TMI Tax Updates - e-Newsletter
January 6, 2017
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Service Tax
Central Excise
CST, VAT & Sales Tax
Indian Laws
TMI SMS
Highlights / Catch Notes
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Income Tax:
Deemed dividend u/s 2(22)(e) - HUF - share certificates were issued in the name of the Karta - it is no gainsaying that since HUF itself is not the registered shareholder, the provisions of deemed dividend are not attracted - SC
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Income Tax:
TDS u/s 194H - non deduction of TDS to milk societies from whom milk was purchased in lieu of services rendered by them in the form of collection of milk from the cattle owners and supply of the same to the assessee - not in the nature of commission or brokerage - No TDS - HC
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Income Tax:
Revision u/s 263 - when a partner retires from the partnership firm, whatever amount received by the partner over and above his capital account is not liable for capital gain tax - CIT was not correct in coming to the conclusion that the order passed by the A.O. is prejudicial to the interest of the revenue - AT
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Income Tax:
TDS u/s 194C - even if payment is made to an Agent so long as the payment is meant for meeting the expenditure in the form of payment to the railways, it stands excluded from the provisions of Section 194C - AT
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Income Tax:
Deduction u/s 54 - assessee has utilized other funds (apart from sale consideration) for constructing residential house and for this reason only he cannot be denied deduction u/s 54 - AT
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Income Tax:
There is no statutory provision under the Income Tax Act, 1961, which provides that in case search was conducted/assessment proceeding under Section 153A has been initiated then the tax, which remains unpaid by the assessee for the same period cannot be recovered from the assessee. - HC
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Income Tax:
Stay on recovery of demand - If the person has the capacity to pay, may be by out of his movable or immovable properties and inspite of that the ground is contended as of hardship, same cannot be termed as genuine hardship - HC
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Income Tax:
Deduction u/s.80JJA - whether baggase/husk is not a waste but is a by-product of agriproduce processing industry - circular cannot override the clear words of Section 80JJA of the Act which provides deduction in respect of profits and gains derived from the business of collecting and processing/treating of biodegradable waste i.e. bagasse into briquettes for fuel - AT
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Income Tax:
Levy fo Penalty - AO failed to strike off either of the limbs of section 271(1)(c), which are not satisfied by the assessee and consequently, notice issued under section 274 r.w.s. 271(1)(c) of the Act is bad in law and order levying penalty for concealment thereafter, is infructuous - AT
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Income Tax:
TDS u/s 194C - nature of composite contract - supply contract or works contract - supply of main plant at Chandrapur TPS extension project - Held as supply contract not liable to TDS - AT
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Income Tax:
Disallowance u/s 37(1) on account of any allocation of cost - The cost of the services provided by the AEs has been allocated on a formula which has been followed form year to year and there is no merit in disallowance of the cost incurred on receipt of support services from its AE - AT
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Income Tax:
TDS u/s 194C OR 194J - availing of composite set of services such as stevedoring, loading and unloading, etc. - assessee has rightly made deduction of tax at the rates applicable u/s 194C - AT
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Customs:
Refund of provisional ADD - Rules are very clear and unambiguous and they provide for refund of provisionally collected anti-dumping duty if the said provisional anti-dumping duty is withdrawn in accordance with the Rules - AT
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Customs:
Valuation - enhancement of 20% of declared value - related party transaction - merely because Foreign and Indian company having 50-50 percent equity in the Indian entity. It does not fall under the definition of related person as provided under Rule 2(2) of the Customs Valuation Rules, 1988. - AT
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Customs:
Valuation - related party transaction - know how agreement - it was considered that royalty is not the condition of sale of the imported goods, royalty not included - AT
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Corporate Law:
Winding up petition - the company admitted its liability to repay the term loan but failed and neglected to repay the same or any part thereof - Willful defaulter - HC passed the interim order against the company
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Service Tax:
Composite contract with foreign supplier - erection, commissioning or installation services and consulting engineering service - levy of service tax on the service elements by vivisecting the composite contract cannot be upheld. - AT
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Service Tax:
CENVAT credit on unregistered premises - reverse charge mechanism - As the tax has been discharged on ‘reverse charge’ mechanism, the identity of provider of service is irrelevant - credit allowed - AT
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Service Tax:
Renting of Immovable Property service - collection of excess amounts from clients - deduction of the amount of the property tax - he appellants have not got the invoices reassessed for the revised value - It is possible that the clients would have taken the credit of service tax shown in the invoices - no relief to the assessee - AT
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Central Excise:
Refund claim - duty paid under protest - unjust enrichment - Time bar - benefit of ‘payment of duty under protest’ made by the manufacturer cannot be extended to the buyer - AT
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Central Excise:
Iron ore fine being a waste emerging during the process of crushing and screening of iron ores and cleared without payment of duty would not call for payment of 10% of the sale value of the product - AT
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Central Excise:
Interest for delayed reversal of credit - This case is revenue neutral inasmuch as had the cenvat credit been reversed, the same would have been eligible for credit to the sister unit - there is no loss of Revenue to the Government Exchequer, and as such, there is no question of compensating the Government for loss of any Revenue. - AT
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Central Excise:
Reversal of CENVAT credit - certain inputs shown the input as waste and value of the input was shown reduced - So long the input is lying in the factory credit cannot be asked to be reversed. Needless to say that as and when the input is cleared from the factory it will be liable for duty in terms of Rule 3(5B) of Cenvat Credit Rules, 2004. - AT
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Central Excise:
Reversal of Cenvat Credit - Restructuring of business - transfer of ownership of their captive power plant, installed within the factory - no amount is required to be paid under Rule (4) on capital goods as there has been no removal - AT
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Central Excise:
Valuation - The extra consideration received by the appellant over and above on actual insurance charges, is required to be added in the assessable value of the finished goods - AT
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Central Excise:
Valuation - designing and engineering charges collected from buyers under separate debit notes were deemed to be part of invoice price irrespective of fact that they were not shown in the invoice but in separate debit notes. - Demand confirmed invoking extended period of limitation - AT
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Central Excise:
100% EOU - Eligibility of concessional rate of duty on domestic clearances - the condition stipulated for eligibility to excise duties, instead of half of the aggregate of duties of customs, that ‘raw materials’ be domestically procured does not permit the latitude of treating ‘consumables’ as ‘raw materials.’ - AT
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Central Excise:
Eligibility of CENVAT credit - cement and TOR steel cannot be considered as inputs which are used in the fabrication or manufacture of capital goods - credit disallowed - AT
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Central Excise:
The stampers used for manufacture of CDs are capital goods falling under Chapter 85 - benefit of exemption under N/N. 67/95-CE dated 16/03/1995 available even if CDs are exempted from duty of excise - AT
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VAT:
Condonation of delay - the court cannot interpret the law in such a manner so as to read into the Act an inherent power of condoning the delay by invoking Section 5 of the Limitation Act, 1963 so as to supplement the provisions of the VAT Act which excludes the operation of Section 5 by necessary implications. - SC
Articles
Notifications
Circulars / Instructions / Orders
News
Case Laws:
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Income Tax
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2017 (1) TMI 331
Deemed dividend u/s 2(22)(e) - HUF - share certificates were issued in the name of the Karta - whether HUF cannot be a registered shareholder in a company and hence could not have been both registered and beneficial shareholder, loan/advances received by HUF could be deemed as dividend? - Held that:- In the instant case, the payment in question is made to the assessee which is a HUF. Shares are held by Shri. Gopal Kumar Sanei, who is Karta of this HUF. The said Karta is, undoubtedly, the member of HUF. He also has substantial interest in the assessee/HUF, being its Karta. It was not disputed that he was entitled to not less than 20% of the income of HUF. In view of the aforesaid position, provisions of Section 2(22)(e) of the Act get attracted and it is not even necessary to determine as to whether HUF can, in law, be beneficial shareholder or registered shareholder in a Company.
It is also found as a fact, from the audited annual return of the Company filed with ROC that the money towards share holding in the Company was given by the assessee/HUF. Though, the share certificates were issued in the name of the Karta, Shri Gopal Kumar Sanei, but in the annual returns, it is the HUF which was shown as registered and beneficial shareholder. In any case, it cannot be doubted that it is the beneficial shareholder. Even if we presume that it is not a registered shareholder, as per the provisions of Section 2(22)(e) of the Act, once the payment is received by the HUF and shareholder (Mr. Sanei, karta, in this case) is a member of the said HUF and he has substantial interest in the HUF, the payment made to the HUF shall constitute deemed dividend within the meaning of clause (e) of Section 2(22) of the Act. This is the effect of Explanation 3 to the said Section, as noticed above. Therefore, it is no gainsaying that since HUF itself is not the registered shareholder, the provisions of deemed dividend are not attracted. For this reason, judgment in C.P. Sarathy Mudaliar,[1971 (10) TMI 8 - SUPREME Court ] relied upon by the learned counsel for the appellant, will have no application. That was a judgment rendered in the context of Section 2(6-A)(e) of the Income Tax Act, 1922 wherein there was no provision like Explanation 3.
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2017 (1) TMI 324
Deduction u/s 54 denied - AO observe that deduction for construction of residential house is allowable u/s 54 of the Act only if the assessee constructs the house within a period of three years after the date of transfer of original asset, whereas assessee commenced and almost completed the construction of new residential house much before the date of transfer of capital asset - Held that:- Provisions of section 54 of the Act contemplates that deduction u/s 54 of the Act can be made by assessee only if a residential house is purchased within one year before or two years after the date of transfer of old residential house or in the alternative if the assessee constructs new residential house within three years from the date of transfer of capital asset. We find that the assessee is eligible to claim deduction under this section even if a new residential house is purchased within one year before the date of transfer of capital asset which means that assessee has to make use of funds other than the sale consideration of house sold for investing in a residential house and it is not mandatory that only the sale consideration of house sold is to be utilized for purchasing or constructing a new residential house. In the given case assessee has utilized other funds (apart from sale consideration) for constructing residential house and for this reason only he cannot be denied deduction u/s 54 of the Act.
