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Showing 461 to 480 of 1359 Records
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2015 (4) TMI 901
Valuation of liability - No VAT was collected from the customers - Held that:- petitioner further submitted that if an opportunity is given to the petitioner, they would be able to convince the authority. The learned counsel for the petitioner further submitted that the petitioner has also agreed to pay 20% of the amount as determined in the impugned order and if some time is granted, they would co-operate to enable the assessing officer to complete the proceedings afresh. - Respondent is directed to accept 20% of the amount as determined in the impugned order, which the petitioner has agreed to pay, which can be adjusted from the refund, if any, and give one more opportunity to the petitioner to putforth their objections and thereafter to pass appropriate orders on merits and in accordance with law - Petition disposed of.
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2015 (4) TMI 900
Denial of refund claim - Rejection on ground that petitioner failed to produce certain evidences, including chalan, cheque number/date as also contract agreement, purchase invoice and expenses made on labour and other expenses - Held that:- It is difficult to support any such action of the Deputy Commissioner, Commercial Taxes. Once the petitioners have produced the certificate for deduction of tax at source in Form C-II before him, it is not for the petitioners to produce any evidence regarding the deposit of any such tax deducted, rather if they are required to be verified they had to be verified by the authorities of the Commercial Taxes department from the Railways. Irrespective of whether the deposits had been made or not, once the tax had been deducted at source in terms of Rule 29 (6), the same had to be treated as payment of tax on behalf of the petitioners and credit had to be given for such deposits on the mere production of Form C-II and the only thing that could have been verified by the Department regarding the same would be regarding their genuineness and that they were not forged documents.
Petitioners have admittedly not filed their applications before the Joint Commissioner. In the said circumstances, the entire proceedings before the Deputy Commissioner, including the order dated 29.12.2014 passed by him are without jurisdiction. The same are, accordingly, quashed. - Decided in favour of assessee.
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2015 (4) TMI 899
Detention of goods - Goods not accompanied with transit pass - Demand of tax - Imposition of compounding fees - Held that:- Court in a series of writ petition, directed the goods to be released on payment of the tax component. - Writ Petition is disposed of with a direction to the respondent to release the goods on payment of the tax component - Decided conditionally in favour of assessee.
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2015 (4) TMI 898
Reversal of Input tax credit - Non issuance of notice to petitioner - Violation of principle of natural justice - Held that:- While going through the averments and the contentions that are supported by the documents filed in the typed set of papers, it is seen that the impugned orders dated 28.11.2014 have not referred to the notices dated 26.11.2014 and that there is a blank about the notice date received by the petitioners - impugned orders are set aside and the matters are remitted back - Decided in favour of assessee.
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2015 (4) TMI 897
Demand of differential duty - Valuation of goods - inclusion of freight and transit insurance in the assessable value - Sale on FOR destination basis - Held that:- The appellant have certain quantum of sale on FOR destination basis in respect of which they have paid duty on FOR destination price which included the element of freight and transit insurance. - In the non- FOR sales, the appellant, on the request of the customers arranged the transportation of the goods and while in some cases, they have paid freight which was recovered from the customer, in other cases, part of freight was paid by the appellant and balance was paid by the customer and part of the freight paid was recovered from the customer and in some cases the entire freight was paid by the customers. The appellant, in all such cases, have taken general insurance policy against the loss of the goods despatched by them to the customers during the transit and proportionate amount of premium is charged by the appellant from their customers as transit insurance.
However, on perusal of some of the invoices issued by the appellant which have been placed on record, it is seen that each invoice mentions that though the appellant take every care for packing and forwarding, but they do not accept liability for any loss, breakage or shortage of the goods once, the goods have left the units and that the goods are always despatched at the buyers risk. This fact is not disputed by the department. The department also does not dispute that in case of loss of the goods or damage to the goods during transit, it is the customers who get survey conducted and on the basis of survey report sent by the customers to the appellant, the appellant claim compensation amount from the insurance company for the goods lost/damaged during transit and thereafter pass on the same to the customers. - every invoice mention that the goods have been despatched at the buyer s risk and that the appellant do not accept any responsibility for loss or damage or shortage of the goods after the goods left from the works. The department also does not dispute that in case of loss of goods during transit it is customer who gets the survey done and on the basis of survey report, the appellant receive compensation for the loss of the goods from the insurance company but the entire compensation is passed on to the buyers without retaining any part of the same.
