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Showing 461 to 480 of 2855 Records
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2015 (10) TMI 2402
Valuation of goods - Undervaluation of goods - Job works - conversion of DTA unit into EOU unit - Benefit of notification 23/2003 - Held that:- During investigations of contract between one party and the respondents was recovered. In terms of the contract with M/s Sulakhi Limited it is clear that it is valid for 10 years from 1 may 2003 as per clause 2.1 and 11.2 of the agreement. It prescribes in paragraph 4 that the material supplied by the respondents to the processor would be the property of the respondent, proper records of the raw materials will be made and reported to the respondents by the processes. It described in paragraph 4 and 5 that the product will be of a particular specification, failing which the processor has to pay damages. The agreement also fixes the processing charges for the job. There was however, no such agreement recovered in respect of M/s Sahastra and M/s Sangadeep. During the examination of various employees of the respondent and one of the processors following has emerged.
From the statements recorded it is apparent that the price at which spent goods were being cleared from the respondent s premises was linked to the price at which the processed goods were to be sold back to the respondents. This is clear from the statements recorded and from the terms of the contract. In the circumstances it cannot be said that the price negotiated between the respondent and the processors was price determined on an arm s length. The price of spent goods was directly linked to the price of the processed goods received back from the Processor. There may or may not have been a written contract between the parties to the contract but there was a clear understanding. Therefore in addition to the sale by the respondents to the processor not being an international transaction, it was also not at arm s length. - The Commissioner has failed to appreciate that the transaction in case of a DTA sale is a local transaction price whereas in case of clearance of an EOU unit the assessable value should be the price in the course of International trade.
Having arrived at the conclusion that the domestic transaction value is to be accepted as the assessable value, due consideration has not been given to the arguments regarding alternate method of valuation in case the domestic transaction value is not accepted as assessable value. The respondents have raised many issues, like using common processing charges for calculations, regarding the method adopted in the show cause notice which have not been answered in the order of Commissioner as he has accepted the domestic sale price as the assessable value. - Cenvat credit rules limit the amount of credit available in respect of duty paid by EOU and therefore credit of entire duty is not available to the processor and hence it is not the revenue neutral situation. From the above it is clear that it is not a case of revenue neutral situation and Commissioners observation regarding with any neutrality is misplaced.
Extended period has been invoked on account of recovery of the contract between the respondents and one of the processor’s in the year 2008. The said agreement was not in the knowledge of the revenue and the terms of transaction between the respondents and the processor’s were not in the knowledge of the Department and were not declared to the Department. I find that the terms between the respondents and it processor’s are of extreme importance in determining the assessable value and therefore non-consideration and nondisclosure of the said terms amounts to misdeclaration and suppression. - impugned order is set aside and the matter is remanded to adjudicating authority for ascertainment of the assessable value after giving due consideration to the arguments of the respondent in this regard. - Decided in favour of assessee.
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2015 (10) TMI 2401
CENVAT Credit - credit of input services distributed by the Input Service Distributor - Jurisdiction - appellant submitted that show cause notice should have been issued to ISD located at Thane and not to them (unit availing credit). - Held that:- Distinction between the location of ISD and that of a manufacturing unit itself is immaterial. Credit is finally availed and utilised by the manufacturing unit. What learned counsel is trying to say is that show cause notice should be issued to head as hand has acted as per the direction of head. In our view, as rightly pointed out by learned AR, cause of action stands with availment and utilization of credit at the manufacturing unit. Of course, ISD and manufacturing unit are integrally connected, and both of them unitedly has to resolve the issue with the department. - Decided against the assessee.
Input service distributor is not providing either any service or manufacturing any goods. There is no requirement of assessment or self-assessment. Input service distributor is only receiving the invoices of service tax paid which in turn are being distributed to different manufacturing units/service providing units. ISD per se does not value, classify or decide the rate of duty relating to the services so received. Therefore there is no question of his assessing such services. All that he does is distributing the same.