Further going through the provisions of section 54 of the Act we also observe that there is no mention about the date of start of construction of residential house but it only refers to a construction of a residential house which in our view is the date of completion of the constructed residential house habitable for the purpose of residence.
Thus in the case of assessee long term capital gain arose from sale of old residential house on 18.07.2008 and assessee invested ₹ 53,92,287 in constructing another residential house construction of which was commenced in 2006 but was completed on 16.4.2009 and was well within the statutory time limit meant for constructing of new residential house within 3 years from the date of transfer of capital asset as envisaged in the provisions of section 54 of the Act and, therefore, assessee is eligible to claim deduction u/s 54 - Decided in favour of assessee
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2017 (1) TMI 329
Assessment u/s 153A validity - Held that:- We do not find any merit in this petition. The special leave petition is, accordingly, dismissed. HC order confimed [2016 (12) TMI 1195 - ORISSA HIGH COURT] as taking into consideration the fact that there is availability of alternative remedy of appeal, we thought it proper not to interfere with the issue since only notice U/s.153-A has been issued to the petitioner with a direction to satisfy the authority, moreover, the search and seizure was conducted on 11.09.2014, well within the knowledge of the petitioner – assessee, but he has not challenged the authority of the jurisdiction under the Act fairly for a period of more than two years and it is only after the notice U/s.153-A of the Act, 1961 issued, this writ petition has been filed.
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2017 (1) TMI 323
Addition to the assessee’s profit by rejecting the books of account and estimating 8% profit on the total turnover - CIT(Appeals) has sustained the addition on the ground that the assessee has not been able to reconcile and explain the difference found between the said tentative profit and loss account and the actual profit and loss account - Held that:- In our considered opinion the tentative profit and loss account found during the course of survey alone cannot be a basis for making an addition of huge amount of ₹ 3.43 crores. Dehorse any other corroborative evidence of suppressed sale or booking of any bogus expenditure, this addition is not sustainable on the anvil of Hon’ble Apex Court decision in the case of S. Khader Khan (2007 (7) TMI 182 - MADRAS HIGH COURT ). If the assessee’s books of account are found to be not reliable, the accepted and permissive course of action in this regard is estimate of profit by applying the prevalent rate of profit in the industry and/or past results of the assessee.
Hence this addition solely based upon a tentative trading/contract works account for the period 01-04-2011 to 07-02-2012 found at the time of survey alone in absence of any books of account or other documents found is not at all sustainable. Since no evidence whatsoever with regard to finding regarding suppressed sale has been brought on record and the AO has rejected the books of account, we are of the opinion that the addition by the AO by applying 8% gross profit as in earlier years is required to be restored and the addition of R.3,43,24,120/- based upon the tentative trading account found on survey is liable to be deleted.- Decided in favour of assessee
Disallowance u/s 40(a)(ia) - it is the assessee’s plea that the sums involved have been paid by the end of the year and no amounts are outstanding - Held that:- As decided in case of M/s Chadda Transport [2016 (3) TMI 1019 - ITAT NAGPUR ] Since we have already held that the provisions of section 40(a)(ia) were not attracted inasmuch as no amount was payable as on the close of the year as well as in absence of any contracts, there was no obligation on the part of the assessee to deduct the tax at source - Decided in favour of assessee
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2017 (1) TMI 322
Entitlement to claim deduction u/s.10A on the profit of Unit B also - AO restricted the deduction u/s.10A on the ground that the so called Unit-B treated by the assessee is nothing but a mere expansion of Unit-A and therefore not eligible for deduction u/s.10A - Held that:- Since the Hon’ble High Court in assessee's own case has already upheld the finding given by the Tribunal that Unit-B is a separate and independent unit for the purpose of claiming deduction u/s.10A of the I.T. Act, therefore, in absence of any contrary material brought to our notice by the Ld. Departmental Representative against the decision of the Hon’ble High Court in assessee’s own case, we find no infirmity in the order of the CIT(A) holding that assessee is entitled to claim deduction u/s.10A in respect of Unit-B.
Deduction under section 80G - Held that:- We restore the issue to the file of the Assessing Officer with a direction to consider the claim of deduction u/s.80G of the Act after verifying the donation receipts along with approval u/s.80G(5)(vi) of the Act. The Assessing Officer shall decide the issue as per fact and law after giving due opportunity of being heard to the assessee.
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2017 (1) TMI 315
Revision u/s 263 - directing the Assessing Officer to set off the brought forward losses, as per CBDT Circular dated 16/07/2013 and then worked out the deduction u/s 10A of the Act and reexamine the claim on admissibility of loss on disposal of investments - Held that:- Section 10A, as amended, is a provision for deduction, the stage of deduction would be while computing the gross total income of the eligible undertaking under Chapter IV of the Act and not at the stage of computation of the total income under Chapter VI. All the appeals shall stand disposed of accordingly. Thus, the Hon'ble Supreme Court held that no adjustment of brought forward losses/unabsorbed depreciation of the eligible unit shall be made before allowing deduction of profits of the eligible unit, which is to be allowed under chapter-IV of the Act without resorting to the adjustments as contemplated under chapter VI of the Act, thus, now, the issue of proceedings u/s 263 of the Act by the CIT on the first issue of adjustment of brought forward losses/unabsorbed depreciation of the eligible unit against the profits of the current year of the eligible unit is academic in nature in view of binding decision of Hon'ble Supreme Court in the case of CIT vs Yokogawa India Ltd. ( 2016 (12) TMI 881 - SUPREME COURT ) and hence the said proceedings u/s 263 of the Act have become in-fructuous.
For adjustment of losses we are in agreement with the contentions of the ld. counsel for the assessee that So far as, loss on the investment of ₹ 22,36,163/- being writing off to the profit & loss account of the assessee and claimed as deduction from the profits of the eligible unit, which was stated to be incurred by the assessee in order to attract the Indian diaspora to its website, the assessee/STPI Unit has to spend aggressively on brand building and advertising outside India and for this purpose the assessee/STPI Unit has three hundred percent subsidy in three markets UK, U.S.A. & U.A,E and during impugned Assessment Year under appeal, the assessee has closed 100% subsidiary in UAE and incurred loss on investment of ₹ 22,36,163/- is charged to P & L Account of STPI. Thus, it was submitted before us that the profit of STPI Unit of ₹ 16,88,45,731/- is after such loss reduced from the profit of the company. We have observed that the Assessing Officer has duly considered the said facts which were submitted before the Assessing Officer during the course of hearing by letter dated 27/02/2014, which is placed on paper book at page no.39 and conscious decision was taken by the Assessing Officer before allowing the said loss. Even if the said loss is disallowed, the same will enhance profits of eligible undertaking by ₹ 22,36,163/-, which in any case is exempt u/s 10A of the Act keeping in view decision of Hon'ble Bombay High Court in the case of Black & Veatch Consulting Pvt. Ltd.(2012 (4) TMI 450 - BOMBAY HIGH COURT).
Now the Revenue has also come out the Circular No.37/2016 dated 02/11/2016, wherein, it has been decided by the CBDT that any additions made on account of provisions u/s 32, 40(a)(ia), 40A(3), 43B, etc. to the income of the eligible unit shall not be contested by Revenue as it has the effect of increasing the profits of eligible unit, which in any case is deductible due to the exemption granted under the Act and hence it is decided to withdraw/not pressed such appeals. The sanctity and mandate of the aforesaid circular is to avoid unnecessary litigation in case where there is increase in profits of eligible units due to disallowance made by the Revenue, which in any case is entitled for exemption/deduction as contemplated for eligible unit. Hence, the whole exercise as contemplated by proceedings u/s 263 are academic in nature and cannot be allowed to proceed and is hereby quashed. - Decided in favour of assessee
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2017 (1) TMI 314
Deduction u/s.80JJA - whether baggase/husk is not a waste but is a by-product of agriproduce processing industry which was purchased and not collected & processed or treated by the assessee, which is a pre-requisite for claiming deduction u/s.80JJA? - Held that:- As decided in assessee's own case the word "collecting" means to gather; to fetch. It is a neutral word and does not mean collection for consideration or collection without consideration. It is an admitted/undisputed position that the respondent assessee has collected bagasse from sugar factories after having made payment for the same. Therefore, the aforesaid requirement of collecting as provided under Section 80JJA of the Act is satisfied. It is a undisputed finding of fact that the collected bagasse has been used by the respondent assessee to make briquettes for fuel as that indeed is the business of the respondent-assessee. The reliance upon the circular No.772 dated 23/12/1998 by the appellant is misplaced. The aforesaid Circular does not restrict its benefits only to local bodies. In any event the circular cannot override the clear words of Section 80JJA of the Act which provides deduction in respect of profits and gains derived from the business of collecting and processing/treating of biodegradable waste i.e. bagasse into briquettes for fuel. - Decided in favour of assessee
Claim of depreciation on windmills - assessee was not a registered owner of the windmills and it was purchasing electricity from Nav Maharashtra Chakan Oil Mills Ltd. (NMCOML), thus having no title/dominion and right to use the asset - Held that:- We find the Ld.CIT(A) following his order for A.Y. 2008-09 & 2009-10 allowed the claim of depreciation. We find the Tribunal in assessee’s own case upheld the order of the CIT(A) for A.Y. 2008-09 and 2009-10 and dismissed the appeal filed by the Revenue wherein held The very concept of depreciation suggest that the tax benefit on account of depreciation legitimately belongs to one who has invested in the capital asset, is utilizing the capital asset and thereby losing gradually investment caused by wear and tear, and would need to replace the same by having lost Its value over a period of time. It is well settled that there cannot be two owners of the property simultaneously and in the same sense of the term. The intention of the legislature in enacting section 32 would be best fulfilled by allowing deduction in respect of depreciation to the person in whom for the time being vests the dominion over the building and who is entitled to use it in his own right ad is using the same for his business or profession. Assigning any different meaning would not sub-serve the legislative intent. In CIT Vs National Cooperative Consumers Federation Ltd. (2000 (9) TMI 15 - DELHI High Court ), the Delhi High Court followed its Full Bench decision in Gowersons Publishers (P) Ltd. Vs CIT (1999 (8) TMI 39 - DELHI High Court ) and held that the assessee was entitled to depreciation allowance in respect of godown-cum-showroom purchased but, not registered in its name.- Decided in favour of assessee
Disallowance on account of Employees’ contribution to Provident Fund and ESIC and Labour Welfare Fund - assessee had made contributions in the respective funds after the due date as specified under the provisions of relevant Acts - Held that:- Although the contribution to the above funds were made after due date as specified under the relevant Acts, but before the due date of filing of return of income under the Income Tax Act. This fact has not been disputed by the Department. The Hon'ble Supreme Court of India in the case of Commissioner of Income Tax Vs. Alom Extrusions Ltd. (2009 (11) TMI 27 - SUPREME COURT ) has held that the contributions made after due date as prescribed under the Provident Fund Act but before the due date of filing of return of income, the assessee is eligible to claim deduction thereof. - Decided in favour of assessee
Deduction u/s.80IA(4) on windmill - Held that:- We are of the considered view that this issue needs a revisit to the file of Assessing Officer. The Assessing Officer shall re-examine the claim of assessee in respect of deduction u/s. 80IA(4) in the light of decision of Pune Bench of the Tribunal in the case of Serum International Ltd. Vs. Addl. CIT (2013 (1) TMI 688 - ITAT PUNE ).
