TMI Tax Updates - e-Newsletter
January 1, 2016
Case Laws in this Newsletter:
Income Tax
Customs
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
TMI SMS
Highlights / Catch Notes
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Income Tax:
MAT computation - Working of tax liability on book profit u/s.115JB - receipt of dividend income - Reopening of assessment - AO formed wrong belief that for the purpose of computing book profit u/s 115JB, the said amount of ₹ 15,458/- disappeared from the consideration - notice of reopening being bad in law, quashed - HC
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Income Tax:
Revision u/s 263 - Merely because the assessing officer has made additions in a particular manner would not mean that the CIT would be confined to scrutiny of the methodology adopted by the assessing officer and to proceed either to confirm or to delete the additions, if such methodology is not found entirely satisfactory - HC
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Income Tax:
Any grievance of the parties in respect of the Tribunal, not complying with the order of this Court for whatever reason could not be remedied by an Appeal under Section 260A of the Act. Thus Appeal as filed from the impugned order is not maintainable under Section 260A of the Act - HC
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Income Tax:
Tribunal power under the Act to extend the stay of demand in the appeals pending before it beyond the period of 365 days - Nothing has been shown to us as to why when the Revenue has accepted the earlier orders, a different stand is taken in this appeal - power to tribunal to extend stay upheld - HC
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Income Tax:
Penalty u/s 271(1)(c) - addition u/s 68 - merely because the assessee had surrendered the amounts it did not follow that the amount agreed to the added represented its concealed income - no penalty - AT
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Income Tax:
Deduction u/s 35ABB - migration of license of assessee from phase-I to phase-II is just modification of terms and conditions of the license and these modification cannot be said that old license granted to assessee in phase-I has ceased or not in force - AT
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Income Tax:
Undisclosed receipts through post office - without rejecting the books of accounts maintained by the assessee company, the addition made simply on the basis of information from the post office without being corroborated or verified cannot be accepted - AT
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Income Tax:
TDS u/s 194H - assessee has not deducted TDS on payment of credit card service charges - There is no such relation between the bank and the shop keeper, which establishes the relationship of a principal and commission agent - no TDS is required - AT
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Income Tax:
MAT - Book adjustment - assessee directed to furnish the requisite calculation before the Assessing Officer, who in turn shall verify the same and compute the book profits under section 115JB of the Act in this regard, after affording reasonable opportunity of hearing to the assessee - AT
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Income Tax:
Disallowance of the accumulation of income - rejection of Form 10 - assessee has not filed the resolution of the society for the specific purpose mentioned in the letter - assessee is eligible for accumulating the excess of income over the expenditure for the relevant assessment year - AT
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Customs:
100% EOU - procurement of goods without payment of duty - Even the supplier reimbursed the amount towards shortage noticed in weight which also supports the view that there was no diversion of the duty free goods. Thus none of the conditions of the exemption Notification No. 53/1977-Cus. are violated. - AT
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Customs:
Import of two Vessels for breaking purpose Demand of differential duty - bunker and stores - the subject bunker and stores were declared by the master of the vessel in the manifest, which was statutory document - Burden cannot be shifted on the revenue - AT
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Customs:
Exemption in relation to import of Chickpeas(garbanzos) and Lentils will continue on or after 1-6-2016 - Seeks to further amend notification No 12/2012-Customs dated 17.03.2012 - Notification
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Indian Laws:
Condonation of delay in filing of appeal - Power of tribunal under SAFEMA to condone the delay - , the Appellate Tribunal had no power to condone the delay beyond the period of 60 days from the date on which the order impugned in the appeal was served on the aggrieved party. - HC
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Service Tax:
Waiver of pre deposit - Section 35F - the order passed by the Tribunal did not indicate that, it has considered the materials to come to a prima facie conclusion. Hence, the order is liable to be set-aside, as the order had been passed, invoking the amended provisions of Section 35F, whereas the law applicable to the case of the assessee is proviso to unamended Section 35F - HC
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Service Tax:
Demand of service tax - To maintain ones own equipment, to optimize the usefulness, by maintenance and repair, in the BOOT period, is certainly not liable to Service tax as services rendered to self cannot be taxed - AT
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Service Tax:
Valuation of goods - Free issue of SIM Cards - Telephone Services - Whether during April 2003 to September 2006 distribution of free of recharge voucher attracts service tax liability or otherwise despite the fact that the recharge voucher are given free of cost to the dealers as consideration for commission - Held No - AT
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Central Excise:
CENVAT Credit - Returned goods - When the vehicle is brought back to the factory for the intended purposes as stipulated under Rule 16(1) the credit of duty paid on such vehicle is available to the appellant. Such vehicles undergo a process of manufacture and become part of process of production of new vehicle is settled and undisputed. - Credit allowed - AT
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Central Excise:
Manufacture - whether the activity by the applicant of bending, assembly and inspection of end formed tubes amount to manufacturing within the meaning of the Central Excise Act - Held Yes - AAR
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Central Excise:
Denial of Concessional rate of duty - Fuel efficient light commercial motor vehicles - The fuel efficiency certificate, if any, in possession of the supplier of engine/chassis namely Eicher Motors Ltd. cannot by itself be the basis for the appellant to claim such concession. - AT
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Central Excise:
Cenvat credit of membership and periodical of various business associations and law journals - all these member ship and subscriptions are directly related to the business activity of the appellant - credit allowed - AT
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VAT:
Levying of tax under the Rajasthan Tax on Entry of Motor Vehicles Into Local Area Act, 198 - Jurisdiction of AO - when all the provisions of Rajasthan Sales Tax Act, 1954 are made applicable mutatis mutandis to the provisions under the Act, therefore, the assessment order passed by the Assistant Commissioner, Anti Evasion Wing, though may not be proper but the entire assessment order could not have been quashed and set aside for all times to come. - HC
Articles
Notifications
News
Case Laws:
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Income Tax
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2015 (12) TMI 1512
Reopening of assessment - assessee sold his immovable property and had earned long term capital gain claiming deduction under section 54-EC on investment in Rural Electrification Corporation - Held that:- The reasons recorded by the assessing officer do not even suggest that the income chargeable to tax had escaped assessment due to failure on the part of the assessee to disclose truly and fully all material facts. The revenue has not, even if possible to do so, demonstrated any such failure on the part of the assessee. In fact, counsel for the petitioner rightly pointed out that not only that all such declarations were in the returns filed, during the assessment also this issue had come up for consideration. The petitioner in communication dated 03.09.2010 had pointed out to the assessing officer the investments made with the Rural Electrification Corporation and in purchase of immovable property. Thus, quite apart from the reasons recorded by the assessing officer not indicating any failure on the part of the assessee to disclose truly and fully all material facts, even the record suggests to the contrary. Reopening quashed - Decided in favour of assessee.