Role of ISD is very different than that of a registered dealer and it is because of this reason that there is a separate return in case of a registered dealer which is not so in case of ISD. In case of ISD, the normal service tax return has a column for the distribution of credit of service tax and that is sufficient to ensure that the distributed service tax is not more than that shown in the invoices. - All that input service distributor is to certify in clause (b) that they have distributed cenvat credit correctly. Based upon the heading given in the return which is a common heading for service provider as well as input service distributor, it cannot be claimed that input service distributor is making self assessment and that self assessment is required to be challenged. No rule provides for assessment/self-assessment by ISD. In view of the said position, we find that the claim of the learned counsel is required to be out rightly rejected and we accordingly do so.
In case of availment of cenvat credit the primary responsibility that the credit has been correctly taken, is on the manufacturer or availer of cenvat credit as per Rule 9(5) and 9(6). Rule 9(5) very clearly provides that the burden or proof regarding admissibility of the cenvat credit shall lie upon the manufacturer or provider of output service taking such credit. In view of this position, we have no hesitation in holding that the extended period of limitation has been correctly invoked. We also note the judgment of hon’ble Madras High Court in the case of F.L. Smidth Pvt. Ltd. (2014 (12) TMI 699 - MADRAS HIGH COURT). - Demand with penalty confirmed - Decided against assessee.
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2015 (10) TMI 2400
Manufacturing activity or not - preparation of cutlery pack for airlines - they put a card showing their name on the cutlery pack so that it is known to the passengers that the catering is by them - items like dal, rice, curry, etc. which are separately packed. - In addition to these items, appellants also bought other items like butter, jam, pickles, etc. manufactured by other manufacturers which are excise duty-paid, if applicable. They put such items on the tray, along with bread, etc. and these are handed over to the airlines in the aircraft. In the aircraft, the heated items are also put in such trays and served to the passengers. - Invocation of extended period of limitation.
Held that:- just because particular goods are classifiable under a particular heading, it will not automatically mean that the activities carried out by an appellant amounts to manufacture. It is for the Revenue to prove that the activity carried out by the appellant amount to manufacture and it satisfies the criteria prescribed by the hon ble Supreme Court, viz. new name, character and use. In our view, adjudicating authority has not given any findings on this issue.
Extended period of limitation - Held that:- the appellants were registered with the department either for payment of excise duty or for payment of service tax. Some of the appellants were manufacturing cake pastries, chocolates and were regularly paying excise duty. Further, it is very well known that the appellants are engaged in providing catering services to the various airlines. In fact, catering to the airline is their main business. Moreover, no such caterer was paying excise duty on meals. In these facts, it is difficult to say that there was suppression of facts or willful misstatement of facts or intention to evade duty.
Whether goods are branded goods - Held that:- Passengers understand that the catering is being done by the appellants. Thus, the meals get connected with the appellants and, therefore, in our considered view, the goods being supplied are branded goods and we find that, almost identical situation existed in the case of Australian Food India (P) Ltd. (2013 (1) TMI 330 - SUPREME COURT) decided by the hon’ble Supreme Court -
For the first issue whether the activity amounts to manufacture or not, we would have normally remanded the matter to the Commissioner for examining the same and give his finding. In the facts and circumstances of the case, in our view, the extended period of limitation is not invokable, we therefore do not consider it necessary to remand the matter to the Commissioner on the issue of manufacture. - demands are beyond the normal period of limitation - Decided in favour of assessee.