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2017 (1) TMI 313
Penalty under section 271(1)(c) - income declared by the appellant in the return of income filed as per statement u/s 132(4) - Held that:- Assessing Officer in the first year i.e. assessment year 2005-06 has only given a direction and has not even mentioned as to which link of section 271(1)(c) of the Act is applicable in the facts of the case. In respect of other assessment years, the Assessing Officer has recorded satisfaction for initiating penalty proceedings on account of concealment of income and furnishing of inaccurate particulars of income. Under the provisions of section 271(1)(c) of the Act, penalty for concealment is leviable where the assessee has fulfilled either conditions i.e. concealment of income or furnishing of inaccurate particulars of income. The Assessing Officer while initiating penalty proceedings has to be satisfied as to under which limb, the penalty is leviable and consequent thereto, issue notice in this regard. However, in the facts of the present case and as pointed out hereinabove, the Assessing Officer has failed to record satisfaction correctly and consequently, we hold that initiation of penalty proceedings against the assessee are not valid for non-recording of satisfaction by the Assessing Officer while completing assessment proceedings.
Further, the Assessing Officer has failed to strike off either of the limbs of section 271(1)(c) of the Act, which are not satisfied by the assessee and consequently, notice issued under section 274 r.w.s. 271(1)(c) of the Act is bad in law and order levying penalty for concealment thereafter, is infructuous. Accordingly, we hold so.- Decided in favour of assessee
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2017 (1) TMI 312
TDS u/s 194C - nature of composite contract - supply contract or works contract - supply of main plant at Chandrapur TPS extension project - Held that:- The Hon’ble jurisdictional High Court in the case of CIT vs. Glenmark Pharmaceutical Ltd. [2010 (3) TMI 289 - BOMBAY HIGH COURT ] has clearly expounded that if the property in the product manufactured passes to the customer upon delivery and the material that was required was not sourced from the customer/purchaser but was independently obtained by the manufacturer from a person other than customer, the contract entered into by the assessee was not a contract for carrying on work within the meaning of section 194C.Considered from this point of view also the assessee is not liable for deduction of tax at source on the equipment good supply contract.
Contract of supply of material is a separate distinct contract and on which no deduction is permissible u/s 194C. - Decided in favour of assessee
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2017 (1) TMI 311
Disallowance under section 37(1) on account of any allocation of cost - Cost allocated by the AEs - Held that:- Assessee has placed on record the evidence of support services being received from the AEs which are in the nature of back office accounting services and IT support services which enable the assessee to run its business in India. The assessee has no establishment in India and has only a branch office wherein it is utilizing the place of its AEs and is also using services for carrying on its service or providing procurement services to its principal, i.e. EIMG, Switzerland, then it cannot be said that the said expenditure has not been wholly and exclusively incurred for the purpose of business. The cost of the services provided by the AEs has been allocated on a formula which has been followed form year to year and there is no merit in disallowance of the cost incurred on receipt of support services from its AE.
In the entirety of the fact and evidences produced by the assessee in respect of its claim of receipt of services from its AEs in India, both support services and Corporate services and also considering the fact that the assessee was recovering the said cost with markup of 18.8%, there is no merit in the disallowance made under section 37(1) of the Act. Further, the transaction is deemed to have been accepted at Arm’s Length price where no such adjustment has been made by the Assessing Officer. The Assessing Officer in its order makes a remark that the assessee had not produced the order of TPO for assessment year 2011-12 to show that the cost allocation transactions were accepted at Arm’s Length. There is no merit in the said observation of the Assessing Officer as under the statute it is incumbent upon the Assessing Officer, if it thinks fit, to make a reference to the TPO under section 92C of the Act to benchmark the international transactions entered into by the assessee. The Assessing Officer in the present case has failed to make any such reference. Consequently, there is no merit in the observation of the Assessing Officer in this regard. Accordingly, we direct the Assessing Officer to allow the expenditure - Decided in favour of assessee
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2017 (1) TMI 319
Allowability of claim for bad debts - maintenance of two sets of book - Held that:- The books maintained for the purposes of the Companies Act duly approved by the Board of Directors and placed before the shareholders at the Annual General Body Meeting of the Company being contain inter alia the profit and loss account for the relevant previous year prepared in accordance with the provisions of Part II-III of Schedule VI to the Companies Act 1956 will form the basis of an assessment in terms of Chapter XII-B, Special Provisions relating to certain companies, that provide for an assessment of Minimum Alternate Tax (MAT). The Income Tax Act requires for the assessee to follow a parellelly consistent method of accounting in accordance with section 145 thereof. The books maintained for the purposes of the Income Tax Act shall comply with the provisions of section 145 and shall form the basis for an assessment thereunder. The error in the order of assessment is the juxtaposition of the two books by the assessing officer. The creation of a provision for bad debts in the corporate accounts thus does not, in any way, impact the claim of bad debt u/s 36(1)(vii) of the Act in the regular computation of income. This submission of the department stands rejected.
The claim of bad debts relates to debts actually written off and not a provision made in this regard. The Supreme Court in the case of Vijaya Bank (2010 (4) TMI 46 - SUPREME COURT ) explaining the methodology for proper write-off set out in accordance with the Judgment of the Supreme Court in Southern Technologies (2010 (1) TMI 5 - SUPREME COURT OF INDIA) states as if an assessee debits an amount of doubtful debt to the P&L Account and credits the asset account like sundry debtors Account, it would constitute a write off of an actual debt. However, if an assesse debits provision for doubtful debt to the P&L Account and makes a corresponding credit to the Current liabilities and provisionson the Liabilities side of the balance sheet, then it would constitute a provision for doubtful debt. In the latter case, assesse would not be entitled to deduction after 1-4-1989.
In view of the above, the Assessee has, in accordance with the provisions of Section 36 (1)(vii), written off the bad debt and the claim is allowable. Substantial Question is answered in favour of the assessee
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2017 (1) TMI 318
Disallowance u/s 14A read with Rule 8D - Held that:- The exemption extended to dividend income would relate only to the previous year when the income was earned and none other and consequently the expenditure incurred in connection therewith should also be dealt with in the same previous year. Thus, by application of the matching concept, in a year where there is no exempt income, there cannot be a disallowance of expenditure in relation to such assumed income. (Madras Industrial Investment Corporation Ltd vs. CIT (1997 (4) TMI 5 - SUPREME Court )). The language of s.14A (1) should be read in that context and such that it advances the scheme of the Act rather than distort it.
In conclusion, we are of the view that the provisions of s. 14A read with Rule 8D of the Rules cannot be made applicable in a vacuum i.e. in the absence of exempt income. The questions of law are answered in favour of the assessee and against the department
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2017 (1) TMI 310
TDS u/s 194C OR 194J - availing of composite set of services such as stevedoring, loading and unloading, etc. - Held that:- Following the decision of the Coordinate Bench in the assessee’s own case for A.Y. 2004-05 and the case of Merchant Shipping Services P. Ltd. (2010 (11) TMI 692 - ITAT, Mumbai ) we sustain the impugned order of the CIT(A) in holding that the payments made by the assessee to NSICT are covered under section 194C of the Act and not under section 194J of the Act and therefore the assessee has rightly made deduction of tax at the rates applicable under section 194C of the Act
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2017 (1) TMI 328
Disallowance of commission payment - Held that:- It is a fact on record that the Assessing Officer has not made any adverse comment in respect of any party other than the five parties examined by him. It is also evident, in respect of rest of the parties the Assessing Officer has not made any enquiry. Therefore, without making any enquiry in respect of other parties, it is totally unjustified on the part of the Assessing Officer to disallow 90% of the commission payment on the basis of enquiry conducted by him in respect of five persons to whom aggregate amount of commission paid is only ₹ 11,06,549. More so, when the Assessing Officer has allowed 10% of the commission paid thereby agreeing that some amount of commission paid by the assessee is genuine. However, on what basis, he has quantified such payment to 10% of the amount paid by the assessee is unknown. Under these circumstances, we are inclined to set aside the impugned order of the learned Commissioner (Appeals) on this issue and restore the matter back to the file of the Assessing Officer for deciding assessee’s claim of commission payment afresh.
