Levy of property tax - Validity of steps taken by the Respondents for levy of property tax - educational institution - exempt from property tax or not - HELD THAT:- The provisions of Section 93 of the Cantonments Act, 2006, would clearly show that against any levy as well, an appeal will lie. Therefore, as rightly submitted by the learned Counsel for the Respondent, it is open to the Appellate Authority to go into the question as to whether the Appellant No. 1/institution was liable to be exempted as well.
Therefore, clarifying that it is open to the Appellants to take all available contentions including their entitlement to exemption from payment of property tax, this appeal is disposed of.
Levy of Service Tax - work of laying Telecom Cables alongside under the roads for Telecom Companies - period October 2006 to November 2010 - HELD THAT:- In view of the clarification of CBEC Circular No. 123/5/2010-TRU dated 24.05.2010, in respect of applicability of Service tax on laying of cables under or alongside roads and similar activities, the Board have clarified that the laying of cables under of alongside roads is not a taxable services under any clause of Sub-section 105 of Section 65 of the Finance Act, 1994.
The laying of Telecom Cables under or alongside the roads is not a taxable service as clarified by the CBEC vide their Circular dated 24.05.2010 - appeal allowed - decided in favor of appellant.
Income accrued or deemed to accrue in India - consideration received by the Appellant for the use of the SAP system is subject to tax as royalty under the Income Tax Act at the rate of 20 percent on a gross basis - assessee a tax resident of Malaysia is engaged in the business of marketing, distribution and sale of household products, fabrics and personal care - DR submitted, payment received by the assessee from CPI is in the nature of royalty as defined both in section 9(1)(vi) of the Act and Article–13(5) of DTAA with Malaysia - HELD THAT:- Undisputedly, meaning of royalty as provided under Explanation–2 to section 9(1)(vi), initially did not include equipment royalty. Only by way of an amendment brought to Explanation–2 to section 9(1)(vi) by Finance Act, 2001, clause (iva) providing for equipment royalty was inserted with effect from 1st April 2002. Thus, till assessment year 2001–02, section 9(1)(vi) did not provide for equipment royalty. Therefore, since equipment royalty was not coming within the meaning of royalty as provided under section 9(1)(vi) r/w Explanation–2 amount received could not have been brought to tax under the Act, at least, till assessment year 2001–02 considering the provisions of section 90(2) of the Act.
Whether the payment made by CPI to CPM towards user of the system can be brought into tax in India under Article–13(5)(b) of India–Malaysia DTAA (Old)? - Admittedly, in the facts of the present case also, it has not been established by the Department that CPI while accessing the SAP system, exercises any control and possession thereof. Hence, the amount paid cannot be treated as “royalty”. More so, when the facts on record suggests that the CPI has been granted a limited access to the SAP system by establishing a communication line at its own cost for use of data available in the SAP system.
In the present case, there is nothing to suggest that the CPI has obtained the right to use of any of such things as mentioned in clause (iii) for which it has paid the amount to CPM. On the contrary, it is very much evident that the payment made by CPI is for the purpose of accessing the SAP system hosted by CPM at its facilities for exchange of information / data. As far as the reliance upon Explanation–6 to section 9(1)(vi), in our considered opinion, it will have no bearing on the issue at hand as the expansion of scope of process in Explanation–6 would not apply to the assessee as it does not relate to payment made towards transmission by satellite. What is meant by the aforesaid Explanation is live transmission of programs such as channel feed and not SAP which is used for input of data and generation of reports. Therefore, in our considered opinion, the payment received by the assessee from CPI towards use of SAP system can neither be treated as “equipment royalty” nor “process royalty” either under the provisions of the Act or the relevant DTAA .
Since we have held that the consideration received by the assessee from CPI towards use of SAP system is not royalty, in terms of Indo–Malaysian treaty, it will be a business profit under Article–7 of the treaty. Therefore, in terms of Article–7, unless the enterprise of a contracting State has a P.E. in the other contracting State, the business profit cannot be brought to tax in the other contracting State. That being the case, the consideration received by the assessee from CPI towards use of SAP system is not taxable in India. Ground no.1, is allowed. - Decided against revenue.
