TMI Tax Updates - e-Newsletter
January 2, 2013
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
Highlights / Catch Notes
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Income Tax:
Escaped assessment Merely because the format in which the return is required to be filed does not provide for any column wherein the assessee is required to state that this is a search case and that he had made certain disclosures during the course of search, does not mean that an assessee is not required to disclose other facts that are material for his assessment - HC
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Income Tax:
Computation of Income from House property - the property was let, but was vacant during the year, due to which vacancy, the actual rent received or receivable by the assessee in respect of such property was nil. Nil rent, then, it cannot be gainsaid, is evidently less than the sum for which the property might reasonably be expected to let from year to year. On this score itself, the grievance of the department loses whatever force it could have had, if any. - AT
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Income Tax:
Undisclosed income A mere claim that the assessee is "Not Ordinarily Resident" in India does not take the assessee automatically away from the purview of Section 5. - HC
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Customs:
Classification of Cordless Infrared Devices for the Remote Control reg. - Circular
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Customs:
Amends Notification No. 36/2001-Customs (N.T.), dated the 3rd August, 2001 - Change in Tariff Value of RBD Palmolein, brass Scrap (All Grades) Poppy seeds, Gold and Silver Notified - Notification
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DGFT:
Amendments in the Reward/Incentive Schemes of Chapter 3 of Foreign Trade Policy 2009-14 - Appendix 37A, Appendix 37C and Appendix 37D of Handbook of Procedure (Vol. I). - Public Notice
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Service Tax:
Penalty - They have also collected the higher amount of service tax from the service recipients but paid to the Government lesser amounts. - no justification for waiving penalty u/s 78 and 77. - AT
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Central Excise:
Rebate claim Adjustment of refund against demand It was highly inappropriate on the part of the revenue authorities to enforce recovery when the stay had been granted by this Tribunal. The refusal by revenue authorities to pay respect to the order of the Tribunal is violation of judicial discipline. - AT
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Central Excise:
CENVAT credit on capital goods - the condition that the same should be in possession of the manufacturer is not applicable to components. - AT
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Central Excise:
SSI Exemption under notification no. 8/2003 Aggregate value - By product versus Waste - Since the appellant is not manufacturing the soap stock from fatty acid it cannot be considered as waste. - AT
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VAT:
VAT - petitioner merely worked as a service provider and, for the purpose of rendering services it had mobilized equipments and accessories in order to execute the works contract - not liable to VAT / Sales tax - HC
Articles
Notifications
Customs-
68/2012 - dated
31-12-2012
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Cus
Concessional rate of duty - Goods imported from Srilanka & Pakistan under SAFTA
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67/2012 - dated
31-12-2012
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Cus
Amendment in Notification No.53/2011-Customs, dated the 1st July, 2011 - goods imported from Malaysia
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66/2012 - dated
31-12-2012
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Cus
Amendment in Notification No.152/2009-Customs, dated the 31st December, 2009 w.e.f. 01/01/2013 - Goods imported from Republic of Korea
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65/2012 - dated
31-12-2012
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Cus
Amendment in Notification No.69/2011-Customs dated the 29th July, 2011 - Goods imported into India from Japan
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64/2012 - dated
31-12-2012
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Cus
Amendment in Notification No.46/2011-Customs, dated the 1st June, 2011 - Provide duty concessions to Philippines and other ASEAN countries in view of ASEAN- India FTA (AIFTA).
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63/2012 - dated
31-12-2012
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Cus
Exempts Crude Petroleum Oils and Oils Obtained From bituminous minerals falling under the tariff item 2709 00 00 of the First Schedule
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115/2012 - dated
31-12-2012
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Cus (NT)
Amends Notification No. 36/2001-Customs (N.T.), dated the 3rd August, 2001 - Change in Tariff Value of RBD Palmolein, brass Scrap (All Grades) Poppy seeds, Gold and Silver Notified
VAT - Delhi-
No.F.2(5)/Policy-II/VAT/2012/1056-67 - dated
1-1-2013
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DVAT
Revoke the monetary limit of 'one thousand and five hundred rupees' prescribed - Eligible for Claiming Refund of tax Borne in respect of Purchase Made Against a Single Tax Invoice which exceeds the amount of 'five thousand rupees' excluding tax paid
Circulars / Instructions / Orders
News
Case Laws:
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Income Tax
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2013 (1) TMI 20
Deduction u/s 80IB Computation of income - Assessee engaged in the business of manufacturing and sale of abrasive and refractory products - Expenditure related to electricity for working out deduction u/s 80IA Assessee has filed the working relating to allocation of electricity charges attributable to Dry Vibration Cement (DVC) Plant Rs. 7,94,075/- as against the allocation of power consumption expenses worked out by the A.O. Rs. 8,15,360/ - Held that:- A.O. after considering the assessees submission, without pointing out any defect in the working given by the assessee to show that power cost computed by the assessee Rs. 3600/- in round figure is less than the actual cost of electricity pertaining to DVC plant. Disallowance made by the A.O. in this regard and partly sustained by the CIT(A) is not sustainable in law and accordingly we direct the A.O. to consider cost of power Rs. 3600/- only pertaining to DVC plant and work out the deduction u/s 80IA. In favour of assessee