Disallowance of depreciation claimed on motor car - motor car is registered in the name of the director of the company - Held that:- Undisputed facts are, the motor car was purchased with the funds of the assessee. It appears, as an “asset” in the books of account of the assessee. There is also no dispute that motor car is wholly and exclusively used for the business of the assessee. Therefore, merely because the motor car was registered in the name of one of the directors under the Motor Vehicles Act, it cannot be said that the assessee is not the owner of the vehicle. For the purpose of claiming deprecation under section 32 of the Act. See Edwise Consultants Pvt. Ltd. v/s DCIT [2015 (12) TMI 297 - ITAT MUMBAI ]
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2017 (1) TMI 321
Validity of reopening of assessment - whether Mere mentioning of certain facts by the Settlement Commission will not make the Show Cause Notice invalid? - Held that:- As under the provisions of the Income Tax Act, 1961 if certain facts have been brought to the notice of the Assessing Officer relating to escapement of income chargeable to tax, he is bound to reassess the income of the assessee of the relevant years. The assessee does have a remedy to file objection and related documents which may be provided by the Assessing Officer. Not only this, the Settlement Commission while deciding case of respondent No.5 has not given any finding in respect of taxability or otherwise or unaccounted receipts / income in respect of the petitioner and has held that the Department shall be free to complete the proceedings initiated u/S. 148 on the basis of information / evidence available and after following the provisions of law.
Resultantly, this Court is of the considered opinion that the order passed by the Settlement Commission dt. 18/5/2016 does not warrant interference at the behest of the petitioner. The Settlement Commission, based upon the documents submitted by the respondent No.5 has passed a final order. So far as notices which have been issued u/S. 148 for the assessment year 2010-2011 and 2011-2012 is concerned, the proper course of action for the petitioner is to file return and if he so desires, to seek reasons / documents for issuing such notices and in case any application is preferred for demand of material on the basis of which assessment has been done, the material shall be given to the petitioner enabling him to defend his case. The assessing Officer, after granting opportunity of hearing to the petitioner and after taking into account the objections and the material, shall pass a speaking order in accordance with law.
This Court does not find any reason to interfere with the order passed by the Settlement Commission at the behest of the petitioner which has been passed in respect of respondent No.5 nor does find any reason to interfere with the notices u/S. 148 of the Income Tax Act, 1961.
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2017 (1) TMI 320
Non-deposition of tax - assessment under Section 153A - prosecution under Section 276C(2) - whether when notice has been issued under Section 153A on 18.09.2015, the earlier self assessment tax return submitted by the petitioner stands abated, therefore, petitioner is not liable to pay any tax to the respondent? - Held that:- In the present case, it is true that a notice was issued under Section 153 of the Act. The petitioner was asked to furnish true and correct particulars of income including the income, which was included by the petitioner in the original return while finalizing the total income, meaning thereby, the return filed in response to the notice under Section 153A includes the income tax income (if any) in addition to income originally declared by the petitioner while filing the return under Section 139(1) of the Act. Meaning thereby, in short, it is as clear as noon of the day that even after filing of the return under Section 153 of the Income Tax Act, in fact, originally declared and demand raised thereon remains alive.
There is no statutory provision under the Income Tax Act, 1961, which provides that in case search was conducted/assessment proceeding under Section 153A has been initiated then the tax, which remains unpaid by the assessee for the same period cannot be recovered from the assessee.
In the considered opinion of this Court, the ground raised by the petitioner for quashment of complaint by taking into account Section 153A does not arise. The application for stay is rejected and the admission is declined.
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2017 (1) TMI 325
TDS u/s 194C - non deduction of tds on payments towards freight charges - Held that:- The assessee categorically submitted that the payment was made to M/s. Exim Services towards freight charges that too for carriage of goods by rail. This claim of the assessee is not disputed by the tax authorities except stating that the payment is not made directly to the railways but to the Agent.
In our considered opinion the opening part of Section 194C refers to payments made to contractors but at the same time makes an exception to the payments made to such contractors if that amount has to be utilised for payment of rail fares. If the intention of the legislature was to make the payment directly to the railway authorities, then the exception provided in the Explanation should not have been introduced in Section 194C of the Act. Thus, on a conspectus of the matter, we are of the view that even if payment is made to an Agent so long as the payment is meant for meeting the expenditure in the form of payment to the railways, it stands excluded from the provisions of Section 194C of the Act. Under these circumstances, we accept the plea of the assessee by holding that there was no need to deduct tax at source with respect to the impugned payment to the contractor. -
As in the case of ACIT, Central Circle-2, Hyderabad vs., M/s. Janapriya Properties Pvt. Ltd., Hyderabad [ 2015 (1) TMI 1208 - ITAT HYDERABAD] Section 40(a)(ia) cannot be invoked in respect of payments already made before the end of the accounting year. - Decided in favour of assessee
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2017 (1) TMI 316
Validity of reopening of assessment - reasons to believe - Held that:- The reasons are bereft of any basis to come to the conclusion that the income chargeable to tax has escaped assessment nor any inference can be drawn therefrom that there was any failure on the part of the petitioner to disclose fully and truly all material facts necessary for assessment. Moreover, the petitioner in its objections to the reasons recorded pointed out that this is a case of mere change of opinion, as this very issue was the subject matter of inquiry during regular assessment proceedings as is evident from the Annexure-II to the notice dated 29th July, 2011 issued under Section 142(1) of the Act to the petitioner. The same was responded to by the petitioner by its communication dated 19th October, 2011.
In the above view, the impugned notice prima facie appears to be without jurisdiction as it does not even remotely suggest that there was any failure on the part of the petitioner to disclose fully and truly all material facts necessary for assessment - Decided in favour of assessee
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2017 (1) TMI 326
Enhanced compensation received by assessee would be taxable as ‘income from other sources’ - Held that:- Interest received u/s. 28 of the Land Acquisition Act, 1894 is nothing but enhanced compensation on the lands acquired. Since the lands are agricultural lands originally, the compensation is exempt u/s. 10(37). In view of that, we uphold the claims of assessee and the grounds are considered allowed. AO is directed to grant exemption as claimed. See Movaliya Bhikhubhai Balabhai Versus Income Tax Officer - TDS - 1 - Surat & 1 [2016 (5) TMI 488 - GUJARAT HIGH COURT ]
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2017 (1) TMI 309
TDS u/s 194H - non deduction of TDS to milk societies from whom milk was purchased in lieu of services rendered by them in the form of collection of milk from the cattle owners and supply of the same to the assessee - Held that:- Assessee’s transaction with distributor is sale. The risk and reward is with the distributor. The transaction is principal to principal basis. The distributor is not the agent of the assessee. From the side of assessee, no amount has been paid in form of commission or brokerage and the case laws referred by the assessee are squarely applicable.
No rendering of any services and the payment is not made for any managerial services Supply of milk and milk products by assessee to the distributors was a sale agreement on principal to principal basis not liable for deduction of tax at source u/s 194H. See Principal Commissioner of Income Tax vs. Sikar & Jhunjhunu Zila Dugdh Utpadak Sahakari Sandh Ltd [2017 (1) TMI 242 - RAJASTHAN HIGH COURT] - Decided in favour of assessee
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2017 (1) TMI 317
Stay on recovery of demand - Application filed under Section 220(2) rejected - genuine hardship - attachment of property by way of enforcement of law by the department - Held that:- The schedule of the properties which were attached as per the documents produced by the petitioners themselves at Annexure-"G" shows that there are huge immovable properties totally 12 in number in the peripheral area of Bangalore city. Therefore, if a person is having large number of immovable properties and can pay the amount of interest by sale or realization of money from the property, it cannot be said to be a genuine hardship as sought to be canvassed. On the contrary, the quantum of amount of ₹ 45,11,093/- is a tip in the iceburg in comparison to huge value of 12 properties belonging to the assessee. If the person has the capacity to pay, may be by out of his movable or immovable properties and inspite of that the ground is contended as of hardship, same cannot be termed as genuine hardship. If such hardship is treated as genuine hardship, it would defeat the purpose of consideration of the genuine hardship. No case is made out for interference.
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2017 (1) TMI 327
Revision u/s 263 - transfer within the meaning of sec. 2(47) when a partner received his share in the partnership business - CIT observed that when a partner retires from a partnership firm, the amount received over and above the capital account of the partner is taxable in total without allowing any deductions towards cost of acquisition of the asset also A.O. without application of mind allowed the cost of acquisition claimed by the assessee, which is otherwise not allowable, therefore, the assessment order passed by the A.O. is prejudicial to the interest of the revenue - Held that:- We find force in the arguments of the assessee, for the reason that the coordinate bench in the case of ACIT Vs. N. Prasad [2014 (1) TMI 1681 - ITAT HYDERABAD ] held that when a partner retires from the partnership firm, taking his share of interest in the firm, no element of transfer is involved thereby not liable for capital gain tax.
A similar view was expressed by the Hon’ble Supreme Court, in the case of CIT Vs. R. Lingamallu Raghu Kumar (1997 (1) TMI 74 - SUPREME Court) wherein held that on retirement of assessee partner from the firm, there was no element of transfer of interest in partnership assets by the retiring partner to the continuing partners and the amount received by him was not liable for capital gains. In view of the above judgements, it is abundantly clear that when a partner retires from the partnership firm, whatever amount received by the partner over and above his capital account is not liable for capital gain tax. Though, there is no transfer within the meaning of section 2(47)(v) of the Act, the assessee himself offered the capital gain on account of relinquishment of his right in the partnership firm, therefore, we are of the view that there is no prejudice is caused to the revenue and hence the CIT was not correct in coming to the conclusion that the order passed by the A.O. is prejudicial to the interest of the revenue. - Decided in favour of assessee.
