TMI Tax Updates - e-Newsletter
January 3, 2018
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Insolvency & Bankruptcy
Service Tax
Central Excise
CST, VAT & Sales Tax
Wealth tax
Indian Laws
TMI SMS
Highlights / Catch Notes
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GST:
Traders under composition scheme - Now requires to pay GST @1% (i.e. 0.5% CGST plus 0.5% SGST) on taxable turnover of goods only w.e.f. 1.1.2018 - See notification as amended.
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GST:
Manufacture under composition scheme - Now requires to pay 1% GST (0.5% CGST and 0.5% SGST) on total turnover (i.e taxable and non-taxable both) [reduced from 2% to 1% w.e.f. 1.1.2018] - See notification as amended.
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Income Tax:
Addition on account of alleged decline in gross profit/net profit - applying the provisions of section 145 - in its report, Statutory Auditor noted that auditor is unable to comment on the accuracy of the valuation of the inventories of finished goods - rejection of books of accounts - being no defect point out by the AO, no addition could be done - AT
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Income Tax:
Nature of expenditure - expenditure incurred by the assessee towards technology upgradation charges which requires frequent replacement due to rapid change in technology and constant need for upgradation would only be revenue in nature - AT
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Customs:
Duty drawback u/s 74 of CA - filing the refund claim under wrong provisions does not disentitle the legitimate claim of the appellant. Substantive right of the appellant to file their claim under the correct provisions of the Act cannot be denied, therefore, the benefit of Section 14 of the Limitation Act, 1963 is available to the appellant. - AT
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Central Excise:
CENVAT credit - - the credit in input service distributors invoice is available in respect of quantum of service used in the respective units. - AT
Articles
Notifications
GST-
1/2018 - dated
1-1-2018
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CGST
Central Tax seeks to further amend notification No. 8/2017 - Central Tax so as to prescribe effective rate of tax under composition scheme for manufacturers and other suppliers
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1/2018 - dated
1-1-2018
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UTGST
Union Territory Tax seeks to further amend notification No. 2/2017 - Union Territory Tax so as to prescribe effective rate of tax under composition scheme for manufacturers and other suppliers
GST - States-
62/2017-State Tax - dated
16-11-2017
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Arunachal Pradesh SGST
Regarding furnishing of returns by the dealer who has not opted for composition (sec 12, sec 14and chapter 9
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61/2017-State Tax - dated
16-11-2017
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Arunachal Pradesh SGST
Exempt from Registration
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60/2017-State Tax - dated
16-11-2017
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Arunachal Pradesh SGST
Recommendations of the Council, waives the amount of late fee payable for failure to furnish the return in FORM GSTR-3B
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59/2017-State Tax - dated
16-11-2017
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Arunachal Pradesh SGST
Seek to amend Notification No. 50/2017- State Tax, dated the 13th November, 2017.
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56/2017-State Tax - dated
16-11-2017
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Arunachal Pradesh SGST
Seek to extends the time limit for furnishing the return in FORM GSTR-5
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55/2017-State Tax - dated
16-11-2017
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Arunachal Pradesh SGST
Seeks to amend Notification No. 38/2017- State Tax, dated the 18th October, 2017
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54/2017-State Tax - dated
16-11-2017
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Arunachal Pradesh SGST
Seeks to extend the due dates for the furnishing of FORM GSTR-1 for those taxpayers with aggregate turnover of more than ₹ 1.5 crores
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53/2017- State Tax - dated
16-11-2017
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Arunachal Pradesh SGST
Extension of time to file GSTR-1 quaterly
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52/2017-State Tax - dated
16-11-2017
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Arunachal Pradesh SGST
Notification regarding to the last date of filing return in FORM GSTR-3B
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58/2017- State Tax - dated
15-11-2017
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Arunachal Pradesh SGST
Extends the time limit for furnishing the return by an Input Service Distributor in FORM GSTR-6
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57/2017-State Tax - dated
15-11-2017
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Arunachal Pradesh SGST
Extends the time limit for furnishing the return in FORM GSTR - 5A
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50/2017-State Tax - dated
13-11-2017
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Arunachal Pradesh SGST
Extends the time limit for making the declaration in FORM GST ITC-04.
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49/2017-State Tax - dated
13-11-2017
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Arunachal Pradesh SGST
Amendments in the Notification number 41/2017- State Tax, dated the 18th October, 2017.
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48/2017-State Tax - dated
13-11-2017
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Arunachal Pradesh SGST
The Arunachal Pradesh Goods and Services Tax (Eleventh Amendment) Rules, 2017.
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47/2017-State Tax - dated
13-11-2017
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Arunachal Pradesh SGST
Waiver the late fee payable in FORM GSTR-3B for the months of August and September, 2017 by the due date.
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46/2017-State Tax - dated
13-11-2017
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Arunachal Pradesh SGST
Evidences are required to be produced by the supplier of deemed export supplies for claiming refund.
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45/2017-State Tax - dated
13-11-2017
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Arunachal Pradesh SGST
Supply of goods by a registered person against Advance Authorisation.
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44/2017-State Tax - dated
13-11-2017
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Arunachal Pradesh SGST
The Arunachal Pradesh Good and Services Tax (Tenth Amendment) Rules, 2017.
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51/2017- State Tax - dated
13-11-2017
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Arunachal Pradesh SGST
Seek to amend Notification No. 27/2017-State Tax, dated the 12th September, 2017
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43/2017-State Tax - dated
18-10-2017
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Arunachal Pradesh SGST
Amendments in the Notification No. 8/2017- State Tax, dated the 31st August, 2017.