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2013 (1) TMI 19
Escaped assessment Re opening of assessment Search u/s 132 Statement on oath u/s 132(4) - Whether filing the ROI before the wrong A.O. amounts to non-filing of return Held that:- The said ground for reopening the assessment is, therefore, not a valid ground. On the basis of such return the concerned A.O. has already framed assessment u/s 143(3) in respect of which the respondent in the affidavit-in-reply has stated that the assessment order does not lack jurisdiction. Thus, for this reason also, the said ground is rendered unsustainable Whether there was any failure on the part of the petitioner to disclose fully and truly all material facts for his assessment Held that:- Assessee had not disclosed to the AO that he had made such disclosure which he had subsequently retracted as according to him, there is no duty cast upon him to make such disclosure while filing his return of income. It is true that the petitioner had subsequently retracted the said statement. However, the petitioner in his statement recorded during the course of search having stated that the said income would be disclosed while filing the return for A.Y. 1995-96 ought to have brought such fact to the notice of the Assessing Officer. The contention that there was no obligation cast upon the petitioner to make such disclosure while filing the return of income, does not merit acceptance. Assessing Officer had made some efforts and examined the record of the previous assessment year, he may have come to know that this was a search and could have taken consequent action thereon. However, that by itself would not absolve the petitioner from the duty to disclose all primary facts before the Assessing Officer Merely because the format in which the return is required to be filed does not provide for any column wherein the assessee is required to state that this is a search case and that he had made certain disclosures during the course of search, does not mean that an assessee is not required to disclose other facts that are material for his assessment At the cost of repetition it may be stated that the fact regarding the petitioner having made a disclosure, though subsequently retracted, was material for the assessment of the petitioner for the assessment year under consideration. Thus, by not disclosing such material fact, evidently, the petitioner has failed to disclose fully and truly all material facts necessary for his assessment Decision - Appeal decides in favour of revenue
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2013 (1) TMI 18
Computation of Income from House property - Vacancy allowance - applicability of Sec. 23(1)(c) or Sec. 23(4)(b) - CIT(A) applied the standard rate of MCD in determining the annual letting value - Held that:- A perusal of section 23(1)(c) clearly shows the unambiguous requirements of the said section that where the property was vacant during the year and due to such vacancy, the actual rent received or receivable in respect thereof is less than the sum for which the property might reasonably be expected to be let from year to year, the amount so received or receivable shall be deemed to be the annual value of such property. On the other hand, as per section 23(4), where the property consists of more than one house, the annual value thereof shall be determined as if such house had been let. As per Section 23(1)(c), if any part of the property was let out and was vacant during the year or any part thereof, and due to such vacancy, the annual rent received or receivable was less than the sum for which the property might reasonably be expected to let from year to year, the lesser of the two amounts, i.e., the amount received or receivable, is to be the annual value of the property. Section 23(4), on the other hand, refers to property where it consists of more than one house, as in the present case. As per this Section, the annual value of such property shall be determined as if the property has been let. Now, the provisions of Section 23(4)(b) are very clear that where the property consists of more than one house, the annual value thereof shall be determined u/s 23(1), as if such property had been let. This re-directs us to Section 23(1). Applying Section 23(1) to the facts of the present case, it is Section 23(1)(c) which shall again come into play inasmuch as it remains undisputed, as observed hereinabove, that the property was let, but was vacant during the year, due to which vacancy, the actual rent received or receivable by the assessee in respect of such property was nil. Nil rent, then, it cannot be gainsaid, is evidently less than the sum for which the property might reasonably be expected to let from year to year. On this score itself, the grievance of the department loses whatever force it could have had, if any. Reverting back to Section 23(4), it makes reference to "property referred to in sub-section (2)" of Section 23. Section 23(2) talks of "the property" and the only difference is that whereas Section 23(2) talks of a house or a part of a house and Section 23(4) considers property consisting of more than one house. As per Section 23(4)(a), the concession will be available to the assessee only with regard to one of the houses constituting the property and the ALV of the remaining houses shall have to be determined, in case, all the houses are in the occupation of the assessee. In the present facts, this is not the case and the two houses, as discussed, were let earlier, but were lying vacant during the year. As such, Section 23(4)(a) is not applicable. Section 23(4)(b) is applicable, as considered, and it leads back to Section 23(1). So the situation is back to square one. Undoubtedly, it was to cure the inequity of taxing vacant properties under a notional charge, that Section 23(1)(c) was brought on the statute book by virtue of the Finance Act of 2001 w.e.f. 01.04.2002, as rightly contended on behalf of the assessee, in order to provide simplified determination of annual value of property on allowing deductions in computing the ALV itself on account of vacancy and unrealized rent. Thus, looked at from any angle, it is the provisions of Section 23(1)(c) which are applicable hereto and none other. Accordingly, CIT(A) was correct in applying the said Section to the present case - against revenue.