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Customs
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2017 (1) TMI 278
Imposition of penalty u/s 112(b) of the Customs Act, 1962 on Moongipa Roadways Pvt. Ltd. and Jabee & Co. - Held that: - The Customs authorities were permitted to seal the trucks knowing fully well that the trucks could not have moved to Kolkata directly and the Customs seals on the trucks were broken and the goods were unloaded and kept in their godown. The learned counsel is not able to explain how and why the goods were unloaded in the Bhiwandi godown and why the Customs seals were broken. In the absence of any plausible explanation for these findings of the adjudicating authority, we hold that the appellant, Moongipa Roadways Pvt. Ltd., has no case.
As regards Jabee & Co., the CHA, As a regular CHA, they should know what type of documents needs to be prepared for the movement of the goods in bond; also they have not controverted the statement of Shri Vijay Bhuwania, the mastermind, who had stated that the CHA was aware of the entire exercise of diversion of the goods. We do not find any reason to interfere in the order of the adjudicating authority.
Penalty upheld - appeal rejected - decided against appellant.
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2017 (1) TMI 277
Valuation - enhancement of 20% of declared value - related party transaction - the foreign collaborator holds 50% share in the company of the appellant - Held that: - foreign collaborator is holding 50% equity in the appellant's company. Except this there is no other evidence which shows that there is a control by the foreign company on the appellant company. As per the judgment relied in the case of MODI SENATOR (I) PVT. LTD. Versus CC. (IMPORTS & GENERAL), NEW DELHI [2009 (3) TMI 808 - CESTAT, NEW DELHI] it was held that merely because Foreign and Indian company having 50-50 percent equity in the Indian entity. It does not fall under the definition of related person as provided under Rule 2(2) of the Customs Valuation Rules, 1988.
In the absence of any other evidence it is not established that the appellant and foreign collaborator are related person. Therefore the impugned order is not sustainable - appeal allowed - decided in favor of appellant.
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2017 (1) TMI 276
Valuation - related party transaction - know how agreement for manufacture of final product between foreign supplier and the appellant - inclusion of royalty in the cost of imported goods - Rule (9)(1)(c) of Customs Valuation Rules, 1989 - Held that: - It is settled legal position by Hon’ble Supreme Court in case of Matsushita Television & Audio (I) Ltd. v. Commissioner of Customs [2007 (4) TMI 5 - SUPREME COURT OF INDIA] where Authority decided that royalty in relation to the sale only includible in assessable value.
In the present case, it was considered that royalty is not the condition of sale of the imported goods, royalty not included - appeal allowed - decided in favor of appellant.
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2017 (1) TMI 281
Unjust enrichment - refund of ADD, amount transferred to the Consumer Welfare Fund in terms of Section 27 (2B) of the Customs Act, 1962 - Held that: - The Chartered Accountant has certified that no extra levy has been collected from the customers. He has also certified that the amount encashed in the shape of Bank Guarantee is reflected in the book of appellant as amounts recoverable from the Customs authorities. None of these have been disputed by the Revenue - the appellants have discharged the onus of unjust enrichment - appeal allowed - decided in favor of appellant.
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2017 (1) TMI 280
Refund claim - unjust enrichment - Held that: - I find that the Balance-sheet shows total purchase of ₹ 9,14,756/- and total sales of ₹ 14,31,953/-. The customs duty paid is ₹ 16,93,136/-. It is obvious that the sale price of ₹ 14,31,953/- cannot recover the cost of purchase ₹ 9,14,756/- and the customs duty ₹ 16,93,136/-. From the above, it is obvious that the sale price does not include the entire customs duty. The same has been certified by the Chartered Accountant and in the Head of summary letter the Balance-sheet clearly reflects that the amount of refund of ₹ 10,66,690/- is due from the Customs department - no unjust enrichment in place - appeal rejected - decided against Revenue.
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2017 (1) TMI 275
Valuation - contemporaneous imports produced by appellant, not considered - Whether imports made by the main appellant Gururaj Steel are secondary/ defective stainless steel or prime material or there was any misdeclaration of the description as well as the value?
Held that: - the adjudicating authority has relied upon some contemporaneous imports details which were not given to appellant and the adjudicating authority seems to have not considered the contemporaneous imports details as produced by the appellant before him. We also find that the adjudicating authority has not recorded any findings on the details of contemporaneous imports as produced by the appellant. In our considered view, the adjudicating authority has to consider the details of contemporaneous imports produced by the appellant and deal with it in impugned order. Having not dealt with it, the impugned order is a non-speaking one - the issue needs reconsideration by the adjudicating authority - appeal disposed off by way of remand.
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2017 (1) TMI 282
Revocation of CHA licence - time bar - time limits as prescribed under Customs Broker Licensing Regulations, 2013 for conduct of various activities by Revenue - amendment made in the Custom House Agent Licensing Regulations, 2004 (CHALR) vide N/N. 30/2010-Cus (NT) dated 8.4.2010 prescribing various time limits - Held that: - Revenue has taken 1221 days to complete the actions for which a period of 270 days is prescribed in CBLR, 2013. There has been a delay of almost three years and more than four times the prescribed time has been taken - reliance was placed in the case of Saro International Freight System [2015 (12) TMI 1432 - MADRAS HIGH COURT], where it was held that the time limit prescribed under the CBLR, 2013 are mandatory in nature.
In the instant case the appellant has been out of work for long period of time. In most such cases the licences are suspended as soon as the inquiry starts and remain suspended till the enquiry is completed. The Custom Brokers are deprived of the fundamental right to work for long periods of time. The fundamental right to work is being denied to the appellant due to failure of the Revenue to follow the time limits prescribed in the law - In the process on the one hand the Custom Broker who are unscrupulous get the advantage of these delays in their defence, the good ones who are not guilty suffer for long periods of time. In both the cases the justice is not delivered.
It was obvious that there is lack of supervision and effort to adhere to the time limit prescribed by law. This will assume serious implications especially in view of the fact that Courts have held time limit to be mandatory in nature - The Revenue seeks the time of 8 to 12 months just to compile the data of such delays. Suffice to say in such a serious issue needs immediate attention of CBE&C and Chief Commissioner of Customs. As a result of such delay, a number of serious offenders will get the benefit and be left of the hook and go scot free, which is not the intent of lawn Similarly, due to the delays, people who are not guilty will continue to suffer the suspension and revocation on account of delays by Revenue due to lack of responsibility.
The license which is revoked by the impugned order is restored forthwith and Commissioner of Customs (General), Mumbai is directed to do the needful immediately - appeal allowed on limitation - decided in favor of appellant.
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2017 (1) TMI 279
Refund of provisional ADD - The Central Government of India, Department of Revenue by N/N. 25/2004-Cus dated 22.01.2004 rescinded the provisional anti-dumping N/N. 141/03-Cus - rejection on the ground that since provisional anti-dumping duty was leviable during relevant time, it was correctly paid and collected - Held that: - The anti-dumping duty either provisional or definitive is imposed under Section 9A of the Customs Tariff Act and as prescribed Rules for collection of anti-dumping duty. Provisions of Rule 21(3) of Customs Tariff (Identification, Assessment and Collection of anti-dumping duty on dumped articles and for Determination of Injury) Rules, 1995 are very clear and unambiguous and they provide for refund of provisionally collected anti-dumping duty if the said provisional anti-dumping duty is withdrawn in accordance with the Rules - similar issue decided in the case of Rao Insulating Company Ltd. [2007 (1) TMI 403 - CESTAT, BANGALORE], where the refund was allowed - refund allowed - appeal allowed - decided in favor of appellant.
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Corporate Laws
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2017 (1) TMI 270
Winding up petition - the company admitted its liability to repay the term loan but failed and neglected to repay the same or any part thereof - Willful defaulter - Held that:- Having considered the fact that the respondent is revenue neutral it appears that respondent company is unable to pay the debt owing to the petitioner. As seen from the Company's response and the submission made in the Company Application filed on behalf of the workers the respondent's business of shipping management is wholly dependent upon the fortunes of its group companies VRL and VSCL. It is VSCL that is funding operation of the respondent Company and it is this fact that is being sought to be leveraged by the respondent and its group Company in order to seek the petitioners consent to agree to the terms proposed by VSCL.
Given the factual contours of the dispute, the ambit of a winding up petition and the discretion vesting in this Court cannot be influenced by the decisions of VSCL and the JLF. The respondents have contended that they have enough assets to cover all liabilities. It is also a matter of record that the promoters were required to bring their own contribution and deposit the same with the State Bank of India to enable payment to the petitioner. The outstanding dues were to be paid subject to restructuring and the promoters contribution. In my view, the respondents have miserably failed in keeping up the promises held out and the same does not appear to be unintentional. The revenues are deliberately kept on a leash, being controlled by its group companies. The respondent will be unable to sustain itself on its own steam. Prima facie, it would have to be shown that Company is plainly commercially insolvent and its existing and probable assets would be insufficient to meet the existing liability. This I believe has been established by the Petitioner in this case ably assisted by the Respondent's admission of being revenue neutral. The respondent company is clearly unable to pay its debts as and when they arise. They have willfully omitted to even service this debt. In my view this is a fit case for admission. Considering the fact that it is a group company presently operating the respondent must be put to terms.
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2017 (1) TMI 269
Sanction of the Scheme of Amalgamation - Held that:- No objection has been received to the Scheme of Amalgamation from any other party. By way of affidavit dated 08.11.2016 of Mr. P. Srinivasan, authorized signatory of the Transferor Company and affidavit dated 09.11.2016 of the counsel for the petitioners, it has been averred that neither the petitioners nor their counsel have received any objection pursuant to the citations published in the newspapers on 17.08.2016.
