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Case Laws
Showing 461 to 480 of 920 Records
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2010 (7) TMI 773
Winding up - inability to pay - petitioner relied upon term of the purchase order that 85 per cent of the invoice value shall be paid after 60 days from the date of dispatch but since such payment has not been made, the respondent has failed to discharge contractual obligations - respondent that the UPS unit supplied by the petitioner were defective – Held that:- defence of the respondent cannot be said to be untenable only for the purpose of defeating the claim of the petitioner. There exist serious disputes between the parties in respect of quality of the goods and the time when such defects were rectified. It cannot be said that it is a case of non-payment of admitted liability, petition is dismissed
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2010 (7) TMI 770
Deemed gift as per the provisions of the Gift-tax Act - Whether capital contribution of Rs. 11,59,375 by the assessee in favour of the partnership firm on 1st April, 1993, and subsequent retirement on August 31, 1993, after four months by receiving a sum of Rs. 22,84,375 the difference of Rs. 11,25,000 cannot be treated as deemed gift as per the provisions of the Gift-tax Act? - Whether the entire transaction was bona fide not for inadequate consideration and consequently does not attract gift-tax liability? - Held that:- As assessee brought their landed properties into the partnership firm. The transaction is not a sham transaction, It is not a case of complete transfer of right of property in favour of the partnership firm. Partnership has admittedly not paid any consideration for such transfer when the properties were brought into the firm. When the partnership firm has not paid any consideration, when the amount mentioned in the books of account is only a notional value and when the partners even after transfer continue to have interest in the property and only on dissolution or retirement, the actual share of a partner could be ascertained and the value of the property is unascertainable on the day they were brought into the partnership firm, the question of holding it as a deemed gift under section 4(1)(a) is impermissible. That is precisely what the Tribunal has held on considering the various judgments on the point. In that view of the matter, no merit in the contention of the Revenue - substantial question of law is answered against the Revenue and in favour of the assessee.
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2010 (7) TMI 769
Undisclosed investment in jewellery - search - Held that:- Central Board of Direct Taxes Circular No. 1916, dated May 11, 1994, lays down guidelines for seizure of jewellery and ornaments in the course of search, the same takes into account the quantity of jewellery which would generally be held by the family members of an assessee belonging to an ordinary Hindu household. The approach adopted by the Tribunal in following the said circular and giving benefit to the assessee, even for explaining the source in respect of the jewellery being held by the family is in consonance with the general practice in the Hindu families whereby jewellery is gifted by the relatives and friends at the time of social functions, viz., marriages, birthdays, marriage anniversary and other festivals. These gifts are customary and customs prevailing in a society cannot be ignored. Thus, although the circular had been issued for the purpose of non-seizure of jewellery during the course of search, the basis for the same recognizes customs prevailing in the Hindu society. In the circumstances, unless the Revenue shows anything to the contrary, it can safely be presumed that the source to the extent of the jewellery stated in the circular stands explained - in favour of assessee.
Gross profit - AO had applied the rate of 10 per cent. for working out the gross profit from trading activity and allowed the deduction at the rate of 5 per cent. towards expenses - Held that:- The gross profit had been merely estimated but there was no basis for such estimation in respect of gross profit or expenses in the assessment order. As whatever income the assessee may have earned from unaccounted business, the same would be held by the assessee as an investment or would have been spent towards personal expenses. During the course of search, no material had been brought on record to prove the investment of such undisclosed amount - Keeping in view the totality of the facts the Tribunal found it appropriate that the gross profit should be adopted at the rate of 5 per cent, on the same set of facts, the Commissioner (Appeals) has worked out the gross profit at the rate of 6 per cent. whereas the Tribunal has adopted the rate of 5 per cent. Thus, the two authorities have on the same set of facts made different estimates. Thus, on these facts, the order impugned does not give rise to a question of law so as to warrant interference because that would only be a case of replacing one estimate by another estimate.
Addition of income from bill discounting – Held that:- AO has estimated the bill discounting income on the basis of cheques being deposited in the accounts of Kamal Trading, Jai Ambe Trading Co. and Arihant Sales Corporation and others & observations of the AO clearly denote that this also relates to the discounting of the cheques, that is why the assessee has deposited the cheques in these accounts. As the figures of these cheques discounted relating to Kamal Trading, Jai Ambe Trading Co. and Arihant Sales Corporation have already confirmed the addition on account of income from the cheque discounting. Therefore, no separate addition can be made estimating as income from the bill discounting - in favour of assessee.