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2013 (1) TMI 17
Undisclosed income Block assessment Search & Seizure Income accrue or arise outside India - Money received from abroad - Gift from relative abroad - Income earn by N.O.R. outside India - Assessee's status is of a person "Not Ordinarily Resident" in India - AO argued that amount received by assessee represented gifts from her relatives abroad Assessee contended that the money was received from out of rental income - Provision of Section 5(1)(c) Held that:- If the claim that it was a rental income which had accrued or arisen outside India, is true, then, the theory of gift made by her brothers and mother could not stand. If the assessee contends that that the benefits of proviso to Section 5(1)(c) enures to the advantage of the assessee, then, the assesee has to prove what is required under the provisions of the Act viz., that she had not derived any income outside India from the business controlled or a profession set up in India. A mere claim that the assessee is "Not Ordinarily Resident" in India does not take the assessee automatically away from the purview of Section 5. In the absence of any material placed before the authorities concerned that such income had accrued or arisen outside India, decides in favour of revenue
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2013 (1) TMI 16
Difference in arm's length price - CIT(A) deleted an addition as AO had not made such an addition based on Section 92(3) but had applied Section 10B r.w.s. 80-IA(10) for such addition - AO referred case to TPO - Held that:- A reading of the above reproduced order of the TPO will clearly show that the prices at which assessee sold its products to its Associate Enterprise were much higher than the arm's length price fixed by the TPO. Sales, as per the books, effected by the assessee to its Associate Enterprise came to Rs. 24,26,80,083/- , whereas, the arm's length price was Rs. 18,79,25,631/- only. There is nothing whatsoever in the order of TPO which required or recommended any adjustment to the value of the international transactions. TPO did not deem it necessary to effect any revision of the sales price as shown by the assessee in its books. Such a recommendation was not made since substituting the sale price shown by the assessee with arm's length price determined, would have resulted in the income getting reduced - There being no recommendation by the TPO for any revision in the arm's length price A.O. was not at all required to make any adjustment in the arm's length price. AO invoking the provisions of s. 80-IA(10) r/w s. 10B(7) - Held that:- Considering the case decided in Tweezerman (India) (P.) Ltd. v. Addl. CIT [2010 (4) TMI 892 - ITAT CHENNAI] the provisions of s. 80-IA(10) do not give an arbitrary power to the AO to fix the profits of the assessee. The AO has to specify as to why he feels that the profits of the assessee are being shown at a higher figure. He has further to show as to how he has computed the ordinary profits which he deems to be the ordinary profits which the assessee might be expected to generate. The fact that the AO has also not shown any calculation on the basis of which he has determined the excess profit received by the assessee cannot stand in view of the fact that he has not shown as to what he feels is the actual ordinary profit which the assessee could have generated nor has he shown any particulars he has used for arriving at such a figure especially when the assessee himself has filed the calculation showing the error in the difference between the profits and the ALP as filed before the TPO. Under these circumstances the reduction of the eligible profits of the assessee as done by the AO by invoking the provisions of s. 80-IA(10) r/w s. 10B(7) is unsustainable and consequently the same is deleted - no reason to interfere with the order of CIT(Appeals).