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F-10- 95/2017/CT/V (174) - dated
24-11-2017
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Chhattisgarh SGST
Corrigendum - Notification No. 01/2017-State Tax (Rate), Dated 28.06.2017
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66/2017-State Tax - dated
22-12-2017
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Delhi SGST
Regarding furnishing of returns by the dealer who has not opted for composition (sec 12, sec 14 and chapter 9
Insolvency and Bankruptcy-
IBBI/2017-18/GN/REG23 - dated
31-12-2017
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IBC
Insolvency and Bankruptcy Board of India (Fast Track Insolvency Resolution Process for Corporate Persons) (Fourth Amendment) Regulations, 2017
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IBBI/2017-18/GN/REG22 - dated
31-12-2017
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IBC
Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Fourth Amendment) Regulations, 2017
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IBBI/2017-18/GN/REG/21 - dated
6-12-2017
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IBC
Insolvency and Bankruptcy Board of India (Grievance and Complaint Handling Procedure) Regulations, 2017
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35/14/2017-lnsolvency Section - dated
16-11-2017
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IBC
Constitution of Insolvency Law Committee
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IBBI/2017-18/GN/REG019 - dated
7-11-2017
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IBC
Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Third Amendment) Regulations, 2017
Circulars / Instructions / Orders
News
Case Laws:
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Income Tax
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2018 (1) TMI 91
Reopening of assessment - Held that:- There is a clearcut mention in the reasons that the assessee has wrongly taken cost of the land, being the market value based on the valuation report of S.B.Shuttari, Chartered Engineer & Government approved valuer. It is, thus, not open for the petitioner to contend that the assessee/petitioner was taken by surprise and that the notice has been confirmed or that the order rejecting the objection, raised by the petitioner, records extraneous consideration. In fact, the reasons recorded in the order while rejecting the objection raised by the petitioner cannot be said to be extraneous since the reference in respect of the grounds does appear in the reasons for reopening assessment, communicated on 03.11.2016. Since it is observed by us that the objection raised by the petitioner is devoid of substance and that there is very much reference to the objection in the communication indicating “reasons for belief”, issued by Respondent Department and that no new material or ground has been introduced in the final order and that the petitioner has not been taken to surprise, we do not find any reason to cause interference in the instant matter. - Decided against assessee
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2018 (1) TMI 90
Levy of interest under Section 234E - intimations under Section 200A - Held that:- Learned counsels for both the parties have brought to the notice of the Court that the Division Bench of this Court in the case of Fatheraj Singhvi & Ors. Vs. Union of India & Ors, [2016 (9) TMI 964 - KARNATAKA HIGH COURT] has held that no such interest can be levied under Section 234E of the Act. Writ petitions are allowed and the impugned Intimations under Section 200A of the Act issued by the Centralized Processing Cell (TDS) by the concerned Deputy Commissioner of Income Tax are set aside. The matters are remanded back to the local Assessing Authority of the petitioners-assessees to pass fresh orders in accordance with law, if at all called for and necessary, after giving an opportunity of hearing to the petitioners-assessees
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2018 (1) TMI 89
Disallowance on account of employees' contributions to Provident Fund paid after the due date - Held that:- Employee’s contribution to PF & ESI is also allowable both u/s 43B and 36(1)(va) if it is remitted to the Govt. A/c before filing of the return of income. See M/s. Nagarjuna Engineering Constructions vs. ACIT [2017 (12) TMI 936 - ITAT, Hyderabad] Adjustment made towards the ALP of the international transactions entered into by the assessee with its AEs - comparable selection criteria - Held that:- The assessee is engaged in the business of software development, thus companies functionally dissimilar with that of assessee need to be deselected from final list. Computation of deduction u/s 10A - Held that:- Exclude the telecommunication charges both from the export turnover as well as from the total turnover for the purposes of computation of deduction u/s 10A of the Act. We find that this issue is covered in favour of the assessee by the decision of the Hon'ble Karnataka High Court in the case of CIT Vs. Tata Elxsi Ltd. (2011 (8) TMI 782 - KARNATAKA HIGH COURT)
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2018 (1) TMI 88
Validity of additions made under section 153A - treatment given to statement under section 132(4) of Sh. Sampat Sharma - Held that:- We find that in the case of best infrastructure (India) private limited (2017 (8) TMI 250 - DELHI HIGH COURT), despite the admission of accommodation entry in statements under section 132(4) of the Act, the court held that the statement do not constitute as incriminating material. In the instant case, neither is there any statement of any accommodation entry operator claiming that any entry was not provided nor any director has admitted that assessee obtained accommodation entry. Thus, the case of the assessee is on better footing then the case of Best Infrastructure (I) P. Ltd (supra). In such facts and circumstances, respectfully following the decision of the Hon’ble Delhi High Court in the case of best infrastructure (India) private limited (supra), we do not have any hesitation to hold that the statement under section 132(4) of Sh. Sampat Sharma cannot be treated as incriminating material found during the course of search. In the result, we hold that addition of share capital in the year under consideration has been made without relying on any incriminating material found during the course of search. In view of the above finding, both the conditions as completed assessment and no incriminating material, have been satisfied in the case, thus, no addition could have been made in the instant assessment year in view of the finding of the Hon’ble Delhi High Court in the case of Kabul Chawla (2015 (9) TMI 80 - DELHI HIGH COURT). The grounds No. 1 and 1.1 of appeal are accordingly allowed.
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2018 (1) TMI 87
Rental receipt from subletting of premises - whether business income or income from other sources? - Held that: - the issue is squarely covered by Tribunal’s order in assessee’s own case for AY 2009-10 [2014 (6) TMI 803 - ITAT MUMBAI], where it was held that the fact that the assessee running the business centre by exploiting the property is not merely an activity of letting out the property and the fact that the assessee has been showing the rent received from letting out the business centre under the head business income continuously since 1984, we are of the considered view that the authorities below are not justified in treating the impugned receipts under the head income from other sources. Treatment of consequential expenses - allowability - Held that: - the income received from the business centre has to be treated as business income in pursuance of the adjudication and the fact that the expenditures have nexus with the business income, the expenditures claimed by the assessee have also to be allowed as business expenditure. Appeal dismissed - decided against Revenue.
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2018 (1) TMI 86
Interest under section 244A - whether the delay for the period from 1/4/2003 to 24/03/2006 is required to be excluded for working out interest under section 244A of the income tax act, treating it as delay attributable on part of the assessee? - Held that:- In the present case before us, assessee has made the claim by way of noting in the original return of income filed and merely the computation and audit report have been filed during the course of the assessment proceedings. This itself proves that the assessee has made the claim during the course of the assessment proceedings. The claim made by the assessee in the original return of income and further quantified during the assessment proceedings cannot be said that there is any delay on part of the assessee. Ld AO could not say that there is any delay in any of the proceedings of the Income tax Act. We do not find that there is any delay on part of the assessee. Therefore, it is apparent that there is no delay, which can be attributed on the part of the assessee. In the present case, the Ld. CIT (A) has directed the Ld. assessing officer to refer the matter to the Chief Commissioner of income tax. The order of the Commissioner of Income Tax was passed on 03/07/2014, the revenue till to date could not show us any evidence that AO has made any reference for the opinion of the Chief Commissioner of the Income Tax. AO has not done so before rejecting the application for the refund of the assessee for a particular period for which he is not empowered to. In view of the above startling facts before us, we do not find that there is any delay attributable on part of the assessee. Therefore we reverse the order of the Ld. CIT (Appeal) in directing AO to refer the matter to the Chief Commissioner of Income Tax for his opinion and direct the Ld. Assessing Officer to grant interest to the assessee under section 244A of the income tax act w.e.f. 01/04/2003 to 24/03/2006, the period for which AO held that delay is attributable on part of the assessee. - Decided in favour of assessee.
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2018 (1) TMI 85
Addition on account of alleged decline in gross profit/net profit - applying the provisions of section 145 - in its report, Statutory Auditor noted that auditor is unable to comment on the accuracy of the valuation of the inventories of finished goods - rejection of books of accounts - Held that:- The method of valuation of inventory followed by the assessee is year to year same. Furthermore, the assessee has maintained complete quantitative details also. No defects have been pointed out by the AO in the books of account other than what is stated by the Auditor. To invoke provisions of section 145(3) of the Act it is necessary that accounts of the assessee suffers from latent, patent and glaring errors. In the present case, we do not find any such finding by the ld AO. Further, the assessee has given detailed reason for the down fall in the gross profit also. Further, the details of valuation of closing stock of the manufactured goods as per retail method were also filed before the lower authorities and no infirmity was found in the same. In view of this, we do not find any reason to sustain the orders passed by the lower authorities with respect to the invocation of provisions of section 145(3) of the Act and consequently, making the addition to the total income of assessee. In the result Ground No. 1 to 3 of the appeal are allowed.
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2018 (1) TMI 84
Disallowance u/s 14A - Held that:- No infirmity in the order of ld. CIT(A) sustaining disallowance at ₹ 46,494/- by observing that assessee main object is to derive income from trading in shares and not for earning exempt income by way of investment in shares and securities. Disallowance of interest - assessee has incurred the said interest for non-business purpose - Held that:- No reason to interfere in the findings of ld. CIT(A) and deleting the impugned addition on account of disallowance of interest when appellant able to establish direct nexus of advances so granted out of interest free fund as evidenced from bank account and also said advance was related to F.Y. 08-09 (A.Y. 09-10) duly confirmed by M/s Isha Investment and no new advance were given during previous year, then disallowance of interest from the claim of interest for impugned previous year is neither justified nor sustainable. The A.O. is directed to delete the addition so made Addition on account of under valuation of closing stock - Held that:- When the matter came up before the ld.CIT(A), assessee succeeded in getting this addition deleted as ld.CIT(A) observed that assessee being in the business of trading shares and securities, calculates the closing stock on the basis of value of shares and securities as on the last date of last settlement, which in this case was 29.03.2010. 18. We find substance in the findings of ld.CIT(A), as the books of accounts of assessee are audited u/s.44AB, method of closing stock is consistent with the preceding year and there is no variation. Further we also find that the last date of settlement was 29.03.2010 and the assessee has calculated the valuation of closing stock at ₹ 6,20,62,436/- by adopting the valuation method of “cost or market value which were is less” for each script held as on 29.03.2010. The detailed working of closing stock also forms parts of the order of ld. CIT(A). We therefore, in the given facts and circumstances as well the factual material of the issue raised in this ground fail to differ with the view taken by ld.CIT(A) deleting the addition.