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2015 (10) TMI 2399
Demand of differential duty - valuation - whether the amount received as bonus by the appellant-assessee from its buyers for the performance of converter bricks/refractory bricks would be included in the assessable value of the refractory bricks sold by the appellant-assessee - Held that:- Refractory bricks were sold by the appellant-assessee based upon the terms and conditions as envisaged in the purchase orders. In the purchase order it is specifically stipulated for performance guaranteed bonus which indicated that the appellant-assessee should stand guarantee for the number of heat per set as per the agreements and bonus shall be awarded if the life achieved is above guaranteed heats and there is a penalty clause also that if the refractory bricks do not sustain the guaranteed heats then penalty would be recovered from the appellant-assessee. We find that the issue is no longer res integra as this Tribunal in the cases of MPR Refractories Ltd. Vs. CCE, Hyderabad (2009 (4) TMI 829 - CESTAT BANGALORE), CCE, Chennai Vs. VRW Refractories (2008 (7) TMI 647 - CESTAT, CHENNAI), Jalan Refractories (P) Ltd. Vs. CCE, Jaipur (2000 (9) TMI 192 - CEGAT, CHENNAI) and Indian Telehpone Industries Vs. CCE, Cochin (2004 (8) TMI 210 - CESTAT, BANGALORE), has consistently held that subsequent dealings between the assessee and the buyer on account of performance or otherwise of the goods is not of any concern in regard to the sale price of the goods at the time of removal. We are, therefore, of the opinion that there is no justification for treating the bonus amount as part of the price of the goods and demanding duty on the basis of bonus received from the buyers for better performance of the bricks was not includible in the assessable value of the refractory bricks. - Impugned order is set aside - Decided in favour of assessee.
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2015 (10) TMI 2398
Manufacture - captive consumption - Department contends that the UDMH manufactured by the appellant and used for mixing with HH in the ratio of 75:25 has to be treated as an intermediary product and since it has been used in the manufacture of an exempted final product, the benefit of exemption notification No.67/95 is not available - Held that:- Admittedly UH25 is manufactured by mixing 75% of UDMH and 25% of HH in mixing container and thereafter thoroughly stirred for 90 minutes to meet the required density and specifications. According to the decision of the Hon ble Supreme Court, to call a process as manufacture it should result in emergence of a new product with distinct name, character and use. In this case there is no doubt that ISRO has given a new name UH25. The question that arises is whether it has attained a different character and is for a different use. As regards use, there is no dispute that both UDMH and HH25 are used for the same purpose viz., as a rocket propellant or fuel.
In the absence of any evidence to show that there is a change in the character of the product and use of the product, we cannot say that Department has been able to show that a new product, as per the definition of manufacture laid down by the Hon’ble Supreme Court, has emerged. In such a situation, when by mixing UDMH and HH a new product is not emerging, it cannot be said that UDMH has been captively consumed in the manufacture of a product which is exempted and therefore duty liability has to be discharged on UDMH manufactured by the appellants and used within the factory. - appellants have been able to show that there is no manufacture and no new product is emerging by mixing UDMH and HH and therefore the stand taken by the Revenue and the impugned order are not sustainable. - Decided in favour of assessee.
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2015 (10) TMI 2397
CENVAT Credit - use of Capital goods in different premises - Suppression of facts - Held that:- The appellant shifted the machine to another premises near to the factory and returned the same within 180 days. The movement of machine as well as semi finished material from the factory and finished material from the rented premises are by challans. According to the appellant, the shifting was done only due to paucity of space, and that no job work was done. The Counsel for appellant submitted that the movement of goods on challans were done as for job work though no job work was done. - appellant has taken semi finished goods outside their factory premises for completion of manufacturing process due to shortage of space in the factory, and the finishing work of stitching and packing is being done by the appellant without hiring or engaging another person for doing the said work. That as no job worker is involved the provisions of Rule (5) of Cenvat Credit Rules do not apply. - The fact that machine was used in a premises near to the factory is not disputed. So also it was used for connected process of manufacture. The process in these premises was carried out by the appellant themselves. The machine was used by appellants for the production of final products. Thus the activity of appellants in using the machine (capital goods) can be said to be part of its manufacturing activities of final products in its registered factory premises. There is no justification for denying credit. - there is no suppression of facts on the part of the appellant as he intimated the department about removal of machine by proper documents, I am of the view that the cenvat credit cannot be denied to the appellant. - Decided in favour of assessee.