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2015 (12) TMI 1511
MAT computation - Working of tax liability on book profit u/s.115JB - receipt of dividend income - Reopening of assessment - Held that:- In the computation of income presented by the petitioner along with the return of income, the petitioner had shown book profit as per Section 115JB of the Act of ₹ 4,23,47,912/-. This figure is significant and would appear in our later observations as well. In the profit and loss account, the petitioner showed dividend income of ₹ 15,458/- as income from other sources and showed profit before tax of ₹ 4,23,47,912/-. For computation of book profit for the purpose of Section 115JB, the petitioner adopted such amount of ₹ 4,23,47,912/- as shown in the profit and loss account. There were no additions and deductions to be made as referred to in Section 115JB and therefore, the final figure of book profit for the said provision came to the said original amount of ₹ 4,23,47,912/-. Thus for all purposes whether for the computation of income for normal tax provisions or as per the book profit under Section 115JB of the Act, the said amount of ₹ 15,458/- was duly reflected and was accounted for. The Assessing Officer formed wrong belief that for the purpose of computing book profit under Section 115JB of the Act, the said amount of ₹ 15,458/- disappeared from the consideration.Under the circumstances, notice of reopening being bad in law, is quashed. - Decided in favour of assessee
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2015 (12) TMI 1510
Revision u/s 263 - Held that:- Merely because the assessing officer has made additions in a particular manner would not mean that the Commissioner would be confined to scrutiny of the methodology adopted by the assessing officer and to proceed either to confirm or to delete the additions, if such methodology is not found entirely satisfactory. Even without the aid of these wide powers, the appellate authority would have inherent power to uphold the additions on correct application of law and facts if sustainable even if on the reasoning of the assessing officer is not found correct. In other words, the appellate authority is not bound by the reasoning of the assessing officer and can through different route reach the same conclusion. Under the circumstances, we do not think that the powers under section 263 of the Act can be exercised when, though addition has been made, on the footing of the premises which are not to the satisfaction of the Commissioner and, therefore, to make additions on better premises with better reasoning or on different application of legal principles.In the result, in our opinion, the Commissioner lacked jurisdiction to issue the impugned notice. When the question is the very foundation of the notice and jurisdiction of the Commissioner to exercise such powers, the question of relegating the petitioner to alternative remedy or to permit the Commissioner to complete the proceedings and thereafter to direct the petitioner to take appeal route does not arise. - Decided in favour of assessee.
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2015 (12) TMI 1509
Maintainability of appeal under Section 260A - whether the Tribunal was right in rejecting the reference application filed by the department, though as per rule 45 of Appellate Tribunal Rule 1962, the tribunal may send the statement to the High Court without annexures? - Held that:- The impugned order has not been passed in appeal by the Tribunal but consequent to the order of this Court dated 2nd February, 1999 allowing the Revenue's application under Section 256(2) of the Act. Therefore, the impugned order has been passed consequent to the order dated 2nd February, 1999 of this Court in advisory jurisdiction. The impugned order of the Tribunal is not in exercise of its appellate jurisdiction for it to be an order amenable to appeal under Section 260A of the Act. The order passed by the Tribunal consequent to the order passed under Section 256(2) of the Act is not an order passed in Appeal by the Appellate Tribunal. An application under Section 256(2) of the Act and the order passed by this Court thereunder are in the exercise of its advisory jurisdiction. Therefore, any grievance of the parties in respect of the Tribunal, not complying with the order of this Court for whatever reason could not be remedied by an Appeal under Section 260A of the Act. Thus Appeal as filed from the impugned order is not maintainable under Section 260A of the Act.
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2015 (12) TMI 1508
Admission made in the statement recorded under Section 132(4) - disclosure of income to be examined in the course of the proceedings under Section 245D(4) - procedure adopted by the Settlement Commission - Held that:- The point of maintainability of the application could be raised as a contention by the Department before the Settlement Commission and the Settlement Commission would be entitled to examine that question at the final hearing. On the other hand, if this court were to issue rule and to admit the case to file and take it up for final hearing several years down the line, it would cause prejudice to the Department. Therefore, since the Settlement Commission would be in a position to decide the application along with the point as regards the maintainability in the first instance, there is no prejudice caused to the Department. Since it is also an admitted fact that the respondent has paid the entire tax on a sum exceeding ₹ 300 crore, there is absolutely no prejudice caused to the Department. The petitions are misconceived.
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2015 (12) TMI 1507
Tribunal power under the Act to extend the stay of demand in the appeals pending before it beyond the period of 365 days - Held that:- This Court has consistently taken a view that the Tribunal has power to extend the stay even after the substituted third proviso to subsection 2A to Section 254 of the Act was introduced. This is evident from all the orders referred to in para 3 hereinabove. The Revenue has not filed appeal against the above orders of this Court in the context of the substituted third proviso to Section 254(2A) of the Act. Nothing has been shown to us as to why when the Revenue has accepted the above orders, a different stand is taken in this appeal. Apex Court in CCE vs. Kumar Cotton Mills (P) Ltd., (2005 (1) TMI 114 - SUPREME COURT OF INDIA) held that notwithstanding the presubstituted third proviso to Section 254(2A) of the Act the Tribunal continues to have powers to grant interim relief. In the above view, therefore, the ratio of the decision in “Narang Overseas (P) Ltd.” (2007 (7) TMI 5 - HIGH COURT, BOMBAY ) would apply even in case of substituted third proviso to Section 254(2A) of the Act. The only substantial difference in the presubstituted third proviso and substituted third proviso to Section 254(2A) of the Act is the addition of the words “even if delay in disposing of the appeal is not attributable to the assessee” These additional words added in the substituted third proviso to Section 254(2A) of the Act has been struck down by the Delhi High Court in Pepsi Foods (P) Ltd. Vs. Asstt. Commissioner of Income Tax, (2015 (5) TMI 655 - DELHI HIGH COURT). - Decided against revenue
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2015 (12) TMI 1506
Penalty u/s 271(1)(c) - addition u/s 68 - Held that:- In the present case there was a change of opinion and no concealment of income or furnishing of inaccurate particulars on the part of the Assessee. Therefore, we find force in the contention of the assessor's counsel that the issue involved in the present case is squarely covered by the decision of the Hon'ble High Court of Delhi in the case of CIT vs. Aggarwal Pipe Co [1999 (7) TMI 57 - DELHI High Court] wherein that the Tribunal had found that the assessee had furnished confirmations from the cash creditors and it was only when the Assessing Officer wanted him to produce these creditors, including Y in whose case summons sent under section 131 of the Income Tax Act, 1961, were received back unserved, that the assessee found it expedient to surrender the amounts, but merely because the assessee had surrendered the amounts it did not follow that the amount agreed to the added represented its concealed income. The surrender so made also stood accepted and the Revenue had brought no material on record, besides the factum of the assessee. The Tribunal was justified in cancelling the penalty Assessee has not furnished inaccurate particulars of income, however, it is a case of change of opinion. Under these circumstances, in our view the penalty in dispute is totally unwarranted and deserve to be deleted. Accordingly, we delete the penalty in dispute made u/s. 271(1)(c) of the I.T. Act and cancel the orders of the authorities below on the issue in dispute. - Decided in favour of assessee.