Department bringing to tax the consideration received towards service rendered by treating it as fees for technical services - HELD THAT:- Though, section 9(1)(vii) of the Act treats income by way of fees for technical services to be taxable in India, however, there is no such expression under the India Malaysia treaty (old). Therefore, the amount received towards service charges has to be treated as business profit of the assessee under Article–7 of the DTAA. Admittedly, as the assessee has no P.E. in India, the amount cannot be brought to tax in India. Though, it is the stand of the department that in view of Article 3(2) of the treaty, definition of FTS provided u/s 9(1)(vii) of the Act would also apply to the treaty, however, we are unable to accept it. In our view, some expression is used in the treaty but not defined, whereas, a definition of such expression is provided in the Act, in that event, in terms of Art.3(2) of the treaty the provisions of the Act will apply.
As far as observations of the learned Commissioner (Appeals) that the assessee cannot switch its option to be taxed either under the Act or DTAA, in respect of different sources of income, on reading the provisions of section 90(2) of the Act, we do not find any such restriction imposed therein. As per the plain reading of section 90(2), the provisions of the Act shall apply to the extent they are more beneficial to the assessee. In other words, if the provision of DTAA qua a particular item of income is more beneficial to the assessee, the same has to apply. Ground no.2, is allowed.
Levy of interest under section 234B and 234D - HELD THAT:- There is no dispute to the fact that the assessee is non–resident company. Therefore, in terms of section 195 of the Act, liability is on the payer to deduct tax while making payments to the assessee. If the payer has failed to deduct tax at source, the assessee cannot be held liable for non–payment of advance tax and consequently levy of interest under section 234B - Thus we hold that in the peculiar circumstances of the case, interest under section 234B is not chargeable.
We find that the issue has been decided in Clough Engineering Ltd. [2011 (2) TMI 1603 - ITAT DELHI] by holding that interest under section 234D is to be charged after excluding the interest granted under section 244A. In view of the aforesaid, we direct the Assessing Officer to charge interest under section 234D only on the principal amount and not on the interest granted under section 244A. Consequently, grounds no.5 and 6 are allowed.
Addition on account of investment in share capital / premium of four different companies u/s 69A - Bogus share capital and share premium - addition of 2% commission attributed to this transaction - HELD THAT:- On lack of veracity of share capital/premium of a company it is the company and /or the shareholders in whose name shares are held have the onus to explain the same. The assessee who is neither a shareholder nor a Director of these companies cannot be deemed to be the owner of these shares just by a statement of the Chartered Accountant who has later on retracted the same. A company is an artificial juridical entity. It has a right of ownership. It can be sued and it can sue. For the wrong doings of a company, the company itself is responsible and it is only in rare circumstances that corporate veil can be pierced and the person behind a veil i.e. the Directors and shareholders can be made accountable for the wrong doing of the company. But a person who is neither shareholder nor a director of the company cannot be deemed to be the owner of the share capital of a company without bringing cogent material on record. No material has been brought on record to show that Settlement Commission in the case of Prime Ispat Ltd. has implicated or found the assessee liable for the share capital and share premium.
In our considered opinion the statement of Shri Sunil Kumar Agrawal which has been duly retracted can by no stretch of imagination be a basis to hold that the assessee was owner of the share capital of these four companies. This presumption is not tenable under any Law be it the Income Tax Law or Company Law - There is no infirmity in the order of learned CIT(Appeals) in quashing the protective assessment of the share capital and share premium of these companies in the hands of the assessee.
Admission of additional evidence by CIT-A - HELD THAT:- As regards the plea that learned CIT(Appeals) has erred in admitting the appeal against the order of protective assessment, we note that there is no specific submission by the Revenue in this regard. Learned counsel of the assessee in this regard has submitted that there is no bar to admit appeal challenging protective addition and that the appeal has been decided by the learned CIT(Appeals) as per the provision of Income-tax Act, 1961. We find ourselves in agreement with this submission and hence ground raised by the Revenue in this regard is also rejected.