Even though the appellant have taken transit insurance policy of the goods in their name, they cannot be treated as owner of the goods during transit. We find that the Tribunal in the case of Associated Strips Ltd. (2002 (3) TMI 96 - CEGAT, COURT NO. I, NEW DELHI) has held that merely because at the instance of the buyer, the assessee has taken transit insurance it does not indicate that the ownership of the goods remained with the assessee during transit. - in view of section 23 and 39 of the Sale of Goods Act, 1930, the goods would be treated as delivered to the buyer and property of possession of the goods and passed on to the buyer when the goods have been handed over to the transporter and that the assessee arranging for transit insurance would nowhere lead to inference that the assesse had retained the ownership of the goods during transit until delivery of the goods at the buyer s premises. - impugned order is not sustainable - Decided in favour of assessee.
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2015 (4) TMI 896
Benefit of exemption Notification No. 15/2005-CE dated 02.05.2005 - Sale of Cocoa shells - Exciseability of by product - Held that:- cocoa shells arise during the manufacturing process of cocoa butter and cocoa powder. The appellant is not manufacturing cocoa shells it is arisen unavoidably during the process of manufacturing cocoa butter and cocoa powder. Therefore the cocoa shells is nothing but by-product or waste. This shows that Rule 6(2) of CENVAT Credit Rule and payment of 10% provided therein is not applicable. This issue is squarely covered by the Hon'ble Supreme Court judgement in the case of Rallis India (2008 (12) TMI 46 - HIGH COURT BOMBAY) and also Hindustan Zinc Ltd. - [2014 (5) TMI 253 - SUPREME COURT]. - lower authority has wrongly confirmed the demand of 10% in terms of rule 6(2) of the CENVAT Credit Rules, 2004. Therefore, the impugned order is set aside - Decided in favour of assessee.
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2015 (4) TMI 895
Demand of differential duty - Suppression of value of goods - Inclusion of cost of cement coating and epoxy coating - Held that:- Cement coating had been got done by the appellant on job work basis through some job workers and the duty demand in respect of the value of cement coating has been dropped by the Commissioner himself and as such there is no dispute in respect of the same. - However, according to the appellant the epoxy coating had also been done through M/s Vipul Colour Coating outside the factory and hence, the value of this coating is not includible in the assessable value. However, on this point we find that Sh. K. G. Mantri, General Manager (Commercial) of the appellant company is his statement dated 16.02.2002 on being specifically asked, has stated that Cenvat Credit of the material used for coating was being availed by them. - value of the epoxy coating would be includable in the assessable value of the pipes, irrespective of whether the coating is done inside the factory or outside the factory. However, the Commissioner in the impugned order has not gone into this point for which, in our view, this matter would have to be remanded.
If the appellant had availed cenvat credit in respect of the coating material and did not include the value of the coating in the assessable value of the pipes and this fact was not specifically intimated to the Department, it would amount to suppression of the relevant facts from the Department and extended period under proviso to section 11A(1) would be invokable. - Matter remanded back.
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2015 (4) TMI 894
Exemption under notification no. 6/2000-CE dated 01.03.2000, 3/2001-CE dated 01.03.2001, 6/2002-CE dated 01.03.2002 - whether the appellant for availing the exemption under notification no. 6/2000-CE, 3/2001-CE and 6/2002-CE were using fly ash to the extent of 25% or more in the manufacture of ACC pipes/ couplers - Denial of cross examination request - Held that:- Appellant in this regard were maintaining the records as prescribed in the exemption notification and were also filing a monthly return along with ER-1 returns. However, on this point the dispute is that these records were not been properly maintained as according to the Department some of the important columns regarding total quantity of finished products, total quantity of fly ash used and percentage of the fly ash in the finished products were being left blank. - It is seen that in April, 2003, the appellant premises had been visited by the Jurisdictional Central Excise Officers for checking the use of fly ash and at that time no irregularity had been found. In view of these circumstances, we are of the view that the appellants request for cross examination of Shri Darpan Jain of M/s Kaka Roadlines, Sh. Chandmal Kumawat of M/s Kumawat Industris the fly ash supplier and Sh Kailash Sharma of Shubham Fly Ash Products and M/s Nirmala Fly Ash Industries is genuine.