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2015 (12) TMI 1505
Deduction u/s 35ABB (2) - Held that:- In view of prohibition to transfer the original license, we reject the claim of the assessee for deduction of the whole sum paid under Phase-I of the license u/s 35ABB (2) of the Act and confirm the order of CIT(A) on this count. Deduction u/s 35ABB (1) - Held that:- Assessee has exercised option to migrate to Phase-II and not to continue under phase-I policy. As per chart submitted by the assessee showing difference between the Phase-I and Phase II, there are change in the payments terms which has become from fixed payment regime to revenue sharing regime, in the conditions pertaining to shareholding, conditions for appointment of directors, hiring of broadcasting equipment's etc. As we have already held that migration of license of assessee from phase-I to phase-II is just modification of terms and conditions of the license and these modification cannot be said that old license granted to assessee in phase-I has ceased or not in force. Therefore we are unable to persuade ourselves that the terms of licence granted in Phase-I has come to an end. In our view terms and conditions of license has been modified in above manner and tenure of the same is also extended and license granted in Phase-II is not independent of license granted to assessee in Phase-I. Therefore the claim of the assessee for deduction of above sum u/s 35ABB (1) is also not correct. Whether the amount of unallowed capital expenses paid by the assessee under phase-I policy is a capital loss or whether such a sum is allowable to the assessee? - Held that:- The reason given by CIT(A) for allowing the deduction of fees paid by assessee under PHASE-I over the remaining life of the license granted under PHASE-II of the regime. We do not find any infirmity in the finding as well as reasoning given by CIT(A) as in substances the reason canvassed by CIT(A) are similar to what we have propounded in our order. In view of this we confirm the order of CIT(A) in granting deduction of ? 1,26,58,244/- being 1/10th of ? 12,65,82,440/- being fees paid by assessee in Phase-I as deductible expenditure u/s 35ABB(1) during the year under consideration i.e. A.Y. 2006-07 - Decided against assessee. Depreciation u/s 32(i) (ii) on the amount of license fees - Held that:- We are of the view that provision of section 35ABB(8) which provides that Where a deduction for any previous year under sub-section (1) is claimed and allowed in respect of any expenditure referred to in that sub-section, no deduction shall be allowed under sub-section (1) of section 32 for the same previous year or any subsequent previous year. Further as held by is in deciding the issue of allowability of claim of the assessee u/s 35ABB (1) wherein we have allowed the claim of the assessee on proportionate basis from remaining years of license, the claim of the assessee cannot be accepted - Decided against assessee. Interest income - assessed as business income OR income from other sources - Held that:- Before CIT(A) the details of such interest income was not furnished by AR of the assessee and same was no such details have been furnished before us. In the assessment order also, AO has not mentioned the reason for changing the head of bank interest income from "Business Income "offered by assessee to 'income from other sources'. Therefore in the interest of justice we set aside this ground of appeal of the assessee back to the file of AO to decide the same on merit after affording reasonable opportunity of hearing to assessee. - Decided in favour of assessee for statistical purposes. Direction by CIT(A) to verify the record and allow carry forward of unabsorbed depreciation/ business loss as per law - Held that:- Assessee submitted before CIT(A) that it has only carried forward of unabsorbed depreciation of previous years of ? 9796408/- and ? 12521695/- of unabsorbed Business loss as per assessment order for AY 2004-05. Against this CIT(A) has granted a direction to AO verify the record and allow carry forward of unabsorbed business loss and depreciation in accordance with the law. We do not find any infirmity in the order of CIT (A) - Decided against revenue
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2015 (12) TMI 1504
Undisclosed receipts through post office - source of information - CIT(a) deleted the addition - Held that:- CIT (A) rightly observed that third party information is important for the purposes of assessment but it should be corroborated by relevant documentary evidences otherwise it cannot be acted upon to saddle the assessee with additions. Though the source of the information is a government organization, like in this case is a post office, the correctness of that information is countered by the assessee with by another piece of evidence emanating from the very same source, then the Post Master is duty bound to establish that the information supplied by him is correct by production of documents from where he has supplied the information to AO at the first place. In this regard, the ld. CIT (A) has noted that the information supplied by the post office to the AO was on monthly basis whereas it was supplied to the assessee on dayto- day basis. Thus, the contention of the assessee that there can be posting or compilation or totaling error cannot be ruled out unless the AO had called for the records from the post office and verified the same. Without doing the said exercise, the AO ought not to have made the addition simply by relying on the information given by the post office, when the assessee also has documentary evidence certified by the Post Master to support its claim. We further take note of the fact that the Post Master issued the certificates duly signed and stamped on day-to-day basis in the regular course of its business and which was the basis of audited books of accounts maintained by the assessee. We find force in the contention of the ld. AR that without rejecting the books of accounts maintained by the assessee company, the addition made simply on the basis of information from the post office without being corroborated or verified cannot be accepted. We further find that from a perusal of the statement of facts filed by the AO along with the appeal, vide letter dated 17.02.2005, the post office has brought to the notice of the AO that the documents for a period from 1999 to March 2002 has been weeded out. It was clearly mentioned that documents pertaining to period from April 2003 to July 2004 comprising of 1353 pages has been taken away by the Investigation Officer, C.O. Dalanwala, Dehradun on 04.09.2004. So, from the said letter, we can safely infer that records pertaining to the relevant assessment year i.e. 2003-04 (financial year 2002-03) was available with the concerned post office. We find that the AO has not taken any pains to call for the records before he passed the assessment order dated 31.03.2006 which he could have easily done. Further, we find that pursuant to the ld. CIT (A)'s seeking remand report, the AO simply stated vide letter dated 24.11.2008 that records of FY 2002-03 are not available. When insisted by the ld. CIT (A) vide letter dated 27.02.2009 a copy of statement on oath of Shri Lalit Mohan Joshi, the Post Master was recorded on 25.02.2009 which has been incorporated verbatim at page 3 of the ld. CIT (A)'s order wherein he simply states that the information given by them must have been based on the basis of cash book and money order payment book and could not be based on wrong facts and the documents have been weeded out. So, we find that the AO, during the original assessment, could have summoned the documents and could have verified the veracity of the statement of the assessee qua the information supplied by the post office. Without doing so, the AO could not have made the addition. We find that though the documents for the next assessment year were taken away by the Investigation Officer, C.O., Dalanwala, Dehradun for the period April 2003 to July 2004 comprising of 1353 pages, we find that the AO in the next assessment year i.e. 2004-05 has not made any addition and has accepted the return filed by the assessee - Decided against revenue
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2015 (12) TMI 1503
Disallowance of excess depreciation claimed on Wind Mill plant - CIT(A) deleted the addition - Held that:- foundation of platform, erection, installation of plant and machinery, preparation of crane platform for wind mill and other civil work carried out for installation are internal part of wind mill, which have not independent use. Thus, we are of the considered view that the assessee is entitled for 80% of depreciation on composite wind mill project including other expenditure for put to use for wind mill. TDS u/s 194H - Disallowance U/s 40(a)(ia) - assessee has not deducted TDS on payment of credit card service charges - Held that:- This issue has been considered by the Coordinate Bench in Gem Paradise Vs. ACIT [2012 (2) TMI 521 - ITAT JAIPUR] in which it has been held that the assessee sold its goods through credit card and on presentation of bill issued against credit card, the bank makes payment to the assessee after deducting agreed fees as per terms and conditions in case of credit card. This is not a commission payment but a fees deducted by the bank. There is no such relation between the bank and the shop keeper, which establishes the relationship of a principal and commission agent. Therefore, TDS is not liable to be deducted on payment made on the basis of credit card. The other case laws referred by the assessee is also squarely applicable. - Decided in favour of assessee. Disallowance of Misc. supply expenses - CIT(A) deleted the addition - Held that:- The assessee is a Five Star hotel managed professionally. There is an agreement with multinational company in sharing receipts. The ld Assessing Officer made addition by making general observation. He is not deducted any specific bill vouchers that the assessee has made cash payments for expenses or made self made vouchers. The ld DR had not controverted the findings given by the ld CIT(A), therefore, we uphold the order of the ld CIT(A).- Decided in favour of assessee.