In view of the approval accorded by the shareholders and creditors of the petitioners to the proposed Scheme and the report and affidavit filed by the Official Liquidator and the Regional Director, Northern Region, respectively, not raising any objection to the proposed Scheme of Amalgamation, there appears to be no impediment to the grant of sanction to the Scheme of Amalgamation. Hence, sanction is hereby granted to the Scheme of Amalgamation under sections 391 and 394 of the Companies Act, 1956. The petitioners will comply with the statutory requirements in accordance with law.
A certified copy of this order, sanctioning the Scheme, be filed with the ROC, within thirty (30) days of its receipt.
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Service Tax
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2017 (1) TMI 307
GTA services - demand of tax and penalty - Held that: - the respondent had submitted the receipts pertaining to hire charges received for letting out their vehicles. There is nothing in the appeal filed by the Revenue to indicate that for such activity the respondent should be subjected to service tax under the category of GTA Services. The requirement for tax liability under the said services is not fulfilled - demand set aside - appeal dismissed - decided against Revenue.
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2017 (1) TMI 303
Renting of Immovable Property service - collection of excess amounts from clients - deduction of the amount of the property tax - Held that: - it is the fact that the appellant had collected excess service tax from the clients which they have returned to them by way of credit to their account. In these circumstances it is obvious that the invoices issued and the assessment made by the appellant has not been changed. It is possible that the clients would have taken the credit of service tax shown in the invoices. The appellants have not got the invoices reassessed for the revised value. The order of the lower authority is therefore sustained - appeal rejected - decided against appellant.
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2017 (1) TMI 308
Composite contract with foreign supplier - erection, commissioning or installation services and consulting engineering service - technical assistance, engineering knowhow training etc - Held that: - It is evident that the contract involves both supply of goods as well as rendering of various services. Such contracts would be covered within the category of works contract service as a separate service in the statute w.e.f. 01/06/2007 - The Hon’ble Supreme Court in the decision of Larsen & Toubro Ltd. [2015 (8) TMI 749 - SUPREME COURT] has categorically held that any contract in the nature of works contract cannot be vivisected into its various elements and charged to service tax separately for the period prior to 01/06/2007 when WCS was introduced in the statute - In the present case the import of the machinery alongwith the associated services was complete during the period 2005-2006, before the introduction of WCS. Consequently, we are of the view that the levy of service tax on the service elements by vivisecting the composite contract cannot be upheld.
The levy has been upheld on the basis of reverse charge mechanism. Section 66A was introduced into the statute w.e.f. 18/04/2006 providing for levy of service tax on reverse charge basis on the import of service. The position of law is well settled that prior to this date, service tax cannot be levied on reverse charge basis. In the present case, the period of dispute is 2005-2006 - Since all such invoices are prior to 18/04/2006, we have no hesitation in holding that the entire demand of service tax merits to be set aside.
Appeal allowed - decided in favor of appellant.
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2017 (1) TMI 302
Imposition of penalty u/s 76 of the FA, 1994 - advertising and promoting services - Held that: - the adjudicating authority has correctly come to a conclusion as there is no dispute on promotion and advertising by respondent beneficiary to him as well as the services recipient located at abroad. We find that this ratio is settled by the Hon'ble High Court of Bombay in the case of Commissioner of Service Tax, Mumbai-Il Vs. SGS India Pvt. Ltd. [2014 (5) TMI 105 - BOMBAY HIGH COURT] - penalty set aside - appeal rejected - decided against Revenue.
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2017 (1) TMI 304
Renting of Immovable Property Service - demand of tax, interest and penalty - section 80 - Bonafide belief - The appellant has claimed that tax liability does not arise on the ground that since the appellant was indebted, their entire factory got attached and in order to pay the bank loan amount, they rented out factory to another sugar factory and they being under bonafide belief that such renting would not amount to services rendered under the category of ‘Renting of Immovable Property’, did not discharge the Service Tax liability.
Held that: - the appellant has discharged the entire Service Tax liability on being pointed out by the authorities; they are also liable to pay interest; the interest was paid by the appellant on direction of the Tribunal. We find that this is a fit case for invoking the provision of Section 80 of the Finance Act, 1994 to set aside the penalty imposed on the appellant under Section 80 of the Finance Act, 1994 - tax and interest upheld - penalty set aside - appeal allowed - decided partly in favor of assessee.
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2017 (1) TMI 306
Imposition of penalty u/s 77 and 78 - the appellant had collected the Service Tax from their clients and failed to deposit the same in timely manner with the Revenue - Held that: - The appellant had given the Service Tax challan details. From the said challan details, it appears that there is no regular payment of Service Tax by the appellants. The appellants have not placed before us any correlation of the tax liability arise during the month and payment made during the month/quarter. The fact is that the appellant have not denied that they have not paid the Service Tax to the Government exchequer despite collecting the same from the clients - penalty u/s 78 are rightly attracted - appeal rejected - decided against assessee.
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2017 (1) TMI 305
CENVAT credit on unregistered premises - reverse charge mechanism - denial on the ground that tax paid as recipient of service was wrongly availed - Held that: - On the tax paid on ‘reverse charge’ on behalf of the provider of service, CENVAT Credit Rules, 2004 does provide for availment of credit against tax paid documents. As the tax has been discharged on ‘reverse charge’ mechanism, the identity of provider of service is irrelevant - credit allowed - appeal allowed - decided in favor of assessee.
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Central Excise
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2017 (1) TMI 287
Eligibility of CENVAT credit - cement and TOR steel - construction of plant and machinery - Held that: - The cement is mainly used in the construction of kiln piers raft/footing, columns, slabs for foundation, foundation for raw mill hoper below the ground, columns in the hoper building, RCC columns, retaining wall in cold dump, columns and wall in cooler building etc. As can be seen all these are civil constructions, though with reference to the overall expansion of production capacity by the appellant. Use of cement in these structures cannot be considered as used cenvatable inputs in the fabrication or manufacture of any capital goods. The same reasoning applies to TOR Steel which is used alongwith cement in creating these structures - the credit on cement and TOR steel availed by the appellant is not justifiable under Cenvat Credit Rules, 2004 - cement and TOR steel cannot be considered as inputs which are used in the fabrication or manufacture of capital goods - credit disallowed - appeal rejected - decided against appellant.
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2017 (1) TMI 301
CENVAT credit - denial on the ground that coal was unconditionally exempt - Held that: - the said notification does not grant exemption from payment of excise duty absolutely but subject to the condition specified in the notification. The basis in the impugned order for denying the Cenvat credit is that excise duty has been paid by the supplier of coal, when they were not required to pay the excise duty in view of the exemption granted under Notification No. 63/1995 dated 16.3.1995. In view of the fact that the notification has extended the benefit subject to conditions, I find that the denial of Cenvat credit is not justified - credit allowed - appeal allowed - decided in favor of appellant.
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2017 (1) TMI 293
Cenvat Credit - Restructuring of business - transfer of ownership of their captive power plant, installed within the factory to M/s Bhilai Electric Supply Company Ltd. (BESCL) - transfer deemed as removal by Department - whether the amount is required to be paid under Rule 3(4) of the Cenvat Credit Rules is to be paid by taking such capital goods as removed from the factory? - Held that: - the Hon’ble Supreme Court in the case of J.K. Cotton Spinning and Weaving Mills Ltd. [1987 (10) TMI 51 - SUPREME COURT OF INDIA], has clearly held that removal contemplates physical removal of goods from one place to another. Such a view has also been taken by the majority of the High Court as well as in several Tribunal decisions including in respect of another unit of respondent. Under the circumstances, we find no infirmity in the order passed by the ld. Commissioner who has held that no amount is required to be paid under Rule (4) on capital goods as there has been no removal and dropped the demand of central excise duty - appeal dismissed - decided against Revenue.
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2017 (1) TMI 292
Valuation - extra consideration received by the appellant on account of transit insurance was to be added in the assessable value or not? - Held that: - reliance was placed in the appellant's own case JCT LIMITED Versus COMMISSIONER OF CENTRAL EXCISE, JALANDHAR [2013 (9) TMI 492 - CESTAT NEW DELHI], where it was held that The price charged at the time of removal was not the sole consideration for transaction of sale. The adjudicating authority and the Commissioner (Appeals) were right in including the difference of transit insurance charged and the amount received by the appellant against transit insurance charge in sale price to work out transaction value for the purpose of excise duty.
The extra consideration received by the appellant over and above on actual insurance charges, is required to be added in the assessable value of the finished goods - appeal dismissed - decided against appellant-assessee.
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2017 (1) TMI 294
CENVAT credit - steel items used in fabrication/manufacture of various capital goods - technological structures for supporting the capital goods - Held that: - the subject matter is covered by Honble Madras High Court decisions in the cases of India Cement Ltd. Vs. CESTAT, Chennai [2015 (3) TMI 661 - MADRAS HIGH COURT] and Com. of E. Ex., Tiruchirapalli Vs. India Cements Ltd [2011 (8) TMI 399 - MADRAS HIGH COURT]. In both these decisions Honble Madras High Court refers to Honble Supreme Courts decision in the case of Commissioner Vs. Rajasthan Spinning & Weaving Mills Ltd. [2010 (7) TMI 12 - SUPREME COURT OF INDIA], where the Apex court allows CENVAT credit on steel items (Plates and M.S. Chennels) keeping in view of the user test - the appellant is be entitled to availment of Cenvat credit for the subject items - appeal allowed - decided in favor of appellant.
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2017 (1) TMI 291
Valuation - inclusion of modification charges in assessable value - Rule 5 and Rule 6 of Valuation Rules, 2000 - Held that: - The process of modification was an essential and integral part of manufacturing process. Since these tools and dies had been retained in the factory against D-3 procedure for manufacture of components, additional sum of money received by the appellants as modification charges for the very same tools/dies is liable to be included in the assessable value in terms of Rule 5 of Valuation Rules, 1975 and Rule 6 of Valuation Rules, 2000 - reliance was placed in the case of Garlick Engineering Vs. CCE, Bombay [1998 (4) TMI 221 - CEGAT, NEW DELHI], where it was held that designing and engineering charges collected from buyers under separate debit notes were deemed to be part of invoice price irrespective of fact that they were not shown in the invoice but in separate debit notes.