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2013 (1) TMI 15
Period of limitation Block assessment Chapter XIV-B - Time limit for completion of block assessment - The assessee was also subjected to search on 19.1.1996 - Notice of assessment issued on 20.9.1996 - The assessment was made on 22.9.1997 - Revenue took the plea that the case of the assessee fell u/s 158BD - Assessee contended that case will be covered u/s 158BC Held that:- When the limitation for completion of the assessment u/s 158BC is one year from the end of the month in which the last of the authorisation for search was executed and it having already expired. Decides in favour of assessee
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2013 (1) TMI 14
Computation of income Deduction u/s 80IB(10) - Revenue recognition - No construction activity was carried out at all during the year - CIT(A) accordingly directed the A.O. to recompute the income of the assessee Held that:- CIT(A) is only empowered either to confirm, reduce, enhance or annul the assessment. He has no power to set aside the matter to the AO for either framing assessment de novo or to compute the income in a particular manner. As far as findings on merit are concerned, none of the parties have any objection. Therefore, CIT(A) to compute the income himself in a manner prescribed by him in his order without interfering the findings on merit. Remand back to CIT(A) Disallowance of expenditure Section 14A read with rule 8D Expenditure in relation to earn exempt income - Restriction of administrative expenses Applicability of Rule 8D - Assessment year involved in the issue is 2007-08 Held that:- Rule 8D would not be applicable in the case of the assessee as it would be applicable from assessment year 2008-09. Since the Revenue has not placed any judgment contrary to the judgment relied upon by the assessee. Therefore confirm the same. In favour of assessee
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2013 (1) TMI 13
Block assessment - Chapter XIVB Matter of record Opportunity of being heard - Tribunal set aside the assessment and remanded the matter back to the A.O On completion of assessment, assessee contended that the revenue had not produced the assessment records as it would have gone against it Revenue argued that assessee's representative categorically stated that he did not want copies of any statements or documents, since he was having them all Held that:- The assessee had, in fact, made an endorsement through his representative that the assessee had all the statements and documents that he required. It is also a matter of record that the assessee was given an opportunity to cross-examine. Therefore, we set aside the order of the Tribunal and matter remand back to Tribunal to decides on merits. Undisclosed income - Undisclosed investment found during search Assessee had disclosed the income from properties in the return and that the assessee's wife and her son had no source of income Held that:- During search did not reveal any material as regards the alleged investments of the assessee in the above-said properties. It is no doubt true that the said properties were in the name of the assessee's wife and his son and the assessee had filed returns admitting the rental income from these properties. In the assessment order that the materials were seized in the course of search, to make the investment made as part of the block assessment proceedings. Hence, unless and until the Revenue had had materials seized at the time of search, the income cannot be claimed as a block assessment. Against revenue Undisclosed investment in shares Held that:- Assessee accepted the ownership of the certificates to an extent of Rs.4,00,000/- and accordingly, the same was assessed for the assessment year 1995-96. As the assessee himself had conceded the investment then said sum liable to be deleted. Partly allowed in favour of revenue Undisclosed investment in business Assessee argue that investment was made out from income derived from the agricultural lands relating to assessees HUF Held that:- If any investigation done, apart from the search, reveal certain state of affairs, it is always open to the Revenue to bring it under the regular assessment procedure. Hence, the question whether the assessee had an agricultural income for the purpose of investment in the wine business, certainly is not a subject matter of block assessment. Consequently, agreeing with the Tribunal's view, it is open to the Revenue to consider the said issue in the regular assessment procedure. Against revenue Addition on account of investment in Tandal business A.O. noted that apart from the assessee, there were also two other persons in the business without any capital contribution - Addition made on the basis of daily collection Held that:- When the Revenue does not dispute the fact that the assessee had been doing the business along with two others. Therefore, questioning the inclusion in the block assessment procedure, the manner of assessment of Rs.27 lakhs is also without any basis. The income from thandal business could not be a subject matter of block assessment. Open to the Revenue to make such investigation as are necessary for the purpose of determining the income that the assessee might have earned in the thandal business. Against revenue
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2013 (1) TMI 12
Penalty u/s. 271(1)(c) - disallowance of provision for bad and doubtful debts - Held that:- The only rider would be where the condition(s) of section 36(2) are not satisfied. The assessee, while divulging the primary facts during the course of assessment proceedings, submitted the details of its claim that while the amount of Rs. 2,69,706/- lacs pertains to earlier year (s), that for Rs. 6.25 lacs relates to the current year. The assessee's only income (Rs. 2.40 lacs, P.Y. Rs. 3.60 lacs) is by way of rent received, besides a negligible amount as interest on FDR/s. A few questions spring immediately in the mind, and which would require being answered as to how could be the amount of 'suspense' and 'cheque in transit' qualify for inclusion as income, as required u/s, 36(2)(i)? How could Rs. 6.25 lacs pertain to the current year when its' gross income for the year is at Rs. 2.40 lacs only? The entire amount of provision forms part of the assessee's loans and advances portfolio and, thus, it is not clear as to how the same forms part of its income for any year, a prerequisite in terms of s. 36(2). The premise of a claim for a bad debt, it may be appreciated, is that the same having already offered as income (for any year), its subsequent non-recovery would warrant a reduction in income (for the year of write off). Further, it could also be that the same (loan and advances) represent a part of the assessee's money lending business, to which the law draws an exception as the same represents a part of the stock-in-trade of such business (s. 36(1)(vii) r/w s. 36(2)(i)). However, there is nothing on record which indicates so, or even if the assessee is in money lending business. That is, there is an apparent non-satisfaction of the essential condition of sec. 36(2), and which clearly impacts not only the assessee's claim u/s. 36(1)(vii), which in any case stands disallowed, but also, concomitantly, the merits of its claim and, thus, that of its explanation in the penalty proceedings. How could then, under such circumstances, one may ask, the assessee's claim be, or considered to be, bona fide, or an explanation in its respect be so'? The matter is restored back to the file of the AO to adjudicate the same afresh per a speaking order in accordance with law, allowing the assessee a proper opportunity to present its case as to how, despite an uncontested disallowance in its respect, the deduction claimed u/s. 36(1)(vii) does not suffer from lack of any bona fides or does not fall within either Explanation 1(A) or 1(B) of section 271(1)(c). Whether ITAT in deciding this appeal has travelled outside its scope - Held that:- As decided in in the case of Kapurchand Shrimal v. CIT [1981 (8) TMI 2 - SUPREME COURT] it is well-known that an appellate authority has the jurisdiction as well as the duty to correct all errors in the proceedings under appeal and to issue, if necessary, appropriate directions to the authority against whose decision the appeal is preferred to dispose of the whole or any part of the matter afresh, unless forbidden from doing so by statute - Revenue's appeal is allowed for statistical purposes.