Addition on account of payment made through debit card - DR relied upon the orders of the AO and reiterated that the AO has not examined the additional evidence on merits - HELD THAT:- Upon careful consideration we find that the additional evidence in this regard has not been examined on merits by the AO. It is also not the case that the learned CIT(Appeals) has himself examined the veracity of the additional evidence. In these circumstances we deem it appropriate to remit the issue to the file of the AO. The AO shall examine the veracity of additional evidence and thereafter decide accordingly.
Assessment u/s 153C - Addition of cash, jewellery and family contribution offered to tax in the case of assessee's brother-in-law Shri Anand Kumar Agrawal - D.R. submitted that in the course of search a red suit-case was seized from the premises of assessee’s brother-in-law Shri Anand Agrawal from the bed room of his mother-in-law Smt. Sitadevi Agrawal containing cash, jewellery and papers which were in the hand-writing of the assessee - HELD THAT:- For a presumption in law that in case of the search the documents, money, jewellery etc. found belonged to the person searched. In the present case Shri Anand Agrawal has not at all disputed this presumption, rather he has supported the presumption by accepting the entire amounts reflected in the said search as his own income and offering the same in his return of income which has been duly accepted by the Revenue in appellate proceedings. Shri Anand Agrawal has also filed an affidavit owning the entire contents of the said suitcase as belonging to himself. Thus in this view also on the anvil of section 292C of the I.T. Act there is no basis for considering this sum as addition in the hands of the assessee.
This assessment is framed pursuant to notice u/s 153C of the I.T. Act. Before the assessment was framed under this section in this case, there was a search conducted on 04-02-2010 at the assessee’s premises. In this search also no incriminating material or evidence relating to the addition made in this case was found. Thus from the above it is clear that the plea of the Revenue authority that Shri Anand Agrawal is a benamidar of assessee is devoid of any cogency.
When the Revenue is alleging that the apparent is not real then onus lies upon the Revenue to prove the same. In the present case Revenue has totally failed to prove the same. The documents, cash & jewellery involved have been found at the time of search at the premises of Shri Anand Agrawal, Shri Anand Agrawal has owned up the same, he has filed an affidavit in this regard, he has filed the return of income in this regard, the same has been added in his hands on substantive basis as per the appellate order of the CIT(Appeals), the Revenue has decided not to appeal against the said order, thus the addition of this amount in the hands of Shri Anand Agrawal has reached finality. There is no evidence whatsoever found in the course of the search that that Shri Anand Agrawal is a benamidar of the assessee, rather the Department has made search on Shri Anand Agrawal as independent group, this itself dispels the doubt of the AO that Shri Anand Agrawal is a benamidar of the assessee
We hold as under :
1. Once the same amount has been added on substantive basis by the appellate order in the case of Shri Anand Agrawal and Revenue has chosen not to appeal against the same, this appeal by the Revenue is not at all sustainable which seeks to add the same amount again in the hands of the assessee.
2. Revenue has totally failed to prove that Shri Anand Agrawal was a benamidar of the assessee. In such circumstances, in our considered opinion, there is no infirmity in the order of the learned CIT(Appeals). Accordingly we uphold the same. - Decided in favour of assessee.
Disallowance of commission expenses - payment of commission for obtaining supply order from government agencies - Assessee was asked by AO to establish the genuineness as well as reasonableness of expenditure in question and assessee was further required to explain the services rendered against which the commission has been claimed as expenditure which he failed to do - CIT(A) allowed the claim of commission payment - HELD THAT:- The assessee has shown the commission ranging from 7% to 9% above the commission to MPLUN. The expenditure is supported by the bills raised by the payee. The assessee has given PAN mentioning the bill. The commission has been paid for collecting the requirement from the Government offices located at Indore, Khargone, Mandla, Balaghat, Chhindwara and Dewas. The assessee is engaged in manufacture of sub-mersible pumps and during the year the assessee has supplied the product of the assessee to Public Health Engineering Department, Govt. of M.P. and many other Government departments. Therefore, the assessee has to identify various places, thereafter for getting the orders the assessee has to make installation of submersible pumps at the various sites identified by Public Health Department and liasoning charges have been paid by the commission account. Thus, the assessee has made payment for the services rendered.