It is also seen that in terms of section 9D(2) of Central Excise Act, 1944, the provision of sub section(I) shall, so far as may be, apply in relation to any proceeding under this act other than proceeding before the court as they apply in relation to proceedings before the court. Under section 9D(1) in course of prosecution proceedings, for offences under the Central Excise Act, 1944, the statement of a person can be used against an assessee only when the person who has made the statement is examined as a witness in that case before the court and the court is of the opinion that having regard to the circumstances of the case, the statement should be admitted in evidence in the interest of justice. - In terms of sub section (2) of section 9D, the provisions of sub-section (1) have to be applied, as far as possible for adjudication proceedings also. Therefore, when the Department s case against an assessee is mainly based on statements given by some persons and those statements are not corroborated by some other independent evidence, and contradict each other, for using those statements, against the assessee for proving the charge of duty evasion against their, their cross examination would be necessary. - Matter remanded back - Decided in favour of assessee.
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2015 (4) TMI 893
Classification of goods - Marketability of product - Whether sugar syrup made by the appellant for captive use in the manufacture of exempted biscuits is chargeable to Central Excise duty under sub-heading 17029090 of the Central Excise Tariff - Held that:- Since the sugar syrup is used in the manufacture of the exempted biscuits, the benefit of Notification No. 67/95-CE would not be available. In this regard, the contention of the appellant is that in terms of the proviso to Notification No. 67/95-CE, the full duty exemption to intermediate products being used for captive consumption is available if a manufacturer discharges the obligation under Rule 6 of the Cenvat Credit Rules. - In this case, it is now known as to whether the appellant throughout during the period of dispute, were manufacturing only exempted final product or alongwith the exempted final product were also manufacturing dutiable final product. The proviso to notification is applicable only in a situation where by using common Cenvat credit availed inputs, a manufacturer manufactures dutiable as well as exempted final product and in respect of the exempted final product, the obligation under Rule 6 of the Cenvat Credit Rules has been discharged.
For classification as sugar syrup blend in this sub-heading the product must contain 50% by weight of fructose sugar in dry state
There is no evidence to show that before seeking classification of the goods, in question, under sub-heading 17029090, the samples drawn from the goods had been got tested by the CRCL to confirm as to whether the fructose content of the goods, in question, in dry stage is 50% by weight. Just because the appellant during period till June 2008 were paying duty on the goods by classifying the same under sub-heading 17029090, it cannot be presumed that they had accepted that the goods, in question, conform to the description of sugar syrup blends of sub-heading 170290 for which the sugar syrup in dry stage must contain 50% by weight of fructose.
Marketability of the goods produced by a particular manufacturer cannot be presumed on the basis of the marketability of the similar goods in different condition being produced by another manufacturer, unless it shown that the two products are identical. In these cases, the Commissioner (Appeals) has held that the goods, in question, to be marketable only on the basis that the invert sugar syrup being manufactured by M/s Dhampur Speciality Sugars Ltd. is being sold to M/s Britannia Industries, M/s J.B. Mangaram Food Industries and M/s ITC Ltd. In our view this basis of holding that the goods, in question, are marketable is absolutely wrong, as it has been presumed that the sugar syrup being made by the appellants is identical to the invert sugar syrup being made by M/s Dhampur Speciality Sugars Ltd. for which there is no basis.
Neither there is any evidence to prove that the goods, in question, are classifiable under 17029090 nor there is any evidence to prove that the goods, in question, in form in which they come into existence in the appellant s factories, are marketable. We, therefore, hold that the impugned order is not sustainable. The same is set aside. - Decided in favour of assesees.
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2015 (4) TMI 892
Exemption under notification 6/01-CE - Only one unit in working condition - Availment of exemption in respect of closed unit - Held that:- Tribunal in the earlier order had held that during the period of dispute, i.e., during period from September, 2001 to 31st March, 2003, the factory of M/s. Shamli was not working and only the goods produced in the factory of M/s. Sikka were being shown to have been manufactured and cleared from the factory of M/s. Shamli. - it is the contention of the appellants that factory of M/s. Shamli was functioning during period of dispute and there is record of production. It has been pleaded that though there was no power connection in the factory of M/s. Shamli there were 2 DG Sets each of 380 KVA each and at the time of officer s visit on 24/4/2003 while one DG Set was in working condition and the other was under repairs. With regard to the purchase of diesel it has been pleaded that the diesel was being purchased from M/s. Dee Cay Traders and was being delivered at their premises under GRs and that in this regard Shri Vinit Kumar of M/s. Super Oils had confirmed the delivery of HSD at the appellant s premises on various occasions. It had been pleaded that the records regarding purchase of raw material and diesel had been recovered from the appellant s premises besides the record regarding payment made to the labour contractors and the details of the tax deducted at source in respect of the payment made to the labour contractors - Some crucial documents had neither been considered by the Commissioner at the stage of the adjudication nor had been considered by the Tribunal, it would be proper to remand this matter to the Commissioner for de-novo adjudication - Decided in favour of assessee.