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2018 (1) TMI 83
Penalty u/s.271(1)(c) - estimation of net profit - Held that:- Assessee is a partnership firm run Sushrusha Hospital. In this year the return was filed showing total income at ₹ 2,70,425/-. The AO on meager discrepancies rejected audited books of accounts and estimated net profit @ 6.1%. Being dissatisfied with the said order, assessee filed an appeal before ld. CIT(A) and ld. CIT(A) reduced net profit @ 3%, further, appeal filed before the ITAT, which also reduced estimation of net profit @ 2% of turnover. While passing the order of the penalty, ld. AO has not considered the relief granted by the ITAT. Thereafter, CIT(A) has also not considered the relief granted by the ITAT. Even though passed appeal order after deciding quantum appeal by ITAT. It is well settled principle that if there is no specific charge of either concealment of income or furnishing inaccurate particulars of income. No penalty u/s.271(1)(c) can be imposed while total income was estimated in view of the decision of ITAT. - Decided in favour of assessee.
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2018 (1) TMI 82
Disallowance of write off of rental deposit - Held that:- When the assessee could not continue with the possession, he claimed the entire amount back which was not given by the landlord, therefore he has filed a Civil Suit in the Civil Court, Bangalore. On account of non-recovery of this amount, he has written it off in the books of account and claimed deduction. Undisputedly, the assessee has given refundable security deposit and on its non-return by the landlord, assessee has filed a Civil Suit and the same is sub judice in the court and therefore the hope of recovery of this refundable security deposit has not been lost. In such circumstances, the business loss claimed by the assessee cannot be allowed in the impugned assessment year. It can only be allowed in that assessment year when the assessee finally fails to recover the said amount. Moreover, it is not a bad debt as it does not fulfill the requisite conditions prescribed u/s. 36(2). Direct the AO to allow the claim of assessee only in that year for which the assessee finally loses the hope of its recovery of the said amount. Deduction in respect of cash theft - Held that:- The assessee could not furnish any evidence either before the lower authorities or before me. He has only submitted that there was a cash theft for which information was given to the Police, but no evidence is filed on record. In the absence of any evidence, the claim of assessee in respect of cash theft cannot be entertained. Accordingly, this ground of the assessee is rejected and confirm the order of the CIT(Appeals).
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2018 (1) TMI 81
Reopening of assessment - interest disallowance u/s 36(1)(iii) - AR has contended that there was no extension of existing business and secondly, interest free funds in the shape of Share Capital & free reserves far exceeded the Capital Work-in-progress - Held that:- These contentions could nowhere be rebutted / controverted either by any of the lower authorities or Ld. DR before us. From the perusal of financial statements, it is quite evident that the interest free funds in the shape of Share Capital & Free Reserves far exceed the closing capital work-inprogress and moreover, the reserves & surplus has grown from 8053.44 Lacs to ₹ 10818.15 Lacs and therefore, a presumption has to be drawn that the CWIP was carried out by the assessee out of own interest free funds. The lower authorities could nowhere prove the nexus of borrowed funds with CWIP being carried out by the assessee despite being pointed out by the assessee before lower authorities. It is also uncontroverted fact that there was no extension of existing business by the assessee. Hence, we are unable to concur with the view taken by Ld. CIT(A) and therefore, inclined to reverse the same. Hence, by deleting the impugned additions, we allow assessee’s appeal.
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2018 (1) TMI 80
Addition made on account of expenditure incurred on ‘Material & Operating Cost & Employee Cost’ - Held that:- AO liberally allowed ₹ 1,51,03,590/- as deduction U/Sec. 36 & 37 of the Act as found from P/L account under the head ‘administrative and other expenses, which, admittedly, is inclusive of salary and allowances and staff welfare. Regarding the other expenses as pointed out by the ld.AR ie. (b) to (i) of Sl. No. 3 of paper book, in our opinion, cannot be allowed as expenditure for the reason that the assessee failed to give any details of work executed by it and has also failed to produce supporting evidence in support of its claim of having incurred expenditure. Thereby the order of CIT-A is justified on this issue. - Decided against assessee.
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2018 (1) TMI 79
Revision u/s 263 - period of limitation - Whether the failure of the AO to give a logical conclusion to the enquiry conducted by him gives power to the CIT to revise such assessment order? - CIT's territorial jurisdiction - order passed u/s 263 in the name of the amalgamating company - Held that:- Contention of the assessee that since the AO of the assessee-company was not empowered to examine or make any addition on account of receipt of share capital with or without premium before amendment to section 68 by the Finance Act, 2012 w.e.f. A.Y. 2013-14 and hence the CIT by means of impugned order u/s 263 could not have directed the AO to do so, is unsustainable. The notices u/s 263 were properly served through affixture or otherwise. Further the law does not require the service of notice u/s 263 strictly as per the terms of section 282 of the Act. The only requirement enshrined in the provision is to give an opportunity of hearing to the assessee, which has been complied with in all such cases. Limitation period for passing order is to be counted from the date of passing the order u/s 147 read with sec. 143(3) and not the date of Intimation issued u/s 143(1) of the Act, which is not an order for the purposes of section 263. In all the cases, the orders have been passed within the time limit. The CIT having jurisdiction over the AO who passed order u/s 147 read with section 143(3), has the territorial jurisdiction to pass the order u/s 263 and not other CIT. Addition in the hands of a company can be made u/s 68 in its first year of incorporation. After amalgamation, no order can be passed u/s 263 in the name of the amalgamating company. But, where the intention of the assessee is to defraud the Revenue by either filing returns, after amalgamation, in the old name or otherwise, then the order passed in the old name is valid. Order passed u/s 263 on a non-working day does not become invalid, when the proceedings involving the participation of the assessee were completed on an earlier working day. Order u/s 263 cannot be declared as a nullity for the notice having not been signed by the CIT, when opportunity of hearing was otherwise given by the CIT. Refusal by the Revenue to accept the written submissions of the assessee sent after the conclusion of hearing cannot render the order void ab initio. At any rate, it is an irregularity. Search proceedings do not debar the CIT from revising order u/s passed u/s 147 of the Act. See Subhlakshmi Vanijya Pvt. Ltd. case [2015 (8) TMI 174 - ITAT KOLKATA] - Decided against assessee.