The assessee has explained the nature of services rendered. Therefore, we are of the view that the learned CIT(A) is justified in allowing the claim. The same kind of commission was allowed in four earlier assessment years 2005-06 to 2008-09 and it was allowed in scrutiny assessments for the assessment years 2005-06 and 2006-07. Therefore, rule of consistency is followed by the learned CIT(A). We are of the view that the learned CIT(A) is justified. Moreover, the assessee has given sufficient evidence to prove the same. Therefore, we do not find any discrepancy in the order of the learned CIT(A) - Case followed PURE PHARMA PVT. LTD. [2004 (3) TMI 31 - MADHYA PRADESH HIGH COURT] - Decided in favour of assessee.
Registration of vehicle in question in the name of the petitioner - rejection on the ground that the certificate of road worthiness in Form No. 22 which was required to be produced from the manufacturer has not been produced and also on the ground that the amount of tax due and payable for the earlier period has not been paid by the petitioner - HELD THAT:- So far as the refusal to register the vehicle in the name of the petitioner on the ground that the petitioner had not produced the certificate issued by the manufacturer in Form No. 22 is concerned, it is required to be noted that as such the petitioner had produced the certificate of the manufacturer in Form No. 22A. Such a certificate was required to show that the vehicle is roadworthy. If the vehicle is sent for bodybuilding work outside the place of the manufacturer, in that case such a certificate is required to be issued in Form No. 22A, which is required to be signed and issued by the manufacturer as well as bodybuilder. However, the purpose and object is to see that the certificate of road worthiness is issued. In the present case it is the case on behalf of the petitioner that vehicle in question was never send to bodybuilder for any bodybuilding work outside. Therefore, the certificate of road worthiness in Form No. 22 only was required - it can be said that the requirement of producing the certificate of road worthiness has been complied with. Under the circumstances in the facts and circumstances of the case the RTO authority is not justified in refusing to register the vehicle in the name of the petitioner on the aforesaid ground.
Demand of tax due and payable on the vehicle from the petitioner - HELD THAT:- Once the vehicle was transferred by the financier to another person, in that case considering section 3(1) of the Act, 1958, the liability to pay the tax on such vehicle will arise. Sub-section (1) of section 3 provides that there shall be levied and collected on all motor vehicles used or kept for use in the State, a tax at the rates fixed by the State Government, by notification in the Official Gazette. Therefore, the moment the possession of the vehicle was handed over to the purchaser who took the loan from the financier and was put to use the liability to pay the tax arise. Proviso to sub-section (1) of section 3 shall be applicable only in a case where the vehicle is kept by a dealer or manufacturer of such vehicles, for the purpose of trade, there shall be levied and collected annually such amount of tax not exceeding ₹ 5000 as the State Government may, by notification in the Official Gazette specify on those motor vehicles only which are permitted to be used on the roads in the manner prescribed by rules made under the Motor Vehicles Act, 1988. Meaning thereby such a dealer/manufacturer is permitted to use the vehicle for limited purpose of repair but not permitted to use on road. Such an eventuality is not there in the present case.
Section 4(1) of the Act, 1958 provides that the tax is required to be paid in advance by every registered owner, or any person having possession or control, of such motor vehicles. Section 8 of the Act, 1958 provides that if the tax leviable in respect of any motor vehicle remains unpaid by any person liable for the payment thereof, and such person before having paid the tax has transferred the ownership of such vehicle or has ceased to be in possession or control of such vehicle, the person to whom the ownership of the vehicle has been transferred or the person who has possession or control of such vehicle shall also be liable to pay the said tax to the Taxation Authority - it cannot be said that the respondent authority had committed any error and/or acted illegally and/or de hors the provision of the Act, 1958 demanding the tax due on such vehicles.
The decision of the Division Bench of this Court in the case of Mono Steels (India) Ltd. [2010 (2) TMI 1300 - GUJARAT HIGH COURT] also shall not be applicable to the facts of the case on hand. In the case before the Division Bench admittedly the subsequent purchaser purchased the vehicle in a public auction as scrap and therefore, considering section 2(28) of the Motor Vehicles Act, 1988, it was held that the Scrap Road Mobile Crane cannot be said to be a motor vehicle inasmuch as it cannot be used on roads by its owners by its own mechanical power and is not meant for transportation on road. Under the circumstances, the said decision also shall not be applicable to the facts of the case on hand.