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2015 (4) TMI 891
Confiscation of seized goods and plant & machinery - Excess stock found lying in the factory - Demand of duty alongwith interest and penalty imposed on the basis of the pocket diary on Appellant No.1 - Fabricated evidence - Held that:- On perusal of the Panchnama, I find that there are some blanks in the panchnama. The investigating officers during cross examination deposed that the blanks were due to an oversight. - On being asked as to why 320 pcs were seized when as per diary there should be physical stock of 973 pcs and as per lot register, there should be 976 pcs, he stated that the seizure of that quantity of unaccounted goods were affected, which were available in the factory. Further, on being asked, on other issues, he stated that since considerable time has elapsed, he was unable to explain the exact reason, and he did not prepare the Annexure-A of the Panchnama. There is no dispute that some spaces in the Panchnama were left blank, which could not be explained by the investigating officers during the cross examination, appears to be a casual approach.
The Adjudicating Authority observed it might be mistakenly shown as 3 bales against 27 bales in the pocket diary. In some cases, it is observed that the name of the consigner or the party code was not mentioned in the lorry receipts but the other details of lorry receipts are tallied with the gate-pass book of the transporters. It is relied upon the grey register recovered from the transporters to corroborate the pocket diary. The appellant disputed grey register of the transporters and requested the cross examination of the transporters, which has not been allowed. - there were discrepancies in the pocket diary and grey register as well as the documents of the transporters cannot be accepted as the cross examination of the transporters was not allowed. It is also disputed the contents of Lorry Receipts recovered from the transporter in so far as out of 17 LRs not a single LR is in the name of the Appellants either as consignor or as consignee. Further as per the said LRs deliveries were made from Bhiwandi to Saroli and no consignment was delivered from/to the Appellants address. As regards Grey Register, the said register is maintained truck-wise by Moongipa Roadways P Ltd. Further in the said register, nowhere the Appellant name was mentioned.
None of the ingredients of sub rule (1) of 173(Q) of the said Rules would be applicable, and no Modvat Credit was availed by the appellant on the seized raw materials. So, confiscation of raw material and imposition of redemption fine would not sustained. The Tribunal in the case of Aishwarya Plast Exporters Pvt Ltd vs. Commissioner of Central Excise, Vadodara [2009 (4) TMI 653 - CESTAT, AHMEDABAD] held that excess raw material lying in factory premises, non-recording would not invite confiscation. So, the confiscation of the raw material, plant and machinery would not be sustained. - confiscation of seized goods, plant and machinery etc., and imposition of redemption fine and demand of duty alongwith interest and penalties on the appellant are not sustainable. Accordingly, the impugned orders are set aside. - Decided in favour of assessee.
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2015 (4) TMI 890
Cenvat credit of SAD - appellant was not liable to pay SAD - refund claim was rejected - appellant found that they are unable to utilise the amount in the EPCG licence as they were going to redeem the licence in a shorter period and therefore they have taken credit in the Cenvat account - Held that:- Appellant is entitled to avail the cenvat credit of SAD as evident from the Notification in 97/2004-CUS, which was also noted by the DGFT authority and after considering that they have availed this amount in their cenvat account, this amount was not reduced towards the value of export obligation. Thus, it is clearly evident that the applicant is eligible to avail the cenvat credit on merit. - Challan is not a document for the purpose of availment of the cenvat credit. It is also observed that the appellant could have taken the credit in the cenvat account on the basis of Bill of Entry. It is revealed from the record that the appellant paid the duty by challan on the basis of the Bill of Entry generated through EDI on 13.3.2006. It is observed that the appellant has shown the reference of the Challan in their cenvat account. In my considered view, the appellant could have mentioned the reference of Bill of Entry number in their cenvat account. The appellant is also eligible to avail credit on the basis of Challan under Rule 9 of the Cenvat Credit Rule 2004 as held by the Tribunal in the case of Essar Oil Ltd (2014 (2) TMI 766 - CESTAT AHMEDABAD). - when there is substantial compliance of law the benefit of cenvat credit cannot be denied on procedural lapse - Decided in favour of assessee.