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2013 (1) TMI 11
Income on sale of shares - Capital gain vs. business income - assessees contented that it always treated the shares as investment, and there is no business activity carried on by the assessees with reference to shares - Held that:- While deciding whether the sale of shares is income from business or income from capital gain, one has to go by the criteria as held in the case of PVS Raju v. Addl. CIT [2011 (7) TMI 818 - ANDHRA PRADESH HIGH COURT] that the character of a transaction cannot be determined solely on the application of any abstract rule, principle or test but must depend upon all the facts and circumstances of the case. The frequency of buying and selling of shares, period of holding, quantum of turnover on account of frequency of transactions, intention of the assessee, No. of scrips shares held for fewer days or engaging in dealing in the same scrips frequently, indulgement in multiple transactions,Repeated transactions, coupled with the subsequent conduct of the assessee to re-enter the same scrip. Mere classification of these share transactions as investment in the assessee's books of accounts was not conclusive need to be looked. Thus on perusal of the statements incorporated by the AO in the assessment order it is found that the assessees have made several transactions of purchase of shares during the relevant year under consideration, and if there high volume, frequency and regularity of the activity carried on by the assessees in a systematic manner, it would partake the character of business activities carried on by the assessee in shares, and it cannot be said that the assessees have merely made investments in shares. The findings of the CIT(A) cannot be sustained in the eyes of law, as he has not considered relevant facts to decide the issue. Thus reverse the order of the CIT(A) and restore the order of the AO - in favour of revenue.
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Customs
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2013 (1) TMI 10
Right of appropriation of the gold and gold jewellery recovered and confiscated by the Customs Department - 45 kg. of gold was loaned by the MMTC to Mr. S S Kanda (NRI) who failed to export ornaments of about 19 kgs - S.S. Kanda in breach of the conditions imposed by the MMTC pledged the gold with Indian Bank & vanished - who has its first charge/lien over the hypothecated stocks of gold and jewellery? - Held that:- The confiscation of the the imported gold can only be for the purpose of recovering the aforesaid amounts. Confiscation of the goods does not mean that the Customs Department can appropriate the property in the imported goods, even after recovering the entire duty, penalty and interest. It is submitted that the goods imported were not contraband items, whose import was prohibited under the law at the relevant time. The import of the gold was valid and legal. It was only on account of the then prevalent governmental scheme vide the aforesaid exemption notification that duty free import was permitted on the condition that the manufactured goods would be exported. Since the present proceedings arise out of the original proceedings before the DRT, the Customs Department cannot be permitted to stake a claim on the said recovered gold, either at the appellate stage or in these proceedings. So far as the Indian Bank is concerned, the said bank did not act in good faith and with due care and diligence while granting loan to Sh.S.S. Kanda, on the basis of security of the imported gold. He submits that the Indian Bank should have required Sh.S.S. Kanda to produce documents of title to the said imported gold.Since that was not done, the said bank cannot claim any charge or lien over the imported gold. While acting as a canalizing agency, had loaned the gold to Sh.S.S. Kanda with the condition that the same would not be sold or hypothecated by him. He further submits that the Indian Bank did not put the MMTC to notice before granting credit facilities to Sh.S.S. Kanda against the gold loaned by MMTC. Thus der cannot be sustained and the finding returned by the DRAT that the first charge over the recovered gold is that of the Indian Bank, is liable to be set aside. Confiscation of imported goods (import whereof is not prohibited in law) is done only as a means to recover its dues by the Customs Department. It does not mean that the Department can appropriate the said goods forever, even when the penalty, duty and other charges are paid by the importer. Admittedly, the Customs Department has already recovered its entire customs duty, penalty & interest amounting to ₹ 2.27 Crores from the MMTC in respect of the 19 Kgs. of gold which was not utilized by Shri S.S.Kanda for export of jewellery.That being the position, no further claim of the Customs Department in respect of the said gold can survive. As Sh.S.S. Kanda did not have ownership rights in the gold and did not create a valid pledge/hypothecation over the said gold in favour of the Indian Bank set aside the impugned order passed by the DRAT dated 04.02.2011 and restore the order of the DRT dated 22.02.2005 insofar as it holds that the MMTC has the first charge over the recovered gold.