The impugned order passed by the authority in not registering the vehicle on the ground that the petitioner had not produced the certificate in Form No. 22 is hereby quashed and set aside and it is observed and held that as the petitioner had produced the certificate of road worthiness issued by the manufacturer in Form No. 22A, in the facts and circumstances of the case, such condition is treated to have been complied with - Application allowed in part.
Incentive for the prompt payment of the monthly tariff invoice - one-time expenditure contemplated under the Power Purchase Agreement, or otherwise - HELD THAT:- No doubt, there is a provision under Clause 6.2 for interest on belated payment, but Clause 6.5(v) is actually a rebate for prompt payment of the monthly invoice. The view thus taken by the KERC and the APTEL, being a plausible view, there are no substantial question of law so as to warrant us to exercise our powers under Section 125 of the Electricity Act, 2003.
Addition made as unexplained capital - fictitious capital -survey action u/s 133A - capital building racket was organized by one Surat based Chartered Accountant, Shri Pankaj Danawala, by alluring gullible low income assessees and showing fictitious entries in their balance-sheets filed with their income tax returns incorporating fictitious capital built up. - HELD THAT:- Additions have been made only based on the fictitious balance-sheet entries which are accepted by Shri. Pankaj Danawala to be his creation and the assessees had no role therein. Moreover, the fictitious capital has never been used which were paper entries only thus no benefit ever accrued to assessee’s.
Also find merit in the contention of assessee that in the case of Smt Leenaben Kantilal Nakrani [2010 (6) TMI 892 - ITAT AHMEDABAD] the addition was deleted by ld. CIT(A) and the Revenue’s appeal was dismissed by ITAT even when the fictitious capital was used in that case by said M/s. M.D. Patel Group and a protective addition was made in the hands of Smt Leenaben. In clear distinction to these facts in the case of assessees in question, the fictitious capital was not at all used or derived any benefit from Shri Danawala or M/s. M.D. Patel Group and the Department has not controverted these facts.
Thus, the assessees at the most are guilty of falling prey to the design of an unscrupulous Chartered Accountant who created nefarious design and allured the assessees without any advantage having accrued to them. In the light of these facts, circumstances, observations and following ITAT judgment in the case of Smt Leenaben Kantilal Nakrani (supra), there is no justification in making addition in each case, which is deleted. The assessees’ appeals are thus allowed.
Interest under section 244A - refund granted on deleted Penalty u/s 271(1)(c) - whether the assessee is entitled to receive interest us 244A of the Act till the date of issuance of refund voucher? - HELD THAT:- We find, the Tribunal, Lucknow Bench in assessee’s own case [2011 (7) TMI 1322 - ITAT LUCKNOW ] had decided the issue in favour of the assessee by holding that interest under section 244A of the Act has to be granted till the date of issuance of refund vouchers.
In view of the aforesaid, we direct the AO to allow interest on refund under section 244A of the Act till the date of issuance of refund voucher on 20th May 2011. The issue being identical in assessment year 2000–01, our aforesaid order will apply mutatis mutandis to the said assessment year and the Assessing Officer is directed to allow refund of interest accordingly. Grounds no.1 and 2 for both the assessment years are allowed.
Interest on delayed payment of interest under section 244A - HELD THAT:- As perused the decision of the Hon'ble Supreme Court in Gujarat Fluro Chemicals Ltd. [2013 (10) TMI 117 - SUPREME COURT] we have noted that the Hon'ble Supreme Court after interpreting its own decision of Sandvik Asia Ltd. [2006 (1) TMI 55 - SUPREME COURT] had observed that the decision to grant interest therein was upon considering the fact that there was inordinate delay on the part of Revenue in refunding certain amounts which included statutory interest. However, Hon'ble Supreme Court held, after insertion of section 244A, which provides for interest on refund under various contingencies, the assessee is entitled to claim interest as provided under section 244A only and no other interest on interest is permissible. In view of the aforesaid decision, we do not find merit in the claim of the assessee. Accordingly, ground no.3, for both the assessment years are dismissed.