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2018 (1) TMI 78
Nature of expenditure - technology upgradation expenses - capital or revenue expenses - Held that:- Hon’ble Supreme Court in the case of Empire Jute Co. vs CIT (1980 (5) TMI 1 - SUPREME Court), where their Lordships had duly distinguished the enduring benefit in the revenue field and enduring benefit in the capital field. They had held that pursuant to incurrence of expenses, if there is some enduring benefit in the revenue field, then the same would only amount to revenue expenditure. We hold that the expenditure incurred by the assessee towards technology upgradation charges which requires frequent replacement due to rapid change in technology and constant need for upgradation would only be revenue in nature. Hence we do not find any infirmity in the order of the ld CITA in this regard. Accordingly, the Ground No. 1 raised by the revenue is dismissed. Software expenses - revenue or capital expenditure - Held that:- We find that the ld CITA had given a categorical finding on verification of the bills for these expenditure that software expenses were incurred by way of renewal of licence fees to the vendor on an annual bais which does not accrue any enduring benefit to the assessee and that the same were paid towards smooth functioning of business of the assessee and not paid for acquiring any capital assets. These findings were not controverted by the ld DR before us. Hence we do not find any infirmity in the order of the ld CITA in this regard. Accordingly, the Ground No. 2 raised by the revenue is dismissed. Optical fibre expenses - revenue or capital expenditure - Held that:- Expenses towards the same towards replacement on a monthly basis, which itself goes to prove that the same is incurred on a recurring basis and there is no enduring value benefit to the assessee on the previously replaced cable wires. Moreover, we find that the assessee had incurred a sum of ₹ 14,56,604/- in the previous year ended 31.3.2009 relevant to Asst Year 2009-10, which the ld AR stated that the same was allowed by the ld AO as revenue expenditure. This was not controverted by the revenue before us. - Decided against revenue
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2018 (1) TMI 77
Re-opening of assessment u/s 147 - addition u/s 68 - Held that:- Re-opening of assessment under section 147 of the Income Tax Act, 1961, and (b) the ld.CIT(A) has erred in confirming addition of ₹ 7,21,000/- which was added by the AO with the aid of section 68 - Held that:- We are satisfied that the AO was possessing sufficient information for harping a belief that taxable income has escaped assessment, and therefore, he has rightly reopened the assessment. It has been observed that the lenders are silent to status of loan as well as rate of interest. Lenders have bank account and they have given loan in cash. It is pertinent to observe that these are not transactions in day-to-day business of assessee. This is to be appreciated with back ground of the assessee, who is a blind person; who has some relationship with lenders. This way loans were taken by him in personal relation capacity. Whenever any small amounts are being taken from near-and-dear one, then interest and other terms and conditions are not negotiated. It is only on the basis of mutual faith and requirement of particular person. They have confirmed advancement of loans. They appeared before the AO in support of such advancement; they have submitted details of land holding and others source of earnings. To my mind, the ld.CIT(A) has erred in rejecting the explanation of the assessee. We are satisfied with the kind of evidence produced by the assessee that has discharged his onus as contemplated under section 68 of the Act. Similarly, the assessee is in service getting salary income. He used to manufacture cane furniture i.e. weaving/interlacing of cane in chairs etc. Savings at his end to the extent of ₹ 2.60,000/- cannot be doubted. - Decided partly in favour of assessee.
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2018 (1) TMI 76
Disallowance u/s 14A - Held that:- The assessee had enough own funds which was more than the investments which yielded tax free income there can be no disallowance of interest expenses in terms of Rule 8D(2)(ii) of the Rule. As held by the Hon’ble Delhi High Court in the case of Cheminvest Ltd vs CIT (2015 (9) TMI 238 - DELHI HIGH COURT) that when there is no exempt income then there can be no question of disallowance u/s 14A of the Act. In the light of the judicial pronouncements, we are of the view that the plea of the assessee to exclude investments which had not yielded any exempt dividend income during the previous year while working out the average value of investments for the purpose of applying Rule 8D(2)(iii) of the Rules, should be accepted. We hold and direct accordingly. Deemed dividend addition u/s 2(22) - Held that:- Though trading in shares of the assessee company remains suspended for non payment of fees to the stock exchange, the fact remains that the assesee’s shares have not been delisted in Calcutta Stock Exchange. In these circumstances it has been construed that TCI Borukha Projects Ltd is a company in which public or substantially interested and therefore the payment of loan or advance by TCI Borukha Projects Ltd., even to a beneficiary shareholder having not less than 10% of the voting power is outside the provision of section 2(22)(e) of the Act. Therefore we hold that no part of the loan given by TCI Boruka Projects Ltd., can be taxed as deemed dividend u/s 2(22)(e) of the Act in the hands of the assessee. As far as loans or advance by Transcorp Enterprises Ltd is concerned it is clear from page 119 of the paper book Vol.I which we have extracted in the earlier part of this order that substantial part of the business of this company is lending of money. It is not disputed that the lending of money to the assessee is in the ordinary course of the business of Transcorp Enterprises Ltd. In such circumstances no part of the advance or loan can be construed as deemed dividend within the meaning of section 2(22)(e) of the Act. We therefore are of the view that CIT(A) was fully justified in giving relief to the assessee in this regard.
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2018 (1) TMI 75
Addition being 10% of overall expenses incurred by the assessee through credit card on behalf of the employer - Held that:- We find that the expenditure incurred by the assessee employee in his credit card during foreign travel visits, for and on behalf of the company M/s Govind Steel Co. Ltd, is not disputed by the revenue. In fact there is a specific finding in this regard in the order of the ld CIT-A. It is not in dispute that the assessee employee had not claimed any expenditure as deduction which were incurred by him through credit card during his foreign travel. He incurred expenses through credit cards and the same were reimbursed to him by the company M/s Govind Steel Co. Ltd. Moreover, the said expenses were included in the FBT return and hence by placing reliance on the Circular No. 8/2005 dated 29.8.2005, there cannot be any element of perquisite to be taxed in the hands of the assessee employee. In any case, if at all, there is no doubt in the mind of the revenue with regard to the subject mentioned expenses, the revenue could examine the same only in the hands of the company M/s Govind Steel Co. Ltd and not in the hands of the assessee employee. We find that both the authorities below had grossly erred in making some addition towards the same on an estimated basis. Hence we have no hesitation in directing the ld AO to delete the entire addition made in this regard. - Decided in favour of assessee.
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2018 (1) TMI 74
Revision u/s 263 - provisions of section 40(a)(ia) applicability - accepting the returned loss filed by the assessee was erroneous and prejudicial to the interests of the revenue - Held that:- It is an admitted position that the AO before completing the assessment did not make any enquiries questioning whether provisions of section 194A of the Act were applicable to factoring charges and consequently factoring charges cannot be allowed as a deduction in computing income from business in view of the provisions of section 40(a)(ia) of the Act for non-deduction of tax at source. The law with regard to exercise of jurisdiction u/s.263 of the Act on the ground that the AO failed to make enquiries which he ought to have made in the given circumstances of a case is well settled. The order becomes erroneous because such an inquiry has not been made and not because there is anything wrong with the order if all the facts stated therein are assumed to be correct. We derive support for the proposition as stated above from the decision of the Hon’ble Delhi High Court in the case of Gee Vee Enterprises (1974 (10) TMI 29 - DELHI High Court). In the light of the law on the issue and in the light of the admitted fact that the AO did not make any enquiries which were required to be made on the issue in question, the order of the AO became both erroneous and prejudicial to the interest of the revenue calling for exercise of revisional jurisdiction u/s.263 of the Act. We therefore uphold the exercise of jurisdiction u/s.263 of the Act by the CIT by the impugned order. the observations of the Pr. CIT with regard to the retrospective operation of second proviso to section 40(a)(ia) of the Act should not influence the AO or the appellate authorities in the proceedings pursuant to the impugned order. This is because the Pr. CIT in the impugned order has not considered the question as to whether in the absence of the decision of jurisdictional High Court, whether the view favourable to the assessee rendered by the non-jurisdictional High Court or the view against the assessee by the non-jurisdictional High Court should be taken into consideration. In any event, we are of the view that when the assessment is set aside on the ground that the AO did not make proper and adequate enquiries before concluding the assessment, the Pr. CIT ought not to have expressed any view on the other issues that might arise for consideration in the assessment proceedings, pursuant to the order u/s. 263 of the Act. With the aforesaid modifications, we confirm the order of the Pr. CIT.
