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Showing 461 to 480 of 1888 Records
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2017 (12) TMI 1432
Finalisation of provisional assessment - adjustment of excess paid duty with short paid duty - Held that: - the adjustment of excess payment of duty against short payment thereof during the provisional assessment period has been ordered before determining the ultimate demand or refund, in the light of the Hon'ble High Court of Karnataka decision in the case of Toyota Kirloskar Auto Parts Ltd. [2011 (10) TMI 201 - KARNATAKA HIGH COURT] - the impugned order set aside and matter remanded back to the original authority to pass de novo order - appeal allowed by way of remand.
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2017 (12) TMI 1431
Clandestine removal - entire case of the Revenue is based upon the shortages of coloured tobacco detected at the time of their visit in the appellants’ factory - Held that: - It was not possible to convert 630 kgs coloured tobacco into marketable final product i.e. branded chewing tobacco and remove it within one day. It is settled law that he who asserts must prove his assertion by producing cogent evidence and/or producing witness. No evidence has been adduced to prove allegation of clandestine removal, therefore, even otherwise, the demand of duty and imposition of penalty are not justified.
Apart from the shortages, there is virtually no evidence on record to show the clandestine activities of the appellants - In the absence of any identification of the buyers, transporters, receipt of consideration etc., the findings of the clandestine activities cannot be upheld.
Appeal allowed - decided in favor of appellant.
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2017 (12) TMI 1430
CENVAT credit - inputs not received - basic allegations in the Show Cause Notice was that M/s Arora Aromatics did not receive inputs on which they availed Cenvat credit basically on the contention of Revenue that M/s Ruchi Infotech System, Jammu did not have facility to manufacture the inputs received by M/s Arora Aromatics and that the goods did not move from Jammu & Kashmir to the appellants factory and therefore, Cenvat credit was not admissible.
Held that: - The present system of assessment in Central Excise is record based. The Officer assessing the duty is not required to be present when the goods are being manufactured to witness the process of manufacture. The adjudication is to be done on the basis of evidence produced before the Adjudicating Authority. As per Evidence Act evidence in totality is to be taken into consideration and therefore, finding recorded in the impugned Order by the Original Authority who passed the said Order dated 29/01/2010 is bad in law. The Original Authority did not understand the process either of assessments or of adjudication. Further the investigations were not undertaken to find out wherefrom the inputs were received by the appellant for the goods they manufactured and on which they paid duty and which were exported, if they had been received the inputs from M/s Ruchi Infotech System, Jammu or the other suppliers of inputs.
The Original Authority was pre-determined to adjudicate the matter in the manner in which he has decided the issue and he was not just and fair and did not discharge his duty as an independent adjudicator.
Demand set aside - appeal allowed - decided in favor of appellant.
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2017 (12) TMI 1429
Refund claim - CBEC Board’s Circular No.120/01/2010-ST dated 19/01/2010 - Whether the Commissioner (Appeals) have rightly set aside the impugned Order-in-Original and remanded the matter back with the direction to consider the matter afresh on the basis of all the documents/information, by giving opportunity of hearing?
Held that: - CBEC Board’s Circular No.120/01/2010-ST dated 19/01/2010 categorically clarified that irrespective of when the credit was taken, the refund should be granted if otherwise in order - there is no error in the finding of the Learned Commissioner (Appeals) wherein he have directed the Adjudicating Authority to reconsider the refund claim in accordance with law, more particularly in view of Board Circular which have been issued subsequent to the passing of the Order-in-Original - appeal dismissed - decided against Revenue.
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2017 (12) TMI 1428
100% EOU - CENVAT credit - whether Cenvat Credit taken by them can be disputed by the Revenue without issuing show cause notice under the provisions of Rule 14 of CCR, 2004 read with Section 73(i) of the Finance Act? - Held that: - the eligibility to Cenvat Credit cannot be challenged without issue of SCN under the CCR as the provisions of the FA read with CCR provide for an issue of SCN under Rule 14 of CCR, 2004 read with Section 73(i) of the Finance Act or Section 11 A of the Excise Act - In the instant appeals admittedly no SCN have been issued for disallowance of Cenvat Credit - appeal allowed - decided in favor of appellant.
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2017 (12) TMI 1427
Principles of natural justice - It is the case of the petitioners that it is only when the second petitioner received the notice of demand dated 15.11.2017 together with the earlier notices that the petitioners came to know about the impugned orders having been passed and the demand raised by the third respondent on behalf of the respondent State authorities - Held that: - the matter could not be proceeded before the assessing authority, the court is of the view that it would be in the interest of justice if the ex parte orders dated 30.8.2013 and 30.9.2013 are quashed and set aside and the matter is remanded to the assessing authority to decide the same afresh after affording the petitioners an opportunity of hearing as well as producing necessary documents in support of their case - petition allowed by way of remand.