Extended period of limitation - Held that: - Since the fact of realization of the additional amounts vide debit notes was not disclosed by the appellants to the department at any stage, it amounts to suppression of vital facts from the department and therefore, we hold that proviso to Section 11A(1) has been correctly invoked for demanding the excise duty beyond the normal period of one year.
Appeal dismissed - decided against appellant.
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2017 (1) TMI 290
100% EOU - Eligibility of concessional rate of duty on domestic clearances - whether ‘barium chloride’ and ‘corundum sand’ are raw materials and not consumables? - Held that: - the decision in the case of VANASTHALI TEXTILES INDUSTRIES LTD. Versus COMMR. OF C. EX., JAIPUR, RAJASTHAN [2007 (10) TMI 303 - SUPREME COURT OF INDIA], makes it even more apparent that these expressions are to be read with reference to the context. The context of the exemption afforded to materials imported by ‘export oriented units’ and the condition stipulated for eligibility to excise duties, instead of half of the aggregate of duties of customs, that ‘raw materials’ be domestically procured does not permit the latitude of treating ‘consumables’ as ‘raw materials.’ The adjudicating Commissioner has erred in doing so.
The discharge of duties by the appellant-assessee on domestic clearances is legal and proper and, hence, warrants no interference - appeal allowed - decided in favor of appellant.
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2017 (1) TMI 288
Reversal of MODVAT credit - input lying in stock, and contained in WIP and finished stock lying on the date of exemption notification i.e. 29-2-2000 - Held that: - The Cenvat credit was availed by the appellant during the period when the final, product i.e. Tooth powder was dutiable therefore the availment of credit was legally permissible. No provision in the Cenvat credit rules existed which provides for reversal of credit which was legally availed in case of final product gets exempted after availing the credit.
As regard the Commissioner(Appeals) rejection of refund on limitation, I find that appellant his admittedly paid the duty 'under protest' and it is not appellant who delayed the filing the refund but it is department who delayed in deciding the issue raised by the appellant - In my considered view, even the appellant was not required to file any refund claim, they could have taken the credit after issue on merit was settled in various judgments including case of Ashok Iron And Steel Ltd [2002 (1) TMI 91 - CEGAT, NEW DELHI]. Therefore there is absolutely no case that refund being time bar.
The appellant is legally entitle for the refund alongwith consequential interest - appeal allowed - decided in favor of appellant.
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2017 (1) TMI 285
Benefit of exemption N/N. 67/1995-CE dated 16/03/1995 - captive consumption of manufactured stampers in the manufacture of CDs - denial on the ground that since the CDs are exempt from payment of duty, exemption on the intermediate product captively consumed is not admissible - is denial justified? - Held that: - the stampers manufactured and used captively is falling under Chapter 85. As per the use of the stampers, we observe that the stampers are not getting consumed in the CDs though it is used for manufacture of CDs. Therefore, in our view the stampers falling under Chapter 85 qualifies as capital goods. The capital goods are exempted under N/N. 67/95-CE dated 16/03/1995 even if it is used in the manufacture of exempted final products - the stampers used for manufacture of CDs are capital goods falling under Chapter 85 - benefit of exemption under N/N. 67/95-CE dated 16/03/1995 available - appeal allowed - decided in favor of appellant.
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2017 (1) TMI 284
Refund claim - duty paid under protest - unjust enrichment - Time bar - Held that: - benefit of ‘payment of duty under protest’ made by the manufacturer cannot be extended to the buyer. Therefore, the present appellant cannot enjoy the benefit of payment of duty under protest by the manufacturer - reliance placed in the case of Commissioner of Central Excise v. Allied Photographic India Limited [2004 (3) TMI 63 - SUPREME COURT OF INDIA], where it was held that there is no merit in the argument advanced on behalf of the respondent that the distributor was entitled to claim refund of “on account” payment made under protest by the manufacturer without complying with Section 11B of the Act, find that the refund claim filed by the appellant is beyond one year and therefore, the same is time-barred - appeal dismissed - decided against appellant.
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2017 (1) TMI 286
Refund claim - the Tribunal allowed the appeal by way of remand to the original authority to re-determine the quantum of refund claim - the Adjudicating authority determined an amount of ₹ 10,47,536.58 only as refundable, but ordered to transfer the same to the Consumer Welfare Fund in terms of Section 11B(2) read with Section 12B of the Central Excise Act, 1944 and rejected the refund claim of Central Excise duty amounting to ₹ 3,68,119.06, ₹ 6,72,072.91 and ₹ 88,138.23.
Held that: - the Tribunal followed the decision in the case of Hindustan Lever Ltd. [2004 (7) TMI 112 - CESTAT, NEW DELHI] on the issue of applicability of unjust enrichment. It is evident that the respondent themselves stated the facts for non-applicability of unjust enrichment and in this context, the Adjudicating Authority held that the refund is hit by unjust enrichment. The lower authorities have failed to consider the Tribunal's order dated 20.01.2005 in proper perspective in the context of the facts and circumstances of the case - It is appropriate that the Commissioner(Appeals) should have examined the facts of the case in light of the decision of the Tribunal vide order dated 20.01.2005 and to decide afresh after following the principles of natural justice.
Appeal filed by revenue is allowed by way of remand.
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2017 (1) TMI 295
CENVAT credit - classification of goods - Held that: - It is undisputed that when the goods i.e. painting system and parts thereof were cleared by M/s. Thermax Surface Coatings Ltd., the said classification was under Ch.84.79 for which Modvat credit was available to the appellant. Appellant accordingly took Modvat credit for the year October 1998 to February 99. Subsequent to change of the classification of M/s. Thermax Surface Coatings Ltd. by their adjudicating authority, cannot be held against the appellant for invoking the extended period and denying the said Modvat credit as the duty paying documents were indicating the Chapter Heading for which Cenvat / Modvat credit was available - appeal allowed - decided in favor of appellant.
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2017 (1) TMI 299
Waste/scrap - cleared without payment of duty - whether the appellant is required to reverse the amount of 10% of the value of products iron ore fine and coal fine cleared by them without payment of duty? - Held that: - the issue is no more res integra and stand settled by the Tribunal decision in the case of CCE & ST Raipur vs. Aarti Sponge & Power Ltd. [2014 (11) TMI 1071 - CESTAT NEW DELHI], It was considered that iron ore fine being a waste emerging during the process of crushing and screening of iron ores and cleared without payment of duty would not call for payment of 10% of the sale value of the product - reversal not sustained - appeal rejected - decided against Revenue.
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2017 (1) TMI 298
Interest for delayed reversal of credit - imposition of penalty - removal of chassis to the sister concern - bonafide belief that no duty is required to be paid when the goods sent to one's own Unit - whether demand of interest justified? - Held that: - on pointing out the irregularity by the Audit Wing, since the cenvat amount was promptly reversed by the appellant before issuance of show cause notice, I am of the view that in terms of the decision of this Tribunal in the case of Paper Products Ltd. [2012 (12) TMI 738 - CESTAT AHMEDABAD], no interest is payable by the appellant.
This case is revenue neutral inasmuch as had the cenvat credit been reversed, the same would have been eligible for credit to the sister unit - there is no loss of Revenue to the Government Exchequer, and as such, there is no question of compensating the Government for loss of any Revenue.
Imposition of penalty under sub-rule (1) of Rule 15 ibid - Held that: - since the authorities below have not specifically allege that wrong cenvat credit has been availed by the appellant, I am of the view that sub-rule (1) of Rule 15 ibid cannot be invoked in the facts and circumstances of this case for imposition of penalty.
Appeal allowed - decided in favor of appellant.
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2017 (1) TMI 296
Manufacture - process of dyeing, twisting, doubling, multiple folding, cabling or anyone or more of these processes, or conversion of any form of the said products into any form - job-work - the respondents were engaged in the activity of purchasing of grey yarn in the cone form after getting it dyed from the job work and selling the yarn in cone form - whether the process amounts to manufacture?
Held that: - though the process of conversion of yarn was undertaken by the appellants in the instant case, but there is no resultant conversion of yarn by the appellants. It is noticeable that the said chapter notes do not stipulate that any process of conversion of the said goods would amount to manufacture, instead it is specified therein that conversion of the goods from one form to another amounts to manufacture, and evidently, there is no conversion of goods from one form to another in the instant case. Further, it is also not disputed that the appellants have received duty paid grey yarn in cone form and also sold dyed yarn in cone form, which indicates that overall duty payable is only in respect of process of dyeing which has not been undertaken by the appellants.
Extended period of limitation - Held that: - There is strength in the contention of the appellants that they had bonafide that they were not doing any manufacturing and hence, not liable to take registration or pay duty on the clearances of the yarn and that it is not a case of duty demand arising from wilful misstatement, suppression of facts with an intent to evade duty - failure to take registration or mis-utilization of exemption or non-payment of duty due to bona-fide reasons cannot be made ground for invoking extended period - demand time barred, not sustainable.
The respondent is not engaged in the activity of dyeing of yarn which has done by the job workers - appeal dismissed - decided against Revenue.
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2017 (1) TMI 283
Recovery of CENVAT credit - removal of miscellaneous waste and scrap as cenvatable goods - Held that: - as regards the packing materials removed as waste and scrap by the appellant, it was held that such waste cannot be treated as arisen out of any manufacturing process and no duty is required to be paid / cenvat credit to be reversed - duty demand on packing material is liable to be set aside.