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2015 (10) TMI 2396
Determination of correct assessable value - Inclusion of commission paid and discounts given - Whether for the period prior to 1.7.2000 when the price on which the goods are generally sold is the correct assessable value or not - Held that:- As the issue has been settled by Hon ble Apex Court in the decision of Elgi Equipments Ltd. (2007 (8) TMI 20 - SUPREME COURT OF INDIA), therefore we hold that price at which goods have been ultimately sold to M/s. PDV shall be the assessable value. In these terms, demands for the period January, 1986 to August, 1987 as confirmed by way of impugned order is set aside. Further, we hold that for the period September, 1987 to November, 1988, the price at which the M/s. RMPL sold the goods to M/s. PDV is the assessable value. In these terms, we have decided the assessable value. As there were no malafide on the part of M/s. RFI for short payment of duty, the penalty is not imposable. - in this case, penalty of ₹ 25,000/- has been imposed on M/s. RMPL. As M/s. RMPL is an artificial person and in the facts of circumstances of the case, malafides against M/s. RMPL are not stand proved as they have conceded that the price at which M/s. RMPL sold the goods to M/s. PDV is the correct assessable value. - Decided in favour of assessee.
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2015 (10) TMI 2395
CENVAT Credit - appellant was maintaining a common cenvatable register in respect of the inputs used in the manufacture of PD pumps as also in the manufacture of spare parts - spare parts manufactured by them were being cleared on payment of duty by utilizing the CENVAT credit - held that:- there is no dispute on the factual position. Admittedly during the period in question the appellant availed the credit in respect of common inputs used in the manufacture of dutiable as also exempted final product. They initially reversed the CENVAT credit relatable to the inputs used in the manufacture of the exempted final product but subsequently they reversed the entire credit, even the one which was relatable to the inputs used in the manufacture of spare parts. - Impugned order is set aside - Decided in favour of assessee.
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2015 (10) TMI 2394
Confiscation of goods – Imposition of penalties – Revenue contended that pulses carried in trucks was meant for illegal export to Nepal and goods were correctly confiscated under Section 113(d) and vehicle was correctly confiscated under Section 115 – Goods were also prohibited as per were also prohibited by DGFT Notification No. 35/2009-2010 – Respondent contended that goods were not intended to be exported to Nepal and were being transported to Manjharia Godowns within the territory of India and pulses seized were meant for sale within India.
Held That:- There is no evidence to rebut the argument of Respondent that pulses were meant for sale only within India – Information gained by Department was on mere hearsay of driver and cannot be taken as evidence - Impugned pulses were not liable to confiscation under Section 113 (d) as these were moving within the territory of India - Pulses have not been shown to have been notified as specified goods under Section 111 - No evidence on record that owner of truck had knowledge of smuggled nature of goods – Decided against Revenue
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2015 (10) TMI 2393
Duty demand - Import of Electrode Grade Calcined Petroleum Coke – Classified goods under CSH No.2713 11 12 and claimed benefit of exemption Notification No.20/2006-Cus - Show-cause cum demand notice issued for wrong availment of benefit under exemption – Appellant states that word "coke" is generic term and not indicative of any particular source of origin and different tariff heads cover different varieties of coke - Benefit of exemption should be allowed to all varieties of coke and same cannot be narrowed down - Demand is barred by limitation – Held That:- Under notification, petroleum crude, kerosene, LPG, petrol, diesel coal, coke etc., have been allowed benefit thus coke derived from coal only, cannot be read into Notification, while allowing exemption to coke derived from other sources, like petroleum.
The benefit of the exemption Notification No.20/2006-Cus dated 01.03.2006 as amended, is available to "Electrode Grade Calcined Petroleum Coke" imported by the Appellant. – Decided in favour of Appellant.
