where the draftsmen uses the same word or phrase in similar contexts, he must be presumed to intend it in each place to bear the same meaning”. The reasoning of the Tribunal, and its reliance on the Hamdard case (2007 (4) TMI 607 - SUPREME COURT) is upheld. Thus, leasing activity carried on by the assessees does amount to resale.
Applicability of value added tax on goods "Unmodified form" - Held that:- Having considered the meaning of the term "form", this Court is of the view that in the context of applicability of value added tax on goods, "unmodified form" would have to be mean that the goods remain in their original state. Mere change/modification by ordinary wear and tear would not amount to modification in form. Generally speaking, form would remain unmodified as long as the basic functionality, structure, and configuration remain unchanged. A complete reading of the relevant entries of the seventh schedule in this case would disclose that while facially, motor vehicles, per se are disentitled to input credit, significantly that entry (Sl. No.1) is subject to Entry No. 2. Entry 1 (i) (motor vehicles) is thus, subject to Entry 2, which, in its controlling part says “…Any entry in clause 1 other than item (ii), (xiii), (xiv) and (xv) shall not be treated as non-creditable goods if the item is purchased by a registered dealer for the purpose of resale in an unmodified form.”. Therefore, the articles in which the assessee deals with fall within the provisions of Sr. No 2 and are thus creditable goods. As a result of this discussion, it is held that the view taken by the Tribunal in favour of the assessee is correct - against the revenue.
Whether a leasing company shall avail the Input Credit available to them on proportionate basis? - Held that:- This Court is of the opinion that while the Tribunal was correct in holding that the manner of grant of credit can be regulated by virtue of Section 12 (4), it fell into error in holding that Rule 4 regulated the grant of credit as it merely visualizes three situations in respect of the method of calculating the “amount of turnover or turnover of purchases arising in the tax period in the case of a sale or purchase occurring.”. Its reference, to sale by transfer of right to use, again is only in respect of the extent of sale for the concerned tax period. However, it does not support the conclusion that credit is admissible in respect of different periods, spreading over, as it were, the credit which a dealer can so enjoy for the duration of the agreement proportionately staggering payment of the amounts of input tax deductible towards credit.
When a dealer, who is involved in leasing business, purchases cars, the point at which credit can be claimed is the tax period when he makes the purchase. The amount of tax – on the purchase so made can be claimed as a credit, in the turnover which he is obliged to declare to the VAT authorities. That turnover would be the total lease rental received by him, for the corresponding tax period (when the purchase is made by him), as well as any other VATable transaction he may be engaged in. Thus, the question of spreading over his credit, proportionately or otherwise, is unfeasible and in any case not borne out by the VAT Act or the Rules - There is no warrant for such method - question answered in favour of the assessee.
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9911796707