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2018 (1) TMI 73
Delayed payment of contribution of Employees for P.F. - Held that:- Assessee had not deposited said contribution in respective fund account on date as prescribed in Explanation to section 36(1)(va), disallowance made by Assessing Officer was just and proper. See Gujarat State Road Transport Corporation case [2014 (1) TMI 502 - GUJARAT HIGH COURT] - Decided against assessee
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Customs
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2018 (1) TMI 72
Import of Gold Dore Bars - Condition No.34(a) of the Notification No.12/2012 - Held that: - this Court is of the opinion that there is absolutely no justification for the petitioner to file this repetitive writ petition. The petitioner-assessee was expected to attend to the proceedings before the Adjudicating Authority in pursuance of the SCN issued to him, for which, the Respondent- Director(TRU-I) has already made it clear in the impugned communication Annexure-A dated 10.10.2017 that the Adjudicating Authority namely, the Commissioner/Prl.Commissioner may not be influenced by the Instructions dated 15.04.2013. There is no justification for this Court to interfere in the matter again and the Adjudicating Authority is expected to pass orders in accordance with law adjudicating show-cause notice issued to the petitioner - petition disposed off.
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2018 (1) TMI 71
Misdeclaration of imported goods - undervaluation - heavy Melting scrap, re-rollable steel scrap and other items of iron and Steel - difference of opinion - Held that: - As there are contrary views and difference of opinion between the Members, therefore, the matter be placed before the Hon'ble President to refer the matter to the third member to resolve the issue:- Whether in the facts and circumstances of the case when the goods were mis-declared as admitted by Shri. K. K. Garg, M.D., the valuation of the goods can be determined on the basis of opinion of chartered engineer based on cotemporaneous bills of entry of similar scrap and the appeals dismissed, as held by the member (Technical)? - matter referred to Third Member.
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2018 (1) TMI 70
Benefit of N/N. 12/2012 dated 17.03.2012 (Serial No.332) - High Seas Sale - denial of benefit on the ground that re-rollable material has been imported along with scrap - confiscation - penalty - difference of opinion - Held that: - As there are contrary views and difference of opinion between the Members, therefore, the matter be placed before the Hon'ble President to appoint the Third Member for resolving the following :- Whether in the facts and circumstances of the case, the goods which were purchased on high sea sale basis and were declared as heavy melting scrap in the documents of high seal seller, are not mis-declared and hence not liable to confiscation and no penalty is imposable, as held by Member (J)? Matter referred to Third Member.
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2018 (1) TMI 69
Mis-declaration of goods - Re-Rollable Steel Scrap - Difference of opinion - Held that: - In view of difference of opinion emerging between the Hon'ble Member on the issue of redemption fine and penalty on the appellant, the registrar is directed to place the matter before the Hon'ble President for nominating the third Member for resolving the following: Whether in view of high sea purchase and declaration in bills of entry, in all these appeals redemption fine and penalty should be reduced to 10% of the fine and penalties imposed by original adjudicating authority in each case, as held by the Hon'ble Member (Judicial)? - matter referred to Third member.
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2018 (1) TMI 68
Refund claim - time limitation - the amount was deposited during investigation and later on the Commissioner has held that the appellant was not liable to pay duty and thereafter the appellant filed the refund claim - Held that: - in view of the judgment in the case of Motorola India Pvt. Ltd. [2006 (4) TMI 390 - CESTAT, BANGALORE] when the amount is paid during the course of investigation, it is not the duty and it is only a deposit and Section 27 of the Customs Act, 1962 is not applicable to deposits made during investigations - refund allowed. Interest on delayed refund - Held that: - the assessee is entitled to interest from the date of expiry of three months from the date of filing the application for refund till the refund is granted. Appeal allowed - decided in favor of appellant.
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2018 (1) TMI 67
Duty drawback u/s 74 of CA - denial on the ground of time limitation - whether in the facts and circumstances of the case, the drawback claim filed by the appellant under Section 74 of the Act can be held as time barred or not? - Held that: - the appellant initially filed claim for duty paid on the goods re-exported under Section 26A of the Act and during the course of pending of said proceedings, on realising that although the claim under Section 26A is not maintainable, they filed refund claim under Section 74 of the Act - filing the refund claim under wrong provisions does not disentitle the legitimate claim of the appellant. Substantive right of the appellant to file their claim under the correct provisions of the Act cannot be denied, therefore, the benefit of Section 14 of the Limitation Act, 1963 is available to the appellant. The authorities below are directed to entertain the claim of drawback filed by the appellant on merits in the interest of justice - appeal allowed by way of remand.
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2018 (1) TMI 66
Misdeclaration of value and quantity of goods - Glass chattons - subsection (1) of Section 127B, sub-section (1) of Section 127(C) and sub-section (2) of Section 127(F) - scope of 'case' - Held that: - it is clear that an assessee can make an application for Settlement before adjudication. On receipt of such an application the Settlement Commission is required to issue a notice within a period of seven days from the date of receipt of the application asking the applicant to explain as to why the application should be allowed to be proceeded with and after taking into consideration the explanation provided, the Settlement Commission shall within a period of 14 days from the date of receipt of notice allow the application to be proceeded with or reject, as the case may be. Once an application is allowed to be proceeded with under Section 127C, the exclusive jurisdiction of Settlement Commission to exercise the powers and perform the functions of Customs or Central Excise officer as the case may be starts as per sub-section (2) of Section 127(F). In the instant case, the Settlement Application was filed on 21-3-2017 and was allowed to be proceeded with on 24-3-2017. The exclusive jurisdiction of Settlement Commission as per sub-section (2) of Section 127(F) starts from the date on which the application is allowed to be proceeded with. In the instant case, the Settlement Application received on 21-3-2017 was allowed to be proceeded with on 24-3-2017. Before the commencement of the exclusive jurisdiction of Settlement Commission, the case had been adjudicated on 10-3-2017. The present applications have been made is no longer pending adjudication and does not fall within the meaning of ‘case’ as defined in clause (b) of Section 127 of Customs Act, 1962. Application not maintainable.
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Corporate Laws
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2018 (1) TMI 64
Public auction - Held that:- Condition No.16 of the terms and conditions of tender document reads as under: “16. The purchaser shall be liable to pay all statutory dues, if any, due and payable on the properties of the subject company for the period after the date of winding-up order. The payment of such dues for pre-Liquidation period shall be settled as per the provisions of the Companies Act, 1956. However dues, taxes, cess, if any, applicable on the sale of assets shall be paid by the purchaser.” The Court finds that in view of the above condition incorporated in the terms and conditions for sale of the company’s property as regards the liability to pay statutory dues and the other taxes on the property sold in public auction, no observation as requested by learned advocate Mr.Jain need to be made. The report stands disposed of accordingly.
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Insolvency & Bankruptcy
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2018 (1) TMI 65
Corporate Insolvency Resolution Process - Held that:- In the present case, as we find that there is no illegality or infirmity committed by Adjudicating Authority in admitting the application under Section 7 of the I&B Code’, we find no ground to interfere with the impugned order. For the said reasons also this Appellate Tribunal has no jurisdiction to accept the settlement reached between the parties to annul the impugned order, though it is open to the Appellants to move before a court of competent jurisdiction for appropriate relief. As during the ‘Resolution Process’, the ‘Resolution Professional’ is required to ensure that the Company remains on-going and if so necessary, he may take assistance of the (suspended) Board of Directors. The authorised person of the ‘Corporate Debtor’, who is authorised to sign the bank cheques may issue cheque only after authorisation of the ‘Resolution Professional’. The bank account(s) of the ‘Corporate Debtor(s)’ can be allowed to be operated for day-to-day functioning of the companies and its projects and for payment of current bills of the suppliers, salaries and wages of the officers, employees’/workmen, electricity and water bills, etc.
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Service Tax
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2018 (1) TMI 60
Penalty - service tax with interest paid on being pointed out - Held that: - the differential service tax already stands paid by the appellant in full. The interest liability for such delayed payment has also been made even before the show-cause notice was issued - in terms of Section 73(3) of the FA, 1994, if the service tax has already been paid with interest before issue of show-cause notice, there will be no need to issue show-cause notice and hence there will be no liability for penalty - demand of tax with interest upheld - appeal allowed in part.