Validity of assessment order - Refusal to accept F-forms - only contention of the petitioner is that Form-F was received belatedly from their counter-part in West Bengal and that the matter requires sympathetic consideration - HELD THAT:- It is true, as rightly contended by the learned Special Standing Counsel for the Department that the petitioner is guilty of delay and laches. In the first instance, the petitioner failed to produce F-Forms before the order of assessment was passed on 27-3-2015. In the 2nd instance, he failed to file either a regular statutory appeal or a writ petition, as against the 1st order dated 27-5-2015 refusing to accept the F-Forms.
But the fundamental fact is that if F-Forms are genuine and if they were issued belatedly by the counter-part of the petitioner, without any mistake on the part of the petitioner, the petitioner could be given one opportunity. Otherwise, the benefit conferred by statute will become nugatory.
The matter remitted back to the 1st respondent for a fresh consideration in the light of the F-Forms produced by the petitioner - Petition allowed by way of remand.
Seeking recall of order - error apparent on the face of the record or not - doctrine of fraud - violation of principles of natural justice - HELD THAT:- In the case of STATE OF PUNJAB AND SUMEDH SINGH SAINI VERSUS DAVINDER PAL SINGH BHULLAR & ORS. ETC. [2011 (12) TMI 656 - SUPREME COURT], it has been held that If a judgment has been pronounced without jurisdiction or in violation of principles of natural justice or where the order has been pronounced without giving an opportunity of being heard to a party affected by it; or where an order was obtained by abuse of the process of the court which would really amount to its being without jurisdiction, inherent powers can be exercised to recall such order, for the reason, that in such eventuality lune order becomes a nullity and the provisions of section 362 crpc would not operate.
In INDIAN BANK VERSUS M/S. SATYAM FIBRES INDIA PVT. LTD. [1996 (8) TMI 518 - SUPREME COURT] stated the legal position that where the Court is misled by a party or the court itself commits a mistake which prejudices a party, the Court has the inherent power to recall its order.
Rejecting claim of the appellant of abnormal expenses - Tribunal found that the claim of the assessee is of adjustment on account of the low capacity utilization - Whether Income-tax Appellate Tribunal was right in upholding the order of the Respondent A.O. in rejecting claim of the appellant of abnormal expenses? - HELD THAT:- The business of the assessee was segregated into two parts, namely, manufacture and distribution. There were various international transactions with the aforesaid associate enterprises, but there was a transfer pricing report which adopted the transaction net margin method considering it to be the most appropriate method for the purpose of benchmarking its activities under the manufacturing and distribution segments separately. The details of all these activities are set out and then what has been argued is that the item No.3 of the table is of Professional Consultancy.
That was a case where a team of experienced professionals visited the assessee's vendors and performed various activities in respect of standardization and improvement of the process at the vendor's site. Thus, they carried out the work to improve the quality. The assessee furnished the details of the work performed by professionals and the details, according to the assessee, was enough for the purposes of making the adjustments.
This is a case where there was no absence of materials, but whether the materials supplied were sufficient and adequate for the purpose of making the adjustments or otherwise. To our mind, this case is completely distinct from the case at hand. Here, the assessee projects that the activities performed and carried out by it by themselves must be taken as a benchmark or as a standardized practice. There is no need to make any comparison or draw any comparables. The Tribunal found that unless the standardization in the jewellery manufacturing units is established and by bringing in the necessary materials, the assessee's consumption by itself and without anything more cannot be accepted. Therefore, we do not think that the Punjab & Haryana decision would be of any assistance.
Similarly in the case of the Tribunal's order, what we have found is that the assessee was a joint venture and with a Switzerland based unit. It was engaged in the business of manufacturing of diamonds and precious stones studded jewellery. The return of income was filed and declaring a loss. The transfer pricing study report was submitted and the AO noticed that the assessee has entered into various international transactions with its associate enterprises, including export of studded jewellery. He, therefore, made the reference and the Transfer Pricing Officer determined the arm's length price.
As far as the capacity utilization is concerned, there is an explanation offered by the assessee that it was operating at 50% of its actual capacity during the year under consideration and, therefore, its operating profit margin was lower as compared to all comparables selected. Thus, there were comparables and on record.