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2015 (4) TMI 889
Conviction under Section 15 of the Narcotic Drugs and Psychotropic Substances Act, 1985 - Seizure of three bags containing commercial quantity of poppy husk - Held that:- Since the vehicle was searched and the contraband was seized from the vehicle, compliance with Section 50 of the NDPS Act was not required. In the absence of independent evidence connecting the appellant with the fitter-rehra, mere compliance with Section 50 of the NDPS Act by itself would not be sufficient to establish the guilt of the appellant. It is a well-settled principle of the criminal jurisprudence that more stringent the punishment, the more heavy is the burden upon the prosecution to prove the offence. When the independent witnesses PW1 and DW2 have not supported the prosecution case and the recovery of the contraband has not been satisfactorily proved, the conviction of the appellant under Section 15 of the NDPS Act cannot be sustained.
Section 15 provides for punishment for contravention in relation to poppy straw. The maximum punishment provided in the section is imprisonment of twenty years and fine of two lakh rupees and minimum sentence of imprisonment of ten years and a fine of one lakh rupee. Since in the cases of NDPS Act the punishment is severe, therefore strict proof is required for proving the search, seizure and the recovery - onviction of the appellant and the sentence imposed on him is set aside - Decided in favour of assessee.
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2015 (4) TMI 888
Confiscation of goods u/s 111 - Freezing of bank account - Smuggling of goods - Whether such freezing of bank account is confiscation/seizure of goods - Held that:- Without even the order / notice / direction of freezing of the account and without proper pleadings, and merely on the basis of copies of some documents handed over across the bar, do not deem it appropriate to render any interpretation of Sections 110 and 121 of the Act. Suffice it is to state that from the show cause notice dated 29th November, 2013 issued by the respondent no.2 DRI to the appellant, a case of the monies in the frozen account being sale proceeds of smuggled goods is made out and the said monies are liable to confiscation under Section 121 supra and thus cannot be allowed to be withdrawn unconditionally by the appellant. - appellant has failed to explain the source of the imported goods sale proceeds whereof were credited into the bank account which has been frozen. The onus was/is on the appellant to explain the transactions in the said bank account and to establish that the said transactions were/are not tainted. No endeavour even in that direction has been made. We, at this stage, have thus but to presume that the monies in the bank account which has been frozen, are sale proceeds of smuggled goods. - Decided against assessee.
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2015 (4) TMI 887
Provisional release of the goods - Import made by using other person's Import Export Code - Held that:- no reason as to why the provisional clearance should not be granted by the customs authorities in respect of the goods which are the subject matter of the present petitions. We direct the Commissioner of Customs, ICD, Tughlakabad, New Delhi to provisionally clear the said goods, subject to the conditions that he may impose in accordance with law. The respondents shall also consider the petitioners‟ applications for detention certificates. - Decisions in the case of Commissioner of Customs & Central Excise v. Achiever International [2012 (5) TMI 67 - DELHI HIGH COURT] and First Track Traders v. Commissioner of Customs, Tuticorin [2012 (3) TMI 310 - MADRAS HIGH COURT] distinguished - Decided in favour of assessee.
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2015 (4) TMI 886
Winding up - Claim of secured creditor rejected by Official Liquidator - Discriminatory treatment to one creditor - Held that:- In the present case, the earlier transferees were aware of the change. They agreed to the change, however, formality might not have been completed that might debar the Bank to claim the money on the basis of such subsequent charge. However, the earlier transferees were not entitled to raise such issue and their consent recorded in the said letter would preclude them to do so. The Official Liquidator would thus be obliged to take into consideration the entire situation and treat the modified charge as a valid one at least, to the extent as recorded with the Registrar of Companies.