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2013 (1) TMI 9
Post of Commissioner of Customs (Adjudication), Mumbai who has to adjudicate the matter, is lying vacant - directions to the Chief Commissioner of Customs, Mumbai to get the adjudicating authority appointed for this purpose and get the matter adjudicated within a period of one month from today in terms of the order dated 14.02.2012 passed by this Tribunal after giving due notice to the appellant. Compliance is to be reported on 15.01.2013.
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Corporate Laws
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2013 (1) TMI 8
Administration of the estate - Appointment of joint administrators for estate left by deceased - Putting the estate for the time being in the custody of three independent persons - Who would act as Joint Administrators pendente lite in and over all the estates of the deceased For making inventory of the estate and take possession of the same except the properties which are under possession of the Joint Special Officer for the time being - They will take all lawful steps for general Administration of the estate left by the said deceased - They will take steps in accordance with law for their participating in all the meetings of Shareholders of the companies and also take all lawful steps as shareholders in accordance with law Issue: - Powers of the Committee of APL - Exercise of nature of rights relating to the shares which form major part of the estate Held that:- Nothing prevents them to exercise all the rights, powers and privileges incidental to the ownership of the shares and stocks except that of distributing such estate to the legatees/beneficiaries which is required to be finally determined by the Court. As representative of the shareholder they can always apply to the company to subscribe for such shares in their capacity as representative of the deceased in the estate and not as owners in their own names. In order to enjoy privileges incidental to the ownership of the shares an application will have to be made to the company as required by law to record their names in the Register of members and the companies will have to consider such an application in accordance with their Articles of Association and the provision of law which governs the same. Parties for the purpose of administration of the estate having agreed to appointment of 3 Member Committee as Joint Administrators they shall be entitled to exercise of the rights and powers of General Administrators over the estate of the deceased other than the right of distributing such estate and we, therefore, direct them i) to prepare and file an inventory of the assets of the estate and appraisal of the value of such assets and ii) to take over possession of the assets of the estate in the manner provided under the law considering the nature of the property. a) From Receivers and Special Officers appointed by the Probate Court; b) From Executors legal heirs; c) From the present Institution and companies as the case may be Receivers/Special Officers appointed by the Probate Court will on handing over the assets out of the estate of the deceased for which they were appointed will stand discharged on their submission and settlement of accounts by the Court.
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2013 (1) TMI 7
Scheme of Amalgamation - Held that:- Board of Director of both the companies approving the Scheme of Amalgamation has been placed on record. No proceedings under Sections 235 to 251 of the Companies Act, 1956 is pending against the Applicant/Transferor Companies and the Applicant/Transferee Company - the requirement of convening meetings of Applicant/ Transferee company's equity Shareholders and unsecured creditors is dispensed with. Affidavit of Service and Publication filed by the Applicant / Transferee Company showing compliance regarding service of the Petition on the Regional Director, Northern Region and the Official Liquidator, and also regarding publication of citations in the defined newspaper. All the staff/employees of all the transferor Companies shall become the employees of the Transferee Company without any break or interruption in their services upon sanctioning of the scheme of the Amalgamation by this Court, the transferee Company undertakes to comply Accounting Standard 14 issued by the ICAI and further undertakes that any amendment in the MOA & AOA for adopting the object of the transferor Companies by the Transferee Company shall be carried out after complying the provision prescribed under the Companies Act, 1956. Justification for issuance of shares on premium @ Rs. 490 per share to the Transferor Companies - There is no bar under the Companies Act, 1956 for the issuance of the share capital on premium by the Company. Even the Government of India has only latest recognized the issuance of the share capital on premium by issuing a proviso in the Financial Bill, 2012 by making an amendment in Section 56(2) of the Income Tax Act. In view of the said section, now if any Private Limited Company issue shares on premium, the same shall be subject to tax under the head Income from other sources. Report of Official Liquidator with no complaint against the proposed Scheme from any person / party interested in the Scheme in any manner and that the affairs of the Applicant / Transferor Companies and the Applicant / Transferee Company do not appear to have been conducted in a manner prejudicial to the interest of its members, creditors or to public interest. There appears to be no impediment to the grant of sanction to the Scheme of Amalgamation. The petitioner companies will comply with the statutory requirements in accordance with law with filing certified copy of the formal order with the ROC within 30 days - the whole or part of the undertaking, the property, rights and powers with all the liabilities and duties of the Transferor Company be transferred to and vest in the Transferee Company without any further act or deed - this order will not be construed as an order granting exemption from payment of stamp duty or any other charges - Petitioner Companies would voluntarily deposit a sum of Rs. 1 Lac in the Common Pool fund of the Official Liquidator within three weeks from today.