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2015 (10) TMI 2392
Import of capital goods under SHIS scheme - Supply of equipment for continuous annealing line for cold rolling mill – Claimed clearance under Status Holder Incentive Scheme (SHIS) scheme vide Customs Notification No. 104/2009 – Revenue contended that goods are not capital goods thus not liable for exemption.
Held That:- Definition of "capital goods" given in FTP are same for EPCG licence or for SHIS Licence – Notification No.104/09-Cus. clearly allows exemption of capital goods imported into India against Duty Credit Scrip issued under SHIS Scheme thus respondents are eligible for benefit – Decided in favour of the assessee.
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2015 (10) TMI 2391
Export of Leather Pouches - 100% EOU - Reimported goods under Notification No. 158/95-Cus - Appellant contended that reimport was within 3 years from date of report and delay of a few months is well within Commissioner's power to condone - Held That:- Condition No. II of Notification No. 158 / 1995-Cus. required that goods be re-exported from date of importation within 6 months of date of re-importation or such extended period not exceeding a further period of six months as Commissioner may allow - Appellant did not seek any permission to re-export the goods beyond the period of 6 months and as such none was granted - Benefit of exemption notification cannot be allowed as one condition is not satisfied - Decided in favour of Revenue.
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2015 (10) TMI 2390
Transaction Value – Rule 4(1) of the Customs Valuation Rules – Department has not been able to dispute the genuineness of the transaction value nor adduced any evidence of contemporary import – Appellant contends that once the Transaction Value is determined under Rule 4(1) there is no question for determining the value under subsequent rules.
Held That:- Reliance on only one part of the Chartered Engineers certificate and ignoring the other part is a misdirected step in arriving at a conclusion - Revenue could have accepted the Transaction Value or the value could be determined under the Residual Rule 8 of Customs Valuation Rules - Order of Commissioner (Appeals) is not sustainable – Decided against the Revenue.
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2015 (10) TMI 2389
Enhancement of Redemption fine and penalty - Non-declaration of MRP on package of goods - Redemption fine and penalty imposed, reduced by appellate authority - Held That:- Considering minimum profit of 10% of value of goods the redemption fine shall be ₹ 2,00,000/- - Omission of declaration of MRP brought Respondent to fold of law - Penalty imposed imposed by Commissioner (Appeals) has to send message to society that breach of law is mildly punished and such approach shall be bonus to evasion - Penalty enhanced to ₹ 1,00,000/- under section 112(a) looking to gravity of the matter - Decision made in case of Commissioner of Customs, Mumbai Vs. Mansi Impex [2011 (8) TMI 470 - Supreme Court of India] followed - Decided in favour of Revenue.
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2015 (10) TMI 2388
Penalty under Section 112 of Customs Act, 1962 - Polyester yarn imported - Goods seized under Section 123 - Appellant contends that goods were purchased from open market and believed to be duty paid and since he is neither a Central Excise assessee nor a registered dealer, he did not maintain prescribed documents - Revenue contends that goods were imported availing the duty benefit under Export Promotion Scheme thus escaped customs duty - Goods purchased without invoices thus penalty imposed is warranted - Held That:- Role of appellant is limited to buying the seized goods from Shri Jitendra Shah, Broker without invoices, taking a lenient view penalty imposed upon appellant reduced from ₹ One lakh to ₹ 25,000/- - Decided in favour of appellant.
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2015 (10) TMI 2387
Utilisation of Advance Licensing Scheme – Matter Remanded back for De-Novo consideration - Tribunal vide impugned order remanded matter back to Commissioner for denovo consideration, and to re-adjudicate show cause notice in its entirety – Whether tribunal was justified in remanding matter back for de-novo consideration – Supreme Court after allowing the exemption dismissed the appeal on the ground of delay. The appeal was filed by Revenue against the decision of High Court [2015 (9) TMI 511 - BOMBAY HIGH COURT]; wherein High Court held that Tribunal clearly concluded issue that activity of respondent assessee could be termed as “manufacture” – Only limited issue which was being dealt with by Tribunal is whether assessee has produced documents to satisfy that imported materials under Advance Licensing Scheme have been correctly utilised as per terms and conditions of scheme read with relevant notifications – Tribunal noticed in order under Appeal that adjudicating authority did travel beyond its earlier direction – Therefore, present court of opinion that Appeal does not raise any substantial question of law.