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2017 (12) TMI 1426
Revision of assessment - Levy of tax @ 5% to 100% EOU - absence of documentary proof - disallowance of exemption of turnover - Held that: - the necessity to set aside the impugned assessment orders does not arise, as, on the date of passing of the assessment orders, the documents now in the possession of the petitioner were not placed before the Assessing Officer. Therefore, the Assessing Officer cannot be faulted for having completed the assessment in the manner done so in the impugned assessment orders.
However, the claim for exemption is an incentive granted to a local manufacturer when he effects sales to 100% export oriented units. Therefore, the claim for exemption should not be denied on technicalities, but the claim has to be verified and if the petitioner produces necessary documents to the satisfaction of the Assessing Officer that they effected sales to 100% export oriented units, then the benefit of exemption should accrue to the petitioner.
The Assessing Officer is directed to afford an opportunity of personal hearing to the petitioner, peruse the documents and if the documents are in order, sanction the claim for exemption by passing revised orders - petition allowed by way of remand.
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2017 (12) TMI 1425
Levy of tax - Whether the 'export sale' will also be a 'sale' which does not attract the levy of tax under Section 3(4) of the Act? - Held that: - similar issue decided in the case of Tube Investments of India Ltd. (Formerly known as M/s. TI Diamond Chain Ltd.) Versus The State of Tamil Nadu, represented by the Commercial Tax Officer [2010 (10) TMI 938 - MADRAS HIGH COURT], where it was held that Section 3(4) of the Act will have no application since situs of the export sales of the petitioners for the purpose of said Section was the State of Tamilnadu and by virtue of the said factual position, the applicability of Section 3(4) stands excluded for the exigibility of tax - tax revision dismissed.
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2017 (12) TMI 1424
Maintainability of appeal - Penalty - Valuation - revised valuation of FOC materials supplied by GMI - loading towards drawing and design supplied by GMI to AVTEC - Held that: - if multiple questions are involved in the matter, then the department has to raise all these issues before the Supreme Court by filing an appeal under Section 35L of the Central Excise Act, 1944 - appeal of the respondent /assessee is pending before the Supreme Court - Central Excise Appeal No.44/2017 dismissed with liberty to challenge the order by filing an appeal u/s 35L of the CEA, 1944.
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2017 (12) TMI 1423
TPA - rejection of aggregation approach adopted by the assessee for benchmarking its international transactions in the manufacturing activities - Held that:- Where various activities were so interlinked to the export of manufactured IC engines, then the said international transactions undertaken by the assessee for the year under consideration need to be aggregated for undertaking benchmarking analysis applying TNNM method. The Tribunal in this regard placed reliance on the principles laid down by the Hon’ble High Court of Delhi in Sony Ericsson Mobile Communications India Pvt. Ltd. Vs. CIT (2015 (3) TMI 580 - DELHI HIGH COURT ). Following the same principle and where the assessee was engaged in similar activity of manufacturing, we hold that various activities need to be aggregated. Accordingly, we direct so.
Applying the TNNM method - whether the margins earned by the assessee from exports to associated enterprises is to be compared with margins earned from sales in domestic market or the same have to be compared with external comparables? - Held that:- Applying the said proposition laid down by the Hon’ble High Court of Delhi in Sony Ericsson Mobile Communications India Pvt. Ltd. Vs. CIT (supra), we hold that accepting the aggregation approach of the assessee of its transactions under the manufacturing activity, we hold that while applying TNNM method, the margins of assessee company are to be compared with the margins of external comparables. However, since the TPO had not verified this factum of comparison with external comparables, we direct the Assessing Officer / TPO to consider the case of assessee and determine the arm's length price and re-compute adjustment, if any, in the hands of assessee on account of international transactions. It may be pointed herein itself that the adjustments were made in the hands of assessee in HHP division and no adjustment was made in LHP division.
Approach adopted by the TPO in application of net profit to cost as PLI - Held that:- We direct the Assessing Officer that while determining the PLI to adopt net profit to sales in order to benchmark the international transactions.