Unexplained expenditure incurred on renovation of house property - Held that:- The expenditure to the extent of ₹ 3.73 lakhs for renovation of the house property had been incurred by Smt. Kantadevi and the said expenditure was disclosed in the return filed by the said Smt.Kantadevi, hence, AO could not have disregarded the same. Besides the expenditure of ₹ 4.92 lakhs incurred by the asses-see is concerned, the assessee had already made a disclosure of the said amount in the total disclosure of ₹ 30 lakhs. In the circumstances, no infirmity can be found in the view taken by the Tribunal in holding that the addition was required to be reduced to the said extent - in favour of assessee.
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2010 (7) TMI 768
Whether the DTA unit is liable to pay export duty on goods supplied to a unit within the Special Economic Zone either under the SEZ Act, 2005 or the Customs Act, 1962? - SEZ units submit that, even if the DTA supplier is liable to pay export duty, it should be recovered from them and not from an SEZ unit – Held that:- A conjoint reading of Section 12(1) with Sections 2(18), 2(23) and 2(27) of the Customs Act, 1962 makes it clear that customs duty can be levied only on goods imported into or exported beyond the territorial waters of India. Since both the SEZ unit and the DTA unit are located within the territorial waters of India, Section 12(1) of the Customs Act 1962 (which is the charging section for levy of customs duty) is not attracted for supplies made by a DTA unit to a unit located within the Special Economic Zone.
It is no doubt true that Section 2(m)(ii) of the SEZ Act defines ‘export’ to mean supplying goods from the domestic area to a unit or developer. The SEZ Act, however, does not contain any provision for the levy of customs duty on goods supplied by a DTA unit to a unit located within a Special Economic Zone. The word ‘export’, as defined in Section 2(m)(ii) of the SEZ Act, cannot be interpolated into Section 12(1) of the Customs Act. The Customs Act is a taxing statute and if the said Act does not, by the plain language used therein, carry out the object the Court will not be justified in supplying deficiencies in the Act.
The Drawback, under Rule 3 of the Drawback Rules, is subject to the provisions of the Customs Act and the Rules made thereunder. These Rules also specify certain goods which are not entitled for drawback. The Drawback Rules do not relate to levy and collection of customs duty, and it is only for the limited purpose of claiming drawback would taking out of goods from a place in a Domestic Tariff Area to a Special Economic Zone fall within the definition of “export” under Rule 2(c) of the Drawback Rules, absence of any provision for the levy or collection of customs duty on goods supplied from a Domestic Tariff Area to a Special Economic Zone for its authorized operations, either on the D.T.A. supplier or the SEZ unit, the impugned proceedings whereby the SEZ units were called upon to furnish bank guarantees, and the D.T.A. units were called upon to pay customs duty, are quashed, Writ Petitions are allowed
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2010 (7) TMI 765
Transfer - whether assets at written down value level valued at ₹ 3,01,700 in exchange of shares valued at ₹ 15,74,874 did not constitute 'transfer' within the meaning of section 2(47) as held by Tribunal ? - Tribunal deleting the addition made by the AO by invoking the proviso to section 41(2) - Held that:- As decided in Kartikeya V. Sarabhai v. CIT [1997 (9) TMI 2 - SUPREME Court] while considering the scope of "transfer" within the meaning of section 2(47) of the Act, where the company had sought to reduce the share capital by reducing the face value of the preference shares, had held the same to be "transfer" under section 2(47) of the Act. Ths the answer to the first question that assets given at the written down value in exchange of shares would amount to 'transfer' within the meaning of section 2(47) of the Act.
Section 41[2] applies wherever the sale proceeds of the capital asset of an assessee exceeds the written down value. The amount that is chargeable to tax under this section is so much of the excess as does not exceed the difference between the actual cost and the written down value. This is taxed as income arising from business or profession of the assessee in the previous year in which the asset is sold. The said charge is termed as balancing charge. This represents the depreciation allowance which is allowed in the previous years from the profits earned by the assessee in those years and where subsequently the capital asset has been sold for excess value, then the difference between the original cost and the written down value is treated as income under section 41(2) of the Act by way of balancing charge.Thus following Chandra Katha Industries’ case [1982 (4) TMI 49 - ALLAHABAD High Court] transfer of assets at written down value for shares of higher value amounts to transfer and attract tax under section 41(2) of the Act. View taken by the Tribunal, thus, cannot be upheld.
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2010 (7) TMI 762
Value of fringe benefits under s. 115WB(2)(H) - inclusion of Salary of drivers & Interest on loan taken for purchase of motor cars in the taxable value of fringe benefits - Held that:- in absence of specific provision laid down under clause. (H) to sub-section. (2) to s. 115WB of the Act, the AO was not justified in including the expenditure on payment of interest on loan taken for purchases of motor cars i.e., Rs. 3,11.580 to compute the fringe benefits. Every required related expenses like repairs, running (including fuel), maintenance of motor cars and the amount of depreciation thereon have been mentioned in specific wordings in the provision, hence the AO was not justified in including the interest expenditure incurred on loan taken for purchase, of motor cars for working out fringe benefits.