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2015 (10) TMI 2386
Payment of royalty - whether royalty is payable at the rate mentioned in the Second Schedule to the MMDR Act on processed coal, that is, coal consumed or removed from the boundaries of the leased area in a beneficiated form or on the raw or unprocessed or ROM coal at the pit-head - Held that:- beneficiation process, as far as coal is concerned, has two significant consequences – the grade of coal improves (from Washery Grade IV it could improve to Steel Grade I) and the weight of the coal increases (from 100 tons of raw ROM coal to 105 tons [excluding rejects] of beneficiated coal). - ROM copper ore contains hardly 1% or 2% of copper but after the beneficiation process the copper extract from the ore increases to about 25%. It is thereafter sent for refining and smelting. In other words, copper ore cannot be utilized as it is or in the ROM state – it must undergo a beneficiation process from the ore and can then be used. - As mentioned in SAIL the consequences of processing dolomite or limestone has a consequence different from that of copper ore, namely, mere removal of waste and foreign matter. It appears that this process does not improve the quality of the dolomite or the limestone, though with the removal of waste and foreign matter, the weight would decrease somewhat. It may be mentioned that royalty is charged on dolomite and limestone on a tonnage basis. - nature of the mineral and the stage at which royalty is to be computed become important. The basis of levy would have to be rational and it might have different consequences at different stages.
Court in the appeal filed by SAIL did not get into the question of removal of the mineral from the boundaries of the leased area but noted that the extracted mineral undergoes a process of removal of waste and foreign matter before it is removed from the boundaries of the leased area. The decision of this court on the levy of royalty turned on the consumption of the mineral through that process carried out by the holder of the mining lease. In that context it was held in SAIL that since the process of removal of waste and foreign matter amounts to consumption, the entire extracted mineral is exigible to royalty. - SAIL did not consider (and then reject) the reasoning given by the Orissa High Court that royalty is not payable on wastage that remains within the boundaries of the leased area. This was critically adverted to in an order M/s Central Coalfields Ltd. v. State of Jharkhand decided by this court on the ground, inter alia, that the distinction made by the Orissa High Court between removal of a mineral from a mine and removal from a leased area has been rejected without any reason.
Section 9 of the MMDR Act has to be read and understood in conjunction with the Second Schedule to the MMDR Act. There is a good reason for it, which is that the scheme of the levy of royalty cannot be straitjacketed in view of the variety of minerals to which the MMDR Act applies and for the extraction of which royalty has to be paid. - Iron ore (with which NMDC is concerned) falls in the same generic category for levy of royalty as dolomite, limestone and coal namely on a tonnage basis but there is a crucial difference between iron ore and coal (as also between dolomite, limestone and iron ore). In the case of iron ore, beneficiation is necessary before it can be utilized. It has been observed in NMDC that "in iron ore production the run-of-mine (ROM) is in a very crude form. A lot of waste material called "impurities" accompanies the iron ore. The ore has to be upgraded. Upgrading the ores is called "beneficiation". That saves the cost of transportation. Different processes have been developed by science and technology and accepted and adopted in different iron ore projects for the purpose of beneficiation."{ National Mineral Development Corporation Ltd v. State of M.P. [2004 (5) TMI 575 - Supreme Court of India].} It is for this reason, inter alia, that the levy of royalty on iron ore is postponed, as held in NMDC, to a post-beneficiation stage.