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2018 (1) TMI 59
N/N. 13/2003-ST dt. 20/06/2003 - business auxiliary services provided by a commission agent - Held that: - identical issue has come up before the Tribunal in the case of CST, Delhi Vs. P.N. Vijay Financial Services (P) Ltd. [2008 (9) TMI 72 - CESTAT, NEW DELHI] wherein it was held that no service tax will be payable on similar sale of mutual fund units - no service tax will be payable on such commission received during the period 01/07/2003 to 30/06/2004 during which the appellant will be eligible for the benefit of exemption N/N. 13/2003-ST dt. 0/06/2003 - Appeal allowed.
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2018 (1) TMI 58
Refund of service tax which was not payable - denial on the ground that appellant has not filed the prescribed documents in terms of Section 11B of CEA - Held that: - the appellant has produced the registration number and other details of the builder who sold the flat to the appellant and collected service tax from the appellant on behalf of the Revenue being their agent. In that circumstances, it is duty of the refund sanctioning authority to verify the fact whether the service provider has paid the service tax or not - appeal allowed by way of remand.
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2018 (1) TMI 57
Refund claim - concept of TTO vis-a-vis ETO as defined in Rule 5(1)(E) of CENVAT Credit Rules, 2004 - Held that: - Since the appellant had no other services apart from export services during the refund claim period, the export turnover of services determined in terms of clause (D) of sub-rule (1) shall be the total turnover. The appellant during the relevant period has only ETO, therefore, reimbursement of expenses has to be excluded from the ETO as well as TTO and only then it will give the fair results - both the authorities had wrongly applied the formula as prescribed under Rule 5(1)(E) of CENVAT Credit Rules, 2004 read with N/N. 27/2012-CE NT dt. 18/06/2012. In view of the wrong application of the formula, the refund has been rejected. Matter remanded to to the original authority to recompute the TTO and then decide the refund claim of the appellant - appeal allowed by way of remand.
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2018 (1) TMI 56
Valuation - free warranty services - Held that: - the appellant have marketing division which has obtained the permission as input service distributor and they have service division, which is engaged in the repair and maintenance and after sale service on warranty and AMC basis - matter is sent back to the adjudicating authority to take into account various documentary evidences which the appellant have furnished including ledgers and returns to support their claim that the entries can be easily correlated for respective divisions - appeal allowed by way of remand.
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2018 (1) TMI 55
Valuation - includibility - value of parts used for replacement on which VAT is paid is includible in the value of the service of “Authorized Service Station” - Held that: - the parts used for providing repair and maintenance service of the vehicle, the same is clearly sold to the client on which the VAT was paid. Therefore the parts used for providing repair and maintenance service is sale of goods and not part of service, therefore the same is not taxable under the Finance Act, 1994 - service tax on the value of parts used for repair and maintenance of vehicle is clearly not sustainable - appeal allowed.
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2018 (1) TMI 54
Validity of subsequent SCN - Interest on refund - Held that: - The issue of subsequent show cause notice was wholly without jurisdiction and also amounts to insubordination - SCN not sustainable - appellant is entitled to interest in addition to the amount of refund - appeal disposed off.
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2018 (1) TMI 53
Application for restoration of appeal - Held that: - the application for restoration of appeal is not the course available to the applicant against our final order dated 30th November, 2016 - despite notice none appeared for the appellant - the applicant has not made out a case in his favor - application for restoration of appeal dismissed.
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2018 (1) TMI 52
CENVAT credit - input services - GTA services for transporting final products from the factory of the respondent to three premises - Held that: - the Tribunal held that the issue is covered in favor of the assessee as per the decision of the Karnataka High Court in COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX, BANGALORE Versus M/s ABB LTD. and others [2011 (3) TMI 248 - KARNATAKA HIGH COURT], where it was held that Credit of service tax paid on outward transportation allowed prior to 1.4.2008 - appeal dismissed.
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Central Excise
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2018 (1) TMI 51
Rejection of Settlement Application - communication of rejection within seven days - Held that: - On 23.2.2017, the Settlement Commission was still not satisfied that all the requirements are fulfilled - Even after issuing the said communication dated 27.2.2017, the Commission did not pass any further order of not allowing the proceedings to proceed further. Period of 14 days was over. Long after that the petitioners approached this Court - If the Commission desired to hear the petitioners further on the question of maintainability, it was open for the Commission to do so only upto a period of 14 days after issuance of notice - petition disposed off.
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2018 (1) TMI 50
CENVAT credit - interpretation of the words 'input' and 'capital goods' - Held that: - similar substantial question of law decided in the case of M/s. Thiru Arooran Sugars, M/s. Dalmia Cements (Bharat) Ltd. Versus Customs, Excise and Service tax Appellate Tribunal, The Commissioner of Central Excise [2017 (7) TMI 524 - MADRAS HIGH COURT], where it was held that Rule 2k(i). Explanation 2 cannot be read in a manner that it constricts, the scope and ambit of the main provision, i.e., Rule 2k(i) - appeal dismissed - decided against Revenue.
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2018 (1) TMI 49
Clandestine removal - the demand has been mainly raised on the basis of statements of the employees of the Appellant concern and statement of dealers - Held that: - the statements of the employees who were not connected with the manufacturing of Coumarin, it cannot be said that the manufacturing process shown by the Appellant firm is false. We find that apart from the statements of above persons there is no records or documents which can show that the production of Coumarin was much more than shown or recorded by the Appellant firm. We find that the revenue after the issue of first show cause notice dt. 16.09.2004 issued five more show cause notice for the subsequent periods by relying upon same investigation but did not conduct any physical test to see as to what is the percentage of production of finished goods. The Hon’ble High Court and Tribunal in number of judgments has held that only on the basis of statements which stands resiled in cross examination and in absence of corroborative evidence the demands cannot be confirmed. In absence of any evidence of diversion of good and any other contrary evidence, credit cannot be denied to the Appellant. In case of alleged shortages we find that Ms Hema Lakhpatwala in her statement dt. 27.05.2004 had explained the shortages found during physical verification and the reconciled stock account were also produced before the adjudicating authority which was not denied by him. Further no evidence of non receipt of such alleged short found inputs or their diversion/ clandestine clearance has been brought on record - the allegation of shortages against Appellant is not sustainable and the demands are not sustainable. In case of seizure of 500 kgs of Coumarin the submission of the Appellant is that the same were cleared mistakenly but duty liability , interest, penalty and confiscation on such clearance is sustainable. Appeal allowed - decided in favor of appellant.
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2018 (1) TMI 48
CENVAT credit - adjudicating authority disallowed the cenvat credit availed on the basis of input service distributors invoice on the ground that the input service distributor as well as the appellant have not maintained proper grounds of services availed so as to show the particulars of services availed by or on behalf of the appellants Tarapur Unit while distributing the above service tax meant for credit under cenvat credit amount - Held that: - the credit was taken by the appellant on the invoices issued by their head office who is input service distributor. The provision for description of input service credit is provided u/r 7 of the CCR, 2004 - the credit in input service distributors invoice is available in respect of quantum of service used in the respective units. Appeal allowed - decided in favor of appellant.