Benefit of variation / reduction of 5% from the arithmetic mean is now decided against the assessee by the Special Bench of Delhi Tribunal in IHG IT Services (India) (P.) Ltd. Vs. ITO (2013 (5) TMI 309 - ITAT DELHI ), wherein it has been held that the benefit of 5% tolerance margin is available only when variation between arm's length price as determined under section 92C(1) of the Act and price at which international transactions has actually been undertaken does not exceed the said tolerance margin. Accordingly, we hold so.
Re-working of deduction under section 80IB - Held that:- As in assessee's own case authorities below in allocating head office expenses, directors’ salary, etc. to the Daman unit and thus, upheld the re-computation of deduction under section 80IB of the Act.
Disallowance of expenses under section 14A - Held that:- As the year of appeal being assessment year 2007-08 i.e. the year in which provisions of Rule 8D of the Income Tax Rules, 1962 were not applicable, we restrict the disallowance to ₹ 2 lakhs
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2017 (12) TMI 1422
Chargeability of “Finance charges” as, interest received from hire purchase transaction, and other interest to attract tax on interest under the Interest Tax Act, 1974 - Held that:- Admittedly, the finance charges involved in the instant case are from hire purchase of vehicles. The position has now been settled by a precedent of this Court involving the same assessee, Commissioner of Income Tax v. K.S.F.E. Ltd. (2008 (3) TMI 676 - KERALA HIGH COURT) as held hire purchase companies are squarely covered by definition of “credit institutions” under the Act and are liable to pay tax on charge of interest on loans and advances. It is immaterial whether a loan or advance is called hire-purchase agreement or not. On the other hand, what is to be considered is whether the transaction involved is really a loan or advance and if the transaction is found so, then the interest earned on the same is taxable under the Interest-tax Act. - Decided against assessee.
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2017 (12) TMI 1421
Deduction admissible under Section 36(1)(viia) - reopening of assessment - Held that:- In any event, the Tribunal remanded the matter for de novo re-adjudication and it would mean that the assessee would be entitled to canvass all the points, which they raised earlier before the Commissioner of Income Tax (Appeals) as well as in the grounds raised in these appeals including the substantial questions of law, which have been raised by the assessee. Therefore, we find that at this stage, the above referred to questions as framed by the assessee or that of the Revenue do not arise for consideration, as the common order passed by the Tribunal is an order consenting for remand of the matters before the Commissioner of Income Tax (Appeals) for re-adjudication de novo after granting the assessee an opportunity of being heard. It is needless to state that all issues are left open to be re-agitated before the Commissioner of Income Tax (Appeals). The Commissioner of Income Tax (Appeals) shall decide the matters afresh without being influenced by his earlier order.
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2017 (12) TMI 1420
Eligibility for deduction u/s 80P(2)(a)(i) and 80P(2)(c)(ii) - Tribunal allowed claim - Held that:- CIT(Appeals) has simply referred to the order of the Assessing Officer and to the decision of this Court in Quepem Urban [2015 (6) TMI 573 - BOMBAY HIGH COURT]. There is no scrutiny on facts, which was necessary since the CIT was reversing the decision of the Assessing Officer denying the benefit to the Respondent/ Assessee. When the Revenue filed an appeal to the Tribunal challenging a decision adverse to them, the Tribunal was expected to scrutinize the decision of the CIT(Appeals). Here again, we find that the Tribunal has not done so. In paragraph 4 the Tribunal has simply reproduced the decision of the CIT(Appeals)and thereafter referred to the decision of this Court in case of Quepem Urban and has dismissed the Appeal.
Thus the inquiry into the factual position, which the learned Counsel for the parties agree is necessary before the legal principle is to be considered, is not done by the CIT(Appeals) as well as the Tribunal. Therefore, before we consider what is the effect of the admission of the Special Leave Petition against the decision of this Court in Quepem Urban and the legal position enumerating from Quepem Urban, the factual foundation must be established as regards the nature of the business of the Respondent.
Thus the appropriate course of action would be to set aside the order passed by the CIT(Appeals) and the Tribunal and to direct the CIT(Appeals) to consider the appeal filed by the Respondent against the order passed by the Assessing Officer dated 31 December 2014.
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2017 (12) TMI 1419
TDS u/s 194C - non deduction of tds - Addition made u/s 201(1) and interest u/s 201(1)(a) - existence of payer and payee - Held that:- The record of the case reveals that both the Commissioner of Income Tax (Appeals) as well as the Tribunal have recorded concurrent findings of fact to the effect that there was nothing on record to indicate that there were any labour contractors with whom any contract had been entered by the assessee. The Tribunal was of the view that section 194C of the Act pre-supposes the existence of payer and payee and that in the facts of the present case the identity of the payee was not established at all.