We would be failing in our duty if we do not draw attention of the learned Company Judge as to the functioning of the Official Liquidator as observed herein before. They were not acting in impartial manner. In course of hearing, we adjourned the matter and directed the Official Liquidator to pay, whatever according to them would be payable to the Bank. We directed so when we noticed, others were paid in ad hoc to the total exclusion of the Syndicate Bank. Official Liquidator paid only poultry a sum of ₹ 8 lakhs. When we asked Mr. Tilak Bose to explain, he would contend, in absence of appropriate papers, the Official Liquidator could not calculate the interest over the claim amount and thus they made prorata payment taking the claim of the Bank to the extent of ₹ 20 lakhs only. We are not sure as to whether they would use the same yardstick once again while making payment to the other creditors. We would humbly request the learned Company Judge to look into the affairs of the office of the Official Liquidator particularly ensuring impartiality. We observe so as we find, although the Official Liquidator was an officer appointed by the Central Government, he would enjoy his office and act strictly as per the direction of the learned Company Judge in his administrative capacity. - Decided partly in favour of appellant.
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2015 (4) TMI 885
Eligibility for exemption u/s 11 - whether the assessee is carrying on commercial activities and hence not eligible for exemption under section 11? - funds claimed to have been received on behalf of the Government of Maharashtra is taxable as income in the hands of the assessee - whether the assessee is not eligible to claim set off of brought forward deficit and also the deduction of book depreciation? - contention of the assessee was that it is an agent or instrumentality of Government of Maharashtra Government, since it is performing Sovereign functions of development and allotment of industrial plots for public purposes - Held that:- the control or directions issued by the State Government would not change the character of "business activity". We are of the view that the activity carried on by the assessee should be examined independently and the fact that the assessee is being regulated by the State Government would not make any difference. In our view "Ownership" of the Corporation and "activities" of the Corporation are two different aspects and the ownership cannot be considered or taken into account to determine the character or nature of the activities carried on by the Corporation. In view of the foregoing discussions, we agree with the Ld CIT(A) in holding that the activities of the assessee are commercial in nature and hence would be hit by the proviso to sec. 2(15) of the Act.
Funds claimed to have been received by the assessee on behalf of the Government of Maharashtra - Held that:- The assessee is raising the contention for the first time before us that it is carrying on the activities on its own account and also as agent of the Government of Maharashtra. There appears to be no reference in the orders of the tax authorities to the resolutions passed by the Government of Maharashtra. It is further contended that the assessee is following consistently taking the funds received on behalf of the State Government to the Balance Sheet as per the resolutions passed by the State Government. Since the assessee has submitted that it is also carrying out certain activities on behalf of the Government of Maharashtra and since the said claim of the assessee has not been examined by the tax authorities, we are of the view that this issue requires fresh examination at the end of the assessing officer. Accordingly, we set aside the order of Ld CIT(A) on this issue and restore the same to the file of the assessing officer with the direction to examine the same afresh by duly considering all the documents and explanations that may be furnished by the assessee before him in order to substantiate its contentions. The assessee is also directed to furnish all the details that may be called for by the assessing officer. Since we have set aside this matter to the file of the AO, the alternative contention of the assessee is also set aside to his file.
Claim for deduction of brought forward deficit computed u/s 11 - Held that:- The Ld CIT(A) held that the same is not allowable as deduction, since the assessee's income is computed in 'commercial manner', since the provisions of the Act do not allow such kind of deduction. Though the Ld A.R placed reliance on certain case law in this regard, yet we notice that they were rendered in the context of the computation of income u/s 11 of the Act. Since the income of the assessee is required to be computed under normal provisions of the Act for the year under consideration, since it is covered by the proviso to sec. 2(15) of the Act, we are in agreement with the view expressed by Ld CIT(A) on this issue.
We notice that the Ld CIT(A) has rejected the claim for deduction of book depreciation. In our view, the depreciation computed u/s 32 of the Income tax Act should be deducted for the purpose of arriving at the income of the assessee, when the income is computed in terms of the provisions of the Income tax Act. Accordingly, we set aside the order of Ld CIT(A) on this issue and direct the AO to allow the depreciation admissible u/s 32 of the Act. - Decided partly in favour of assessee for statistical purposes.