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2015 (12) TMI 1502
Validity of reopening of the case u/s 147 - AO treating the amount received on sale of shares which was claimed as Long-term-capital-gain, as income from other sources along with the commission paid for obtaining the alleged fictitious LTCG @ 0.15% - Held that:- From the analysis of the reasons recorded, it is evident that there is no specific information that the shares of N.E. Electronics Company purchased through M/s Goldstar Finvest Pvt Ltd. In April 2001 and sold through M/s Mahasagar Securities Pvt Ltd in June 2003 was a bogus transaction or was an accommodation entry. If the AO has received certain information from investigation wing then, it was incumbent upon him to apply his mind and peruse the assessee’s assessment record to see, whether the transactions undertaken by the assessee is also sham transaction or was only a accommodation entry taken from these companies of Mukesh Chokshi and there is any failure on the part of the assessee to disclose all material facts relating to such transaction.. More so, in this case the assessment sought to be reopened was beyond the period of 4 years. The ‘reason to believe’ entertained by the AO in such cases should be such that, whether there is any failure on the part of the assessee to disclose truly or full all material facts because that is a point of jurisdiction which AO has to acquire to reopen the competed assessment u/s 143(3). The information received from the Investigation wing was that assessee had also transacted with the said companies, i.e., it was also one of the beneficiary appearing in the list forwarded by the DDI(IT). There is no specific mention that, whether the particular transaction undertaken by the assessee of N.E. Electronics Pvt Ltd was a bogus transaction. From the perusal of the statement recorded of Shri Mukesh Chokshi it is evident that there is no mention or whisper about the assessee has taken accommodation entry to the assessee. The other most important fact here is that, the AO has not uttered a word about failure on the part of the assessee for disclosing the true and correct material facts. Such ascribing of failure of the assessee in the “reasons recorded” itself is mandatory, because from the reasons alone, it can be gathered whether there was any failure on the part of the assessee or not so as to acquire jurisdiction for reopening the case beyond the period of 4 years. There is not an iota of allegation of failure on the part of the assessee to disclose material facts. Thus, without there being any failure on the part of the assessee, the reopening of the assessment u/s 147 beyond a period of 4 years is not permissible in the present case, as the assessee had completely disclosed all these material facts which has also been subjected to the scrutiny. - Decided in favour of assessee.
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2015 (12) TMI 1501
Computation of deduction under section 10B - enhanced profits by way of disallowance of an expenditure, in view of non-deduction of tax at source under section 40(a)(ia) - CIT(A) allowed the claim of the assessee - Held that:- As referred by the CIT(A), there is a provision by way of proviso under section 92C(4) of the Act that in case any addition is made on account of transfer pricing adjustment, no deduction under section 10A/10AA/10B of the Act or under Chapter VIA shall be allowed in respect of such amount of income by which the total income of the assessee is enhanced. However, there is no similar provision in respect of the disallowance made under section 40(a)(ia) of the Act. In the absence of specific provision of the Act, the income enhanced after the statutory disallowance under section 40(a)(ia) of the Act is to be considered as the eligible profits of the undertaking while computing deduction under section 10B of the Act. Upholding the order of CIT(A), we dismiss the grounds of appeal raised by the Revenue. Reduction of carried forward losses while computing the profits of the eligible undertaking under section 10B - Held that:- The facts arising in the present case are similar to the facts before the Tribunal in Vishay Components India Pvt. Ltd. Vs. Addl.CIT & Anr. (2015 (11) TMI 118 - ITAT PUNE ) and following the same parity of reasoning, we hold that the deduction under section 10B of the Act would be allowed to the assessee in the first instance before allowing the adjustment on account of brought forward depreciation losses, the deduction under section 10B of the Act is to be first allowed against the eligible profits and in case there are any leftover profits, then the same are to be adjusted against brought forward unabsorbed depreciation / loss as claimed by the assessee in its return of income. Accordingly, we direct the Assessing Officer to re-compute the deduction under section 10B of the Act in the hands of the assessee. - Decided in favour of assessee Addition made on account of outward freight while computing the book profits under section 115JB - Held that:- We find merit in the claim of assessee with special reference to the calculation of book profits by applying provisions of section 115JB of the Act. The assessee has also filed a revised computation of eligible book profits under section 115JB of the Act, which is also placed on record. In case, the amount of unascertained liabilities of ₹ 2.65 crores is added back to the net profit shown in the Profit & Loss Account and the balance expenditure and income relatable to the deduction claimed under section 10B of the Act is added / reduced, then it cannot be held that the assessee had not added back the provision of ₹ 2.65 crores. However, in fairness, we are of the view that the matter needs to be looked at by the Assessing Officer in this regard. Accordingly, we direct the assessee to furnish the requisite calculation before the Assessing Officer, who in turn shall verify the same and compute the book profits under section 115JB of the Act in this regard, after affording reasonable opportunity of hearing to the assessee - Decided in favour of assessee for statistical purposes
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2015 (12) TMI 1500
Trading addition - CIT(A) deleted the addition - Held that:- Firstly, it is not under dispute that the assessee is in a line of business of petroleum trading wherein both purchase of petroleum products as well as subsequent sale thereof are governed by Oil Marketing Companies, in the instant case which is Indian Oil Corporation (IOC). Accordingly, the margin which is earned by the assessee is effectively governed by the IOC. It is also not under dispute that assessee has declared turnover of ₹ 33.11 cr and it is not the case of the revenue that there is a suppression of sales by the assessee during the year under consideration. Further, the assessee has demonstrated through the chart (reproduced above) that with the change in sale price of the petroleum products, the margin in the hands of the assessee remains the same. Further, we agree with the contention of the ld. A/R that since the revenue has not challenged the finding of the ld. CIT (A) wherein he has held that books of account cannot be rejected, revenue cannot be allowed to take the ground that ld. CIT (A) has erred in deleting the trading addition. In the light of above, we do not find any infirmity in the order of ld. CIT (A) - Decided against revenue. Disallowance of salary expenses made by AO u/s 40A(2)(b) - CIT(A) deleted the addition - Held that:- We believe that ld. CIT (A) has rightly stated that the salary which is derived by a person not only depends on experience but also depends on his qualification. In the instant case it is not under dispute that Shri Naresh Pareek was holding Post Graduate diploma in Management from Balaji Institute of Modern Management, Pune. Secondly, the appellant, considering the educational qualification, has contractually agreed to pay ₹ 15,000/- per month to Shri Naresh Pareek. It is a settled principle that it is the businessman who is the best judge to determine the services which are required for the purpose of his business and what should be reasonable compensation to avail the services. In the instant case the appellant in his wisdom has decided to appoint Shri Naresh Pareek to run its business more efficiently and have agreed to pay a salary of ₹ 15,000/- per month to him. We see no infirmity in the order of ld. CIT (A). - Decided against revenue.