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2018 (1) TMI 47
Clandestine removal - It is the case of the department that the assessee removed clandestinely aluminium scrap and plastic scrap during the period 1991-92 to 1995-96 either under delivery challan or without delivery challan - whether the appellants have cleared the aluminium scrap which was alleged by the revenue and whether the plastic scrap cleared by the appellants is liable to duty? - Held that: - As regards aluminium scrap we find that the only scrap which was cleared out of factory is those scrap for which the challans were issued. The remaining quantity was used in the manufacture of final product as a packing material. During the course of manufacture of plastic vessel tank the aluminium was used as a mould. After manufacture of such vessel tank, such aluminium gets scrapped and therefore that scrap material was used for the purpose of packing of final product which was cleared on payment of duty. The aluminium used as a mould for manufacture of plastic vessel tank and subsequently used for packing of final product, it is clearly covered by N/N. 217/86, hence no duty can be demanded on such scrap. As regards the aluminium scrap shown to have been cleared as per the challans same alone is liable for duty. The matter is remanded to the adjudicating authority only for requantification of demand - appeal allowed by way of remand.
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2018 (1) TMI 46
Whether the goods manufactured and cleared by the appellant is machinery falling under chapter heading 841900 or parts thereof and consequently whether the same is eligible for exemption N/N. 56/95-C.E. either under Sr. No. 14 and 15? - Held that: - in the present case the process of assembly was not simple assembly operations of fixing screws, nuts etc. but a complex process requiring engineering skills. Further, Explanatory Notes V with regard to Rule 2(a) of Rules of Interpretation in respect of classification of articles presented unassembled or disassembled provides that complete or finished articles are to be presented unassembled or disassembled. Clearly in the present case complete or finished articles were never presented in unassembled or disassembled conditions. Penalty u/s 173Q - Held that: - Merely by not mentioning the sub-clause the penalty cannot be avoided - As regards the bonafide belief entertained by the appellant regarding the claim of exemption entry under notification in respect of machinery falling under 8419.00 we find that the appellant was very much aware about legality of the issue and therefore they have represented to the government via CII to make uniform rate of machine and parts i.e. 10%. Therefore appellant knowingly claimed the wrong exemption - penalty upheld. Appeal dismissed - decided against appellant.
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2018 (1) TMI 45
SSI Exemption - N/N. 175/86-CE dated 1.3.1986 - Held that: - it has been categorically admitted that the aforesaid four units are not separate entities, but functioning as one and the same, therefore, value of clearances of excisable goods of each unit is to be clubbed with clearance value of M/s Usha Thermosets Pvt. Ltd. so as to determine the eligibility of exemption under the N/N. 176/86-Central Excise during the relevant period. It cannot be denied that observation of principle of natural justice is fundamental for delivery of justice which not only includes opportunity of personal hearing but supply of statements and other documentary evidences so as to enable the person against whom charges are leveled to rebut the said charges. Even though, during the course of hearing the adjudication file was placed where the statements are stated to be not available, however, in the impugned order no categorical finding about non-availability of such statements has been recorded - the statements are not available or witnesses cannot be produced, the adjudicating authority may proceed to decide the case. Appeal allowed by way of remand.
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2018 (1) TMI 44
CENVAT credit - Alleging that the credit availed at Unit I not admissible, show cause notice was issued for recovery of the credit amounting to ₹ 4,53,303/- and ₹ 3,19,403/- with interest and penalty - Held that: - the issue is covered by the judgment of this Tribunal in OPG Metals Pvt. Ltd. [2016 (7) TMI 497 - CESTAT CHENNAI] where it was held that the department has not disputed the duty-paid nature of the capital goods, discharge of duty by the appellant, usage of capital goods for generation of electricity and consumption of such electricity by the appellant in the manufacture of dutiable final products - credit allowed - appeal allowed - decided in favor of appellant.
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2018 (1) TMI 43
Recovery of 5%/6% of the value of the exempted goods - non-compliance with the provision of Rule 6(3(ii) & (iii) of CCR, 2004 - Held that: - the Appellant had indicated inclusion of the clearance value to SEZ/100% EOU in arriving at the total turnover of the goods cleared. Even though the show cause notice was issued a year after i.e. 9.6.2014, no allegation on the correctness of proportionate credit reversed has been made out against the Appellant - the ld. Commissioner has travelled beyond the scope of the allegations leveled in the SCN which cannot be sustained. Since the ld. Commissioner has categorically observed that the Appellant had complied with the conditions of Rule 6(3)(ii) of CCR, 2004, the amount of 5%/6% of the exempted products sought to be recovered in the SCN cannot be sustained. Appeal allowed - decided in favor of appellant.
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2018 (1) TMI 42
Shortage/discrepancy of 3060 kgs. of finished goods - difference in the quantity mentioned in the respective balance sheet and in the RG-1 Register - Held that: - had the Range report been given at the initial stage, the litigation would not have continued so far to this Tribunal again. However, examining the report vis-`-vis the submission and findings, I find that apparent discrepancy in the balance sheet figure and respective statutory records noted by the Audit party had been properly addressed by the Range Officer in its report dated 22.9.2009 - the adjudicating authority ought to have considered and recorded a specific finding in relation to the apparent discrepancy of sales/production figures in the respective balance sheets vis-`-vis the statutory records maintained by the Assessee-Appellant - appeal allowed by way of remand.
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2018 (1) TMI 41
Penalty - SSI Exemption - Difference of opinion - Held that: - In view of the difference of opinion emerging between Hon'ble Members on the issue of penalty on Sh. Prem Khanna, M. D. in appeal no.E/3226/2009, the registry is directed to place the matter before Hon'ble President for nominating the third Member for resolving the following:- Whether in the facts and circumstances of the case the matter pertaining to penalty on She Prem Khanna, M. D. should be remanded to the adjudicating authority, as held by Member (Judicial)? - matter referred to Third Member.
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2018 (1) TMI 40
Area Based Exemption - N/N. 56/2002-CE dated 14.11.2002 - assessee located in the area of Jammu, is entitled to the refund of the amount of duty which they pay in cash. If, under a mis-apprehension liability, the assessee has paid the higher duty in cash, they would be entitled to the refund of the same. - they did not avail the credit of additional duty of customs - Difference of opinion - Held that: - As there are contrary views and difference of opinion between the Members, therefore, the matter be placed before the Hon'ble President to refer the matter to the third member to resolve the following issues: - Whether in view of the revenue neutral situation, the compliance with the condition of notification 56/2002-CE should not be insisted upon and the appeal allowed, as held by Member (Judicial) - matter referred to Third Member.
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2018 (1) TMI 39
CENVAT credit - failure to pay duty from PLA account - Rule 8(3A) of the Central Excise Rules, 2002 - Held that: - said issue came up before this Tribunal in the case of R.B Industries [2017 (10) TMI 611 - CESTAT CHANDIGARH], where it was held that reliance placed in the case of M/s Space Telelink Ltd. [2016 (3) TMI 1261 - DELHI HIGH COURT], where the order of the Gujarat High Court in Indsur Global Ltd. v. Union of India [2014 (12) TMI 585 - GUJARAT HIGH COURT] has been stayed - the demand u/r 8(3A) of CER, 2002 is not sustainable - appeal allowed - decided in favor of appellant.
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2018 (1) TMI 38
100% EOU - Refund of unutilized CENVAT credit - goods cleared to 100% EOU and SEZs - whether the clearances made by an 100% EOU to 100% EOU are deemed export or not? - Held that: - the goods cleared from 100%EOU to 100% EOU are deemed exports and therefore respondent is entitled to claim refund of accumulated Cenvat credit in their Cenvat credit account, in terms of Rule 5 of CCR, 2004 - reliance placed in the case of CCE & Cus. Vs. Anita Synthetics Pvt. Limited [2014 (9) TMI 368 - GUJARAT HIGH COURT] wherein it has been held that the goods cleared from one 100% EOU to another 100%EOU are deemed exports and assessees are entitled to claim refund under Rule 5 of Cenvat Credit Rules, 2004 - decided against Revenue.