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2015 (4) TMI 884
Dis-allowance of interest paid on borrowings u/s 36 - Interest free advances given to various parties - Direct nexus between the interest bearing loan taken by the assessee and the interest free advance given - Dis-allowance of expenditure u/s 14A - No claim for exemption of any income from payment of tax - Levy of interest u/s 234 of Income Tax Act, 1961 - Issue of double taxation on account of prior period income - Addition u/s 41(1) of Income Tax Act, 1961 - Held that:- In the instant case the CIT(A) has recorded a finding to the effect that in the assessment of Assessment Year 2005-06 the Assessing Officer has established a direct nexus between the interest bearing loan taken by the assessee and the interest free advance given by the assessee which was not for its business purposes. The CIT(A) has followed its own order passed in the case of the assessee in the Assessment Year 2005-06 for confirming the disallowance made in the year under appeal. The Authorized Representative of the assessee has brought no material to controvert the above findings of the CIT(A). The Departmental Representative also could not bring any material before us to show that the finding of the CIT(A) in the case of the assessee in the Assessment Year 2005-06 was reversed in an appeal by any higher authority. In the above circumstances, we do not find any good reason to interfere with the order of the CIT(A) which is hereby confirmed and this ground of the appeal of the assessee is dismissed.
Dis-allowance of expenditure u/s 14A - The Authorized Representative of the assessee has pointed out from page nos. 11 to 13 of the paper-book for Assessment Year 2007-08 that the assessee had not claimed any income as exempt from tax. He has also pointed out from page nos. 27 and 28 of the paper-book for Assessment Year 2008-09 that no income was claimed as exempt by the assessee in its Return of Income. The Authorized Representative of the assessee has relied on the decision of the Hon’ble Gujarat High Court in the case of Corrtech Energy (P) Ltd. [2014 (3) TMI 856 - GUJARAT HIGH COURT], wherein it has been held that where the assessee has not made any claim for exemption of any income from payment of tax, no disallowance could be made u/s 14A of the Act. The Departmental Representative has not disputed the submission of the assessee that during the assessment years under consideration the assessee has not claimed any income as exempt from tax in its Return of Income filed. Therefore, respectfully following the decision of Hon’ble Gujarat High Court in the case of Corrtech Energy (P) Ltd.[2014 (3) TMI 856 - GUJARAT HIGH COURT], we delete the disallowance of expenditure made u/s 14A read with Rule 8D.
Levy of interest u/s 234 - At the time of hearing, no submissions were made by the Authorized Representative of the assessee on this ground of appeal taken in the appeal. Therefore, we hold that charging of interest is consequential and accordingly dispose of this ground of appeal of the assessee.
Issue of double taxation on account of prior period income - We find that it is not in dispute that ₹ 30,46,655/- was income of prior period. In our considered view, on the same analogy on which expenses of prior period is not allowable, the income of prior period also cannot be brought to tax for the year under consideration. The lower authorities in the garb of disallowance of gross amount of prior period expenses, has in fact brought to tax prior period income for the year under consideration. No material has been brought before us to show that how and why the prior period income of ₹ 30,46,655/- is taxable in the year under consideration, when the system of accounting of the assessee is mercantile. Therefore, in our considered view, when the gross amount of prior period expenses added to the income of the assessee, then lower authorities could have also reduced prior period income of ₹ 30,46,655/- for computing the total income of the year under consideration. We, therefore, delete the disallowance of ₹ 30,46,655/- and allow the grounds of the appeal of the assessee.
Adhoc disallowance out of interest expenses - We find that the CIT(A) has confirmed the disallowance by following order of his predecessor passed in the case of the assessee itself in the immediately preceding year. The AR brought no material to controvert the above findings of the CIT(A) or to show that this order of the CIT(A) passed in the immediately preceding year was reversed by any higher authority. Therefore, we do not find any good reason to interfere with the order of the CIT(A), which is confirmed and the ground of the appeal of the assessee is dismissed. - In net decided partly in favour of assessee.
Addition u/s 41(1) of Income Tax Act, 1961 - The DR simply relied upon the order of the AO and could not point out any error in the order of the CIT(A). In the absence of any material to show that the liability in question ceased to exist during the year under consideration or any benefit was received by the assessee during the year under consideration, we find no error in the order of the CIT(A), which is confirmed, and the ground appeal of the Revenue is dismissed. - Decided against the revenue.