For expenses incurred on payment of salary to drivers - running of motor cars is a wider term to include payment of salary to drivers. In the provisions laid down under cl. (H) "running" has been supplemented by wordings "including fuel" under brackets. It reflects the very aim and object of the Legislature as expenditure incurred on running of car besides other will also include fuel expenses. It is a common knowledge that for running of a car besides fuel a driver is also required. It may be a sell driven car or a driver is employed to drive the car. Thus expenditure incurred on payment of salary to driver will be included in computing the expenses on running of the car within the meaning of the provision laid down under section. 115WB(2)(H) - Partly in favour of assessee.
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2010 (7) TMI 760
Levy of additional tax - Rectification of intimation u/s 143(1)(a) – Held that:- proceedings under section 154 of the Act for rectification cannot be initiated after issuance of notice under section143(2) by the Assessing Officer to the assessee. Accordingly, the questionof law as proposed, is answered against the Revenue, appeal is dismissed
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2010 (7) TMI 757
Credit of duty on goods brought to the factory - with the repeal for the old rules and enacting these two new rules, the legal position has not changed. In view of Rule 33, the notification issued under earlier Rules, is deemed to be valid and issued under the Rule 16 of the present Rules, as the same is relevant and consistent with the present Rule. A perusal of the aforesaid rule makes it clear that even if duty is paid, it is refundable. Earlier, no duty was leviable. Therefore, the notification issued earlier cannot be said to be in contravention of any of the rules and the authority to pass such notification could be traced to this rule. In that view of the matter, the Tribunal was justified in holding that assessee is not liable to pay any duty on the naphtha as it was brought back to the crude tank of the refinery for further processing in the production of petroleum products, the substantial questions of law framed by the revenue do not arise for consideration. Even if they arise for consideration, they are answered against the revenue and in favour of the assessee, appeal is rejected.
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2010 (7) TMI 756
Condonation of delay - preamble to the Appellate Commissioner’s order did not guide the appellant properly inasmuch as it laid down not only appellate remedy but also revisional remedy. On the other hand, the ld. JDR submits that the cases in which a revision application to the Government of India could be filed as also other cases in which an appeal could be filed with this Tribunal were distinctly mentioned in the preamble to the impugned order - Held that:- appellant was mistakenly pursuing the revisionary remedy before the Government of India after receiving the Appellate Commissioner’s order. Upon the papers having been retuned by the revisionary authority, they filed an appeal with this Tribunal without unreasonable delay. In these circumstances, we allow the present application.
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2010 (7) TMI 755
Limitation - Appeal time-barred - Cenvat credit - appellant had availed Cenvat credit on certain inputs, which they later on reversed at the instance of the Department - Held that:- assistant Commissioner’s letter dated 17-3-2009 refusing to issue show-cause notice created civil consequences for the appellant. The appellant was, therefore, aggrieved and hence filed the appeal with the Commissioner (Appeals). The appeal, filed on 1-5-2009, challenging the Assistant Commissioner’s view communicated in letter dated 17-3-2009, was very much within the period of limitation prescribed under Section 35 of the Central Excise Act. appeal filed by the appellant before the Commissioner (Appeals) was not time-barred.
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2010 (7) TMI 754
Whether the ex-gratia/compensation receipt under V.R.S. partakes the character of salary or not - Whether the benefit of section 89(1) of the Act could be given to the assessee receiving ex-gratia/compensation or not – There is no prohibition to the twin benefits in respect of the amount received under the Voluntary Retirement Scheme. The relief contemplated under Section 89 of the Act is aimed to mitigate the hardship that may be caused on account of the high incidence of tax due to progressive increase in tax rates and thus held that the benefits under Section 10 (10-C) and 89 could be granted to the assessee, view taken by the Tribunal has been upheld and appeal filed by the revenue has been dismissed. Respectfully, following the aforesaid decision, the questions are answered in favour of the assessee and against the revenue. The order of the Tribunal is upheld, appeal is dismissed
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2010 (7) TMI 753
Revision Application - Penalty - Hon’ble Supreme Court in case of Surgeet Singh Chhabra has observed that statement made before the Customs Officer though re-tracted within six-days is an admission and binding since Customs Officers are not police officers under section 108 of the Customs Act and FEMA. Further it is a settled law that statutory obligations as provided by the statute and classified by the concerned department are not mere formalities but these are to be strictly adhered to, Government therefore is of the conclusive opinion herein that the Applicant as having been filed, processed and got the impugned Shipping bills (goods) cleared, through its employees is very much responsible and concerned with these established fraud cases involving contraventions of Customs Act, 1962 and as such has rightly been held liable to penalty under Section 114(iii) of the Act ibid, Government, therefore, is in conformity with the views of Commissioner (Appeals) and the impugned order-in-appeal is thus upheld for being legal and proper, Government do not find any merits in these Revision Applications and the same are here by rejected.