With regard to oily cotton canvas, which were removed in the form of scrap, cannot be considered as input for the appellant, who manufactures biscuits. Thus, I am of the firm opinion that said goods are not the input for the appellant. Thus, removal of such goods as scrap will not attract payment of central excise duty/ reversal of cenvat credit.
with regard to the wooden scrap namely, doors, windows, iron rods etc., which have no relation with the manufacture of the final product and obviously there was no scope on the part of the appellant to avail the cenvat credit. Thus, duty liability cannot be fastened on removal of those goods as waste and scrap.
With regard to plastic scrap, the Ld. Advocate states that the same were generated during the course of manufacture/ packing of the final product. Since, initial procurement of plastic were not input as such and were not generated during the course of manufacture of the final product, on removal of the same as waste and scrap, no duty is required to be paid.
With regard to iron and steel items removed as scrap, the appellant has not produced adequate documents to demonstrate that no cenvat credit were taken. The matter should go back to the original authority for verification of records/ documents maintained by the appellant - matter remanded.
Imposition of penalty u/s 11AC of the Central Excise Act, 1944 - Held that: - Since, the information were gathered by the department from the balance sheet of the appellant, no malafide can be attributed, justifying imposition of penalty under Section 11AC ibid - penalty set aside.
Appeal diposed off - decided partly in favor of assessee - part of matter on remand.
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2017 (1) TMI 297
Reversal of CENVAT credit - reversal on the ground that the appellant in respect of certain inputs shown the input as waste and value of the input was shown reduced - Held that: - though input was shown in the books of the appellant as scrap and lesser value was shown, but it is not the case where the value of the input was written off. Therefore in my view Rule 3(5B) has no application - So long the input is lying in the factory credit cannot be asked to be reversed. Needless to say that as and when the input is cleared from the factory it will be liable for duty in terms of Rule 3(5B) of Cenvat Credit Rules, 2004.
Reversal of credit not justified - appeal allowed - decided in favor of assessee.
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2017 (1) TMI 289
Reversal of CENVAT credit - simultaneous availment of CENVAT credit as well as benefit of exemption N/N. 30/2004-CE dt. 9.7.2004 - demand of interest with imposition of penalty - extended period of limitation - Held that: - the appellant has suppressed the fact regarding availment of credit despite they were claiming exemption under N/N. 30/2004-CE. The appellant was duty bound to reverse the credit on the clearance of the goods under said exemption which they failed to do so. The entire case was unearthed only after the visit of the factory by the officer. Therefore, it is established that there is a suppression of fact on the part of the appellant. In such case the demand was correctly confirmed under the proviso to Section 11A of the Act. Consequently, the equal amount of penalty under Section 11AC is also correct.
As regards interest, since the appellant has failed to reverse the credit at the time of clearance of goods under exemption but the same was reversed belatedly after almost 3-4 years, interest is inevitably chargeable under Section 11AB of the Act, from the date of availment of credit till the date of reversal.
Demand upheld - appeal dismissed - decided against assessee.
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2017 (1) TMI 300
Imposition of penalty on Mr. S.K. Bhatnagar, Whole Time Director and Shri R.K. Agarwal, DGM (Finance) - scope of Rule 26 - Held that: - during the period involved Mr. S.K. Bhatnagar was not working with the Company namely Kashipur Sugar Mills Ltd.. Therefore, the charges levied by the Revenue against the appellant, Shri S.K. Bhatnagar cannot be sustained.
In case of the charges levied against Shri R.K. Agarwal, the appellant, the findings given by Hon’ble Uttarkhand High Court in the case of SK. Bhatnagar and RK. Agarwal Versus Commissioner of Central Excise, Meerut-II [2015 (5) TMI 243 - UTTARAKHAND HIGH COURT] are relevant and would be applicable for the present proceedings also, where it was held that Petitioners are not guilty of issuing any excise duty invoice without delivery of the goods nor such invoice was used to take ineligible benefit under the Act or the Rules nor both the petitioners were found guilty in transporting, removing or depositing any excisable goods, which were liable to be confiscated, no penalty - penalty not sustained.
Appeal allowed - decided in favor of appellant.
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CST, VAT & Sales Tax
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2017 (1) TMI 330
Condonation of delay - Interpretation of statute - Whether provisions of Section 5 of the Limitation Act, 1963 are applicable in respect of revision petition filed in the High Court under Section 81 of the Assam Value Added Tax Act, 2003? -
Held that: - In the task of interpreting and applying a statue, Judges have to be conscious that in the end the statue is the master not the servant of the judgment and no judge has a choice between implementing it and disobeying it - What, therefore, follows is that the court cannot interpret the law in such a manner so as to read into the Act an inherent power of condoning the delay by invoking Section 5 of the Limitation Act, 1963 so as to supplement the provisions of the VAT Act which excludes the operation of Section 5 by necessary implications.
Appeal dismissed - decided against appellant.
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2017 (1) TMI 272
Imposition of penalty u/s 78(5) of the RST Act, 1994 - Declaration Form ST-18A - produced one day later of the vehicle getting intercepted, and also many columns were left blank - is imposition of penalty justified? - Held that: - even the description of goods, weight, value, and other factors which are required to be taken into consideration, has not been filled in by the respondent assessee. The AO did highlight in the assessment order that even vehicle number, name of the transporter and other particulars were not filled in.
The judgment of Apex court in the case of Guljag Industries [2007 (8) TMI 344 - SUPREME Court], so also the Larger Bench decision of this court in the case of Indian Oil Corporation Ltd. [2015 (11) TMI 1078 - RAJASTHAN HIGH COURT], are squarely applicable in the facts of the present case and the Revenue is not required to prove mens rea in such cases when it is apparent that the goods are being carried with the intention of evasion of tax.
Penalty justified - petition allowed - decided in favor of AO-Revenue.
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2017 (1) TMI 274
Imposition of penalty - notice u/s 78(5) of the Act given by Dy. Commissioner (Appeals) - it is a finding of fact recorded by the Dy. Commissioner (Appeals) as well as the Tax Board in the later order that the case was compounded by M/s D.S. Roadlines by paying the compounding fees - Held that: - Review is impermissible of an own order by the authority unless apparent mistakes crept in and in my view in this case the Tax Board ignored the fact of compounding of the case by the transporter and which was considered by the DC(A), was raised before the Tax Board, but no finding has been given by the Tax Board in the earlier order, therefore, the order rectifying appears to be just and proper.
In the present case, compounding has already been held in the same case by M/s D.S. Roadlines and compounding fees has also been deposited which has been accepted by the Revenue and in my view there is a concurrent finding by both the appellate authorities that there is no collusion of the respondent with M/s D.S. Roadlines, accordingly the finding is just and proper.
Appeal dismissed - decided against appellant.
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2017 (1) TMI 273
Imposition of penalty u/s 76(6) of the Rajasthan VAT Act, 2003 - evasion of tax - non-disclosure of all facts in declaration form and required receipts - Held that: - The AO, after having produced declaration form VAT 47, has not conducted any inquiry worth name and the order of AO at various places mentions about doubtful nature of transaction and has not come to a conclusive finding based on any other material on record, which could prove that the goods were being intended to transport with the intention of evasion of tax
When the AO himself after conducting inquiry comes to a finding that when the railways does not accept any enclosure or document, then the AO ought not to have come to an adverse conclusion - penalty set aside - petition allowed - decided against AO.
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2017 (1) TMI 271
Survey - Interest - Penalty - Held that: - it appears that none of the above certificates were before the AO and they have been obtained after the assessment was completed on 12.11.2008. I also notice that none of the certificates has been referred to by the DC(A) also in its order, and all the certificates do find place in the order of Tax Board only - Even the learned counsel for the assessee has provided the certificates during the course of final hearing before this court, and not filed in advance nor had given a copy to the counsel for the Revenue.
In my view, though the assessment years are more than ten years old, but it would be appropriate to set aside the order of Tax Board and to remand the same to the Assessing Officer to take into consideration the same and to re-decide the issue afresh in the light of the material or any other material in this regard - Appeal allowed by way of remand.
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Indian Laws
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2017 (1) TMI 268
Validity of award of a contract given by the Income Tax Department in the matter of supplying of technical and non-technical labours to the department - Held that:- During the course of hearing except for contending that Clause 7.5 of the Bid document is ultra-vires and the conditions stipulated therein i.e. minimum wages as notified by the State Govt. can also be accepted makes the clause ultra-vires, nothing is brought to our notice on the basis of which it can be said that there is any statutory violation or malafides made out in awarding of a contract.
As when the minimum wages fixed by the Central Govt. under the Minimum Wages Act is insisted upon, we find nothing ultra-vires in Clause 7.5 merely because the word 'State Govt.' is also used before the word 'or'. Once, it is crystal clear from the material available on record that contract has been awarded based on the minimum wages fixed by the Central Govt. , we see no reason to declare the Clause as ultra-vires.
As far as accepting bid of the petitioner for technical staff, as the rate of the petitioner is lower is concerned, we cannot permit bifurcation of the contract for supplying of technical labours and non-technical labours by two different contracts. The contract is a consolidated contract for supply of both class of labours by one contract and if based on the subjective satisfaction of the employer and looking to the various aspects of the matter, they have awarded the contract to respondent no. 3 then in the absence of any statutory rule or regulation being violated or malafides being established, we see no reason to interfere into the matter, even in the objection raised by the petitioner which is available at page 37, we find that except for making vague and unspecified allegations, no objection which can be upheld under law are pointed out.
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2017 (1) TMI 267
Renewal of trade licence from second quarter - licence for running a Bar-cum-Restaurant - Held that: - the delay in granting renewal was only because the respondent-writ petitioner had failed to submit his trade licence along with his application seeking renewal; and his licence was renewed, the moment the trade licence was submitted by him. The action of the appellants, in insisting that the entire annual licence fee be paid by the petitioner, cannot therefore be faulted - Appeal allowed.
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