Section 194C envisages deduction of tax at source in pursuance of a contract between the contractor and a specified person. In the facts of the present case, there is a concurrent finding of fact recorded by both, the Commissioner (Appeals) as well as the Tribunal, that no such contract between the assessee and any specified person has been identified - Decided against revenue
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2017 (12) TMI 1418
Levy of late filing fee u/s 234E - delay of 105 days as per intimation under section 200A - Held that:- Admittedly the default has been committed by assessee prior to 01.06.2015. As the legal issue raised in the present case is squarely covered by the ratio by this Tribunal in the case of Gajanan Construction (2016 (10) TMI 92 - ITAT PUNE), respectfully following the same we are also of the considered opinion that the Assessing Officer is not empowered to charge fees under section 234E of the Act by way of intimation issued under section 200A of the Act, in the case of present assessee since the default committed is prior to 01/06/15. - Decided in favour of assessee.
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2017 (12) TMI 1417
Disallowing being interest paid on pro-rata basis relating to earning tax free interest Income on tax free HUDCO Bond - Held that:- During the year assessee has made investment in HUDCO of ₹ 2 crores as mentioned at page No. 3 of the assessment order whereas, interest free funds available with the assessee of share capital and reserve and surplus of ₹ 42.28 crores as at 31.03.2006. Further, as at 31.03.1999 the available interest free funds in the form of share capital and reserve and surplus was ₹ 35.14 crores. In view of this the presumption would lie in favour of the assessee that assessee has made investment out of its own tax free funds. Therefore, following decision of the Hon'ble Bombay High Court in HDFC Bank Ltd Vs. DCIT [2016 (3) TMI 755 - BOMBAY HIGH COURT] we reverse the finding of the lower authorities and direct the Ld AO to delete the disallowance of ₹ 364206/- on account for interest expenses being allegedly paid on pro rata basis relating to earning of tax free interest income of ₹ 15.50 lacs on tax free HUDCO bonds of ₹ 2 crores. In the result ground No. 1 of the appeal is allowed.
Disallowance of interest paid on borrowings from Head Office - Held that:- Explanation to section 9(1)(v) has been inserted w.e.f. 01.04.2015, therefore, the situation arises is that the assessee a branch of a foreign bank of non treaty jurisdiction who has paid interest to its foreign head office is allowable as deduction or not. Prior to 01.04.2015 if interest is paid by the assessee to its Taiwan Head Office it is payment to self. In para no 50 of the decision of the Sumitomo Mitusi banking cop V DDIT (2012 (4) TMI 80 - ITAT MUMBAI) while dealing with domestic tax law this issues has been discussed that in domestic tax law there is no question of granting deduction of interest paid by the assessee to its HO , because it is payment to self. The issue of any applicability of any DTAA is not before us, therefore various case laws cited before us are not relevant as they deal with various DTAAs. In the result we do not find any infirmity in the orders of lower authorities in denying deduction of interest paid to HO by the assessee.
Denying the claim of the assessee u/s 44C - head office expenses restricted - Held that:- The actual expenditure said to be borne by the head office is ₹ 3781095880/-. However due to the restriction placed u/s 44C of the Act the above expenditure claim were restricted to ₹ 1661289/- for the purpose of section 44C of the act. The assessee has not produced details of the expenditure incurred by the assessee, which are attributable to the business of the assessee either before lower authorities as well as before us. In the present case the total expenditure incurred by the head office of NTD 27056314/- as well as pension of NTD 4481126/- was said to be attributable to the assessee’s business. The details of the expenditure with respect to nature of such expenditure, purpose of such expenditure and actual incurring of such expenditure were neither provided before the lower authorities as well as before us. In view of this, we do not find any infirmity in the order of the lower authorities in denying the claim of the assessee u/s 44C of the Act. In the result ground No. 3 of the appeal of the assessee is dismissed.
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2017 (12) TMI 1416
Addition on account of interest due to assessee - accrual of income - assessee did not include the same in its income on the ground that the amount of loan given to M/s ISG Traders Ltd., was Non-performing asset (NPA) - Held that:- The principle laid down by the Hon'ble Delhi High Court in the case of Vasisth chay Vyapar (2010 (11) TMI 88 - Delhi High Court) are identical to the facts of the present case. In the case before us the amount of interest was overdue but the same was not realized by the assessee since the year it was advanced to the party. Therefore we hold that the income of interest indeed has accrued to the assessee but has not been realized. Thus, applying the rule of real theory income we hold that the addition for the amount of interest income cannot be sustained in the hands of assessee. Thus, ground raised by assessee is allowed.