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Service Tax
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2013 (1) TMI 24
Penalty u/s 77- Penalty u/s 78 - Security services provider - Short payment of service tax - On being pointed out, they have discharged the service tax liability along with interest - Held that:- They have also collected the higher amount of service tax from the service recipients but paid to the Government lesser amounts. This position stands accepted by the proprietor of the appellant firm. Ingredients of section 78 justifying imposition of equal amount of penalty are evidently available on records. There is no justification for waiving penalty u/s 78 and 77. In favour of revenue
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2013 (1) TMI 23
Short payment of Service tax - Stock broking services - demand of pre deposit - Held that:- The appellant has not made out a prima facie case for complete waiver of the amounts involved. Accordingly, the appellant are directed to make a further deposit of Rs.20,000 within a period of four weeks from today and report compliance on 22.10.2012.
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2013 (1) TMI 22
Cargo Handling Services - Customs House Agent Services - Steamer Agent Services - Short payment of Service Tax - Utilize credit in excess of the credit available - CENVAT credit wrongly utilised - Penalty u/s 76 - Penalty under Rule 15(3) of CCR - An amount equal to the irregularly availed credit was paid back in cash before the issue of SCN - Short-paid service tax was also paid after issue of SCN Assessee argued that they have paid the service tax short-paid and the credit irregularly utilized voluntarily even before confirmation of the demand by the original authority Held that:- There was deliberate attempt in delaying payment of service tax by adopting questionable methods and that there was irregular utilization of credit has to be upheld. Under these circumstances, the imposition of penalties u/s 76 and Rule 15 (3) of the CENVAT Credit Rules are justified. In favour of revenue
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Central Excise
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2013 (1) TMI 5
M.S.Plates, Angles, Channels and HR Sheets - Whether Structural steel items used for civil construction activity are capital goods eligible for credit in terms of Rule 57Q - Held that:- In the decision reported in Commissioner of Central Excise Jaipur V. Rajasthan Spinning & Weaving Mills Ltd. [2010 (7) TMI 12 - SUPREME COURT OF INDIA] applying the "user test" following the Jawahar Mills's case [2001 (7) TMI 118 - SUPREME COURT OF INDIA] held that steel plates and M.S.Channels used in the fabrication of chimney would fall within the ambit of "capital goods" - the assessee was entitled to the relief of MODVAT Credit - against revenue.
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2013 (1) TMI 4
Rebate claim Adjustment of refund against demand Whether it is open to revenue, to adjust the demand against refund due to assessee even when stay has been granted by Tribunal or stay application is pending before Tribunal against such demand Held that:- Following the decision in case of GALAXY INDO FAB. LIMITED (2010 (3) TMI 235 - ALLAHABAD HIGH COURT) that recovery/demand notice during pendency of stay cannot be undertaken by the Revenue authorities especially when the stay was not challenged and the said stay order was binding on the revenue authorities. When a stay application is pending before the Tribunal, no coercive steps should be taken to recover the demands. It was highly inappropriate on the part of the revenue authorities to enforce recovery when the stay had been granted by this Tribunal. The refusal by revenue authorities to pay respect to the order of the Tribunal is violation of judicial discipline. In favour of assessee
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2013 (1) TMI 3
Condonation of delay in filling of appeal u/s 35B - delay of 2649 days Appellants submits that they were pursuing a writ petition filed in the Hon'ble High Court of Andhra Pradesh and that the writ petition was dismissed as withdrawn on 17.6.2011 and further that the present appeals and applications were filed thereafter - Held that:- The pendency of the writ petition filed by the appellants who were conscious of the statutory remedy cannot per se constitute a valid ground for condonation of the deliberate delay of over seven years. In favour of revenue
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2013 (1) TMI 2
CENVAT credit on capital goods - Remaining credit of 50% availed on subsequent financial year denied - the said bushings, after use, were re-exported for remaking - applicants engaged in manufacture of Glass Fibre' by drawing the molten glass through the bushings - Held that:- Going through the Rule 4(2) of CRR 2004 the balance of CENVAT Credit may be taken in any financial year subsequent to the financial year in which the capital goods were received in the factory of the manufacturer, or in the premises of the provider of output service, if the capital goods, other than components, spares and accessories, refractories and refractory materials, moulds and dies and goods falling under heading 6805, grinding, wheels and the like, and parts thereof falling under heading 6804 of the first schedule to the Excise Tariff Act, are in the possession of the manufacturer of final products. The goods in question are components, which are entitled for capital goods credit. Hence in view of the provisions of Rule 4(2)(b), the condition that the same should be in possession of the manufacturer is not applicable to components. In view of this, the applicants made out a strong prima facie case for complete waiver of pre-deposit. Stay petition is allowed.