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2018 (1) TMI 37
GTA services - Section 32E of Central Excise Act, 1944 - power to approach Settlement Commission - Held that: - Once it is established that applicant is not eligible to approach Settlement Commission, granting another opportunity to be heard on merits is meaningless - There may be cases where it is possible for the Commission to record a finding that the disclosure made in the application is “full and true”. There may, however, be situations in which the Commission may not be able to, at the stage of admission of the application, record a finding with any amount of certainty. In any such situation, it will not be legally impermissible for the Commission to keep the question open as it has done in the instant case to be examined at a later stage or at the stage of final disposal of the application. Settlement application rejected.
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CST, VAT & Sales Tax
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2018 (1) TMI 36
Recovery proceedings - section 44(1)(B) of the GVAT Act, 2003 - attachment of petitioner's stock - Held that: - no hearing is yet granted by the first appellate authority on the appeal and stay application though the same were filed on 16.11.2017. Thus, the impugned notice is issued on 22.11.2017 after a week despite the fact that the appeal and stay application were pending for hearing. It is not the case of the respondents that the same are not heard because of any fault attributed to the petitioner-Company - The respondent authorities should have restrained themselves from directing the Bank to deposit an amount of ₹ 15,72,74,830/- from the account held by the petitioner-Company towards recovery of the demand based on the assessment order dated 18.08.2017 till the hearing of the appeal and stay application of the petitioner - petition allowed.
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2018 (1) TMI 35
Whether, on the facts and in the circumstances of the case, the Gujarat Value Added Tax Tribunal was justified in refusing to grant waiver of pre-deposit for admission of appeal and grant of stay against recovery of dues? Held that: - there is nothing to indicate any complicity on the part of the appellant in filing the manual revised return with a view to defraud the Government. Even in the charge-sheet filed after conclusion of the investigation, there is no allegation whatsoever against the appellant and on the contrary, the proprietor and his son are shown as witnesses. In this background, when the additions have been made on the basis of such fraudulent revised return showing huge sales while the regular returns filed by the appellant were of sales of much less volume, it cannot be gainsaid that if the appellant is not involved in the fraud, it is by and large a dealer working on a small scale and having an annual turnover of rupees ten to twenty lakh and consequently, would not be in a position to pay even a fraction of the tax, penalty and interest, as assessed on the basis of the sales shown in the revised returns. Having regard to the fact that there is not even a whisper of an allegation against the appellant insofar as the commission of fraud by filing revised return is concerned, at least for the purpose of waiver of pre-deposit the appellant ought to have been given the benefit of doubt and permitted to prosecute the appeal without saddling it with the onerous liability of making pre-deposit of amounts beyond its capacity. Considering the backdrop of the case, this court is of the view that the Tribunal was not justified in not granting complete waiver in payment of pre-deposit to the appellant. Appeal allowed.
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Wealth tax
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2018 (1) TMI 34
Wealth tax assessment - treatment to agricultural land - Held that:- Agricultural land on its conversion for nonagricultural purposes ceased to be an agricultural land. Therefore, it becomes an asset for the purposes of Wealth-tax Act. See Shri. A.N. Manidatta (HUF) , Versus Assistant Commissioner of Wealth-Tax, Circle -2 (2) (1) , Bengaluru [2017 (3) TMI 1603 - ITAT BANGALORE]
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Indian Laws
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2018 (1) TMI 63
Smuggling - illegal recovery of Nepali Charas - compliance with section 50 of NDPS Act or not? - Held that: - Nothing significant has been asked in the cross-examination by the defence counsel from this witness as regards compliance of section 50 of the Act. Similarly the other witness of fact, Anuradha Singh (PW 3) has repeated the same version and has gone on to say in the examination in chief that the appellant was told that she could get herself searched in presence of a Gazetted Officer or Magistrate and that the same was her legal right, but the appellant stated that she was ready to be searched by the police party as she had already been arrested. Thereafter at the instruction of the staff the three lady Constables, which included PW 3 as well, took search. The appellant came out after getting the thaili of cloth detached from her body by lady Constable Anita Dhruve, from which 6 packets of Nepali charas of bigger size and 12 packets of oval-shaped Nepali charas were taken out. From PW 4, Rampal Singh, the investigating officer, the defence has not asked anything regarding non-compliance of section 50 of the Act - It was essential for the prosecution witnesses to bring on record that the seal which was used at the time of sealing the alleged recovered contraband substance was compared with the seal on the said material when brought before Court for being exhibited and only after the seal was found matching, it could be held that it was the same case property which was recovered from the accused and sealed on the spot. This has not been done and hence it is an important missing link in this case. Whether the prosecution has been able to prove successfully that the said contraband substance (charas) was recovered from the appellant? - Held that: - there is no evidence found on record of keeping the sample of the alleged recovered contraband substance, remainder and sample seal in safe custody in Malkhana, till the sample along with sample seal was sent to the Forensic Science Lab and the remainder contraband substance was produced before Court to prove that on it was found seal of SI Ram Pal Yadav at the time of statement of PW 1 in cross-examination, whose seal was affixed on the spot. This leaves gnawing gap in the prosecution's case to prove that the sample of the same contraband substance was sent for being tested to the Forensic Science Lab which was recovered from the accused on the spot - there is huge missing link which would leave doubt in the mind as to whether the sample sent to the FSL was that of alleged recovered contraband which was recovered from the accused on the spot and consequently the recovery of said contraband would itself become suspect. Whether the prosecution has made compliance of section 57 of the NDPS Act, which required the police party to send a report of arrest of the accused and seizure of contraband substance made from her, to its higher authorities? - Held that: - There is no evidence on record to the effect that any such report was prepared by the police party making arrest of the accused and seizing the contraband substance from her, hence question does not arise of having sent any such report to the higher authorities. The purpose behind this compliance is that no false plantation of any contraband substance be allowed to be made by keeping a check of such kind. All the above-mentioned link evidence being missing it cannot be held beyond doubt that prosecution has been able to prove that the said amount of charas was recovered from the accused, to possess which she did not have valid license. The learned lower Court has not made proper appreciation of evidence on record and has omitted to notice these irregularities/infirmities in the prosecution evidence. In view of this the conviction judgment of the accused appellant may not be sustained. The accused appellant deserves to be acquitted of the charge. Appeal allowed.
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2018 (1) TMI 62
Smuggling - Charas - Charge under Sections 20 (b) (2) (c) (ii) of N.D.P.S. Act - Held that: - A careful perusal of the statements of all the aforesaid prosecution witnesses disclose that they have complied the mandatory provisions provided under the N.D.P.S. Act. It is true that in this case all the prosecution witnesses are police officials but there is no reason to disbelieve their statements. They all are independent witnesses and the appellants have not shown any reason in their statements u/s 313 Cr.P.C. as to why the police officials have falsely implicated them in this case. Only due to the reason that the prosecution witnesses are police officials, their entire evidence cannot be discarded, specially when no material discrepancy is seen in their statements. The amount of Charas recovered from the possession of the appellants is multiple times more than its commercial quantity, which is 1 Kg., whereas the appellants were found carrying 12 Kg of Charas with them. Therefore, the amount of contraband being of such huge quantity and Charas being a very expensive contraband, it cannot be planted by the police. The facts of the present case clearly show that the appellants were in conscious possession of Charas as they were caught red-handed by the police with Charas kept in the bag, which they were carrying. Appeal dismissed.
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2018 (1) TMI 61
Release on bail - compliance of section 42 of NDPS Act - Held that: - in the present case it can safely be held that since the search was made in the presence of a Gazetted Officer and the secret information which was received by an officer was the Gazetted Officer, there was no need for recording the same and to pass on the same to higher authority. There was therefore sufficient compliance made in the present case because the secret information was recorded in writing and thereafter a team of officers was constituted after consultation with the senior authority for making search of the accused and seizure of the illegal narcotic injections from him. Though there are a number of other arguments which have been made by the learned amicus curiae, they need not be discussed in detail at the stage of bail. Bail application dismissed.
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