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2015 (12) TMI 1499
Disallowance of the accumulation of income - rejection of Form 10 - Held that:- The assessee is a charitable trust and has been registered under section 12AA of the Act. During the relevant financial year, the assessee has excess of income over expenditure and has sought to set apart the said excess for the purposes of objects of the trust. Though in Form 10, the assessee has not mentioned specific purpose for which the accumulation is being done, we find that during the course of the assessment proceedings, the assessee has stated the specific purpose for which the accumulation is being done. The reason for the Assessing Officer's refusal to accept the subsequent letter of the assessee giving specific purpose of accumulation is that the assessee has not filed the resolution of the society for the specific purpose mentioned in the letter. Thus particularly taking into consideration the assessee's contention that the funds set apart have been utilised for the purpose mentioned by the assessee in its letter filed before the Assessing Officer during the assessment proceedings, I am of the opinion that the assessee is eligible for accumulating the excess of income over the expenditure for the relevant assessment year. - Decided in favour of assessee
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Customs
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2015 (12) TMI 1485
100% EOU - procurement of goods without payment of duty - The goods were received in the appellants factory and at the time of weigment while re-warehousing found to be short - penalty under Section 114A - Held that:- there is no allegation either in the show cause notice or in the order of the first appellate authority that there was any diversion of the goods after their import duty free. The number of bales received in the factory were the same as shown in the Bill of Entry and they were found to be intact and unopened at the time of re-warehousing in the factory which was done in the presence of the custom officer. Cotton is a kind of raw material which can vary in weight marginally depending upon its moisture content. Possibly for that reason only CBEC vide the circular dated 15.4.1983 stated that loss in weight up to 1% was condonable, although it gave no scientific basis as to how the figure of 1% was arrived at. Further, there is nothing sacrosanct about the figure of 1% mentioned in the said letter CBEC. The entire quantity of bales of cotton imported was received in the factory intact and there is neither any allegation of diversion nor any evidence to that effect. Even the supplier reimbursed the amount towards shortage noticed in weight which also supports the view that there was no diversion of the duty free goods. Thus none of the conditions of the exemption Notification No. 53/1977-Cus. are violated. In these circumstances the impugned demand is totally unsustainable and is therefore set aside - Decided in favour of assessee.
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2015 (12) TMI 1484
Import of Pashmina and wool shawls - restricted items - Confiscation of goods under Section113(d), (e) and (l) of the Customs Act, 1962 - Imposition of penalty - Held that:- no one on behalf of the appellant appeared for personal hearing. We also find that in the reply to the Show Cause Notice the appellant did not seek any cross-examination of the Wildlife authorities. In its appeal it has stated that proper chemical analysis of the shawls was not conducted by wildlife authorities. The appellant has no basis to assert that when it did not seek any cross-examination of the wildlife authorities who tested the samples. There can be various ways to test a sample depending upon the purpose of test. In these circumstances, the order of confiscation of 41 shawls for containing material prohibited for export is sustainable. As regards the contention that other shawls (other than 41) found in packet 4 should not have been confiscated, we find that the primary adjudicating authority has ordered confiscation of only 41 shawls and has categorically stated “I order for unconditional release of remaining shawls out of 1290 shawls seized along with their respective packet.” Thus, it is obvious that the confiscation ordered by the primary adjudicating authority and upheld by the first appellate authority was only with regard to the 41 shawls. As 41 shawls were liable to confiscation on account of being attempted to be exported in spite of being prohibited for export, the appellant is clearly liable to penalty. The penalty of ₹ 50,000/- imposed is neither unreasonable nor arbitrary. - Decided against assessee.
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2015 (12) TMI 1483
Confiscation of goods - Import of restricted goods - Importer does not license to import impugned goods - Held that:- impugned goods are not freely importable. Even the ITC (HS) classification for worn clothing and other worn articles against classification CTH 6309 declared these goods and to be restricted subject to import licence. Appellant was well aware that the impugned goods required licence to import as in its own case CESTAT Final Order No.151/2006, dated 07.04.2006 had upheld confiscation of worn clothing for the same reason. Therefore, the confiscation as ordered by the primary adjudicating authority is legally sustainable as the appellant did not have any import licence. We also find that the redemption fine and penalty are in the vicinity of 15% and 20% respectively of the assessable value which for these kind of goods and for a repeat offender are in no way excessive, arbitrary or unreasonable. - No infirmity in impugned order - Decided against assessee.
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2015 (12) TMI 1482
Benefit of Notification No.45/2002-Cus, dt.22.04.2002 under DEPB scheme - Fraudulent DEPB Licence - over invoicing - Held that:- Tribunal allowed the appeal of M/s Kanak Metal Industries in the said proceeding as reported in [2011 (8) TMI 924 - CESTAT, DELHI]. Revenue filed the appeal against the order of Tribunal, which was dismissed as reported in [2012 (7) TMI 927 - SUPREME COURT] (Commissioner Vs Kanak Metal Industries). - we do not find any reason to interfere the order of Commissioner (Appeals) - Decided against Revenue.
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2015 (12) TMI 1481
Demand of interest on delayed refund claim - Refund under Notfn. No 102/2007 and CBEC Circular No 6/2008-CUS dated 28.4.2008 - Held that:- Adjudicating Authority while deciding the refund claim of the appellant under OIO dated 13.9.2013 and 9.10.2013 has not passed any order with respect to claim of interest on the delayed payment of refund. Under such circumstances order, with respect to interest on the payment of refund, passed by the First Appellate Authority is set aside and the matter is remanded to the Adjudicating Authority to decide the claim of the appellant with respect to interest on delayed payment in the light of judgements relied upon by the appellant and the Revenue, during the course of hearing. The appeals filed by the appellant are allowed by way of demand to the Adjudicating Authority. - Matter reanded back - Decided in favour of assessee.
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2015 (12) TMI 1480
Import of materials for the manufacture of Heart Valve Prosthesis - claim of exemption - Suppression of facts - Imposition of equivalent penalty - Held that:- Dept. issued show cause notices on the same items in earlier period within the normal period. So, the Department was aware of the import of these items. It is noticed that the appellant claimed exemption benefit in respect of the entire consignment and out of that about ₹ 68 lacs, the Adjudicating Authority dropped the demand. Hence, the findings of the Adjudicating authority on suppression of the fact in respect of the balance amount cannot be sustained. It is a case of claim of exemption notification. - demand of duty alongwith interest is set aside, as barred by limitation. The penalties imposed on both the appellants are also set aside - Decided in favour of assessee.
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2015 (12) TMI 1479
Import of two Vessels for breaking purpose Demand of differential duty - bunker and stores - Burden to prove - Wrong classification of goods - Held that:- The Adjudicating Authority held that the fuel oil, engine oil and ship stores, as spare parts, food stuffs and others, as per sub para (C) of CBEC Circular No. 37/96-Cus., dated 03.07.1996, should be classified separately under heading no. 89.08 and the importer should pay the differential amount of duty of ₹ 3,81,865.00. By the impugned order, Commissioner (Appeals) upheld the adjudication order. Appellant contended before the Commissioner (Appeals) that the burden was on the Department to prove that the subject goods bunkers and stores were imported and cleared by the importer through the Customs barrier. The Commissioner (Appeals) proceeded on the basis that the subject bunker and stores were declared by the master of the vessel in the manifest, which was statutory document. Hence, the contention of the appellant is not sustainable. - Decided against Assessee.
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2015 (12) TMI 1478
Export of goods - exporter did not produce the Shipping bills before the proper officer of Customs for grant of LEO and hence the goods were not cleared for exportation - Confiscation of goods - Imposition of penalty - Held that:- exporter has no control over the goods, once the goods enter into the port of export. I also find that the matter is squarely covered by the decision of the Hon'ble Bombay High Court in the case of Commissioner of Customs (Export) Vs. Kusters Calico Machinery Ltd. [2010 (3) TMI 474 - BOMBAY HIGH COURT] Accordingly, following the ratio of Kusters Calico Machinery Ltd. (supra), I set aside the penalty imposed on the appellant-exporter - Decided in favour of assessee.