Under the circumstances, removal of beneficiated coal as against ROM coal might work to the disadvantage of the lease holder. For this reason, no similarity can be found between coal and iron ore or between coal and dolomite and limestone (apart from the fact that SAIL did not deal with removal from the leased area but consumption within the leased area). - issue of computation of royalty on minerals is rather complex and it is best left to the experts in the field and it cannot be painted with a broad brush as has been done in SAIL. That decision must be confined to its own facts with reference to consumption of dolomite and limestone. Since the Second Schedule to the MMDR Act must be read as a part and parcel of Section 9 thereof, the interpretation given in SAIL possibly cannot apply to the computation of royalty for every mineral.
Similarly, Rule 64C of the MCR relates to royalty on tailings or rejects. As far as Tata Steel is concerned, its computation given in the Convenience Volume indicates that royalty is paid and payable on middlings and tailings. Rule 64C of the MCR makes it clear that royalty is payable on rejects when they are sold or consumed after being dumped. This will take care of situations such as that pertaining to silver, as mentioned in the affidavit of the Union of India.
There is nothing to indicate in Rule 64B and Rule 64C of the MCR that coal has been put on a different pedestal from other minerals mentioned in the MMDR Act read with the Second Schedule thereto. It is, therefore, difficult to accept the view canvassed by the Union of India that these rules "may not be particularly applicable on coal minerals." That apart, the stand of the Union of India is not definite or categorical ("may not be"). In any event, we are not bound to accept the interpretation given by the Union of India to Rule 64B and Rule 64C of the MCR as excluding only coal. On the contrary, in NMDC this court has observed that these rules are general in nature, applicable to all types of minerals, which includes coal. The expression of opinion by the Union of India is contrary to the observations of this court.
With effect from 25th September, 2000 when these rules were inserted in the MCR, royalty is payable on all minerals including coal at the stage mentioned in these rules, that is, on removal of the mineral from the boundaries of the leased area. For the period prior to that, the law laid down in Central Coalfields Ltd. will operate, as far as coal is concerned, from 10th August, 1998 when SAIL was decided, though for different reasons - High Court really gave no reason for denying the refund of the excess royalty paid by TISCO. For the reasons given in respect of Tata Steel keeping in view the decision rendered in Central Coalfields Ltd., we hold that TISCO is entitled to refund of royalty paid from 10th August, 1998 to 25th September, 2000. However, this amount need not be physically refunded but should be adjusted pro rata against future payments of royalty by TISCO over the next one year. TISCO is not entitled to refund of royalty paid after 25th September, 2000. The royalty paid by TISCO after 25th September, 2000 was correctly paid and in accordance with Rule 64B and Rule 64C of the MCR, which have not been challenged by TISCO. - Appeal disposed of.
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2015 (10) TMI 2385
Entitlement to carry forward and set-off of business loss - assessee not owning 51% voting powers in the company as per Section 79 of the Act by taking the beneficial share holding of M/s. Amco Properties & Investments Ltd. - Held that:- Dealing with a case under Section 79(a) and (b) of the unamended Section [Clause (b) was deleted w.e.f. 01.04.1988] and while relating to Clause (a) of Section 79 of the Act, the Apex Court in Commissioner of Income Tax V/S Italindia Cotton Private Limited (1988 (9) TMI 1 - SUPREME Court), held that the Section would be applicable only when there is change in shareholding in the previous year which may result in change of control of the Company and that every such change of shareholding need not fall within the prohibition against the carry forward and set-off of business losses. In the present case, though there may have been change in the shareholding in the assessment year 2002-03, yet, there was no change of control of the Company, as the control remained with the ABL as the voting power of ABL, along with its subsidiary Company APIL, remained at 51%. The Supreme Court further observed that the object of enacting Section 79 appears to be to discourage persons claiming a reduction of their tax liability on the profits earned in the Companies which had sustained losses in earlier years. In the present case, the control over the Company, with 51% voting power, remained with ABL and, as such, in our view, the provisions of Section 79 of the Act would not be attracted. - Decided in favour of assessee.