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2010 (7) TMI 751
Refund of excise duty under Section 11-B of the Central Excise Act - excise duty has not been passed on to the customer - Held that:- when the duty at a higher rate was paid by the manufacturer to the Department is not collected from the customer, in other words, if the higher duty is not passed on to the customer and the customer has not paid the said amount, the assessee is entitled to refund of that excess amount paid at a higher rate, substantial question of law is answered against the revenue and in favour of the assessee.
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2010 (7) TMI 750
Security services - Penalty - appellant does not dispute confirmation of service tax but submits that it is not a case of invoking penal provisions against them inasmuch as there was a lot of confusion in the case as regards service tax and the appellants were under a bona fide belief that no service tax is required to be paid by them - Held that:- nothing on record to show that the tax was not paid by the assessee on account of any mala fidies on their part, in which case the benefit of provisions to section 80 of the Finance Act, 1994 is required to be extended to them, demand of service tax confirmed against the appellant, penalties imposed upon them under various sections of the Finance Act set aside, appeal is allowed
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2010 (7) TMI 747
Manufacturing of handy-craft - Whether exemption notification can be claimed at any point of time - Held that:- benefit of Notification No. 76/86-Central Excise is not available to the respondents or the same has been wrongly extended by the Commissioner (Appeals), the benefit of any notification, if otherwise available cannot be denied on the sole ground that the same is claimed belatedly. merits in the respondents plea that the Revenue has not raised any grounds against setting aside of penalties on the respondents, no merits in the appeals and the same are accordingly, rejected.
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2010 (7) TMI 745
Delay in payment of tax - appellants submits that failure to pay service tax and to follow other statutory formalities by the appellants had been occasioned by reasons beyond his control. He had to visit his native place in Uttar Pradesh frequently during the material period for treatment of his father, who was ailing and eventually expired on 4.12.2007. The relevant death certificate is on record. He submits that there was no intention on the part of the assessee to evade the impugned tax – Held that:- appellants already paid the service tax and the interest found due from them before issuance of the show-cause notice, allegation of intention to evade service tax is absent in this case, penalties imposed under Sections 78 and 77 of the Act may not be sustainable. However, the penalty imposed under Section 76 is on a different footing. The same is imposed for delay in payment of tax during the material period. Section 76 provides for imposing penalty ranging from Rs. 100 to Rs. 200/- per day. In the facts of the case, the maximum penalty provided under this Section is apparently not imposable, there shall be waiver of pre-deposit and stay of recovery of the balance dues adjudged against the appellants pending decision in the appeal.
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2010 (7) TMI 744
Stay application - demand of service tax against the appellants but did not impose any penalty by invoking Section 80 of the Finance Act, 1994 - Held that:- contract between the appellants and ONGC, appellant is undertaking services and for rendering such services, they are using mobile units "workover rigs". The nature of activities, prima facie, support the view of the Commissioner that the same are in the nature of management, maintenance and repairing services. We also, prima facie, agree with the submission of the ld. Jt. CDR that the Tribunal in the earlier order has not upheld the view of the Commissioner's earlier findings that the dispute involving legal interpretation and that the belief of the appellants is bona fide, it is not a case for full waiver of dues as per the impugned order. - Pre-deposit ordered partly.
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2010 (7) TMI 741
Penalty - lower appellate authority has upheld the penalties imposed under Section 77 and Section 78 of the Finance Act, 1994, but has set aside the penalty under Section 76 of the Finance Act, 1994, one of the penalties imposed under Section 76 or under Section 78, is sufficient keeping in view the subsequent amendment to the law making these penalties mutually exclusive, the department's appeal is rejected.
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2010 (7) TMI 739
Levy of service tax - levy under the category of business auxiliary service - goods were not dealt by the present appellants. But they get consideration for service provided to boost the sales of the aforesaid principal who compensated the appellant by way of commission. - Held that:- demand are very small in nature and there is a difference in judgement by the revenue, pre-deposit of 20 per cent of the service tax demanded, predeposit of balance demand shall be waived till the disposal of appeal
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2010 (7) TMI 737
Constitutional validity of section 65(30a) read with section 65(105)(zzq) and section 65(105)(zzzh) read with section 66 of the Finance Act, 1994, as amended by the Finance Act, 2010 - construction services - builders - no coercive steps shall be taken against the Petitioners for the recovery of service tax in relation to the provision in question, but it is clarified that assessments may proceed in accordance with law
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