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Service Tax
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2015 (12) TMI 1498
Waiver of pre deposit - Section 35F - whether the amended provisions of Section 35F of the Central Excise Act, 1994, would be applicable or the unamended provisions of Section 35F of the Central Excise Act, 1994, would be applicale and what are the requirements to be fulfilled under the required provision - Overriding Commission - Held that:- As per the decision of the Hon 'ble Supreme Court, in the case of Garikapatti Veeraya v. N.Subbaiah Choudhry and others [1957 (2) TMI 54 - SUPREME COURT], the right of appeal is to be governed by the law prevailing at the date of institution of the suit or proceeding and not by the law that prevails at the date of its decision or at the date of filing of the appeal. - Thus, it is clear that the law applicable to the case of the assessee is the unamended provision of Section 35F of the Act, As the assessee was of the strong view that, the assessee has a better case on the issue of liability and perhaps carried away by this view, it did not raise the issue regarding the financial hardship. However, the Tribunal is expected to exercise its discretion, vested under the unamended provisions of Section 35F of the Act. In this case, there is a failure to exercise the discretion, as the Tribunal had lost sight of the provision applicable to the case, having regard to the date of filing of the appeal. When the Tribunal had failed to exercise the discretion, this Court is bound to interfere. Further, the order passed by the Tribunal did not indicate that, it has considered the materials to come to a prima facie conclusion. Hence, the order is liable to be set-aside, as the order had been passed, invoking the amended provisions of Section 35F of the Act, whereas the law applicable to the case of the assessee is proviso to unamended Section 35F of the Act. - Matter remanded back - Decided in favour of assessee.
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2015 (12) TMI 1497
Demand of service tax - activity of galvanization of hand pump Parts - whether the activity undertaken by the appellants is a service falling under BAS, or a process of manufacture as contended by them - Held that:- while the processing or production of goods for, or on behalf of the client falls under the Category of BAS, the same does not cover any activity that amounts to manufacture of excisable goods in terms of clause (f) of Section 2 of Central Excise Act, 1944. The appellants do appear to have an arguable case. Further they have raised the issue if limitation. That the Department was always aware of the fact that they were carrying out job work and not paying service tax for such job work which reflected in ER-I returns. That they were reversing credit in respect of Zinc & Furnace oil in connection with job work and that the same-was would reveal that there was no suppression of facts or any intention to evade payment of duty. - Partial stay granted.
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2015 (12) TMI 1496
Demand of service tax - services provided to self - Management, Maintenance or Repair services - Held that:- To maintain ones own equipment, to optimize the usefulness, by maintenance and repair, in the BOOT period, is certainly not liable to Service tax as services rendered to self cannot be taxed. - There is nothing on record to indicate contrary in the appeal filed by the Revenue - In our view the impugned order as well as the order of the adjudicating authority are correct, legal and does not suffer from any infirmity. - Decided against Revenue.
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2015 (12) TMI 1495
Valuation of goods - Free issue of SIM Cards - Telephone Services - Whether during April 2003 to September 2006 distribution of free of recharge voucher attracts service tax liability or otherwise despite the fact that the recharge voucher are given free of cost to the dealers as consideration for commission - Held that:- Appellant is discharging the service tax liability under the category of "Telephone Services" on an amount received by them from distributors/dealers for the sale of prepaid SIM Cards; the SIM Cards are sold to the distributors/dealers on MRP and in lieu of the commission payable to them, appellant issues recharge vouchers to that amount which is commission, as free of cost. It is also undisputed that the dealers have recovered the amount as sale of such recharge vouchers from the ultimate subscriber/customer Value of any taxable service shall be gross amount charged by the service provider for such services rendered by him. In the case in hand, during the relevant period, the appellant herein being service provider has discharged the service tax liability on the prepaid SIM Cards sold by them to the distributors/dealers. The sale of such prepaid SIM Cards on the MRP value is undisputed and discharge of service tax liability for services rendered on such sale is also accepted by revenue. It is to be noted that the recharge voucher are distributed free of cost, appellant has not received any amount towards the recharge voucher, though the distributors/dealers have sold the recharge vouchers. In our view distribution of recharge voucher fee of cost to the distributors/dealers would in a way amount to giving commission to the dealer for the transactions of sale of prepaid SIM Cards for the appellant. It can also be noticed that during the relevant period the Explanation as per the Section 67 of Finance Act, 1994 (herein above reproduced) also do not indicate inclusion in that gross value of any cost towards free distribution made by the service provider. Gross amount paid by the person to whom telecommunication service is actually provided is the amount on which tax liability is to be discharged which would mean that prior to 01.03.2011, the amount received by telecommunication provider from the dealer is the amount received for the services provided by the service provider - ratio of judgement of the Tribunal in the case of BPL Mobile Cellular (2007 (6) TMI 107 - CESTAT, CHENNAI) on similar set of facts would be applicable. In the case of BPL Mobile Cellular the issue was regarding discharge of service tax on an amount received by the appellant therein for the sale or prepaid SIM Cards to the dealers and distributors; in that case the appellant threrein discharge the service tax liability on actual amount received from the distributors after adjustment of commission payable to them - Impugned order is unsustainable and is liable to be set aside - Decided in favour of assessee.
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2015 (12) TMI 1494
Demand of service tax - Maintenance and Repair Service - major part of the demand relates to the period 28/11/2003 to 16/06/2005 - Held that:- Service tax liability arises only if the service is provided under maintenance contract or an agreement and in relation to maintenance or repair or servicing of any goods or equipment. In the case in hand, the first appellate authority as well as the adjudicating authority has clearly recorded that the appellant had carried out electrical work at various parts of the service recipient's factory. On perusal of the impugned order, at paragraph No.10, we find that the work-order issued to the appellant indicates that the activity carried out by the appellant is in respect of wiring and fixing of lights which would not fall under the category of 'maintenance or repair service' of any goods or equipment during the relevant period. We also find that the Tribunal in the case of Basant Enterprises vs. Commissioner of Central Excise [2011 (4) TMI 550 - CESTAT, NEW DELHI] has considered an identical issue and held in favour of the assessee therein. We find that the said ratio would be applicable in the case in hand also, upto 16/06/2005 - for the period post 16/06/2005, in the appellant's case, service tax liability of ₹ 5,084/- along with interest has to be upheld - Decided partly in favour of assessee.
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Central Excise
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2015 (12) TMI 1493
Eligibility of CENVAT Credit - returned goods - Credit of duty paid on the vehicles at the time of their initial clearance which were later brought back to the factory due to damage - Held that:- Admitted facts of the case are that the appellants discharged due duty at the time of clearance of vehicle. Due to damage in transit, the said duty paid vehicle is brought back to the factory for being re-made or salvaged to the extent possible. We find that the case of the appellant is clearly covered by the provisions of Rule 16 (1). The said rule permits Cenvat credit of the duty paid as if such goods are received as inputs under the Cenvat Credit Rules, 2002 and to utilize this credit according to the said rules. Clearly a legal fiction has been created in this rule. In normal course duty paid motor vehicle cannot be an input for making same type of motor vehicle. Here the said vehicle is deemed to have been input only because it is brought into the factory for being re-made, refined, re-conditioned or for any other reason. We find the scope for which a duty paid vehicle can be brought to the factory is very wide and includes the processes undertaken by the appellants in the present case - When the vehicle is brought back to the factory for the intended purposes as stipulated under Rule 16 (1) the credit of duty paid on such vehicle is available to the appellant. Such vehicles undergo a process of manufacture and become part of process of production of new vehicle is settled and undisputed. As such, we find no legal basis for denial of credit either partly or fully in respect of such vehicles in terms of clear provisions of Rule 16 (1) Further, first show cause notice 'being completely time barred as the issue involved under dispute is well within the knowledge of the Department for long and has been-subject matter of decisions including by this Tribunal - Impugned order is set aside - Decided in favour of assessee.