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2013 (1) TMI 1
SSI Exemption under notification no. 8/2003 Aggregate value of clearance during the preceding financial years - Revenue held that assessee was not eligible for the exemption on clearances of soap stocks under Notification No.8/2003 - Whether the "Soap Stock" which arises in the manufacturing process of the appellant is waste or by-product AO argued that appellant was not discharging Central Excise Duty on products like soap Stock etc. emerging during the process of manufacture/refining of vegetable oil Held that:- Such soap stock are known in the market as commercial product, but there is nothing on record to show that the appellant assessee had cleared such soap stock in the market as a final product. Since the appellant is not manufacturing the soap stock from fatty acid it cannot be considered as waste. In favour of assessee
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CST, VAT & Sales Tax
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2013 (1) TMI 25
Tripura Value Added Tax Act, 1976 - Tripura Value Added Tax Rules - Exigible under the Tripura Sales Tax Act or not - Dealer, under Section 2(8) the TVAT Act - Assessee engaged in the business of providing services including Well Logging Perforating and other Wire Line Services, on contract basis Registered as Service provider with Service Tax department - Assessee entered into an agreement with the ONGC - To provide the services of Well Logging, Perforating and other Wire Line Services - For execution of works under the said contract agreement, the petitioner mobilized equipments and accessories into the State of Tripura from outside. Revenue contended that the contract between the petitioner and the ONGC was also for supplying of materials, such as, spares, explosives, logging cables, etc., and liable to Sales Tax. Held that:- The contents of the agreement make it abundantly clear that the petitioner merely worked as a service provider and, for the purpose of rendering services, under the contract agreement, the petitioner had mobilized equipments and accessories in order to execute the works contract and the respondents could not show any material to prove any element of transfer of right to use any of the equipments/accessories by the petitioner to the ONGC. It is, no doubt, that tax is chargeable in the event of transfer of the property in goods or if there is a deemed transfer, and, as it has already been decided by this Court, there was no element of transfer of right to use any goods and therefore, the petitioner was not chargeable to pay sales tax. In favour of assessee
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Indian Laws
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2013 (1) TMI 21
Section 138 of the Negotiable Instruments Act - Presumption under Section 139 of the N.I. Act - Legally enforceable debt - The accused approached the complainant through his wife and obtained a hand loan of Rs.1,90,000/- for settlement of the debts - With a promise to repay the same within six months - In spite of several demands, the accused began dodging - Accused in the presence of said Dharma Reddy gave a cheque bearing No.384351 drawn on State Bank of Hyderabad The said cheque was deposited in the complainant's account but the same was returned on 02.11.1998 with an endorsement of insufficient funds and party reported to stop operations in the account - Complainant re-deposited the said cheque on 20.11.1998, again the said cheque was returned with the same endorsement - Complainant came to know that a lawyer's notice was appeared in Vaartha newspaper on 12.10.1998 with regard to transfer of said property in the name of her daughter - Section 251 of Cr.P.C Held that:- The presumption, which is available u/s 139 of the N.I. Act can be rebutted by producing necessary evidence or he can also rely upon the evidence produced by the complainant and the material available on record without examining himself. The burden can be discharged by the accused on the basis of preponderance of possibilities. Applicant further deposed that the accused has executed a bond on her own hand writing after receiving the said amount and in the cross- examination he has deposed that the said bond was returned by the complainant one week or ten days prior to the issuing Ex.P-1 cheque. No prudent man would return the bond executed by the borrower without obtaining the cheque in lieu of said bond and more particularly when there is a dispute with regard to the property The accused was working as a teacher as on that date and if really she has issued a cheque for Rs.1,90,000/- she would have written the blanks in the said cheque with her own hand writing. Thus, the complainant has scribed the same in his hand- writing supports the contention of the accused that she issued two blank cheques in favour of Ushodaya Finance Company. The above circumstances create a doubt with regard to lending of the money by PW.1 to the accused and the accused issued the cheque in favour of the complainant. Thus, the accused by relying upon the evidence produced by the complainant could able to rebut the presumption available u/s 139 of the N.I. Act by preponderance of possibilities. In favour of respondent
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2013 (1) TMI 6
Mismatching in the questioned and the admitted signatures - Appeal against order of CLB - dismissal of application filed by the petitioner seeking a dismissal of the petition filed by Naveen Gupta - additional prayer to initiate proceedings u/s 340 of the Cr.PC for forged signatures - Held that:- Apart from the fact that Naveen Gupta had appeared in the Court and owned his signatures on the rejoinder and the affidavits accompanying it, the CLB has also returned a fact finding that there is nothing on record to show that Naveen Gupta was not in Delhi at the time when the said affidavit was filed, this Court has also perused the documents and there appears to be no manifestly evident difference in the questioned and the admitted signatures for which recourse is required for the non-applicant to be hauled-up for the offences under Section 463 or 471 of the IPC. As noted supra, it is also not the argument of the petitioner that any benefit has occurred to Naveen Gupta or the corresponding loss has occurred to the opposing party. In such a situation, no case for initiation of proceedings under Section 340 of Cr.PC is made out. The intent of fraud on the part of Naveen Gupta is clearly not made out. This appeal is nothing but an abuse of the process of the Court. Being a wastage of its precious time, it is dismissed with costs of Rs.25,000/-.
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