It is in relation to the comparables performance that the Transfer Pricing Officer was, by taking that as a benchmark, applying the same to the assessee before the Tribunal. The assessee was a relatively new unit having put in only two years after its existence and, therefore, could not achieve the optimum capacity. That is why it urged that it was operating at 50% of its actual capacity. Thus, materials were already on record and there was no dispute about it. It is in these circumstances that the Tribunal found fault with the approach of the authorities in taking the comparables as the benchmark and applying them to a relatively new unit. Therefore, to our mind, even this Tribunal's order cannot assist the assessee in the facts and circumstances of our case.
GP Estimation - AO completed the assessment by estimating the gross profit of the assessee on the ground that the assessee has not cooperated and have not produced the books of accounts - FAA confirmed the action of the A.O. - HELD THAT:- Assessee was not granted sufficient opportunity to demonstrate its case. From the assessment order it is clear that the assessment proceedings commenced on 5.2.2014 and thereafter a show cause notice was given on 11.2.2014. The assessee appeared on 14.2.2014 and 21.2.2014 and furnished certain details. Yet another show cause notice was given on 25.2.2014 which was replied to by the assessee on 4.3.2014. The assessment order was passed on 19.3.2014.
The assessee contradicts the claims of the A.O. that he was not willing to produce the books of accounts. In fact, he submits that the books of accounts were produced before the A.O. on 22.5.2013. The details of events are given in the paper book. The detailed reply of the assessee to the query of the A.O. dt. 22.5.2013 demonstrates that the assessee has made his submissions in response to the queries from the Revenue. These have not been considered by the authorities below - assessment should be set aside to the file of the A.O. for fresh adjudication in accordance with law. Appeal of the assessee is allowed for statistical purposes.
Rejection of bid relating to the commercial tower - non-speaking order - Maintainability of suit in absence of concluded contract - Competency of Administrator to accept/reject bid - Legality of rejection of bid.
Maintainability of suit in absence of concluded contract - HELD THAT:- In the absence of a concluded contract, i.e. in the absence of allotment letter and acceptance of highest bid, the suit by the plaintiff was wholly misconceived. Even if non-acceptance of the bid was by an incompetent authority, the court had no power to accept the bid and to direct the allotment letter to be issued. Merely on granting the declaration which was sought that rejection was illegal and arbitrary and by incompetent authority, further relief of mandatory injunction could not have been granted, on the basis of findings recorded, to issue the allotment letter, as it would then become necessary to forward the bid to competent authority – Chief Administrator - for its acceptance, if at all it was required.
Competency of Administrator to accept/reject bid - HELD THAT:- The plaintiff has not questioned the delegation of power before the courts below in any manner whatsoever. We decline to examine the submission raised by learned counsel for the plaintiff in this Court that there is no delegation of power under section 51(4) and the power of the Chief Administrator could have been delegated only by the State Government not by HUDA under section 51(1) as per its order dated 13.9.1989. In the absence of challenge to legality of delegation order dated 13.9.1989, and the plaintiff being guilty of suppressio veri, it is not entitled to urge the aforesaid submission so as to invalidate the statutory delegation of power made by HUDA under section 51(1) - it is apparent that the Administrator had the power to reject a bid, not only being the Presiding Officer as per terms and condition N0.4 of auction but otherwise also he had the power. Thus, the decision of the High Court in setting aside the auction on the aforesaid ground cannot be said to be legally sustainable.
Legality of rejection of bid - HELD THAT:- When it is apparent from the communication that the reports were considered and what was contained in the report was very much pleaded in the written statement, mere non-production of report was not of any significance in the instant case. We are satisfied that the rejection of the bid by the Administrator was absolutely proper and justified and was beyond the pale of judicial scrutiny. The Administrator had the right to reject the bids and he had rejected it on sufficient ground, duly considering the materials on record as is apparent from the communication dated 21.9.2004. In the interest of the public, revenue of the State and in the interest of HUDA the huge property was saved from being plundered.