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2015 (12) TMI 1492
Duty demand - Manufacture - whether the activity by the applicant of bending, assembly and inspection of end formed tubes amount to manufacturing within the meaning of the Central Excise Act - Held that:- The opinion expressed by the Commissioner is correct. Since, there is no dispute on the question as to whether the proposed activity amounts to manufacture or not, it is held that the said activity would amount to manufacture in keeping with the unanimous opinion of the applicant - Appeal disposed of.
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2015 (12) TMI 1491
Denial of CENVAT Credit - Credit on short receipt of iron ore - Held that:- Appellant has availed input service tax credit in respect of crushing of raw materials/iron ore which was supplied to the service provider/job worker for the process of crushing. After crushing some portion becomes waste/unfit for use in manufacture of final products. The remaining portion is received back in the factory and used in manufacture of final products. According to Revenue, cenvat credit is not admissible on that quantity which is not received back in the factory being unfit for use in manufacture. This view of the Revenue does not appear to be convincing - Undeniably, iron ore lumps are costlier than iron ore as such. It is the choice of the manufacturer to obtain iron ore and get into crushed lumps. Therefore, disallowance of credit on the ground that short quantity is not used in or in relation to the manufacture of final products, is not sustainable. Further, Rule 3(5) of Cenvat Credit Rules ,2004 speaks about inputs and capital goods and does not mention input service. - denial of credit is unsustainable. In the result, the impugned order, is set aside - Decided in favour of assessee.
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2015 (12) TMI 1490
Denial of Concessional rate of duty - Fuel efficient light commercial motor vehicles - Benefit of Notification No. 462/1986-CE - Held that:- Appellants are deemed as manufacturers of motor vehicles. This by itself does not make them eligible for the concessional rate of duty under Notification No. 462/1986-CE. The terms of the notification are very clear for the concession therein is available only for Fuel efficient light commercial motor vehicles which satisfy the Fuel efficiency test with the particular type of fuel and authorized pay load, speed and atmospheric condition as tested by the Competent Authority and certified by the officer not below the rank of Joint Secretary to the Government of India in the Ministry of Industry. The appellant is not in the possession of any such certificate. The motor vehicles cleared by them were not subjected to any such test for fuel efficiency. The fuel efficiency certificate, if any, in possession of the supplier of engine/chassis namely Eicher Motors Ltd. cannot by itself be the basis for the appellant to claim such concession. Such interpretation will be against the terms and conditions mentioned in the said notification. We find no infirmity in the order of the lower authority - Decided against assessee.
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2015 (12) TMI 1489
Denial of CENVAT Credit - outdoor catering service - Held that:- Impugned order has not dealt with the aspect that there is no nexus between the input service and the manufacturing activities undertaken by the Respondent. - Input service definition was amended w.e.f. 01.04.2011 providing for certain excluded services on which the manufactureror the service provider is not entitled to take cenvat credit of service tax paid thereon. The excluded services are contained in clause (C) of the definition of 'input service'. As per the definition, the excluded services are not to be considered as input service, when such services are used primarily for personal use or consumption of any employee. Outdoor catering is one of such excluded service itemized in the said clause. In the present case since, the outdoor catering service has not been used for the personal use or consumption of the employee and the said service has been provided by the employer to its employees for preserving proper working atmosphere in the factory for enhancing the productivity, I am of the view that the Ld. Commissioner (Appeals) has rightly extended the Cenvat benefit on the disputed service to the respondent. I find that this Tribunal in the case of Hindustan Coca Cola Beverages (P) Ltd. vs CCE Nasik reported in [2014 (12) TMI 596 - CESTAT MUMBAI] has allowed the cenvat credit on the disputed service. - Decided against revenue.
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2015 (12) TMI 1488
Denial of Abatement claim - manufacture of branded unmanufactured tobacco - period of closure of factory - Whether the Phrase Continuous period of 15 days or more stipulated in Rule 10 of the said Rules would mean period of 15 days of a particular month or the same can be spilled over to the next calendar month, for computation of the period of 15 days - Held that:- factory of the appellant was closed during the period from 23.03.2013 to 26.09.2013. Though the factory was continuously closed for a period of about 6 months, the Department is of the view that since in the month of March 2013, the factory was closed only for 9 days, the benefit of abatement as provided in Rule 10 shall not be applicable. In this context, I find that the case of the appellant is supported by the decision of the Tribunal in the case of Kaipan Pan Masala (2013 (1) TMI 356 - CESTAT, NEW DELHI), holding that for computation of the period of 15 days, the remaining period in the next calendar month, during which the factory was closed, shall also be taken into consideration - appellant shall be eligible for abatement for the period from 23.03.2013 to 31.03.2013, which have been rightly allowed by the Original Authority. In view of above, the impugned order denying the abatement to the appellant is set aside - Decided in favour of assessee.
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2015 (12) TMI 1487
Admissibility of Cenvat Credit - Outdoor catering services and membership and subscriptions of various business association and business periodicals - Held that:- credit in respect of out door catering services was denied on the ground that the service charges to the extent Cenvat credit was proposed to be denied were recovered by the company from the employee. In this regard appellant made submission in the appeal that they have submitted revised quantification sheet according to which the amount of Cenvat credit attributed to the amount of service charges of out door catering service recovered from the employee comes to ₹ 60,871/- instead of ₹ 1,21,742/- as confirmed by lower authority. Therefore I find the amount demanded of ₹ 1,21,742/- does not appear to be correct and only credit of ₹ 60,871/- should be denied. However since lower authority have not looked into this re-quantification, I direct the adjudicating authority to verify this re-quantifications and if it is found correct then demand amount of ₹ 1,21,742/- shall be reduced to ₹ 60,871/-. As regard the issue of Cenvat credit of membership and periodical of various business associations and law journals such as CII, Young President Pune Chapter, IEEMA, Economic Research India Ltd, MCCIA etc. I am of the view that all these member ship and subscriptions are directly related to the business activity of the appellant. Therefore I am of the view that Cenvat credit clearly admissible on these membership and subscription particularly when the amount is paid by the appellant, booked into their books of account as expenditure. - membership and business associations and subscriptions of business periodicals are admissible input services - Decided in favour of assessee.
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2015 (12) TMI 1486
Denial of CENVAT Credit - House-keeping and Rent-a-Cab service - Held that:- With regard to the service tax paid on housekeeping service, it is no doubt, a fact that the said service has been used for keeping the factory premises neat and clean, which is a statutory requirement of Section 11 of the Factories Act, 1948. Thus, said services has the nexus with the manufacture of final product, because without compliance with the provisions of the Factories Act, manufacturing activities are not possible. As regards, the rent-a-cab service for transportation of employees, it is not a welfare measure, but a basic necessity, for the reason that unless the workers reach the factory premises in time, the manufacturing activities either directly or indirectly will suffer. Thus, the disputed services should qualify as 'input service' for the purpose of getting the cenvat benefit - Decided against Revenue.