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2017 (12) TMI 1415
Addition u/s 14A r.w.r. Rule 8D - Held that:- It is the duty of assessee to justify the source of investment mad by the assessee in the investment / PPF irrespective of fact that the own fund of assessee exceeds the impugned investment. We find that the issue of disallowance of interest will accordingly be decided after verifying the details whether the impugned investment was made by the assessee out of her own fund or borrowed fund. Thus, in the interest of justice and fair play we are inclined to restore the issue back to the file of AO with a direction to verify the source of investment made by the assessee in the impugned equity shares / PPF. In terms of above, this ground of Revenue’s appeal is allowed for statistical purpose.
For disallowance made by the AO under Rule 8D(2)(iii) of I.T Rules, 1962. At the outside, it was observed that assessee has sum motu made the disallowance of ₹15 lacs against the exempted income earned by it during the year. However, the AO has invoked the provision of Rule 8D(2)(iii) without recording the satisfaction as envisaged under the provision of Section 14A of the Act. We also find that in similar facts and circumstance, the Hon'ble Co-ordinate Bench of this Tribunal in assessee’s own case in immediate preceding AY 2010-11 has deleted the addition
Disallowance on account of no business activity - Held that:- At the outset, it was observed that assessee has claimed total income business expenses in its profit and loss account for ₹41,49,216/- only and , total expenses disallowed by AO comes to ₹41,48,587/-. Thus, in our considered view further disallowance of ₹15,00,632/- will lead to the double addition in the hands of assessee. Moreover, the amount of disallowance cannot exceed the actual expense claimed by assessee in its income tax return. In this view of the above matter, we do not find any infirmity in the order of Ld. CIT(A). We uphold the same
Addition under the head house property - Held that:- It is undisputed fact that impugned properties are commercial properties and the assessee conceded the addition made by the Ld. CIT(A) for ₹4.20 lacs as the addition of the same has not been challenged. Therefore, we dismiss the plea of Ld. AR that no addition can be made in respect of commercial property under the head “house property”.
FMV determination - Held that:- AR has not brought any documentary evidence suggesting that fair market value as recommended by the Inspector of Department is not as per prevailing market rate. Thus in this view of the above, we find no infirmity in the order passed by Ld. CIT(A). Accordingly, we uphold the same. Hence, this ground of Revenue’s appeal is allowed.
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2017 (12) TMI 1414
Mismatch between the audited profit and loss account and ITS details - The assessee is acting as agent on various Air Lines for domestic and international bookings. The assessee operates through its branches in almost all the major cities and places of tourist interest in India. - Held that:- On perusal of audited financial statement we note that the assessee has shown gross total income of ₹12,65,18,608/- as evident from the audited profit and loss account. Thus, the allegation of the AO that all the income shown in the ITS details has not been declared in income tax return does not hold good. The AO has not bought anything on record about the name of parties in respect of which the assessee failed to disclose income in its income tax return. Thus, we feel that no addition cannot be sustained in the given facts and circumstances.
We also note that the additional income declared by assessee in its income tax return vis-à-vis in ITS details exceeds the income shown in ITS details. Once the income shown by the assessee is greater than the ITS details then no addition can be made on account of non-disclosure of income. - Decided against revenue
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2017 (12) TMI 1413
Penalty u/s 271(1)(c) - Exemption u/s 11 denied - Held that:- In the present case, it is an admitted fact that the claim of the assessee for exemption u/s 11 of the Act was earlier allowed by the AO up to the assessment year 1988-89 and thereafter upto assessment year 2007-08, for the year under consideration also the claim of the assessee was allowed by the ITAT. Subsequently the Hon’ble Jurisdictional High Court did not allow the claim of the assessee u/s 11 of the Act. However, SLP is pending before the Hon’ble Supreme Court. Therefore, it can be said that the issue relating to the claim of exemption u/s 11 of the Act is highly a debatable and legal issue. Therefore, it cannot be said that the assessee furnished inaccurate particulars of income or concealed its income. See CIT vs. Reliance Petro Products [2010 (3) TMI 80 - SUPREME COURT]
In the present case also the claim of the assessee for exemption u/s 11 has not been allowed by the AO on the basis of the judgment of the Hon’ble High Court. Therefore, not allowing the claim of the assessee u/s 11 of the Act itself cannot tantamount to furnishing of inaccurate particulars of income - Decided in favour of assessee.
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