In the instant case reasons have been mentioned in the rejection order and the nature of reports has also been sufficiently explained. Thus the rejection of seven different bids in the auction reflects that there was due application of mind by the concerned authority and rejection could not be said to be illegal, arbitrary or sans of reason - under compelling circumstances and duly considering the reports, the Administrator had taken the decision to reject the bids not only of the plaintiff but also six others. For the first time in the history of State of Haryana, such big properties were put to hammer on the prices indicated. The hitch in fixing the reserve price also indicates that the reserve price was not determined in a fair manner in the instant case. Not only the plaintiff but HUDA also did not place the delegation of power on record of the courts below. None of the officials of HUDA had been examined. Only an Assistant – a junior ranking person had been examined who was not posted there when the auction was held and came only in 2008. As the property was a commercial tower in Sector 29, Gurgaon, with huge commercial complex, the first appellate court was right in dismissing the suit.
The judgment and decree passed by the High Court is set aside and that of the first appellate court is restored - Appeal allowed.
The Supreme Court issued an order directing that no coercive process be taken against the petitioner for recovery of the demand amount. The case was tagged with SLP(C) No.17432 of 2014.
Stay or implementation and enforcement of the order - HELD THAT:- The respondent-Revenue should inculcate as a matter of habit that the orders of the CESTAT, if not stayed or its implementation and enforcement is kept in abeyance, it shall implement these orders. Else, this conduct of the Revenue will set a bad precedent. In that event tomorrow assessees also will openly defy binding orders and directions of a Tribunal. The Tribunal is a last fact-finding Court of appeal and presided over by a retired Judge of the High Court. Its Benches also comprise of Members (Judicial and Technical). They exercise judicial powers. In the circumstances, their orders bind the parties. Once the appeal of the Revenue in this case has been admitted, but interim stay is refused, then, we do not think that the Tribunal's order can be kept in abeyance and indefinitely.
This matter is posted on 23rd January, 2017. It shall appear under the caption “For Passing Orders”.
Refund claim - exempt goods - goods cleared to research institute under exemption Notification 10/97, dated 1-3-1997 - appellant paid an amount equal to 10% of the value of the said exempted goods - applicability of Rule 6(3)(a) of Cenvat Credit Rules - HELD THAT:- The ground of refund of the appellant is only that the same goods are cleared on payment of duty and under exemption to the research institute.
The contention of the appellant cannot be agreed upon. The Rule 6(3) applies when the excisable goods are cleared on payment of duty and under exemption and if the common inputs are used in both goods Rule 6(3)(a) is clearly applicable. Therefore, the payment of 10% of the value of the exempted goods made by the appellant is in conformation to Rule 6(3)(a) which does not require any interference.
Seeking grant of Bail - out of a total of 15 accused, 4 accused are absconding and of the remaining 11 accused, 8 have been released on bail by different forums including one accused by this Court - HELD THAT:- The charges against the accused are, undoubtedly, serious. However, as observed in the earlier order of this Court dated 4th May, 2016 such charges will have to be balanced with certain other facts like the period of custody suffered and the likely period within which the trial can be expected to be completed.
Till date only one witness has been examined and that too his examination is also not over. The prosecution proposes to examine 147 witnesses. The accused appellants have been in custody close to four years.
The accused appellants should be granted the privilege of bail - the accused appellants are directed to be released on bail by the learned trial Court - appeal allowed.
Levy of Entertainment Duty - billiards tables - principles of mutuality - HELD THAT:- The public is neither invited to use the tables nor is permitted to use them. The billiards tables are provided only for the members of the petitioner-Club with a view to achieve the object of the club of providing social entertainment and physical and mental recreation. The Entertainment Tax Inspector has levied the duty on the premise that the petitioner runs a 'pool parlour' in the club where the billiards tables are provided. Under Section 2(b-2) of the Act, a pool parlour would be a place of entertainment where tables are provided for playing a pool-game for which payment is necessary. It is not the case of the respondents that payment is made by the public for using the billiards tables for the pool-game. The billiards tables in the petitioner-Club would not be a game or sport to which persons are admitted for payment and hence, the same cannot be considered as entertainment for which duty is leviable under Section 3 of the Act.
Since the action of the Entertainment Tax Inspector of initiating proceedings against the petitioner-club for payment of entertainment duty is bad in law, the impugned demand notices are hereby quashed and set aside - Appeal allowed.
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