Entitlement to claim deduction in accordance with Section 35AB - transfer of technical knowhow, which amount was payable in installments between 31.5.1998 to 31.5.2006 - Held that:- The assessee would be entitled to claim deduction in accordance with Section 35AB of the Act in respect of sum of ₹ 5 Crores for transfer of technical know-how, even though the amount was payable and paid in instalments on subsequent dates. This we say so, also because the law is well settled that while interpreting the provisions of taxing statutes, where two views are possible, the one which is in favour of the assessee should be adopted. - Decided in favour of assessee.
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2015 (10) TMI 2384
Deduction u/s 80IB (10) (a) - whether the stipulation in Section 80IB(10)(a) of completion certificate issued by the Local Authority before the cut off date, cannot be applied in the case of assessee following the work in progress accounting method? - Held that:- Issuance of completion certificate, after the cut off date by the Local Authority but, mentioning the date of completion of project before the cut off date, does not fulfil the condition specified in clause (a) of Section 80IB (10) read with Explanation (ii) thereunder. We reject the argument of the assessee that the effect of amended clause (a) of sub-Section 10 of Section 80IB, which has come into force with effect from 1st April, 2005, has retrospective effect or that it is unjust in any manner or incapable of compliance at all. Similarly, the requirement of securing completion certificate issued by the Local Authority before the cut off date is not directory, in view of the express provision in Section 80IB(10)(a) and the Explanation (ii) thereunder. The completion certificate granted by the Local Authority must bear the date of having been issued before the cut off date.
The provision in the form of Section 80IB(10)(a), applies uniformly to all the assessees - be it following work in progress accounting method or otherwise. The benefit of deduction under this provision can be availed by the assessee following the work in progress accounting method, provided he has complied with the stipulation of having produced completion certificate issued by the Local Authority before the cut off date, as may be applicable in his case. In other words, if the housing project was approved by the Local Authority before 1st April, 2004, he must submit completion certificate issued by the Authority having been issued before the 31st March, 2008. Whereas, in the case of housing project approved on or after 1st April, 2004, the assessee can avail of the benefit provided completion certificate issued by the Local Authority is within four years from the end of the financial year in which the concerned housing project was approved by the Local Authority. If this condition is not fulfilled, the assessee who maintains work in progress accounting method and has claimed deduction under Section 80IB(10)(a) must suffer the consequence of disallowance or withdrawal of the benefit claimed by him on that count. Thus the decision of the Assessing Officer to disallow deduction under Section 80IB(10)(a) of the Income Tax Act is upheld. - Decided against assessee.
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2015 (10) TMI 2383
Reopening of assessment - AO received information from the Enforcement Directorate (ED) that in the books of the Assessee there were huge cash deposits - Held that:- The nature of the information provided by the governmental agency in that case did not itself refer to any amounts or entries in the books of accounts of the Assessee. In the present case, however, the information received from the ED makes a reference to what was found in the books of accounts of the Assessee.
The next question that had to be examined by the AO was whether what was disclosed in the books of accounts was also disclosed in the returns filed by the Assessees. If it was not disclosed, then possibly the AO could have reasons to believe that the cash deposits reflected in the books of accounts may have escaped assessment. However, no effort appears to have been made by the AO to examine the returns filed by the Assessee in either of these cases.
As far as RL Travels is concerned, the further information concerning payments made to third parties, which were unable to be verified by the ED, also required to be assessed by the AO by examining the returns filed to discern whether the said transaction was duly disclosed by the Assessee. It is the treatment of the entries in the books of accounts in the returns filed by the Assessee that would be determinative of whether in fact there was any concealment of relevant information or whether any income had in fact escaped assessment.
With the AO in either of these cases not having adopted that approach, it could not be said that the jurisdictional requirement of the AO having to form reasons to believe on the basis of some tangible material that income had escaped assessment was fulfilled.Consequently, the Court finds no error having been committed by the ITAT in the impugned orders in coming to the conclusion that the reopening of the assessments was bad in law. - Decided in favour of assessee.
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