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2015 (4) TMI 883
Legality of allowing the claim for deduction by way of filing revised statement of income during the assessment proceedings - revenue contended that since the assessee has not claimed the deduction in its original return, the assessee cannot claim any benefit which the assessee has forgotten to claim while filing the return - Held that:- It is found that TDS on the alleged payment was deposited on 19.05.2007 i.e. in the F.Y. 2007-08 relevant to the AY under consideration. Even by the pre amendment provision of section 40(a)(ia), the said payment was allowable in the year of payment of TDS i.e. the year under consideration. Even if no revised statement of income was filed , the claim was allowable as the deduction has been claimed on the payment of TDS . We do not find any reason to interfere with the findings of the CIT(A) - Appeal of revenue dismissed.
Allowability of delayed payment of PF - Amendment to section 43B - Held that:- Relying upon Commissioner of Income Tax v/s Alom Extrusions Ltd. [2009 (11) TMI 27 - SUPREME COURT] and Commissioner of Income Tax-4 vs. M/s. Hindustan Organics Chemicals Ltd [2014 (7) TMI 477 - BOMBAY HIGH COURT] the amendments to the section brought about by the Finance Act, 2003 with effect from 1st April 2004 were retrospective in nature and would operate from 1st April 1988 – thus, the Tribunal was fully justified in deleting the addition on account of delayed payment of Provident Fund of employees' contribution – thus, no substantial question of law arises for consideration – Decided against Revenue.
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2015 (4) TMI 882
Charge of rental income - business income or income from house property - Tribunal directing the Assessing Officer to tax the rental income as 'income from house property' and to allow deduction u/s 24 - ITAT allowed the claim of expenses of ₹ 45 lakhs on account of provision for incomplete work - interest paid as capital brought in by partners - Held that:- We do not think that when the Tribunal relied upon the judgment of the Hon'ble Supreme Court in the case of East India Housing [1960 (11) TMI 7 - SUPREME Court], it had committed any error of law or acted perversely. Therefore, assuming that we can allow any mixed questions to be raised for the first time, raising them does not enable the Revenue to urge and contrary to what is held by the Tribunal. The position also appears to be identical in the case dealt with by the Hon'ble Supreme Court in Commissioner of Income-tax v. Vikram Cotton Mills Limited [1987 (12) TMI 1 - SUPREME Court]. There as well, the property came to be mortgaged and what was before the Supreme Court was the fact that the High Court, with the approval of the assessee and the creditors evolved a scheme where under the business assets of the assessee were let out to M/s. General Fibres Dealers (P) Ltd. It is in that peculiar fact situation that the Supreme Court took the view and with regard to the nature of income. We are of the view that on the essential contentions raised before the Tribunal and as elaborated or additionally proposed before us a different view than the one taken by the Tribunal is not possible.- Decided against revenue.
Expenses claimed on account of incomplete work - Held that:- It is an undisputed fact that in the case of project completion method the project is deemed to have been completed on its completion and sale of its 80%. The remaining portion of 20% is under either renovation or under sale. The common areas are generally renovated after the completion of the project. In this situation, making a provision for incomplete work, cannot be called to be incorrect system of accounting. More over, the claim made by the assessee were not doubted by the Assessing Officer. He has simply disallowed the claim of the assessee on the ground that the provision of incomplete work should not have been made in the impugned assessment year, without looking to the facts that same cost of incomplete work was taken in the closing stock. We are of the opinion that CIT (A) has properly adjudicated the issue in the light of given facts and circumstances of the case. We, therefore, find ourselves in agreement with the Order of the CIT (A). We do not think that the Assessing Officer's view having been interfered with in such a scenario that any substantial question of law arises for our determination and consideration. Thus, the appeals fail on these two grounds. - Decided against revenue.
Deduction under section 24(b) of the IT Act as interest on borrowed capital - ITAT allowed the claim - Held that:- If two conflicting views of the Commissioner were placed before the Tribunal and the Tribunal found that it had concurred with one of those views and that the view with which it concurred prevails, then, we do not think how the Revenue can raise this issue. The issue has been considered bearing in mind the typical factual background. If the entire interest paid on the partners' capital was related to the premises which were let out by the assessee but the construction thereof came from the contributions of the partners, then, the interest was due and payable to them. That interest was payable not only in terms of the general principle of partnership and highlighted in the Indian Partnership Act, 1932, but also on the broad consideration under section 24(b) of the Income Tax Act, 1961. If the income is income from house property and that is a deduction which could be granted from the same we do not think that the Revenue should be permitted to raise this ground. Even otherwise, the finding being consistent with the factual position which is not disputed, then all the more even this ground cannot be considered as a substantial question of law. - Decided against revenue.
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