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CST, VAT & Sales Tax
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2015 (12) TMI 1477
Levying of tax under the Rajasthan Tax on Entry of Motor Vehicles Into Local Area Act, 198 - Jurisdiction of AO - Held that:- when one statute make a reference to another Act then it cannot be said that provision of that Act cannot be read into it, and as observed earlier when all the provisions of Rajasthan Sales Tax Act, 1954 are made applicable mutatis mutandis to the provisions under the Act, therefore, the assessment order passed by the Assistant Commissioner, Anti Evasion Wing, though may not be proper but the entire assessment order could not have been quashed and set aside for all times to come. At least when liability under the Act is fastened on an assessee who imports vehicle into the State of Rajasthan for personal use and such intention is to use the vehicle for all times to come, the provisions of the Act cannot be made redundant as held by the Tax Board that the Assistant Commissioner, Anti Evasion Wing had no jurisdiction. CTO under Section 3(2)(b) had the jurisdiction to assess the assessee according to the area where one ordinarily resides or carries on business or provides any service, therefore, in the instant case assessment will have to be passed by the CTO in accordance with the place of residence or the place of business or place of providing service. In case the respondent-assessee is already assessed to tax by a particular CTO, the same officer would have jurisdiction to assess the assessee and in case some of the assessees are not assessed to sales tax, then the CTO will get jurisdiction to assess according to the place of residence of the person. - order of the Tax Board is quashed and set aside, the order of Dy. Commissioner(Appeals) insofar as direction to assess the assessee by the Assessing Officer (CTO) having jurisdiction, as above, is upheld - Decided in favour of Revenue.
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2015 (12) TMI 1476
Failure to VAT - Attachment of the petitioners' bank accounts and immovable property in the form of residential flat and office premises as per the details given in the petitions - Held that:- in the opinion of this court, the Government revenue is sufficiently secure in view of the attachment of the residential premises and office premises. Under the circumstances, the respondents do not appear to be justified in further attaching all the bank accounts of both the petitioners. In the opinion of this court, the attachment of the bank accounts must, in all probability, have brought the business of the petitioners to a standstill, inasmuch as, they would not be in a position to encash the cheques received by them nor make other payments by way of cheque. However, having regard to the submissions advanced by the learned Assistant Government Pleader, this court is of the view that while releasing the attachment of the bank accounts, the petitioners are required to be put to certain terms to maintain a particular balance in the bank accounts. - Decided in favour of assessee.
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2015 (12) TMI 1475
Detention of goods - petitioner has not raised any inter-state sale invoice or delivery notice in Form JJ required under CST Act - Imposition of compounding fees - Held that:- petition stands disposed of with a direction to the respondents to release the goods forthwith on condition that the petitioner pays the one time tax of a sum of ₹ 2,13,516. As regards the compounding fee demanded, it is always open to the petitioner to agitate the same in the manner known to law - Appeal disposed of.
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2015 (12) TMI 1474
Levy of purchase tax - Whether the Tribunal has erred in holding that “Naptha” was not “taxable goods” and so purchase tax cannot be levied under section 15B of the Sales Tax Act - Held that:- Controversy involved in the present case stands concluded by the judgment and order of even date rendered by this Court in Tax Appeals [2015 (12) TMI 119 - GUJARAT HIGH COURT] - there being no infirmity in the impugned order of the Tribunal, the same does not give rise to any question of law, much less, a substantial question of law so as to warrant interference. - Appeal disposed of.
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Indian Laws
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2015 (12) TMI 1473
Condonation of delay in filing of appeal - Power of tribunal under SAFEMA to condone the delay - Forfeiture of property - Detention order - Respondent No.3 and his wife failed to produce sufficient evidence to prove that the suit property was acquired from legal sources - Held that:- Appeal admittedly was filed on 6th June, 2012. Therefore clearly the appeal was filed after a period of 106 days from the date on which the order was served upon the Petitioners. On an ex-facie reading of section 12(4), it is clear that the appeal is to be filed within a period of 45 days from the date on which the order is served on the aggrieved person. If the appeal is not filed within the aforesaid period, under the proviso to section 12(4), the Appellate Tribunal is given the power to condone the delay for an additional period of 15 days, but not thereafter. This is ex-facie apparent from the clear language of the proviso to section 12(4) which categorically stipulates that the Appellate Tribunal may entertain an appeal after the said period of 45 days but not after 60 days from the date aforesaid, if it is satisfied that the Appellant was prevented by sufficient cause from filing the appeal in time. The words "but not after 60 days" are of great significance. These words indicate that there is a clear mandate that beyond the period of 60 days from the date on which the order is served upon the aggrieved person, the Appellate Tribunal has no power to condone the delay. SAFEMA is a special law and that section 12(4) provides for a period of limitation different from that prescribed under the Limitation Act, 1963. Section 29(2) of the Limitation Act, inter alia stipulates that where any special or local law prescribes for any suit, appeal or application, a period of limitation different from the period prescribed by the Schedule to the Limitation Act, provisions of section 3 thereof shall apply as if such period were the period prescribed by the Schedule and for the purpose of determining any period of limitation prescribed by any such special or local law, the provisions contained in sections 4 to 24 of the Limitation Act shall apply only insofar as and to the extent to which, they are not expressly excluded by such special or local legislation. - under the provisions of section 12(4) read with the proviso thereto, the Appellate Tribunal had no power to condone the delay beyond the period of 60 days from the date on which the order impugned in the appeal was served on the aggrieved party. In the facts of the present case, admittedly, the appeal of the Petitioners was filed beyond the period of 60 days from the date on which the order was served upon them. We, therefore, find no infirmity in the impugned order dated 12th March, 2013 passed by Respondent No.1. In view of the authoritative pronouncements of the Supreme Court as well as a Division Bench of this Court, we are clearly of the view that Respondent No.1 had no power to condone the delay beyond the period of 60 days from the date on which the order was served upon the Petitioners. As stated earlier, it is admitted that the appeal of the Petitioners was not filed within the aforesaid period, and therefore, clearly time barred. In this view of the matter, no fault can be found with the impugned order requiring interference in our extraordinary, equitable and discretionary jurisdiction under Article 226 of the Constitution of India. - Decided against the appellant.
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2015 (12) TMI 1472
SARFAESI Act - Whether a Company Court, directly or through an Official Liquidator, can wield any control in respect of sale of a secured asset by a secured creditor in exercise of powers available to such creditor under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for brevity the SARFAESI Act )? - Held that:- There is a discretion in the Company Court either to accept or reject the highest bid before an order of confirmation of sale is made. However, once the Company Court is satisfied that the price is adequate, the subsequent higher offer cannot be a ground for refusing confirmation. The price of immoveable property keeps on varying depending upon the market conditions and availability of a buyer. Such fluctuations may attract fresh higher offers but normally such offers cannot be made the basis for reopening the confirmed sale which was otherwise valid. In the present case, we are satisfied that the sale made in favour of M/s. Venus Realcon does not require any interference. There is no good reason why the full price paid by Venus Realcon should be ordered to be refunded with interest etc. and possession which was delivered to Venus Realcon at the time of sale should be disturbed after passage of so much time. The money deposited in this case by the intervener M/s. Himalayan Infra Projects Private Limited should be refunded to it forthwith along with interest accrued thereupon. The judgment and order of the Delhi High Court is affirmed by holding that powers under the Companies Act cannot be wielded by the Company Judge to interfere with proceedings by a secured creditor to realize its secured interests as per provisions of the SARFAESI Act.
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2015 (12) TMI 1471
Right to be represented before the Redressal Committee through a lawyer - Held that:- As in the peculiar facts of this case the High Court while declaring the law relating to one's right to be represented before the Redressal Committee through a lawyer in favour of the petitioners, however permitted the respondents herein to be represented by a lawyer making it clear that the hearing before the Redressal Committee will be concluded in one day.
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